Whether objection of pecuniary jurisdiction of court should be decided as per S 9A of CPC?

Objection to pecuniary jurisdiction of the court must be decided as preliminary issue at initial stage as per section 9-A Of CPC

IN THE HIGH COURT OF JUDICATURE AT BOMBAY.

APPELLATE JURISDICTION.

APPEAL FROM ORDER NO. 567 OF 2011

Shri Rajan Dhansukhlal Vora,V/s. Shri Dinesh Bacchubhai Parekh.

CORAM: R.M.BORDE, J.

DATED : 5th October 2011.

This appeal from order is directed against the order passed by the Judge, City Civil Court on 3rd April 2010 in S.C.Suit No. 3203/2004 directing the counsel for the parties to make submission on the Notice of Motion No.1682/2009 on merits with a view to decide as to whether the preliminary issue can be framed at the particular stage of the proceeding. The appellant is the original defendant No.3. The respondent No.1 is the original plaintiff who presented the suit being S.C.Suit No.3203/2004 claiming following substantial reliefs:

a) That this Honourable Court be pleased to declare that the occupation of the Defendant No.3 in the suit premises viz. a Garage premises admeasuring 200 sq.ft. situated on the Ground Floor of Suresh Vithal Niwas Building, L.N.Road, Matunga, Mumbai 400 019, is that of a wrongful trespasser who has been unlawfully inducted without the consent and permission of the Plaintiff and consequently the tenancy agreement, if any, executed by the Defendants 3 567.11-ao

No.1 and 2 in Defendant No.3's favour being sham, colourable and bogus document, be set aside.

b) That this Honourable Court be pleased to Order and Decree the Defendant No.3 to quit, vacate and hand over quiet, vacant and peaceful possession of the suit premises to the Plaintiff.

c) The Defendant No.3 be ordered and decreed to pay mesne profits as this Honourable Court may deem fit and proper by instituting an inquiry under Order 20 Rule 12(c) of the C.P .C."

2. In the pending suit, the plaintiffs have taken out notice of motion claiming interim relief which came to be numbered as Notice of Motion No.3063/2004. There were three prayers made in the notice of motion. The learned trial Judge found prayer (a) is beyond the scope of the suit, prayer (b) is in respect of appointment of Court Receiver, whereas prayer (c) is for injunction against defendant No.3 restraining him from parting with the possession of the suit premises. The learned trial Judge passed an order on 8th June 2005 and directed the plaintiffs and defendants to lead evidence in support of the notice of motion on the next date. The suit along with the notice of motion was adjourned for consideration after recording of evidence. It was also directed to all the parties to exchange their affidavits on which they wanted to rely.

3. In the pending suit, defendant No.3 took out notice of motion being Notice of Motion No.1682/2009 and requested the Court to frame the issue of pecuniary jurisdiction of the Court as preliminary issue and decide the same as provided under order 9A of Code of Civil Procedure, 1908 (C.P.C.). The plaintiff gave no objection to frame the 4 567.11-ao

issue as prayed for in Notice of Motion No.1682/2009 by recording endorsement on the notice of motion. While considering the notice of motion, the learned trial Judge framed preliminary issue as "Whether this Court has pecuniary jurisdiction to try and entertain the suit?". Both parties also assured the Court that they will not lead any oral evidence in support of the preliminary issue. The matter was adjourned to 20th November 2009 for hearing on preliminary issue. When the notice of motion was taken up for hearing by the Court, it was argued by the counsel appearing for the plaintiff that his junior has inadvertently recorded no-objection on the notice of motion for framing preliminary issue. It is contended, however, that since the no-objection was given and the issue has already been framed, the issue so framed needs to be tried along with other issues involved in the matter. It was further contended that the issue raised by the defendant No.3, in any case, cannot be tried as preliminary issue. The Court, after hearing both parties, deemed it fit to decide Notice of Motion No.1682/2009 on merits as it was not disposed of. Hence it is ordered to both parties to make their submissions on Notice of Motion No.1682/2009 on merits so that it could be decided whether the preliminary issue can be framed at relevant stage and, accordingly, adjourned the motion to 20th April 2010.

