Indian.docx

INTRODUCTION Power of Supreme Court to transfer the case Section 25 of the Code of Civil Procedure enables the Supreme Court to transfer any Case, appeal or other proceedings from High Court or other civil court in one State to a High Court or other civil court in any other State. This power may be exercised by the Supreme Court if it is satisfied that an order under this Section is expedient for the ends of justice. Hence wide powers are given to the Supreme Court to order a transfer if it feels that the ends of justice so require. Section 25, as it originally stood, empowered the State Government to transfer a suit, appeal or other proceeding pending in a High Court presided over by a single Judge to any other High Court with the consent of the State Government of that Court. The old section has, however, been substituted by the new section which confers the power of transfer a suits, etc. from a High Court or civil court in one State to another High Court or other civil court in any other State. The Supreme Court has similar power of transfer as it has in regard to criminal cases under section 406 of the Code of Criminal Procedure, 1973. There is then the power of the Supreme Court to transfer suits, which is provided in section 25 of the Code. On the application of a party to the hearing of a suit, appeal or other proceeding pending in a High Court or civil court in one State and after notice to the parties, and after hearing them, the Supreme Court may, at any stage, if satisfied that an order under this section is expedient for the ends of justice, direct transfer of such suit, appeal or other proceeding to another High Court or other civil court in another State. (1) On the application of a party, and after notice to the parties, and after hearing such of them as desire to be heard, the Supreme Court may, at any stage, if satisfied that an order under this section is expedient for the ends of justice, direct that any suit, appeal or other proceeding be transferred from a High Court or other Civil Court in one State to a High Court or other Civil Court in any other State. (2) Every application under this section shall be made by a motion which shall be supported by an affidavit.

(3) The Court to which such suit, appeal or other proceeding is transferred shall, subject to any special directions in the order of transfer, either retry it or proceed from the stage at which it was transferred to it. (4) In dismissing any application under this section, the Supreme Court, may, if it is of opinion that the application was frivolous or vexatious, order the applicant to pay by way of compensation to any person who has opposed the application such sum, not exceeding two thousand rupees, as it considers appropriate in the circumstances of the case. (5) The law applicable to any suit, appeal or other proceeding transferred under this section shall be the law which the Court in which the suit, appeal or other proceeding was originally instituted ought to have applied to such suit, appeal or proceeding

FACTS OF THE CASE 1. There were 5 parties in the case. The case in the hon’ble court had one petitioner and 4 respondents as mentioned above. 2. The chemical construction entered into a contract on November 11, 1969 with the Rajadhiraj Industries to construct a plant in order to manufacture of hydrogenated vegetable oil. 3. The Industrial Bank agreed to finance the manufacturer chemical construction under a Scheme called the "Bills Rediscounting Scheme". Under that Scheme the manufacturer would obtain in installments the value of the machinery by discounting with his banker the bills of exchange arising out of the sale of the machinery. 4. Under the scheme, the bankers of the manufacturer/seller would take up the discounted bills and get them rediscounted by the Industrial Bank. The discounting bank would be liable to pay to the Industrial Bank. 5. The Madhya Pradesh Financial Corporation (fourth respondent) executed an irrevocable guarantee on November 3, 1970 and a supplementary guarantee on February 18, 1971 in favour of the Indian Overseas bank (petitioner) on behalf of Rajadhiraj Industries. 6. The petitioner had discounted a total of 9 Bills that amounts to Rs. 9.42 lacs The first eight of these bills were rediscounted by the petitioner with the Industrial Bank for a total sum of Rs. 6.99 lacs, which was subsequently paid over to the Industrial Bank by the Indian Overseas Bank. 7. These eight bills was not paid by the Rajadhiraj Industries to the Indian Overseas Bank. The remaining bill for Rs. 2,43,376/- was not rediscounted. 8. On September 1972, Rajadhiraj Industries filed suit in the District Court, Seoni against the all the parties. 9. The Indian Overseas bank filed suit in the High Court of Madras against Chemical

Construction firm and Madhya Pradesh Financial Corporation and five other defendants, who are partners in the Chemical Construction firm.

