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  • Section 3(15) of the General Clauses Act
  • Ss. 22, 23, 24 and 151 of Act 5 of 1908.
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • Section 3(15) of the General Clauses Act
  • Ss. 22, 23, 24 and 151 of Act 5 of 1908.
Smart Summary

Factual and Procedural Background

This application was referred to the court by Sankaran Nair, J., sitting in Chambers under Rule 177, Order 15 of the Rules of the High Court of Madras, so that the bench was sitting as the High Court in its original civil jurisdiction. The defendants in a libel suit (editor, printer and publisher of a Lahore newspaper) applied that all further proceedings on the original side of the High Court in that suit be indefinitely stayed under Sections 22, 23, 24 and 151 of Act 5 of 1908 (the Code of Civil Procedure, 1908).

The suit had been instituted by a limited liability company (registered office at Gujranwala near Lahore) seeking damages for defamation arising from publication in a Lahore newspaper. Publication in Madras was admitted; the plaintiffs limited their claim to damages in respect of publication in Madras. The defendants sought either transfer or a stay of proceedings in Madras on statutory and inherent-jurisdiction grounds.

Legal Issues Presented

  1. Whether Sections 22 and 23 (and the related statutory scheme, including Section 24) of the Code of Civil Procedure apply so as to permit the transfer or stay of a suit brought on the original side of a High Court where an alternative forum is alleged.
  2. Whether the High Court may exercise its inherent jurisdiction under Section 151 of the Code to stay proceedings as a remedy to prevent an alleged abuse of the process of the Court.
  3. Whether, on the facts presented (including admitted publication in Madras and references to local agents and local government), the institution of the suit in Madras amounts to an abuse of the process of the Court (for example, brought to harass defendants or to compel settlement), such as would justify a stay under the inherent jurisdiction.

Arguments of the Parties

Defendants' Arguments

  • The defendants applied for an indefinite stay of further proceedings in the Madras High Court under Sections 22, 23, 24 and 151 of Act 5 of 1908.
  • They relied on the contention that the suit could properly be tried in another Court (notably in the Punjab) and that, under the statutory scheme for suits which could be instituted in more than one court, transfer or stay was appropriate.
  • They invoked the High Court's inherent jurisdiction under Section 151 to prevent abuse of process and relied on English authorities (Norton v. Norton, Egbert v. Short, Logan v. Bank of Scotland) as illustrative of circumstances in which courts had stayed proceedings where jurisdiction had been obtained by what was contended to be an improper forum-shopping tactic.
  • For the purposes of the application the defendants' counsel was prepared to assume that the whole cause of action arose in Madras (i.e. they did not dispute that point for the application) but asserted that nonetheless the suit should not proceed in Madras.

