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PETITIONER: SETH HIRALAL PATNI

       Vs.

RESPONDENT: SRI KALI NATH

DATE OF JUDGMENT: 04/05/1961

BENCH: SINHA, BHUVNESHWAR P.(CJ) BENCH: SINHA, BHUVNESHWAR P.(CJ) SUBBARAO, K. DAYAL, RAGHUBAR MUDHOLKAR, J.R.

CITATION:  1962 AIR  199            1962 SCR  (2) 747  CITATOR INFO :  RF         1966 SC 634  (3)  RF         1969 SC1147  (20)  F          1977 SC1201  (3)

ACT: Execution  Proceeding-Objection to territorial  jurisdiction of  court  granting decree-When to  be  raised-Reference  to arbitration-Decree-Waiver-Estoppel-Letters  Patent. cl.  12- Code of Civil Procedure 1908 (V of 1908). ss. 47, 51.

HEADNOTE: The respondent instituted a suit on the Original Side of the Bombay High Court against the appellant for the recovery  of his  commission in respect of certain share transactions  at Agra.   The  plaint was filed after obtaining leave  of  the Bombay  High Court under cl. 12 of the Letters Patent.   One of  the  defences  of the appellant, taken  in  his  written statement,   was  that  the  suit  filed  was  outside   the territorial  jurisdiction of the Bombay High Court  Original Side, in as much as the entire cause of action, if any,  had arisen  at  Agra.   The  suit  was  eventually  referred  to arbitration.  The arbitrator gave his award in favour of the respondent which was upheld on appeal by the High Court. The  respondent took out execution proceedings  wherein  the appellant  took  objection inter alia that the  Bombay  High Court had no jurisdiction to entertain the suit and to  make the award a decree of the court, as no part of the cause of’ action  ever  arose within the territorial  jurisdiction  of that court, and that therefore all the proceedings following thereupon were wholly without jurisdiction. Held,  that where a party to a suit had agreed to refer  the matter  to arbitration through court lie would be deemed  to have waived his objection to the territorial jurisdiction of the court raised by him in his written statement. Held,  further, that the question of the correctness of  the procedure  or the order granting leave under cl. 12  of  the Letters Patent or the waiver of any objection must be raised in  the proceedings before the High Court and could  not  be agitated  in  execution proceedings.  The  validity  of  the decree could be challenged in execution Proceedings only  on

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the  ground that the court which had passed the  decree  was lacking  in inherent jurisdiction in respect of the  subject matter of the suit or over the parties to it. 748 in  the  present  case  the  appellant  was  estopped   from challenging  the  jurisdiction of the Bombay High  Court  to entertain  the  suit  and  to  make  the  reference  to  the arbitrator; and he was equally estopped from challenging the authority of the arbitrator to render the award. Ledgard v. Bull (1886) L. R. 13 I. A. 134, not applicable.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No 237 of 1958. Appeal from the judgment and decree dated January 27,  1955, of  the Allahabad High Court in Execution First  Appeal  No. 137 of 1954. A.   V. Viswanatha Sastri, E. Udayarathnam and S. S. Shukla, for the appellant. Vidya Sagar, for respondent. 1961.  May 4. The Judgment of the Court was delivered by SINHA C. J.-This appeal., on a certificate by the High Court of judicature at Allahabad, arises in execution proceedings, taken  by  the  decree holder-respondent  in  the  following circumstances.   The appellant wished to acquire  shares  in certain mills, popularly known as ’John Mills’, at Agra.  He ’engaged  the  services of the respondent to  negotiate  the deal  on certain terms.  The bargain was concluded, and  the appellant,  together  with  another  person,  purchased  the entire  interest of one Major A. U. John by an indenture  of sale dated July 10, 1946.  The respondent instituted a suit, being  suit  No. 3718 of 1947, on the original side  of  the High  Court  of  judicature at Bombay for  recovery  of  his commission,  amounting to one lakh of rupees, in respect  of the transaction aforesaid. The  suit was eventually referred to the arbitration of  one Mr.  W.  E.  Pereira, administrator of  the  estate  of  the aforesaid  Major A.U. John, deceased.  One of  the  defences taken by the appellant, as                             749 defendant  in  the action, was that the suit  filed  in  the Bombay  High Court, as aforesaid, after obtaining  leave  of that  Court, under cl. 12 of the Letters Patent was  outside the territorial jurisdiction of the Bombay High Court on the original side, in as much as the entire cause of action,  if any,  bad arisen at Agra.  The arbitrator gave an  award  in favour  of  the respondent to the extent  of  decreeing  his claim  for only seventy five thousand rupees as  commission, with  interest at 6% per annum pendente  lite.   Proceedings were taken in the High Court of Bombay for setting aside the award  on certain grounds, not necessary to be stated  here. The Bombay High Court found that there was no defect in  the award and that there was no legal misconduct on the part  of the  arbitrator.   The  High Court  further  held  that  the petition  was frivolous, and dismissed it with  costs.   The appellant  preferred  an  appeal which was  dismissed  by  a Division  Bench of the High Court of Bombay on  January  21, 1952.  The award was, thus, incorporated in a decree of  the High Court.  That decree was transferred to the court of the District Judge Agra, for execution.  On February 5, 1952 the execution  proceedings were instituted by the decree  holder in the Court of the Civil Judge, Agra, to realise the sum of one lakh ten thousand rupees, approximately, on the basis of the decree passed as aforesaid by the Bombay High Court.

