Gujarat High Court
Sarine Technologies Ltd vs Diyora And Bhanderi Corporation on 4 July, 2023
Bench: Ilesh J. Vora
C/SCA/4870/2022 ORDER DATED: 04/07/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4870 of 2022
With
CIVIL APPLICATION (FOR VACATING STAY) NO. 2 of 2022
In
R/SPECIAL CIVIL APPLICATION NO. 4870 of 2022
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SARINE TECHNOLOGIES LTD.
Versus
DIYORA AND BHANDERI CORPORATION
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Appearance:
MR SHALIN MEHTA, SR. ADV WITH DHWANI LAKHANI, ISHWAR UPNEJA,
VORA GAUR, AASHNA FOR ORTIS LAW OFFICES(12342) for the Petitioner
MR NEERAJ GROWER, RAJAT SABU WITH MANAN A SHAH(5412) for the
Respondent
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CORAM:HONOURABLE MR. JUSTICE ILESH J. VORA
Date : 04/07/2023
COMMON ORAL ORDER
1. This petition under Article 227 of the Constitution of India assails
the legality and correctness of the order dated 24.11.2021, passed
below Exh. 29, in Title Suit Diyora and Bhanderi Corporation Vs.
Sarine Technologies Ltd being registered as Special Civil Suit No.
191 of 2018, by which, the learned 23 rd Additional Senior Civil
Judge, Surat, rejected the prayer to frame the issue of jurisdiction as
a preliminary issue.
2. This Court has heard learned Senior Counsel Mr. Shalin Mehta for
Ortis Law Offices and Mr. Neeraj Grower, learned counsel with Mr.
Rajat Sabu and Mr. Manan Shah, learned advocates appearing for
the respective parties.
C/SCA/4870/2022 ORDER DATED: 04/07/2023
3. Facts and circumstances giving rise to file the present petition are
that, the plaintiff - respondent Diyora and Bhanderi Corporation
instituted a suit being Special Civil Suit No 191 of 2018, against the
present petitioner - defendant Sarine Technologies Ltd, seeking
damages for tortuous act of unlawful interference with the contract
and business relation worth Rs.5 crore and further grant of
permanent injunction against the petitioner defendant restraining
them from sending interfering letters / notices to the clients and
potential clients of the plaintiff.
3.1 The plaintiff - respondent is a partnership engaged in the business
of advisory services and providing technologies and policy process
for the Diamonds and Gemstone, having its office at Surat, State:
Gujarat. The primary business is assemble and selling of inclusion
scanning machinery and providing inclusion scanning and diamond
polishing services to its customers.
3.2 The defendant is a company incorporated under the laws of Israel
having its registered office at Israel and is engaged in the business to
provide diamond dealers and merchants either directly or indirectly
with the best in class equipment and services for the mapping
processing and trade of diamonds and other Gemstones. The
petitioner defendant has developed the Adviser registered software
for the use Rough Gemstone Planning Software.
C/SCA/4870/2022 ORDER DATED: 04/07/2023
3.3 Before filing the present suit, there is an ongoing suit for alleged
copyright infringement filed by the petitioner against the respondent
plaintiff, whereas, the another suit for patent infringement is also
filed against the respondent plaintiff.
3.4 It is in these background, suit in question is being filed, inter-alia,
alleging that, the letters and communications sent by the petitioner -
defendant to various business in United States and India constitute
threats and unlawful and tortuous interference and are illegal and
further sought an permanent injunction, restraining the petitioner -
defendant from circulating any notices / publications through any
correspondence or in any other manner, so as to stop the Tortuous
Interference in the running and contractual business of the plaintiff.
3.5 In the plaint para-42, it is specifically stated that, the Civil Court at
Surat has territorial jurisdiction to try and adjudicate upon the suit as
part of cause of action has arisen within the territorial limits of the
Court, wherein, other suits originated by the defendant, are being
pleaded and by virtue of letter being sent by Rogers and Holland on
provocation of defendant to various clients of the plaintiff based in
Surat urging not to trade with the plaintiff.
