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When a plaint under Order VII Rule 10 and 10A is returned, should trial start de novo or should the proceedings continue from the point at which they were transferred? A Bench of Justice Deepak Gupta and Aniruddha Bose has referred this question to a larger Bench of the Supreme Court.
Noting that there is a conflict between Supreme Court judgments on the subject, the Court framed the following question to be answered by the larger Bench:
“The issue which needs to be resolved is “whether after a plaint is returned in terms of Order VII Rule 10 and Rule 10A, Code of Civil Procedure (CPC), should the trial in the Court where the plaint is now filed start de novo or from such stage at which the plaint was ordered to be returned?””
Facts of the Case
The respondent-plaintiff, in this case, had filed a recovery suit against the petitioner-defendant in a court in Gurgaon. The petitioner thereafter filed an application under Order VII Rule 10 which deals with the returning of plaint to a court where the suit should have been instituted. This application was filed on the grounds that the Court in Gurgaon had no jurisdiction as no cause of action arose there. The petitioner did not reside in Gurgaon and the cause of action arose in Meerut, it was contended.
This application was dismissed and the court held that evidence in the case was required to be collected and thus the question of jurisdiction ought to be framed separately as a preliminary issue. The court subsequently ruled against the petitioner on the issue of jurisdiction and proceeded to set a date for the evidence.
In the meantime, the plaintiff moved the Delhi High Court challenging this decision of the lower court. The High Court held that the agreement between the parties conferred exclusive jurisdiction to the courts in Delhi and therefore, Gurgaon Court had no jurisdiction in the matter.
Therefore, an application under Order VII Rule 10 and 10A was filed again seeking transfer of the proceedings to the Court in Dwarka. This was challenged before the High Court and a revision of the decision was sought on the ground that the trial must start de novo before the Dwarka Court. The High Court, however, dismissed this plea.
Restricting itself to the issue of jurisdiction and transfer of the case, the Supreme Court observed that the scheme of the CPC stipulates that applications under Order VII Rule 10 be decided expeditiously and before evidence is recorded. It is expected that the applications for return of plaint will be decided before pleadings are complete and therefore the transferee Court will hear the trial de novo, the Court noted.
“We are mainly concerned with the jurisdictional aspect. Should the time of the Court, parties and witnesses spent in the Court not having jurisdiction, be set at naught or should that material be taken into consideration in the new Court and the proceedings proceed from the stage at which the return is ordered?”
However, adverting to the problem of pendency, the Supreme Court went on to note that courts in India are “burdened with a lot of litigation”.
Hence, it held that there is no reason as to why the proceedings that have already taken place in a Court not having jurisdiction cannot be transferred to a competent Court from the stage at which the return is ordered. Unless one of the parties has been prejudiced on account of the trial by the court without jurisdiction, proceedings need not be directed to start afresh, the Court opined and said,
“Unless a party can prove that it has been actually prejudiced by some proceedings before the Court not having jurisdiction, it would not be in the larger interest to start the proceedings de novo.”
The Court, however, noted that there conflicting rulings on this subject.
In Joginder Tuli, the plaint was placed before a Court of competent jurisdiction. Subsequently, the plaint had been amended to seek higher pecuniary relief. Thus, the case had to be transferred to the Court with the requisite jurisdiction. When the matter was transferred, the transferee Court continued the proceedings from the point at which the suit was transferred.
However, in the case of Modern Constructions, relying upon other judgments, the proceedings were directed to be started de novo upon the transfer of a plaint as if the trial had concluded at the transferring Court.
The Supreme Court noted that the primary difference between Joginder Tuli and other cases was that in Joginder Tuli even the first Court had jurisdiction at the time of institution of the suit whereas in other cases the competent jurisdiction was absent. Having said that, the Court still asserted that it may not be able to subscribe to the view taken in Modern Constructions and opined that this judgment may require reconsideration by a larger Bench.
Hence, it proceeded to refer the issue to a larger Bench.