Conflict Decisions in Joginder Tuli vs. S.L. Bhatia, (1997) 1 SCC 502 and Oil and Natural Gas Corporation Ltd. vs. Modern Construction & Co., (2014) 1 SCC 648. The question of law we are required to answer is that if a plaint is returned under Order VII Rule 10 and 10A of the Code of Civil Procedure 1908, (hereinafter called as “the Code”) for presentation in the court in which it should have been instituted, whether the suit shall proceed de novo or will it continue from 1 the stage where it was pending before the court at the time of returning of the plaint.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 2904 OF 2020
(arising out of SLP (Civil) No(s). 16893 of 2018)
M/S. EXL CAREERS AND ANOTHER …APPELLANT(S)
VERSUS
FRANKFINN AVIATION SERVICES
PRIVATE LIMITED ..RESPONDENT(S)
JUDGMENT
NAVIN SINHA, J.
Leave granted.

  1. The present appeal has been placed before us on a reference
    by a two Judge Bench opining a perceived conflict between two
    Division Bench decisions in Joginder Tuli vs. S.L. Bhatia,
    (1997) 1 SCC 502 and Oil and Natural Gas Corporation Ltd.
    vs. Modern Construction & Co., (2014) 1 SCC 648. The
    question of law we are required to answer is that if a plaint is
    returned under Order VII Rule 10 and 10A of the Code of Civil
    Procedure 1908, (hereinafter called as “the Code”) for
    presentation in the court in which it should have been instituted,
    whether the suit shall proceed de novo or will it continue from
    1
    the stage where it was pending before the court at the time of
    returning of the plaint. The order of reference also leaves it open
    for consideration if the conduct of the appellant disentitles it to
    any relief notwithstanding the decision on the issue of law.
  2. The respondent filed a suit for recovery against the
    appellant arising out of a franchise agreement dated 24.03.2004,
    before the Civil Judge (Sr. Division) at Gurgaon. In view of the
    exclusion clause in the agreement, the plaint was returned
    holding that the court at Gurgaon lacked territorial jurisdiction
    and that the court at Delhi alone had jurisdiction in the matter.
    The High Court by the impugned order dated 13.03.2018 has
    held that the suit at Delhi shall proceed from the stage at which
    it was pending at Gurgaon before return of the plaint and not de
    novo. Aggrieved, the appellant preferred the present appeal.
    Further proceedings were stayed on 13.07.2018 culminating in
    the order of reference.
  3. Shri Manoj Swarup, learned senior counsel appearing on
    behalf of the appellant, submitted that there is no conflict
    between the decisions in Joginder Tuli (supra) and Modern
    2
    Construction (supra) requiring consideration by a larger Bench.
    The latter lays down the correct law that the suit will have to
    proceed de novo at Delhi and cannot be continued from the
    earlier stage at Gurgaon. Joginder Tuli (supra) cannot have any
    precedential value not being based on consideration of the law,
    but having been passed more in the facts of that case.
  4. Shri Swarup submitted that the High Court erred in not
    appreciating that it was not exercising transfer jurisdiction under
    Section 24 of the Code. The plaint could be returned at any stage
    of the suit under Order VII Rule 10 and 10A. The fact that the
    pleadings and evidence may have concluded before the Gurgaon
    court was inconsequential. The suit was filed on 06.01.2011. The
    appellant had preferred the objection under Order VII Rule 10
    promptly on 26.08.2011. Order XVIII Rule 15 also could not be
    invoked in view of the nature of jurisdiction conferred under Rule
    10 for return of the plaint. Rule 10A is only a sequitur with
    regard to the procedure to be followed for the same. It cannot be
    interpreted as providing for continuation of the suit. The High
    Court in the first revisional order dated 05.09.2017 had rejected
    the objection with regard to the advanced stage at which the suit
    3
    was at Gurgaon. The mere use of the words ‘return the file’ are
    irrelevant and cannot be construed as enlarging the scope of
    jurisdiction under Order VII Rule 10. The order attained finality
    as no appeal was preferred against the same. Significantly under
    Order VII Rule 10A fresh summons had to issue upon
    presentation of the plaint before the court of competent
    jurisdiction. Shri Swarup in this context referred to Order IV Rule
    1 with regard to the institution of the suit by presentation of a
    plaint and issuance of summons under Order V Rule 1 to
    contend that under Rule 10A when summons are issued by the
    new court where the plaint is presented the proceedings go back
    to the inception of the suit by institution.
