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Firm Ramnath Ramchander Vs. Firm Bhagatram and Co. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtRajasthan High Court
Decided On
Case NumberFirst Appeal No. 55 of 1951
Judge
Reported inAIR1960Raj219
ActsLimitation Act, 1908 - Sections 14; High Court Rules; High Court Orders; Rajasthan High Court Rules, 1952 - Rule 59; Code of Civil Procedure (CPC) , 1908 - Sections 100
AppellantFirm Ramnath Ramchander
RespondentFirm Bhagatram and Co.
Appellant Advocate M.D. Bhargava, Adv.
Respondent Advocate P.C. Bhandari, Adv.
DispositionAppeal dismissed
Cases ReferredManghanmal v. Fernandez
Excerpt:
.....and has been pressed with considerable insistence is founded upon the words 'in a court which from defect of jurisdiction or other cause of a like nature is unable to entertain if occurring in section 14 of the limitation act and the corresponding kishangarh act. it was contended that in order to attract the provisions of section 14 of the limitation act, among other things, it must be shown that the court had an inherent incapacity to entertain the suit and that this incapacity should arise out of a defect of jurisdiction or other came of a like nature. that the plaintiffs had acquired disability to prosecute the suit in the beawar court in consequence of an agreement between the parties, cannot amount to saying that the beawar court was unable to entertain the suit on account of defect..........and has been pressed with considerable insistence is founded upon the words 'in a court which from defect of jurisdiction or other cause of a like nature is unable to entertain if occurring in section 14 of the limitation act and the corresponding kishangarh act. it was contended that in order to attract the provisions of section 14 of the limitation act, among other things, it must be shown that the court had an inherent incapacity to entertain the suit and that this incapacity should arise out of a defect of jurisdiction or other came of a like nature.in the present case, it was pointed out that the beawar court had jurisdiction to entertain the suit in view of the defendants' residence within the jurisdiction of that court and, therefore, there was no inability on the part of the.....
Judgment:

Chhangani, J.

1. This is a first appeal by the defendants against the decree dated 14th of August, 1951 for an amount of Rs. 9,500/3/- passed by the Civil Judge, Kishangarh against them and in favour of the plaintiffs-respondents and the sole point for determination is whether the plaintiffs-respondents were rightly given by the trial court the benefit under section 14 of the Limitation Act to bring within time their suit which was admittedly presented beyond the prescribed period of Limitation. The relevant facts may very shortly be stated as follows:--

The plaintiffs-respondents, a partnership firm deal in the purchase and sale of gold, silver and yarn and also carry on business as commission agents. The defendants who are the members of a joint Hindu family firm entered into various transactions of sale and purchase of gold, silver and yarn during period from Bhadva Vadi 12, samwat 2000 to Kartik Sudi 15, samwat 2000 through the agency of the plaintiffs' firm, alleging that as a result of these transactions an amount of Rs. 11,454/15/-became due to the plaintiffs' firm from the defendants.

The plaintiffs filed a suit for the recovery of that amount in the court of Sub-Judge, First Class, Beawar on the 17th of May, 1944. The defendants resisted the plaintiffs' suit and, inter alia, pleaded that there was a contract between the parties to the effect that the suits arising between them would be instituted in Kishangarh, Courts and, therefore, the plaintiffs could not bring the suit in the court of the Sub-Judge, First Class, Bewar, The Sub Judge, First Class, Beawar did not try the suit on merits.

It held that the agreement between the parties to the effect that suits would be instituted in Kishangarh courts should be enforced and the plaintiffs be asked to institute the suit at Kishangarh Court. It, therefore, directed the return of the plaint to the plaintiffs for presentation to the proper court on 14th of January, 1947. An appeal by the plaintiffs against the order of the Sub Judge, First Class Beawar was dismissed by the Judicial Commissioner, vide his order dated 24th of March, 1949.

