Orissa High Court
Madhabananda Ray And Anr. vs Spencer And Company Ltd. on 1 May, 1987
Equivalent citations: AIR1988ORI35, AIR 1988 ORISSA 35, (1987) 64 CUTLT 560, (1987) 5 REPORTS 514, (1987) 2 ORISSA LR 39
JUDGMENT P.C. Misra, J.
1. The defendants in O.S. No. 86 of 1977-III of the Court of Subordinate Judge, Bhubaneswar, are the petitioners in this revision. The present. opposite party filed the aforesaid suit for realisation of Rs. 20,885.70 paise from the defendants towards the value of the consignment and interest thereof on the allegation that the goods in those consignment were misappropriated by them. The present petitioners filed a written statement denying the plaint allegations and alleging that the goods were delivered to M/s. Panda Medical Hall, Jajpur as per the telephonic instructions of the plaintiff. It was further alleged in the written statement that as per condition No. 17 embodied in the consignment note all the disputes relating to the consignment were subject to the jurisdiction of the Court at Cuttack and, therefore, the Court at Bhubaneswar had no territorial jurisdiction to entertain the suit. Issues were framed by the trial Court, one of which was "Has this Court jurisdiction to try the suit"? A petition was filed on 2-12-80 on behalf of the defendants to decide the said issue relating to the jurisdiction of the Court as a preliminary issue instead of deferring the same to be decided at the time of hearing of the suit as the said question goes to the root of the matter and in the event the Court ultimately decides at the hearing that the Court at Bhubaneswar has no jurisdiction to entertain the suit, all the evidence adduced, expenses incurred and time consumed in this process of hearing of the suit shall be rendered futile. This revision was placed before a learned single Judge of this Court, who, by order 10-8-1984, referred the matter to be decided by a larger Bench as the learned Judge was of the view that there are apparent conflicts in the single Judge decisions of this Court specific reference of which has been made in the order. This is how we have been called upon to analyse the position of law touching the question.
2. The sole question to be decided in this revision is whether the issue relating to the territorial jurisdiction of the Court should be taken up for hearing as a preliminary issue. It is relevant in this connection to note the provisions of law governing the subject. Order 14, Rule 2 of the Civil P.C. has now been substituted by Act 104 of 1976. Former Rule 2 was as follows : --
"2. Issues of law and of fact :-- Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined."
The substituted Rule 2 after the aforesaid amendment which has taken effect from 1-2-1977 reads as follows :
"Rule 2. Court to pronounce judgment on all issues :-- (1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of Sub-rule (2), pronounce judgment on all issues.
(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to-
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue."
Thus Sub-rule (1) of the present Rule 2 clearly provides :
"Notwithstanding that a case may be disposed of on a preliminary issue the Court shall subject to the provision of Sub-rule (2) pronounce judgment on all issues. Sub-rule (2) corresponds to the old Rule 2 except for the provision that issue of law to be tried as a preliminary issue must now relate to (a) the jurisdiction of the Court, or (b) to a bar to the suit created by any law for the time being in force."
