IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 31.03.2010 CORAM THE HON'BLE MS. JUSTICE R.MALA A.No.6411 of 2009 in C.S.No.859 of 2009 ORDER The applicant-defendant filed this application to reject the plaint in C.S.No.859 of 2009, stating that the suit was filed by the respondent-plaintiff for recovery of the amount due on goods sold to the tune of Rs.7,80,090.01 and interest at Rs.79,024.31, totalling Rs.8,59,114.32 and also in respect of damages for causing loss of business and loss of reputation, at Rs.2 lakhs and the plaintiff thus valued the suit for Rs.10,59,114.32 and also claimed interest on Rs.7,80,090.01 @ 21% p.a. from the date of the plaint till the realisation. 2. The plaintiff also filed A.No.4933 of 2009 in C.S.No.859 of 2009, praying to pass prohibitory order, prohibiting the second respondent-M/s.Great Lakes Institute of Management and the third respondent-M/s.Chaitanya Builders and Leasing (P) Ltd., the garnishees, from making payment to the first respondent-M.K.Sathyanarayana Rao (defendant) to the extent of the suit claim and consequentially, to direct them to deposit the same to the credit of the suit, pending disposal of the suit. In A.No.4933 of 2009, this Court granted prohibitory order, prohibiting the respondents 2 and 3 therein from making payments to the first respondent therein, to the extent of the suit claim till 20.10.2009 and the prohibitory order was extended from time to time, and lastly, by order dated 15.12.2009, it was extended upto 4.1.2010. 3. The first claim in the suit is for the decree for Rs.8,59,114.32, in respect of the amount due on business transactions, which includes the principal amount due at Rs.7,80,090.01 and interest at Rs.79,024.31 and the second claim is for the decree in respect of the damages for business loss and reputation at Rs.2 lakhs. The value for the first claim in respect of the first cause of action is Rs.8,59,114.32 and so, this Court has no pecuniary jurisdiction to try this case in respect of the first cause of action. The second cause of action in respect of the second claim of Rs.2 lakhs and even for this claim, this Court has no pecuniary jurisdiction. According to Clause 14 of the Letters Patent, where the plaintiff has several causes of action against the defendant, such causes of action not being for land or other immovable property, the High Court shall have original jurisdiction in respect of one of such causes of action. But in the present case, this Court has no jurisdiction in respect of even any one of the cause of action and hence, the defendant prayed for rejection of the plaint. 4. The respondent-plaintiff has filed his counter affidavit stating that to drag on the proceedings, the defendant has come forward with such application seeking for rejection of the plaint. Clause 14 of the Letters Patent, which is being referred to, is not applicable to the facts of the case on hand. Since the Registry of this Court has the value of two reliefs arising out of the same cause of action, the same is valued separately and separate Court fees are also paid. Since the two claims are being out of the same cause of action and since the total value of the relief claimed is within the pecuniary jurisdiction of this Court, the suit has been filed before this Court. No case is made out to allow the application for rejection of the plaint, either under Order 7 Rule 11 CPC or under any other provision of law and hence, the plaintiff prayed for dismissal of the said application. 5. Heard both sides. 6. Learned counsel for the applicant-defendant contends that this Court has no pecuniary jurisdiction. The pecuniary jurisdiction of this Court is above Rs.10 lakhs and there is mis-joinder of the causes of action. As per Clause 14 of the Letters Patent, without the leave of the Court, no single suit for several cause of actions, can be filed. He further submits that as per Clause 14 of the Letters Patent, if the plaintiff has filed a suit for several reliefs, at least one of the causes of action in respect of one of the reliefs, this Court must have the original jurisdiction. But in the present case, the first prayer is for claim amount due on the business transactions and it is below Rs.10 lakhs and the second claim is for damages for defaming the reputation of the plaintiff's concern and it is for Rs.2 lakhs and so, both the claims are below Rs.10 lakhs and so, this Court has no pecuniary jurisdiction and hence, he prayed for allowing the application and for rejection of the plaint. Learned counsel for the defendant relied upon various decisions in support of his contentions. 7. Repudiating the said contentions, learned counsel for the respondent-plaintiff would submit that Clause 14 of the Letters Patent is not applicable to the facts of the present case. No reason has been given as to under what provisions of Order 7 Rule 11 C.P.C., the defendant has come forward with the application for rejection of the plaint. He further submits that to save the bar under Order 2 Rule 2 C.P.C., the plaintiff filed the suit. Learned counsel for the plaintiff further submitted that a single suit is maintainable by clubbing the causes of actions. He relied on various decisions and prayed for dismissal of the application. 