  5. In support of his submission that the suit has necessarily to
    proceed de novo on return of the plaint, he relied upon Ramdutt
    Ramkissen Dass vs. E.D. Sassoon & Co., AIR 1929 PC 103;
    Amar Chand Inani vs. The Union of India, (1973) 1 SCC 115;
    Harshad Chimanlal Modi (II) vs. DLF Universal Ltd., (2006) 1
    SCC 364 and Hasham Abbas Sayyad vs. Usman Abbas
    Sayyad, (2007) 2 SCC 355, to submit that the institution of the
    4
    suit at Gurgaon being coram non judice the suit had necessarily
    to commence de novo at Delhi.
  6. Shri P.S. Patwalia, learned senior counsel appearing for the
    respondent, submitted that the special leave petition suffers from
    suppression of material facts. Had the materials placed in the
    counter affidavit been brought to the attention of the court
    perhaps the special leave petition may not have been entertained.
    The appellant in his first objection did not raise the ground under
    the exclusion clause 16B of the agreement but limited it to the
    grounds that no business was carried on at Gurgaon and that
    defendant no.2 did not reside there also. The first order of
    rejection dated 12.03.2015 has not been annexed to the appeal.
    Thereafter jurisdiction was framed as a preliminary issue which
    was again decided in favour of the respondent on 06.09.2016.
    The revision by the appellant having been allowed by the High
    Court on 05.09.2017, it did not take any steps for having the
    plaint retuned to the respondent. It was left for the respondent to
    file a fresh application under Order VII Rule 10 praying for
    transfer of the entire judicial file from Gurgaon to Delhi
    considering the advanced stage of the suit which was allowed by
    5
    the Civil Judge and affirmed in the impugned order by the High
    Court.
  7. Shri Patwalia next submitted that the High Court on
    05.09.2017 had consciously directed for return of the file.
    Nothing precluded the High Court from directing the return of the
    plaint. The Trial Court has justifiably reasoned that the order of
    the High Court for return of the file was based on the premise of
    the advanced stage of the suit for continuation of the same at
    Delhi, as otherwise it would be a travesty of justice if the suit was
    to proceed de novo at Delhi. The High Court correctly affirmed
    the same by the impugned order. The present was not a case
    where the Gurgaon court lacked complete jurisdiction. The
    respondent has been non suited at Gurgaon only in view of the
    exclusionary clause at 16B of the franchise agreement. It shall be
    a question on the facts of each case, if the trial should proceed
    afresh or continue from the earlier stage and the matter could
    not be put in a straight jacket. The present being a case of
    overlapping jurisdictions it would be a travesty of justice and will
    cause great injustice and prejudice to the respondent if the suit
    is directed to proceed de novo at Delhi. Shri Patwalia relied upon
    6
    R.K. Roja vs. U.S. Rayudu, (2016) 14 SCC 275 and Oriental
    Insurance Company Ltd. vs. Tejparas Associates and
    Exports Pvt. Ltd., (2019) 9 SCC 435, to submit that the latter
    also follows Joginder Tuli (supra).
  8. We have considered the submission on behalf of the parties
    and considered the materials on record. The franchise agreement
    was executed between the parties at New Delhi on 24.03.2004 for
    running courses in Aviation, Hospitality and travel Management
    at Meerut in accordance with the prescriptions and standards of
    the respondent. Clause 16B of the agreement stipulated as
    follows:
    “B. JURISDICTION
    Only Courts in Delhi shall have exclusive
    jurisdiction to settle all disputes and
    differences arising out of the AGREEMENT,
    whether during its term or after expiry/earlier
    termination thereof.”
  9. The respondent on 06.01.2011 instituted a suit before the
    Civil Judge (Sr. Division) at Gurgaon against the appellant for
    recovery of Rs.23,11,190/­. The appellant filed an application
    under Order VII Rule 10 CPC on 26.08.2011 contending that the
    Gurgaon court had no territorial jurisdiction as it did not carry
    7
    on any business within its jurisdiction and neither was it a
    resident, requiring the plaint to be returned to the respondent.
    No objection was raised under clause 16B of the agreement. The
    Civil Judge, Gurgaon on 12.03.2015 rejected the objection
    opining that it could not be decided summarily and was required
    to be framed as a preliminary issue. The appellant then filed its
    written statement and the respondent its replication. Issues in
    the suit were framed on 01.10.2015 inadvertently ignoring the
    earlier order leading to framing of the preliminary issue on
    01.10.2015 with regard to jurisdiction. The appellant offers no
    explanation why the objection under clause 16B of the agreement
    was not raised in its application dated 26.08.2011 under Order
    VII Rule 10 CPC.