3.6 The petitioner - defendant vide Exh. 7, submitted an application
under Order 7 Rule 11 read with Section 151 of the Civil Procedure
Code, inter-alia, praying that, the Civil Court does not have
jurisdiction, territorial or otherwise, to entertain the present suit as
defendant neither has its office nor carries on business within
C/SCA/4870/2022 ORDER DATED: 04/07/2023
territorial jurisdiction of the Court. The alleged letters and press
release was not made in India and therefore, no cause of action, as
alleged or otherwise can be said to have arisen within the territorial
jurisdiction of the Court. The learned court below vide its order
dated 29.01.2019, rejected the said application. The order of the
Court below, challenged before this Court by preferring SCA No.
6027 of 2019 and this Court also rejected the petition vide order
dated 31.01.2020 and against the order of this Court, the matter went
to Apex Court in SLP No. 4824 of 2020. The Apex Court, vide order
dated 28.02.2020, while dismissing the SLP granted liberty to the
petitioner to request the court below for framing issue of jurisdiction
as a preliminary issue. The Apex Court observed that, "If the
petitioner requests for framing issue of jurisdiction as a preliminary
issue, it is left to the consideration of the Court in its wisdom in
accordance with law."
3.7 Pursuant to the order passed by the Apex Court dated 28.02.2020
vide Exh. 29, the petitioner defendant prayed to frame and try the
issue of jurisdiction and other issues of law, as set out in para-5 of
the application. During the proceedings, the application Exh. 30, the
defendant prayed that the application Exh. 29 be taken up for
hearing before the application of the plaintiff for joining parties
under Order 1 Rule 10. The learned trial Court, allowed the
application Exh. 30, and fixed the application Exh. 29 for final
hearing.
C/SCA/4870/2022 ORDER DATED: 04/07/2023
3.8 In the aforesaid facts, the Court below vide its order dated
24.11.2021, rejected the application Exh. 29 and refused to frame
the issue of jurisdiction and further ordered that, the issue of
jurisdiction will be taken into consideration at the time of framing
issues.
4. Being aggrieved with the impugned order dated 24.11.2021, the
defendant petitioner has come up before this Court, invoking
supervisory jurisdiction under Article 227 of the Constitution of
India, assailing the order passed by the court below.
5. Mr. Shalin Mehta, learned Senior Counsel for the petitioner
submitted that, on perusal of the impugned order, makes it clear that
the order is not contrary to settled position of law, that issue of
jurisdiction has to be decided at the very threshold and same is
passed in contravention to the direction given by the Apex Court and
therefore, order is erroneous and passed in ignorance of the settled
position of law, warranting interference under supervisory
jurisdiction of this Court.
6. Mr. Mehta, learned Senior Counsel further submitted that, court
below does not have the jurisdiction, territorial or otherwise to
entertain the suit, as defendant has neither has its office nor carries
on business within the territorial jurisdiction of the court below and
the alleged letter and publication referred by the plaintiff was not
published or circulated in India. Thus, the learned trial Court failed
to appreciate the said admitted facts and thereby, failed to exercise
C/SCA/4870/2022 ORDER DATED: 04/07/2023
jurisdiction vested on it.
7. Mr. Mehta, learned Senior Counsel further contended that, the
impugned order is non-speaking and unreasoned order in as much as
it fails to assign any reason, whatsoever, for arriving at the
conclusion for not framing the issue of jurisdiction as a preliminary
issue. On the issue of reasons, he submitted that, it is settled law that,
the reasons are the soul of the order and order must thus always
contains reasons, in as much as the same enables the appellate court
to be aware of what weigh with the court below while passing the
order and to examine the legality of the decision in its proper
prospective. In support of this contention, he relies on the decision of
the Apex Court delivered in Uttar Pradesh State Road Transport
Corporation Vs Jagdishprasad Gupta (2009 SCC On-line SC
632) and Union of India Vs. Ibrahim Uddin and other (2012 SCC
On-line 528), to contend that, the hallmark of a judgment / order
and exercise of judicial power by juridical forum is to disclose its
reasons for its decision. Thus, he urged that, on this count, the
impugned order does warrant interference.
