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PETITIONER: THE BAHREIN PETROLEUM CO.  LTD.

       Vs.

RESPONDENT: P.  J. PAPPU AND ANOTHER

DATE OF JUDGMENT: 16/08/1965

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. SUBBARAO, K. MUDHOLKAR, J.R.

CITATION:  1966 AIR  634            1966 SCR  (1) 461  CITATOR INFO :  R          1969 SC1147  (20)  D          1992 SC1545  (4)

ACT: Arbitration Act (10 of 1940), ss. 34 and 39(1)-  Application for stay-Dismissed-Appeal-If recognition of jurisdiction  of Court.

HEADNOTE: The  respondent instituted a suit for recovery  of  gratuity and  arrears of salary from the appellants.  The  appellants applied  for  stay  of  suit  under  s.  34  of  the  Indian Arbitration Act, 1940 and protested against the jurisdiction of  the  court  to  try the suit.  They  fought  up  to  the appellate and revisional courts, and having failed to obtain the  stay order, they were compelled to apply to  the  trial court  for permission to file their written statement,  and, on  the permission being granted they filed it objecting  to the  jurisdiction  and  also pleading on  the  merits.   The question  of jurisdiction was tried as a preliminary  issue, and the trial and appellate courts decided in favour of  the appellant.   But on revision, the High Court held  that  the objection  as to territorial jurisdiction was waived by  the appellant. In the appeal to this Court, HELD :The appellants did not waive their objection as to the territorial jurisdiction of the trial court. [464 D-E] A  defendant may waive the objection as to jurisdiction  and may  subsequently  be  precluded from taking  it.   But  the appellants lodged their protest at the earliest  opportunity and  persisted  in their objection.  An application  to  the court before which the suit is pending for stay of the  suit under  s.  34  of  the  Arbitration Act,  is  in  no  way  a recognition that court has jurisdiction to try the suit, nor can  an appeal from an order of the Court, under  s.  39(1), have that effect, because the general definition of  "Court" in  s. 2(c) cannot be imported into s. 34.   The  appellants need   not  allege  nor  prove  a  failure  of  justice   in consequence of the order of the High Court, because, S.  21, Civil Procedure Code, does not preclude the objection as  to the  place  of  suing, if the trial court has  not  given  a

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verdict  on  the merits at the time when  the  objection  is taken in the appellate or revisional court. [463 B-C; F; 464 B-G]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 432 of 1965. Appeal  by special leave from the judgment and  order  dated October 19, 1964 of the Kerala High Court in Civil  Revision Petition No. 536 of 1963. G.   B.  Pai,  J. B. Dadachanji, O. C. Mathur  and  Ravinder Narain for the appellant. Gopal Singh, for respondent No. 1. The Judgment of the Court was delivered by Bachawat, J. The plaintiff was a typist clerk in the  employ of the second defendant, the Bahrein Petroleum Co. Ltd.  The 462 first  defendant was the recruiting agent of the Company  at Bombay.  The contract of service was signed at Bombay.   The zone of operation under the contract of service was  Bahrein Island  outside India.  The plaintiff instituted a suit  for recovery  of  gratuity  and arrears of  salary  against  the Company  and  its  recruiting  agent in  the  Court  of  the Subordinate Judge of Cochin.  Both defendants applied to the Cochin Court for stay of the suit under s. 34 of the  Indian Arbitration Act, 1940.  The Cochin Court refused to stay the suit.   An appeal from this order to the District  Court  of Emakulam was dismissed, and a revision petition to the  High Court was dismissed in limine.  In the meantime, the  Cochin Court passed an order declaring that the suit should proceed ex  parte.  On an application by the defendants, this  order was set aside, and the defendants were allowed to file their written   statement.   In  their  written   statement,   the defendants  pleaded  on  the merits and  also  disputed  the territorial  jurisdiction  of  the  Cochin  Court.   On  the application  of the defendants, the Cochin Court  tried  the preliminary issue as to jurisdiction.  The Cochin Court held that it had no territorial jurisdiction to try the suit, and directed  the return of the plaint for presentation  to  the proper Court.  An appeal to the District Judge of  Ernakulam was  dismissed.  But, on revision, the High Court of  Kerala held that the defendants had waived the objection as to  the territorial  jurisdiction of the trial Court, set aside  the orders of the lower Courts, and directed the Cochin Court to try  the  suit  on the merits.   The  second  defendant  now appeals to this Court by special leave. The defendants neither resided nor carried on business,  nor did  any part of the cause of action arise within the  local limits of the jurisdiction of the Cochin Court.  The  Cochin Court had, therefore, no territorial jurisdiction to try the suit under s. 20 of the Code of Civil Procedure, 1908. Counsel  for the plaintiff-respondent submitted that it  was open to the defendants to waive this objection, and if  they did  so,  they could not subsequently  take  the  objection. This submission is well-founded.  As a general rule, neither consent nor waiver nor ,acquiescence can confer jurisdiction upon a Court, otherwise incompetent to try the suit.  But s. 21 of the Code provides an exception, and a defect as to the place  of suing, that is to say, the local venue  for  suits cogniscible by the Courts under the Code may be waived under this  section.   The  waiver  under s.  21  is  limited  ,lo objections  in the appellate and revisional Courts.  But  s. 21  ’is  a statutory recognition of the principle  that  the defect  as to the place of suing under ss. 15 to 20  may  be

