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particular Defendant. Reliance was placed on a Division Bench
judgment of this Court in the case of Sheela Ram Vidhani & Anr Vs S.K.
Trading Company & Ors,4 wherein a Division Bench of this Court
enunciated that in view of the judgment of the Supreme Court, in the
case of Church of Christ Charitable Trust And Education Charitable
Society Vs Ponniamman Educational Trust5 which was delivered prior in
point of time to the decision of the Supreme Court in the case of Madhav
Prasad Aggrawal Vs Axis Bank Limited,6 a Plaint can be rejected as a
whole against some of the Defendants. Therefore, there was no embargo
on the rejection of the Plaint in the instant Suit qua Defendant Nos. 1
and 2.
10. In opposition to this, Mr. Vaishnav, the learned Counsel for
Respondent No.1-Plaintiff would support the impugned order. Mr.
Vaishnav submitted that the learned District Judge rightly held that the
Defendant Nos. 1 and 2 had submitted to the jurisdiction of the
Commercial Court at Pune by acts of omission and commission.
11. In any event, since a part of cause of action had arisen within the
local limits of the jurisdiction of the Commercial Court at Pune, in view
of the provisions contained in Section 20 (c) of the Code, the
Commercial Court at Pune has the jurisdiction to entertain, try and
4 2021 SCC OnLine Bom 864.
5 (2012) 8 SCC 706.
6 (2019) 7 SCC 158.
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decide the Suit qua Defendant Nos. 1 and 2 also. The principle of Private
International Law, pressed into service by Defendant Nos. 1 and 2 is not
absolute. It is subject to the local law which confers the jurisdiction on
the domestic Courts over the foreigners.
12. It was forcefully canvassed by Mr. Vaishnav that Section 20(c) of
the Code confers jurisdiction on a Court in India over the foreigners if
the cause of action arose within the jurisdiction of this Court. To this
end, Mr Vaishnav placed a strong reliance on a Constitution Bench
judgment of the Supreme Court in the case of Lalji Raja & Sons Vs Firm
Hansraj Nathuram.7 Reliance was also placed on a Division Bench
judgment of the Patna High Court in the case of Suresh Narain Sinha Vs
Akhauri Balbhadra Prasad & Ors8 and a decision in the case of the
Gaekwar Baroda State Railway Vs Habib Ullah.9
13. Mr. Vaishnav further urged that the position in law that a Plaint
cannot be rejected qua a particular Defendant is also well-recognized.
Reliance was placed on a decision of the Supreme Court in the case of
Sejal Glass Limited Vs Navilan Merchants Private Limited, 10 wherein it
was postulated that, if the claim survives against certain Defendants
and/or property, Order VII Rule 11 will have no application at all, and
the Suit as a whole must then proceed to trial.
7 1971(1) SCC 721.
8 1957 SCC OnLine Pat 7.
9 1933 ILR 828.
10 (2018) 11 SCC 780.
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14. In the light of the aforesaid rival submissions, the core question
that comes to the fore is whether the Commercial Court at Pune was
justified in exercising the jurisdiction qua Defendant Nos. 1 and 2?
15. The facts are not much in contest. Defendant Nos. 1 and 2 are
foreign residents, or for that matter, it is, by and large, not controverted
that Defendant Nos. 1 and 2 do not carry on business in India.
16. The crux of the Plaintiff's case is that Defendant No.2 induced it
to make the bookings by addressing communications and making
representations that the amount would be remitted. Later on, it was
falsely claimed that somebody impersonated Defendant No.2 and
induced the Plaintiff to make the bookings. It is the claim of the Plaintiff
that the bookings were made and the emails were received and the
representations were made to the Plaintiff at Pune. Therefore, a part of
cause of action has arisen within the local limits of the jurisdiction of the
Courts at Pune.
