2016 (9) TMI 1613 - HC - Indian Laws

High Court's Jurisdiction on Suit Valuation Amendments & Transfer Orders

The majority in the case held that the High Court could entertain and decide on applications to amend the valuation of a suit to retain jurisdiction. ... Amendment of the plaint to enhance the valuation of the suit for the purposes of pecuniary jurisdiction - HELD THAT:- Though the plaintiff is the dominus litis and has the prerogative to choose the remedy, and the forum, as also put appropriate valuation to the relief (if so permitted in law as in the case of declaration and injunction), the discretion to be exercised cannot be arbitrary or capricious and the same is open to objections by the opposite party and, therefore, subject to judicial scrutiny. The continuation in, or retention before, the forum whose jurisdiction initially may have been properly invoked, is not a vested right and the same is subject to the requirements of justice, amenable to the jurisdiction of the competent courts to order the transfer of such lis, as indeed subject to legislative mandate by amendment of law reflecting public policy. The right of a party to the proceedings in a civil suit to amend the pleadings is qualified by the consideration of its necessity for just determination of the real question in controversy. The discretion given by the law to put an appropriate valuation to the reliefs in the nature of declaration and injunction at the threshold may generally be not open to question but the move to make amendments in such valuation would have to pass the same test as is applied in the case of amendments of pleadings and, thus, must be bonafide and not arbitrary or capricious or irreparably prejudicial to the defendant - Permissibility of amendment to the pleadings as proposed by a party to the civil suit is an issue to be determined by the court which has the requisite jurisdiction to deal with the matter in which such issues arise. There is no 'inherent jurisdiction' to deal with the matter concerning which the law confers no jurisdiction. The question of over-valuation or under- valuation has to be dealt with as per the terms of the said Section and not otherwise for when a judgment is rendered on merits, it should not be reversed purely on technical grounds, unless it has resulted in the failure of justice. Even on the question of subject-matter jurisdiction, some dent has been made by incorporation of Explanation VIII to Section 11 CPC, which pertains to res judicata and binding force on a judgment even of a court of limited jurisdiction, provided it is competent to decide the issue of jurisdiction. In that event, an unsuccessful party cannot initiate collateral proceedings notwithstanding that the court of limited jurisdiction was not competent to try such proceeding or issues. It is difficult to accept and approve that a contesting losing side/defendant can file a suit to declare a decree as a nullity for want of pecuniary jurisdiction. Collateral separate proceedings would not lie and would be rejected. The Original Side of the High Court being in seisin of the matter, would have the jurisdiction to determine whether the suit should be transferred and the jurisdiction would include the power to decide an application for amendment, which if allowed, would mean that the suit is not to be transferred. When the jurisdiction is established, it would be not correct to hold that the procedural laws have been violated - the question referred and answered is in the context in question i.e. the suit was validly instituted as per Section 15 of the Code read with the Delhi High Court Act, Sections 4 and 5 of the Amending Act of 2015, the notification dated 24th November, 2015 and the suit is pending in the High Court. Final order - HELD THAT:- In view of the majority opinion, the question of law, in the context and matrix in question, is answered in the affirmative, holding that the Original Side of the High Court can decide the application to amend the plaint and increase the pecuniary valuation of the suit, where if the application is allowed, it would result in the suit not being transferred - The amendment application would be listed before Judge of the Original Side of the High Court on 21st September, 2016. Issues Involved:1. Jurisdiction to entertain amendment applications.2. Amendment of pecuniary jurisdiction.3. Transfer of suits due to change in pecuniary jurisdiction.4. Plaintiff's discretion in valuing reliefs.5. Impact of legislative amendments on pending suits.Detailed Analysis:1. Jurisdiction to entertain amendment applications:The core issue was whether a court lacking pecuniary jurisdiction could entertain an application to amend the plaint to enhance the valuation to fall within its jurisdiction. The majority held that the High Court, while in seisin of the matter, retains jurisdiction to decide such applications. It was emphasized that the court has the inherent power to determine its own jurisdiction and decide on the amendment application to avoid unnecessary delays and procedural complications.2. Amendment of pecuniary jurisdiction:The plaintiff sought to amend the plaint to increase the valuation of the suit, thereby retaining it within the High Court's jurisdiction. The majority opinion, supported by precedents like Lakha Ram Sharma v. Balar Marketing Pvt. Ltd., held that the court could allow such amendments, emphasizing that procedural rules should promote justice and not hinder it. The dissenting opinion, however, argued that post-amendment, the High Court ceased to have jurisdiction over cases falling below the new pecuniary threshold unless transferred back under Section 24 CPC.3. Transfer of suits due to change in pecuniary jurisdiction:Following the Delhi High Court (Amendment) Act, 2015, pecuniary jurisdiction was increased from Rs. 20 lakhs to Rs. 2 crores. Section 4 of the Amendment Act empowered the Chief Justice to transfer pending suits to subordinate courts. The majority held that the High Court could still entertain amendment applications to enhance valuation before transferring the suit. The dissenting opinion emphasized that once the Chief Justice's order is issued, the High Court becomes functus officio regarding such suits, and they should be transferred forthwith.4. Plaintiff's discretion in valuing reliefs:The plaintiff, as dominus litis, has the prerogative to value the reliefs sought. However, this discretion is not absolute and is subject to judicial scrutiny to prevent arbitrary or capricious valuations. The majority opinion supported the plaintiff's right to amend the valuation to retain jurisdiction, while the dissenting opinion stressed that such amendments should be scrutinized for bona fides and should not circumvent legislative intent.5. Impact of legislative amendments on pending suits:The Amendment Act's prospective nature was discussed, with the majority holding that pending suits could be retained in the High Court if the valuation is amended appropriately. The dissenting opinion argued that the legislative intent and public policy reflected in the Amendment Act necessitated the transfer of suits below the new pecuniary threshold, emphasizing that the Chief Justice's order under Section 4 was binding and not merely administrative.Conclusion:The majority concluded that the High Court could entertain and decide amendment applications to enhance the valuation, thereby retaining jurisdiction over the suit. The dissenting opinion, however, maintained that the High Court ceased to have jurisdiction over such suits upon the Chief Justice's transfer order, and any amendments should be scrutinized by the transferee court. The final order directed the amendment application to be listed before the Original Side Judge for decision on merits.