1. This second appeal arises out of the suit brought by the appellant Messrs. Chhelu Mal Hari Ram for rendition of accounts for the sale of 300 bags of cotton seeds alleged to have been entrusted to the defendant firm Mangtu Ram Devki Nandan of Patan I of Tehsil Nim-ka-thana (Rajasthan) for sale as commission agents. In contesting the suit the defendant-firm and its partners, who were impleaded as defendants, besides denying any such entrustment of goods for sale, objected that the Court had no jurisdiction to try the suit as neither any part of cause of action arose within the jurisdiction of the Court nor any of the parties resided within the District of Mohindergarh where the suit was instituted. The learned trial Judge rejected the plea of jurisdiction and dealing with the merits of the plaintiff's plaint granted a preliminary decree for rendition of accounts with costs. In appeal, the learned District Judge, Sangrur, without dealing with the issues relating to the merits of the plaintiff's claim reversed the decree and dismissed the suit on the finding that the decision of the trial Court on the issue of jurisdiction was unsustainable and not warranted by the evidence adducted at the trial. He held that no part of the cause of action arose at Narnaul where the suit had been instituted and, accordingly, the Subordinate Judge, who had tried the suit, had no jurisdiction to try the same. It is against this appellate decree dated 18th September, 1963, that the plaintiff-firm has preferred this appeal.
2. Admittedly, none of the defendants resided or carried on business at Narnaul or in any part of Mohindergarh District of which Narnaul is the headquarters. In returning the finding that no part of cause of action arose within the territorial jurisdiction of the trial Court, the learned District Judge went into the entire relevant evidence and disagreed with its assessment by the trial Court. The facts found by him in dealing with this matter on assessment of the evidence cannot be disputed. But in challenging the finding of the learned District Judge that the Court had no jurisdiction to try the suit, Mr. S. P. Goyal, appearing for the appellant has contended that a mere wrong decision on the question of jurisdiction did not confer any jurisdiction on the District Judge acting as appellate Court to dismiss the suit without going into its merits. In this connection, he has placed reliance on Section 21 of the Code of Civil Procedure, which provides:
'No objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earlier possible opportunity and in all cases where issues are settled at or before such settlement, and unless there has been a consequent failure of justice.'
3. Mr. Goyal argues that though the objection to the jurisdiction was taken at the earliest opportunity, in view of the clear wording of the section the finding of the trial Court on the question of jurisdiction, even though it be erroneous, could not be set aside by the Appellate Court without coming to the conclusion that the lack of territorial jurisdiction had resulted in 'consequent failure of justice.' On reference to the judgment under appeal I find that this aspect of the matter was not present to the mind of the learned District Judge and he did not go into the question whether the wrong assumption of the jurisdiction by the Subordinate Judge had resulted in failure of justice in this particular case. The provision as it stands cannot be construed as meaning that wherever a wrong finding on the issue of jurisdiction is recorded, failure of justice has to be presumed. On the contrary, it has been observed by a Full Bench in Premadib Pictures v. New Sound Pictures, AIR 1955 Madh Bha 193, that the expression 'failure of justice' refers to the merits of the case. Support of this observation was sought from the decision of the Lahore High Court in Kanshi Ram Roshan Lal v. Mohkam Chand Chela Ram, AIR 1934 Lah 233, wherein Bhide, J. had said that in view of the provisions of Section 21 in the absence of prejudice to the defendant, the decree passed by the trial Court should be upheld. In Lakhshmi Datt Rup Chand v. Goverdhan Dass, 1965 Cur LJ 256 (Punj) Dua, J., (now an Hon'ble Judge of the Supreme Court) distinguishing the cases of lack of territorial jurisdiction from those of inherent lack of jurisdiction observed :
'I, however, cannot help remarking the defects relating to territorial jurisdiction are not treated with the same seriousness or strictness as defects relating to want of inherent jurisdiction. In M/s. Tarsema Textile Traders, Bombay v. Tarlok Sadhu Singh, AIR 1962 Punj 470, I had occasion to deal with this aspect. It was observed there that the objection relating to territorial jurisdiction is taken out of the general principle that defect of jurisdiction in respect of the subject-matter cannot be cured even by consent and that the question of territorial jurisdiction is more or less placed at par with irregularities which would vitiate the order only if resultant failure of justice is also established.'
4. Falshaw, J. (as his Lordships then was) in Sarup Singh v. Ram Ditta Mal, ILR (1961) 1 Punj 508, dealt with the matter in these words:--
'It is clear that the law recognizes a vast difference between inherent jurisdiction and purely local jurisdiction, at any rate as regards civil Courts. This can be seen most clearly in the provisions of Section 21 of the Code of Civil Procedure which provides that no objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement, and unless there has been a consequent failure of justice. The effect of this is that a defendant who fails to object to the local jurisdiction of a Court at the outset, either through ignorance of the law or indifference, is precluded from raising the question of local jurisdiction in any subsequent appeal or revision, and even if it has raised an objection at the proper time in the trial Court or it has been decided against him, he cannot succeed in appeal or revision on this ground unless he can show that the trial of the case by a Court which did not possess local jurisdiction has resulted in the failure of justice. This is a clear recognition of the principle that local jurisdiction in civil law at any rate is something quite distinct from inherent jurisdiction.'
5. Later, a Division Bench of this Court in Yogeshwar Raj Puri v. Yog Raj Puri, AIR 1967 Punj 163, to which A. N. Grover, J., (now an Hon'ble Judge of the Supreme Court) was a party, reiterated the same rule and held that when a case has been tried out by a Court on merits and judgment delivered, it cannot be reversed purely on the ground of jurisdiction unless it has resulted in failure of justice. That was also a case for rendition of accounts and the learned Judge further observed:
'Where in a suit for accounts, parties had led evidence on issues relating to merits and a preliminary decree had been passed, the appellate Courts in appeal against the preliminary decree cannot go into the question of jurisdiction in the absence of failure of justice.'
6. It is needles to multiply authorities on this point as the wording of Section 21 of the Code of Civil Procedure is quite clear and unambiguous. It not only requires that objection to jurisdiction should be taken at the earliest, but the finding given by the Court on the issue of jurisdiction can be reversed only if it is further proved that the wrong finding recorded on that issue has resulted in failure of justice. In the case with which we are dealing, no such finding as to the failure of justice has been recorded by the learned District Judge. Accordingly, he was clearly in error in dismissing the suit solely in reversing the decision of the trial Court on the question of jurisdiction. The appeal is, accordingly, accepted. The decree and the judgment of the learned District Judge are set aside and the case remanded to the Court of District Judge, Gurgaon at Narnaul for re-hearing the appeal on merits in the light of the observations made above. Parties should appear before the District Judge on 24th March, 1972. No order as to costs.
7. Appeal accepted.