Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): The Division Bench of Justice Bansi Lal Bhat (Acting Chairperson) and Dr Ashok Kumar Mishra (Technical Member) observed that:

“I&B Code would not permit the Adjudicating Authority to make a roving enquiry into the aspect of solvency or insolvency of the Corporate Debtor except to the extent of the Financial Creditors or the Operational Creditors, who sought triggering of Corporate Insolvency Resolution Process.”

Present appeal has been heard in ex-parte.

Bench notes that the application of appellant filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 has not been admitted or rejected by the Adjudicating Authority (NCLT, Bengaluru Bench).

Adjudicating Authority disposed of the application directing the respondent to make endeavours for resolution in respect of outstanding debt, failing which the appellant would be at liberty to invoke the arbitration clause contained in the Agreement.

The above finding of the Adjudicating Authority was found to be unique and not in conformity with the provisions embodied in Section 9 (5) of the I&B Code, hence cannot be supported.

Section 9(5) of the I&B Code, 2016:

“9(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order—

(i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,—

(a) the application made under sub-section (2) is complete;

(b) there is no repayment of the unpaid operational debt;

(c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor;

(d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and

(e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any.

  1. ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if—

(a) the application made under sub-section (2) is incomplete;

(b) there has been repayment of the unpaid operational debt;

(c) the creditor has not delivered the invoice or notice for payment to the corporate debtor;

(d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or

(e) any disciplinary proceeding is pending against any proposed resolution professional:

Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority.”

The above provision abundantly makes it clear that the Adjudicating Authority has only two options, either to admit Application or to reject the same. No third option or course is postulated by law.

Appellant’s counsel invited Tribunal’s attention to the fact that the Adjudicating Authority took note of the fact that the respondent did not respond to the Demand Notice, demanding the outstanding amount in respect of the four invoices noticed in the impugned order.

Further another point was brought in from the impugned order wherein it was observed that mere acceptance of the debt in question by the Respondent would not automatically entitle the Appellant to invoke the provisions of the Code, unless the debt and default is undisputed and proved to the satisfaction of the Adjudicating Authority.

Bench in view of the above expressed that the Adjudicating Authority should have, in absence of any dispute contemplated under Section 8(2) having been raised by the Respondent as a pre-existing dispute or that the claim of Appellant had been satisfied, proceeded to admit the Application, as no dispute had been raised before it, justifying its disinclination to admit the Application.

We cannot understand as to how the availability of alternate remedy would render the debt and default disputed.

Tribunal further added to its reasoning that

In absence of pre-existing dispute having been raised by the Corporate Debtor or it being demonstrated that a suit or arbitration was pending in respect of the operational debt, in respect whereof Corporate Debtor was alleged to have committed default, the Adjudicating Authority would not be justified in drawing a conclusion in respect of there being dispute as regards debt and default merely on the strength of an Agreement relied upon by the Appellant.

Adjudicating Authority clearly landed in error by observing that the course adopted by it was warranted on the principle of ease of doing business, ignoring the fact that such course was not available to it, ease of doing business only being an objective of the legislation.

Hence, while allowing the appeal and setting aside the impugned order, Tribunal directed the Adjudicating Authority to pass an order of admission. [Sodexo India Service (P) Ltd. v. Chemizol Additives (P) Ltd., 2021 SCC OnLine NCLAT 18, decided on 22-02-2021]

Case BriefsHigh Courts

Madhya Pradesh High Court: G.S. Ahluwalia, J., disposed of a writ petition setting aside the orders passed by the Board of Revenue and Additional Commissioner in relation to a matter of Will.

The petition contained that the husband of the petitioner had one-half share in the agricultural land bearing survey nos.1031 area 0.81 hectare, 1033 area 0.15 hectare, 1040 area 0.72 hectare, 1084 area 0.76 hectare total area 2.44 hectare situated in a village. The husband of the petitioner had died issue-less on 17-5-2006 due to illness. The respondents had then filed an application for mutation of their names on the basis of a “Will” purportedly executed by the deceased. The petitioner submitted her objection and claimed that she is the sole legal heir of deceased, being his legally wedded wife. After which the Tehsildar had rejected the application filed by the respondents, being aggrieved an appeal was filed before the Court of SDO which was again rejected. Finally respondent made n appeal before the Additional Commissioner which was allowed after relying upon the so called “Will” executed by deceased and the names of the respondents were directed to be mutated in the revenue records, aggrieved by which the petitioners had preferred an appeal before the Additional Commissioner which was dismissed. Thus, the instant appeal was filed.

The Court relied on the decision given in Ranjit v. Nandita Singh, MP No.2692 of 2020 which talked about the Conferral of Status of Courts on Board and Revenue Officers where it was clearly held that the revenue authorities have no jurisdiction to decide the correctness and genuineness of a “Will” and if the propounder of the “Will” wants to take advantage of the “Will”, then he had to get his title declared from the Civil Court of competent jurisdiction.

The Court while setting aside the orders passed by the Board of Revenue and Additional Commissioner directed that the revenue authorities restore the names of the petitioner in the revenue records.[Ramkali v. Banmali, 2021 SCC OnLine MP 359, decided on 17-02-2021]


Suchita Shukla, Editorial Assistant has put this story together.

Case BriefsSupreme Court

Supreme Court: The bench of Dr. DY Chandrachud* and MR Shah, JJ has held that the presence of an arbitration clause within a contract between a state instrumentality and a private party does not act as an absolute bar to availing remedies under Article 226.

“If the state instrumentality violates its constitutional mandate under Article 14 to act fairly and reasonably, relief under the plenary powers of the Article 226 of the Constitution would lie.”

In the case where it was argued that a remedy for the recovery of moneys arising out a contractual matter cannot be availed of under Article 226 of the Constitution, the Court clarified that the recourse to the jurisdiction under Article 226 of the Constitution is not excluded altogether in a contractual matter. A public law remedy is available for enforcing legal rights subject to well-settled parameters.

“The jurisdiction under Article 226 is a valuable constitutional safeguard against an arbitrary exercise of state power or a misuse of authority. In determining as to whether the jurisdiction should be exercised in a contractual dispute, the Court must, undoubtedly eschew, disputed questions of fact which would depend upon an evidentiary determination requiring a trial. But equally, it is well-settled that the jurisdiction under Article 226 cannot be ousted only on the basis that the dispute pertains to the contractual arena.”

The Court, however, made clear that though the presence of an arbitration clause does not oust the jurisdiction under Article 226 in all cases, it still needs to be decided from case to case as to whether recourse to a public law remedy can justifiably be invoked.

[Unitech Ltd. v. Telangana State Industrial Infrastructure Corporation, 2021 SCC OnLine SC 99, decided on 17.02.2021]


*Judgment by: Justice Dr. DY chandrachud 

Know Thy Judge| Justice Dr. DY Chandrachud

Case BriefsHigh Courts

Calcutta High Court: Sabyasachi Bhattacharya, J., reiterated the decision of Supreme Court in Embassy Property Developments (P) Ltd. v. State of Karnataka, 2019 SCC OnLine SC 1542, regarding whether NCLT and Resolution Professional have jurisdiction to take control and custody of any asset except as subject to the determination of ownership by a court or authority.

“…the power of the resolution professional to take control of any asset, itself, is subject to the determination of ownership by a court or authority.”

Factual Matrix

Kolkata Municipal Corporation filed the present petition challenging an order passed by the National Company Law Tribunal (NCLT) acting as Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 for handing over physical possession of the office premises.

KMC, in exercise of its authority under Sections 217-220 of the Kolkata Municipal Corporation Act, 1980, had distrained the said property in the recovery of municipal tax dues from an assessee.

Debt of the assessee came within the purview of a Corporate Insolvency Resolution Process (CIRP), thus prompting respondent 4, the Resolution Professional, representing the owner of the asset, to approach the NCLT for handing over of such physical possession of the property-in-question from the KMC.

In view of the above, the instant petition was filed.

Questions that arise in the instant matter are:

  • Whether the writ jurisdiction of this court under Article 226 of the Constitution of India can be invoked in the matter, despite the availability of an alternative remedy;
  • Whether the property-in-question, having been seized by the KMC in recovery of its statutory claims against the debtor, can be the subject matter of a Corporate Resolution Process under the Insolvency and Bankruptcy Code, 2016.

While considering the first question, Bench referred to the decision of Embassy Property Developments (P) Ltd. v. State of Karnataka, 2019 SCC OnLine SC 1542, wherein it was held that, in so far as the question of exercise of the power conferred by Article 226, despite the distinction between lack of jurisdiction and the wrongful exercise of the available jurisdiction, should certainly be taken into account by High Courts, when Article 226 is sought to be invoked by passing a statutory alternative remedy provided by a special statute.

Petitioners urged that the NCLT and the Resolution Professional have no jurisdiction to take control and custody of any asset except as subject to the determination of ownership by a court or authority. KMC exercised its powers under Sections 217 to 220 of the 1980 Act to distraint the asset of the debtor and to attach the property, to be followed by sale in future, but the said exercise of power was argued to be beyond the purview of IBC. Resolution Professional and the NCLT acted de hors their statutory powers in seeking to take control and custody of the asset.

Hence, the challenge in the present petition was on the ground of absence of jurisdiction and not ‘wrongful exercise of the available jurisdiction’, thus bringing it within the fold of Article 226 of the Constitution. Therefore, petition is maintainable.

“…although a wrongful exercise of available jurisdiction would not be sufficient to invoke the High Court’s jurisdiction under Article 226 of the Constitution, the ground of absence of jurisdiction could trigger such invocation.”

Considering the second questions posed above, Bench stated that it would be particularly apt to consider the tests laid down by the Supreme Court in Embassy Property Developments (P) Ltd. v. State of Karnataka, 2019 SCC OnLine SC 1542.

In the above-referred decision, while discussing Section 60(5)(c) of IBC, Supreme Court held, “…a decision taken by the government or a statutory authority in relation to a matter which is in the realm of public law, cannot, by any stretch of imagination, be brought within the fold of the phrase “arising out of or in relation to the insolvency resolution”.

Further, the Court, while moving ahead in the analysis of the matter and reaching a conclusion expressed that there cannot be any doubt about the proposition that the contours of the powers conferred on the Adjudicating Authority, being the NCLT, under Section 60 of the IBC, are defined by the duties of the interim resolution professional under Section 18.

What is to be seen to examine the charter of the interim resolution professional is whether the assets, of which control and custody is sought to be taken by the professional, are sub judice before a court or authority for the purpose of “determination of ownership” thereof.

In the instant matter, petitioner proceeded with acquiring the possession of the property-in-question and putting up the same for attachment under its powers as flowing from Sections 217-220 of the 1980 Act.