2. Thereafter, the plaintiffs filed the present suit out of which this appeal arises for an amount of Rs. 11,454/15/- in the court of the District Judge, Kishangarh, which was ultimately tried by the Senior Civil Judge. The defendants raised various pleas including that of limitation. The plea of the defendants relating to limitation was decided on 23rd of August, 1950 against the defendants. The trial court relied upon Chittaranjan Guha v. Parul Rani Nandi AIR 1946 Cal 112 and observed that the question whether parties can by an agreement restrict the choice of forum was not free from doubt and consequently the plaintiffs' action in filing the suit in the Beawar court cannot be said to be clearly against law.

It, therefore, gave benefit of doubt to the plaintiffs respondents. Ultimately, the suit was decreed on, 14th of August, 1951. The defendants thereupon filed the present appeal and simply raised the question of limitation as stated above. The appeal was heard by a Division Bench of this Court consisting of Ranawat and Sharma JJ. OB 26th of March, 1958. Before that Bench, it was argued that the Beawar court being a foreign court in 1944 was not a court to which the Kishangarh State Limitation Act, 1944 could be applied and, therefore, the plaintiffs could not get the benefit of the pendency of suit in that court. The respondents answered this contention by pleading that the Beawar court could not be regarded as a foreign court. The Division Bench formulated the following question and referred it to a Full Bench of this Court: (Since reported in AIR 1959 Raj 149):

'Whether advantage can be taken under Section 15 of the Kishangarh State Limitation Act comesponding to Section 14 of the Indian Limitation Act of the pendency of a suit in the courts of the erstwhile territory of the Ajmer-Merwara in subsequent suit in Kishangarh Court in view of the accession of Kishangarh State to the Dominion of India and thereafter its becoming a part of the Union of India and specially the merger of the erstwhile State of Ajmer with Rajasthan under the State Re-organization Act, 1956?'

3. The Full Bench after hearing the parties at length divided the question in the following two parts:--

'(1) Whether the plaintiffs could take advantage of Section 15 of the Kishangarh State Limitation Act (corresponding to Section 14 of the Indian Limitation Act) of the pendency of a suit in the courts of the erstwhile territory of Ajmer-Merwara, in a subsequent suit in Kishangarh court.

(2) Whether such an advantage could be taken in view of the accession of Kishangarh State to the Dominion of India and thereafter its having become a part of the Union of India and specially the merger of the erstwhile State of Ajmer-Merwara with Rajasthan under the States Reorganization Act, 1956.'

4. The first question was considered and answered in the affirmative.

5. The Full Bench, in substance, held that the foreign court will also be included in the word 'court' occurring in Section 14. It also held that the previous suit was prosecuted by the plaintiffs respondents in good faith. In view of this finding, the Full Bench considered it unnecessary to answer the second part of the question. After the return if the answer of the question by the Full Bench, the case was again ,argued at great length before us.

6. At the outset, Mr. M. D. Bhargava appearing for the defendants appellants contended that the question of good faith was not referred to the Full Bench at all, nor was it argued before it and. therefore, any decision given by the Full Bench on that point was not binding on this Court and we should allow the appellants to reargue the point. Learned counsel for the appellant relied on Rule 59 of the Rules of this Court and Young v. Bristol Aeroplane Co. Ltd. 1944-2 All ER 293 in support of this contention. Shri P. C. Bhandari, appearing for the respondents has unambiguously stated before us that Mr. Bhargava's statement in this connection is correct

7. Rule 59 of the Rajasthan High Court Rules, 1952, reads as follows:--

'The Chief Justice may constitute a Bench of two or more Judges to decide a case or any question or questions of law formulated by a Bench hearing a case. In the latter event the decision of such Bench on the question or questions so formulated shall be returned to the Bench hearing the case and that Bench shall follow that decision on such question or questions and dispose of the case after deciding the remaining questions, if any, arising therein.'