17. At the outset, it is imperative to note that a meaningful reading
of the Plaint, especially the averments in paragraphs 75 and 76, lead to
a sustainable inference that a part of the cause of action has arisen
within the local limits of the jurisdiction of the Courts at Pune. I find it
rather difficult to accede to the submission on behalf of the Defendant
Nos. 1 and 2 that no part of cause of action has arisen within the local
limits of the Courts at Pune. It is trite that, cause of action is a bundle
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of facts. In the case at hand, the Plaintiff has adverted to various facts
which transpired within the local limits of jurisdiction of the Courts at
Pune, commencing from the initial representation made by Defendant
Nos. 3 to 5, the email purportedly addressed by Defendant No.2, the
representation purportedly made by Defendant No.2 professing to remit
the amount to the Plaintiff and the eventual disclaimer made by
Defendant No.1 that the bookings were made without instructions or
approvals of Defendant No.1, and someone fraudulently represented
himself as an employee of the Defendant No.1 -Company.
18. This takes me to the thrust of the submission on behalf of the
Defendant that the provisions of Section 20(c) of the Code would not
override the principle of Private International Law. The edifice of the
submission was sought to be built on the enunciation of law in the case
of World Tanker Carrier Corporation (Supra). Before proceeding to note
the principles enunciated therein, it may be apposite to clearly
appreciate the factual backdrop in which the law was postulated in he
case of World Tanker Carrier Corporation (Supra).
19. In World Tanker Carrier Corporation (Supra) the question of
jurisdiction arose out of a limitation action in the claims against the
owners of the vessel for compensation for the damage. The Supreme
Court enunciated that the right of an owner to bring a limitation action
was governed by Part X-A of the Merchant Shipping Act 1958. The
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whole purpose of limitation of liability was to protect an owner against
large claims, far exceeding the value of the Ship and cargo, which can
be made against him all over the world in case his ship meets with an
accident causing damage to cargo, to another vessel or loss of life or
personal injury. A limitation action, though it is normally filed in the
admiralty jurisdiction of a Court, is somewhat different from an ordinary
admiralty action which normally begins with the arrest of the defaulting
vessel. The vessel itself, through its master, is a party in the admiralty
suit, and the plaintiff must have claims provable in admiralty against the
vessel. In the case of an action for limitation of liability, it is the personal
right of the owner of the vessel to file a limitation action or to use it as a
defence to an action against him for liability. It is a "defensive" action
against claims in admiralty filed by various claimants against the owner
of the vessel and the vessel. A limitation action need not be filed in the
same forum as a liability action. But it must be a forum having
jurisdiction to limit the extent of such claims and whose decree in the
form of a limitation fund will bind all the claimants.
20. After referring to the Brussels convention 1957, especially Article
7, the Supreme Court enunciated that Article 7 gives to a contracting
State the right to exclude certain persons from the benefit of its
provisions. Thus persons not ordinarily resident in a contracting State
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nor having their principal place of business in the contracting State and
ships not flying the flag of the contracting State, can be excluded.
21. Thereafter, the Supreme Court observed as under:
"20. Under principles of Private International Law, a
court cannot entertain an action against a foreigner resident
outside the country or a foreigner not carrying on business
within the country, unless he submits to the jurisdiction of
the court here. This principle applies to actions in
personam."
22. It is also necessary to note the observations in paragraph 43,
wherein the Supreme Court exposited that appearance before the
Domestic Court, under protest, does not amount to submission to the
jurisdiction of the Domestic Court. They read as under.
"43. The presence of a foreign defendant who appears under
protest to contest jurisdiction, cannot be considered as
conferring jurisdiction on the court to take action. Unless a
foreign defendant either resides within jurisdiction or
voluntarily appears or has contracted to submit to the
jurisdiction of the court, it is not possible to hold that the court
will have jurisdiction against a foreign defendant. See in this
connection R. Viswanathan Vs Rukn-ul-Mulk Syed Abdul Wajid
(AIR 1963 SC 1) and Raj Rajendra Sardar Moloji Nar Singh Rao
Shitole Vs Shankar Saran (AIR 1962 SC 1737). This factor also,
therefore, is against the respondents in the present appeals."