The above-said provision envisages a situation where an amount of tax, for which a bill has been presented under Section 216 of the Act, is not paid within 30 days from the presentation thereof.

In view of the event, Municipal Commissioner may cause a demand notice to be served on the person for such liability and on the non-payment of such tax, petitioner shall under Section 219 of the 1980 Act issue a distress warrant, for distraint of the property. Further in the process, person charged with the execution of the warrant in the presence of two witnesses, makes an inventory of the property which he seizes under such warrant. Thereafter, steps are taken for disposal of such property, including attachment and sale.

KMC followed the above-laid procedure and took possession of the disputed property for non-payment of tax. Hence, there was no scope of any ‘determination’ of ownership of the property by the KMC. Thus, in view of the Supreme Court decision in Embassy Property Developments (P) Ltd. v. State of Karnataka, 2019 SCC OnLine SC 1542  a finalised claim would come within the purview of “operational debt” under Section 5(21) of the IBC. Hence, the Resolution Professional has jurisdiction to take custody and control of the same.

Parameters of powers of the NCLT, as an Adjudicating Authority under Section 60 of the IBC, is defined and circumscribed by the scope of Section 18(f)(vi) of the IBC. Such exercise of power would fall within the ambit of the expression “arising out of or in relation to the insolvency resolution”, as envisaged in Section 60(5)(c) of the IBC.

Crown Debts

Referring to the decision of Supreme Court in Commr. of Income-tax v. Monnet Ispat Energy Ltd., [Special Leave to Appeal (C) No (S) 6438 of 2018], wherein it was held that income tax dues, being in the nature of crown debts do not take precedence even over secured creditors, Bench stated that the said proposition holds true in the present matter as well.

Hence, KMC’s claim being in the nature of crown debts, cannot gain precedence over other secured creditors, as contemplated in the IBC.

Therefore, in view of the Supreme Court decision in Embassy Property Developments (P) Ltd. v. State of Karnataka, 2019 SCC OnLine SC 1542 Finalised claim of the KMC can very well be the subject-matter of a Corporate Resolution Process under the IBC.

Accordingly, the Court decided the above two questions in affirmative.[Kolkata Municipal Corpn. v. Union of India, 2021 SCC OnLine Cal 145, decided on 29-01-2021]


Advocates who appeared:

For Petitioners:

Ashok Kumar Banerjee, Sr. Adv.,

Rajdip Roy,
Anindya Sundar Chatterjee,
Goutam Dinda

For Respondent 3:

Jishnu Chowdhury,

Dilwar Khan,
Sondwip Sutradhar

For Respondent 4:

Rishav Banerjee,

Pronoy Agarwal,

Ankita Baid

Case BriefsSupreme Court

Supreme Court: The 3-Judge Bench comprising of Ashok Bhushan*, R. Subhash Reddy and M.R. Shah allowed the instant appeal against the order of High Court of Uttrakhand regarding summon issued under S. 319 of CrPC. The Bench said,

“Order dated 18-09-2019 by which the Trial Court has directed appearance of the accused-appellant is to be taken to its logical end but that order cannot provide a shield of protection to earlier order dated 17-08-2019 by which appellant has been summoned.”

The appellant was made an accused under Ss. 147, 148, 149, 323, 324, 307, 452, 504 and 506 of IPC along with six other accused. Police, after carrying out investigation submitted a charge-sheet exonerating the appellant. During trial, the informant was examined as PW-1. In his Statement, the informant implicated all accused including the appellant but no specific role was assigned to the appellant.

An application under S. 319 CrPC was filed by the informant before the Sessions Judge praying that appellant be also summoned in the case. The Trial Court rejected the said application, pursuant to which the applicant approached the High Court by revision appeal to take actions against the appellant. The High Court, while relying on Rajesh v.State of Haryana, (2019) 6 SCC 368, remitted the matter back to the Trial Court and directed that the application under Section 319 CrPC to should be considered afresh.

Pursuant to the order of the High Court, the Trial Court allowed the application and summoned the appellants by Order dated 17-08-2019. On non-appearance of the appellant, the Trial Court had issued non-bailable warrant to the appellant and a notice under S. 446 CrPC was also issued.

The appellant filed Criminal Revision before the High Court against the order dated 17-08-2019 which was dismissed by the High Court on the ground that since the proceeding in pursuance to allowing the application under Section 319 CrPC had already been initiated, revision appeal could not be entertained.

In Hardeep Singh versus State of Punjab, (2014) 3 SCC 92, the Constitution Bench had elaborately considered all contours of Section 319 CrPC. The Court had held,

power under S. 319 CrPC is a discretionary and extra-ordinary power which has to be exercised sparingly. It is not to be exercised because the Magistrate or the Sessions Judge is of the opinion that some other person may also be guilty of committing that offence. Only where strong and cogent evidence occurs against a person from the evidence led before the Court that such power should be exercised and not in a casual and cavalier manner.”

Hence, the Bench opined that the High Court had completely erred in holding that since the proceedings in pursuance of Section 319 CrPC had already been initiated, no simultaneous challenge to the impugned order dated 17-08-2019 summoning the revisionists under Section 319 CrPC would be tenable before the High Court till the order dated 18-09-2019 subsist. The Bench held that,

“Subsequent proceedings, in no manner could be a ground to not consider the correctness and validity of order dated 17-08-2019 and when it is found that order dated 17-08-2019 could not have been passed in exercise of jurisdiction under S. 319 CrPC, all subsequent proceedings thereto shall automatically come to an end.”

Therefore, the order of the High Court was held to unsustainable and deserving to be set aside. The High Court was directed to consider the Criminal Revision afresh.

[Ajay Kumar v. State of Uttarakhand,  2021 SCC OnLine SC 48, decided on 29-01-2021]


Kamini Sharma, Editorial Assistant has put this report together 

*Judgment by: Justice Ashok Bhushan

Op EdsOP. ED.

The advent of the internet has enabled individuals to copy and distribute protected marks and materials with ease, while its accessibility across territories has complicated the issue of determining jurisdiction for legal action. The issue of jurisdiction has been raised before courts time and again, and the volume of adjudication upon it is extensive. This article summarises takeaways from said adjudication, and sets out the principles currently guiding the choice of forum in a suit involving online infringement of trademarks or copyrights.

I. Legislative Backdrop

The general provision governing territorial jurisdiction in respect of intellectual property disputes is contained under Section 20 of the Civil Procedure Code, 1908 (hereinafter “CPC”), which provides that a suit may be instituted at the court within whose jurisdiction:

  1. the defendant resides, carries on business, or personally works for gain; or
  2. where a part of or the entire cause of action arises.

According to the accompanying explanation, a defendant corporation is deemed to carry on business at its sole/principal office, or at a subordinate office if the cause of action arose at the place where such subordinate office is located.

More specifically, the issue of territorial jurisdiction is governed by Section 62 of the Copyright Act, 1957 (hereinafter “the CR Act”) and by  Section 134 of the Trade Marks Act, 1999 (hereinafter “the TM Act”),  both of which are pari materia. According to the same, suits are to be instituted at a “district court having jurisdiction”, which includes courts within whose territorial limits the plaintiff resides, carries on business, or personally works for gain. These provisions may be availed only in cases of infringement, and not in cases of passing off i.e. only a registered right-holder may sue at the place of its residence or business.

It is to be noted that any explanation for the aspect of “carrying on business” similar to the one for a defendant corporation under Section 20 CPC is absent from the text under both the CR Act and the TM Act (hereinafter collectively “the IP Acts”). Despite that, the explanation has been read into the IP Acts by virtue of the decisions in Indian Performing Rights Society Ltd. v. Sanjay Dalia[1] (hereinafter “Sanjay Dalia”) and Ultra Home Construction (P) Ltd. v. Purushottam Kumar Chaubey[2] (hereinafter “Ultra Home”). This acts as a restriction on forum shopping by plaintiffs and is discussed later in the article.

Ordinarily, the doctrines of lex specialis and lex posterior would apply, and the provision under CPC would be restricted. However, in light of the language used in the IP Acts, the Supreme Court has held that the jurisdiction under CPC is not ousted[3]; rather the IP Acts merely provide an additional forum where suits may be filed. The purpose behind this additional route is to expose an infringer with inconvenience rather than compelling the sufferer to chase after the former.

Since content, products and services on a website or mobile application are available throughout territories wherever the reach of the internet extends, there are two pertinent questions that need answering:

  1. In respect of an entity having an online presence, where exactly can a plaintiff or a defendant be said to “carry on business”?
  2. In respect of infringing goods/services offered or sold over the internet, where exactly does the “cause of action” arise?

Answers to these can assist us in addressing the conundrum of jurisdiction around internet-based intellectual property disputes, and pinpoint the appropriate forum for institution of a suit.

II. “Carrying on Business”

In Dhodha House v. S.K. Maingi[4] (hereinafter “Dhodha House”), it was observed that the presence of any man was not necessary for the purpose of “carrying on business”, and the Supreme Court set out three fundamental conditions that had to be satisfied for establishing that an entity carries on business within a court’s jurisdiction:

  1. Presence of an agent who carries on business exclusively for and in the name of the principal;
  2. Agency in the strict sense of the term; and
  3. An “essential part” of the business must take place in that place.

However, in World Wrestling Entertainment Inc. v. Reshma Collection[5] (hereinafter “WWE”), the Division Bench clarified that in case of web-based business models, the first two conditions set out in Dhodha House[6] will not apply, since they specifically relate to agents. What warrants consideration is whether in transactions over the internet  the third condition stipulating performance of the essential part of the business is satisfied, and if yes, where?

It was noted that display of goods on a website amounts to an invitation to offer against which an offer is made by a customer at the place where he or she is located. If accepted, the money is paid from the customer’s location, and the goods are delivered to the same location. Owing to the nature of the internet, the offer and acceptance are instantaneous. Keeping these factors in mind, it was held that the availability of transactions through a website at a particular place is virtually the same as a seller having a shop at that place in the physical world, and therefore, such seller would be regarded as carrying on business at that place.

The principle expounded in WWE[7] has been upheld and applied in subsequent cases. In Millennium & Copthorne International Ltd. v. Aryans Plaza Services (P) Ltd.[8] (hereinafter “Millennium & Copthorne”), it was clarified that service providers would also attract jurisdiction at places where customers can make a mere reservation (even through third-party websites), whether the reservation concludes into a transaction or not. For example, if there is a hotel located at A, and through a tourism website, customers at B and C can book a room at the hotel, the hotel would be carrying on business at B and C, and would attract jurisdiction on this ground at both of those places in addition to A.