8. Our attention was invited to the second sentence of the Rule and it was submitted that the Full Bench can return decisions only on the question or questions so formulated and that the Bench hearing shall follow those decisions only. This Rule is merely procedural and cannot be invoked for deciding the authority of the Full Bench vis-a-vis the smaller Benches. It is well settled that the Division Benches are bound by the Full Bench decisions and that it is competent to the Full Bench to over-rule the decisions of the Division Benches and in these circumstances, we cannot take the procedural Rule to enable a Division Bench to ignore the decision of a Full Bench. There is no substance in the arguments based upon Rule 59.

9. The case of 1944-2 All ER 293 lays down that in England, the court of appeal is bound to follow previous decisions of its own as well as those of courts of co-ordinate jurisdiction with 3 exceptions and that a full court of the Court of Appeal has no greater powers than any division of the court. This ruling has no relevance in India, as it is to be borne in mind that the English decisions may well have been influenced by considerations peculiar to England and cannot be applied in India where the conditions are different and where the law with regard to the authority of a Full Bench vis-a-vis the other Benches is settled. We cannot also help observing that if the appellants had any grievance against the decision of the Full Bench, the remedy cannot be by way of request to the Division Bench to ignore the Full Bench decision.

10. We are of the opinion that the question of good faith is inseparable from the question of giving advantage under Section 15 of the Kishangarh State Limitation Act, 1944 (corresponding to Section 14 of the Indian Limitation Act). We are unable to hold that the Full Bench had acted beyond its jurisdiction in recording its opinion thereon and the omission on the part of the parties to address arguments on the question is of no consequence in the peculiar facts of this case. The good faith of the plaintiffs respondents is apparent from the facts of the case and the Full Bench has given cogent reasons for its finding on the point and, in our opinion, the defendants appellants can have no legitimate grievance whatsoever on the point. In any case as we look at the matter, this finding is binding upon us and we find it difficult to hold that the question of good faith can be reagitated before us,

11. Learned counsel for the respondents also cited Khanchand Malhotra v. Ruby General Insurance Co. Ltd., 61 Pun LR 114 for our consideration. The facts in this case were that Jullundur court and Amritsar court had concurrent jurisdiction, but the forum in the event of a dispute had been determined by the terms of contract between the parties, whereby the cause had to be taken to the Amritsar court. Khosla J. observed that a mere reference to the conditions of the insurance policy would have directed the attention of the plaintiff to the clause showing that in case of any dispute between the parties, the cause of action was to be taken to the particular court and in these facts and circumstances, starting the action at Jullundur amounted to nothing but negligence which could not entitle him to any benefit of the provisions of Section 14 of the Limitation Act.

This Punjab case is of instance where the plaintiff disregarded a very clear agreement made for the benefit of the defendant. Secondly, this case arose after the law relating to restriction of choice of forum had become fully settled. The facts of the case before us are materially different. The present case was instituted at Beawar in 1944 when there were some Lahore and Calcutta authorities taking a different view with regard to the agreements restricting the choice of forum. The question of Private International Law has also to be considered for the present case and finally, it was a case of a plaintiff ignoring an agreement secured for his benefit and choosing a forum extremely convenient to the defendant. We have no doubt about the good faith of the plaintiff and we cannot accept the contention of the appellant's learned counsel. We may add that the question of good faith is essentially a question of fact and cannot he decided on mere formulas deducible from eases but must be decided on the facts of each case.

12. The last argument which has been presented with some elaboration and has been pressed with considerable insistence is founded upon the words 'in a court which from defect of jurisdiction or other cause of a like nature is unable to entertain if occurring in Section 14 of the Limitation Act and the corresponding Kishangarh Act. It was contended that in order to attract the provisions of Section 14 of the Limitation Act, among other things, it must be shown that the court had an inherent incapacity to entertain the suit and that this incapacity should arise out of a defect of jurisdiction or other came of a like nature.

