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M/S EXL Careers & Anr. v. Frankfinn Aviation Services Pvt. Ltd.

Civil Appeal · 2020 INSC 477Decided 5 Aug 2020
Civil Appeal No. 2904 of 2020
Justice Rohinton Fali Nariman · Justice Navin Sinha · Justice Indira Banerjee

Background

Frankfinn sued EXL Careers for recovery of money under a franchise agreement in a Gurgaon civil court, even though the agreement gave exclusive jurisdiction to Delhi courts. After years of litigation, pleadings completed and evidence closed, the Gurgaon court's plaint was ordered returned for filing in Delhi, and the question arose whether the suit should restart from scratch ("de novo") in Delhi or continue from the advanced stage it had already reached in Gurgaon. A two-judge bench, noticing a conflict between two earlier Supreme Court rulings on this point, referred the question to a larger bench.

Decision Breakdown

The Court resolved the conflict by holding that where a plaint is returned under Order VII Rule 10 of the Code of Civil Procedure for being filed in the correct court, the suit must proceed afresh ("de novo") in the new court: it does not continue from the stage reached in the earlier court, unlike a formal "transfer" of a case under Sections 24/25 of the Code where continuation from the same stage is allowed by law. It approved the reasoning in Modern Construction's case and disapproved a contrary ruling in Oriental Insurance's case. However, exercising its special discretionary power under Articles 136 and 142 of the Constitution to do complete justice, the Court declined to actually restart the Gurgaon suit from scratch in this particular case, noting the appellant had delayed raising the jurisdiction objection and the suit was already fully argued, and let the Delhi court continue from where it stood.

Lesson Learnt

As a matter of law, a case sent back to be re-filed in the correct court normally starts over from zero, unlike a case that is formally "transferred," but the Supreme Court can still depart from this rule in special circumstances to avoid unfairness, especially where a party sat on an available objection for years.

Official source (sci.gov.in)View Judgment (PDF)

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