Section 9-A of Civil Procedure Code : A Conundrum

I. Introduction:

Section 9-A of the Civil Procedure Code, 1908 (“Code”) was a novel concept which was inserted in the Code by way of a State amendment in the year 1970 and was limited in its application to the State of Maharashtra. This section mandated the Civil Court to decide any issue of jurisdiction as a preliminary issue even before granting any order of interim relief.

This provision was introduced to mitigate the abuse of process by litigants who used to take advantage of injunction orders in cases where the Court otherwise did not have jurisdiction. However, this provision itself became an enabler for dilatory tactics and also increased the time frame required for concluding the proceedings. Hence, the need was felt to take appropriate measures to curb this problem and the Legislature vide the Code of Civil Procedure (Amendment Act), 2018 [Maharashtra Act No. LXI of 2018] deleted the provision of Section 9-A.

This article traces the evolution of Section 9-A from its insertion till its ultimate deletion with special emphasis on recent judgements of Supreme Court / Bombay High Court and its impact on pending matters.

II. History of the provision

Judicial Pronouncement prior to introduction of Section 9-A

Institute Indo-Portuguese v Theotonio Borges: This matter arose out of a dispute in the management of a Public Trust named Institute Indo-Portuguese. The Trial Court, as an ad-interim measure, had passed an order appointing a Court Receiver for the management of the Trust. This order was challenged before the High Court.

The Bombay High Court while dealing with the issue of jurisdiction at the interim stage observed that such issue has to be dealt along with all other issues finally. During the ad-interim stage the Court has to assume that the Suit is properly filed before the Court competent to pass orders thereon. Such observation of the High Court created a binding precedent and empowered the Civil Court to grant interim reliefs without going into the question of jurisdiction.

Introduction of Section 9-A – Need to cure judicial precedent

In light of the observations made in the matter of Institute Indo Portuguese (supra), litigants started filing declaratory suits against the Government without issuing the statutory notice under Section 80 of the Code, which otherwise rendered such suit as barred under the Code. After obtaining ad-interim injunctions in such suit, the litigants used to issue the statutory notice and after expiry of the notice period, the earlier suit used to be withdrawn with liberty to file fresh suits in the intervening period. The Courts as a matter of course used to continue the injunctions granted in earlier suit.

Thus, the litigants used to circumvent the statutory requirement under Section 80 of the Code and inspite of such obvious lacuna, used to obtain injunctions. Therefore, the need was felt to curb such practice and empower the Court to determine the question of jurisdiction first before granting any interim reliefs.

Accordingly, by the Civil Procedure (Maharashtra Amendment) Act, 1970, Section 9-A was introduced in the Code. It was subsequently reintroduced with slight modifications vide the Civil Procedure (Maharashtra Amendment) Act, 1977. In a nutshell, Section 9-A mandated that if any objection is raised regarding jurisdiction of the Court, the Court shall decide the issue of jurisdiction as a preliminary issue before granting any interim relief in the nature of injunctions, appointment of court receivers etc. The Court was also empowered to grant ad-interim protections, if it was expedient in the interest of justice, during pendency of the determination of such preliminary issue.

Subsequent judgements – Expanding the scope and procedure of the provision

Over the last four decades several landmark judgements were passed determining the scope as well as the procedure for adjudicating any issue under Section 9-A. Some of the relevant judicial pronouncements are discussed under:

1. Meher Singh v Deepak Sawhny: A reference was made to the Division Bench of the Bombay High Court to decide the issue as to whether the parties are required to be given opportunity to lead evidence while adjudication of preliminary issue under Section 9-A. The High Court held that Section 9-A is a departure from Order XIV Rule 2 of the Code, as under Section 9-A, the issue of jurisdiction is decided finally and the rights of the parties qua jurisdiction stand crystallised. Thus, the Court held that when the issue of jurisdiction is a mixed question of law and fact, the issue has to be determined at the preliminary stage in light of the language adopted under Section 9-A and for such determination parties ought to be provided the opportunity to lead evidence.

2. Kamalakar Eknath Salunkhe v Baburav Vishnu Javalkar: The question which arose for consideration in this matter was whether an issue of limitation, being a mixed question of fact and law, can be decided as a preliminary issue under Section 9-A. The Apex Court after considering the language adopted in Section 9-A as well as the statements of object and reason, concluded that the term “jurisdiction” is used in a narrow sense in the provision encompassing only those issues which deal with the inherent jurisdiction of a Court to entertain a dispute and does not include issues related to limitation.

