SUPREME COURT OF INDIA

Before:- R.C. Lahoti, C.J. and G.P. Mathur, J.

Civil Appeal No. 2485 of 2005, Arising out of SLP (C) No. 8848 of 2003. D/d. 8.4.2005.

P.K. Ramachandran - Appellant

Versus

State of Kerala and another - Respondents

Civil Procedure Code, 1908, Section 21 - Territorial jurisdiction - Court of Subordinate Judge, Ernakulam, directed an award made under Arbitration Act to be made rule of Court overruling objections by respondents as to Territorial jurisdiction - Objection as to territorial jurisdiction neither taken before trial court by parties nor in the memo of appeal filed before High Court, nor was it argued and nor was it found by the High Court that on account of the proceedings having been entertained by trial court, respondent objectors had suffered any prejudice and consequent failure of justice - Matter remitted to High Court for decision on other question arising in the appeal.

[Paras 3, 4 and 5]

ORDER

R.C. Lahoti, C.J. - Leave granted.

2. The Court of Subordinate Judge, Ernakulam has directed an award made under the Arbitration Act, 1940 to be made rule of the court overruling the objections preferred there against. The objectors (respondents before us) preferred an appeal in the High Court of Kerala at Ernakulam. The Division Bench, which heard the appeal, formed an opinion that the cause of action relating to the subject-matter of arbitration and award could be said to have arisen only in the districts of Kollam or Pathanamthitta or Idukki and not in Ernakulam. If the subject-matter of arbitration would have been sought to be filed as a suit, it could never have been in a court at Ernakulam. In the opinion of the High Court, the hearing and the decree made by the Court of Subordinate Judge were vitiated for want of territorial jurisdiction. For this reason alone, the High Court set aside the decree and directed that either the award be returned to the arbitrator or all the proceedings be transferred to the competent court at Kottarakkara. The claimant has come up in appeal by special leave.

3. Having heard the learned counsel for the parties, we are satisfied that the view taken by the High Court cannot be countenanced. The situation is squarely covered by Section 21 of the Code of Civil Procedure , 1908. The High Court has noted in its judgment that an objection as to the want of territorial jurisdiction in the trial court was not taken up by any of the parties and certainly not by the objectors. The plea was not taken even in the memo of appeal filed in the High Court. Neither it was argued nor has it been found by the High Court that on account of the proceedings having been entertained by the trial court, the objectors in the trial court (i.e. the respondents before us) have suffered any prejudice and consequent failure of justice.

4. Under Section 21 of the Code of Civil Procedure , want of territorial jurisdiction in the trial court must be pleaded at the earliest possible opportunity and, in all cases where issues were settled, at or before such settlement and even then an appellate or revisional court would not upset the order or decree passed by the trial court unless it is satisfied to hold that there has been a consequent failure of justice.

5. The appeal is allowed. The impugned judgment of the High Court is set aside. The appeal is remitted back to the High Court for hearing and decision on other questions arising for decision in the appeal.

6. No order as to the costs.

7. The parties, through their respective counsel, are directed to appear before the Court on 30-6-2005.

Appeal allowed.