III. Cause of Action

The determination of the cause of action, and thereby, jurisdiction under Section20 CPC in an online context has been examined extensively in Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy[9] (hereinafter “Banyan Tree”); a case where interestingly, neither the plaintiff nor the defendant was located within the territorial limits of the court. Here, the Division Bench of the Delhi High Court decided that mere accessibility or interactivity of a website in a particular place would not confer jurisdiction to courts in that place. Rather, the plaintiff must establish that the defendant “purposefully availed” itself of the jurisdiction at the place of suing. After noting common law developments in UK and USA, the following elements were held necessary to show that the cause of action partly arose in a particular place through the use of internet:

  1. Specific targeting of customers in that place;
  2. Conclusion of commercial transactions with such customers; and
  3. Injury to plaintiff’s business, goodwill or reputation in that place.

Thus, a rigorous standard to determine cause of action and jurisdiction in cases of online transactions was set up. Over the years, however, adjudication has diluted this standard. In Sholay Media and Entertainment (P) Ltd.  v. Yogesh Patel[10], the Court considering that mere display of a trade mark at an exhibition confers jurisdiction[11] observed that an act of advertising counterfeit products or soliciting customers therefor in a place would constitute a part of the cause of action, and courts in such place would accordingly have jurisdiction.

Similar views have been held in Burger King Corpn. v. Techchand Shewakramani[12] and in Exxon Mobil Corpn. v. Exoncorp (P) Ltd.[13] (hereinafter “Exxon Mobil”).  According to these decisions, the cause of action arises in each and every place where infringement/passing off occurs. Since, in addition to actual sales, advertisements and promotions too constitute infringement according to the IP Acts, the cause of action partly arises in all places where such advertisements and promotions are made. The courts exercising jurisdiction in all those places would thus be appropriate fora for institution of proceedings.

IV. Restriction on Forum Shopping

Guided by the motive of aiding convenience, the IP Acts provide for an additional forum where a registered right-holder could sue for infringement. However, the motive was never to enable a plaintiff to indulge in forum shopping, and the legislature did not attend to require either party to travel to distant places. Therefore in Sanjay Dalia[14], the Supreme Court interpreted Section 62 of the CR Act and Section 134 of the TM Act in a manner that allowed the availment of the additional route to plaintiffs while restricting harassment of defendants through filing of suits at far-flung places.

It was noted that generally, a plaintiff under the IP Acts ought to file a suit at the place of ordinary residence or where the principal office is situated. However, if a right-holder is residing or carrying on business at a place where the cause of action has also arisen, the suit must be filed at that place itself – the IP Acts thus do not allow the right-holder to travel to a far-off place where it carries on business for the purposes of instituting proceedings. For example, if a company has its registered office at A and branch offices at B and C, with the cause of action arising at B, the appropriate forum for filing a suit under the IP Acts would be the court exercising jurisdiction over B.

This position has been adopted and further clarified in Ultra Home[15], where specific scenarios contemplating the plaintiff as a corporation were set out as follows:

Sl. No. Place of principal or registered office Place of subordinate or branch office Place where cause of action arose Place where plaintiff may sue under IP Acts
1. A C A
2. A B A A
3. A B B B
4. A B C A

It is important to remember that this stance is not in derogation of Dhodha House[16].  While the Court in that case elucidated upon the meaning of the phrase “carrying on business”, in Sanjay Dalia[17], the Court defined the geographic limits for institution of a suit under the IP Acts. The above table is applicable in scenarios where one seeks to sue under Section 62 of the CR Act or under Section 134 of the TM Act, and is in addition to the fora available to a plaintiff under Section 20 CPC.

V. Conclusion: Synopsis

Section 62 of the CR Act and Section134 of the TM Act provide a forum additional to those under Section 20 CPC where a plaintiff may institute proceedings. However, the jurisdiction under IP Acts may only be utilised in respect of a registered copyright/trade mark; in cases of passing off, only the jurisdiction under CPC may be availed.

In a case involving infringement of a copyright/trade mark, jurisdiction may be invoked either under the IP Acts or under CPC. Both are individually sufficient for determining the appropriate forum of dispute.

By virtue of Sanjay Dalia[18], the plaintiff’s right to sue under the IP Acts has been restricted to those places of residence or business where there is an overlap with the cause of action. Alternatively, the cause of action ipso facto confers jurisdiction under CPC to courts in the place where it has arisen, regardless of whether that place has an office/residence of the plaintiff/defendant or not.

In context of disputes over the internet, the scope of “carrying on business” has been elucidated in WWE[19] while the scope of “cause of action” has been expounded in Banyan Tree[20]. The ratios of these decisions have been applied and clarified in the subsequent decisions of Millennium & Copthorne[21] and Exxon Mobil[22] to hold that jurisdiction is conferred even in places where a website advertises infringing goods and services or facilitates the mere making of bookings or reservations.

These decisions have greatly expanded the ambit of jurisdiction in cases of online intellectual property violations, so far so that they were recently applied in HT Media v. Brainlink International[23] towards the exercise of extra-territorial jurisdiction to injunct the infringing activities of a defendant located in New York.

Clearly, Section 20 CPC has a wider scope than jurisdiction under the IP Acts, and in context of intellectual property violations over the internet, right-holders would be able to invoke jurisdiction on the basis of “cause of action” under CPC with greater ease than on the ground of “carrying on business”. To demonstrate the same, the table provided by the Court in Ultra Home[24] is reproduced below, with an additional column setting out the choice of forum under CPC as well.

Sl. No. Place of principal or registered office Place of subordinate or branch office Place where cause of action arose Place where plaintiff may sue under IP Acts Place where plaintiff may sue under CPC
1. A C A A, C
2. A B A A A
3. A B B B B
4. A B C A A, C

*Practising Lawyer, New Delhi. Author can be reached at aggarlaw@gmail.com.

[1] (2015) 10 SCC 161

[2] 2016 SCC OnLine Del 376

[3] Exphar SA v. Eupharma Laboratories Ltd., (2004) 3 SCC 688

[4] (2006) 9 SCC 41

[5] 2014 SCC OnLine Del 2031 : (2014) 60 PTC 452 

[6] Supra Note 4.

[7] Supra Note 5.

[8] 2018 SCC OnLine Del 8260

[9] 2009 SCC OnLine Del 3780

[10]2014 SCC OnLine Del 7704

[11] Laxman Prasad v. Prodigy Electronics Ltd., (2008) 1 SCC 618

[12] 2018 SCC OnLine Del 10881

[13] 2019 SCC OnLine Del 9193

[14] Supra Note 1.

[15] Supra Note 2.

[16] Supra Note 4.

[17] Supra Note 1.

[18] Ibid.

[19] Supra Note 5.

[20] Supra Note 9.

[21] Supra Note 8.

[22] Supra Note 13.

[23] 2020 SCC OnLine Del 1703

[24] Supra Note 2.

Case BriefsForeign Courts

I.Introduction

The Brownlie case[1], subject of comment on jurisdictional aspects of “damage” in tortious claims, centered on the rules applicable on service out where tort claims have connections with UK Court, only to the extent where claimant suffers consequential damages within its territory.

II. Brief Description of Facts

Litigation before the High Court of England and Wales[2] commenced between Lady Christine Brownlie, widow of renowned international lawyer Sir Ian Brownlie QC and Four Seasons Holdings Incorporated (Canadian Corporation) running a chain of hotels by the name and style of Four Seasons. She along with her husband, daughter and grandchildren suffered a tragic accident in Cairo, Egypt, on a holiday. Their excursion on 3-1-2010 resulted in a car crash whereby Lady Brownlie and the grandchildren survived serious injuries. However, Sir Ian Brownlie and their daughter died.

It is Lady Brownlie’s evidence that on her previous visit she had taken a brochure, published and circulated by Four Seasons advertising safari tours provided by them. She contacted the hotel before leaving England for the holiday through telephone and made a booking to hire a chauffeur-driven vehicle for an excursion with the concierge of the hotel.

Lady Brownlie’s claims were against — (a) Four Seasons Holdings Inc., the holding company (first defendant); (b) Nova Park SAE (Egyptian company), owner of the hotel building (as per Lady Brownlie’s solicitors) (second defendant).

The three tortious claims by Lady Brownlie, through service out jurisdiction after her return to England against defendants (Canadian) were for (a) “personal claim” on account of severe injuries suffered on her person; (b) being a dependent, for loss of her husband under Fatal Accidents Act, 1976; and (c) as an executrix of the estate of Sir Brownlie, for the loss and damages under the Law Reform (Miscellaneous Provisions) Act, 1934.

III. Applicable Rules of Jurisdiction           

Prior to the Brownlie case[3], English courts since 1852 opined that jurisdiction in tort cases was delimited by the power of the court[4], for permission for grant of service on the defendant subject to the claimant’s proof that a serious issue existed for trial by England courts (forum conveniens).[5]

According to English common law, English courts have adjudicatory competence on the basis of “submission” and “presence”. The service of proceedings on a foreign-based defendant is possible wherein the defendant is domicile of European Union (EU) member State/another part of UK. As per Civil Procedure Rules (CPR) (Rules 6.32 and 6.33), the claimant is not required to take the permission of the court and Brussels I Regulation Recast is applicable.

However, in a cross- border commercial matter wherein the defendant is not domiciled, the claimant needs a prior permission of the court before submission of claim form (outside jurisdiction) and an English Court, may grant permission, as per the CPR (Domestic Law of UK).[6] Exercise of discretionary powers[7]  by the court to allow service out are subject to the main obligations being satisfied by the claimant. These mandatory service out conditions on a foreign-based defendant are[8]

(i)      Application for permission (Rule 6.36) setting out grounds in Para 3.1 of Practice Direction 6-B. “Good arguable case” to be tested on the ground that at least one of the claims by the parties falls within the “gateways” of Practice Directions.

(ii)     Belief that the claim has a reasonable prospect of success.

(iii)    A “reasonable issue” must exist between the claimant and defendant and “reasonably” tried on merits by the court.

Discretion is exercised once the court believes that England and Wales are forum conveniens (proper place) for the claim to be brought, by applying the test in Spiliada Maritime Corpn. v. Cansulex Ltd.[9].

In Lady Brownlie case[10], the application for permission of the claim founded on contract to serve out was based on Practice Direction 6-B, Para 3.1(6)(a), contending that the contract was made within jurisdiction. Her claim founded on tort was based on Practice Direction 6-B, Para 3.1(9)(a), further arguing consequential losses were suffered in England. She placed reliance on an earlier decision[11] to support that consequential damage sustained by her in England was sufficient to satisfy requirements of CPR Practice Direction 6-B Para 3.1(9)(a) gateway. However, defendants supported the decision in Erste Group Bank AG (London) v. JSC (VMZ Red October)[12] wherein English courts determined the meaning of damage preferring direct damage interpretation [in torts – CPR  Para 3.1(9)(a)] in line with the Brussels I Regulation Recast.