10. As two cases were going on between same parties so the Indian Overseas Bank had

filed petition in the Hon’ble Supreme Court to transfer the case from Seoni District Court to Madras High Court.

ISSUES  Whether financial burden to a party can be the sole reason to reject the transfer petition?  Whether or not section 10 of Code of Civil Procedure is applicable in transfer petition?1

ARGUMENTS Arguments by Petitioner  The petitioner and other respondents in this case argued that financial burden to a party cannot be the sole reason to reject the petition. They argued that other factors such as availability of evidence, and the common link to all the respondents were Madras as the contract was signed and agreed there.  The petitioner and other respondents agreed to the petition to transfer the suit from seoni to Madras. As Madhya Pradesh Financial Corporation who were the guarantors also

said that they had no objection to the transfer of the Seoni suit to Madras.

Arguments by Rajadhiraj Industries  The counsel for the industries submitted that for a small company it will simply be impossible to fight the litigation at Madras, and the extra expenditure that will have to be incurred by his clients in undertaking frequent visits to Madras which is about 1000 miles from Seoni, may prove too heavy a financial burden for it.  Another objection as to want of territorial jurisdiction of the Madras High Court. The counsel from the side of the industries argued the proper course is to stay the subsequently instituted suit under Section 10 of the Code of Civil Procedure till the disposal of the suit at Seoni by the District Judge.

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1979 (4) SCC 358

JUDGMENT The judgment was given by Justice R.S. Sarkaria and Justice Ranjit Singh and was authored by Justice Sarkaria. The bench at first looked into the issues and the prayer of the parties in both the cases. The analysis of the apex court pertaining to issues in both the cases were : Whether the second respondent and the fourth respondent, are bound to make payment, the second respondent as acceptor of the bills of exchange and the fourth respondent as guarantors for due payment thereunder. Under an interim order dated April 9, 1976 passed by the High Court of Madras in the said suit, the fourth respondent has deposited with the petitioner herein, a sum of Rs. 10 lacs as and by way of deposit. Apart from a claim for damages of Rs. 1 lac against the first respondent herein, (the manufacturers), no money claim has been made against the petitioner in the Seoni Suit. Nor has the petitioner made any counter-claim in the Senoi Suit The prayer in Seoni case is as under : (a) one lac of rupees against the first respondent on account of damages for breach of contract; (b) directing the petitioners (Indian Overseas Bank) and respondents 1 & 3 jointly and severally to deliver up the guarantee deeds dated November 3, 1970 and February 18, 1971 and the 9 Usance Bills and for cancellation of the same by the Court; (c) permanent injunction restraining the petitioner Bank and respondents 1 & 3 from enforcing the aforesaid guarantee and the 9 Usance Bills; (d) permanently restraining the guarantor (fourth respondent) from discharging any liability under the aforesaid guarantees, dated November 3, 1970 and February 18, 1971. And the prayer in the Madras High Court is :

(a) Directing the respondents, herein, (except respondent 3), jointly and severally to pay to the plaintiff-petitioner the sum of Rs. 10,62,364.57 under the Bills Purchase Account together with interest on the said nine Usance Bills. (b) Directing the first respondent herein, and their partners to pay to the plaintiff-petitioner the sum of Rs. 1,28,154.57 under the overdraft account of the first defendant firm together with interest. Passing of a mortgage preliminary decree against defendants 5 and 6 therein, (two of the partners of the first respondent) After comparing the issues and prayer in both the cases and hearing the parties. The court held that Section 25 of the Code of Civil Procedure as substituted for the former section by the Code of Civil Procedure (Amendment) Act, 1976, empowers the Court to direct that any suit, appeal or other proceeding be transferred from a High Court or other Civil Court in one State to a High Court or other Civil Court in any other State, if it is satisfied that such an order is "expedient in the ends of justice". The court discussed the scope and said “the scope of the former Section was very restricted as it provided only for transfer of any proceeding pending in a High Court presided by a Single Judge. It was thought that the State Government was not the appropriate agency for exercising this power of transfer, obviously because such exercise is a judicial function. For these reasons, the new Section 25 which has been substituted for the former one, confers on this Court very wide powers of transfer which are as extensive as its powers under Section 406 of the Code of Criminal Procedure, 1973.” The principle governing the general power of transfer and withdrawal under Section 24 of the Code is that the plaintiff is the dominus litis and, as such, entitled to institute his suit in any forum which the law allows him. The Court should not lightly change that forum and compel him to go to another Court, with consequent increase in inconvenience and expense of prosecuting his suit. A mere balance of convenience in favour of proceedings in another Court, albeit a material consideration may not always be a sure criterion justifying transfer. As compared with Section 24, the power of transfer of a civil proceeding to another Court, conferred under the new Section 25 on the Supreme Court, is far wider. And, so is the amplitude

