Jurisdiction Under Code of Civil Procedure, 1908
The Code of Civil Procedure, 1908 is the Procedural Law which primarily governs the cases of civil nature in India. Broadly, the infraction of rights of a person can be classified under two heads i.e. Criminal and Civil depending on the nature of the infraction of the rights. If the infraction is related to violation of the private rights of person whether legal or natural then it can be said to give rise to cause of action under the civil law of the India. Per contra, if there is infraction of rights which affects the society as a whole or affects the law and order situation, then it will be governed by the criminal laws of the country i.e. Cr.P.C , I.P.C. etc.
In the present social milieu, individuals as well as corporate personalities interact with each other on regular basis to carry out business transactions inter alia. In order to smoothen the business transactions a written contract is executed between various parties, which defines the rights and duties of the respective parties of the contract. However, the problem arises when one or more parties are in breach of the contract and legal recourse is often taken by the parties to the contract. Therefore, an important question of jurisdiction arises as to where the legal proceeding can be initiated as per the law of the land. This is where the provisions of the Code of Civil Procedure, 1908 come into scenario.
The concept of jurisdiction can further be pigeonholed into various categories e.g. Pecuniary Jurisdiction, Territorial Jurisdiction etc. The provisions which govern the jurisdiction of civil proceeding are governed by section 15 to 26 which defines various aspects of the place of suing.
Section 15. Every suit shall be instituted in the court of the lowest grade competent to try it.
The word “competent” occurring in section 15 refers to the competency of court with regard to pecuniary jurisdiction i.e. money or valuation aspect of the suit. Various courts have been bestowed with different pecuniary jurisdiction in India e.g. In Delhi, Civil Judge can try suits having value up to three Lac, District Judge can try suits up to Two Crores and suits having value more than two Crores will be tried by the Delhi High Court as it is one of the few High Courts which is having original jurisdiction whereas the Punjab and Haryana High Court does not have any original civil jurisdiction and all the civil suits of whatever value has to be instituted in Lower District Courts.
Section 16 to 20 governs jurisdiction as far as Territorial aspect is concerned. Section 16 in broad terms mention that the suits with regard to immovable properties shall be instituted in the court within local limits of whose jurisdiction the immovable property is situate.1
If the immovable property situate within jurisdiction of different courts, the suit may be instituted in any court within the local limits of whose jurisdiction any portion of the property is situate.2
Further, a suit for damages for wrong done to the person or to movable property can be instituted within the local limits of the court where the wrong was done or where the Defendant resides, or carries on business, or personally works for gain at the option of the Plaintiff.3
And finally, all other suits may be instituted where any of the Defendants actually and voluntarily resides, or carries on business, or personally works for gain; or
The cause of action, wholly or in part, arises.4
Apart from the aforementioned categories of the jurisdiction another important category is the “Subject matter Jurisdiction”. What is meant by “Subject Matter jurisdiction” is that different courts have been entrusted jurisdiction of different type of suits. One glaring example is the Family Courts which can try cases regarding matrimonial disputes only and are barred from entertaining any other suits of different nature.5
EXCLUSIVE JURISDICTION CLAUSE
One of the most important aspects in commercial contracts and in other contracts as well is the existence of “Exclusive Jurisdiction Clause”. What is meant by “Exclusive Jurisdiction Clause” is that parties to the contract confer jurisdiction in courts at a particular place with consent. Now the obvious question arises regarding the legality of the “Exclusive Jurisdiction Clause” or whether it contravenes the mandate of section 28 of the Indian Contract Act. The Hon’ble Supreme Court of India has dealt with this question in a litany of cases starting from Hakam Singh Vs M/S Gammon (India) Ltd and culminating in the landmark judgment of A.B.C Laminart Pvt Ltd Vs A.P. Agencies. The Hon’ble Supreme Court of India laid at rest the question of legality of the “Exclusive Jurisdiction Clause” and clarified that any clause which ousts the jurisdiction of all courts having jurisdiction and conferring jurisdiction on a court not otherwise having jurisdiction would be invalid. However, if one of the courts which otherwise having jurisdiction as per provision of the Code of Civil Procedure is conferred sole jurisdiction, then the clause will not be in contravention of the mandate of Section 28 of the Indian Contract Act and will be perfectly valid. The Hon’ble Supreme Court has relied on A.B.C Laminart Judgment in various cases later on.8
Arbitration has become one of the most effective methods of Alternative Dispute Resolution in today’s scenario. Though neither the jurisdiction aspect in Arbitration matters is governed by the Code of Civil Procedure, 1908 nor it is a topic in the present blog, however considering the importance of the matter and for the benefit of the readers, I deem it fit to give an overview of the jurisdiction aspect in arbitration matters. After the Amendment Act, 2015 in The Arbitration and Conciliation Act, 1996, the parties are absolutely free to choose the place of Arbitration.9 Therefore, any place irrespective of the provisions of the Code of Civil Procedure, 1908 can be made place of arbitration with the consent of the Parties concerned.