In my opinion, a fading line of distinction distinguishes direct damage (which completes cause of action) from damage that is consequential leaving applicability to be an open question.

IV. Interpretation of Rules on Jurisdiction and Decision

Claimant, resident of England brought the claim in England against the defendant of a Canadian Holding Company, on the ground that the contract for excursion was with defendant or that defendant was vicariously liable for fatal accident due to driver’s negligence.

The analysis of English Court’s approach is primarily for the determination of “damage” as per CPR Practice Direction 6-B Para 3.1(9)(a), regarded as obiter dicta.

The Court of Appeal[13] unanimously upheld direct damage suffered by the claimant to be outside tort gateway however, the loss of dependency claim was well within its confines.

The Supreme Court[14] opined that Lady Brownlie stumbled on the first aspect to provide the prerequisites of service out as first defendant, the non-trading holding company were neither owners nor operated the Cairo Hotel.

The interpretation of the “tort gatewayas per Practice Direction 6-B, Para 3.1(9)(a) is divided in the ratio of 3:2.

The majority opinion concluded upon the ordinary and natural meaning of gateway, to include, “all detriment, physical, financial and social, which the plaintiff suffers as a result of the tortious conduct of the defendant”. The Court opined that despite personal injury and death of Sir Brownlie in Egypt, the consequential damage (funeral and medical expenses, pain, suffering and loss of amenity) were suffered in England.

 It is my view that the majority opinion has adopted a very wide approach in determining the gateway to test damage suffered to serve out. Any event occurring in England sans “significant damage” will not hold good to prove forum conveniens. It has trodden away from “direct damage”[15] since the applied gateway only mentioned “damage”. No differentiation of direct and indirect/consequential damage is clear in the absence of lucid and precise meaning of the gateway being provided, leading to an unreliable test. This wide approach poses a risk of opening floodgates to many applications to serve out of the jurisdiction, by interfering with the sovereignty of another State. The required cautious approach is not being exercised by the UK jurisdiction, leaving the concept of damage open to questions since the Court has not discarded it by clearly defining the boundaries of tort gateway. The opinion of rejecting the consistency between the gateway and Brussels I Regime is however a test for if the history behind the draft of the gateway is being correctly applied.

I agree with the minority view to the extent of supporting restrictive application of “damage” as personal injury. However, the universal jurisdiction of English courts on tort claims suffered anywhere is vague.

V. Conclusion

Through the majority view, whether expansive interpretation by English courts of tort gateways should be abandoned or that ambiguity can be removed if the meaning is brought within the scope of the interpretation under Article 7(2) Brussels I Regulation for achieving certainty in a situation gripped with the conflict of laws. It is also hard to conclude the approach which the courts will finally adopt in order to attain a balance in the situation of the claimant and defendant considering if the test of forum conveniens is applicable. It can be said that the Supreme Court missed the bus for determining scope of jurisdiction – service out in tortious claims.


* BA LLB (Hons.) Amity Law School, Delhi, Guru Gobind Singh Indraprastha University, Delhi (Batch of 2019).

[1] (2018) 1 WLR 192

[2] Ibid.

[3] (2018) 1 WLR 192

[4] R. 6.36, Civil Procedure Rules.

[5] Seaconsar (Far East) Ltd. v. Bank Markazi Jomhouri Islami Iran, (1994) 1 AC 438 : (1993) 3 WLR 756 HL(E) (Seaconsar).

[6] (2018) 1 WLR 192; R. 6.37, Civil Procedure Rules.

[7] Lord Collins of Mapesbury et al., Dicey, Morris & Collins on the Conflict of Laws, 15th Edn., Sweet & Maxwell,   2012.

[8] R. 6.37, Civil Procedure Rules, UK.

[9] 1987 AC 460 : (1986) 3 WLR 972 HL(E)

[10] (2018) 1 WLR 192

[11] Booth v. Phillips, (2004) 1 WLR 3292:  2004 EWHC 1437 (Comm)

[12] [2015] EWCA Civ 379; [2015] 1 CLC 706, CA

[13] Brownlie v. Four Seasons Holdings Inc., (2016) 1 WLR 1814

[14] (2018) 1 WLR 192

[15]Dumez France SA v. Hessische Landesbank, (Case C-220/88) ,1990 ECR I-49; Marinari v. Lloyds Bank Plc., 1996 QB 217 : (1996) 2 WLR 159 

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) expressed that:

Law is settled that illegal and forceful means cannot be adopted by Banks to seize any property.

The present revision petition was filed by the petitioners against the order dated 31-10-2011 of the West Bengal State Consumer Disputes Redressal Commission wherein the appeal filed by the petitioners was dismissed.

Complainant had purchased a ten-wheeler truck financed by OP 1 and accordingly OP 1 through OP 2. Further, the complainant entered into an agreement with OP 1and accordingly both OP 1and 2 sanctioned a loan of Rs 9,15,000.  The Complainant was supposed to repay a sum of Rs 11,57,700 in 47 instalments.

Thereafter, when it came to the notice of the Complainant that the Registration Certificate bore the name of Opposite Party 3 as a joint registered owner, on enquiry, Opposite Party 3 informed him that he had incurred an expenditure of Rs 45,000 from his own pocket in order to get the loan sanctioned in favour of the Complainant and as and when the Complainant would repay the same, he would take necessary steps to remove his name from the Registration Certificate.

Later, although the Complainant paid Rs 45,000 to Opposite Party 3 in two instalments, Opposite Party 3 took no steps to delete his name from the Registration Certificate. Further, Opposite Party 3 detained the vehicle by force and removed its tyres to render it defunct. According to the Complainant, Opposite Parties, in collusion with each other, seized the vehicle.

Decision

Bench stated that it is not understood as to why respondent 2/OP 3 took possession of the vehicle and removed its tyres and later on said to have voluntarily handed over the possession of the vehicle to the petitioners.

The Petitioners could not place any evidence as to any notice having been given to the Complainant for seizure of the vehicle nor any notice of auction of the vehicle.

Commission expressed that District Forum rightly held “we do not see any reason to accept the contention of Opposite Party 2 that they did not take possession of the vehicle in question by force.”

State Commission observed that the vehicle was auctioned without issuing any prior notice to the Complainant.

Law is settled that illegal and forceful means cannot be adopted by Banks to seize any property. Due notice had to be given for seizure of the vehicle and following the established procedure the vehicle could be seized and later auctioned.

 While concluding the bench decided that the petitioners in collusion with respondent 2/OP 3 adopted illegal and unfair means in seizure of the vehicle which amounted to unfair trade practice.

Jurisdiction of this Commission under Section 21 (b) is very limited. This Commission is not required to re-appreciate and reassess the evidences and reach its own conclusion. The Court can intervene only when the petitioner succeeds in showing that the Fora below has wrongly exercised its jurisdiction or there is a miscarriage of justice.

 Referring to the decision of Supreme Court in Rubi (Chandra) Dutta v. United India Insurance Co. Ltd. (2011) 11 SCC 269 and Lourdes Society Snehanjali Girls Hostel v. H&R Johnson (India) Ltd., (2016) 8 SCC 286, Commission did not find any infirmity or illegality in the impugned order. [Manager, IndusInd Bank Ltd. v. Abani Kanta Das,  2021 SCC OnLine NCDRC 14, decided on 11-01-2021]


Advocates for the parties:

For the Petitioner: Rana Ranjit, Advocate
For the Respondent 1: Somraj Gangopadhyay, Advocate

Case BriefsSupreme Court

Supreme Court: B.R. Gavai, J., while addressing a contempt petition expressed that:

“…contempt proceeding is not like an execution proceeding under the Code of Civil Procedure.”

“…contempt proceedings are quasi-criminal in nature and the standard of proof required is in the same manner as in the other criminal cases.”

“A mere objection to jurisdiction does not instantly disable the Court from passing any interim orders.”

Contempt Petition | Father v. Sons

The instant contempt petition arose out of an unfortunate family dispute between a father and his two sons from his first wife.

Petitioner in the contempt petition Rama Narang was married to Smt. Motia. The respondent’s 1 and 2 i.e. Ramesh Narang and Rajesh Narang so also Rakesh Narang are sons of the petitioner and Smt. Motia. The petitioner and Smt. Motia divorced in 1963. The petitioner thereafter married Smt. Mona. Out of the said wedlock, two sons Rohit and Rahul, as well as a daughter Ramona, were born.

Family Settlement

In accordance with the family settlement, that insofar as ‘Narang International Hotel Limited’ and its subsidiaries were concerned, Rama Narang, Ramesh Narang and Rajesh Narang were to be the only Directors.

Further, it was added that any decision by the Board of Directors was to be taken by the mutual consent of Rama Narang on one hand and Ramesh and Rajesh, on the other hand. Though if the amount of any transaction was exceeding Rs 10 lakhs, then the same could be undertaken only through a cheque signed jointly by Rama Narang on one hand and Ramesh or Rajesh on the other hand.

Though the matter was settled in terms of minutes of Consent Order, there was no quietus to the dispute between the parties.

Allegations

Rama Narang alleged that Ramesh and Rajesh had violated the terms of Consent Order stipulated in clause 3 (c), (d), (e) and (f) of the Minutes of the Consent Order. Violation of the said order amounted to clear disobedience and thus punishable under the Contempt of Courts Act, 1971.

Contempt Proceedings against the Respondents

Court initiated contempt proceedings and requested Justice V.A. Mohta, retired Chief Justice of Orissa High Court to act as a Mediator for settlement of disputes between the parties. However, despite serious efforts made by the Mediator, the settlement could not be arrived at.

A three-Judge Bench of this Court in Rama Narang v. Ramesh Narang, (2006) 11 SCC 114, observed the following:

“32. The object of entering into consent terms and jointly filing the undertaking was to run the family business harmoniously with the active participation of all as a family business but the respondents had taken absolute control of the Company NIHL to the total exclusion of the petitioner.

 33.The respondents have erroneously submitted that joint management and control of the Company means giving veto power to the petitioner. According to the terms of undertaking the petitioner and the respondents were under an obligation to run the Company harmoniously with the active participation of all as a family business but unfortunately the respondents have taken absolute control to the total exclusion of the petitioner. This is contrary to the terms of the undertaking given to this Court.”

The Court in the earlier Order held the respondents guilty of contempt, taking into consideration the fact that immediately sending respondents to jail would create total chaos in the Company and it would also vitally affect the interest of large number of people including the employees of the Company the sentence of imprisonment imposed on the respondents was kept in abeyance.

Consequences

On account of non-cooperation by Rama, the functioning of the Company had come to a standstill. It was contended in the said company petition, that due to non-cooperation by Rama in signing cheques, the employees could not be paid their salaries from November 2007 onwards. It was also contended, that bills for payment to supplier could also not be paid, due to which, the entire functioning of the various units of the Company had been seriously affected.