23. In the case of Kohinoor Carpet Manufactures (Supra) the Plaintiff
had instituted a Suit against a Shipping Company (D2) and it's Shipping
agent (D1) for the loss of cargo at destination. The Plaintiffs had
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prayed that the claim for loss of cargo may be enforced by action in rem
against "HOEGH DRAKE", the carrier, and against the shipping company
and the shipping agent, in personam. It was also asserted that, the office
of the shipping agent (D2) was situated at Bombay within the
jurisdiction of the High Court in its Admiralty and Vice-Admiralty
jurisdiction.
24. This Court ruled that the action in personam cannot be
maintained against the shipping company (D2) as D2 did not carry on
business and/or had office within the jurisdiction of this Court and that
the shipping company had not submitted to the jurisdiction of this
Court. On the contrary, D2 had raised a plea contesting the jurisdiction
of this Court. Reliance was placed on the afore-extracted observations in
Paragraph 43 of the judgment in the case of World Tanker Carrier
Corporation (Supra).
25. In the case of Angsley Investments Limited (Supra) a Division
Bench of this Court, followed the decision in the cases of World Tanker
Carrier Corporation (Supra) and Kohinoor Carpet Manufactures (Supra)
to hold that an action in personam against a foreign Defendant not
within the jurisdiction of this Court was not maintainable. It was
enunciated that it is trite law that the Suit in personam qua a foreign
Defendant who is not within the jurisdiction of the Court and who has
not voluntarily submitted to jurisdiction, is not maintainable. In the said
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case, Defendant No.2 had chosen not to enter appearance before the
Court. Nor voluntarily submitted to the jurisdiction of the Court.
26. On the aspect of submission to the jurisdiction of the Court at
Pune, I find substance in the submission of Mr. Parikh that the learned
District Judge was not justified in drawing an inference that the
Defendants voluntarily submitted to the jurisdiction of the Court by not
replying to the notice, or by filing an Application to set aside the order
to proceed ex-parte or by filing Written Statement. The failure to give
reply to pre-suit notice can, by no stretch of imagination, be construed
as a submission to the jurisdiction of the Court.
27. This Court also finds that in the Application to set aside the order
to proceed to ex-parte, as well as in the Written Statement filed on
behalf of Defendant Nos. 1 and 2 there are clear and categorical
contentions that Defendant Nos.1 and 2 were not submitting to the
jurisdiction of the Court and those applications and Written Statements
were filed without prejudice to the contentions of Defendant Nos. 1 and
2 that the Court had no jurisdiction over them. Such appearance before
the Court with such express disclaimer and, in a sense, under protest,
could not have been legitimately construed as submission to the
jurisdiction of the Court. This leads to me to the core controversy.
28. Mr. Vaishnav, the learned Counsel for the Plaintiffs made an
endeavour to persuade the Court to hold that the aforesaid
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pronouncements do not govern the facts of the case at hand. The
jurisdiction of the Commercial Court at Pune would be governed by the
provisions contained in Section 20(c) of the Code. If it could be shown
that a part of the cause of action arose within the local limits of
jurisdiction of the Domestic Court and the municipal legislation
conferred the jurisdiction on the Domestic Court, then the fact that the
foreign resident had not submitted to the jurisdiction of the Domestic
Court is of no significance.
29. To buttress this submission, Mr. Vaishnav placed a very strong
reliance on the Constitution Bench judgment in the case of Lalji Raja &
Son (Supra). The facts in the case of Lalji Raja & Son (Supra) deserve to
be noted, first. In the said case, the decree holders had obtained a
decree against the Respondent in the Court of Bankura (West Bengal).
The decree came to be transferred to the Court at Morena in the State of
Madhya Bharat for execution with a certificate of non-satisfaction. The
executing Court at Morena dismissed the Execution Petition on the
ground that the Morena Court had no jurisdiction to execute the same as
the decree was that of a foreign Court and the same had been passed ex-
parte. On 1st April 1951, the Code of Civil Procedure 1908 was extended
to the former State of Madhya Bharat as well. Thereafter, the decree
holders filed another execution case before the Bankura Court. The
decree was again transferred by Bankura Court to the Morena Court for
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execution. The judgment debtors raised objection, inter alia, that the
decree was not executable as it was a decree of a foreign Court. A
question thus arose before the Supreme Court, whether the decree in
execution was not executable by Courts situated in the area comprised
in the former State of Madhya Bharat.