8. Mr. Mehta, learned Senior Counsel, submitted that, the Apex Court
vide order dated 28.02.2020 passed in SLP (Civil) No. 4824 of 2020,
granted liberty to the petitioner - defendant to request the court for
framing the issue of jurisdiction as a preliminary issue and pursuant
to the said order, the Exh. 29 was filed before the Court below to
frame the preliminary issue. Learned court below fails to adjudicate
the said question at all and merely deferred the matter to a later stage
C/SCA/4870/2022 ORDER DATED: 04/07/2023
and therefore, order impugned is being passed in complete violation
of the direction given by the Apex Court.
9. Learned Senior Counsel Mr. Mehta, further submitted that in the
order passed below Exh. 30, the court below agreed to decide first
Exh. 29 for framing the issue of jurisdiction as a preliminary issue
and while dealing with Exh. 29, the court below did not consider to
frame the preliminary issue. Thus, the impugned order is in complete
contradiction with its own order dated 05.07.2021 passed below Exh.
30.
10. On the issue of settled law, relying on the judgment of the Apex
Court and this Court, (Union of India and anothers Vs. Adani
Exports Ltd., (2002 1 SCC 567], [Tekno Exports Vs. Jagdip
Processors (2011 SC On-line Gujarat 6397],), the learned Senior
counsel contended that, if there is any question of law raised by any
party, the same ought to be decided as a preliminary issue first and
the settlement of the other issues should be postponed and merely,
because some evidence is required to be taken, an issue could not be
refused to be tried.
11. In the aforesaid contentions, the learned Senior counsel prays that
the findings recorded by the trial Court are patently erroneous and
dehors the factual and legal position on record and therefore, case is
made out, warranting interference by this Court and same may be
quashed and set aside.
C/SCA/4870/2022 ORDER DATED: 04/07/2023
12. On the other hand, countering to the contentions raised by the
petitioner, the learned counsel Mr. Neeraj Grower for the
respondents reiterating the contents of the affidavit in reply,
submitted that, the present petition filed by the petitioner - defendant
is nothing but an abuse of process of law, since same is nothing but a
re-agitation of an issue, which had already been decided by the Court
below in the matter of Order 7 Rule 11 and same is upheld by this
Court as well as Apex Court. He further submitted that, the stage of
framing issue under Order 14 of the CPC has not reached yet before
the trial Court and an application under Order 1 Rule 10 of the CPC
filed by the plaintiff-respondent is still pending before the court
below and therefore, the petitioner - defendant cannot be permitted
to bye-pass the procedure and indirectly restrained the court to hear
the application under Order 1 Rule 10 of the CPC. He further
submitted that, there is no mandatory direction by the Apex Court to
allow the application for framing the jurisdiction as a preliminary
issue, as the Apex Court left it to the consideration of the Court in its
wisdom in accordance with law.
13. In the aforesaid contention, he submitted that the Court below has
rightly exercised its discretion by refusing to frame the jurisdictional
issue as an preliminary issue and considered it at the stage of issue.
14. Mr. Neeraj Grower, learned counsel further submitted that, the High
Court exercising supervisory jurisdiction under Article 227 does not
act as court of First Appeal or reappreciate the facts upon which
determination under the challenge is based, as supervisory
C/SCA/4870/2022 ORDER DATED: 04/07/2023
jurisdiction is not to correct every error of fact and same is exercised
sparingly in appropriate cases.
15. In view of the aforesaid contentions and settled position of law,
learned counsel Mr. Neeraj Grower submitted that, no reason or
ground is made out for interference by this Court under supervisory
jurisdiction and further prayed to dismiss the petition with cost.
16. This Court has heard the learned counsel for the respective parties
and perused the impugned order as well as written submissions.