3. Out of the decisions taken note of in the referring order, the decisions of the Chief Justice S. Barman (as he then was) in Civil Revn. No. 187 of 1967, (M/s. Janata Cinema, Grand Road, Puri v. Ruprag Private Ltd.) and the another reported in ILR (1958) Cut 180, (Y. Krushna Murty v. Maddi Veeranna), that of Justice G. K. Misra (as he then was) reported in ILR (1970) Cut 152 : (AIR 1969 Orissa 295), (Ram Saraf v. Mani Dei), the decision of Justice S. K. Ray (as he then was) reported in (1975) 41 Cut LT 1296, (M. Appala Narasiah v. Arjuno Jena) and the decision of Justice P. K. Mohanti, reported in ILR (1976) Cut 1482 : (AIR 1977 Orissa 42), (Smt. Sorojini Rath v. Bhaskar Rath) relate to cases prior to the amendment of the Civil P.C. in 1976. Before the insertion of new Rule 2 by the Amendment Act of 1976 the settled position was that in appealable cases, the Court should as far as possible decide all the issues together, as piecemeal trial of some of the issues might lead to protracted litigation and reported appeals in the same suit. In a decision reported in AIR 1964 SC 497, (Major S. S. Khanna v. Brig. F. J. Dhillon), their Lordships of the Supreme Court observed that under Order 14, Rule 2 of the Civil P.C. where issues both of law and of fact arise in the same suit and the Court is of opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined. Their Lordships observed that the jurisdiction to try issues of law apart from the issues of fact may be exercised only where in the opinion of the Court the whole suit or a part thereof may be disposed of on the issues of law alone, but the Code confers no jurisdiction upon the Court to try a suit on mixed issues of law and of fact as preliminary issues. Normally all the issues in a suit should be tried by the Court; not to do so, especially when the decision on issues even of law depends upon the decision of issues of fact, would result in a lopsided trial of the suit. Justice, S. Barman (as he then was) in the decision reported in ILR (1958) Cut 180 (supra) deprecated the trial of a suit piecemeal and in the decision in Civil Revn, No. 187 of 1967 (supra) followed the same principle. In the latter case, his Lordship was of the view that the issues relating to the jurisdiction of the Court should not in the facts of that case be decided without going into evidence, and in such cases piecemeal trial of such issues should not be encouraged. In the decision reported in ILR (1970) Cut 152 : (AIR 1969 Orissa 293) (supra), Justice G. K. Misra (as he then was) has examined an order passed by the Munsif rejecting the prayer for trial of two issues i.e. (1) an issue relating to maintainability of the suit in view of Article 113 of the Limitation Act, (2) Whether the suit is barred under Order 2, Rule 2 of the Civil P.C. While dismissing the revision his Lordship has observed that the suit must be tried as a whole and not piecemeal unless it involves the question of jurisdiction. The point was emphasized by saying that if the valuation of the suit be such that it will oust the jurisdiction of the Court before whom it was instituted, then in such cases ordinarily that issue should be tried as a preliminary issue to prevent unnecessary harassment to the litigants. His Lordship further observed that in all other matters it is always desirable that the cases should be tried as a whole, so that it would not be remanded times without number from the appellate Court to re-examine other matters left undecided. In the decision reported in (1975) 41 Cut LT 1296 (supra), Justice S. K. Ray (as he then was) explained the legal position by observing that the purpose of this rule is that where the entire case or part of it can be disposed of by determining an issue of law, it shall be so done, as that will save unnecessary inconvenience and expenses to the parties and waste of time and labour of the Court as well. Therefore, if these preconditions embodied in this rule are fulfilled, there is no option other than to try that issue of law as a preliminary issue. In that case the question as to whether the plea of res judicata was to be taken up as a preliminary issue was under consideration. In the facts of that case his Lordship held that the basic facts on which the issue of res judicata has been framed stand admitted in the plaint and for that reason the adjudication of that issue would involve a reference to the admitted pleadings and the judgments of the different Courts in the prior litigation. Justice P. K. Mohanti (as he then was) in his decision reported in ILR (1976) Cut 1482 : (AIR 1977 Orissa 42) (supra) held that the trial of a case piecemeal is a serious evil to the parties, as it leads to protracted litigation and repeated appeals, but at the same time, observed that when issues of law, going to the root of the jurisdiction of the Court, arise, the Court must try those issues first. The rule as it existed prior to the amendment, permitted the Court to try the issues of law preliminarily, if it was of opinion that the case or any part thereof may be disposed of by deciding those issues only. Any interpretation of that rule that in no event the issues of law could be tried preliminarily would oppose to the language of the rule itself, and therefore, cannot be accepted. The scope and applicability of the said rule have been indicated in the aforesaid cases and in many other cases of different High Courts. The conscientious opinion was that in appealable cases piecemeal trial by taking up some of the issues preliminarily should be avoided as it may lead to protracted litigation and repeated appeals in the same suit, the exception being where the issues of law going to the root of the case arise which are capable of being decided without evidence in that event the Court shall be bound to try those issues first. Discretion vested in the Court under the rule was to be exercised depending upon the facts of each case. Thus there appears to be no apparent conflict in the abovementioned decisions which were on the basis of the old rule as it existed before the amendment.
4. The new Rule 2 consists of two parts. First part is contained in Sub-rule (1) which lays down as follows : --
"Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of Sub-rule (2) pronounce judgment on all issues."
