2009 (3) TMI 959 - HC - VAT and Sales Tax

Whether the court within whose territorial jurisdiction the consequence ensued from the wrong done to movables beyond its territorial jurisdiction entertain a suit for compensation for the wrong done? Held that - In view of the interpretation given to the phrase wrong done occurring in section 19 of the Code and the factual situation of the case the Sub-court Ernakulam has jurisdiction to try the suit. This appeal succeeds. The order under challenge is set aside. The learned Sub-judge is directed to proceed with the trial and dispose of the case as expeditiously as possible.

Summary

Issues:
Territorial jurisdiction of the court to entertain a suit for compensation for wrong done to movables beyond its territorial jurisdiction.

Analysis:
The appellant purchased teak wood from a Forest Department depot and faced obstruction during transportation by respondent No. 2 at a sales tax check-post. The Sales Tax Officer later ordered a refund, leading to a claim for compensation. The respondents contended that the court lacked territorial jurisdiction to try the suit. The Sub-judge found no territorial jurisdiction and directed the plaint to be presented before the proper court.

The appellant argued that the order of refund formed part of the cause of action, conferring territorial jurisdiction to the Sub-court. The Government Pleader maintained that since the wrong occurred at a location beyond the court's jurisdiction, the suit was not maintainable there.

The interpretation of "wrong done" under section 19 of the Code of Civil Procedure was crucial. The section allows suits for compensation for wrongs to be filed where the wrong occurred or where the defendant resides. The term "wrong done" includes the act and its consequences, as supported by legal precedents. In this case, the effect of the wrongful act was felt at the destination in Ernakulam, justifying the court's jurisdiction.

Section 21 of the Code requires objections on the place of suing to be raised early in the proceedings. The court should decide such objections promptly to prevent hardship to the parties. In this case, the objection to territorial jurisdiction was raised late, after evidence was produced. However, the respondents' conduct implied a waiver of their objection, allowing the court to proceed with the trial.

The court concluded that the Sub-court in Ernakulam had jurisdiction to try the suit based on the interpretation of "wrong done" and the factual circumstances. The appeal succeeded, setting aside the previous order and directing the Sub-judge to continue with the trial promptly. The parties were instructed to appear in the Sub-court, Ernakulam, on a specified date, with no costs imposed.