ALL THE DIFFERENCES & DISPUTES BETWEEN THE PARTIES CAN BE RESOLVED IN ONE SUIT:
14 Order 23, Rule 3 of CPC provide for various aspect of consent decrees and the duty of Court. There is no dispute to the proposition that the Court while passing the consent terms/decree needs to consider the relevant laws but once satisfied, the Court is empowered to pass consent decree on all issues and/or subjects which may be of other territorial jurisdiction and/or even matters foreign to the suit between the parties. There is no total bar to widen the scope of consent terms. It is permissible to resolve their all disputes and differences in one suit between the parties. It may cover the other subjects or the reliefs, though not part of the suit.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO. 472 OF 2011
M/s. Indrayani Foods Ltd. vs Pam-Pac Machines Pvt.Ltd.
CORAM: ANOOP V. MOHTA, J.
PRONOUNCED ON: October, 19 2011
The Applicant/Petitioner(original Defendant)(judgment debtor) by this Revision Application under Section 115 of the Code of Civil Procedure (CPC) has challenged the order dated 30 April 2011 passed by the learned IInd Joint Civil Judge Senior Division, Satara below Exhibits 28 and 31 in Special Darkhast No.42 of 2010, whereby both these applications raising objection to the execution proceeding instituted by the Respondent (original Plaintiff) (decree holder) based upon a compromise decree, passed by the Court of Civil Judge, Senior Division, Pune have been rejected.
2 The Memorandum of Understanding cum Agreement to Sell (for short, "the Agreement") was executed between the Applicant and the Respondent at Mumbai, whereby the Applicant agreed to sell the two properties situated at Mouje Dhangarwadi, taluka : Khandala, District : Satara, for total consideration of ` 3,60,00,000/- out of which ` 60,00,000 was paid at the time of execution of the Agreement. The balance consideration was to be paid on certain terms and conditions.
3 The relevant clause 22 reads as under:
"The parties hereto agree that in case of any dispute and/or differences arising out of and in respect of the interpretation of the terms and conditions hereof, the same shall be subject to the jurisdiction of the Courts at Pune." There is no dispute that the Applicant's corporate office is at 301, Landmark Centre, Op. City Prode, Pune Satara Road, Pune-411009.
4 The Respondent filed Special Suit No.886/2008 on 30 April 2008 in the Court of Civil Judge, Senior Division, Pune for specific performance of Agreement and for the Sale Deed. The Applicant, by application dated 28 July 2008, under Section 9A of CPC raised an objection with regard to the territorial jurisdiction, as the properties are situated in District-Satara and thereby contended that the Pune Court would not have jurisdiction to entertain and try the Suit. However, the parties arrived at settlement and filed a pursis to that effect. The Court on 14 October 2008 has passed a compromise decree as per the consent terms. The Applicant has not pressed the application and thereby waived the jurisdiction objection.
LACK OF INHERENT JURISDICTION OR TERRITORIAL JURISDICTION
5 It is settled that the validity of a decree can be challenged even in execution proceedings on the ground that the Court which has passed the decree lacks an inherent jurisdiction. But, the objection to its territorial jurisdiction does not go to the competence of the Court and can, therefore, be waived. [ 1962 (2) SCR 747 - Seth Hiralal Patni v. Sri Kali Nath].
6 It is also clear that in view of Sections 20 and 21 of CPC, the defect as to the place of suing under Sections 15 to 20 may be waived. The defendant may waive the objection and may be subsequently precluded from taking it. [ AIR 1966 SC 634-Behrein Petroleum Co.Ltd. vs. P.J. Pappu and anr. ]. The Apex Court has followed in Subhash Mahadevasa Habib Vs. Nemasa Ambasa Dharmadas & Ors.(2007) 13 SCC 650.
7 The submission of the applicant based upon a Supreme Court Judgment in Kiran Singh and ors. v. Chaman Paswan and ors., AIR 1954 SC 340, is that the decree passed without jurisdiction is a nullity and its validity can be set up whenever and wherever it is sought to be
enforced or relied upon even at the stage of execution and/or even in collateral proceedings and, therefore, such defect cannot be cured even by the consent of the parties.
8 The Supreme Court in (2005) 7 SCC 791 - Harshad Chiman Lal Modi vs. DLF Universal Ltd. And anr has categorized various aspects of Court's jurisdiction in the following words : "30 We are unable to uphold the contention. The
jurisdiction of a court may be classified into several categories. The important categories are (i) territorial or local jurisdiction; (ii) pecuniary jurisdiction; and (iii) jurisdiction over the subject-matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject-matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject-matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is a nullity."
9 It is also settled that neither "waiver" nor "acquiescence" can confer jurisdiction upon a Court otherwise incompetent to try the Suit. It is clear that a clause vesting a jurisdiction on a Court which lacks inherent jurisdiction to decide the matter would be void as being
against public policy. Hence, unenforceable. Harshad (supra) . These are settled positions in law, need no further discussion. However, we have to see the factual position in every case first. THE AGREED TERRITORIAL JURISDICTION CLAUSE IS BINDING: 10 The submission that a suit for specific performance is maintainable only in Court within jurisdiction of which the suit property is situated and the parties cannot by an agreement vest the jurisdiction in other Court, in view of Section 16(d) and Section 21 of CPC, is unacceptable as the Petitioner/parties themselves agreed specifically that in case of dispute the suit be filed in Pune Court's jurisdiction, though property was situated at Satara. It is a commercial document between the parties. The Plaintiffs/Petitioners corporate office is in Pune. Therefore, there was no defect and/or any objection upto stage of getting the consent decree with regard to the territorial jurisdiction and/or filing of the suit at Pune. The suit was also filed at Pune as the Petitioner could not fulfill its obligation though received substantial amount based upon the same. Though objection was raised about the territorial jurisdiction, admittedly, it was not pressed before the same Court, thereby, waived the objection
with regard to the territorial jurisdiction and/or place of filing of the suit, not even that the parties in fact arrived at settlement and obtained consent decree from the court at Pune only. In this view of the matter, I am not inclined to accept that such agreement is against public policy in view of Section 23 and 28 of the Contract Act. Such objection is waivable. The Appellant volunteered and submitted to the Pune Court's jurisdiction. The reliance therefore based upon AIR 2002 HP 166 - Ranjana Nagpal vs. Devi Ram and ors, is of no assistance.
