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Mitsubishi Finance (S.A.) and Carrying on Business Through Its Agents Vs. Neyveli Lignite Corpn. Ltd., Neiveli by Its Chairman and Managing Director S. Nageswaran and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1984)2MLJ369
AppellantMitsubishi Finance (S.A.) and Carrying on Business Through Its Agents
RespondentNeyveli Lignite Corpn. Ltd., Neiveli by Its Chairman and Managing Director S. Nageswaran and anr.
Cases ReferredShah Babulal Khimji v. Jayaben
Excerpt:
- - where he failed to do so, the principle of constructive res judicata as contained under section 11, explanation iv of the code of civil procedure would apply. 5. the further submission of the learned counsel is that it is well settled that the principle of res judicata, either direct or constructive, would apply not only to successive suits but also to successive stages of the same suit......arguments:1. first of all the plaintiff obtained the leave of this court to sue;2. secondly, the plea of jurisdiction was raised on omnibus terms by the 2nd defendant when he entered appearance under protest. nothing prevented him from raising this plea also viz., want of jurisdiction of this court in view of clause 18 of the suit contract.where he failed to do so, the principle of constructive res judicata as contained under section 11, explanation iv of the code of civil procedure would apply. in support of this submission, reliance is placed on state of uttar pradesh v. nawab hussain : [1977]3scr428 , and also jawaharlal v. chhaganlal . if there was a duty cast upon the appellant to raise this plea, which he might or ought to have raised that explanation will squarely apply.5. the.....
Judgment:

S. Mohan, J.

1. The appeal is against an order of our learned brother Singaravelu, J., dated 7-9-1983 made in C.S. No. 44 of 1977, in and by which the learned Judge declined the request of the appellant to try the issue relating to jurisdiction as a preliminary issue.

2. In order to appreciate the controversy between the parties it is necessary for us to note the following few facts:

C.S. No. 44 of 1977 is a suit filed by Neiveli Lignite Corporation Ltd. (1st respondent herein) against defendants 1 and 2. The 2nd defendant, Mitsubishi France (SA) is having its head office at Paris, while the 1st defendant has its branch at Madras. The suit laid for the recovery of a sum of Rs. 33,21,764-27 being the damages for breach of contract, with future interest. When the 2nd defendant was served with the suit summons, it entered appearance on 13-10-1977 under protest and contested the jurisdiction of the Court stating that the plaintiff had no jurisdiction to institute the suit, because the 2nd defendant is situated outside the territorial limits of India. The matter came up for decision before our learned brother, Shanmukham, J. He, by his order posted the issue relating to the jurisdiction as a preliminary issue and ultimately concluded by his order dated 8-12-1980 as follows:

It cannot be disputed that the place of delivery of the goods is a material fact constituting a cause of action. Thus in this case, part of cause of action arose at Madras as per the allegations in the plaint. Then as leave of this Court was obtained in Application No. 372 of 1977 on the above basis also I have no hesitation to hold that this Court has jurisdiction.

Presently, after the issues were framed, one such issue (being an additional issue) is framed, which is as follows:

Has this Court no jurisdiction to entertain the suit as against the second defendant

This was necessitated in view of the written statement filed by the 2nd defendant that the suit contract itself envisages the disputes to be settled by the Courts having jurisdiction over Neiveliandin Clause 18 in relation to jurisdiction, it is so specifically stated. The request before our learned brother Singaravelu, J., was that the issue relating to jurisdiction be tried as a preliminary issue. The learned Judge inter alia, held that the question of jurisdiction is a mixed question of fact and law and the long practice of this Court is to try the suit as a whole. Besides, the learned Judge has also relied upon the order of Shanmukham, J., to which we have made a reference just now. Accordingly, he declined the request to try the issue relating to jurisdiction as a preliminary issue. Therefore, the appeal before us.

3. Mr. S. Govind Swaminathan, learned Counsel for the appellant, urges that the learned Judge has not correctly appreciated the prayer of the appellant. What was earlier raised was in relation to the territorial jurisdiction of this Court in that the second defendant being a foreigner the courts in India could not pass a decree. At that stage appearance was entered under protest as otherwise if the suit had been contested after entering regular attendance and filing written statement that would amount to submission to jurisdiction of this Court. Such a plea as to want of jurisdiction in Courts of India, would not have been available to the appellant. No. doubt that plea was negatived by this Court, when Shanmukham, J., passed the order on 8-12-80. The present plea, however, is totally different. After having accepted the finding of the learned Judge concerning the jurisdiction of Indian Courts, a written statement comes to be filed, in which inter alia it is contended that in view of Clause 18 of the suit contract, the suit could not be entertained on the original side of the High Court. This is entirely a different one. No question of the earlier order binding on the appellant would arise. This issue as to whether the original side of the High Court will have jurisdiction or not could not be raised, nor was it raised, much less decided. Only in such a case either r es judicata by itself or constructive res judicata by implication would ever arise. For all these reasons, the learned Counsel prays that the order under appeal be set aside.

4. Mr. U.N.R. Rao. learned Counsel for the 1st respondent, would submit in answer to those arguments:

1. First of all the plaintiff obtained the leave of this Court to sue;

2. Secondly, the plea of jurisdiction was raised on omnibus terms by the 2nd defendant when he entered appearance under protest. Nothing prevented him from raising this plea also viz., want of jurisdiction of this Court in view of Clause 18 of the suit contract.

