A) ABSTRACT / HEADNOTE

The judgment in M/s EXL Careers and Another v. Frankfinn Aviation Services Private Limited authoritatively settles the legal position concerning the procedural consequence of the return of a plaint under Order VII Rules 10 and 10A of the Code of Civil Procedure, 1908. The Supreme Court examined whether a civil suit, upon return of the plaint for want of territorial jurisdiction, must recommence de novo or could continue from the stage at which it stood prior to such return. The controversy arose due to a perceived conflict between Joginder Tuli v. S.L. Bhatia and ONGC Ltd. v. Modern Construction & Co.

The Court clarified that where a plaint is returned because the court lacked jurisdiction, the subsequent proceedings before the competent court must commence afresh, as the earlier proceedings were coram non judice. The judgment provides a doctrinal distinction between transfer of suits under Sections 24 and 25 CPC and return of plaint under Order VII Rule 10, emphasizing that the latter leaves no discretion for continuation of prior proceedings. The Court also overruled Oriental Insurance Co. Ltd. v. Tejparas Associates, holding that the insertion of Order VII Rule 10A does not alter the mandatory requirement of a de novo trial.

However, invoking its discretionary jurisdiction under Articles 136 and 142 of the Constitution, the Court declined to interfere with the impugned High Court order due to the peculiar facts, procedural conduct of parties, and the advanced stage of the suit. The decision thus harmonizes procedural law with equitable justice while reaffirming settled jurisprudence.

Keywords:
Return of plaint, De novo trial, Territorial jurisdiction, Exclusionary jurisdiction clause, Order VII CPC, Article 142 Constitution

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The dispute arose from a franchise agreement executed in New Delhi on 24.03.2004, containing an exclusive jurisdiction clause conferring jurisdiction solely upon courts at Delhi. Despite such stipulation, the respondent instituted a suit for recovery before the Civil Judge at Gurgaon. The appellant initially objected to territorial jurisdiction but failed to invoke the exclusionary clause at the earliest opportunity. Subsequent procedural developments, including framing of issues, completion of evidence, and fixation for final arguments, significantly advanced the suit. It was only at a later stage that the jurisdictional objection based on the contractual clause was raised and accepted by the High Court, which directed return of the plaint under Order VII Rules 10 and 10A CPC.

The legal question thereafter crystallized around whether the suit, upon presentation before the competent court at Delhi, should recommence afresh or continue from the advanced stage reached earlier. Divergent judicial opinions had created uncertainty, particularly due to the observations in Joginder Tuli v. S.L. Bhatia seemingly permitting continuation in certain circumstances. The reference before the Supreme Court required reconciliation of these precedents and clarification of the correct procedural law governing returned plaints. The judgment thus operates at the intersection of procedural rigor and equitable discretion, offering clarity on jurisdictional competence and procedural nullity.

D) FACTS OF THE CASE

The respondent filed a suit for recovery of Rs. 23,11,190 before the Civil Judge (Senior Division), Gurgaon, arising out of obligations under a franchise agreement. Clause 16B of the agreement expressly provided that “Only Courts in Delhi shall have exclusive jurisdiction” over disputes. The appellant initially objected to jurisdiction under Order VII Rule 10 CPC on the ground that it neither carried on business nor resided within Gurgaon, without invoking the exclusion clause. This objection was rejected, and jurisdiction was framed as a preliminary issue.

Subsequently, the Civil Judge rejected the jurisdictional challenge even after the exclusion clause was raised. In revision, the High Court reversed this finding and directed return of the plaint. By this time, pleadings were complete, evidence closed, and the suit was fixed for final arguments. The respondent then applied for transfer of the entire judicial file to Delhi, which was allowed. The High Court upheld continuation of proceedings from the same stage. Aggrieved, the appellant approached the Supreme Court challenging the legality of continuation without a de novo trial.