8. While considering the arguments of both sides, on a perusal of the plaint, no doubt, in the 'cause of action' column, in paragraph 10, the plaintiff has stated as follows: First cause of action: ".. the place where the plaintiff is carrying on business also at George Town, the place where the defendant is carrying on business at Royapettah, the place where on various dates, the goods were sold to the defendant, and delivered the same at the various places as directed by the defendant, on 1.4.2009 when after giving several credits to the on account payments made by the defendant the defendant is due and liable to the plaintiff sum of Rs.5,69,803.01, between 2.4.2009 and 29.8.2009 various other goods were sold and delivered to the defendant under various invoices and after giving several credits of payment made by the defendant on account between this dates and ultimately when defendant is due and liable to pay the sum of Rs.7,89,090.01, when interest become due, on 29.8.2009 when defendant made on account part payment of Rs.5,58,724/- by cheque, on 31.8.2009 when the said cheque was returned dishonoured, on 1.9.2009 when plaintiff wrote letter to the defendant, when defendant issued two cheque respectively dated 21.9.2009, and 2.10.2009. ..." Second cause of action: " .... When defendant started defaming plaintiff and because of which the plaintiff incurred loss of sales and loss of reputation in the market, on 10.9.2009 when defendant sent e-mail with malafide intention on 16.9.2009, when plaintiff sent reply to the e-mail of the defendant and subsequently." In the heading under "Memo of Court Fee valuation", the plaintiff has stated as follows: Claim No.1: 1. Opening Balance as on 1.4.2009 : Rs.5,69,803.01 2. Sales upto 31.8.2009 on various dates and after giving credit to the various on account payments the amount due : Rs.2,10,287.00 Total: Rs.7,80,090.01 Interest as aforesaid @ 21% p.a. : Rs. 79,024.31 Total claim : Rs.8,59,114.32 Court Fee paid on Rs.8,60,000/- : Rs.12,125.00 Claim No.2 : 1. Loss for Business and Reputation: Rs.2,00,000.00 2. Court Fee paid : Rs. 5,525.00 3. Total Court Fee paid by the plaintiff for both the claims : Rs. 17,631.74 9. It is seen that the two causes of action are entirely different; one is for recovery of money due on business transactions and another is for loss of business and reputation for defaming the respondent-plaintiff. As per Claim No.(i), for recovery of money due on business transactions, the amount due is Rs.7,80,090.01 and interest at Rs.79,024.31 and its total claim is Rs.8,59,114.32. As per Claim No.(ii), in respect of loss of business and reputation for defaming the respondent-plaintiff, the amount claimed is Rs.2,00,000/-. After adding the total of both the claims, the plaintiff prays for recovery of Rs.10,59,114.32, and also claims interest on Rs.7,80,090.01 at 21% p.a. from the date of the plaint till realisation. 10. At this juncture, it is appropriate to consider as to whether the plaint is liable to be rejected, under Order 7 Rule 11 C.P.C. Order 7 Rule 11 C.P.C. reads as follows: Order 7 : Plaint Rule 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 requisite 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; 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 from 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." 11. Even though the application is filed by the defendant, under Order 7 Rule 11 C.P.C., for rejection of the plaint, the defendant questioned the pecuniary jurisdiction of this Court. In such circumstances, the pecuniary jurisdiction can be decided only as a preliminary issue under Order 14 Rule 2 C.P.C. and not under the application under Order 7 Rule 11 C.P.C. Even though the application is filed for rejection of the plaint, for want of pecuniary jurisdiction, the plaint shall not be rejected and it can be returned for re-presentation before appropriate forum. So, instead of dismissing the application for rejection of the plaint, considering the pendency of the suit from 2009, it is appropriate on the part of this Court to decide as to whether this Court has pecuniary jurisdiction to decide the matter. 12. Now, this Court has to decide as to whether there is any mis-joinder of the causes of action. In this connection, it is relevant to notice Clause 14 of the Letters Patent, which reads as follows: "Clause 14: Joinder of several causes of action.--And we do further ordain that where plaintiff has several causes of action against defendant, such causes of action not being for land or other immovable property, and the said High Court shall have original jurisdiction in respect of one of such causes of action, it shall be lawful for the said High Court to call on the defendant to show cause why the several causes of action should not be joined together in one suit, and to make such order for trial of the same as the High Court shall seem fit." 13. In this regard, it is appropriate to consider the decisions relied on by the learned counsel for the parties: (a) 1993 (2) M.L.J. 132 (Madras High Court-Division Bench): (Brooke Bond India Ltd. Vs. Balaji Tea (India) P. Ltd): "5. We do not think it necessary to go further into the various aspects of the case that the learned single Judge has discussed in his judgment and we shall presently see as to what may be necessary for attracting Clause 14 of the Letters Patent and when. It is conceded when the suit in one part for the relief as to the copyright is maintainable exercising jurisdiction to amalgamate such causes of action that are closely allied and associated with the trade and business of the plaintiff and defendant in which trade and business the copyright involved is involved, the court should avoid multiplicity