-CODE OF CIVIL PROCEDURE- CLASS OF 2017

CASE BRIEFS

I. Territorial Jurisdiction:

1. Khandesh Spinning & Weaving Mills Ltd. v. Moolji Jaitha & Co. 1948 (50) Bom LR 49

Facts: Khandesh Mills, incorporated in Bombay, had certain land in Jalgaon city of Maharashtra. Moolji
Jaitha firm was the managing agent of Khandesh Mills which also had its principal office in Bombay.
During the course of its employment, Moolji purchased certain lands in Jalgaon in their own name, but
allegedly with the funds belonging to Khandesh Co. It was also alleged that Moolji firm fraudulently
charged double commission for the yarn and misappropriated company’s accounts. Khandesh Mills
moved to Bombay High Court with the prayer for:
 Declaration of title to the property purchased by Mooji Co. in Jalgaon with the funds of Khandesh
Mills &;
 Moolji firm be asked to produce account of the management of Khandesh Mills’ affairs from the
commencement of their agency to its termination.
Issue: The question before the Bombay High Court was whether it is an appropriate forum to assume
jurisdiction with respect to an immovable property situated outside its jurisdiction?
Judgment: It was held that the suit was brought by a principal against his agent for investigation into the
affairs of the agency. The leading purpose was to charge the defendants for various acts of misconduct.
Plaintiff’s prayer for transfer of the lands bought by the defendant in Jalgaon to its own name was not an
independent claim relating to the title to land but was tied up to the questions relating to the defendant’s
agency as it was alleged that the defendants acquired the lands out of the funds belonging to the plaintiff.
Thus, there was an equity of personal nature between the parties arising out of the contract of agency, for
which, by virtue of the proviso to Section 16 of CPC, the Court could act in personam upon the
conscience of the defendants who were within the Court’s jurisdiction. Hence, the Bombay High Court
could exercise jurisdiction over the matter.
2. Harshad Chimmanlal Modi v. DLF Universal, 2005 (7) SCC 791
Facts: Mr. Modi entered into a “plot buyer agreement” with DLF for the construction of a house in
Gurgaon. Contract was signed in Delhi where DLF also had its head office. Under the contract, parties
had submitted to the jurisdiction of Delhi. After Modi had made certain installments towards the payment,
DLF unilaterally terminated the agreement.
Procedural History: In 1988, Modi filed the suit in the Delhi court for specific performance of contract.
After more than 8 years of filing the written statement, in 1998, DLF filed an application for amendment
of its written statement by disputing the jurisdiction of Delhi court by virtue of Section 16 of CPC,
because the property was situated in Gurgaon. Delhi court agreed to the objection of DLF and returned
the plaint. Modi aggrieved by this, moved to the Delhi high court in appeal, but failed. He then appealed
before the Supreme Court by special leave where the following arguments were placed.
Issue: The question was whether Delhi Court had jurisdiction as per Section 20, because the question
related to specific performance of the contract? Or whether Section 16 will be considered to decide the
jurisdiction as it was the question of immovable property?
 Judgment: It was held that neither the Proviso to Section 16 would get attracted nor Section 20
(residuary provision) would apply because even though the relief sought was ‘specific performance of
contract’, the contract was respecting an immovable property and specific performance under the same
required the defendant to execute sale deed in favor of plaintiff and to deliver possession to him.
Therefore, the question was related to the right or interest in such property which was covered by Section
16(d) CPC; thus, the matter ought to be decided by the Gurgaon courts, where the property is situated and
not the Delhi courts.
3. Hakkam Singh v. Gammon India AIR 1971 SC 740
Facts: A contract was entered into by the parties for construction of work which provided that
notwithstanding where the work was to be executed, the contract “shall be deemed to have been entered