30. The Supreme Court repelled the contention that judgment in
question was a foreign judgment. The observations in paragraphs 7 and
8 of the judgment are material and hence extracted below.
"7. Reliance was placed on Private International Law in
support of the contention that in a personal action, a decree pro-
nounced in absentem by a foreign court, to the jurisdiction of
which the defendant had not in any way submitted himself is an
absolute nulity. It was urged that the Bankura court had no
jurisdiction over the judgment-debtors and therefore the decree
passed being one pronounced in absentem is a nullity. In support
of this contention reliance was placed on the decision of the
Judicial Committee in Sirdar Gurdyal Singh v. The Rajah of
Faridkote (21 IA 171). Therein the Judicial Committee observed:
"In a personal action, to which none of these causes of
jurisdiction apply, a decree pronounced in absentem by a foreign
Court, to the jurisdiction of which the Defendant has not in any
way submitted himself, is by international law an absolute
nullity."
But the Board qualified those observations by the following
words :
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"He is under no obligation of any kind to obey it; and it
must be regarded as a mere nullity by the Courts of every nation
except (when authorised by special local legislation) in the
country of the forum by which it was pronounced."
8. The above remarks of the Board indicate that even a decree
which is pronounced in absentem by a foreign court is valid and
executable in the country of the forum by which it was
pronounced when authorised by special local legislation. A
decree passed by a foreign court to whose jurisdiction a
judgment-debtor had not submitted is an absolute nullity only if
the local legislature had not conferred jurisdiction on the
domestic courts over the foreigners either generally or under
specified circumstances Section 20(c) of 'the Code' confers
jurisdiction on a court in India over the foreigners if the cause of
action arises within the jurisdiction of that court. Hence the
observation of the Board quoted in some of the decisions of the
courts in India including the decision of this Court in Rajendra
Sardar Maloji Narasingh Rao Shitole Vs Sri Shankar Sareen and
Others (1963) 2 SCR 577, that such a decree is an 'absolute
nullity' may not be apposite. It may be more appropriate to say
that the decree in question is not executable in courts outside
this country. The board itself had noticed that this rule of Private
International law is subject to special local legislation. Clause (c)
of Section 20 of 'the Code' provided at the relevant time and still
provides that subject to the limitations mentioned in the earlier
sections of 'the Code', a suit can be instituted in a court within
the local limits of whose jurisdiction the cause of action wholly
or in part, arises. There is no dispute in this case that the cause of
action for the suit which led up to the decree under execution
arose within the jurisdiction of Bankura court. Hence it must be
held that the suit in question was a properly instituted suit. From
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that it follows that the decree in question is a valid decree
though it might not have been executable at one stage in courts
in the former Indian States."
31. The Supreme Court has in terms enunciated that a decree passed
by a foreign Court to whose jurisdiction a judgment debtor had not
submitted is an absolute nullity only if the local legislation had not
conferred jurisdiction on the domestic Court over the foreigners either
generally or under specified circumstances. Section 20 (c) of the Code
confers jurisdiction on a Court in India over the foreigners if the cause
of action arises within the jurisdiction of that Court. Therefore, the
observations of the Judicial Committee in the case of Sirdar Gurdyal
Singh Vs the Rajah of Faridkote11 and quoted in some of the decisions of
the Court in India that such a decree is an "absolute nullity" may not
apposite.
32. Mr. Parikh, the learned Counsel for the Petitioners made a
strenuous effort to distinguish the aforesaid pronouncement in the case
of Lalji Raja and Sons (Supra) on the ground that the said decision was
not squarely on the aspect of jurisdiction. On the contrary, the issue of
executability of a decree passed by a competent Court having
jurisdiction, arose in the case of Lalji Raja and Sons (Supra), urged Mr.
