# [1979] 3 S.C.R. 920

- **Citation:** [1979] 3 S.C.R. 920
- **Court:** Supreme Court of India
- **Decided:** 1979-05-03
- **Bench:** S. Sarkaria, D. A. Desai
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1979-3-s-c-r-920-7822
- **Pages:** 8

## Headnote

Code of Civil Procedurt, 1908-S. 25 as amended in 1976-Scope r~fJurisdiction of Supreme Court to transfer d suit from one court to arwt11«'-
Explai11ed.
The first respondent entered into a contract with the second respondent for
C
the erection of a factory in a place named Seoni in Madhya Pradesh. Under the
Scheme for re-discounting of bills, the first respondent discounted with its Banker
(petitioner), the Bills of Exchange in respect of sale of machinery. When the
second respondent failed to honour the Bills, the drawees of the Bills filed a suit
in the District Court, Seoni against the petitioner Bank and others seeking certaia
reliefs. The petitioner-Bank on the other hand filed a suit in the Madras High
Court against the first respondent and others. In a petition under s. 25 of the
D
Code of Civil Procedure, 1908 (as amended in 1976) the petitioDfr sought ti'lllllfer of the suit filed in Seoni to the file of the Madras High Court.
Allowing the petition,
HELD : 1. Section 25 of the Code of Civil Procedure as amended in 1916
empowers the Supreme Court to direct that any suit, appeal or other proceeding
E
be transferred from a High Court or other Civil Court in one State to a High
Court or other Civil Court in any other State, if it· is satisfied that such an order
ls expedient in the ends of justice. [925A)
2. The principle governing the general power of transfer and withdrawal
under s. 24 of the Code is that the plaintiff is the dominus litis and as such
entitled to institute his suit in any forum which the law allows
him. The
F
Court should not lightly change that forum and compel him to go to another
Court with consequent increase in inconvenience and expense of prosecuting
his suit. The mere balance of convenience in
favour
of
proceedings
ia
another Court albeit a material considemtion, may not always
be
a
true
criterion justifying the transfer. The power of transfer of a civil proceedint;
to another Court conferred under the new Section 25 C.P.C. on the Supreme
Court is far wider and so is the amplitude of the expression "expedient in the
G
interests of justice" which furnishes a general guideline
for the exercise of
the power. [925E-F]
B
3. One of the broad propositions as to what may constitute a ground for
transfer of a civil suit from one court to another is that where two suits
raising common questions of facts and law between parties, common to both
the suits are pending in two different Courts, it is generally in the interests
of justice to transfer one of these suits to the other forum to be tried
by
the same Court with consequent avoidance of multiplicity in the trial of the
same issues and the risk of conflicting decisions thereon. [925H]
\
(
t
I
•
' r
t
X
,.,
"f
I ..
I
I t
i
I
t
l I
}
l
\
OV!lSUS J4NIC v. CHIWIUL COII!TJ.UCTX>N CO. :Sarkarla, 1.) 921-
• • -4. Ia tht illltta.at Clti, • COiDJ&rativ• atudy ct tho -.uc. ~
ia the
two suita lboWI dlat the principal common queatioll ariJina in c:a.ch of theM
suits is whether the a«<nd re$pondent and the fourth respondent were bonnd
to make payment!!. The m:tivinl patty in both the tuitt 'ffii the "'titioner.
Acoordin1 to the .nteationa in the petition, the Billl of Exchanae were drawn
in Madra, an ddiscounted in lfadrae and al80 rediscounted with the Indw·
trial Bank end payments were to be made expressly in Madru. Both tho
parties were the aame .nd the material issuea in both ot them were common
or inter·depende11.t. It the two euifa ue allowed to continue in their origillal
forums, there is a pos!ibility of c:on11.ictina findings on tho question of liabi·
Iity. The evidel'lce in both the euits would m011tly bo common and is locally
available at Madras. Transfer of the Seoni enit to tho Madral! High Court
will avoid multiplicity in the Trial of the common iS!ues and obviate the ri!k
of conilictinr deci!ioru. In the circ\IIMtances it is manifestly expedient, in the
interests of justice that both the euits mould be tried by the Madraa Hiah
Court on itl!l ori;inal s

