Background
Section 9-A was inserted in the Code of Civil Procedure, 1908 (“the Code”) as an amendment specific to the State of Maharashtra by the Code of Civil Procedure (Maharashtra Amendment) Act, 1970 and by way of abundant caution, was reintroduced in the Code vide the Code of Civil Procedure (Maharashtra Amendment) Act, 1977. The insertion of Section 9?A in the Code was guided by peculiar circumstances, i.e. at such time, the practice was followed to initiate declaratory suits without giving valid notice to the government under Section 80 of the Code. The plaintiff would undertake to issue such notice and would pray for ad interim injunction. After the expiry of the period for issuance of such notice, the plaintiff would withdraw the suit and file a fresh one praying for and successfully obtaining fresh ad interim reliefs from the Court. This vicious cycle was sought to be avoided by the introduction of Section 9-A in the Code in 1970.
Thereafter, in 2018, the Code of Civil Procedure (Maharashtra Amendment) Act was notified. The Statement of Objects and Reasons of this amendment inter alia, noted that Section 9-A was leading to judicial bottlenecks in the form of the application for interim relief being pending and as a consequence, the interim relief was being continued as final relief in most cases. Further, the orders passed under Section 9-A was amenable to their own challenge, leading to a multiplicity of proceedings without any consideration of the matter on merits.
Section 9-A was accordingly deleted by the above amendment. However, by a second amendment in 2018, it was provided that the proceedings pending under Section 9-A on the date of the introduction of the amendment and any preliminary issue framed under Section 9-A would be decided at the time of final determination of the other issues framed under Order XIV of the Code, and that any ad-interim relief granted under Section 9-A may be confirmed, vacated or modified at the stage of final hearing of the interim application.
The Judgment in Nusli Neville Wadia v. Ivory Properties
In Nusli Neville Wadia v. Ivory Properties[1] (“Nusli Wadia case”), the correctness of Foreshore Cooperative Housing Society Limited v. Praveen D. Desai (Dead) through Legal Representatives[2] (“Foreshore”) was considered to determine the scope of the term “jurisdiction of the court” in Section 9-A of the Code.
In Foreshore (supra), it had been held that the term ‘jurisdiction’ in Section 9A was wide enough to include the issue of limitation and that the term could not be read in a restricted sense to include only territorial, pecuniary or subject matter jurisdiction. In order to determine whether the position taken in Foreshore (supra) was correct in law, the Supreme Court discussed a plethora of judgments passed by the Supreme Court itself as well as various High Courts to determine whether jurisdiction was an issue of law and fact, whether limitation could be included within the ambit of jurisdiction, and the scope of Section 9-A vis-à-vis Order XIV, Rule 2 of the Code.
Whether Jurisdiction includes limitation in its ambit
Foreshore (supra) held that although the plea of limitation was a mixed question of law and fact, Section 9-A was a self-contained scheme with a non-obstante clause that mandates the court to follow the provision. Further, it held that the question of limitation was synonymous with jurisdiction, and if the same was raised, it had to be tried as a preliminary issue by the Court.
In the Nusli Wadia case (supra), during the course of arguments before the Supreme Court, Mr Fali S. Nariman contended that no issue which was a mixed question of fact and law could be tried as a preliminary issue under the Code and that the plea of limitation is always a mixed question of fact and law, and therefore cannot be decided without reference to the starting point of the limitation period which will be purely factual.
Eventually, in the Nusli Wadia case (supra), it was held that the “jurisdiction to entertain” in Section 9-A could not be understood within the wide ambit that was held in Foreshore (supra) and had to be interpreted in the narrow sense. The case drew the distinction between jurisdiction and limitation by holding that in the event that the Court does not have the jurisdiction to entertain the suit, it means that the Court does not have the power to entertain the suit. When a suit is barred by limitation, it means that it is not possible for the Court to grant the relief as prayed for. While the difference between the two is subtle, the Nusli Wadia case (supra) has clarified that the scope of Section 9-A is limited to the maintainability and the competence of the Court to receive the suit for adjudication.
Jurisdiction under Section 9-A v. Order XIV, Rule 2
Order XIV, Rule 2, which was amended in 1977, mandates that the Court has to pronounce judgment on all issues, and sub-rule (2) states that the Court may try the issue of jurisdiction of the Court or a bar to the suit created by an law before the settlement of other issues, only if the preliminary issues are based on law.
While the Supreme Court, in the Nusli Wadia case (supra), held that Section 9-A was not repugnant to Order XIV, Rule 2, it also clarified that the scope of Section 9-A was limited as compared to the same of Order XIV, Rule 2. Pertinently, it held that the jurisdiction to entertain can be contemplated under Section 9-A only if it is a pure question of law, and not a question of law and fact. It also emphasized that no evidence can be recorded to decide the preliminary issue of jurisdiction under Section 9-A of the Code as the Code does not contemplate two full-fledged trials being held to decide preliminary issues as well as the other issues.
By holding the above, the Supreme Court has effectively reconciled Section 9-A of the Code with Order XIV, Rule 2. Consequently, while jurisdiction may be tried as a preliminary issue, for all the remaining cases under Section 9-A, the Court will also have to adhere to the principles of Order XIV, Rule 2. In other words, only issues of law can be treated as preliminary issues.
Jurisdiction under the Arbitration and Conciliation Act, 1996
While the Nusli Wadia case (supra) did not specifically deal with the scope of jurisdiction in arbitration proceedings, the judgment in Indian Farmers Fertilizer Cooperative Limited v. Bhadra Products[3] (“Indian Farmer’s case”) has been referred to in the judgment. The Indian Farmers case was referred to in order to understand the meaning of jurisdiction in different legislation and the interpretation of the same in case law.
In the Indian Farmers case (supra), it was observed that limitation did not fall under the ambit of jurisdiction under Section 16 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) and accordingly held that when a jurisdictional challenge is upheld, it is an appealable order under Section 37 of the Arbitration Act. While the Indian Farmers case sought to clarify the scope of jurisdiction in arbitration proceedings, since the Nusli Wadia case (supra) has not opined on it, it is probable that the judgment in the Nusli Wadia case (supra) will have an effect on the interpretation of the term in the future.
Conclusion
With the repeal of Section 9-A applicable to the State of Maharashtra, there has been certain ambiguity regarding the treatment of the cases in which issues were formed under Section 9-A before the repeal. However, the judgment in the Nusli Wadia case (supra) has clarified not only the interpretation of the term “jurisdiction” in Section 9-A but also the context in which it has to be read. While the term “jurisdiction” has been mentioned in the Code in several places, as the title of this article suggests, each occurrence of the term is a different colour, a different meaning.
Since Section 9-A refers to the “jurisdiction of the court to entertain such a suit”, it is clear that the Court should have the inherent jurisdiction to receive the suit in order to consider the merits of the same. The Court has indicated that “jurisdiction” under Section 9-A will be limited to territorial, pecuniary and subject-matter jurisdiction, and can be treated as a preliminary issue only when it may be resolved solely based on law and admitted facts. The judgment in the Nusli Wadia case (supra) may have helped to clarify the position of law in the cases that are still under the old regime of Section 9-A, however, challenges to the 2018 Amendment, especially the sunset clause, continue to be heard in the High Court of Bombay and have been referred to a larger bench.
† Ankoosh Mehta (Partner), Dhvani Shah (Senior Associate) and Sanika Gokhale (Associate), Cyril Amarchand Mangaldas.