4. It is the contention of defendant No.3 that once the preliminary issue has been framed and parties to the litigation agreed for trial of the preliminary issue then it was not permissible to the Court to go back and reconsider the earlier decision in respect of trial of the issue. It is contended that even on consideration of merits of the matter the preliminary issue as regards the pecuniary jurisdiction of the 5 567.11-ao

Court needs to be framed mandated in section 9A of C.P.C. and the same needs to be decided before trial of other issues. According to defendant No.3, it is immaterial whether the Court has decided to try notice of motion in respect of grant of injunction along with main suit. The fact remains that there is a notice of motion for grant of interim relief pending and defendant No.3 has raised objection to the jurisdiction of the Court. As such, the provision of section 9A of C.P.C. are attracted. In such circumstances, the mandate of law must be followed and preliminary issue as regards the pecuniary jurisdiction of the Court needs to be decided before rendering decision on all other issues. The counsel appearing for respondent No.1 opposed the contentions raised by the appellant contending that the suit is presented in the year 2004 and after passage of time of about 6 to 7 years it cannot be permitted to raise preliminary issue of jurisdiction of the Court. It is contended that the trial Court has decided to deal with the notice of motion for grant of interim relief at the time of final hearing of the suit along with all other issues involved in the matter. In the circumstances, it is not permissible to the trial Court to frame preliminary issue as regards the jurisdiction of the Court and direct trial of the said issue as preliminary before rendering decision on all other issues. It is contended that the issue raised by defendant No.3 is a mixed question of law and fact and such issue cannot be tried as preliminary one.

5. Section 9A of C.P.C. reads thus:

"9-A. Where at the hearing of application relating to interim relief in a suit, objection to jurisdiction is taken, such issue to be decided by the Court as a 6 567.11-ao

preliminary issue.---- (1) Notwithstanding anything contained in this Code or any other law for the time being in force, if, at the hearing of any application for granting or setting aside an order granting any interim relief, whether by way of stay, injunction, appointment of a receiver or otherwise, made in any suit, an objection to the jurisdiction of the Court to entertain such a suit is taken by any of the parties to the suit, the Court shall proceed to determine at the hearing of such application the issue as to the jurisdiction as a preliminary issue before granting or setting aside the order granting the interim relief. Any such application shall be heard and disposed of by the Court as expeditiously as possible and shall not in any case be adjourned to the hearing of the suit.

(2) Notwithstanding anything contained in subsection (1), at the hearing of any such application, the Court may grant such interim relief as it may consider necessary, pending determination by it of the preliminary issue as to the jurisdiction.

6. Reliance can be placed on the judgment of this Court in the case of Mukund Ltd. v. Mumbai International Airport, 2011 (2) Mh.L.J. 936; wherein the Division Bench of this Court held that the provisions of section 9-A of C.P.C. are of an imperative nature and are mandatory. Once the issue of jurisdiction is raised, the same is germane to the maintainability of the suit itself and not merely to the motion for interim relief. Whether the Court has decided to postpone the hearing of the motion for interim relief or for that plaintiff chooses not to press motion will not make any difference and motion needs to be decided if it relates to the maintainability of the suit. The observations of the Division Bench appear in paragraph-13 of the judgment, which read thus:

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13. The principle that emerges is that the provisions of Section 9A are of an imperative nature and are mandatory. Once an issue of jurisdiction is raised at the hearing of an application for the grant of interim relief or for setting aside an order granting interim relief, the Court is under an obligation to decide that issue as a preliminary issue before deciding the question of interim relief. Section 9A is prefaced by a non obstante provision. The first part of Section 9A refers to the stage at which the objection is taken; the stage being at the hearing of an application for granting or setting aside an order granting interim relief. The second part of the provision elucidates the nature of the objection; the objection being to the jurisdiction of the Court to entertain a suit. Once such an objection to the jurisdiction of the Court to entertain a suit is taken by a party to the suit, the Court has to proceed to determine the issue of jurisdiction at the hearing of the application as a preliminary issue. The determination of the issue cannot be postponed to the trial of the suit and the issue of jurisdiction has to be decided before granting or setting aside an order granting interim relief. The mandatory nature of the provision was emphasized in a judgment of a Division Bench of this Court in Royal Palms (India) Pvt. Ltd. v. Bharat Shantilal Shah. 2009 (2) Bom.C.R. 622 In that case, at the hearing of a motion for interim relief, the Defendant opposed the motion on the ground that the suit was barred by limitation. The Learned Single Judge despite the objection to the jurisdiction of the Court, ignored the provisions of Section 9A and proceeded to make an interim order without framing a preliminary issue. The Division Bench while holding that the procedure adopted by the Learned Single Judge was contrary to Section 9A held as follows:

"Perusal of provisions of section 9A of C.P.C. quoted above makes it clear that whenever there is an application for grant of temporary 8 567.11-ao

injunction or appointment of Receiver is sought before any Court and an objection to the jurisdiction of the Court to entertain the suit in which the application for such interim relief has been made by any of the pasties, then it becomes the duty of the Court to first frame the preliminary issue as to the jurisdiction of the Court to entertain the suit and decide that issue and thereafter take up for consideration the application for interim relief."

The Division Bench held that the question as to whether a suit is barred by limitation was an objection to the jurisdiction of the Court for the purpose of Section 9A and followed the earlier decision in Foreshore Cooperative Society (supra). Elaborating on the provisions of Section 9A, the Division Bench observed as follows:

"When an objection to the jurisdiction of the Court to entertain the suits as the suits are barred by the law of limitation is raised, at the hearing of notices of motion wherein interim order is claimed, the Court is obliged by provisions of section 9A of C.P to frame .C.

preliminary issue as to the ground raised to the jurisdiction of the Court to entertain the suits and proceed to decide that preliminary issue and it is only on decision of that preliminary issue, that the notices of motion can be taken up for final decision.""

7. The counsel appearing for respondent No.1 invited my attention to the decision of the Apex Court in the case of Ramesh B. Desai v. Bipin Vadilal Mehta, 2006 (5) SCC 638. The Apex Court has mandated that where mixed issue of law and fact arises in the matter, the Code does not confer jurisdiction on the Court to try such issue as preliminary one and where the decision on issue of law depends upon 9 567.11-ao

decision of fact then it cannot be tried as preliminary issue. The relevant observations of the Apex Court are found in paragraph- 13 of the judgment, which reads thus:

"13. Sub-rule (2) of Order 14 Rule 2 CPC lays down that where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to (a) the jurisdiction of the Court, or (b) a bar to the suit created by any law for the time being in force. The provisions of this Rule came up for consideration before this Court in Major S.S. Khanna v. Brig. F.J.Dillon, (1964) 4 SCR 409 : AIR 1964 SC 497, and it was held as under: (SCR p.421)

"Under Order 14 Rule 2 where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on the

issues of law only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined. The jurisdiction to try issues of law apart from the issues of fact may be exercised only where in the opinion of the Court the whole suit may be disposed of on

the issues of law alone, but the Code confers no jurisdiction upon the Court to try a suit on mixed issues of law and fact as preliminary issues. Normally all the issues in a suit should be tried by the Court: not to do so, especially when the decision on issues even of law depends upon the decision of issues of fact, would result in a lop-sided trial of the suit."

Though there has been a slight amendment in the language of Order 14 Rule 2 CPC by the amending Act, 1976 but the principle enunciated in the above 10 567.11-ao

quoted decision still holds good and there can be no departure from the principle that the Code confers no jurisdiction upon the Court to try a suit on mixed issue of law and fact as a preliminary issue and where the decision on issue of law depends upon decision of fact, it cannot be tried as a preliminary issue."