Plaintiffs' Arguments

  • The plaintiffs (a company with registered office near Lahore) pleaded publication of the alleged libel in Madras and limited their claim to damages "so far as this Presidency is concerned." Publication in Madras was not disputed.
  • The libel expressly referred to local agents and invited the attention of the Local Government of Madras; therefore the relevant facts and witnesses had direct reference to Madras and it would be more appropriate for the Madras Court to try the suit.
  • The plaintiffs contended that their choice of forum was legitimate and that bringing the suit in Madras was not for the improper object of harassing the defendants or forcing a settlement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Norton v. Norton Illustrates circumstances where proceedings were stayed because the plaintiff had sued in an inconvenient/immaterial forum in order to compel settlement; Vaughan Williams, L.J.'s test that it must be shown that difficulties or expense of trial in the other forum would make it practically impossible for the applicant to obtain justice. The court found the facts of the present case did not meet the Norton test; the Madras forum was legitimately chosen and the defendants did not show they would be unable to obtain justice if the suit proceeded in Madras.
Egbert v. Short Shows a case stayed where the action was brought "not bona fide for the purpose of obtaining justice, but for the purpose of harassing and annoying the defendants." The court held that the present facts did not support a conclusion that the plaintiff sued in Madras for such improper purposes; therefore Egbert v. Short did not justify a stay here.
Logan v. Bank of Scotland Cited as one of the English decisions explaining when courts will exercise inherent jurisdiction to stay proceedings as an abuse of process. Referenced generally as part of the authorities explaining the inherent jurisdiction; no specific factual parallel was made that would lead the court to a different result in this case.
Tula Ram v. Harjiwan Das An application under Section 24 (old Code) where the suit was not instituted in a High Court but in a subordinate court; the court intimated jurisdiction but declined to exercise it. Used as an example where, despite jurisdiction, the court declined to stay or transfer on the merits; the present case differs in fact and context but the decision was noted by the court.
Geffert v. Ruckchand Mohla A decision (Scott, J.) involving a libel suit in a High Court where an earlier suit existed in a subordinate court; the judge assumed jurisdiction to stay but on merits declined to do so, observing plaintiffs may vindicate their character where they allege defamation occurred. The court cited this decision to support the view that plaintiffs desirous of vindicating their character in the place where they allege defamation occurred cannot readily be prevented from doing so.
Rabban Bibi v. Sohadra Bibi (Oudh Judicial Commissioner's Court) Case involving an application for transfer of a suit between subordinate Courts under different High Courts where the judge ordered transfer on merits, considering convenience of parties and witnesses. The court regarded the Oudh case as factually distinguishable from the present proceedings but noted its approach to transfer on considerations of convenience and real interest of parties.

Court's Reasoning and Analysis

The court's analysis proceeded in two principal strands: (1) statutory interpretation of Sections 22 and 23 of the Code of Civil Procedure, and (2) the scope and exercise of the High Court's inherent jurisdiction under Section 151 to prevent abuse of process.

Statutory analysis (Sections 22 and 23):

  • The judges considered whether Sections 22 and 23 (and related provisions) applied where the suit was instituted on the original side of a High Court. Tyabji, J. expressed doubt whether those sections, on their terms, were applicable to a suit instituted in the High Court in its ordinary original civil jurisdiction because the definitions of "District Courts" in Section 3 of the Code do not refer to the High Court in original jurisdiction. He also relied on Section 3(15) of the General Clauses Act which prevents the High Court in original jurisdiction being included within the expression "District Judge."
  • White, C.J. read Sections 22 and 23 together and concluded that Section 23 does not provide for the present situation (since the Court in which the suit was instituted is not a subordinate court) and that therefore Section 22 could not be made to apply in this case in isolation. He further observed that Sections 21 and 23 deal with power of transfer rather than power to stay, and that the statutory scheme therefore did not furnish a direct basis for the stay sought by the defendants in the High Court's original jurisdiction.

Inherent jurisdiction under Section 151 (abuse of process):

  • Both judges accepted that the High Court possesses inherent jurisdiction, recognized in Section 151 of the Code, to prevent abuse of the process of the Court and to stay proceedings where appropriate. Tyabji, J. expressly accepted the existence of that jurisdiction and referred to English decisions that explain the circumstances in which such jurisdiction may be exercised.
  • However, the court applied that principle to the facts and concluded the defendants had not established that the institution of the suit in Madras constituted an abuse of process. Key factual points informing this conclusion included:
    • The alleged libel referred to the local agents of the plaintiffs and invited the attention of the Local Government of Madras — facts showing the dispute had real connections with Madras.
    • The plaintiffs had limited their claim to damages in Madras and had pleaded matters (publication and local references) making it reasonable for them to elect to sue in Madras.
    • Although defendants might face practical difficulties (e.g., taking evidence on commission), those practical disadvantages do not alone demonstrate an abuse of process or make the suit vexatious; difficulties of defence do not automatically bar the plaintiff's choice of forum.
  • White, C.J. also considered the authorities (notably Norton v. Norton and Egbert v. Short) and the principle articulated by Vaughan Williams, L.J. that to obtain a stay the applicant must show that the expense or difficulties of a trial in the forum chosen would be so great that injustice would result (practically impossible to obtain justice). The court found the present case did not approach that test: nothing established that the defendants would be unable to get justice in Madras.
  • On balance, therefore, although the court acknowledged the inherent jurisdiction to stay proceedings as an instrument against abuse, the factual matrix here (publication in Madras; local agents and references; plaintiffs' limitation of claim to Madras) meant the defendants had not proved an abuse of the Court's process sufficient to warrant a stay.