17. In the facts of the present case, it is no doubt true that the application
of the petitioner - defendant under Order 7 Rule 11 vide Exh. 7,
attained finality as the Apex Court did not have deem it proper to
interfere with the findings recorded by this Court as well as the court
below. However, at the same time, the Apex Court granted liberty to
the petitioner defendant to request the court below for framing issue
of jurisdiction as preliminary issue and it was left to the
consideration of the trial Court to decide in its wisdom in accordance
with law. The Court below vide Exh. 30, agreed to hear the issue of
framing jurisdiction as a preliminary issue as raised in the
application Exh. 29 and accordingly, the Court below had decided
the application Exh. 29, On perusal of the impugned order, the
learned court below after hearing the parties, recorded the findings
that the plea of jurisdiction raised by the petitioner - defendant, in a
particular circumstances of the case, cannot be acceded to and came
to the conclusion that the issue of jurisdiction will be taken into
C/SCA/4870/2022 ORDER DATED: 04/07/2023
consideration at the time of framing issues.
18. Before adverting to the submissions canvassed by the learned
counsel for the respective parties, let us referred to the statutory
provision of Order 14 Rule 2, which reads as under:
" 2. COURT TO PRONOUNCE JUDGMENT ON ALL
ISSUES.
(1) Notwithstanding that a case may be disposed of on
preliminary issue, the Court shall, subject to the provisions
of sub-rule (2), pronounce judgment on all issues.
(2) Where issues both of law and of fact arise in the same
suit, and the Court is of opinion that the case or any part
thereof may be disposed of on an issue of law only, it may
try that issue first if that issue relates to-
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being
in-force.
and for that purpose may, if it thinks fit, postpone the
settlement of the other issues until after that issue has been
determined, and may deal with the suit in accordance with
the decision on that issue.
C/SCA/4870/2022 ORDER DATED: 04/07/2023
19. A bare reading of the aforesaid provision, the sub-rule (2) of Order
14, confers discretionary power on the Court to decide issues
relating to the jurisdiction of the Court or a bar to the suit as a
preliminary issue. Before 1976, the Rule 2 of Order 14, was
mandatory and it was obligatory on the court to take issues of law, as
a preliminary issue and decide it by postponing other issues. The
Amendment Act of 1976 however, altered the position. Sub-rule (1)
of Rule 2 starts with non-obstantiate clause and states that the Court
must try all issues, except though specified in sub-rule (2).
20. The Apex Court time and again in various judgments held that, a
question of jurisdiction may be a pure question of law or a mixed
question of law and fact, it will depend on facts of each case,
whether it is one category or other. Generally, an issue of
jurisdiction can be tried as a preliminary issue, if it can be disposed
of the suit without recording evidence and for that purpose, the
provision of Rule 2 of Order 14 enacted with a view to preventing
injustice by forcing the defendant into long litigation.
21. Now revert back to the facts of the present case, it is the contention
of the petitioner - defendant that while deciding the application Exh.
29, praying inter-alia to frame the issue of jurisdiction as a
preliminary issue, the court below has not properly dealt with the
issue and without assigning proper and sufficient reasons, the
application was rejected.