Sub-rule (2) deals with a case where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only. In a case answering the above precondition the Court is authorised to try that issue first if it relates to-- (a) the jurisdiction of the Court, or (b) a bar to the suit created by any law for the time being in force. Therefore, the new Sub-rule (2) of Rule 2 puts a further restriction on the Court that an issue of law, though it might be disposing of the suit or any part thereof the same shall not be tried as a preliminary issue unless it involves the jurisdiction of the Court or bar to the maintainability of the suit created by any law in force. Thus after the amendment of the rule it is not permissible for a Court to take up an issue of law as a preliminary issue if the same does not come within the purview of the substituted rule.
5. We shall now proceed to deal with those cases mentioned in the referring order which were decided after the new rule was substituted by the Amendment Act. The first of this category is the decision of Justice P. K. Mohanti in Civil Revn. No. 439 of 1978, (Orissa Road Transport Company Ltd. v. Satchidananda Kanungo). In this case the question involved was whether the suit was cognizable by a Civil Court or the Industrial Tribunal. It was argued in that case that though the said issue involved the question of jurisdiction, it would not be decided without any evidence as to whether the opposite party was a workman as defined in the Industrial Disputes Act for which reason it was not a pure issue of law which could be taken up for trial as a preliminary issue. His Lordship was of the view that merely because some evidence was required to be taken before the question of jurisdiction could be disposed of, it would not prevent the determination of issue relating to the jurisdiction of the Court. His Lordship further observed that it is the requirement of the new rule that the question of jurisdiction is to be decided first as a preliminary issue and if some evidence is required to be recorded for deciding the question of jurisdiction that also the Court can do while deciding the issue preliminarily. The earlier decision of the learned Judge in the case reported in ILR (1976) Cut 1482 : (AIR 1977 Orissa 42) (supra) cannot be said to be inconsistent with the view expressed in the latter case (C.R. 439 of 1978) firstly because that was before the amendment of the Civil P.C., and secondly because, there was no apparent conflict between the two views. Before the amendment of the Code, piecemeal trial was not favoured except in exceptional cases which position has now been incorporated in the rule itself by the Amendment of 1976. As already stated Sub-rule (1) of Rule 2 provides that subject to the provisions of Sub-rule (2) the Court shall pronounce judgment on all issues, notwithstanding that a case may be disposed of on a preliminary issue. We, therefore.
cannot subscribe to the comment of the learned Judge in this behalf.
6. In Civil Revision No. 2 of 1979, (Bancha alias Banchhanidhi Pujhari v. Manasi alias Manasi Behera) decided by Justice R. N. Misra, (as he then was), his Lordship expressed, since the question of pecuniary jurisdiction was in issue in that case, that it would be very appropriate that the same should be adjudged as a preliminary one so that parties may know whether the Court would have the jurisdiction to go into litigation. His Lordship further observed that in order to determine the valuation of the suit for deciding the question of pecuniary jurisdiction of the Court some evidence may be necessary but that evidence would be of a similar type and may not be as protracted as the trial itself and for that reason the learned Judge directed for disposal of the issue relating to the pecuniary jurisdiction as a preliminary one. Though the decision does not discuss the scope of the provisions of the new rule, as it appears, the learned Judge (as he then was) proceeded on the basis that the issue in question relates to the jurisdiction of the Court and if for deciding that issue some evidence is required to be gone into it is permissible to do so.
7. The next decision is of Justice R. C. Patnaik, reported in (1982) 54 Cut LT 298 : (AIR 1982 Orissa 272), (Bairagi Ch. Das v. Kartik Chandra Das). Discussing several other cases decided by this Court as well as by different High Courts, his Lordship has expressed the view that the Court in its discretion may try an issue of law only if that issue relates to the jurisdiction of the Court or bar to the suit created by any law for the time being in force. An issue of fact or mixed issue of fact and law cannot be decided as a preliminary issue. His Lordship further observed that where an issue of jurisdiction is a question of fact or is a mixed question of law and fact, it cannot be decided as a preliminary issue; but it should be decided on merits along with the other issues. In that case, "whether the suit was barred by law of res judicata" was the issue. His Lordship came to the conclusion that the issue relating to res judicata was not a pure issue of law and decision of that issue would not bring an end to the suit as there were other questions also to be decided. So far as the interpretation of the rule is concerned, in our opinion, the approach of the learned Judge in that case is in conformity with the clear provisions of the rule.