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waived.  Independently  463. of  this section, the defendant may waive the objection  and may be subsequently precluded from taking it, see Seth  Hira Lal Patni v.   Sri Kali Nath.(1) Counsel  for  the  plaintiff further submitted  that,  as  a matter of fact, the defendants by their conduct have  waived the objection.  Though this submission found favour with the High  Court, we are unable to accept it.  If  the  defendant allows  the  trial  Court to  proceed  to  judgment  without raising the objection as to the place of suing and takes the chance  of a verdict in his favour, the clearly  waives  the objection,  and will not be subsequently permitted to  raise it.   It  is even possible to say that  long  and  continued participation  by the defendant in the  proceedings  without any protest may, in an appropriate case, amount to a  waiver of :the objection.  But, in this case, we find no conduct of the defendants which amounts to a waiver, or which precludes them from ’raising the objection. At  the earliest opportunity and before taking any steps  in the suit, the defendants applied for stay of the suit  under s. 34 of the Indian Arbitration Act, 1940.  In the  petition for  stay,  they protested against the jurisdiction  of  the Court  to  try the suit.  In; paragraph 5 of  the  petition, they   clearly  pleaded  that  the  Cochin  ’Court  had   no jurisdiction  to entertain the suit.  They objected  lo  the trial  of the suit on the merits, pressed for a  stay  order before ’the Cochin Court and fought up to the appellate  and revisional ’Courts.  Having failed to obtain the stay order, they were compelled to apply to the Court for permission  to file their written ,statement, and on the permission  being, granted,  they  filed it objectIng to the  jurisdiction  and also  pleading  on the merits.  Throughout,  the  defendants protested against the jurisdiction of the Court ’to try  the suit.   They  lodged their protest at  the  earliest  oppor- tunity, and persisted in their objection thereafter.  At  no stage they waved or abandoned their objection. The High Court was of the view that the effect of ss.  2(c), 34  and 39 of the Indian Arbitration Act was that by  filing the  appeal  ’under s. 39 against the order  of  the  Cochin Court  refusing  to stay ’the suit, the defendants  must  be deemed  to have conceded that the Cochin Court was  a  Court having  jurisdiction to try the suit.  An application  under s. 34 lies to the judicial authority, before which the  suit is pending.  Section 39(1) permits an appeal from, an  order of a Court under s. 34.  Section 2(c) defines a "Court" (1)  [1962] 2 S.C.R. 747, 751-752. 464 as a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same  had been the subject-matter of a suit.  On a combined reading of ss. 2(c), 34 and 39, the High Court concluded that by filing the appeal ’under S. 39(1), the defendants conceded that the Cochin  Court before which the application under s. 34,  was made  was a Court as defined in s. 2(c), and,  therefore,  a Court  having jurisdiction to ’try the suit.  We are  unable to  accept  this line of reasoning.  Even  Substituting  the word  "Court" for the words "judicial authority" in  34,  it would  appear that the general definition of "Court"  in  s. 2(c) cannot be imported into s. 34.  An application for stay of  a  suit  must be made to the Court before  which  it  is pending.   That  Court may or may not be  the  Court  having jurisdiction  to ,decide the questions forming the  subject- matter  of the reference, if the same had been the  subject- matter  of a suit.  Still, the application must be  made  to

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the Court and to no other.  An applicant to the Court before which  the suit is pending for stay of the suit under s.  34 is  in no way a recognition that Court has ,jurisdiction  to try the suit, nor can an appeal from an order of ’the  Court under s. 34 have that effect.  We, therefore, hold that  The defendants   did  not  waive  their  objection  as  to   the territorial jurisdiction of the Cochin Court. Counsel for the plaintiff also submitted that the defendants -having  neither  alleged nor proved that there has  been  a failure ,of justice in consequence of the order of the  High Court, they ’are precluded by S. 21 of the Code from raising this   objection  in  ’this  Court.   We  think  that   this contention has no force.  The suit has not yet been tried on the  merits.   So  far, only the  preliminary  issue  as  to jurisdiction  has  been tried.  That issue  was  decided  in favour of the defendants by the trial Court and the District Court  I  and against them by the High Court, and  from  the order of the ’High Court, this appeal has been filed.  There cannot  be  a consequent failure of justice at  this  stage. The condition "unless ’there has been a consequent,  failure of justice" implies that at the ’time when the objection  is taken  in the appellate or revisional ’Court, the  suit  has already  been  tried on the merits.  The section  ’does  not preclude  the  objection is to the place of  suing,  if  the trial  Court  has not given a verdict on the merits  at  the time  when  the  objection  is taken  in  the  appellate  or revisional Court.  The ’point is clearly brought out in  the judgment of Venkatarama Aiyar, J. in Kiran Singh and  others v. Chaman Paswan and others(2) thus : (1)  [1955] 1 S.C.R. 117, 122. (2) 1955] 1 S.C.R. 117,122.  465 .lm15 "The  policy  underlying  sections 21 and 99  of  the  Civil Procedure Code and section 11 of the Suits Valuation Act  is the same, namely, that when a case had been tried by a Court on the merits and judgment rendered, it should not be liable to  be reversed purely on technical grounds, unless  it  had resulted  in  a failure of justice, and the  policy  of  the Legislature  has  been to treat objections  to  jurisdiction both territorial and pecuniary as technical and not open  to consideration by an appellate Court, unless there has been a prejudice on the merits." The  appeal is allowed, the judgment of the High  Court  set aside,  and the orders of the trial Court and  the  District Court are restored.  There will be no order as to costs. Appeal allowed. 468