  10. The Civil Judge Gurgaon by his order dated 06.09.2016
    rejected the argument with regard to exclusive jurisdiction at
    Delhi under clause 16B of the Agreement. The High Court in
    revision on 05.09.2017 set aside the order of the Civil Judge
    dated 6.9.2016 holding that in view of clause 16B of the
    franchise agreement, the Gurgaon court lacked territorial
    jurisdiction directing return of the file. The submission of the
    8
    respondent with regard to the advanced stage of the suit at
    Gurgaon was rejected. Prior thereto, the suit had made
    substantive progress as in the meantime evidence of the parties
    had been closed and the matter has been fixed for final argument
    on 01.06.2017. We are of the considered opinion that the mere
    use of the words ‘return the file’ in the order dated 05.09.2017
    cannot enlarge the scope of jurisdiction under Order VII Rule 10
    to mean that the High Court has directed so with the intention
    for continuance of the suit. Firstly, that objection was expressly
    rejected. Secondly the order itself states that the file be returned
    under Order VII Rule 10 and 10A of the Code. Clearly what the
    High Court intended was the return of the plaint.
  11. Thereafter it was left for the respondent who moved an
    application on 11.10.2017 before the Civil Judge at Gurgaon that
    in the peculiar facts of the case, the advanced stage at which the
    proceedings were at Gurgaon, it would be in the interest of
    justice that the entire judicial file be transferred to the court
    having jurisdiction at Delhi, which was allowed by the Civil Judge
    Gurgaon on 14.02.2018 noticing that the High Court in revision
    had directed for transfer of the file. In the fresh revision preferred
    9
    by the respondent against the order, the High Court by the
    impugned order dated 13.03.2018 declined to interfere and
    rejected the contention of the appellant for a de novo trial at
    Delhi. We have referred to the facts of the case with brevity to
    notice the conduct of the parties and all other relevant aspects to
    be kept in mind while passing final orders.
  12. It is no more res­integra that in a dispute between parties
    where two or more courts may have jurisdiction, it is always open
    for them by agreement to confer exclusive jurisdiction by consent
    on one of the two courts. Clause 16B of the agreement extracted
    above leaves us in no doubt that the parties clearly indicated that
    it was only the court at Delhi which shall have exclusive
    jurisdiction with regard to any dispute concerning the franchise
    agreement and no other court would have jurisdiction over the
    same. In that view of the matter, the presentation of the plaint at
    Gurgaon was certainly not before a court having jurisdiction in
    the matter. This Court considering a similar clause restricting
    jurisdiction by consent in Swastik Gases (P) Ltd. vs. Indian Oil
    Corpn. Ltd., (2013) 9 SCC 32, observed as follows:
    10
    “32. ….It is a fact that whilst providing for
    jurisdiction clause in the agreement the words
    like “alone”, “only”, “exclusive” or “exclusive
    jurisdiction” have not been used but this, in
    our view, is not decisive and does not make
    any material difference. The intention of the
    parties—by having Clause 18 in the agreement
    —is clear and unambiguous that the courts at
    Kolkata shall have jurisdiction which means
    that the courts at Kolkata alone shall have
    jurisdiction. It is so because for construction of
    jurisdiction clause, like Clause 18 in the
    agreement, the maxim expressio unius est
    exclusio alterius comes into play as there is
    nothing to indicate to the contrary. This legal
    maxim means that expression of one is the
    exclusion of another. By making a provision
    that the agreement is subject to the
    jurisdiction of the courts at Kolkata, the
    parties have impliedly excluded the jurisdiction
    of other courts. Where the contract specifies
    the jurisdiction of the courts at a particular
    place and such courts have jurisdiction to deal
    with the matter, we think that an inference
    may be drawn that parties intended to exclude
    all other courts. A clause like this is not hit by
    Section 23 of the Contract Act at all. Such
    clause is neither forbidden by law nor it is
    against the public policy. It does not offend
    Section 28 of the Contract Act in any manner.”
  13. This was reiterated in State of West Bengal vs.
    Associated Contractors, (2015) 1 SCC 32, holding that
    presentation of the plaint in a court contrary to the exclusion
    clause could not be said to be proper presentation before the
    court having jurisdiction in the matter.