of the expression, "expedient in the interest of justice" which furnishes a general guideline for the exercise of the power. Whether it is expedient or desirable in the interest of justice to transfer a proceeding to another Court is a question which depends on the circumstances of the particular case. Here, in the two suits, one in the District Court, Seoni, Madhya Pradesh, and the other filed by the petitioner in the High Court of Madras, the parties are the same except that in the Madras suit five other persons who are alleged to be partners of the first respondent, herein and two of whom furnished collateral securities, have also been joined as defendants. Further, the material issues in both the suits are common or interdependent. For instance, issue No. 14 in the Seoni Suit is substantially the same as issue No. 7 framed by the Madras High Court in the suit filed there by the petitioner. The questions involved, inter alia, in issues 9, 10, 12, 18, 19 and 20 in the Seoni Suit have a substantial bearing on the decision of issues 1, 2, 6, 8, 9 and 10 framed in the Madras Suit. The basic question commonly arising in each of the two suits concerns the liability of the second respondent and the fourth respondent to make payment as the acceptor of the bills of exchange and the guarantors, respectively, for due payment under those bills. If the two suits are allowed to continue in their original forums there is a possibility of conflicting findings on the question of liability under the Usance Bills and under the guarantees. It is not disputed (we are told) that the payment of the bills were to be made to the petitioner bank at Madras. The evidence in both the suits would mostly be common and locally available at Madras. Transfer of the Seoni suit to Madras High Court will avoid multiplicity in the trial of the common issues and obviate the risk of conflicting decisions. Under the circumstances, it is manifestly "expedient in the interest of justice" that both the suits should be tried by the Madras High Court on its Original Side by the same Judge/Judges.

CONCLUSION As a general rule the court should not interfere unless the expenses and difficulties of the trial would be so great as to lead to injustice or the suit has been filed in a particular court for the purpose of working injustice. Another valid ground for transfer is the abuse of the process of the court. Bihar State Food and Supplies Corporation v. Godrej Soaps (P) Ltd. 2 and Sons], a petition under Section 25 CPC was filed for re-transfer of the suit to the Subordinate Judge at Patna on the ground that the purpose of transfer was over since the 2 cases couldn’t currently be tried along. The Court disallowed the petition for transfer and requested the learned decide on the initial side to frame the necessary problems in the suit inside six weeks and thereafter take evidence on a day-after-day basis. The complete evidence and the record of the suit were thenceforth to be transmitted to the Division Bench for thought in conjunction with the sooner suit that had gone in appeal, so those conflicting decisions might be avoided. In Avtar Singh and Co. Pvt. Ltd. v. S.S. Enterprises3, a petition was filed, under Section 25

CPC for transfer of the suit from the Calcutta High Court to the District Court at Kanpur where a suit was already pending. The Court directed the Calcutta suit to be transferred to Kanpur taking under consideration of proven fact that Kanpur suit was filed earlier in purpose of time and that the suit was filed in Calcutta was within the nature of a cross-suit.

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AIR 1996 SC 336 AIR 1996 SC 385

CASE COMMENT Indian Overseas Bank, Madras vs Chemical Construction Company & Ors. 1979 (4) SCC 358 Submitted To : Ms. Homa Bansal (Assistant Professor) Submitted By : Aastha Registration No 11510874

INDEX

s.no.

Particular

1

introduction

2

Facts

3

Issues

4

Arguments

5

Judgment

6

Conclusion

Page