In the present case, it was pointed out that the Beawar court had jurisdiction to entertain the suit in view of the defendants' residence within the jurisdiction of that court and, therefore, there was no inability on the part of the court to entertain the suit. The Beawar court simply gave effect to the agreement between the parties, whereby the plaintiffs' choice of forum restricted to the Kishangarh courts. That the plaintiffs had acquired disability to prosecute the suit in the Beawar court in consequence of an agreement between the parties, cannot amount to saying that the Beawar Court was unable to entertain the suit on account of defect of jurisdiction or other cause of a like nature.

13. Learned counsel for the appellants relied upon the principle that the parties cannot by consent confer jurisdiction upon courts nor can they create a defect of jurisdiction and the further principle that there is clear distinction between saying that the court has no jurisdiction and that the court should not entertain the suit because of the agreement between the parties to file a suit in the particular Court. A number of authorities were cited in support of these principles. Reliance was placed on Indian Publishers Ltd. v. Aldridge, ILR 35 Cal 728 for interpreting the words 'unable to entertain' as indicating inability to entertain the suit in its inception. The argument is indeed plausible and possesses an attractive subtility. However, on a closer scrutiny, we do not feel persuaded to accept it,

14. Dealing with the principles stated above, it is unnecessary to refer to those rulings in support of the principles, as we are of opinion that these principles are well settled at this stage and must be accepted. The respondents' counsel referred to a contrary ruling of the Lahore High Court in Kidriprasad v. K.R. Khosla, AIR 1923 Lah 425 but we must point out that the same Court by a Full Bench decision in Musaji Lukmanji v. Durgadass, AIR 1946 Lah 57 came in line with other High Courts, Similarly, a few earlier Calcutta cases to the contrary were noticed and dissented from in Continental Drug Co. Ltd. v. Chemoids and Industries Ltd, (S) AIR 1955 Cal 161.

We therefore, feel inclined to accept the appellant's counsel's stand that the Beawar court was not divested of its jurisdiction by the agreement between the parties as that agreement could not create a defect of jurisdiction and the return of the plaint by that court was not, strictly speaking, the consequence of lack of jurisdiction of that court, but was an act in the nature of enforcing the agreement between the parties that litigation between them will be conducted in the Kishangarh State Courts.

15. However, these principles enunciated for the purpose of determining the validity of agreements restricting choice of forum in connection with the interpretation of Section 28 of the Indian Contract Act being based upon considerations peculiar to the law and notions about Contracts cannot be imported and adopted as conclusive for interpreting Section 14 of the Limitation Act incorporated on other considerations and principles. In Ramdutt Ram Kissen Dass v. E. D. Sassoon and Co., AIR 1929 PC 103, the Privy Council made the following observations:

'It may be assumed that it had been ascertained before these provisions (i.e. Section 14) were formulated that there was a serious risk of injustice arising if the period of Limitation; which is in many cases shorter than in England, should be too strictly applied. In Indian Litigation, it is consistent with the experience of their Lordships that the time necessary for the decision in a suit may be of much longer duration than one is accustomed to in the Courts of Great Britain. Hence, the necessity for some provision to protect a bona fide plaintiff from the consequences of some mistake which had been made by his advisers in prosecuting his claim.'

16. We may also refer to the principle laid down in Mathurasingh v. Bhawani Singh, ILR 22 All 248 for the interpretation of Section 14:

'The principle is, broadly speaking, the protection against the bar of limitation of a man honestly doing his best to get his case tried on the merits, but failing through the Court being unable to give him such a trial. That is the principle; and I think, it is clearly applicable not only to cases in which a man brings his suit in the wrong court, that is a Court having no jurisdiction to entertain it, but also where he brings his suit in the right Court, but is nevertheless prevented from getting a trial on the merits bv something, which, though not a defect of jurisdiction, is analogous to that defect.'

17. These principles emphasize the necessity of affording protection to bona fide plaintiffs for consequences of mistakes and it is in this background that we have to examine the contentions of the appellant's learned counsel with regard to the interpretation of Section 14 of the Limitation Act.