Holding and Implications

Holding: Application dismissed. (The application to stay all further proceedings on the original side of the High Court was dismissed with costs.)

Implications:

  • Direct effect: The libel suit in the Madras High Court was allowed to proceed; no stay or transfer was ordered and the plaintiffs' choice of forum stands.
  • On statutory questions: The court recorded serious doubts about the applicability of Sections 22 and 23 of the Code to suits instituted in the High Court in its ordinary original civil jurisdiction and read those sections together to conclude they did not supply the defendants' requested remedy in this instance.
  • On inherent jurisdiction: The High Court affirmed its inherent jurisdiction under Section 151 to stay proceedings that amount to an abuse of process, but held that the defendants had not demonstrated facts warranting exercise of that jurisdiction here.
  • Broader precedent: The court did not purport to lay down a new expansive rule; rather it applied established principles (including English authorities) to the specific facts and concluded no abuse of process was shown. No new legal principle was announced beyond the application of the existing tests to the facts of this case.

Note: This summary faithfully reflects only the content present in the provided opinion and does not add or infer material beyond what the opinion discloses.

    Hindustan Assurance And Mutual Benefit Society Ltd. v. Mulraj

    The Judgment of the Court was delivered by

    Tyabji, J.:— This application has been referred to us by Sankaran Nair, J., sitting in Chambers on the original side of the High Court under R. 177, O. 15, of the Rules of the High Court of Madras. We are therefore sitting as the High Court in its original civil jurisdiction, and not in the exercise of the appellate jurisdiction in appeal from decisions in the exercise of its original jurisdiction.

    2. The application is that all further proceedings in this suit which have been instituted on the original side of this High Court be “indefinitely stayed under Ss. 22, 23, 24 and 151 of Act 5 of 1908.” The suit is instituted by a limited liability company for recovering damages for defamation from the editor, printer and publisher of a newspaper in Lahore. Section 22 of the CPC, refers to cases where a suit may be instituted in any one of two or more Courts, and is instituted in one of such Courts. In such cases an, application may be made by any defendant for transfer of the suit to another Court. S. 22 does not provide to which Court the application for transfer has to be made. That matter is provided for in S. 23. The sub-section of S. 23 which is suggested as being applicable is sub-S. 3. That sub-section however refers to the case where the several Courts having jurisdiction are subordinate to different High Courts. One of the difficulties in the way of applying this sub-section to the present case is that the two Courts which the applicant suggests have jurisdiction, viz. (1) the original side of the Madras High Court, (2) the Chief Court of the Punjab cannot be said to be “subordinate to different High Courts.” The section defining which Courts are subordinate to the High Court is Section 3 of the CPC. S. 3 refers to District Courts, but not to the High Court in the exercise of its original civil jurisdiction. S. 2(4) defines a “District” so as to include the local limits of the ordinary original civil jurisdiction of a High Court; but it does not refer to the High Court in the exercise of its ordinary original jurisdiction as a District Court. The collocation of words in S. 3 does not suggest that it was intended that the expression “District Court” should be applicable to the High Court, and Section 3(15) of the General Clauses Act prevents the High Court in the exercise of its ordinary original civil jurisdiction being included in the expression “District Judge,” and Cl. 24 of the same section defines a High Court in terms which do not throw any light on the question I am considering.

