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HIRALAL V. KALINATH

Hiralal v. kalinath [1962] 2SCR 747

ISSUE:

  • Whether the leave obtained had been rightly obtained or wrongly obtained is not a matter which can be agitated at the execution stage?

RULE:

  • The objection as to the local jurisdiction of a Court does not stand on the same footing as an objection to the competence of a Court to try a case. The competence of a Court to try a case goes to the very root of the jurisdiction and where it is lacking it is a case of inherent lack of jurisdiction. On the other hand, an objection as to the local jurisdiction of a Court can be waived and this principle has been given statutory recognition by enactments like S. 21 of the Code of Civil Procedure.

FACTS:

  • The appellant wished to acquire shares in certain mills, popularly known as ‘John Mills’, at Agra. He engaged the services of the respondent to negotiate the deal on certain terms.
  • The bargain was concluded, and the appellant, together with another person, purchased the entire interest of one Major A. U. John by an indenture of sale dated July 10, 1946.
  • The respondent instituted a suit, being suit No. 3718 of 1947, on the original side of the High Court of judicature at Bombay for recovery of his commission, amounting to one lakh of rupees, in respect of the transaction aforesaid. The suit was eventually referred to the arbitration of one Mr. W. E. Pereira, administrator of the estate of the aforesaid Major A. U. John, deceased.
  • One of the defences taken by the appellant, as defendant in the action, was that the suit filed in the Bombay High Court, as aforesaid, after obtaining leave of that Court, under clause 12 of the Letters Patent was outside the territorial jurisdiction of the Bombay High Court on the original side, in as much as the entire cause of action, if any, had arisen at Agra.
  • The arbitrator gave an award in favour of the respondent to the extent of decreeing his claim for only seventy five thousand rupees as commission, with interest at 6% per annum pendente lite. Proceedings were taken in the High Court of Bombay for setting aside the award on certain grounds, not necessary to be stated here.
  • The Bombay High Court found that there was no defect in the award and that there was no legal misconduct on the part of the arbitrator. The High Court further held that the petition was frivolous, and dismissed it with costs.
  • The appellant preferred an appeal which was dismissed by a Division Bench of the High Court of Bombay on January 21, 1952. The award was, thus, incorporated in a decree of the High Court.
  • That decree was transferred to the court of the District Judge Agra, for execution. On February 5, 1952 the execution proceedings were instituted by the decree-holder in the Court of the Civil Judge, Agra, to realize the sum of one lakh ten thousand rupees, approximately, on the basis of the decree passed as aforesaid by the Bombay High Court.

HELD:

  • In that case, the suit had been instituted in the Court of the Subordinate Judge, who was incompetent to try it. By consent of the parties, the case was transferred to the Court of the District Judge for convenience of trial. It was laid down by the Privy Council that as the Court in which the suit had been originally instituted was entirely lacking in the jurisdiction, in the sense that it was incompetent to try it, whatever happened subsequently was null and void because the consent of parties could not operate to confer jurisdiction on a Court which was incompetent to try the suit.
  • That decision has no relevance to a case like the present where there could be no question of inherent lack of jurisdiction in the sense that the Bombay High Court was incompetent to try a suit of that kind. The objection to its territorial jurisdiction is one that does not go to the competence of the Court and can, therefore, be waived.
  • In the instant case, when the plaintiff obtained the leave of the Bombay High Court on the original side, under clause 12 of the Letters Patent, the correctness of the procedure or of the order granting the leave could be questioned by the defendant or the objection could be waived by him.
  • When he agreed to refer the matter to arbitration through Court, he would be deemed to have waived his objection to the territorial jurisdiction of the Court, raised by him in his written statement. It is well settled that the objection as to local jurisdiction of a Court does not stand on the same footing as an objection to the competence of a Court to try a case.
  • The competence of a Court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is a case of inherent lack of jurisdiction. On the other hand, an objection as to the local jurisdiction of a Court can be waived and this principle has been given statutory recognition by enactments like Section 21 of the Code of Civil Procedure.
  • Having consented to have the controversy between the parties resolved by reference to arbitration through Court, the defendant deprived himself of the right to question the authority of the Court to refer the matter to arbitration or of the arbitrator to render the award.
  • It is clear, therefore, that the defendant is estopped from challenging the jurisdiction of the Bombay High Court to entertain the suit and to make the reference to the arbitrator.
  • He is equally estopped from challenging the authority of the arbitrator to render the award. In our opinion this conclusion is sufficient to dispose of the appeal. It is not, therefore, necessary to determine the other points in controversy, including the question of whether The Decrees and Orders Validating Act, 1936 (Act V of 1936) had the effect of validating what otherwise may have been invalid.
  • Appeal Dismissed.