It is, thus, contended that the issue raised in the instant matter is a mixed question of law and fact and, as such, cannot be tried as preliminary issue. The issue raised before the Apex Court was in relation to the bar of limitation in presenting company petition. The plea of limitation is a mixed question of law and fact and, therefore, the Apex Court held that the company petition could not be dismissed on preliminary issue holding it as barred by limitation.

8. In the instant case, objection to the pecuniary jurisdiction of the Court to deal with the suit is raised and it is argued that the plaintiff has not properly valued the suit property. This goes to the root of the matter and, thus, needs to be decided at initial stage. The judgment of the Apex Court in the case of Ramesh B. Desai v. Bipin Vadilal Mehta (supra) was considered by this Court in the case of Satpuda Tapi Parisar Sahakari Karkhana Ltd. v. Jagruti Industries, 2008 (5) Bom.C.R. 284. After quoting the relevant observations of the Apex Court in para-22 of the judgment, Division Bench of this Court observed in para-28 thus:

"28. The correct principle, therefore, is the one recognized and reiterated in Section 9-A to wit, where an objection to jurisdiction of a Civil Court is raised to entertain a suit and to pass any interim 11 567.11-ao

orders therein, the Court should decide the question of jurisdiction in the first instance but that does not mean that pending the decision on the question of jurisdiction, the Court has no jurisdiction to pass interim orders as may be called for in the facts and circumstances of the case. A mere objection to jurisdiction does not instantly disable the Court from passing any interim orders. It can yet pass appropriate orders. At the same time, it should also decide the question of jurisdiction at the earliest possible time. The interim orders so passed are orders within jurisdiction when passed and effective till the Court decides that it has no jurisdiction when passed and effective till the Court decides that it has no jurisdiction to entertain the suit. These interim orders undoubtedly come to an end with the decision that this Court had no jurisdiction. It is open to the Court to modify these orders while holding that it has no jurisdiction to try the suit. Indeed, in certain situations, it would be its duty to modify such orders or make appropriate directions. For example, take a case, where a party has been dispossessed from the suit property by appointing a receiver or otherwise; in such a case, the Court should, while holding that it has no jurisdiction to entertain the suit, put back the party in the position he was on the date of suit. But this power or obligation has nothing to do with the proposition that while in force, these orders have to be obeyed and their violation can be punished even after the question of jurisdiction is decided against the plaintiff provided the violation is committed before the decision of the Court on the question of jurisdiction."

9. The reference made in the aforesaid matter was relating to two questions: (i) whether application for framing of issue regarding jurisdiction whether pecuniary or territorial can be framed at a later 12 567.11-ao

stage and whether the Court is obliged to decide that issue as a preliminary one? and (ii) whether the object of introduction of section 9-A in the Code can be made applicable to the applications that may be filed at a later stage of the suit. The Division Bench of this Court has made observations in para- 34 of the judgment on the questions referred and answered the reference in para- 36 of the judgment. Paragraph- 34 and 36 of the said judgment read thus:

34. No statute can provide for all situations when legislature enacts a law. It may neither be feasible nor comprehensible to legislate a law which could operate as a straight-jacket formula for all classes, situations and stage of proceedings. It is also neither permissible nor proper for the Court to provide a strait-jacket formula regulating exercise of statutory powers. The provisions of Section 9A of the Code are prefaced with a non-obstante clause. These provisions, as applicable in the State of Maharashtra, are required to be enforced in preference to any other provisions contained in the Code and even any other law for the time being in force. When the provisions of Section 9A can be invoked is reflected in the language of the Section itself. In consonance with the law aforestated in different judgments of this Court, it is essential that an application for injunction or for vacating injunction or grant of such other relief or even an application for setting-aside the orders as spelt out under these provisions, should be pending before the Court. In the proceeding, an objection in regard to the jurisdiction of the Court ought to be taken by the parties who desire to have such issue determined at the initial stage itself. In that event, the Court is expected to deal with the application by framing a preliminary issue of jurisdiction and after granting the parties an opportunity even to lead evidence to decide such an issue at the first instance and not to defer it for determination along with the 13 567.11-ao