    3. It seems to me therefore very doubtful whether the provisions of S. 22 and S. 23 can be said in their terms to apply to the present case. Subject to this doubt I agree with the learned Chief Justice in his remarks on these two sections and his examination of the Indian authorities on this point.

    4. The application is however supported before us mainly on the ground that we have under Section 151 of the CPC, inherent power to prevent abuse of the process of the Court. The existence of the jurisdiction cannot be denied. The circumstances in which the Courts will in the exercise of this jurisdiction stay proceedings on the ground that the process of the Court is being abused, are referred to and explained in Norton v. Norton(1), Egbert v. Short(2) and Logan v. Bank of Scotland(3).

    5. These decisions refer to cases where the cause of action had arisen outside England and where the English Courts were sought to be given jurisdiction on the ground that the defendant was, at the time when the writ was issued, residing within the jurisdiction of the English Courts. In the case now before us the learned pleader for the applicants asked us to decide the case on the basis that it must be assumed for the purposes of this application that the whole of the cause of action had arisen in Madras. Where the jurisdiction is sought to be snatched from a Court by means of the accidental circumstances that the defendant happens temporarily to be within the jurisdiction of a Court other than that in the local limits of which Court he ordinarily resides, the case bears a very different aspect from such a case as the present. For the libel upon which this action is based expressly refers to the local agents of the limited liability company which is alleged to have been libelled, and “the attention of the local Government of Madras is most reapectfully invited to the letters” by the editor of the newspaper. The facts therefore that have to be determined in deciding this suit have direct reference to the conduct of the local agents of the Madras branch of the company. In these circumstances the plaintiffs may well claim that, inasmuch as the question on which they seek adjudication has reference to people residing in Madras and the acts that will be the subject of investigation have taken place in Madras, it would be more beneficial to the plaintiffs that the suit should be tried by the Court in Madras.

    6. It cannot be said that in these circumstances the facts before us have any analogy to such facts as were before the English Courts in the decisions cited to us. There it was clearly pointed out that the plaintiff was seeking to put the defendant in the position referred to by Vaughan Willaims, L.J, in Norton v. Norton. He says: “I have come to the conclusion, not only that this is a case in which it is more natural and more convenient to try the question in dispute in India because the settlement was made in India and refers entirely to property in India but, further, that Mrs. Norton has brought the action in England, not for the purpose of any legitimate advantage which she might gain by so doing, but for the purpose of putting her husband in such a position that he would be practically compelled to settle the action.” In the present case owing to the facts to which I have referred, it seems to me to be clear that at least on the materials now before us it is impossible to say that the plaintiffs have brought the suit in Madras not for the purpose of any legitimate advantage which they might gain by so doing, but for the purpose of putting the defendants in such a position that they will be practically compelled to settle the action. Conceding for the purposes of the application that the defendants may have some difficulty in proving their cases that they may find it necessary to examine their witnesses on commission, it is the plaintiffs who have the choice of the forum and it does not follow that because the defendants may find it more difficult to make their defence in one forum than in another, the plaintiffs should be restricted in their choice. That difficulty may be a matter which the Judge trying the action may take into consideration when the defence is before him. It does not prevent the plaintiffs from bringing a suit in the Court which they may find more convenient, unless for some such reasons' as have been referred to in the decisions of the English Courts.

    7. I therefore agree that the application must be dismissed with costs.

    White, C.J:— This matter came before the learned Judge sitting in Chambers in the original side of this Court and under R. 177 of the Original Side Rules he has referred it to us. A suit has been instituted in this Court for damages for an alleged libel in a newspaper. A Judge's summons has been taken out by the defendants, in which they ask for an order that all further proceedings in the suit in this Court should be stayed and for a direction that the plaintiffs should file their suit in a proper Court in the Punjab. It has not been seriously argued that it would be within our powers to direct the plaintiffs to file the suit in a proper Court in another Province. The contention has been that the case is one in which we ought to make an order staying all further proceedings in the suit in this High Court.