E) LEGAL ISSUES RAISED

i. Whether a suit must proceed de novo after return of plaint under Order VII Rules 10 and 10A CPC?
ii. Whether Order VII Rule 10A permits continuation of proceedings from the previous stage?
iii. Whether Joginder Tuli v. S.L. Bhatia lays down binding precedent on continuation of suits?
iv. Whether equitable considerations can override mandatory procedural requirements?

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for the appellant submitted that a plaint returned for want of jurisdiction renders all prior proceedings void as coram non judice. Reliance was placed on Ramdutt Ramkissen Dass v. E.D. Sassoon & Co., Amar Chand Inani v. Union of India, and ONGC Ltd. v. Modern Construction & Co., asserting that presentation before a competent court constitutes a fresh institution of suit. It was argued that Order VII Rule 10A is merely procedural and does not vest discretion to continue proceedings. The High Court, it was contended, wrongly equated return of plaint with transfer of suit under Section 24 CPC.

G) RESPONDENT’S ARGUMENTS

The counsels for the respondent contended that the appellant suppressed material facts and failed to raise the exclusion clause at the earliest opportunity. It was argued that the High Court consciously ordered return of the file, not merely the plaint, considering the advanced stage of trial. Reliance was placed on Joginder Tuli v. S.L. Bhatia and Oriental Insurance Co. Ltd. v. Tejparas Associates, urging that rigid application of de novo trial would result in grave injustice.

H) JUDGMENT 

The Supreme Court held that the law laid down in ONGC Ltd. v. Modern Construction & Co. represents the correct legal position. It ruled that where a plaint is returned under Order VII Rule 10, the subsequent proceedings must commence de novo, as the court returning the plaint lacks jurisdiction. The Court categorically distinguished Joginder Tuli as a fact-specific order lacking precedential value and declared Oriental Insurance Co. Ltd. v. Tejparas Associates as incorrectly decided and overruled it.

The Court clarified that Order VII Rule 10A does not dilute the mandate of de novo trial and merely obviates the need for fresh summons. The distinction between return of plaint and transfer of suit was emphasized, noting that only in transfers under Sections 24 and 25 CPC does discretion exist to continue proceedings.

However, invoking Articles 136 and 142, the Court declined to set aside the High Court’s order due to the appellant’s conduct, delayed objection, and the advanced stage of the suit, thereby balancing procedural law with equitable justice .

a) RATIO DECIDENDI

A plaint returned under Order VII Rules 10 and 10A CPC must be treated as a fresh plaint upon presentation before the competent court, necessitating a de novo trial. Prior proceedings before a court lacking jurisdiction are void and non-est in law.

b) OBITER DICTA

The discretionary jurisdiction under Article 136 is one of conscience and equity. Even an incorrect order may be allowed to stand if interference would defeat substantive justice in peculiar factual circumstances.

c) GUIDELINES

i. Return of plaint is distinct from transfer of suit.
ii. Order VII Rule 10A does not permit continuation of proceedings.
iii. Jurisdictional objections based on contractual clauses must be raised at the earliest stage.
iv. Equitable relief under Article 142 is fact-specific and exceptional.

I) CONCLUSION & COMMENTS

The judgment reinforces procedural certainty while preserving judicial discretion. It reaffirms that jurisdiction is foundational and proceedings before an incompetent court are nullities. At the same time, it demonstrates the Supreme Court’s willingness to temper strict legality with equity to prevent injustice caused by procedural delay and litigant conduct. The ruling provides authoritative clarity on the scope of Order VII CPC and harmonizes conflicting precedents without unsettling concluded proceedings.

J) REFERENCES

a) Important Cases Referred

• ONGC Ltd. v. Modern Construction & Co., [2013] 10 SCR 466

• Joginder Tuli v. S.L. Bhatia, [1996] 7 Supp SCR 221

• Amar Chand Inani v. Union of India, [1973] 2 SCR 684

• Swastik Gases (P) Ltd. v. Indian Oil Corporation Ltd., [2013] 7 SCR 581

b) Important Statutes Referred

• Code of Civil Procedure, 1908

• Constitution of India