8. The next case reported in (1984) 58 Cut LT 311 : (AIR 1983 NOC 62), (B. N. Das v. Bijay Ketan Mohanty) is a case decided by one of us, (Justice B. K. Behera). In that case, the new rule was the subject of the interpretation and it was indicated that in order to avoid harassment to the parties and protracted litigation by remanding the suit for fresh disposal because of misapplication of the provisions of Order 14, Rule 2, as it stood before amendment, the present provision has been made the construction of which should be made keeping in mind the intent of the legislature. It was held in that case that an issue of fact or a mixed question of fact and law is not to be decided as a preliminary issue and is to be decided on merits along with the other issues in the suit.
9. In next two decisions to which reference has been made in the referring order are by Justice R. C. Patnaik in Civil Revn. No. 534 of 1982, (Kamala Bala v. Brahmananda Das) and Civil Revn. No. 106 of 1981, (Gouri Shankar Mohapatra v. Arkhita Bisoi). In the first mentioned case the issue sought to be tried as a preliminary issue was relating to the maintainability of the suit. Reading through the pleadings of the parties his Lordship was of the view that the question raised was not an issue of law nor did it relate to a bar to the suit created by any law for the time being in force. In the next case the same principle of law was repeated and the Court refused to interfere in relation to the discretionary power exercised which the trial Court was considered to have properly exercised. It is thus seen that with a slightly different approach the same conclusion has been reached in all the decisions governed by the new rule, which is because of the change introduced by the amendment of the Code.
10. Though the basic principles of the new rule have been correctly stated in all those decisions, we are not in agreement as to the applicability of the provisions of the new rule as has been done in Civil Revn. No. 439 of 1978 (supra) decided by Justice P. K. Mohanti and in Civil Revn. No. 2 of 1979 (supra) decided by Justice R. N. Misra. In both the cases the issue sought to be tried as a preliminary issue was relating to jurisdiction which is permissible to be tried as a preliminary issue by the provisions of the new rule. But their Lordships have proceeded on the basis that the issue relating to the jurisdiction of the Court may be taken up as a preliminary issue even though evidence may be required to be gone into for the purpose. In our opinion in each of the aforesaid cases the issue relating to jurisdiction was not a pure issue of law. Sub-rule (2) of Rule 2, Order 14, C.P.C., authorises the Court to try an issue of law only, if that issue relates to the jurisdiction of the Court. In the abovementioned cases, the issue did relate to the jurisdiction of the Court, but cannot be said to be an issue of law only.
11. Order 14 of the Civil P.C. deals with settlement of issues and for determination of the suit on issues of law where it is so possible. Issues are of two kinds, namely, issues of fact and issues of law. Sub-rule (3) of Rule 1 thereof provides that each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue. Therefore, in Civil Revn. No. 439 of 1978 decided by Justice P. K. Mohanti (as he then was) the issue relating to the jurisdiction of the Court really involved two issues, namely, whether the opposite party is a workman as defined in the Industrial Disputes Act and secondly if he is found to be a workman whether the suit would be cognisable by the Civil Court. The second one is a pure issue of law depending upon the decision of the first one. Similarly in Civil Revn. No. 2 of 1979 decided by Justice R. N. Misra (as he then was) the question of pecuniary jurisdiction involved was one issue of fact and another issue of law. The issue of fact was what was the real valuation of the suit lands and depending upon the decision of that issue, the further issue to be decided was whether the Court had pecuniary jurisdiction to entertain the suit. Here also the second issue though a pure issue of law was dependant upon the decision of an issue of fact. Under Order 14, Rule 2, C.P.C. it is not permissible for the Court to decide an issue of fact as a preliminary issue. It, therefore, follows that where an issue of fact is necessary to be decided before an issue of law relating to jurisdiction comes up for consideration, such issue cannot be taken up as a preliminary issue within the meaning of Order 14, Rule 2, C.P.C.
The point of reference having thus been answered, this case may be placed before the appropriate Bench for disposal.
B.K. Behera, J.