18. Learned counsel's first submission in this connection is that the words 'unable to entertain' should be interpreted to mean an inability to entertain a suit in its inception and on that footing, the Beawar Court having had jurisdiction to entertain the suit, it cannot be postulated of it that it was unable to entertain the suit in terms of Section 14 of the Limitation Act, and the corresponding Section 15 Kishangarh Act. We have already dealt with the argument on behalf of the appellant's learned counsel based upon the general principles enunciated with reference to Section 28 of the Indian Contract Act and discarded it as inconclusive and not helpful.

Further, we are of the opinion that on a consideration of the language of Section 14 of the Limitation Act, there is ample justification for coming to the conclusion that the words 'unable to entertain' need not be given the restricted interpretation suggested by the appellant's learned counsel. One 06 the requirements of Sec, 14 of the Limitation Act is that the court should be unable to entertain a suit from the defect of jurisdiction or other cause of a like nature.

Explanation 3 to Section 14 of the Limitation Act states that for the purposes of this section, misjoinder of parties or causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction. When there is a defect of misjoinder of parties or causes of action, it is indeed difficult to predicate that a court is unable to entertain a suit in its inception on account of this defect. In fact, in such a case, the court has ample jurisdiction to deal with the suit and exercise jurisdiction by striking out some of the parties and eliminating some of the causes of action. In such case, the suit is properly entertained and it cannot be said that a court cannot proceed with it on account of lack of jurisdiction.

All that has to be done in such a case is to remove the necessary defects and to allow the suit to proceed after striking down some parties and eliminating some causes of action. Clearly therefore, the interpretation of the words 'unable to entertain' as implying inability to entertain the suit in its inception is wholly inappropriate and inconsistent with the explanation 3 to Section 14 of the Limitation Act and it is necessary to liberally interpret these words so as to mean as inability to give a trial on merits.

19. A reference to the provisions of the Code of Civil Procedure also reveals that while recognizing various modes of disposal of suits it does not contemplate a disposal of a case by decision for enforcement of an agreement to get a suit decided by a particular court and, therefore, when a court returns the plaint with reference to such an agreement, the proper and correct mode is to interpret that in effect the Court tells the plaintiff that in view of the agreement, it is unable to give the trial.

20. We may also refer in this 'connection to the practice of courts having higher pecuniary jurisdiction returning plaints for presentation to courts having lower pecuniary jurisdiction. Now, it cannot be said that a court with a higher pecuniary jurisdiction is unable to entertain a suit which can be instituted in a court of lower pecuniary jurisdiction, and it is assumed that when such a court returns a plaint for presentation to the lower court, in a way, it indicates its inability to give a trial of the case. The adoption of a restricted meaning of the words 'unable to entertain' is bound to create complications in cases of return of such plaints. We may make it clear that we should not be understood to take this practice as one of the important basis of our conclusions.

We have simply referred to it as an instance of an implied yet general and consistent acceptance of liberal interpretation of the words 'unable to entertain' and consequently as one element though not very significant to be considered in coming to a correct conclusion regarding the interpretation of these words on realistic ana practical considerations. On general principles, therefore, we cannot but hold that the words 'unable to entertain' should not be narrowly construed so as to imply inability to entertain a suit in its inception but should be liberally construed so as to mean inability to give a trial on the merits of the case on account of defect of jurisdiction Or other cause of a like nature.

21. Now, we might refer to ILR 35 Cal 728 relied upon by the appellants learned counsel. In this case, Maclean C. J. observed that the legislature intended to limit the benefit of Section 14 to cases where the court had no power to embark upon the case at all. In that case, the plaintiffs who were parties to an earlier suit, could not get relief on account of misjoinder of parties and causes of action and in a subsequent suit, they claimed benefit under Section 14 of the Limitation Act, and their prayer was rejected on the ground that in a case of misjoinder of parties and causes of action, it cannot be said that a court is unable to entertain the suit in its inception.