Parikh.
11 21 IA 171.
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33. I find it rather difficult to accede to this submission. The principle
of Private International Law, which was adverted to in the case of World
Tanker Carrier Corporation (Supra) was qualified by the Judicial
Committee of the Privy Council by observing "it must be regarded as
nullity by every nation (when authorised by special local legislation) in
the country of the forum by which it was pronounced." The Supreme
Court has expressly enunciated that Section 20(c) of the Code amounts
to such special local legislation and confers jurisdiction on the Courts
within local limits of whose jurisdiction the cause of action, wholly or in
part arises. It is also imperative to note that the Supreme Court
specifically enunciated that the contrary observations of the Board
quoted in some of the decisions, including the decision of the Supreme
Court in the case of Raj Rajendra Sardar Maloji Marsingh Rao Shitole Vs
Shankar Saran & Ors,12 -- from which support was drawn by the
Supreme Court in World Tanker Carrier Corporation (Supra) -- may not
be apposite.
34. The situation which, thus, emerges that the pronouncement of
the Constitution Bench in the case of Lalji Raja and Sons (Supra)
governs the case of a more general nature whereas World Tanker Carrier
Corporation (Supra) was rendered in the specialized admiralty
jurisdiction. In the case of World Tanker Carrier Corporation (Supra),
the Supreme Court explicitly referred to the fact that the admiralty
12 AIR 1962 SC 1737.
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jurisdiction of the Charted High Court was governed by Letters Patent.
Thus, Section 20 of the Code will not govern the admiralty jurisdiction
of a chartered High Court regulated by its Letters Patent. Consequently,
a limitation action in admiralty jurisdiction cannot be filed in the Court
where a part of the cause of action arises where all the claimants who
are the Defendants to the action are foreigners who reside outside India,
who do not carry on business in India and who have not submitted to
the jurisdiction of any Court in India.
35. The observations in paragraphs 33 and 34 of the judgment in the
case of World Tanker Carrier Corporation (Supra) deserve to be
extracted. They read as under.
"33. Is there any other court which will have
jurisdiction? learned counsel for SNP drew our
attention to Clause 12 of the Letters Patent, Section
20(2) of the Civil Procedure Code and Section 3(15) of
the Merchant Shipping Act and submitted that the
Court within whose jurisdiction a part of the cause of
action arises is a court having jurisdiction in a
limitation action.
34. As earlier stated, Section 3(15) has no
application to a limitation action. Clause 12 of the
Letters Patent also has no application because a
limitation action is governed by Clause 32 of the
Letters Patent and not Clause 12. For the same reason,
Section 20 of the Civil Procedure Code will not govern
the admiralty jurisdiction of a chartered High Court
regulated by its Letters patent. A limitation action in
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admiralty jurisdiction cannot be filed in a court where
a part of the cause or action arises when all claimants
who are defendants to the action are foreigners who
reside outside India, who do not carry on business in
India and who have not submitted to the jurisdiction
of any court in India, and have not filed a liability
action here and are not likely to do so."
36. In view of the aforesaid enunciation of law, the decision in
World Tanker Carrier Corporation (Supra) can be said to have been
rendered in the context of a limitation action in admiralty jurisdiction.
Nay, the applicability of the provisions contained in Section 20 of the
Code was explicitly ruled out as admiralty jurisdiction of the High Court
was governed by the Letters Patent.
37. The necessary corollary of the aforesaid enunciation is that in the
case of World Tanker Carrier Corporation (Supra) the principle of Public
International Law, forcefully canvassed on behalf of Defendant Nos. 1
and 2, was not tested on the anvil of the limitation thereto, in view of a
special provision under the local legislation, i.e., Section 20(c) of the
Code. Thus, the decision of the Constitution Bench in the case of Lalji
Raja and Sons (Supra), which specifically refers to the conferment of
jurisdiction by a special law, i.e., Section 20(c) of the Code, cannot be
said to be inapplicable to the facts of the case at hand.