of the suit, and order joinder of causes of action...." (b) 1993 (2) L.W. 453 (Division Bench of the Madras High Court): Food Corporation of India, etc. Vs. M/s.Mayavaram Financial Syndicate, etc. "Clause 14 of the Letters Patent is not a provision wherein joinder of several causes of action is contemplated to amalgamate them to enhance the valuation so as to bring the case within the pecuniary jurisdiction of this Court. In fact, this clause has made no reference to the pecuniary jurisdiction of the Court. All that it says is, 'High Court shall have original jurisdiction in respect of one of such causes of action'. Local limits of the ordinary original jurisdiction of the High Court are determined by the provisions in the original recitals of the Letters Patent of this Court, amended from time to time by the Madras High Court (Jurisdictional Limits) Amendment Act, 1927 as well as Madras High Court (Jurisdictional Limits) Amendment Act, 1947." "9. A Full Bench of this Court in the case of Ramamirtham v. Rama Film Service (AIR 1951 Madras 93 = (1951) 2 M.L.J. 121 (F.B) ) has considered the question, whether S.15, C.P.C. governs Chartered High Courts and whether in view of it all suits below Rs.10,000/- in value, now may be read Rs.1,00,000/- should not be instituted direct in the City Civil Court, in some details and since this question had arisen for the reason of a controversy, whether the High Court could transfer suits instituted on its original side before the Amendment Act under which the valuation was raised for the suit in the City Civil Court to rupees ten thousand, the court also considered the effect of the provisions in the Presidency Small Cause Courts Act, 1882, and various provisions of the Letters Patent of this Court in some details. Of the three Judges consisting the Bench, two delivered separate but concurring judgments and the third agreed with both of them. Satyanarayana Rao, J. in his judgment has expounded as follows: "1. The High Court, therefore, has practically unlimited original jurisdiction except that if the debt or damage or the value of the property does not exceed Rs.100/- and the case is one which falls within the jurisdiction of the Small Cause Court at Madras the High Court in its original jurisdiction cannot try such a suit ... 2. The local limits of the jurisdiction of the small cause court is co-extensive with the ordinary original civil jurisdiction of the High Court. A small cause court is empowered to try all suits of a civil nature subject to the exceptions contained in S.19 of the Act if the amount or value of the subject matter did not exceed Rs.2000/- and further subject to the conditions regarding the cause of action and the residence of the debts, contained in cls.(a) to (c) of S.18, S.21 of the Act, however, gave an option to the plaintiff, when the amount or value of the subject matter of the suit exceeded Rs.1000 to institute the suit either in the High Court on its original side or in the small cause court. In 1892 the Madras City Civil Court Act was passed by the Legislature which empowered the local Govt. by notification in the Official Gazette to establish a Court, to be called the Madras City Civil Court, with jurisdiction to receive, try and dispose of all suits and other proceedings of a Civil nature not exceeding RS.2500/- in value and arising within the City of Madras. .... In 1935 the Act was amended by introducing a new section, S.3 (already mentioned above). Appeal as against the decisions of the City Civil Court lie to the High Court and the right of appeal is conferred by S.15 of the Act. 3. The pecuniary jurisdiction of the Civil Civil Court is increased by Notification under S.3-A." We are saved of any further exercise into the controversy for the reason of a well considered verdict wherein Satyanarayana Rao,J. has also said: "The first of the questions referred to us relates to the applicability of S.15 C.P.C. to Chartered High Courts. In other words, the question is if a suit is below rupees ten thousand in value, is the litigant bound to institute it is the City Civil Court, as the Court of the lowest grade competent to try it. S.15 of the Code directs that every suit shall be instituted in the Court of the lowest grade competent to try it. Under Cl.12 of the Letters Patent, subject to one qualification, the High Court has unlimited original jurisdiction and this jurisdiction was saved under S.16, City Civil Court Act (7 of 1892). Competency contemplated by this Section is pecuniary competency and it has been held that this Section lays down a rule of procedure and not of jurisdiction. While it enjoins the institution of a suit in the Court of the lowest grade competent to try it, it does not oust the jurisdiction of the Court of a higher grade. Even if the Court of a higher grade tries and disposes of a suit which could have been instituted in a court of a lower grade, the decision rendered is not without jurisdiction and is not a nullity. It has now been decided by the Privy Council is Sabitri Thakurain v. Savi 48 Cal. 481 = AIR (8) 1921 P.C. 80 that the C.P.C. of 1908 and the rules contained in the orders apply to proceedings in the High Court, whether original or appellate, except so far as the Code expressly provided to the contrary. The question that actually arose for decision in that case was whether the provision in O.41, R.10, C.P.C., of 1908 applied to an appeal under Cl.15 of the Letters Patent as this provision was not expressly