    11
  14. That brings us to the order of the reference to be answered
    by us. In Joginder Tuli (supra) the original court lost
    jurisdiction by reason of the amendment of the plaint. The Trial
    Court directed it to be returned for presentation before the
    District Court. This Court observed as follows:
    “5. … Normally, when the plaint is directed to
    be returned for presentation to the proper
    court perhaps it has to start from the
    beginning but in this case, since the evidence
    was already adduced by the parties, the matter
    was tried accordingly. The High Court had
    directed to proceed from that stage at which
    the suit stood transferred. We find no illegality
    in the order passed by the High Court
    warranting interference.”
    To our mind, the observations are very clear that the suit
    has to proceed afresh before the proper court. The directions
    came to be made more in the peculiar facts of the case in exercise
    of the discretionary jurisdiction under Article 136 of the
    Constitution. We may also notice that it does not take into
    consideration any earlier judgments including Amar Chand
    Inani vs. The Union of India (supra) by a Bench of three
    12
    Honourable Judges. There is no discussion of the law either and
    therefore it has no precedential value as laying down any law.
  15. Modern Construction (supra), referred to the consistent
    position in law by reference to Ramdutt Ramkissen Dass vs.
    E.D. Sassoon & Co., Amar Chand Inani vs. The Union of
    India, Hanamanthappa vs. Chandrashekharappa, (1997) 9
    SCC 688, Harshad Chimanlal Modi (II) (supra) and after also
    noticing Joginder Tuli (supra), arrived at the conclusion as
    follows:
    “17. Thus, in view of the above, the law on the
    issue can be summarised to the effect that if
    the court where the suit is instituted, is of the
    view that it has no jurisdiction, the plaint is to
    be returned in view of the provisions of Order 7
    Rule 10 CPC and the plaintiff can present it
    before the court having competent jurisdiction.
    In such a factual matrix, the plaintiff is
    entitled to exclude the period during which he
    prosecuted the case before the court having no
    jurisdiction in view of the provisions of Section
    14 of the Limitation Act, and may also seek
    adjustment of court fee paid in that court.
    However, after presentation before the court of
    competent jurisdiction, the plaint is to be
    considered as a fresh plaint and the trial is to
    be conducted de novo even if it stood
    concluded before the court having no
    competence to try the same.”
    13
    Joginder Tuli (supra) was also noticed in Harshad
    Chimanlal Modi (II) (supra) but distinguished on its own facts.
  16. We find no contradiction in the law as laid down in Modern
    Construction (supra) pronounced after consideration of the law
    and precedents requiring reconsideration in view of any conflict
    with Joginder Tuli (supra). Modern Construction (supra) lays
    down the correct law. We answer the reference accordingly.
  17. We regret our inability to concur with Oriental Insurance
    Company Ltd. (supra), relied upon by Mr. Patwalia, that in
    pursuance of the amendment dated 01­02­1977 by reason of
    insertion of Rule 10A to Order VII, it cannot be said that under
    all circumstances the return of a plaint for presentation before
    the appropriate court shall be considered as a fresh filing,
    distinguishing it from Amar Chand Inani (supra). The attention
    of the Court does not appear to have been invited to Modern
    Construction (supra) and the plethora of precedents post the
    amendment.
    14
  18. Order VII Rule 10-A, as the notes on clauses, indicates was
    inserted by the Code of Civil Procedure (Amendment) Act, 1976 (with
    effect from 01.02.1977) for the reason:
    “New Rule 10-A is being inserted to obviate the necessity
    of serving summonses on the defendants where the return
    of plaint is made after the appearance of the defendant in
    the suit.”
    Also, under sub-rule (3) all that the Court returning the plaint can do,
    notwithstanding that it has no jurisdiction to try the suit is:
    “10A. Power of Court to fix a date of appearance in the
    Court where plaint is to be filed after its return.
    xxx xxx xxx
    (3) Where an application is made by the plaintiff under subrule (2), the Court shall, before returning the plaint and
    notwithstanding that the order for return of plaint was made
    by it on the ground that it has no jurisdiction to try the suit,

    (a) fix a date for the appearance of the parties in the Court
    in which the plaint is proposed to be presented, and
    (b) give to the plaintiff and to the defendant notice of such
    date for appearance.”
  19. The language of Order VII Rule 10-A is in marked contrast to the
    language of Section 24(2) and Section 25(3) of the Code of Civil
    Procedure which read as under:
    “24. General power of transfer and withdrawal.
    15
    xxx xxx xxx
    (2) Where any suit or proceeding has been transferred or
    withdrawn under sub-section (1), the Court which is
    thereafter to try or dispose of such suit or proceeding may,
    subject to any special directions in the case of an order of
    transfer, either retry it or proceed from the point at which it
    was transferred or withdrawn.
