Civil Revision No. 3517 of 2010 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Revision No. 3517 of 2010 Date of Decision: July 02, 2010 Vineet Handa ......... Petitioner versus M/s OZO Media Estate Ltd and others .......... Respondents 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present:- Shri Akshay Bhan, Advocate for the petitioner. Shri Pradeep Dewan, Advocate, and Shri Vikram Bali, Advocate for respondents No. 1 & 3 Shri P.C. Chaudhary, Advocate for respondent No. 2 Shri Gagan Chhabbra, Advocate for respondents No. 10 to 41. HEMANT GUPTA, J. The challenge in the present petition is to the order passed by the learned trial Court on 14.5.2010 whereby an application filed by defendant No.2 under Order 7 Rule 11 of the Code of Civil Procedure, 1980 (for short “the Code”) for rejecting the plaint was allowed holding that the Court has no territorial jurisdiction to try the present suit and in consequence thereof the plaint was ordered to be returned to the plaintiff. Plaintiff-respondent No.1 filed a civil suit No. 193 of 2010 for declaration alleging that the Development Agreement dated 4.1.2006, Civil Revision No. 3517 of 2010 [2] Annexure P-16, is a false, forged and fabricated document and is void ab initio. The plaintiff also claimed a decree for mandatory injunction in respect of Collaboration Agreement for Development of Property dated 4.1.2006, Annexure P-3. As per plaintiff, it was the Collaboration Agreement for Development of Property dated 4.10.2006 (Annexure P-3) which was executed between the parties in respect of commercial office spaces purchased by the plaintiff and defendants No.10 to 41 in a building proposed to be constructed at Mumbai whereas the defendant relies upon Development Agreement dated 4.1.2006 in respect of building proposed to be constructed on the land in Mumbai. It is not necessary to refer to other terms of agreement and the averments in the suit except to the extent that Clause 28 in Collaboration Agreement, Annexure P-3, is that the said agreement shall be subject to jurisdiction of Courts in Mumbai alone. Similarly, in Development Agreement, Annexure P-16, Clause 28 is that this Development Agreement shall be subject to the jurisdiction of the Court at Mumbai alone. The plaintiff-respondent has filed a suit claiming multiple reliefs arising out of agreement Annexure P-3 in respect of property situated in Mumbai and challenging the legality and validity of the agreement Annexure P16. Defendant No.2 moved an application under Order 7 Rule 11 of the Code to the effect that Gurgaon Courts have no territorial jurisdiction to entertain the suit, inter alia, for the reason that the subject matter of the suit i.e., the immovable property, is situated in Mumbai and, therefore, in terms of Section 16 of the Code, it is the Mumbai Court alone which has the jurisdiction to entertain the suit. Reliance was also placed upon Clause 28 of the Agreement to contend that Mumbai Court alone has Civil Revision No. 3517 of 2010 [3] the jurisdiction to entertain the suit. The said application was allowed by the learned trial Court, inter alia, holding that the plaintiff has not disclosed how the cause of action has arisen at Gurgaon and in terms of Clause 28 in both the Agreements, the jurisdiction is of Courts at Mumbai alone and, therefore, the Gurgaon Court has no territorial jurisdiction to try and entertain the present suit. Learned counsel for the petitioner has vehemently argued that though the agreement pertain to purchase of immovable property situated in Mumbai but part of cause of action has arisen in Gurgaon as agreements were entered into at Gurgaon and some of the defendants are residing in Gurgaon. It is contended that the primary dispute is in terms of agreement as to whether such terms were entered upon and, therefore, the Gurgaon Court has the territorial jurisdiction to entertain the suit. On the other hand, learned counsel for the respondent has vehemently argued that the impugned order is appealable and, therefore, the present revision petition is not maintainable. It is contended that the order passed by the learned trial Court is of rejection of plaint and such rejection of plaint is a decree within the meaning of Section 2 (2) of the Code. Therefore, the petitioner has a right to file first appeal against the decree. Such appeal is maintainable before the learned District Judge. Reliance was placed upon R. Shanmughavelu Pillai vs. R. Karuppannan Ambalam, AIR 1976 Madras 289. Alternatively, it is contended that since the plaint has been ordered to be returned, it is the order passed under Order 7 Rule 10 of the Code against which again appeal lies in terms of Order 43 Rule 1 (a) of the Code. Therefore, in either case the revision is not maintainable as the order passed is appealable either as a decree or as a order. It is also Civil Revision No. 3517 of 2010 [4] contended that Agreements, Annexures P-3 and P-16, pertain to immovable property situated at Mumbai. The plaintiff is claiming interest in the immovable property at Mumbai. Therefore, in terms of Section 16 of the Code, it is Mumbai Court alone which has territorial jurisdiction to entertain the suit. Reliance is placed upon judgment of the Supreme Court in case reported as Harshad Chiman Lal Modi