suit. Thus, it is obvious that once ail application for the relief of injunction, appointment of Court receiver, stay, etc; has been finally decided by the Court in accordance with law, the rigours of Section 9A would lose their significance and statutory application. Thereafter, the test applicable would be that of Order 14, Rule 2 of the Code, where the Court is to form an opinion as to whether along with other issues, the issue relating to the jurisdiction or bar to the maintainability of the suit under any other law should or should not be treated as preliminary issue. Whether it should be decided preferably at the initial stage or along with all issues relating to the merits of the case, is injudicial discretion of the Court. This judicial discretion of the Court is then in no way controlled by the provisions of Section 9A of the Code as the stage indicated by the legislative mandate under Section 9A is over. Similar power obviously could be exercised by the Appellate Court as well. We have already noticed that the consistent view of this Court has been that there is no conflict between the provisions of Section 9A and Order 14, Rule 2 of the Code. On their correct and harmonious interpretation, the said provisions are intended to achieve the same object i.e. expeditious disposal of the preliminary issue relating to the jurisdiction of the Court.

36. In view of the above discussion, we answer the questions as follows:

(i) An application for framing of issue relating to jurisdiction of the Court can be filed at any stage of the proceedings in the suit. The provisions of Section 9-A of the Code are attracted only when the conditions stated in that provision are satisfied at the time when question of jurisdiction is raised before the Court. Once the stage contemplated under Section 9-A of the Code is over (i.e. the application for interim orders has been decided), then these provisions lose their mandatory character and significance. 14 567.11-ao

Whereafter the application for framing an issue relating to jurisdiction and its determination in accordance with law would be controlled by the provisions of Order 14, Rule 2 of the Code.

(ii) However, if an application for grant or vacation of reliefs specified under Section 9-A of the Code has already been decided by the Court of competent jurisdiction, in that event, the proceedings in the suit would be controlled by the provisions of Order 14, Rule 2 of the Code. The formation of opinion and exercise of discretion by the Court cannot be regulated by any strait-jacket formula and essentially it must be left in the discretion of the Court, depending on the facts and circumstances of a given case. The Court will obviously exercise such jurisdiction applying the well accepted canons of civil jurisprudence. In other words and construed objectively, the provisions of Section 9-A are not mandatory and subject to what has been stated above, it may not be necessary for the Court to decide the issue at the threshold. If the application for interim relief is pending, Section 9-A of the Code will operate with - all its rigour and irrespective of the stage of such application."

10. Reference can also be conveniently made to another judgment of the Division Bench of this Court in the case of Royal Palms (India) Pvt.Ltd. v. Bharat Shantilal Shah, 2009 (2) Bom.C.R. 622. It is observed that when objection to the jurisdiction of the Court to entertain the suit is raised under section 9-A of C.P.C. it becomes the duty of the Court to to first frame the preliminary issue as to the jurisdiction of the Court to entertain the suit and decide that issues and thereafter take up for consideration the application for interim relief. The relevant observations find place in para- 3 of the judgment which is quoted as below:

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3. ..... ..... ..... ..... ..... Perusal of provisions of section 9A of C.P .C. quoted above makes it clear that whenever there is an application for grant of temporary injunction or appointment of Receiver is sought before any Court and an objection to the jurisdiction of the Court to entertain the suit in which the application for such interim relief has been made by any of the parties, then it becomes the duty of the Court to first frame the preliminary issue as to the jurisdiction of the Court to entertain the suit and decide that issue and thereafter take up for consideration the application for interim relief. The scope and ambit of the provisions of section 9A of the C.P .C. has been considered by the Supreme Court in its judgment in the case of (Tayabbhai Bagasarwalla and anr. v/s Hind Rubber Industries Pvt.Ltd.) reported in AIR 1997 SC 1240 and after quoting the provisions of section 9A of C.P the Supreme .C.,