excluded by the Code and it was held that an appeal under S.15 of the Letters Patent was governed by that provision. The scheme of the Code, according to their Lordships of the Judicial Committee, is to provide "Generally for the mode in which the High Court is to exercise its jurisdiction, whatever it may be, while specifically excepting the powers relating to the exercise of original civil jurisdiction, to which the Code is not to apply. It confers a general rule making power saving only what is excepted in the body of the Code." It would appear, therefore, that unless there is some other provision which is inconsistent with S.15 or there is other reason for inferring that the Legislature did not intend by enacting S.15 in the Code to affect in any manner or to any extent the original civil jurisdiction conferred on the High Court under Cl.12 of the Letters Patent, S.15 necessarily would apply. S.15 occurs in the fascicule of Ss.15 to 20 relating to place of suing. The Calcutta High Court had occasion to examine the scheme of these sections in order to determine whether S.21 which is not expressly excluded under S.120 applied to the original jurisdiction of the High Court. The view taken by the Calcutta High Court was that it did not. Dealing with S.15 of the Code, Ranking, C.J. in Mahindra Chandra v. Lal Mohan 56 Cal. 949 = AIR (16) 1929 Cal. 358 observed that it had no application either in practice or in substance to the original jurisdiction of the High Court i.e., however, expressly stated that he was not considering the position of the City Civil Court in Madras or matters of that kind. The Rangoon High Court in Bank of Chettinad v. S.P.K.V.R.Firm, AIR (22) 1935 Rang. 517 = 160 I.C. 808 was also of opinion that S.15 did not apply to the High Court, in the exercise of its original civil jurisdiction notwithstanding that it is not one of the excepted Sections mentioned in S.120 of the Code. The conclusion was based on the arrangement of the group of sections relating to place of suing most of which were expressly excluded by S.120 as inapplicable to chartered High Courts. In my view there is much to be said in favour of the view taken by the Calcutta and Rangoon High Courts in the two decisions above referred to. The City Civil Court Act expressly saved the original civil jurisdiction of the High Court and the policy of the Legislature has been not to touch the original jurisdiction of the High Court. The scheme of the entire group of sections relating to place of suing cannot be made applicable when a self-contained provision relating to place of suing was laid down in Cl.12 of the Letters Patent. The practice has also been so far not to apply S.15 to the original jurisdiction of the High Court. Apart from this in my opinion proviso (1) to S.16, Madras City Civil Court Act, is clearly inconsistent with S.15 and does not make it obligatory on the plaintiff to choose the lowest Court of pecuniary jurisdiction to institute a suit when the conflict is between the City Civil Court and the High Court. The only disability which the proviso imposes in a case where a suit which ought to have been instituted in the City Court has been instituted in the High Court is that the successful plaintiff should be deprived of his costs and the successful defendant should be allowed his costs as between attorney and client. It must be remembered that O.7 R.10 was not made applicable to the chartered High Courts and if a plaint which ought to have been filed in a Court of lower pecuniary jurisdiction is in fact filed in the higher Court, viz., the High Court, the High Court cannot return the plaint and in such a case the High Court has the option of following one of two courses, provided in the first proviso to S.16 or to transfer the suit under proviso 2 to the said section. Proviso (1) recognises the right of the litigant to institute a suit which ought to have been filed in the City Civil Court even in the High Court and there is no mandatory provision like S.15 in the City Civil Court Act enjoining upon him the duty of resorting to the Court of lowest pecuniary jurisdiction. The proviso (1) to S.16, in my opinion, clearly negatives the applicability of S.15 when the City Civil Court happens to be the Court of the lowest grade competent to try the suit. It was also argued with some force that the gradation contemplated by S.15 is only the gradation or subordination of courts provided in S.3 of the Code, S.3 says that for the purposes this Code, the District Court is subordinate to the High Court. Every civil court of a grade inferior to that of a District Court and every court of small causes is subordinate to the High Court and District Court. It follows that in the gradation of Courts contemplated by the Madras Civil Courts Act, i.e., the Munsif Court, the Sub Court, the District Court and the High Court and Small Causes Courts there are two kinds of gradation. One is the gradation beginning with the District Court and ending with the District Munsif's Court so far as the institution of the suits is concerned and the High Court and the Small Causes and Court constituted another kind of gradation. At the head of all, no doubt, is the High Court but in the chain of gradation of Courts, the City Civil Court does not come in and it is possible to assume that for the purpose of the Code, the gradation contemplated is the gradation referred to in S.3. In this view S.15 would apply only when there is necessity to choose the