BAHREIN PETROLEUM COMPANY LIMITED Vs. P J PAPPU

JUDGEMENT

(1.) THE plaintiff was a typist clerk in the employ of the second defendant, the Bahrein Petroleum Co. Ltd. THE first defendant was the recruiting agent of the Company at Bombay. THE contract of service was signed at Bombay. THE zone of operation under the contract of service was Bahrein Island outside India. THE plaintiff instituted a suit for recovery of gratuity and arrears of salary against the Company and its recruiting agent in the Court of the Sub-ordinate Judge of Cochin. Both defendants applied to the Cochin Court for stay of the suit under S. 34 of the Indian Arbitration Act, 1940. THE Cochin Court refused to stay the suit. An appeal from this order to the District Court of Ernakulam was dismissed, and a revision petition to the High Court was dismissed in limine. In the meantime, the Cochin Court passed an order declaring that the suit should proceed ex parte. On an application by the defendants this order was set aside, and the defendants were allowed to file their written statement. In their written statement, the defendants pleaded on the merits and also disputed the territorial jurisdiction of the Cochin Court. On the application of the defendants, the Cochin Court tried the preliminary issue as to jurisdiction. THE Cochin Court held that it had no territorial jurisdiction to try the suit, and directed the return of the plaint for presentation to the proper Court. An appeal to the District Judge of Ernakulam was dismissed. But, on revision, the High Court of Kerala held that the defendants had waived the objection as to the territorial jurisdiction of the trial Court, set aside the orders of the lower Courts, and directed the Cochin Court to try the suit on the merits. THE second defendant now appeals to this Court by special leave.

(2.) THE defendants neither resided nor carried on business, nor did any part of the cause of action arise within the local limits of the jurisdiction of the Cochin Court. THE Cochin Court had, therefore, no territorial jurisdiction to try the suit under S. 20 of the Code of Civil Procedure, 1908.

(3.) AT the earliest opportunity and before taking any steps in the suit, the defendants applied for stay of the suit under S. 34 of the Indian Arbitration Act, 1940. In the petition for stay, they protested against the jurisdiction of the Court to try the suit. In paragraph 5 of the petition, they clearly pleaded that the Cochin had no jurisdiction to entertain the suit. They objected to the trial of the suit on the merits, pressed for a stay order before the Cochin Court and fought up to the appellate and revisional Courts. Having failed to obtain the stay order, they were compelled to apply to the Court for permission to file their written statement, and on the permission being granted, they filed it objection to the jurisdiction and also pleading on the merits. Throughout, the defendants protested against the jurisdiction of the Court to try the suit. They lodged their protest at the earliest opportunity, and persisted in their objection thereafter. AT no stage they waived or abandoned their objection.