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The appellant, as judgment-debtor, put in an objection under ss. 47 and 151 of the Code of Civil Procedure, objecting  to the execution of the decree on a number of grounds, of which it  is  only  necessary to notice the  one  challenging  the jurisdiction of the High Court to entertain the suit and  to make  the  award a decree of court.  It  was  contended  the Bombay High Court had no jurisdiction to entertain the  suit as  no  part of the cause of action ever  arose  within  the territorial jurisdiction of that Court, and that  therefore, all the proceedings 751 the  effect  of  rendering the  Court  entirely  lacking  in jurisdiction  in of the subject matter of the suit  or  over the  parties  to it.  But in the instant case there  was  no such  inherent  lack of jurisdiction. The  decision  of  the Privy  Council  in the case of Ledgard vs.  Bull (1)  is  an authority  for  the proposition that consent or  waiver  can cure defect of jurisdiction but cannot cure inherent lack of jurisdiction.  In that case, the suit had been instituted in the  Court of the Subordinate Judge, who was incompetent  to try   it.   By  consent  of’  the  parties,  the  case   was transferred  to  the  Court  of  the,  district  Judge   for convenience of trial.  It was laid down by the Privy Council that as the Court in the suit had been originally instituted was  entirely lacking in jurisdiction, in the sense that  it was  incompetent to try it, whatever  happened  subsequently was  null  and  void because consent of  parties  could  not operate  to  confer  jurisdiction  on  a  Court  which   was incompetent to try the suit.  That decision has no relevance to a case like the present where there could be no  question of  inherent  lack  of jurisdiction in the  sense  that  the Bombay  High  Court was incompetent to try a, suit  of  that kind.  The objection to its territorial jurisdiction is  one which  does not go to the competence of the Court  and  can, therefore,  be  waived.   In  the  instant  case,  when  the plaintiff  obtained the leave of the, Bombay High  Court  on the  original side, under el. 12 of the Letters Patent,  the correctness  of the procedure or of the order  granting  the leave could be. questioned by the defendant or the objection could be waived by him.  When he agreed to refer the  matter to  arbitration  through Court, he would be deemed  to  have waived his objection to the territorial jurisdiction of  the Court,  raised by him in his written statement.  It  is  wel settled  that  the objection as to local jurisdiction  of  a Court does not stand on the same footing as an objection  to the  competence of a Court to try a case.  Competence  of  a Court to try a case goes to the very (1)  (1886) L.R. 13A. 134. 752 root  of the jurisdiction, and Where it is lacking, it is  a case  of inherent lack of jurisdiction.  On the other  hand, an objection as to the local jurisdiction of a Court can  be waived  and  this  principle  has  been  given  a  statutory recognition  by ’enactments like s. 21 of the Code of  Civil Procedure.  Having consented to have the controversy between the  parties  resolved by reference to  arbitration  through Court,  the.  defendant  deprived himself of  the  right  to question  the authority of the Court to refer the matter  to arbitration or of the arbitrator to render the award.  It is clear,  therefore,  that  the  defendant  is  estopped  from challenging  the  jurisdiction of the Bombay High  Court  to entertain  the  suit  and  to  make  the  reference  to  the arbitrator.   He  is equally estopped from  challenging  the authority  of  the arbitrator to render the award.   In  our opinion  this  conclusion is sufficient to  dispose  of  the

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appeal.   It, is not, therefore, necessary to determine  the other points in controversy, including the question  whether The Decrees and Orders Validating Act, 1936 (Act V of  1936) had  the effect of validating what otherwise may  have  been invalid. The appeal is accordingly dismissed with costs. Appeal dismissed. 753