into at Bombay” and the Bombay Courts “alone shall have jurisdiction to adjudicate” the dispute between
the parties. Gammon India’s registered office also situated in Bombay.
Procedural history: Hakkam Singh was not made certain payments for the construction work, so he filed
a suit in Varanasi court where the construction was going on. Gammon objected owing to the
jurisdictional clause in contract. Court dismissed objection providing that parties by agreement could not
confer jurisdiction on Bombay courts where they otherwise did not possess. The entire cause of action
had arisen in Varanasi, and no legal nexus could be established to give Bombay courts, the jurisdiction to
try the matter. Allahabad High Court revised the Varanasi court’s judgment and overturned the same,
against which Hakkam Singh moved to Supreme court by SLP.
Issue: The question before the Supreme court was whether the court at Bombay alone had jurisdiction to
resolve such dispute?
Judgment: It was held that the clause restricting jurisdiction to Bombay courts was valid as in any event,
Gammon India had its principal office in Bombay, and therefore, was liable to be sued there. The parties
can, by agreement, bind themselves to the jurisdiction to one court, but only in case two or more courts
have jurisdiction, under the law, to try their dispute, and such agreement shall not be against public
policy.
4. ABC Laminart v. AP Agencies, Salem, (1989) 2 SCC 163
Facts: ABC Laminart, having regd. office in Kaira, Gujarat entered into a contract to supply metallic yarn
to AP Agencies in Salem, Tamil Nadu. A clause in the contract provided: “Any dispute arising out of this
sale shall be subject to Kaira jurisdiction”.
Procedural history: Disputes having arisen, AP Agencies filed a suit in Salem wherein ABC Laminart
objected to jurisdiction by virtue of the clause. The objection was allowed to which AP Agencies
appealed to High Court. The appealed was allowed, and hence ABC Laminart moved to Supreme Court
by an SLP.
Issue: Whether the clause could be validly construed to have excluded the jurisdiction of Salem? &
Whether Kaira would be proper jurisdiction in the matter of this contract?
Judgment: Dismissing the appeal, the Supreme Court held- both Kaira and Salem had connecting factors
to file a suit with respect to the suit as the former was where the contract was made, and latter was where
the yarn was delivered to the respondent. However, the clause in the contract had no exclusionary words,
therefore, jurisdiction of Salem could not be said to be clearly, unambiguously and explicitly excluded.
Mention of jurisdiction of one court would not ipso facto take away jurisdiction of other courts. Had there
 been use of words like ‘alone’, ‘only’, ‘exclusive’, and the like, there might be no difficulty in
construction of the ouster clause.
5. Swastik Gases v. IOCL, 2013 (9) SCC 32
Facts: Swastik Gases was IOCL’s Consignment agent for marketing lubricants and petroleum products at
Jaipur. Disputes arose between them as huge stock of lubricants could not be sold, and Swastik Gases
claimed refund. Failing to resolve amicably, Swastik Gases moved to Rajasthan High Court to which
IOCL objected pointing to the clause in agreement which stated, “the agreement shall be subject to the
jurisdiction of courts in Kolkata”. The objection was allowed. An SLP to the Supreme Court was then
filed from this order by Swastik Gases.
Issue: Whether Kolkata courts have exclusive jurisdiction to resolve disputes between the parties by
virtue of the clause in their agreement?
Judgment: It was held that the effect of the jurisdiction clause provides that the intention of the parties-
by having this clause in the agreement- is clear and unambiguous that the courts at Kolkata shall have
jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. In the clause, there is
nothing to indicate to the contrary, therefore, an inference may be drawn that the parties intended to
exclude all other courts. By making a provision that the agreement is subject to the jurisdiction of the
courts at Kolkata, the parties have impliedly excluded the jurisdiction of all other courts. Hence, only the
courts in Kolkata had jurisdiction to entertain the disputes between the parties.

