Case: Seth Hiralal Patni Vs. Sri Kali Nath

The appellant wished to acquire shares in certain mills, popularly known as John Mills, at Agra. He engaged the services of the respondent to negotiate the deal on certain terms, The bargain was concluded, and the appellant, together with another person, purchased the entire interest of one Major A. U. John by an indenture of sale dated July l0, 1946. The respondent instituted a suit, being suit No. 3718 of 1947, on the original side of the High Court of Judicature at Bombay for recovery of his commission, amounting to one lakh of rupees, in respect of the transaction afore said.2. The suit was eventually referred to the arbitration of one Mr. W. E. Pereira, administrator of the estate of the aforesaid Major A. U. John, deceased. One of the defences taken by the appellant, as defendant in the action, was that the suit filed in the Bombay High Court, as aforesaid, after obtaining leave of that Court under Cl. 12 of the Letters Patent, was outside the territorial jurisdiction of the Bombay High Court on the original side, inasmuch as the entire cause of action, if any, had arisen at Agra. The arbitrator gave an award in favour of the respondent to the extent of decreeing his claim for only seventy five thousand rupees as commission, with interest at 6% per annum pendente lite. Proceedings were taken in the High Court of Bombay for setting aside the award on certain grounds, not necessary to be stated here. The Bombay High Court found that there was no defect in the award and that there was no legal misconduct on the part of the arbitrator. The High Court further held that the petition was frivolous, and dismissed it with costs. The appellant preferred an appeal which was dismissed by a Division Bench of the High Court of Bombay on January 21, 1952. The award was, thus, incorporated in a decree of the High Court. That decree was transferred to the Court of the District Judge, Agra, for execution. On February 5, 1952, the execution proceedings were instituted by the decree-holder in the Court of the Civil Judge, Agra, to realise the sum of one lakh ten thousand rupees, approximately, on the basis of the decree passed as aforesaid by the Bombay High Court.3. The appellant, as judgment-debtor put in an objection under Ss. 47 and l51 of the Code of Civil Procedure, objecting to the execution of the decree on a number of grounds, of which it is only necessary to notice the one challenging the jurisdiction of the High Court to entertain the suit and to make the award a decree of Court. It was contended that the Bombay High Court had no jurisdiction to entertain the suit as no part of the cause of action even arose within the territorial jurisdiction of that Court, that, therefore, all the proceedings following thereupon were wholly without jurisdiction. The learned Execution Judge, by his judgment and order dated April 3, 1954 dismissed the objection petition with costs. The appellant then preferred an appeal to the High Court of Judicature at Allahabad against the aforesaid judgment and order of the Executing Court. The appeal, being Execution First Appeal No. 137 of 1954, was ultimately dismissed by a Division Bench of the Allahabad High Court, by its judgment dated January 27, 1955. The judgment debtor-appellant moved the High Court and obtained the necessary certificate that the case was a fit one for appeal to this Court; and that is how the matter is before us.

Court's reasoning:
In our opinion, there is no substance in this contention. There was no inherent lack of jurisdiction in the Bombay High Court where the suit was instituted by the plaintiff-decree-holder. The plaint had been filed after obtaining the necessary leave of the High Court under Cl. 12 of the Letters Patent. Whether the leave obtained had been rightly obtained or wrongly obtained is not a matter which can be agitated at the execution stage. The validity of a decree can be challenged in execution proceedings only on the ground that the court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seizin of the case because subject matter was wholly foreign to its jurisdiction or that the defendant was dead at the time the suit had been instituted or decree passed, or some such other ground which could have the effect of rendering the court entirely lacking in jurisdiction in respect of the subject matter of the suit in over the parties to it. But in the instant case there was no such inherent lack ofdecision has no relevance to a case like the present where there could he no question of inherent lack of jurisdiction in the sense that the Bombay High Court was incompetent to try a suit of that kind. The objection to its territorial jurisdiction is one which does not go to the competence of the Court and can, therefore, be waived. In the instant case, when the plaintiff obtained the leave of the Bombay High Court on the original side, under Cl. 12 of the Letters Patent, the correctness of the procedure or of the order granting the leave could be questioned by the defendant or the objection could be waived by him. When he agreed to refer the matter to arbitration through Court, he would be deemed to have waived his objection to the territorial jurisdiction of the Court, raised by him in his written statement. It is well settled that the objection as to local jurisdiction of a court does not stand on the same footing as an objection to the competence of a court to try case. Competence of a court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is a case of inherent lack of jurisdiction. On the other hand an objection as to the local jurisdiction of a court can be waived and this principle has been given a statutory recognition by enactments like S. 21 of the Code of Civil Procedure. Having consented to have the controversy between the parties resolved by reference to arbitration through court, the defendant deprived himself of the right to question the authority of the Court to refer the matter to arbitration or of the arbitrator to render the award. It is clear, therefore, that the defendant is estopped from challenging the jurisdiction of the Bombay High Court to entertain the suit and to make the reference to the arbitrator. He is equally estopped from challenging the authority of the arbitrator to render the award. In our opinion, this conclusion is sufficient to dispose of the appeal. It is not, therefore, necessary to determine the other points in controversy, including the question whether the Decrees and Orders Validating Act, 1936 (Act V of 1936) had the effect of validating what otherwise may have been invalid.