Case: The Bahrein Petroleum Co. Ltd Vs. P. J. Pappu And Another

1. The plaintiff was a typist clerk in the employ of the second defendant, the Bahrein Petroleum Co. Ltd. The first defendant was the recruiting agent of the Company at Bombay. The contract of service was signed at Bombay. The zone of operation under the contract of service was Bahrein Island outside India. The plaintiff instituted a suit for recovery of gratuity and arrears of salary against the Company and its recruiting agent in the Court of the Sub-ordinate Judge of Cochin. Both defendants applied to the Cochin Court for stay of the suit under S. 34 of the Indian Arbitration Act, 1940. The Cochin Court refused to stay the suit. An appeal from this order to the District Court of Ernakulam was dismissed, and a revision petition to the High Court was dismissed in limine. In the meantime, the Cochin Court passed an order declaring that the suit should proceed ex parte. On an application by the defendants this order was set aside, and the defendants were allowed to file their written statement. In their written statement, the defendants pleaded on the merits and also disputed the territorial jurisdiction of the Cochin Court. On the application of the defendants, the Cochin Court tried the preliminary issue as to jurisdiction. The Cochin Court held that it had no territorial jurisdiction to try the suit, and directed the return of the plaint for presentation to the proper Court. An appeal to the District Judge of Ernakulam was dismissed. But, on revision, the High Court of Kerala held that the defendants had waived the objection as to the territorial jurisdiction of the trial Court, set aside the orders of the lower Courts, and directed the Cochin Court to try the suit on the merits. The second defendant now appeals to this Court by special leave.

Court's reasoning:
7. Counsel for the plaintiff also submitted that the defendants having neither alleged nor proved that there has been a failure of justice in consequence of the order of the High Court, they are precluded by S. 21 of the Code from raising this objection in this Court. We think that this contention has no force. The suit has not yet been tried on the merits. So far, only the preliminary issue as to jurisdiction has been tried. That issue was decided in favour of the defendants by the trial Court and the District Court and against them by the High Court, and from the order of the High Court, this appeal has been filed. There cannot be a consequent failure of justice at this stage. The condition "unless there has been a consequent failure of justice" implies that at the time when the objection is taken in the appellate or revisional Court, the suit has already been tried on the merits. The section does not preclude the objection as to the place of suing, if the trial Court has not given a verdict on the merits at the time when the objection is taken in the appellate or revisional Court. The point is clearly brought out in the judgment of Venkatarama Aiyar, J. in Kiran Singh v. Chaman Paswan, 1955-1 SCR 117  at p. 122: (AIR 1954 SC 340  at p. 342), thus:"The policy underlying Ss. 21 and 99 of the Civil Procedure Code and S. 11 of the Suits Valuation Act is the same, namely, that when a case had been tried by a Court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice, and the policy of the Legislature has been to treat objections to jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate Court, unless there has been a prejudice on the merits.