II. Subject Matter Jurisdiction:

6. Dhulabhai v. State of M.P.. 1968 (3) SCR 662
This case is related to a taxation matter, but para 35 of the judgment given by the Constitution bench on
this case greatly discusses the meaning and scope of the words “express and implied bar” in the following
points:
1. Where the statute gives finality to the orders of the special Tribunals, the civil courts’ jurisdiction
must be held to be excluded.
2. Where there is an express bar of the jurisdiction of the court, an examination of the scheme of a
particular Act to find the adequacy or sufficiency of the remedies provided may be relevant.
3. Challenge to provisions of a particular act as ultra vires cannot be brought before Tribunals
constituted under that Act.
4. When a provision is declared unconstitutional or the constitutionality of any provision is to be
challenged, a suit is open.

7. Nahar Industrial Enterprises Ltd. v. HSBC (2009) 8 SCC 646

Facts & Procedural history: Nahar Industries had entered into a Foreign Exchange Derivate Contract
with HSBC. Pending certain transactions on its part under the contract, Nahar filed a suit in Ludhiana
civil court seeking the contract to be declared void as being illegal and violative of FEMA, 1999. An
order of ‘status quo’ was passed. Meanwhile, HSBC filed an application before the Debt Recovery
Tribunal (DRT), Mumbai for recovery of dues under the contract. It also filed a transfer petition before
Punjab & Haryana High Court seeking transfer of proceedings pending before Ludhiana Civil Judge to
DRT, Mumbai. The transfer was allowed to which Nahar Industries felt aggrieved and challenged the
same before the Supreme Court.
 Issue: Whether a suit from a civil court could be transferred to DRT? Whether it is appropriate to treat
DRT as a civil court for the purpose of transferring the suit?
Judgment: The court held that the DRT was constituted for a specific purpose laid down by its statute.
Entire focus of the proceedings before DRT centers around the legally recoverable dues of the bank, and
hence, it is empowered to grant a relief limited to the same subject matter. Whereas civil courts have wide
powers to pass a decree granting relief with respect to a wide variety of civil claims. Hence, DRT must
not be considered a civil court. Also, the provisions from Section 22 to 25 of the CPC are exhaustive in
nature. Consequently, a suit can only be transferred from a civil court to another. The transfer order of
High Court was therefore, dismissed and it was decided that both the questions- validity of contract and
recovery of dues must be dealt with by appropriate forums i.e. the civil court and the DRT respectively.
8. CDS Financial v. BPL Communications (2004) 121 Comp Cas 374
Facts: As per the relevant provisions of Company law, the consent of plaintiff being minority
shareholders of the defendant company was required to pursue any important decisions. However, the
plaintiff’s approval was not sought before the defendant company finalized a resolution for disposal of an
undertaking of the company. A suit for oppression and mismanagement was filed by the plaintiff
challenging the resolution. Prayer- One, a permanent injunction was sought restraining the defendants
from giving effect to the resolution; second, a declaration for plaintiff to exercise all rights it is entitled to
exercise, without the interference of the defendants in any manner.
Procedural history: The defendants objected to the subject matter jurisdiction of the civil court, arguing
that the matter, by virtue of falling under Company Law, pertains to jurisdiction of Company Court. The
objection was allowed, and therefore, the aggrieved plaintiff moved to the High Court in appeal.
Issue: Whether civil courts have jurisdiction to try a matter for which a special statute is incorporated for
the purpose of granting relief?
Judgment: It was held that when there is no express provision excluding jurisdiction of civil courts, such
exclusion can be implied only in cases where a right itself is created and the machinery for enforcement
of such right is also provided by the statute. If the right is traceable to general law of contract, or it is a
common law right, it can be enforced through civil court, even though the forum under the statute will
also have jurisdiction to enforce that right. The relevant provisions under the Companies Act do not
confer exclusive jurisdiction to the Company Court to grant relief against oppression and
mismanagement. They only provide for convenient remedy for minority shareholders under certain
conditions. Hence, for the minority shareholders who do not fall under those conditions, the provisions of
Company Law are not intended to exclude all other remedies including those covered under the
jurisdiction of the ordinary courts.

III. Res Sub Judice:

9. Aspi Jal v. Khushboo Rustom (2013) 4 SCC 333
Facts/ Procedural history: In 2004, Aspi Jal filed two suits for eviction of tenant Khushboo in the small
causes court on two different grounds under Tenancy laws of Bombay. One for bonafide requirement, and
the other for non-usage of property by tenant for several years. During the pendency of both, Aspi filed
another suit in the same court in 2010 on the ground of non-usage of property by tenant for last 6 months.
The suit was stayed by the court under Section 10 stating that the same matter was already subjudice.
Bombay high court upheld the same order, and thus Aspi moved to Supreme court in appeal.
 Issue: Whether the matter is issue in the third suit is directly and substantially the same as the matter in
previous suit?
Judgment: The test for applicability of Section 10 is whether on a final decision being reached on a
previously instituted suit, such decision would operate as Res Judicata in the subsequent suit. Although
the relief claimed by the plaintiff is the same i.e. eviction of her tenant, but the grounds for claiming the
same are different. The cause of action giving rise to such claims is also different because the timeline is
changed, and the ground of non-user is for different periods. Hence, the issue is not directly and
substantially the same and both the suits can parallelly continue before the same judge.

IV. Constructive Res Judicata:

10. State of U.P. v. Nawab Hussain 1977(2) SCC 806
Facts: Nawab Hussain, a Sub-Inspector (SI) in the U.P. Police was charged with corruption and
suspended by Deputy Inspector General (DIG) under the Prevention of Corruption Act.
Procedural History: Nawab Hussain filed a writ petition in Allahabad High Court for quashing of the
suspension order and reinstating him in services on the grounds that he was not given a fair hearing and
reasonable opportunity to present his case, and the decision of suspension was based on malafide
intention of the DIG. The said petition was dismissed. Nawab Hussain later filed a suit in the court of
civil judge with the same prayer, but on the ground that he could not be suspended by the DIG as the DIG
was not his appointing authority. The suit was dismissed under Section 11, explanation IV by virtue of
Constructive Res Judicata. The District Judge agreed with the dismissal, but the High Court allowed the
appeal of Nawab Hussain on the basis that the ground is different. State of U.P. moved to Supreme Court
by SLP.
Issue: Whether the present suit is maintainable or barred by Constructive Res Judicata?
Judgment: Held that the principle of constructive res judicata will operate when the plaintiff raises an
additional plea in the subsequent suit, even though it was available to him in the former suit but was not
taken by him therein. Here, although the ground for the present suit was new, but it ought to have been
taken in the former suit as it was available to Nawab Hussain. Hence, the suit is barred by constructive res
judicata.