38. The matter can be looked at from another perspective. Ordinarily,
the Civil Court has jurisdiction to try all disputes of civil nature except
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where its jurisdiction is either expressly or impliedly barred. It is equally
well settled that the exclusion of the jurisdiction of the Civil Court is not
to be readily inferred. The presumption is in favour of existence of the
jurisdiction rather than its exclusion. The rigid rule of Private
International Law that a foreign resident cannot be proceeded against
unless he voluntarily submits to the jurisdiction of the domestic Court,
despite the cause of action having been arisen within the local limits of
the jurisdiction of the domestic Court, is also required to be appreciated
in the light of the paradigm change in the mode of businesses, especially
on a virtual platform. The geographical boundaries and logistical
barriers to trade and commerce have long perished. With the
globalization and exponential increase in the business transactions on
virtual mode, it may not be appropriate to take a very constricted view,
where a cause of action arises within the local limits of the jurisdiction
of the domestic Court. Lest, the aggrieved party may be rendered
virtually remediless.
39. For the forgoing reasons, in my view, the decision of the
Constitution Bench in the case of Lalji Raja and Sons (Supra) deserves to
be applied to the facts of the case. The provisions contained in Section
20(c) provide the necessary jurisdictional competence to the
Commercial Court at Pune.
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40. Having taken the aforesaid view, it may not be necessary to delve
into the question as to whether the Plaint could have been rejected in
part against Defendant Nos. 1 and 2. Yet, I am afraid to accede to the
submissions on behalf of Defendant Nos. 1 and 2 that the Division Bench
judgment in the case of Sheela Ram Vidhani (Supra) sets the
controversy at rest. It is true, in the decision in the case of Sheela Ram
Vidhani (Supra), the Division Bench has enunciated that in view of the
judgment of the Supreme Court in the case of Church of Christ
Charitable Trust And Education Charitable Society (Supra) which was
rendered by a two Judge Bench prior in point of time to the decision in
the case of Madhav Prasad Aggrawal (Supra), rendered by a Bench of
co-equal strength, adhering to the principle of law of precedent
enunciated in the case of Sundeep Kumar Bafna Vs State of
Maharashtra,13 the decision in the case of Church of Christ Charitable
Trust And Education Charitable Society (Supra) was required to be
followed and thus there was no legal embargo in rejecting the Plaint as a
whole against some of the Defendants.
41. However, with respect, it needs to be noted that the attention of
the Division Bench, which rendered Sheela Ram Vidhani (Supra), does
not seem to have been drawn to a three Judge Bench judgment of the
Supreme Court in the case of D Ramchandran Vs R.V. Jankiraman &
13 2014 (16) SCC 623
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Ors14; which was prior in point of time also to the decision in the case of
Church of Christ Charitable Trust And Education Charitable Society
(Supra). In the case of D Ramchandran (Supra), the three Judge Bench
has explicitly enunciated that under Order VII Rule 11(a) of the Code,
there cannot be a partial rejection of the Plaint or the Petition. In the
said decision, a reference was made by the Supreme Court to an earlier
judgment in the case of Roop Lal Sathi Vs Nachhattar Singh Gill 15
wherein the Supreme Court enunciated that where the Plaintiff discloses
no cause of action, it is obligatory upon the Court to reject the Plaint as
a whole under Order VII Rule 11(a) of the Code. But the Rule does not
justify the rejection of any particular portion of a Plaint.
42. The upshot of the aforesaid consideration is that, the impugned
order deserves to be affirmed though the view of the learned District
Judge that Defendant Nos. 1 and 2 had submitted to the jurisdiction of
the Commercial Court cannot be sustained. Resultantly, the Petition
deserves to be dismissed.
43. Hence the following order.
:ORDER:
(i) The Petition stands dismissed.
(ii) No costs.
14 (1999) 3 SCC 267.
15 (1982) 3 SCC 487.
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(iii) Rule discharged.
[N. J. JAMADAR, J.]