    8. The plaintiffs are a limited liability company with their registered office at Gujranwala near Lahore. The paper in which the alleged libel was published is printed and published at Lahore. It is not denied that there has been publication of the alleged libel in Madras. The question as to whether the cause of action for this suit arose wholly within the local limits of the jurisdiction of the Madras High Court has not been argued by the learned vakil for the defendants, but for the purposes of this application he is prepared to assume that it did. Assuming that the matter is libellous, publication within the jurisdiction being admitted, I think there can be no question that the cause of action or a cause of action with reference to this alleged libel arose within the jurisdiction. We have been asked to make an order staying the suit on two grounds: first under express provisions of the Code; and secondly, in exercise of the inherent jurisdiction which is now recognized in S. 151 of the Code. The express provisions are Ss. 22 and 23 of the Code. S. 22 provides as follows: “Where a suit may be instituted in any one of two or more Courts and is instituted in any one of such Courts, any defendant …. may …… apply to hive the suit transferred to another Court, and the Court to which such application is made …… shall determine in which of the several Courts Having jurisdiction the suit shall proceed.” (I assume this suit could have been instituted in a Punjab subordinate Court or in the Madras High Court, though damages are only claimed in respect of the publication in Madras). The first sub-section of S. 23 clearly does not apply.

    9. Then the section goes on to say: “Where such Courts are subordinate to different appellate Courts but to the same High Court, the application shall be made to the said High Court.” The case does not fall within sub-S. (2). Sub-S. (3) says: “Where such Courts are: subbordinate to different High Courts the application shall be made to the High Court within the local limits of whose jurisdiction the Court in which the suit is brought is situate.” The Court in which this suit has been instituted is not a Court sub-ordinate to a High Court. Therefore, S. 23 does not apply. It was argued that 22 gives the jurisdiction and S. 23 could not out it down. It seems tome however that the two sections should be read together and if we find that S. 23 contains no provision as to the Court to which the application should be made, it may reasonably be held that S. 22 has no application, to the particular facts of this case. Moreover Ss. 23 and 21 deal with the power of the Court to transfer, not with the power of the Court to stay. Certain authorities have been cited. The first case was Tula Ram v. Harjiwan Das(4). That was a case in which the application was made under S. 24 of the old Code and the suit which was asked to be stayed was not instituted in a High Court, but in a Court subordinate to the High Court, and the learned Judges while intimating that they had jurisdiction declined to exercise it. Geffert v. Ruckchand Mohla(5) is a decision of Scott, J., sitting alone. In some respects it is not unlike this case. There the plaintiff brought a suit in the High Court of Bombay claiming damages for libel. He had previously brought a suit in the Court of the Deputy Commissioner of the Central Provinces in which he had asked for damages for wrongful dismissal an application was made by the defendant in the suit in the Bombay High Court asking for an order staying the proceedings in the Bombay High Court. The learned Judge; no doubt, assumed that he would have had jurisdiction to make the order asked for. The question of jurisdiction however does not seem to have been argued and on the merits he declined to make any order. With reference to this suit before him, he makes the observation that the plaintiff “desires to vindicate his character in the place where he alleges it has been defamed,” and he adds: “I can find no authority for preventing him doing so.” Our attention has also been drawn to a decision of the Oudh Judicial Commissioner's Court in Rabban Bibi v. Sohadra Bibi(6). There again the facts were similar to those in Tula Ram v. Harijiwan Dass.