This decision was given before the introduction of Explanation 3 to Section 14 of the Limitation Act The addition of explanation No. 3 laying down that misjoinder of parties and causes of action, shall be deemed to be a case of a like nature with defect of jurisdiction, has completely shaken the reasoning and the conclusions of Maclean C. J. in the above case and the appellant's learned counsel, therefore, can derive no help from it. For a contrary authority, we may refer to the decision of S.R. Das J., as he was then, in Sarojendra Kumar Dutt v. Purnachandra Sinha, AIR 1949 Cal 24.

In that case, an attorney made an application under Chap. 38, Rule 48 of the Original Side in Chamber on Summons for an order against his client for payment of the same allowed on taxation. In case of such applications the High Court has a discretion, to make an order of payment or to refer to the parties to a suit. The High Court did not make an order of payment and referred the parties to the suit. In a suit filed subsequently, the plaintiff sought to exclude the period taken in prosecuting the application.

It was argued before the High Court that it was not a case of inability to entertain the application. S.R. Das J. as he was then, repelled the contention and observed that the order referring the parties to a suit was nothing more than an indication that the court is unable to entertain the application. With respect, we adopt the principle and hold, that in this present case, the court while directing the parties to approach the Kishangarh Court in. terms of agreement simply indicated its ability to entertain it.

22. Thus, both on principles as well as on authorities, the submission of the appellant's learned counsel cannot be accepted.

23. Learned counsel for the appellant's second submission is that the agreement between the parties requiring the suit to be brought in a particular court does not give rise to a defect of jurisdiction or other cause of a like nature. Ignoring the principles stated with reference to Section 28 of the Contract Act as not materially relevant for conclusion as indicated earlier, we cannot help observing why a court relying upon an agreement between the parties restricting choice of forum and refusing to exercise jurisdiction and to give a trial on merits, cannot be said to have acquired a defect of jurisdiction or interfere to give a trial on a liberal interpretation of Section 14 of the Limitation Act. In the Calcutta case cited earlier AIR 1949 Cal 24, S.R. Das J. further observed as follows:

'It is, therefore, by reason of an infirmity or defect of jurisdiction that the order for payment could not be made'.

24. We need not however go to the length of treating it as a defect of jurisdiction as we have absolutely no doubt that at any rate, it must certainly fall in the category of 'other cause of a like nature'. There are a number of authorities favouring the liberal interpretation of these words. Section 14 of the Limitation Act has been applied if a suit had failed because it was brought without proper leave, Subbaran v. Yagana Pantulu, ILR 19 Mad 90, Laliteshwar Singh v. Rameshwar Singh, ILR 34 Cal 619, Ramdeo Dass v. Gonesh Narain ILR 35 Cal 924 or if it failed because no notice under Section 80 C. P. C. had been given, Manghanmal v. Fernandez 13 Ind Cas 260 (Sind) or where it failed for non-production of the Collector's certificate required by Section 6, Pensions Act.

25. In the light of the principles embodied in those, we consider it quite lair and reasonable to hold that the agreement between the parties restricting choice of forum and preventing a court having jurisdiction to try a case may well result in creating a cause of a like nature in terms of Section 14 of the Limitation Act. Consequently, the submission of the appellant's learned counsel in this behalf cannot be accepted. The natural corollary from the above discussion is that the words 'in a court which, from defect of jurisdiction, or other cause of a like nature, is unable to entertain it' should not be construed narrowly as to be confined to the cases of initial inability on the part of a court to entertain a suit on account of lack of jurisdiction or other inherent incapacity. They must be construed liberally so as to include cases where there may be ability to entertain a suit, but where there may be only an inability to give a trial. The inability to give a trial need not arise from a defect of jurisdiction or inherent incapacity of the court only, but may be brought about by other causes including agreement between the parties restricting choice of forum.

26. In this view of the matter, we have nohesitation in concluding that the trial court wasquite correct in giving the benefit of Section 15 of the Kishangarh Limitation Act to the plaintiffs and holding their suit within limitation. There are, therefore, no merits in this appeal. It, therefore, failsand is hereby dismissed. In view of the specialfeatures and circumstances of the case, we pass noorder as to costs.


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