12. I agree. In support of the same conclusion, I would add a few words.
13. With regard to the difficulties in working out the provisions contained in Order 14, Rule 2 of the unamended Civil P.C., the Law Commission, in its Fifty-fourth Report, had observed : --
"This rule has led to one difficulty. Where a case can be disposed of on a preliminary point (issue) of law, often the Courts do not inquire into the merits, with the result that when, on an appeal against the finding on the preliminary issue the decision of the Court on that issue is reversed, the case has to be remanded to the Court of first instance for trial on the other issues. This causes delay. It is considered that delay should be eliminated, by providing that a Court must give judgment on all issues excepting, of course, where the Court finds that it has no jurisdiction or where the suit is barred by any law for the time being in force."
The Rule was amended with the under-noted object as would appear from the Notes on Clauses of the Amendment Bill:
"Rule 2 is being substituted to provide that, although a suit can be disposed of on preliminary issue, the Court shall ordinarily pronounce judgment on all issues, but where any issue relates to the jurisdiction of the Court or a bar created by any law for the time being in force, the Court may postpone settlement of the other issues until the preliminary issue with regard to the jurisdiction of the Court or such bar has been determined and the Court may deal with the suit in accordance with the determination of such preliminary issue."
By amending this rule, the view of the Law Commission has been given effect to.
In order to avoid harassment to the parties and protracted litigation by misapplicatipn of the unamended provisions of Order 14, Rule 2, the new provision has been made which should be interpreted keeping in mind the intent of the Legislature. An issue of fact or a mixed question of fact and law is not to be decided as a preliminary issue and is to be taken up while deciding the suit on merits along with other issues.
14. In the case of Dhirendranath Chandra v. Apurba Krishna Chandra, AIR 1979 Pat 34, a learned single Judge of the Patna High Court has observed and held :
"A plain reading of Rule 2 will show that ordinarily even if the case may be disposed of on a preliminary issue, the Court is bound to pronounce judgment on all issues. The ordinary rule is subject to only one exception which has been provided in Sub-rule (2) according to which if the case or any part thereof may be disposed of on issue of law only and if that issue of law relates to the jurisdiction of the Court or a bar to the suit created by any law for the time being in force the Court may try such issue first. It is, therefore, clear that a departure from the ordinary rule provided in Sub-rule (1) of Rule 2 can be made by the Court only in the circumstances mentioned in Sub-rule (2) and even in these circumstances the Court has only a discretion that it may try an issue of law relating to the points mentioned in Clauses (a) and (b) of Sub-rule (2) as a preliminary issue before framing other issues. There is, however, nothing in Sub-rule (2) which in my opinion makes it obligatory for the Court to try such an issue first in all cases. If, therefore, the Court is of opinion that in any particular case it will be more expedient to try all the issues together and therefore, if it refuses to try and decide any issue of law even on the points referred to in Clauses (a) and (b) of Sub-rule (2) as a preliminary issue before taking up other issues, I do not think it has committed an error touching jurisdiction."
The same view has been taken by the Punjab and Haryana High Court in AIR 1978 Punj and Har 230, Hardwari Lal v. Pohkar Mal and by the Rajasthan High Court in AIR 1980 Raj 192, Cheni Ram v. Shanti Devi.
15. A reading of the unamended and the amended provisions would indicate that the consideration of an issue and its disposal as a preliminary one are now permitted in limited cases. While under the unamended provision, the categorisation was only between issues of law and of fact and it was mandatory for the Court to try the issues of law at the first instance, under the amended provision, there is a mandate to the court that notwithstanding that a case may be disposed of on a preliminary issue, the Court has to pronounce judgment on all the issues. The only exception to this has been provided in Sub-rule (2) which confers a discretion on the Court to try an issue first if the case or any part thereof may be disposed of on an issue of law only. The exercise of this discretion is circumscribed by and limited to the contingency that the issue to be so tried must relate to the jurisdiction of the Court or a bar to the suit created by any law in force. Thus it would not be correct to assume that any question touching upon the jurisdiction of a Court would automatically become an issue of law as this question may as well depend on factual aspects. If no investigation is necessary and it is not necessary to go into controversial facts, the question relating to jurisdiction may be treated and decided as an issue of law only under the amended provision. If, on the other hand, it would be necessary to decide a factual controversy before arriving at a conclusion with regard to the question of jurisdiction of the Court, such a question cannot be treated to be a pure question of law. When the institution of the suit is incompetent under the law or when the Court finds that it has no jurisdiction and to come to such a conclusion, no investigation is necessary and no evidence is necessary to be recorded, the Court has jurisdiction to decide the case or any part thereof on an issue of law only.