Company Law Board

CLB noticed, that due to differences among the Directors, many operational issues like payment of salaries/wages, payment to supplier etc. were pending, leading to agitation by employees and irregularities in supply.

The CLB found it appropriate, that till the petition was disposed of, as an interim measure, in the interests of the Company and more than 3000 employees/workers, there should be a mechanism by which the day-to-day operations of the Company were carried on without any hitch.

Petitioner alleged that the CLB Order was violative of the order of the Supreme Court and nothing but an attempt to legalize their conduct of contempt but the petitioner approached the Court by the instant contempt petition.

Analysis

Section 2(b) of the Contempt of Courts Act, 1971:

2. Definitions. – …..
(b) “civil contempt” means wilful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to a court.”

Civil Contempt

It is clear that for bringing an action under the ambit of civil contempt, there has to be a wilful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to the Court.

Respondents submitted that the petitioner was attempting to use the consent terms as a veto to stall the functioning of the Company.

Bench referred to Sections 397, 398 and 403 of the Companies Act, 1956.

Respondents legitimately invoked the jurisdiction of Company Law Board invoking the powers under Sections 397, 398 and 403 of the Companies Act, to which they were entitled to in law and were not restrained to do so by any competent Court/forum.

 CLB had passed interim orders in exercise of its powers under Section 403 of the Companies Act. Petitioner had approached the Court immediately after the order dated 10-04-2008, was passed by the CLB by way of present contempt petition.

Main Contention

Petitioner’s primary contention was that invoking the jurisdiction of the CLB and entertaining the said proceedings by the CLB, itself amounts to contempt.

 Observation

Court referred to the observations of in Pratap Singh v. Gurbaksh Singh, 1962 Supp (2) SCR 838:

“The principle behind all these cases is that such action of the person which he takes in pursuance of his right to take legal action in a Court of law or in just making a demand on the other to make amends for his acts will not amount to interfering with the course of justice, even though that may require some action on the part of the other party in connection with his own judicial proceeding, as a party is free to take action to enforce his legal rights.”

 Supreme Court stated that in the present case, the respondents were entitled to invoke the jurisdiction of the CLB under Sections 397, 398 and 403 of the Companies Act. Respondents had to take recourse to that remedy in compelling circumstances to safeguard the interest of the Company and its stakeholders.

Further, the Court added that merely taking recourse to the statutory remedy available to the respondents would not amount to contempt.

“…for bringing an action for civil contempt, the petitioner has to satisfy the court that there has been a willful disobedience of any judgment, decree, direction, order, writ or other processes of the Court.”

Requisite in a contempt proceeding

In a contempt proceeding, before a contemnor is held guilty and punished, the Court has to record a finding, that such disobedience was wilful and intentional.

Adding to the above, it has also been stated that if from the circumstances of a particular case, though the Court is satisfied that there has been disobedience, but such disobedience is the result of some compelling circumstances, under which it is not possible for the contemnor to comply with the same, the Court may not punish the alleged contemnor.

Bench also referred to the decision of Supreme Court in Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307.

Situation in the present case

Court held that the petitioner failed to make out a case of wilful, deliberate and intentional disobedience of any of the directions given by the Court or acting in breach of an undertaking given to the Court.

“…where an objection is taken to the jurisdiction to entertain a suit and to pass any interim orders therein, the Court should decide the question of jurisdiction in the first instance. However, that does not mean that pending the decision on the question of jurisdiction, the Court has no jurisdiction to pass interim orders as may be called for in the facts and circumstances of the case.”

Further, the Bench expressed in light of jurisdiction that,

“…question of jurisdiction should be decided at the earliest possible time, the interim orders so passed are orders within jurisdiction, when passed and effective till the court decides that it has no jurisdiction, to entertain the suit. It has been held, that those interim orders would undoubtedly come to an end with the decision that the Court had no jurisdiction.”

 Violation of Interim Orders

 While in force, the interim orders passed by such Court have to be obeyed and their violation can be punished even after the question of jurisdiction is decided against the plaintiff, provided violation is committed before the decision of the Court on the question of jurisdiction.

 Another Observation made by the Court was that in the present case, the petitioner qualified under Section 399 of Companies Act and that the Company Law Board had jurisdiction to deal with the petition under Sections 397 and 398 of the Companies Act.

“…in the proceedings under Sections 397/398, it is the interest of the Company which is paramount.”

Bench expressing no more opinion in the present matter held that the contempt petition deserves to be dismissed and added that parties may invoke the jurisdiction of NCLT for seeking orders as deemed fit in the facts and circumstances. [Rama Narang v. Ramesh Narang, 2021 SCC OnLine SC 29, decided on 19-01-2021]

Legislation UpdatesStatutes/Bills/Ordinances

Governor of Madhya Pradesh promulgates the Madhya Pradesh Freedom of Religion Ordinance, 2020.

Purpose of this Ordinance

To provide freedom of religion by prohibiting conversion from one religion to another by misrepresentation, allurement, use of threat or force, undue influence, coercion, marriage or any fraudulent means and for the matters connected therewith.

Prohibition of unlawful conversion from one religion to other religions [Section 3]

The said ordinance states that no person shall:

  • Convert or attempt to convert, either directly or otherwise, any other person by use of misrepresentation, allurement, use of threat or force, undue influence, coercion or marriage or by any other fraudulent means;
  • Abet or conspire such conversion

Complaint against conversion of religion [Section 4]

No police officer shall inquire or investigate except upon written complaint of a person converted in contravention of Section 3 above or his parents or siblings or with leave of the Court by any other person who is related by blood, marriage or adoption, guardianship or custodianship as may be applicable.

Punishment for contravention of provisions of Section 3 [Section 5]

Imprisonment for a term not less than one year but which may extend to 5 years and the person shall also be liable to not less than Rs 25,000 fine.

There are certain proviso clauses mentioned under the said Section.

Marriages performed with the intent to convert a person shall be null and void [Section 6]

Marriages performed in contravention of Section 3 shall be deemed to be null and void.

Jurisdiction of Court [Section 7]

To declare the marriage null and void, the petition shall be presented by any person mentioned in Section 4 before the family court or where a family court is not established, the Court having jurisdiction of a family court within the local limits wherein, —

  • The marriage was solemnized or
  • Respondent at the time of the presentation resides or
  • Either parties to the marriage last resided together or
  • Where the petitioner is residing on the date of presentation of the petition.

Inheritance Right [Section 8]

Child born out of a marriage performed in contravention of Section 3 will be legitimate and succession to the property by such child shall be regulated according to the law governing inheritance of the father.

Right to Maintenance [Section 9]

Woman whose marriage is declared null and void under Section 7, children born out of that marriage shall be entitled to maintenance.

Declaration before conversion of religion [Section 10]

Any person who desires to convert shall submit a declaration to that effect 60 days prior to such conversion to the District Magistrate stating his desire to convert without any force, coercion, undue influence or allurement.

Section 11 states the punishment for violation of provisions of Ordinance by an institution or organization.

Burden of Proof [Section 12]

Burden of Proof as to whether a conversion was not effected through misrepresentation, allurement, use of force, threat of force, undue influence, coercion or by marriage or any other fraudulent means done for the purpose of carrying out conversion lies on the accused.

Investigation [Section 14]

No police officer below the rank of sub-inspector of police shall investigate any offence registered under the ordinance.


Also Read:

Prohibition of Unlawful Religious Conversion | Uttar Pradesh Prohibition of Unlawful Conversion of Religion Ordinance, 2020 [Brief Explainer]

Case BriefsHigh Courts

Punjab and Haryana High Court: Arun Kumar Tyagi, J., addressed a petition challenging the impugned order of Judicial Magistrate Ist Class of dismissing the complaint due to non-appearance of the appellant under Section 256 of the Code of Criminal Procedure, 1973.

The appellant had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 on the grounds that the accused issued a Cheque No.031411 dated 17-04-2013 for Rs 6,50,000 drawn on HDFC Bank, in discharge of subsisting liability under the friendly loan taken by him but the said cheque was dishonoured with remarks ‘Funds Insufficient’ and ‘Account Closed’. While the case was fixed for arguments on the above said application, the appellant absented himself on which the complaint was dismissed for non-prosecution.

The appellant argued that he had been regularly appearing in his complaint case and absented just on one date due to noting down of wrong date of hearing. Hence, dismissal of his complaint and acquittal of the accused was not proper and justified.

The Court observed that prosecution of a private complaint about an offence under section 138 of the N.I. Act differs from the prosecution of private complaint in respect of other offences under other enactments as in case of complaint for an offence under Section 138 of the N.I. Act there is no remedy available to the complainant to file a second complaint when the first complaint is dismissed in default in view of the limitations prescribed and the only remedy available to the complainant is to file a revision or appeal. The Court relied on Steel Strips Ltd. Chandigarh v. Jyoti Mechanical Movements, 2001 SCC OnLine P&H 202, whereby it had been held that “It is imperative upon Magistrate to form his opinion by taking care of the matter as to whether it is appropriate to dismiss the complaint. The real test in such like matters is always good faith.” It was held that for absence of complainant on one occasion, the complaint should not be dismissed unless, the Court is of the opinion that the complainant had been trying to protract the matter to harass the accused deliberately or with ulterior motive and the like.

Noticing that the case was fixed for arguments on application filed by the accused for examination of hand-writing on the cheque, the Court stated that presence of the complainant was not absolute essential for hearing of the arguments and passing of appropriate order on the above-said application. The Court, while setting aside the impugned order held that the order suffered from material illegality since the Magistrate had mechanically passed the order without recording any opinion as to whether personal attendance of the complainant was necessary or could be dispensed with and whether in his absence the case could be further proceeded with. [Vikram Singh v. Naveen Siwatch, 2019 SCC OnLine P&H 5702, decided on 03-12-2019]

Case BriefsHigh Courts

Kerala High Court: B. Sudheendra Kumar, J., allowing the present petition observed, “Since the appeal was already filed, the court below had no jurisdiction to stay the execution petition in the absence of any order from the appellate court.”

Petitioner is a decree-holder, who filed praying for issuing a direction to the Station House Officer concerned, to protect the possession of the petitioner over the schedule property and also for taking prosecution for the violation of the decree. Court issued two orders which were under consideration before the instant Court.

