Clause XII of the Letters Patent empowers the presidency courts to grant leave to a plaintiff to institute a suit where part cause of action arises within such court's jurisdiction, which court otherwise may not have jurisdiction to try such case. A question then arises whether leave under Clause XII, typically granted ex parte, precludes a defendant from challenging the territorial jurisdiction of the court at a subsequent stage. Precedents suggest that jurisdictional objections should be raised in the written statement and decided at trial. Nonetheless, the Supreme Court, in Asma Lateef v. Shabbir Ahmed, has observed that it is incumbent upon the court to be satisfied of existence of prima facie jurisdiction before granting any interim reliefs. This article examines whether the finding in Asma Lateef would apply even where Clause XII leave has already been granted.
Brief Background to Clause XII
The Letters Patent, issued under the authority of the British Crown, established the framework of High Courts in the presidency towns of Bombay, Madras, and Calcutta. These presidency courts are vested with 'ordinary original civil jurisdiction' allowing them to hear suits at first instance. Akin to civil courts, the presidency courts are empowered to entertain suits for which the cause of action arises either wholly or partly within their original jurisdiction. However, a peculiarity of the presidency courts is that where only part cause of action arises within their original jurisdiction, specific leave of the court must be sought by the plaintiff for institution of suits. This power is contained in Clause XII of the Letters Patent and the leave granted thereunder is referred to as a 'Clause XII leave'. The application seeking Clause XII leave is typically heard and decided ex parte.
Revocation of Leave
As early as 1931, the Calcutta High Court, in Secretary of State for India in Council v. Golabrai Paliram, noted that lack of territorial jurisdiction should be pleaded in the written statement as a substantive part of the defense. It added that only in the clearest cases where the conditions of Clause XII were not met should an application seeking revocation be entertained.
In 2004, the Supreme Court in Indian Mineral and Chemicals Co. v. Deutsche Bank, held that whether part cause of action originated within the jurisdiction of the High Court was a mixed question of law and fact which would have to be decided on evidence and not settled by way of an application seeking revocation. Despite this, a single judge of the Calcutta High Court in Isha Distribution v. Aditya Birla Nuvo Limited, allowed an application for revocation, observing that the forum selection clause under the distribution agreements conferred exclusive jurisdiction on courts in Bangalore. The Division Bench of the High Court upheld the decision, but it was reversed by the Supreme Court which reaffirmed Golabrai Paliram and held that "a plea of territorial jurisdiction is essentially a mixed question of law and fact" and therefore should not be entertained in an application seeking revocation. A similar view was taken by the Madras High Court in R. Mathiazhagan v. P.J. Ethiraj.
An example of 'clearest case' justifying revocation of Clause XII leave could be where such leave has been granted merely based on an exclusive jurisdiction clause in the agreement even though the plaint fails to disclose if any cause of action has arisen within the jurisdiction of the court which has exclusive jurisdiction. In this regard, the Bombay High Court, in SNV Aviation (P) Ltd. v. Captain Gareema Kumar, relying on the well settled principle that parties cannot by consent confer jurisdiction on a court which otherwise has no jurisdiction, has opined that mere conferring of exclusive jurisdiction upon a particular court would not automatically result in grant of Clause XII leave, and presence of cause of action within the jurisdiction of such could would still have to be shown.
Challenge to Territorial Jurisdiction before granting Interim Relief
Though applications seeking interim reliefs can be filed at various stages of a trial, all too often they are filed at the initial stages when the written statement is not on record. Given that a preliminary determination of the case is often made by the court at the interim stage itself, which determination often lasts throughout the course of the trial, it becomes important that any jurisdictional objections are allowed to be raised and considered by the court before any interim reliefs are granted.
To permit the issue of jurisdiction to be decided as a preliminary issue before grant of any interim relief, Section 9A to the Civil Procedure Code, 1908 ("CPC") was introduced by the CPC (Maharashtra Amendment) Act, 1977. The Supreme Court in Nusli Neville Wadia v. Ivory Properties, sought to limit the scope of Section 9A by holding that issues thereunder could only be raised when they were pure questions of law and not mixed questions of law and fact. This essentially reconciled Section 9A with Order XIV Rule 2 of the CPC. However, Section 9A led to backlogs, as courts were forced to undertake extensive inquiries into jurisdiction at the interim stage. Recognizing these procedural impediments, the provision was repealed in 2018.
Notwithstanding the repeal of Section 9A, the question remained whether the court should at least satisfy itself of its prima facie jurisdiction before granting interim relief. Last year, the Supreme Court in Asma Lateef v. Shabbir Ahmed, albeit as obiter, affirmed that a court must establish prima facie satisfaction of its jurisdiction before granting interim relief. The judgment emphasized that while a detailed inquiry into jurisdiction need not precede every interim order, it would be improper for the court to grant interim relief without considering the maintainability of the suit. If the court is of the opinion that the suit is barred for want of jurisdiction, it can deny interim relief, and record lack of jurisdiction as a ground for refusal to grant relief. However, it cannot dismiss the case without framing it as a preliminary issue after the written statement is filed. The Supreme Court further noted that where it would take time to decide maintainability, and extraordinary circumstances exist where not granting interim protection would have irreversible consequences, the court can grant interim relief without going into these questions by justifying the course of action it adopts. It is, however, noteworthy that in Asma Lateef the court did not deal with a case where Clause XII leave was a pre-requisite for filing the suit.
Several High Courts have relied on Asma Lateef's obiter to determine whether they must examine jurisdiction before granting interim reliefs. Examples include the Bombay High Court in ING Vysya Bank Ltd. v. All India ING Vysya Bank Employee's Union and Ayush Realty v. Ajit Arvind Yelwande, the Calcutta High Court in Debaditya Mukherjee v. Debika Banerjee, and the Delhi High Court in Gautam Dutta v. Registrar of Societies. However, there remains uncertainty about whether courts must be satisfied of their jurisdiction when granting interim reliefs, wherein Clause XII leave has already been granted. For example in Punjab Produce and Trading Co. Private Limited v. Harsh Vardhan Lodha, the defendants, placing reliance on Asma Lateef, argued that the Calcutta High Court lacked jurisdiction since the cause of action arose outside its territory. However, the Court held that Clause XII leave had already been granted to the plaintiffs, which signifies that the Court was prima facie satisfied of its jurisdiction and hence the jurisdictional challenge had to be decided against the defendants.
Conclusion
Given that Clause XII leave is typically granted ex parte, based solely on the plaintiff's pleadings, it remains to be seen whether the Asma Lateef obiter, which requires prima facie satisfaction of jurisdiction before granting interim relief, would still apply in cases where Clause XII leave has already been granted. If Clause XII leave is treated as a binding determination of jurisdiction, it could prevent defendants from raising jurisdictional objections at the interim stage, even if they were never heard initially. If Asma Lateef is applied where Clause XII leave has been granted, courts should reassess jurisdiction at the interim stage, now considering the defendant's objections. Alternatively, the court should sufficiently satisfy itself of its prima facie jurisdiction before granting the ex parte Clause XII leave rather than granting it in a routine manner. This would provide an additional safeguard against plaintiffs obtaining Clause XII leave improperly, using it to argue that jurisdiction is settled and obtaining interim reliefs from court which would eventually be found to be lacking jurisdiction after prolonged litigation. The lack of clarity on this point creates scope for conflicting interpretations, making it crucial for courts to clarify whether Asma Lateef introduces a second layer of jurisdictional scrutiny in cases where Clause XII leave has already been granted.
The authors would like to thank Anoushka Kothari for her research assistance.
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