  20. Power of Supreme Court to transfer suits, etc.
    xxx xxx xxx
    (3) The Court to which such suit, appeal or other
    proceeding is transferred shall, subject to any special
    directions in the order of transfer, either retry it or proceed
    from the stage at which it was transferred to it.”
  21. The statutory scheme now becomes clear. In cases dealing with
    transfer of proceedings from a Court having jurisdiction to another Court,
    the discretion vested in the Court by Sections 24(2) and 25(3) either to
    retry the proceedings or proceed from the point at which such proceeding
    was transferred or withdrawn, is in marked contrast to the scheme under
    Order VII Rule 10 read with Rule 10-A where no such discretion is given
    and the proceeding has to commence de novo.
  22. For all these reasons, we hold that Oriental Insurance Co.
    (supra) does not lay down the correct law and over­rule the same.
    16
    R.K. Roja (supra) has no direct relevance to the controversy at
    hand.
  23. That brings us to a question with regard to the nature of the
    order to be passed in the facts and circumstances of the present
    case. In Penu Balakrishna Iyer vs. Ariya M. Ramaswami
    Iyer, AIR 1965 SC 195, this court observed as follows:
    “7. …The question as to whether the jurisdiction of
    this Court under Article 136 should be exercised or
    not, and if yes, on what terms and conditions, is a
    matter which this Court has to decide on the facts
    of each case.”
  24. In Balraj Taneja v. Sunil Madan, (1999) 8 SCC 396 it was
    observed as follows :­
    “47….It is true that the jurisdiction under Article
    136 of the Constitution is a discretionary
    jurisdiction and notwithstanding that a judgment
    may not be wholly correct or in accordance with
    law, this Court is not bound to interfere in exercise
    of its discretionary jurisdiction….”
  25. In ONGC Ltd. vs. Sendhabhai Vastram Patel, (2005) 6
    SCC 454, it was observed:
    “23. It is now well settled that the High Courts
    and the Supreme Court while exercising their
    equity jurisdiction under Articles 226 and 32 of
    the Constitution as also Article 136 thereof may
    not exercise the same in appropriate cases. While
    exercising such jurisdiction, the superior courts
    in India may not strike down even a wrong order
    17
    only because it would be lawful to do so. A
    discretionary relief may be refused to be
    extended to the appellant in a given case
    although the Court may find the same to be
    justified in law.”
  26. The nature of jurisdiction under Article 136 of the
    Constitution was again considered in Shin­Etsu Chemical Co.
    Ltd. (2) vs. Vindhya Telelinks Ltd., (2009) 14 SCC 16. In
    Karam Kapahi vs. Lal Chand Public Charitable Trust, (2010)
    4 SCC 753, it was observed as follows:
    “65. The jurisdiction of this Court under Article
    136 of the Constitution is basically one of
    conscience. The jurisdiction is plenary and
    residuary in nature. It is unfettered and not
    confined within definite bounds. Discretion to be
    exercised here is subject to only one limitation
    and that is the wisdom and sense of justice of
    the Judges (see Kunhayammed vs. State of
    Kerala, (2000) 6 SCC 359). This jurisdiction has
    to be exercised only in suitable cases and very
    sparingly as opined by the Constitution Bench of
    this Court in Pritam Singh vs. State, AIR 1950 SC
    169…”
  27. In the peculiar facts and circumstances of the case, because
    the appellant did not raise the objection under clause 16B of the
    agreement at the very first opportunity, the first order of rejection
    attained finality, the objection under clause 16B was raised more
    as an after­thought, the second application under Order VII Rule
    18
    10 had to be preferred by the respondent, that pleadings of the
    parties have been completed, evidence led, and that the matter
    was fixed for final argument on 03.07.2017, we are of the
    considered opinion that despite having concluded that the
    impugned order is not sustainable in view of the law laid down in
    the Modern Construction (supra), in exercise of our
    discretionary jurisdiction under Article 136 of the Constitution
    and in order to do complete and substantial justice between the
    parties under Article 142 of the Constitution in the peculiar facts
    and circumstances of the case nonetheless we decline to set aside
    the impugned order of the High Court dated 13.03.2018.
  28. The appeal stands disposed of.
    ………………………..J.
    (R.F. Nariman)
    ………………………..J.
    (Navin Sinha)
    ………………………..J.
    (Indira Banerjee)
    New Delhi,
    August 05, 2020
    19