Court in paragraph 16 has observed thus :-

16. According to this section, if an objection is raised to the jurisdiction of the Court at the hearing of an application for grant of, or for vacating, interim relief, the Court should determine that issue in the first instance as preliminary issue before granting or setting aside the relief already granted. An application raising objection to the jurisdiction to the Court is directed to be heard with all expedition. Sub-rule (2), however, says that the command in sub-rule

(1) does not preclude the Court from granting such interim relief as it may consider necessary pending the decision on the question of jurisdiction. In our opinion, the provision merely states the obvious. It makes explicit what is implicit in law. Just because an objection to the jurisdiction is raised, the Court does not become helpless  

forthwith - nor does it become incompetent

to grant the interim relief. It can. At the same time, it should also decide the objection to jurisdiction at the earlier possible moment. This is the general principle and this is what section 9A reiterates."

11. The counsel appearing for respondent No.1 made reference to the judgment of the learned single Judge of this Court in the case of Maharashtra State Warehousing Corpn.Ltd. v. Bhujang K. Kohate, 1999 (2) ALL MR 171 and contended that the Court is under obligation to decide all issues even if there are some issues either covered under order 14 rule 2, clauses (a) and (b) which are purely of law. The Court is not under an obligation to decide the question of law as a preliminary issue. It is observed by learned single Judge that whether the issue relating to jurisdiction and/or bar of law, if required investigation into the facts and/or leading of evidence and/or those issues are mixed question of law and fact, in that circumstances those issues cannot be decided as preliminary issues. Answer to this also finds place in the judgment of the Division Bench of this Court in the case of Satpuda Tapi Parisar Sahakari Karkhana Ltd. v. Jagruti Industries (supra) wherein it is specifically observed that the jurisdictional fact for consideration of the issue is required to be decided. It would be open for the Court to receive evidence for deciding jurisdictional fact even for deciding the preliminary issue. In para-9 sub-para- 12 it is observed thus:

"12. We would, at this stage, refer to the precise principle laid down by this Court in the case of (Fazlehussein v. Yusufally) 10, AIR 1995 Bom. 55, wherein the Court has, after observing that the 

averments made in the plaint would be sufficient to decide the question of jurisdiction, held as under:

"In considering the preliminary issue, the Court must look into the averments in the plaint and consider any objections which the defendant may choose to raise against the maintainability of the action on those averments. The question of jurisdiction which is raised by way of a demurrer has always to be decided on the allegations made in the plaint and not on the contentions that the defendant may raise. It is true that if the jurisdiction of the Court depends upon the proof of a fact and the question as to the existence or otherwise of that fact is canvassed, the parties may lead evidence in support of their respective cases before the preliminary issue as to jurisdiction of the Court is decided.""

12. As held by the Division Bench of this Court the provisions of section 9A are not in conflict with the provisions of order 14 rule (2) of C.P.C. On their correct and harmonious interpretation, said provisions are intended to achieve the same object i.e. expeditious disposal of the preliminary issue regarding jurisdiction of the Court. For the reasons set out above and on consideration of law laid down by Division Bench of this Court which is quoted in the aforesaid paragraphs, I am of the view that the learned trial Judge is in error in directing reconsideration of the Notice of Motion No.1682/2009. It is mandatory for the Court to deal with the preliminary issue of jurisdiction framed by the Court and raised in the matter in accordance with section 9-A of C.P.C. The Court shall render decision on the preliminary issue even by permitting the parties to lead evidence, if necessary.

13. Appeal from order stands allowed. The impugned order passed by the Judge, City Civil Court dated 3rd April 2010 in S.C.Suit No.3203/2004 is quashed and set aside. The learned trial Judge shall proceed to decide notice of motion in accordance with the observations made in this judgment. In the facts and circumstances of the case, there shall be no order as to costs.

14. In view of disposal of appeal from order, pending civil application does not survive and stands disposed of accordingly.

(R.M.BORDE, J.)