Jurisdiction To Be Tried As Preliminary Issue If Raised, Finding At Final Stage Will Cause Undue Hardship To Parties: Kerala High Court

The Kerala High Court has recently held that where a defendant raises the question of jurisdiction and an issue is framed in the suit regarding jurisdiction, for the convenience of the parties, the same should be tried as a preliminary issue.

Justice A. Badharudeen added that the finding regarding jurisdiction at the final stage would only cause undue hardship to the parties.

"I have no hesitation to hold that where the defendant alleged that the court has no jurisdiction to try the case and an issue is framed regarding jurisdiction, for the convenience of the parties same should have been tried as preliminary issue and if the court finds that it has no jurisdiction the plaintiff can very well proceed the litigation in the proper court. The finding regarding jurisdiction at the final stage would only cause undue hardship to the parties and also that when issue of law and facts are framed in a Suit, those relating to the jurisdiction to be tried at the first hand."

The petitioner herein was the 2nd defendant in a suit before the Kottayam Additional Sub Court and he filed an application contending that the Sub Court has no jurisdiction to entertain the suit since no cause of action arose within the jurisdiction of the Kottayam district. However, the Sub Judge posted to hear this issue of territorial jurisdiction along with the suit. 

Advocates Philip Antony Chacko, K. Remiya Ramachandran and Anjaly N.S appearing for the petitioner submitted that the issue of territorial jurisdiction shall be tried and decided as a preliminary issue and that the procedure adopted by the trial court is erroneous and, therefore, requires interference. Reliance was placed on Femina Handloom of India v. M/s.M.R.Verma & Sons to assert this argument. 

However, Advocate M. Narendra Kumar appearing for the respondents submitted that the question of territorial jurisdiction raised by the petitioner is without bona fides and that in the written statement, there was wilful admission by him to the effect that a part of the transaction in the suit arose within the jurisdiction of Kottayam. 

The Court noted that the suit was instituted in 2013. and when the written statement was filed on 03.09.2013, the petitioner wilfully admitted that part of the transaction was within the jurisdiction of the Sub Court, Kottayam. However, the petitioner submitted that in the reply affidavit, the circumstances that led to the above contention in the written statement have been explained and later it was revealed that the respondent does not have any factories in other places in Kottayam except in Erattupetta.

The Court did not find this explanation in the reply affidavit as a reason to retract the wilful admission made in the written statement, filed as early in the year 2013, particularly since the present application was filed in 2020.

Either way, it was held that the procedure adopted by the Munsiff to decide the question of territorial jurisdiction during the final stage of the trial cannot be justified and therefore, the said order was set aside.

Although this case ought to have been remitted back to the trial court to decide the question of jurisdiction afresh, since the suit was filed in 2013, to facilitate its early disposal the High Court itself addressed the issue of jurisdiction. 

As such, the Court noted that since the respondent herein specifically contended that part of the transaction took place in Kottayam, and this was admitted by the petitioner in the written statement,  this wilful admission cannot be retracted.

Therefore, it was held that the Sub Court, Kottayam has territorial jurisdiction to try the suit and the petitioner's application was thereby dismissed. The Sub Judge was asked to expedite the disposal of the case on merits, within 3 months.

Case Title: S. Dhanalakshmi v. Sahal V.J & Anr. 

Citation: 2022 LiveLaw (Ker) 269

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