With respect to the first order dismissing the application stating that if the order is violated, the petitioner can approach the court by filing proper application, it was observed, “It appears that the court below did not consider as to whether the decree was already violated and as to whether the police assistance sought for by the decree-holder had to be granted or not, in accordance with law. Since the court below did not consider the said aspects, Ext.P8 is not sustainable.” Addressing the second order, it was remarked, “As per Ext.P11, the court below stayed the execution petition till the disposal of the appeal. The application was filed under Order 21 Rule 26 CPC. It is settled law that Order 21 Rule 26 CPC is applicable only to transfer decree. The proper provision is Order 41 Rule 5(2). It is clear that the power of the execution court to stay the execution is only upto to the stage of filing the appeal. In this case, the appeal was already filed. Since the appeal was already filed, the court below had no jurisdiction to stay the execution petition in the absence of any order from the appellate court. In view of the above, Ext.P11 cannot be also sustained.”

Allowing the present petition, Court clarified the applicability of Order 41 Code of Civil Procedure, 1908 and further quashed the challenged orders.[Syamala v. Thapodhanan, 2020 SCC OnLine Ker 8401, decided on 22-01-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Jharkhand High Court: Rajesh Shankar, J., quashing the impugned letter, held, “The respondent 5 being an administrative/revenue Officer is supposed to know the basic law and he can not be permitted to act without jurisdiction so as to infringe the right to property of the petitioners in an arbitrary fashion.”

Background

The factual background of the case as stated in the writ petition is that the petitioners purchased the said land by virtue of three separate sale deeds and they came in peaceful possession of their respective land. Thereafter, they decided to construct a residential apartment over the same, however, some miscreants started threatening and making demand of ransom from them. Two individuals filed a petition under Section 144 Code of Criminal Procedure, 1973, before the Sub Divisional Officer, Sadar Ranchi, which was registered as Case No. M-2073 of 2019, and, thereafter, the petitioners were restrained by the respondents 5 and 6 from initiating construction work. Ultimately, the Sub-Divisional Officer, Sadar, Ranchi dismissed the aforesaid case vide order dated 22-01-2020. The petitioners then filed a representation dated 31-05-2020 requesting the respondent 6 to maintain law and order situation as the petitioners were apprehending interference of local goons once the construction work was started. However, when the petitioners started construction work in the month of May, 2020, the husband of the petitioner 2 was attacked and threatened by local goons and an amount of 10 lac was demanded as ransom from him which was duly reported to the police, resultantly an FIR was registered. The respondent 5 vide letter no.37/(ii) dated 08-06-2020 directed the respondent no.6 to take steps for stopping the construction work taking place over the said land, as Original Suit No.18 of 2020 was pending in the court of Civil Judge Senior Division-I, Ranchi. The said letter was subsequently handed over to the petitioners by the respondent no.6. Thereafter, the respondent no.6 issued notice dated 09-06-2020 to the petitioners, directing them to stop construction work over the said land till the disposal of the aforesaid suit in the light of the direction issued by the respondent 5 vide letter no.37/(ii) dated 08-06-2020. The present petition is moved to question the authority of the said notices and further for setting aside the same.

Contentions

Counsel for the petitioner, Amritansh Vats, referred to a catena of judgments by the Supreme Court, to emphasize that Right to Property is a Constitutional Right under Article 300-A of the Constitution and the Respondent authority does not possess any power or jurisdiction to arbitrarily restrain the petitioners from enjoying such right. Reliance was placed on;

  • Hari Krishna Mandir Trust v. State of Maharashtra, 2020 SCC OnLine SC 631, In this case, the Supreme Court held that the right to property may not be a fundamental right any longer but it is still a constitutional right under Article 300-A as well as a human right and no person can be deprived of his property save by the authority of law. The High Courts exercising their jurisdiction under Article 226 of the Constitution of India, not only have the power to issue a Writ of Mandamus or in nature thereof, but are duty-bound to exercise such power where the government or public authority has failed to exercise or has wrongly exercised discretion conferred upon it by a Statute, or a rule, or a policy decision of the government or has exercised such discretion with malafide, or on irrelevant consideration.
  • M.C. Mehta v. Union of India, 2020 SCC OnLine SC 648, With respect to the enforceability of Article 300-A, the Court observed, “The law in this behalf is explicit. Right of a person to construct residential houses in the residential area is a valuable right. The said right can only be regulated in terms of a regulatory statute but unless there exists a clear provision the same cannot be taken away.”
  • State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77, In the present case, the Court categorically held, “In absence of any substantive provision contained in a parliamentary or legislative enactment, a person cannot be refrained from dealing with his property in any manner he likes. Such statutory interdict would be opposed to one’s right to property as envisaged under Article 300-A of the Constitution.”
  • State of U.P. v. Manohar, (2005) 2 SCC 126, Supreme Court remarked, in the words,
    “Para 7. Ours is a constitutional democracy and the rights available to the citizens are declared by the Constitution. Although Article 19(1)(f) was deleted by the Forty-fourth Amendment to the Constitution, Article 300-A has been placed in the Constitution, which reads as follows:
    300-A. Persons not to be deprived of property save by authority of law.—No person shall be deprived of his property save by authority of law.
    Para 8. This is a case where we find utter lack of legal authority for deprivation of the respondent’s property by the appellants who are State authorities. In our view, this case was an eminently fit one for exercising the writ jurisdiction of the High Court under Article 226 of the Constitution. In our view, the High Court was somewhat liberal in not imposing exemplary costs on the appellants. We would have perhaps followed suit, but for the intransigence displayed before us.”
  • Delhi Airtech Services v. State of U.P., (2011) 9 SCC 354, A synonymity was drawn between the word ‘law’ as used under Article 21 and under Article 300-A by the Supreme Court, stating, “ Para 83. The expression law which figures both in Article 21 and Article 300-A must be given the same meaning. In both cases, the law would mean a validly enacted law. In order to be valid law it must be just, fair and reasonable having regard to the requirement of Articles 14 and 21 as explained in Maneka Gandhi, (1978) 1 SCC 248. This is especially so, as “law” in both the Articles 21 and 300-A is meant to prevent deprivation of rights. Insofar as Article 21 is concerned, it is a fundamental right whereas in Article 300-A it is a constitutional right which has been given a status of a basic human right.”

Observation

With respect to the alleged arbitrary exercise of power by the Administrative/Revenue Officer “If a suit is filed in any civil court, it is the court concerned which may grant an injunction on an application of the aggrieved person, if it is established that there exists a prima facie case, balance of convenience lies in his favour and if such order is not passed, he would suffer irreparable loss and injury. It is a settled law that mere filing of a suit does not entitle the plaintiff to presume an order of status quo unless the court by a specific order grants the same having taken into consideration the facts, applicable law and judicial pronouncement. The Circle officer has no power or jurisdiction to grant status quo on the mere filing of a civil suit. The respondent 5 being an administrative/revenue Officer is supposed to know the basic law and he can not be permitted to act without jurisdiction so as to infringe the right to property of the petitioners in an arbitrary fashion.”

Decision

Allowing the present petition, the Court quashed the impugned letter no. 37(ii) dated 08-06-2020 issued by the Circle Officer, as well as the letter dated 09-06-2020 issued by the Police Inspector cum officer in charge of the Kanke Police Station, Ranchi.[Sandip Khanna v. State of Jharkhand, 2020 SCC OnLine Jhar 1020, decided on 14-12-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Delhi High Court: Pratibha M. Singh, J., observed that:

Complaints of sexual harassment are initially filed with enormous reluctance. The power of the ICC to hold the enquiry and give a report ought to be within the scheme and the four corners of the statute itself.

In the instant petition, recommendations of the Internal Complaints Committee have been challenged as given in the report as well as further action taken by the Punjab National Bank on the basis of ICC’s report.

A complaint was filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 against respondent 3 who was working as the General Manager of respondent 1 Bank, in Mumbai.

The above-stated complaint was referred to the ICC, which was constituted by the Bank, consisting of four members.

What was the analysis of ICC?

ICC came to the conclusion that the relationship between the petitioner and respondent 3 was based on personal grounds with mutual consent, and that the allegations of sexual, emotional and mental harassment were not substantiated by the petitioner.

Hence, the complaint against respondent 3 was rejected.

ICC made additional observations that the behaviour of the parties had been inappropriate and unbecoming of officers/employees of the Bank and accordingly recommended the Competent Authority to take suitable action against the petitioner and the respondent 3.

Based on the above report, a charge sheet was issued against the petitioner under Regulation 6 of the Punjab National bank Officer Employees’ (Discipline & Appeal) Regulations, 1977, hence in view of the same, petitioner has filed the instant petition.

Single Judge in his order had stayed the ICC’s recommendation and the consequent charge-sheet.

Later during the pendency of the petition, the petitioner became eligible to be considered for promotion. Petitioner stated that her promotion was being held up in view of the pendency of the present petition.

Thereafter, the Bank was directed to independently consider the petitioner’s candidature for promotion, however, it was directed that the same shall not be given effect to and kept in a sealed cover. Due to the lockdown, the matter could not be heard.

Analysis and Decision

Bench on perusal of the facts and circumstances of the matter raised the question as to whether the ICC could have, in the first place, made a recommendation directing the competent authority to take action?

ICC in its report had concluded that the allegations were not substantiated and the complaint was not made out. and further added remarks in regard to the conduct of the petitioner and respondent.

High Court made an observation in light of Section 13 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, that is the allegations of sexual harassment or any other form of harassment, as contemplated under the Act, are not proved before the ICC, the ICC can only recommend the employer to not take any action in the particular matter.

In the instant case, ICC has gone beyond its statutory mandate and has made observations that both the parties indulged in inappropriate/unbecoming conduct and indiscipline action against them.

Bench held that the above-stated recommendation by the ICC was beyond jurisdiction.

Moral Policing

‘Moral Policing’ is not the job of the Management or of the ICC.

With regard to Moral Policing, Court expressed that, any consensual relationship among adults would not be the concern of the Management or of the ICC, so long as the said relationship does not affect the working and the discipline of the organisation and is not contrary to the Rules or code of conduct binding on the said employees. It is only if a complaint is made of sexual harassment under the Act that the Management can constitute the ICC to enquire into the same.

Bench in view of the above discussion found the last paragraph of ICC’s report in the instant case to be commenting on the conduct of the parties which is against the statute and hence the same was not tenable and liable to be set aside.

In view of the above position, the fact that the Petitioner has become eligible for promotion means that the Bank would accordingly offer her promotion in accordance with her seniority, performance and merit, as per the applicable service rules. [Bibha Pandey  v. Punjab National Bank,  2020 SCC OnLine Del 1639, decided on 16-12-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Green Tribunal (NGT), Principal Bench, New Delhi: The Bench of Justice Adarsh Kumar Goel (Chairperson) and Justice Sheo Kumar Singh (Judicial Member) and Dr Nagin Nanda (Expert Member)declined any relief to the applicant seeking an injunction against the demolition of Dhobi Ghat.

The instant application sought an injunction against the demolition of Dhobi Ghat, Okhla Delhi.