vs. D.L.F. Universal Limited and another, AIR 2005 SC 4446. It is also contended that even if it is assumed that part of cause of action has arisen at Gurgaon, though it is disputed, still the parties have restricted the jurisdiction of the Mumbai Court, therefore, the Gurgaon Court is excluded from exercising the jurisdiction over the suit. Before proceeding further, some of the provisions of the Code need to be extracted. “ Code of Civil Procedure, 1908 2. Definitions- In this Act, unless there is anything repugnant in the subject or context, - (1) xx xx (2) “decree” means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include - (a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default. Explanation – A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly Civil Revision No. 3517 of 2010 [5] final”. Order 7 Rule 10 of the Code of Civil Procedure, 1908 “ 10. Return of plaint (1) Subject to the provisions of Rule 10A, the plaint shall at any stage of the suit be returned to be presented to the Court in which the suit should have been instituted. Explanation: For the removal of doubts, it is hereby declared that a Court of appeal or revision may direct, after setting aside the decree passed in a suit, the return of the plaint under this sub-rule. (2) Procedure on returning plaint - On returning a plaint, the Judge shall endorse thereon the date of its presentation and return, the name of the party presenting it, and a brief statement of the reasons for returning it. Order 7 Rule 11 of the Code of Civil Procedure, 1908 “11. Rejection of plaint : - The plaint shall be rejected in the following cases : - (a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so; (c) where the relief claimed is properly valued but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the required stamp-paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law; (e) where it is not filed in duplicate; (f) where the plaintiff fails to comply with the provisions of rule 9 Civil Revision No. 3517 of 2010 [6] Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature for correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff ”. Q.No.1 Whether the plaint can be ordered to be rejected on a ground not enumerated in Order 7 Rule 11 of the Civil Procedure Code, 1908? In Thakur Harihar Bakhsh Singh vs. Thakur Jagannath Singh and another, AIR 1924 Oudh 413, it was held that the grounds of rejection of plaint given in Order 7 Rule 11 of the Code are not exhaustive. It does not limit the powers of the Court under section 151 of the Code. It was held to the following effect: - “ On behalf of the appellant it is contended that the only grounds on which a court is authorised to reject a plaint are those given in Order 7, Rule 11 of the Code of Civil Procedure and that the Subordinate Judge had no jurisdiction to reject this plaint on the grounds taken by him. With this contention we are not disposed to agree. The instances given in the rule referred to cannot be regarded as exhaustive or as limiting the powers of the court under Section 151 of the same Code. We concur in the view taken by the Madras High Court in Lakshmanam Chetty vs. Lakshmanam Chettiar (1914) 1 L.W. 875 that a court has jurisdiction in a proper case to dismiss a suit filed by the next friend of a minor, on the ground that it is not in the interests of the minor that the suit should be allowed to go. The cases quoted in that ruling from “Simpson Civil Revision No. 3517 of 2010 [7] on the Law of Infants” (pp.471 to 473) show that this is also the law in England”. In Radakishen vs. Wali Mohammed, AIR 1956 Hyderabad 133, it has been held by a Division Bench that the instances given in Order 7 Rule 11 of the Code cannot be regarded as exhaustive of all the cases in which a Court can reject a plaint or as limiting the inherent powers of the Court in respect thereof. It was held to the following effect:- “ We do not altogether agree with the second contention of the learned Advocate that the plaint could not be rejected under O. 7 R.11, C.P.C. No doubt O.7 R.11 gives instances of the rejection of the plaint in cases of non-disclosure of causes of action, undervaluation of the relief claimed, insufficiency of court-fees or claim being barred by any law; the instances given, in our opinion, cannot be regarded as exhaustive of all the cases in which a court can reject a plaint or as limiting the inherent powers of the Court in respect thereof ”. In Badri Nath L. Tirath Ram and another vs. State of Pepsu and others, AIR 1957 Pepsu 14 reliance was placed upon Thakur Harihar Bakhsh Singh's case (supra) to hold that the rejection of plaint as mentioned in sub-section (2) of Section 2 of the Code is not confined to rejection of plaint under Order 7 Rule 11 of the Code. However, it was held that even if technically it is not considered rejection of plaint but on dismissal of suit, it will amount to decree and appeal would be competent. The provisions of Order 7 Rule 11 of the Code delineate circumstances and the plaint can be rejected but such circumstances are not exhaustive. The circumstances enumerated in such rule are only illustrative. Neither the Code nor the court can limit the circumstances on which the plaint can be said to liable to be rejected as all situations cannot