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Fresh trial to be conducted of a plaint returned under Order VII Rule 10 and 10A of CPC

In M/S. EXL CAREERS vs FRANKFINN AVIATION SERVICES PRIVATE LIMITED, appeal has been placed before us on a reference by a two Judge Bench opining a perceived conflict between two Division   Bench   decisions   in  Joginder   Tuli   vs.   S.L.   Bhatia, (1997) 1 SCC 502 and Oil and Natural Gas Corporation Ltd. vs.   Modern   Construction   &   Co.,  (2014)   1   SCC   648.   The question of law required to be answered is that if a plaint is returned under Order VII Rule 10 and 10A of the Code of Civil Procedure   1908,  for presentation in the court in which it should have been instituted, whether the suit shall proceed  de novo  or will it continue from 1 the stage where it was pending before the court at the time of returning of the plaint. The order of reference also leaves it open for consideration if the conduct of the appellant disentitles it to any relief notwithstanding the decision on the issue of law. 

The Court noticed that the observations in Joginder Tuli verdict are very clear that the suit has to proceed afresh before the proper court and that the directions came to be made more in the peculiar facts of the case in exercise of the discretionary jurisdiction under Article 136 of the Constitution. Further, it does not take into consideration any earlier judgments and there is no discussion of the law either. Hence, it has no precedential value as laying down any law.

The Modern Construction verdict, on the hand, was pronounced after consideration of the law and precedents requiring reconsideration in view of any conflict with Joginder Tuli Verdict and hence, lays down the correct law.

The Court also overruled the ruling in Oriental Insurance Company Ltd. v. Tejparas Associates and Exports Pvt. Ltd., (2019) 9 SCC 435, wherein it was held that in pursuance of the amendment dated 01­02­1977 by reason of insertion of Rule 10A to Order VII, it cannot be said that under all circumstances the return of a plaint for presentation before the appropriate court shall be considered as a fresh filing.

Explaining the statutory scheme, the Court noticed that the language of Order VII Rule 10-A is in marked contrast to the language of Section 24(2) and Section 25(3) of CPC. In cases dealing with transfer of proceedings from a Court having jurisdiction to another Court, the discretion vested in the Court by Sections 24(2) and 25(3) either to retry the proceedings or proceed from the point at which such proceeding was transferred or withdrawn, is in marked contrast to the scheme under Order VII Rule 10 read with Rule 10-A where no such discretion is given and the proceeding has to commence de novo.

The Court, hence, held that Oriental Insurance Co. does not lay down the correct law.

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