Applicant on an earlier occasion had approached the Delhi High Court by way of WP (C) 8963 of 2020, Muslim Kassar Vikas Sangthan (Reg.) v. Delhi Development Authority, the said petition was disposed of on 12-11-2020, wherein the Court had asked the petitioners to approach the NGT. 

Tribunal found the grievance to be out of the ambit of Sections 14 and 15 of the National Green Tribunal Act, 2010.

Bench added that jurisdiction of NGT under Sections 14 and 15 can be invoked by a victim of pollution for the restoration of environment or for compensation to the victim, and the said issue is not shown in the instant matter.

Hence, in view of the above application was disposed of. [Muslim Kassar Vikas Sangthan (Regd.) v. Delhi Development Authority, 2020 SCC OnLine NGT 867, decided on 11-12-2020]


Also Read:

Section 14 of the NGT Act:

Tribunal to settle disputes.—(1) The Tribunal shall have the jurisdiction over all civil cases where a substantial question relating to environment (including enforcement of any legal right relating to environment), is involved and such question arises out of the implementation of the enactments specified in Schedule I.

(2) The Tribunal shall hear the disputes arising from the questions referred to in sub-section (1) and settle such disputes and pass order thereon.

(3) No application for adjudication of dispute under this section shall be entertained by the Tribunal unless it is made within a period of six months from the date on which the cause of action for such dispute first arose:

Provided that the Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from filing the application within the said period, allow it to be filed within a further period not exceeding sixty days.

Section 15 of the NGT Act:

Reliefcompensation and restitution.—(1) The Tribunal may, by an order, provide,—

(arelief and compensation to the victims of pollution and other environmental damage arising under the enactments specified in the Schedule I (including accident occurring while handling any hazardous substance);

(b) for restitution of property damaged;

(c) for restitution of the environment for such area or areas,

as the Tribunal may think fit.

(2) The relief and compensation and restitution of property and environment referred to in clauses (a), (band (c) of sub-section (1) shall be in addition to the relief paid or payable under the Public Liability Insurance Act, 1991 (6 of 1991).

(3) No application for grant of any compensation or relief or restitution of property or environment under this section shall be entertained by the Tribunal unless it is made within a period of five years from the date on which the cause for such compensation or relief first arose:

Provided that the Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from filing the application within the said period, allow it to be filed within a further period not exceeding sixty days.

(4) The Tribunal may, having regard to the damage to public health, property and environment, divide the compensation or relief payable under separate heads specified in Schedule II so as to provide compensation or relief to the claimants and for restitution of the damaged property or environment, as it may think fit.

(5) Every claimant of the compensation or relief under this Act shall intimate to the Tribunal about the application filed to, or, as the case may be, compensation or relief received from, any other court or authority.

Case BriefsHigh Courts

Madhya Pradesh High Court: S.A.Dharmadhikari J., dismissed a writ petition which was filed invoking the jurisdiction of the Court under Article 226 of the Constitution of India.

The petitioner had alleged that his son (corpus) Ali Khan was in illegal detention of respondent 5 Yasmin Bano who was the wife of the petitioner. He contended that from the initial stage itself behavior of respondent 5 towards the petitioner was not good and she used to quarrel with his mother and other family member. The counsel for the petitioner, Mr Sushil Goswami submitted that the respondent 5 came to her maternal home in Gwalior without any intimation and refused to return back and did not even permit the petitioner to meet the son. He further submitted that as per the settled legal position father has the equal right as of the mother in respect of the son.

The Court explained that child with the mother can not be said to be in illegal confinement, the Court further explained that writ petition for habeas corpus was maintainable only if the person was in illegal confinement and in exceptional circumstances and it was not to justify or examine the legality of the custody. The court observed that in the present matter custody of the child was with the mother/respondent 5 can not be said to be illegal confinement. Remedy lies only under the Hindu Minority and Guardianship Act or the Guardianship and Wards Act as the case may be.

The Court while dismissing the appeal held that it was not inclined to exercise the jurisdiction under Article 226 of the Constitution of India and the petitioner could file an application for custody of the child under the appropriate law.[Mohd. Shakil Khan v. State of M.P., 2020 SCC OnLine MP 2825, decided on 11-12-2020]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Delhi High Court: Suresh Kumar Kait, J., addressed a matter involving the determination of jurisdiction with regard to the occurrence of a crime.

The instant petition was filed under Section 482 of the Criminal Procedure Code, 1973 in regard to quashing an FIR for the offences under Sections 420/406 of Penal Code, 1860.

Facts of the instant case:

Since 2009, the petitioner through his sole partnership had been undertaking the business of fresh/dehydrated onions and garlic and other perishable items export to various countries like Europe, Gulf and rest of Asia.

In January 2018, the Complainant’s office, Tiger Logistics, approached the Petitioner and one Makbul Sheikh- salesman of Tiger Logistics. Makbul Sheikh represented to the petitioner that respondent 2 is a commission agent and can provide cost-efficient and reliable services.

Petitioner, based on the transit time of 21 days promised by Tiger Logistics, entered into a sales contract with his customer Sadro SRL, an importer based in Italy. Upon such commitment, the Petitioner provided 13 bookings to Respondent 1 for 26 containers.

The Petitioner only as a goodwill gesture as a sincere exporter and upon the insistence of the representatives of Tiger Logistics paid an amount of Rs.10,76,100 through cheque.

Over the month of January 2018, petitioner had sent 26 shipments of fresh onions through but the shipment did not reach the Port f Naples within 21 days.

Petitioner issued an email to the representatives of Tiger Logistics based out of Gujarat expressing his concerns with regards to the delay of 14 days in the delivery of the shipment of fresh onions.

Due to the Petitioner’s growing concern over the delay in delivery of shipments and risk of loss with every passing day, the Petitioner on 16-04-2018 issued another email to the representatives of Tiger Logistics based out of Gujarat expressing his concern over the delay.

The above-stated delay was acknowledged and accepted and in light of the same representatives of the Tiger Logistics apologized for the delay in the delivery.

However, to the dismay of the petitioner, there was complete failure on the art of the logistics service as promised.

Petitioners were subjected to a huge loss due to the delay in shipments. Respondent 2 started demanding approximately Rs 37 lakhs from the petitioner. Since there was an utter failure of shipping services provided by Tiger Logistics which cannot claim any part of the payment from the petitioner.

Since the petitioner did not pay the above-stated amount, present FIR was registered against the petitioner.

Analysis, Law and Decision

Bench referred to the Supreme Court decision in V.V. Jose v. State of Gujarat, (2009) 3 SCC 78  wherein it was held that even in a case where allegation were made in regard to the failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 IPC could have been said to be made out.

Further, it was held in the above that, a matter which essentially involves dispute of a civil nature should not be allowed to be the subject matter of a criminal offence, the latter being not a shortcut of executing a decree which is non-existent.

Court in regard to the instant matter made an observation that:

“It is trite that an inquiry and trial with respect of an offence shall be conducted by the Court within whose local jurisdiction occurrence in question is said to have taken place and thereby cause of action has arisen. Section 178 and Section 179 of CrPC. are merely exceptions to this principle enumerated in Section 177, and their scope should not be enlarged on analogous consideration.”

Bench added that for determination of offences alleged to have been committed under Section 406 of the Penal Code 1860, Section 181 of CrPC lays down the jurisdiction of such court where “the offence was committed or any part of the property which is the subject of the offence was received or retained.”

 Jurisdiction and Breach of Trust

In view of the above-stated, Court held that,

Since the transaction between the parties in relation to the transaction of goods took place in Gujarat, the representations and meeting took place in Gujarat, the goods were shipped from Pipavav Port Gujarat, bill of ladings were released from Ahmedabad Gujarat, the invoices were raised by the entity based out of Gujarat and the jurisdiction of such invoices were subject to the court of Gujarat, therefore, applying the direct principles of Section 181, only the court situated in Gujarat can exercise jurisdiction over the alleged criminal breach of trust, if any.

 In case of Jai Prakash v. Dinesh Dayal: (1989) 39 DLT 376, this Court held that where the accused is carrying on business in a city, agreement to supply to complainant’s branch office at that city is entered within the local jurisdiction of that city, institution of complaint at New Delhi on the ground that the complainant’s head office situated there, is without jurisdiction.

In view of the above-discussed law and the facts and circumstances of the case, the registration of FIR in question in Delhi is an abuse of the process of law.

“Investigating Agency and Court should not be made an instrument of compelling a party to come to a place far away from his own place, to submit to the jurisdiction of a Court which actually has none.”

Hence, in the instant case, FIR was without jurisdiction and therefore the complainant attempted to seek unlawful recovery of money which was purely commercial matter.[Ramesh Boghabhai Bhut v. State, 2020 SCC OnLine Del 1475, decided on 23-11-2020]

Op EdsOP. ED.

With an increase in arbitration agreements, the issues with respect to jurisdiction have also increased. We have witnessed the issue of jurisdiction of courts in foreign seated arbitration getting more settled from Bhatia International[1] to Balco[2] and then to the 2015 Amendment. However, with the increase in domestic arbitration, the issue of jurisdiction of courts in India still has scope of being more precise and clear.

Section 20 CPC confers jurisdiction to such court, in case of a dispute pertaining to an agreement, within the local limits of whose jurisdiction either cause of action or part of cause of action has arisen or place of the defendant.[3] Therefore, the jurisdiction may lie upon more than one court. It is a settled position of law that an agreement may exclude the jurisdiction of other courts in case it lies upon more than one court but the jurisdiction can only be conferred upon the court which originally had it in the first place. The situation is a little different when it comes to arbitration agreement. Section 20 of the Arbitration Act, 1996[4] gives the parties autonomy to mutually choose jurisdiction of the court even if it did not have jurisdiction in the first place. For example, business of X is in Ahmedabad while Y is from Jaipur, a dispute arose between the parties wherein cause of action arose in Vadodara and part of cause of action also arose in Ahmedabad, X may choose either to file the suit in the courts of Vadodara, Ahmedabad or Jaipur, they may also exclude the jurisdiction of courts of Jaipur and Vadodara submitting themselves exclusively to the jurisdiction of the courts of Ahmedabad but cannot choose the jurisdiction of the court other than Vadodara, Ahmedabad or Jaipur, while in an arbitration agreement they may exclusively choose to submit to the jurisdiction of the court of Mumbai even if no part of cause of action arose in Mumbai.