3. Foreshore Co-operative Housing Society Limited v Praveen D. Desai: Similar questions related to limitation and scope of Section 9-A vis-à-vis Order XIV Rule 2 were raised in these appeals. The Apex Court in this case deviated from the findings in Kamlakar Salunkhe (supra) and observed that the position of Section 9-A is a clear departure from the position under Order XIV Rule 2, thus the provision of Section 9-A has to be strictly followed. The Apex Court further held that the term jurisdiction cannot be given a narrow and conventional meaning and has to include any objection which affects the jurisdiction of the Court, including issues related to limitation. The Supreme Court also declared the ratio in Kamalakar Salunkhe (supra) as per incuriam.

Deletions of Section 9-A – Again need to cure judicial precedents

The aforementioned judicial precedents propounded the following legal position

1. Section 9-A is a complete departure from the position prescribed under Order XIV Rule 2 and it is mandatory in nature i.e. if an objection to jurisdiction is raised, the same has to be decided as a preliminary issue;

2. Under Section 9-A, the Court is empowered to try issues involving pure questions of law as well as issues involving mixed questions of law and fact, like limitation;

3. Whilst adjudicating mixed questions of law and fact as a preliminary issue, the Courts should provide opportunity to the parties to lead evidence

However, such judicial findings resulted in Section 9-A being a tedious and cumbersome process as it led to delays in disposal of cases. It led to the following undesirable situations:

1. Any ad-interim protection granted under Section 9A (2) continues to operate till the disposal of the motion and virtually becomes a final relief;

2. It also led to duplication of trial as one trial had to be conducted for preliminary issue whereas another trial had to be conducted for final issue.

Thus, the provision which was introduced to avoid abuse of process and save judicial time became a tool for delay and wastage of judicial time. In such circumstance, the legislature felt it expedient to delete the entire provision and mandate that all issues including issues of jurisdiction be decided at the time of final hearing.

In the aforesaid background, the Code of Civil Procedure (Maharashtra Amendment) Ordinance, 2018 was promulgated and was later enacted into the Code of Civil Procedure (Maharashtra Amendment) Act, 2018, commonly known as the First Amendment Act, 2018 which came into force with effect from 27.06.2018. The salient features of the First Amendment Act are as follow:

1. Section 9-A of the Code stood deleted

2. In cases where preliminary issues were already framed on the date of operation of the enactment but were pending adjudication, the said issues were deemed to be framed under Order XIV and were to be decided with all other issues

3. In cases where the preliminary issue stood decided in favour of the court having jurisdiction and revisional proceedings were pending, such revisional proceedings stood abated with the liberty granted to the aggrieved party to raise such issue in the memorandum of Appeal

4. In cases where the preliminary issue stood decided against the court having jurisdiction and revisional proceedings were pending, then such revisional proceedings continued as if no such amendment is brought about. However, if any matter is remanded for reconsideration, then the issue will be decided finally along with other issues

5. Any ad-interim order passed under Section 9-A (2) were to be considered as an ad-interim order passed under Order XXXIX of the Code with the liberty to the Court to continue, vacate or modify the same.

Subsequently, on 15.12.2018, the State Government published another amendment i.e. the Code of Civil Procedure (Maharashtra Amendment) (Amendment) Act, 2018 commonly known as the Second Amendment Act to amend the First Amendment Act. As per the Second Amendment Act, any proceedings, where the preliminary issue was framed on the date of enactment of the First Amendment but was pending adjudication [refer point (i) above], such preliminary issue would be decided as if Section 9-A was not deleted.

III. Judicial Pronouncements – Post Amendment

1. Nirmal Seeds Private Limited v Yashoda Seeds Private Limited: The legality and validity of the First Amendment Ordinance came to be challenged before the Aurangabad bench of the Bombay High Court. The High Court reiterated the concerns highlighted in the statement of object and reasons of the First Amendment Ordinance and Act and upheld the validity of the Ordinance.

2. Vidya Niwas Co-operative Housing Society Limited v Sanjay Ramesh Agarwal: The validity of the Second Amendment Act came to be challenged before the Bombay High Court. The grounds of challenge of the Second Amendment were that it created a difference / distinction between different classes of litigants and were discriminatory in nature The Ld. Single Judge of the Bombay High Court observed that the Second Amendment Act created different classes among litigants i.e. (i) cases where jurisdictional issue is framed, the same is to be decided under Section 9-A but (ii) cases where jurisdictional issue is raised but not yet framed, the same would be decided under Order XIV at the time of final hearing. The Court further observed that provisions of Section 9-A and Order XIV cannot be treated as merely procedural in nature as it creates entitlement on litigants as to which stage the Court will decide its jurisdiction. Thus, any distinction amongst litigants on such issue and providing the benefit of Section 9-A to only certain classes of litigants is discriminatory in nature. Accordingly, the Ld. Single Judge referred the issue related to the validity and interplay of the Second Amendment Act vis-à-vis the First Amendment Act before a Larger Bench. To the best of the knowledge of the author, the said reference is pending adjudication.