be Civil Revision No. 3517 of 2010 [8] envisaged. Such rule does not restrict the inherent jurisdiction of the court conferred by Section 151 to exercise its jurisdiction for rejection of plaint. It is so apparent from the judgments referred to above. Thus it is held that powers of court for rejection of plaint are not circumscribed with the situations mentioned in Order 7 Rule 11 of the Code. Q.No.2 Whether all orders rejecting plaint are appealable or the orders which adjudicates conclusively rights of the parties alone are appealable? In Pt. Amba Shankar vs. Mt Seoti, AIR 1937 Allahabad 280, it was held that where the plaint was rejected for one or the other of the causes mentioned in Order 7 Rule 11 of the Code, the said order is a decree. Where the Court rejects a plaint or a Memorandum of Appeal for any other cause, very different considerations apply. In the case under consideration, the learned District Judge dismissed the appeal for non payment of court fee on the plaint though the plaintiff has paid full court fee on the Memorandum of Appeal. It was held that the learned District Judge could reject the Memorandum of Appeal for non payment of court fee in terms of Order 7 Rule 11 of the Code but rejection of Memorandum of Appeal for non payment of court fee before the learned trial Court is not a ground on which the Memorandum of Appeal can be rejected. It was held to the following effect:- “ ..... In all these cases the plaint was rejected for one or the other causes mentioned in O.7, R.11, Civil P.C. As already stated, where the Court rejects a plaint for one of the reasons for which rejection is prescribed by the Civil Procedure Code, the order is a 'decree'. Where the Court rejects a plaint or a memorandum of appeal for any other cause, very different Civil Revision No. 3517 of 2010 [9] considerations apply. In my opinion, the order of the learned District Judge, impugned in this revision, was wholly without jurisdiction”. In Barkat Ram, General Manager, Bharat National Bank Ltd vs. Sardar Bhagwan Singh, AIR 1943 Lahore 140, the Full Bench was considering the right of appeal arising out of adjudication of rights in execution under Section 47 of the Code, the provision then existing. It was held that the words in sub-section (2) of Section 2 the Code “the rights of the parties with regard to all or some of the matters in controversy” appearing in the first part of sub-section (2) is closely associated with the second part. The order passed in execution proceedings is deemed to be decree. It was held to the following effect:- “ ...... It is, no doubt, true that in the second part of sub-section (2) of Section 2 the words “the rights of the parties with regard to all or some of the matters in controversy: which occur in the first part of the sub-section of S.2 are not repeated. But the two sentences are closely associated with each other. The first sentence defines a “decree” strictly so-called, and has reference to an adjudication in a suit: The second states (inter alia) that certain orders passed in executing proceedings shall be deemed to be decrees. The two sentences are closely associated with each other and it is reasonably clear that the expression “determination of any question” in the second sentence is used ejusdem generis with the phrase “conclusively determines” etc., in the first. This well settled rule of interpretation applies as much to associated words in one sentence as to terms or phrases appearing in parts of the same section or in different sections in the same chapter. The omission of these words in the second sentence does not lend support to the contention of the appellants....” Civil Revision No. 3517 of 2010 [10] A Full Bench of Nagpur High Court in Baliram Ganpatrao Bhoot vs. Manohar Damodhar Bhoot, AIR 1943 Nagpur 204 has held that decree as defined in sub-section (2) of Section 2 of the Code embodies the formal expression of an adjudication which conclusively determines the suit and not merely some of the points in controversy even though they may affect the rights of the parties. It is only when all the matters in controversy in the suit are decided or when some of the matters in controversy the decision of which is sufficient for the disposal of the suit as a whole are adjudicated that the result can be embodied in the decree. It was held to the following effect: - “..... The Civil Procedure Code itself makes a distinction between the decision of an issue and the decision of a suit as will be clear from Rule 5 of Order 20. It is only when the finding upon any one or more of the issues is sufficient for the decision of the suit that a judgment can be pronounced followed by a decree: see S.33. A decree as defined in section 2 (2), Civil P.C., embodies the formal expression of an adjudication which conclusively determines the suit and not merely some of the points in controversy even though they may affect the rights of the parties. It is only when all the matters in controversy in the suit are decided or when some of the matters in controversy the decision of which is sufficient for the disposal of the suit as a whole are adjudicated that the result can be embodied in the decree ...” A Division Bench of this Court in Des Raj vs. Om Parkash and another, (1985) 2 PLR 293 