This article discusses issues related to implied exclusion of courts in arbitration agreements. The above-stated issue arose in  Swastika Gases (P) Ltd. v. Indian Oil Corporation Ltd.[5] wherein Clause 18 of the agreement between the parties conferred jurisdiction on the courts at Kolkata. It was the case of the appellant that part of cause of action arose in Jaipur and that the agreement does not expressly oust the jurisdiction of other courts as Clause 18 cannot be construed as an ouster clause due to lack of words like “alone”, “only”, “exclusive” and “exclusive jurisdiction” in the clause and therefore the courts of Jaipur also have the jurisdiction. The Supreme Court held that for jurisdiction clause in the agreement the words like “alone”, “only”, “exclusive” or “exclusive jurisdiction” are not decisive and do not make any material difference, that the intention of the parties by having Clause 18 in the agreement is clear and unambiguous and that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction.[6]

The said judgment was followed in B.E. Simoese Von Staraburg Niedenthal v. Chhattisgarh Investment Ltd. [7] and in Indus Mobile Distribution (P) Ltd.  v. Datawind Innovations (P)  Ltd.[8]  In B.E. Simoese[9] jurisdiction clause of the agreement stated that “the courts at Goa shall have exclusive jurisdiction”. Whereas in Indus Mobile[10], the seat of arbitration was Mumbai and the jurisdiction clause stated that “all disputes and differences of any kind whatever arising out of or in connection with this agreement shall be subject to the exclusive jurisdiction of courts of Mumbai only”. It is pertinent to note here that there was express exclusion of jurisdiction of other courts by using words like exclusive and only in respective cases. However, in Indus Mobile[11] the  Supreme Court went on to hold that in arbitration law, the moment “seat” is determined, the court of that place would vest with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties.

The issue was thereafter discussed in Brahmani River Pellets Ltd. v. Kamachi Industries Ltd.[12] wherein the jurisdiction clause of the agreement stated that “Arbitration shall be under the Arbitration and Conciliation Act, 1996 and the venue of arbitration shall be Bhubaneswar”. The respondent in the present case filed a petition under Section 11 of the Arbitration Act before the Madras High Court for appointment of sole arbitrator. The case of the appellant was that the parties have agreed that the seat of arbitration be Bhubaneswar, that when the parties have agreed for a place/venue for arbitration, it gets the status of seat which is the juridical seat and therefore, only the Orissa High Court has exclusive jurisdiction to appoint the arbitrator. The Supreme Court held that the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and the parties intended to exclude all other courts. In the present case, the parties have agreed that the “venue” of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having chosen Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastika[13], non-use of words like “exclusive jurisdiction”, “only”, “exclusive”, “alone” is not decisive and does not make any material difference. The  Supreme Court relied upon the judgments in Swastika[14] and Indus Mobile[15]  to establish that choosing of seat of arbitration not only vests jurisdiction to the courts of the chosen seat but also implies exclusion of other courts as well. By virtue of the said series of judgments, it is safe to conclude that Section 11 application would be maintainable only before a High Court under whose jurisdiction the place chosen as seat of the arbitration is situated and not before any other High Court.

Though the situation might slightly be different when it comes to application filed under Section 9 before a court. Swastika[16], Mobile[17] and Brahmani River[18] were dealing with Section 11 application whereas B.E. Simoese[19] dealt with Section 9 application. The Supreme Court in Indus Mobile[20] held that the moment “seat” is determined, the court of that place would vest with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties, it is pertinent to note that Section 9 application is not for regulating arbitral proceeding but to provide interim relief to the parties before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36 and hence mere choosing of seat would not oust the jurisdiction of other competent courts[21] to entertain Section 9 application. Nevertheless, any specific clause in the arbitration agreement vesting jurisdiction to the court of chosen seat, even if without the usage of words such as “only”, “alone”, “exclusive” and “exclusive jurisdiction”, would imply the ouster of jurisdiction of other courts from entertaining Section 9 application.


* Advocate, Gujarat High Court

[1] Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105 

[2] Bharat Aluminium Company Ltd.  v. Kaiser Aluminium Technical Services, (2012) 9 SCC 552

[3] Section 20 of Civil Procedure Code: Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises.

[4] Arbitration and Conciliation Act, 1996, S. 20

[5] (2013) 9 SCC 32

[6] Swastika Gases (P)  Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32, para 32.

“It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither a forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner. It is not necessary to include words like alone, only, exclusively to confer jurisdiction to a court and that the intension of parties matter. Therefore exclusion of courts can also be implied.”

[7] (2015) 12 SCC 225

[8] (2017) 7 SCC 678

[9] (2015) 12 SCC 225

[10] (2017) 7 SCC 678

[11] Ibid

[12] (2020) 5 SCC 462

[13] (2013) 9 SCC 32

[14] Ibid

[15] (2017) 7 SCC 678

[16](2013) 9 SCC 32

[17]  (2017) 7 SCC 678

[18] (2020) 5 SCC 462

[19]  (2015) 12 SCC 225

[20]  (2017) 7 SCC 678

[21] Clause (e) of sub-section (1) of Section 2 of the Arbitration Act, 1996 defines “court” which means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise of its ordinary civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes.

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of L. Nageswara Rao, Hemant Gupta* and Ajay Rastogi, JJ has held that the High Court is not obliged to frame substantial question of law, in case, it finds no error in the findings recorded by the First Appellate Court.

The Court was hearing the case relating to suit for permanent injunction wherein the High had dismissed the second appeal without framing any substantial question of law. It was contended before the Court that framing of substantial question of law is mandatory in terms of Section 100 CPC and hence, the matter should be remitted back to the High Court for determination of the substantial question of law framed by the appellants.

On this, the Court explained that Sub-section (1) of Section 100 CPC contemplates that an appeal shall lie to the High Court if it is satisfied that the case involves a substantial question of law. The substantial question of law is required to be precisely stated in the memorandum of appeal. If the High Court is satisfied that such substantial question of law is involved, it is required to formulate that question. The appeal has to be heard on the question so formulated. However, the Court has the power to hear appeal on any other substantial question of law on satisfaction of the conditions laid down in the proviso of Section 100 CPC.

Therefore, if the substantial question of law framed by the appellants are found to be arising in the case, only then the High Court is required to formulate the same for consideration. If no such question arises, it is not necessary for the High Court to frame any substantial question of law.

“The formulation of substantial question of law or reformulation of the same in terms of the proviso arises only if there are some questions of law and not in the absence of any substantial question of law.”

It was the case of the appellants that the First Appellate Court had ordered that the question of jurisdiction of Civil Court would be decided first, however the appeal was decided without dealing with the said issue., thereby causing serious prejudice to the rights of the appellants. Similarly, the application under Order XLI Rule 27 of the Code was not decided which was again prejudicial to their rights.

The Court, however, found that such substantial questions of law did not arise for consideration. The issue of jurisdiction was not an issue of fact but of law. Therefore, it could very well be decided by the First Appellate Court while taking up the entire appeal for hearing.

It was noticed that the suit was simpliciter for injunction based upon possession of the property, hence, the said suit could be decided only by the Civil Court as there is no mechanism prescribed under the Land Revenue Act for grant of injunction in respect of disputes relating to possession. The Civil Court has plenary jurisdiction to entertain all disputes except in cases where the jurisdiction of the Civil Court is either expressly or impliedly barred in terms of Section 9 CPC. Since there is no implied or express bar of jurisdiction of the Civil Court in terms of Section 9 CPC, the Civil Court has plenary jurisdiction to decide all disputes between the parties.

Hence, it was held that the High Court did not commit any illegality in not framing any substantial question of law while dismissing the appeal filed by the appellants.

[Kirpa Ram v. Surendra Deo Gaur,  2020 SCC OnLine SC 935, decided on 16.11.2020]


*Justice Hemant Gupta has penned this judgment 

Case BriefsHigh Courts

Bombay High Court: Vibha Kankanwadi, J., observed that,

“The practice of pronouncing Judgments in appeal against conviction in absence of the accused, thereby dismissing the appeal and then directing the trial Court to issue warrant, requires to be deprecated.”

The instant application was filed by the original accused for suspension of substantive sentence, during the pendency of revision imposed against him by Judicial Magistrate after holding him guilty of committing an offence punishable under Section 138 of the Negotiable Instruments Act.

Bench stated that at first it is required to be seen, as to whether before admitting the revision and while dealing with the present application whether it is necessary first to direct the applicant to surrender himself.

It appears that the Appellate Court in the present case pronounced the Judgment on 04-05-2019 in absence of the appellant-accused.

Section 387 of CrPC deals with Judgment of subordinate Appellate Court and it provides that the rule contained in Chapter XXVII as to the judgment of a Criminal Court of original jurisdiction shall apply, so far as may be practicable, to the judgment in appeal of a Court of Session or Chief Judicial Magistrate.

“…if directions/ order is passed by the Appellate Court for exemption of the accused, then only the Judgment can be pronounced in absence of the accused; otherwise his presence should be secured before the Judgment is pronounced.”

No doubt, sub section (7) of Section 353 of the Code provides, that no judgment delivered by any Criminal Court shall be deemed to be invalid by the reason only in absence of any party, however, the Appellate Court cannot insist upon invoking sub section (7) of Section 353 of the Code if there was no endeavour on its part to secure the presence of the accused.

Court stated that it is the Appellate Court’s duty to see that the Judgment in an appeal against conviction should be pronounced in presence of the accused (only exception as enumerated in Section 353 (6) of the Code) and to take such appellant in custody upon the confirmation of the conviction.

Coming to the question of whether in the present case, Court could direct the revision applicant to surrender himself before the Appellate Court and then take up revision for hearing, Bench stated that the answer for the said question was in the Supreme Court’s decision of Bihari Prasad Singh v. State of Bihar, (2000) 10 SCC 346.

In the above-cited case, the following question was considered:

Whether the High Court while exercising its jurisdiction can refuse to hear or entertain the matter on the ground that the accused has not surrendered?

Following was observed:

“Under the provisions of the Criminal Procedure Code, there is no such requirement though many High Courts in this country have made such provision in the respective rules of the High Court. But it is stated to us that there is no such rule in the Patna High Court Rules. In that view of the matter the High Court was not justified in rejecting the application for revision solely on the ground that the accused has not surrendered.”

In view of the above discussion, Court held that the revision application cannot be rejected on the ground that the accused did not surrender and therefore, there was no bar on considering the present application.

What was the basic crux and background of the matter?

The complainant stated he had extended loan amount, from time to time, and the disputed cheque was given by the accused in the discharge of said legal debt or liability. Accused took a defence that he had already given certain cheques in possession of the complainant and one of the said cheques was misused. He led evidence and in his defence he tried to show, that the presumption under Section 139 of the Negotiable Instruments Act had been rebutted by him.

Court found the above to be an arguable case and hence held that the revision deserves to be admitted.

Bench directed for the suspension of the substantive part of the sentence till the revision was decided.[Fazal Khalil Ahemad Shaikh v. Nadkishor Ramnivasji Agrawal, Criminal Application No. 2743 of 2019, decided on 13-02-2020]