Territorial Challenges Do Not Undermine Core Jurisdiction: J&K High Court Says Untimely Jurisdictional Objections Cannot Invalidate Decrees

In such instances, a decree rendered without timely jurisdictional objections was not deemed null and void since challenges related to the territorial or pecuniary jurisdiction were not considered foundational or striking at the Court's core of jurisdiction, Justice Rajesh Sekhri explained.

Background of the Case:

The matter traced its origin back to a civil suit where the respondent, M/s K.C. Hotels, sought recovery of Rs. 25.00 lacs from the petitioner, M/s Oikos India Pvt. Ltd. The plaintiff alleged that the defendant supplied and applied exterior paints that started fading within two years, leading to a dispute.

The petitioner/defendant, challenging the territorial jurisdiction of the trial court, argued that the court lacked jurisdiction as the subject hotel was situated in Katra, falling under the jurisdiction of the Principal District Judge, Reasi. After the defendant's initial appearance, they failed to appear before the Court, leading to ex parte proceedings, and the trial court ultimately decreed the suit in favor of the plaintiff.

Dissatisfied with the decree, the petitioner/defendant raised objections during execution proceedings, specifically challenging the court's jurisdiction which came to be dismissed by the executing court.

Challenging the order, the petitioner argued that since a preliminary issue regarding territorial jurisdiction was struck by the trial court, therefore, regardless of the absence of the defendant, it was obliged to return a finding on the said issue in terms of Order XIV Rule 2(ii) of the Code of Civil Procedure, 1908 (for short CPC).

It was argued that since the issue regarding the territorial jurisdiction of the trial court remained unaddressed, the impugned order passed by the Executing Court declining the objection regarding maintainability and executability of the impugned decree was bad in the eyes of the law and was liable to be struck down.

In response, the plaintiff/respondent argued that objections related to territorial jurisdiction could not be raised at the present stage, emphasizing that such issues should have been raised during the trial.

Additionally, it was asserted that the judgment had attained finality as the petitioner failed to challenge the order dismissing their application for condonation of delay.

Court Observations:

Justice Sekhri observed that the maintainability and executability of a decree can be questioned in subsequent proceedings.

However, it was held that a case of lack of inherent jurisdiction would only arise when at the execution stage, the Court which passed the decree can be shown to have lacked competency which struck at the root of its jurisdiction. 

The bench emphasized that objections concerning territorial or pecuniary jurisdiction, when not raised at the appropriate juncture, cannot be considered in subsequent proceedings because such objections, lacking timely assertion, do not invalidate a decree.

It underscored that these objections do not strike at the fundamental jurisdiction of the court and, therefore, do not render the decree null and void.

Furthermore, the court relied on Section 21 of the Code of Civil Procedure and highlighted that objections to the place of suing or the competence of a court regarding pecuniary limits should be raised at the earliest opportunity, and unless there is a consequent failure of justice, they cannot be entertained later.

Pointing towards the record that the defendants, after the framing of issues by the trial court had absented themselves, leading to ex parte proceedings and also to the dismissal of the defendant's application for condonation of delay, the Court reiterated that the judgment and decree had thus attained finality.

Acknowledging that the trial court was obligated to address jurisdictional issues early in the proceedings, framed an issue under Order XIV Rule 2(ii) CPC the bench stated that since the defendants had failed to present evidence due to their continued absence, the trial court could not treat the issue of territorial jurisdiction as a purely legal matter.

In light of these observations, the bench found no perversity in the impugned order of the executing court and hence dismissed the plea.

Case Title: M/s Oikos India Pvt. Ltd Vs M/s K.C. Hotels Pvt. Ltd.

Citation: 2023 LiveLaw (JKL) 308

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