was considering the provisions of sub- section (2) of Section 2 of the Code. It has held the following essential ingredients to determine the question whether an appeal would lie against an order passed:- Civil Revision No. 3517 of 2010 [11] (i) There should be an adjudication; (ii) the adjudication should determine the rights of the parties regarding all or any of the matters in controversy; (iii) the adjudication should be in a suit; and (iv) the adjudication should be formal & conclusive so far as that Court is concerned. In view of the said essential ingredients, the Court found that the order of rejection of Memorandum of Appeal does not amount to rejection of plaint and, thus, does not fall within the definition of decree. In R. Shanmughavelu Pillai, the plaintiff filed a suit for damages for three crops and also claimed damages by way of mesne profits. The plaint was rejected but not on a ground enumerated in Order 7 Rule 11 of the Code. It was found that such suit is not maintainable nor the plaintiff can claim damages by way of mesne profits against whom a decree for permanent injunction was in force. It was held that the appeal will lie against the rejection of plaint and it is not limited to such cases wherein the plaint was rejected under Order 7 Rule 11 of the Code. It was held to the following effect: - “ For the proposition that against the rejection of the plaint, only appeal lies, has been made clear in the decision reported in Lakshmanam v. Lakshmanam (AIR 1915 Mad 483) and in Badri Nath v. State of Pepsu (AIR 1957 Pepsu 14). Even reading of Section 2(2), C.P.C., it does not say the rejection of the plaint under Order 7 Rule 11, C.P.C. on the other hand, it generally states that decree will include rejection of plaint. Thus it is clear both from the section and also the decisions cited above that only appeal will lie against the rejection of the plaint and it is not limited to such cases wherein the plaint was rejected for the reasons stated under Order 7, Rule 11, C.P.C.” Civil Revision No. 3517 of 2010 [12] Though the judgment referred to by learned counsel for the respondent has held that all orders rejecting plaint are appealable but in view of the division judgment of this court and that of predecessor court. It is held that rejection of plaint affecting the rights of the parties conclusively are deemed to be decree and, thus, appealable. Conclusions: The want of territorial jurisdiction is not a ground for rejection of plaint as delineated in Order 7 Rule 11 of the Code. The grounds of rejection of the plaint, inter-alia, are that whether the plaint does not disclose cause of action; whether the relief is undervalued or the plaint is insufficiently stamped or the suit appears to be barred by any law. Though the grounds (a) for rejection of plaint, whether it does not disclose any cause of action is wide but it does not include within its ambit lack of territorial jurisdiction. Similarly, lack of territorial jurisdiction does not fall within clause (d) as a ground for rejection of plaint as such objection does not bar the jurisdiction of the Court. Some of the other grounds on which the plaint can be rejected are undervaluation of the plaint or non payment of appropriate court fee. On such like grounds, the plaintiff can file fresh suit in terms of Order 7 Rule 13 of the Code but if the court finds that the plaint does not disclose any cause of action or the suit is barred by any law, resulting in adjudication of rights of the parties conclusively; such adjudication bars the plaintiff to file a fresh suit. The rejection of plaint for lack of territorial jurisdiction in substance and in effect is an order for return of the plaint. Such order enables the plaintiff to file a suit in a Court of competent jurisdiction whereas rejection of plaint except as provided in Rule 13 shall preclude the plaintiff from presenting the fresh plaint. Thus, Civil Revision No. 3517 of 2010 [13] though the defendant has sought rejection of plaint by moving an application styled under Order 7 Rule 11 of the Code but substantially it is an application for return of plaint for lack of territorial jurisdiction. Therefore, the order passed by the learned trial Court is an order to return the plaint before an appropriate Court on an application invoking the inherent jurisdiction of the civil Court for return of the plaint. Thus, the only remedy is to challenge this order passed is in appeal under Order 43 Rule 1 (a) of the Code. Such order returning the plaint does not adjudicate any of the rights of the parties. It leaves the parties to seek adjudication on the issue arising in the suit before the competent Court of law. Therefore, an order rejecting the plaint could be passed by the Court under its inherent jurisdiction and is appealable by virtue of Order 43 Rule 1(a) of the Code. In view of the above, since the petitioner had remedy of appeal, the present revision petition is not maintainable. The same is dismissed with liberty to the petitioner to avail his remedy of appeal. The other contentions raised by the defendant in respect of lack of jurisdiction of Gurgaon Court are left open to be decided by the Appellate Court in the event the order is sought to be challenged. July 02, 2010 ( HEMANT GUPTA ) ks JUDGE