3. Nusli Neville Wadia v Ivory Properties: As highlighted above, the Apex Court, in the matter of Foreshore Properties CHSL (supra), declared the judgement passed in the matter of Kamalakar Salunkhe (supra) as per incuriam and held that issue of limitation can be decided under Section 9-A. However, in light of such conflicting legal position, the issue was referred to a three judge bench for deciding the issue finally. The Apex Court analysed the interplay of Section 9-A with various other provisions of the Code, including Order XIV, Order 7 Rule 11 (d) and concluded that the law laid down in Foreshore Properties CHSL (supra) is not the correct position and upheld the judgement passed in the matter of Kamalakar Salunkhe (supra) The key findings / observations of the Apex Court are set-out hereunder:

4. The expression “jurisdiction” used in Section 9-A has to be interpreted in a narrow sense to find whether the Court has jurisdiction to entertain the matter i.e. to adjudicate the matter. When a case is barred by limitation or res judicata, it is not that the court has no power to entertain it but the court does not have the power to pass relief as sought in the Suit. In cases of limitation or res-judicata, the Court has to consider the issue and decide the same on merits. Thus, issue of limitation or res judicata cannot be brought under the ambit of Section 9-A.

5. In case of the issue of limitation can be decided on admitted facts the same can be decided under Order XIV Rule (2) (2). However, if it involves disputed questions of fact, the same cannot be decided as a preliminary issue either under Section 9-A or under Order XIV Rule (2) (2).

6. Only pure questions of law can be decided under Section 9-A and mixed questions of law and fact cannot be decided under Section 9-A or Order XIV Rule (2) (2). The Code does not contemplate two trials, one at the stage of preliminary issue and one at the stage of other issues. Thus, recording of evidence is not mandated under Section 9-A and the decision passed by the Bombay High Court in the matter of Meher Singh (supra) stood overruled.

7. The provisions of the Second Amendment Act does not change the legal scenario as to what can be decided under Section 9-A and only those issues can be decided which falls within the parameters of Section 9-A as interpreted in the judgement.

IV. Impact of Nusli Neville Wadia - Author’s View

Impact on Bombay High Court reference

While deciding the scope and ambit of Section 9-A, the Apex Court took notice of the Second Amendment Act and proceeded to decide the issue assuming the validity of the Second Amendment Act. The relevant portion of the judgement is set-out hereunder:

“On 15.12.2018, the State of Maharashtra enacted the “Code of Civil Procedure (Maharashtra Amendment) (Amendment) Act, 2018” (the 2nd Amendment Act). Section 2 of Act reads as follows:

2. In section 3 of the Code of Civil Procedure (Maharashtra Amendment) Act, 2018, for clause (1), the following clause shall be substituted and shall be deemed to have been substituted with effect from the 27th June, 2018, being the date of commencement of the said Act, namely :­ “(1) where consideration of a preliminary issue framed under section 9A is pending on the date of commencement of the Code of Civil Procedure (Maharashtra Amendment) Act, 2018 (hereinafter, in this section, referred to as “the Amendment Act”), the said issue shall be decided and disposed of by the Court under Section 9A, as if the said section 9A has not been deleted.

It is provided that if the court has ordered to decide an issue as a preliminary issue before the date of deletion of section 9A, it shall be decided by the court as a preliminary issue. Thus, it has become necessary to decide the issue.” (Emphasis supplied)

The author is of the view that such observations constitute an implicit validation to the constitutionality of the Second Amendment Act as the Apex Court took note of the Second Amendment Act and acted upon the same. Thus, this may render the reference proceeding pending before the Bombay High Court, infructuous.

Impact on the Amendment Acts

As evident from the Statement of Objects and Reasons of the First Amendment Act, Section 9-A was deleted as it created a judicial bottleneck and stymied the expeditious disposal of cases. This was on account of the various judgements which held that mixed questions of law and fact could be adjudicated under Section 9-A and the parties had to be provided opportunity for leading evidence, which led to two full-fledged trials in the same proceeding.

However, the said issue has been conclusively decided by the Apex Court in the matter of Nusli Neville Wadia and the Court has held that only pure questions of law, which require no evidence, can be decided under Section 9-A. Thus, the very reason for which Section 9-A was deleted, does not exist anymore.

Section 9-A was a beneficial provision intended for weeding out suits which were filed before the wrong forum and in turn save precious judicial time. However, over time the provision led to delay in disposal of cases and defeated the very purpose of its enactment and necessitated deletion of the provision. However, with the Supreme Court deciding the issues and effectively removing the judicial bottlenecks, the legislature should consider re-introduction of the provision so that it can be utilized for its intended purpose.