Where he failed to do so, the principle of constructive res judicata as contained under Section 11, Explanation IV of the Code of Civil Procedure would apply. In support of this submission, reliance is placed on State of Uttar Pradesh v. Nawab Hussain : [1977]3SCR428 , and also Jawaharlal v. Chhaganlal . If there was a duty cast upon the appellant to raise this plea, which he might or ought to have raised that explanation will squarely apply.

5. The further submission of the learned Counsel is that it is well settled that the principle of res judicata, either direct or constructive, would apply not only to successive suits but also to successive stages of the same suit.

6. Lastly, it is submitted that in so far as by the earlier order of this Court, viz., 8-12-1980, Shanmukham, J., had concluded that a part of cause of action arose within the jurisdiction of this Court and that order having become final, the same plea, cannot be allowed to be raised.

7. By way of legal background we may state this before we proceed to the facts of this case. The plea of res judicata is a wholesome plea, i.e., in order to avoid multiplicity of proceedings. In other words, it is based on the principle that no party shall be vexed over the same cause of action twice. Barring that, there is no rule of absolution. If this is kept in the background there will be no difficulty in appreciating that we hold below. In this case no doubt the second defendant raised the point relating to jurisdiction earlier. But at what stage

(i) It was at a stage when it would not file a written statement.

(ii) It was at a stage when it had entered appearance under protest.

The contention of the 2nd defendant was that it being a foreignor situated in Paris (France), the Courts in India will have no jurisdiction at all. If really, as rightly contended by Mr. Govind Swami-nathan, learned Counsel for the appellant, the second defendant had entered appearance, such a plea will not be available. Therefore, after entering appearance under protest the plea of jurisdiction in relation to all the Courts in India (territorial) jurisdiction of the Indian Courts) was raised. That was answered against the 2nd defendant.

8. Then the question is whether the 2nd defendant is precluded now in raising the same point of jurisdiction, of course in a totally different context altogether.

9. The point relating to jurisdiction is contained in Clause 18 of the suit contract. That may now be extracted:

18. JURISDICTION: The Civil Courts having ordinary original civil jurisdiction over Neyveli shall alone have exclusive jurisdiction in regard to all question of dispute arising under the contract with the purchaser or whatever nature.

This plea has come to be raised by way of defence in the written statement, as one among the various other defences. Under those circumstances, whether by reason of Clause 18 of the contract, the suit laid on the original side of the High Court is entertainable or not, could not have been raised at the earlier stage. The reason, as we observed above, is that there was no opportunity to file written statement and only by way of defence this could be raised. If really there was no opportunity or possibility the question of constructive res judicata would not have been raised. Therefore, the ruling relied on by the learned Counsel for the 1st respondent, on State of U.P. v. Nawab Hussain : [1977]3SCR428 , and Jawaharlal v. Chhaganlal, A.l.R. 1959 Raj. 197, will have no application. Only if there was a duty cast upon the second defendant (appellant herein) to raise this plea which he might or ought to have raised, the principle of constructive res judicata as adumbrated under Section 11, Explanation IV of the Code of Civil Procedure, will come into play. In the circumstances of the case we set absolutely no scope for application of that principle.

10. It is axiomatic that the principle of res judicata would apply not only to successive suits but also to the successive stage in the same proceedings. There can be no demur to such a legal proposition. But, we do not see how that arises at all in view of what we have observed above. In other words, there being no duty cast and there being no opportunity for the second defendant to raise the plea of jurisdiction in relation to Clause 18 of the suit contract, the principle of res judicata would not apply.

11. We are also unable to uphold the argument of Mr. U.N.R. Rao, learned Counsel for the 1st respondent, that the order under appeal is not a judgment and therefore it is not appealable under Clause 15 of the Letters Patent in the light of the decision reported in Shah Babulal Khimji v. Jayaben : [1982]1SCR187 . If the issue relating to jurisdiction be decided in favour of the appellant, as we pointed out above, it will put an end to the litigation and therefore, we hold that the order is an appealable order under Clause 15 of the Letters Patent.

12. Turning to the order under appeal, we are not in a position to accept the reasons of the learned Judge. After all if the point of jurisdiction is held in favour of the appellant, he need not undergo the ordeal of trial. No doubt, it may be a mixed question of facts and law. Nevertheless, where in the event of the appellant succeeding on this issue, it could avoid the ordeal of trial, certainly it is not only desirable but also just that this issue be tried as a preliminary issue.

13. Therefore, we direct that the parties will be at liberty to adduce such evidence as they may desire only in relation to jurisdiction and the issue relating to jurisdiction, which is hereby recast shall be tried as a preliminary issue. The issue is recast as follows:

Has this Court no jurisdiction to entertain the suit as against the defendants in view of Clause 18 of the suit contract dated 5-4-83.

If the court comes to the conclusion that in spite of the above Clause 18 that this Court has jurisdiction to entertain the suit, the trial can be proceeded with.

14. We also make it clear that the order dated 8-12-1980 passed by Shanmukham, J., in relation to territorial jurisdiction of this Court as against the 2nd defendant, over-ruling the plea that it is a foreigner is final and conclusive and that cannot be reopened by the parties.

15. This appeal is allowed in the above terms. No costs.


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