11 The submission therefore that the Pune Court, does not have inherent jurisdiction to decide the matter and/or vest jurisdiction, therefore such consent decree would be void and/or against the public policy by referring to Harshad (supra) is also of no assistance. Having once agreed and signed the Consent Terms and also taken advantage of the same, the Petitioner could have proceeded further to execute the sale deed also. Therefore, till this stage there cannot be any objection with regard to the jurisdictional aspect. However, as the Petitioner themselves resiled and failed to perform their part of terms of the consent decree, the Respondent has filed the execution petition at Satara. The Petitioner initially by agreeing to Pune Court's
jurisdiction, by not pressing Section 9 Petition, and lastly signed the consent terms and received the full consideration now cannot be permitted to challenge the consent decree on the alleged ground of inherent jurisdiction. This, in my view, goes to the root of the matter in the present case. Therefore, the submission based upon Sections 15 to 20 of CPC and the judgment cited by the learned counsel appearing for the Petitioner are of no assistance to interfere with the impugned order.
12 The suit for specific performance in view of the agreed clause and waiver of territorial or local jurisdiction which was permissible and within the frame work of law and as this, according to me, cannot be stated to be "inherent lack of jurisdiction". The principle of "waiver and acquiescence" are applicable. The citations so referred and relied upon by the learned counsel for the Petitioners are different on facts and circumstances. Though there is no serious quarrel with regard to the principle provided case is made out accordingly, as objection to the place of filing of suit can be waived. [Behrein Petroleum Co.Ltd. (supra)]. [Rajasthan State Electricity Board vs. Universal Petrol Chemicals Limited - (2009) 3 SCC 107].
13 The Petitioner, based upon the consent terms, in fact, acted upon and has received the full consideration. Such person cannot be permitted, now to raise this objection of the territorial jurisdiction in the execution proceedings. The judgment in Mukand Ltd. vs. Mumbai International Airport & ors., 2011(2) ALL MR 510 of this Court is also nowhere support the submissions raised by the Petitioner to set aside the impugned order.
ALL THE DIFFERENCES & DISPUTES BETWEEN THE PARTIES CAN BE RESOLVED IN ONE SUIT:
14 Order 23, Rule 3 of CPC provide for various aspect of consent decrees and the duty of Court. There is no dispute to the proposition that the Court while passing the consent terms/decree needs to consider the relevant laws but once satisfied, the Court is empowered to pass consent decree on all issues and/or subjects which may be of other territorial jurisdiction and/or even matters foreign to the suit between the parties. There is no total bar to widen the scope of consent terms. It is permissible to resolve their all disputes and differences in one suit between the parties. It may cover the other subjects or the reliefs, though not part of the suit. Having once
obtained the consent terms at Pune and acted upon the same by accepting the amount and consideration by waiving even the objection with regard to the territorial jurisdiction, such person cannot be permitted to raise such objection with regard to the decree being nullity in the execution for the first time. The execution so filed at Satara cannot be permitted to halt and/or set aside at the instance of the petitioner in such fashion, at this execution stage. 15 Importantly, the compromised decree between the parties, for the properties to the Suit has attained finality. The same remained unchallenged till this date. The executing Court, therefore, also right in rejecting the Application of the Petitioner and cannot go into the question of validity of a consent decree as there was no inherent lack of jurisdiction to pass such decree. (2009 (5) Mh.L.J. 387 Savitribai A. Salvi Vs. Suman Navgire), (Darshan Singh Vs. State of Punjab (2007) 14 SCC 262. The executing Court, therefore, right in rejecting the prayer of declaration that the decree is null and void. The decree is enforceable and executable.
THE EXECUTING COURT IS BOUND BY THE CONSENT DECREE. 16 It is necessary to consider the aspect of doctrine of nullity/non-
est or void ab-initio with voidable, illegal and irregular orders. The inherent defect of jurisdiction cannot be corrected by the procedural provision of estoppal or res-judicata. (Muthavalli of Sha Madhari Diwan Wakf, S.J. Syed Zakrudeen & Anr. Vs. Syed Zindasha & Ors. (2009) 12 SCC 280). The voidable illegal or irregular order can be corrected in accordance with law. But in the present case the parties themselves agreed for the particular territorial jurisdiction and not pressed the objection and in fact signed and acted upon the consent decree & as no failure of justice or prejudice is shown, now it is impermissible for them to resile therefrom. They are bound by the consent decree and so also the executing Court.
17 Recently, the Supreme Court has reiterated that the executing Court has no authority to set aside, modify or vary the consent decree under Section 47 of C.P [MANU/SC/3053/2008- Premium .C.
Exchange and Finance Ltd. vs. S.N. Bagla and Co. ] ORDER
18 Resultantly, Civil Revision Application is dismissed. There shall be no order as to costs.
19 The learned counsel appearing for the Petitioner requested to 12 cra-472-11.sxw
stay the effect and operation of the judgment passed today. The learned counsel appearing for Respondent, however, makes statement that they will not proceed further in the execution for four weeks. The Statement is accepted. Therefore, no further order is necessary at this stage.
(ANOOP V. MOHTA, J.)
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