    10. The application was for the transfer of a suit pending a subordinate Court within the jurisdiction of the Oudh Judicial Commissioner's Court and it was asked that the suit should be transferred to a subordinate Court within the jurisdiction of the Allahabad High Court. The learned Judge on the merits made an order that the subordinate Court, subject to the jurisdiction of the Allahabad High Court, was the proper Court, having regard to the real interest of the parties and the general convenience of the witnesses in which the suit should proceed. The facts in the Oudh case are clearly distinguishable. As regards our inherent jurisdiction, I have no hesitation in holding that apart from the express provisions of the Code there is an inherent jurisdiction in the High Court to stay any suit which is an abuse of the process of this Court. The jurisdiction, in my opinion, existed prior to the Code of 1908 and it is recognized in S. 151. Then the question is, in the circumstances, is this suit an abuse of the process of this Court? I do not propose to read the whole affidavit on which the defendants rely, but in so far as the affidavit consists of allegations of fact and not expressions of opinion, I am prepared to accept all the allegations in the affidavit. Do those allegations establish that the bringing of the suit here is an abuse of the process of this Court? We start with this that we are assuming for the purposes of this application and the assumption seems to me to be well founded in law that the cause of action arose wholly within the jurisdiction of this Court. The alleged libel is set out in the plaint. It contains this passage: “The attention of the Local Governments of Bengal, Madras, the Central Provinces and the Punjab is most respectfully invited to the letters of our correspondents.” These letters the plaintiffs say form part of the libel. That the articles were published in Madras is undisputed. The plaintiffs ask for damages so far as this Presidency is concerned. I do not think it necessary to discuss what may be the legal effect of limiting their claim to damages accruing in this Presidency. But we do find that in the plaint they expressly limit their claim. The learned vakil for the defendants has not been able to call our attention to any Indian case in which this inherent jurisdiction has been exercised. The principle however is well recognized and has been given effect to in several English decisions. I would only refer to two cases, both of which curiously enough were Indian cases. In both cases disputes had arisen between husband and wife and in both cases the question was whether an action should proceed in England or in India.

    11. The first case is Norton v. Norton That was a suit in which the plaintiff claimed an account under a settlement. The settlement had been made in India. The wife had gone to England and she alleged that she intended to reside in England permanently. The husband and one of the trustees of the settlement were served with a writ during their temporary presence in England, and the husband and the other defendant applied to stay the proceedings in England. The application was in the Court of first instance refused, but on appeal an order was made staying the proceedings in England. Vaughan Williams, L.J, in delivering the judgment of the Court of appeal says at p. 479: “In my opinion, it must be proved to the satisfaction of the Court that either the expense, or the difficulties of a trial in this country, are so great that injustice will be done, is this sense, that it will be very difficult, or practically impossible, for the litigant who is applying for the stay to get justice in this country.” It is scarcely necessary to observe that the facts of the present case do not come anywhere near the test suggested by Vaughan Williams, L.J The other case is the case of Egbert v. Short. There a deed of separation had been executed in India, between the plaintiff and her husband. The defendant was the trustee under the deed. There was default in paying the allowance under the deed, and the defendant happened to be in England on a holiday and he was served with a writ. He applied to have the proceedings, stayed and they were stayed. The learned Judge in his order in staying the proceedings observes at p. 214: “On the whole the conclusion at which I have arrived is that this action is brought in the tribunal in which it has been brought not bona fide for the purpose of obtaining justice, but for the purpose of harassing and annoying the defendants, and of, obtaining something to which the plaintiff may not in justice be entitled.” It cannot be suggested in this case that if the plaintiff proves in this Court that be has been defamed, if he proves that the defamatory matter has been published within the local limits of the jurisdiction of this Court, and that he has suffered damage within the local limits of the jurisdiction, of this Court by reason of the publication it cannot be suggested that the suit is brought within the local limits of the jurisdiction of this Court “for the purpose”, to use the words of the learned Judge in Egbert v. Short, “of obtaining something to which he may not in justice be entitled.” It seems to me that the defendants have failed to make out that the institution of the suit in this Court is an abuse of the process of this Court.

    12. I would dismiss the application with costs.

    S.N/R.K

    13. Application dismissed.

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    Hindustan Assurance And Mutual Benefit Society Ltd. v. Mulraj
    (Apr 28, 1914)