C/SCA/4870/2022 ORDER DATED: 04/07/2023
22. Considering the peculiar facts and circumstances of the present case
and on perusal of the findings recorded by the Court below in the
impugned order, this Court is of the considered view that the
impugned order is non-speaking and unreasoned order and court
below failed to assign sufficient reason for arriving at the conclusion
for not exercising discretion framing the issue of jurisdiction as a
preliminary issue. Despite the finality of the order passed under
Order 7 Rule 11 of the code, the Apex Court granted liberty to raise
the issue of jurisdiction by way of framing the issue as a preliminary
issue. However, it is the discretion of the court, whether it would be
allowed or not but at the same time, the court below is duty bond to
apply its mind to the issue of law and facts of the case and decide the
same after assigning proper reasons to arrive at the conclusion
whether case is made out for framing the issue of jurisdiction as
preliminary issue. The Court below in its order, did not have arrived
at the conclusion that the issue raised is pure question of law or
mixed question of facts and law. This court do not find that what
weighed with the court below to arrive at the conclusion that the
issue of jurisdiction will require to be decided at the time of framing
of the issues. Thus, there is substance in the contention raised by the
learned counsel for the petitioner that the impugned order is non-
speaking and unreasoned. It is apt to refer the observations of the
Apex Court made in the case of S.N. Mukharji Vs. Union of India
(1990 4 SCC 594). In para-12 of the judgment, it was observed that
recording of a reason is an essential feature of dispensation of
justice. A litigant, who approaches the court with any grievance in
accordance with law, is entitled to know the reasons for grant or
C/SCA/4870/2022 ORDER DATED: 04/07/2023
rejection of his prayer. Reasons are the soul of the order. Non-
recording of the reasons, could lead to dual infirmities; firstly, it may
cause prejudice to the affected party and secondly, more particularly,
hamper the proper administration of justice. A judgment without
reasons causes prejudice to the person against whom it is
pronounced, as that litigant is unable to know the ground which
weighed with the court in rejecting his claim and causes
impediments in its taking adequate and appropriate grounds before
the higher courts, in the event of challenge to that judgment. In
Rajkishor Jha Vs. State of Bihar, (2003 11 SCC 519), the Apex
Court, held that, reasons is the heartbeat of every conclusion and
without the same, it becomes lightless, as right to reason is an
indispensable sound of judicial system; reasons at least sufficient to
indicate an application of mind to the matter before the court and is
one of the salutary requirement of natural justice is spelling out
reasons for the order made.
23. In the facts of the present case, at the cost of repetition, I may
observe that, the court below, while rejecting the application
recorded that "the submission of the defendant regarding civil court
having no jurisdiction cannot be acceded to". Except, the aforesaid
observation, nothing further discussed on the issue why court is
declined to frame the issue of jurisdiction as a preliminary issue.
24. The learned counsel Mr. Neeraj Grower, vehemently submitted that,
the court below has rightly rejected the application and when
discretion has been properly exercised by the court, the High Court
C/SCA/4870/2022 ORDER DATED: 04/07/2023
in its supervisory jurisdiction cannot correct the error either on
factual aspect or on otherwise. This contention having no substance
and is not accepted. The reason is in the facts of the present case, the
principles of natural justice having not been properly followed as the
impugned order is unreasoned order and therefore, when the error is
manifest and apparent on the face of the proceedings, based on the
clear ignorance of law, causing grave injustice to the parties, the
High Court shall in its supervisory jurisdiction interfere with the
impugned order.
25. Mr. Neeraj Grower, learned counsel raised the contention that, the
direction may be issued to decide the application Order 1 Rule 10
filed by the respondent plaintiff simultaneously with the issue of
jurisdiction. In this issue, this court cannot direct the Court below as
the court below has already decided the issue and held that, framing
the issue of preliminary issue of jurisdiction be heard first. Thus,
when the plaintiff - respondent has not challenged the decisions
passed below Exh. 30, this Court at this stage, cannot interfere with
the discretion exercised by the court below.
26. For the foregoing reasons, without entering into the merits of the
case, the petition is allowed. The impugned order passed below Exh.
29 dated 24.11.2021 is hereby quashed. The matter is remitted back
to the trial Court to decide the application Exh. 29 afresh in
accordance with law, expeditiously preferably within 3 months from
the receipt of this order. The observations made hereinabove is
confine to the decide the application Exh. 29 and same is tentative in
C/SCA/4870/2022 ORDER DATED: 04/07/2023
nature. The trial Court shall decide the application Exh. 29 in its own
merits. Direct service permitted.
ORDER IN CIVIL APPLICATION :
In view of order passed in main matter, no order in Civil
Application and accordingly, Civil Application is disposed of.
(ILESH J. VORA,J)
P.S. JOSHI