## Text

A
B
INDIAN OVERSEAS BANK, MADRAS
CHEMICAL CONstRUCTION COMPANY & ORS.
May 3, 1979
[R, S. SARKARIA AND D. A. DESAI, JJ.]
Code of Civil Procedurt, 1908-S. 25 as amended in 1976-Scope r~fJurisdiction of Supreme Court to transfer d suit from one court to arwt11«'-
Explai11ed.
The first respondent entered into a contract with the second respondent for
C
the erection of a factory in a place named Seoni in Madhya Pradesh. Under the
Scheme for re-discounting of bills, the first respondent discounted with its Banker
(petitioner), the Bills of Exchange in respect of sale of machinery. When the
second respondent failed to honour the Bills, the drawees of the Bills filed a suit
in the District Court, Seoni against the petitioner Bank and others seeking certaia
reliefs. The petitioner-Bank on the other hand filed a suit in the Madras High
Court against the first respondent and others. In a petition under s. 25 of the
D
Code of Civil Procedure, 1908 (as amended in 1976) the petitioDfr sought ti'lllllfer of the suit filed in Seoni to the file of the Madras High Court.
Allowing the petition,
HELD : 1. Section 25 of the Code of Civil Procedure as amended in 1916
empowers the Supreme Court to direct that any suit, appeal or other proceeding
E
be transferred from a High Court or other Civil Court in one State to a High
Court or other Civil Court in any other State, if it· is satisfied that such an order
ls expedient in the ends of justice. [925A)
2. The principle governing the general power of transfer and withdrawal
under s. 24 of the Code is that the plaintiff is the dominus litis and as such
entitled to institute his suit in any forum which the law allows
him. The
F
Court should not lightly change that forum and compel him to go to another
Court with consequent increase in inconvenience and expense of prosecuting
his suit. The mere balance of convenience in
favour
of
proceedings
ia
another Court albeit a material considemtion, may not always
be
a
true
criterion justifying the transfer. The power of transfer of a civil proceedint;
to another Court conferred under the new Section 25 C.P.C. on the Supreme
Court is far wider and so is the amplitude of the expression "expedient in the
G
interests of justice" which furnishes a general guideline
for the exercise of
the power. [925E-F]
B
3. One of the broad propositions as to what may constitute a ground for
transfer of a civil suit from one court to another is that where two suits
raising common questions of facts and law between parties, common to both
the suits are pending in two different Courts, it is generally in the interests
of justice to transfer one of these suits to the other forum to be tried
by
the same Court with consequent avoidance of multiplicity in the trial of the
same issues and the risk of conflicting decisions thereon. [925H]
\
(
t
I
•
' r
t
X
,.,
"f
I ..
I
I t
i
I
t
l I
}
l
\
OV!lSUS J4NIC v. CHIWIUL COII!TJ.UCTX>N CO. :Sarkarla, 1.) 921-
• • -4. Ia tht illltta.at Clti, • COiDJ&rativ• atudy ct tho -.uc. ~
ia the
two suita lboWI dlat the principal common queatioll ariJina in c:a.ch of theM
suits is whether the a«<nd re$pondent and the fourth respondent were bonnd
to make payment!!. The m:tivinl patty in both the tuitt 'ffii the "'titioner.
Acoordin1 to the .nteationa in the petition, the Billl of Exchanae were drawn
in Madra, an ddiscounted in lfadrae and al80 rediscounted with the Indw·
trial Bank end payments were to be made expressly in Madru. Both tho
parties were the aame .nd the material issuea in both ot them were common
or inter·depende11.t. It the two euifa ue allowed to continue in their origillal
forums, there is a pos!ibility of c:on11.ictina findings on tho question of liabi·
Iity. The evidel'lce in both the euits would m011tly bo common and is locally
available at Madras. Transfer of the Seoni enit to tho Madral! High Court
will avoid multiplicity in the Trial of the common iS!ues and obviate the ri!k
of conilictinr deci!ioru. In the circ\IIMtances it is manifestly expedient, in the
interests of justice that both the euits mould be tried by the Madraa Hiah
Court on itl!l ori;inal side by the same Judge or Judge•. [926C·F]
5. The second respondent's apprehenaion that the tranafer of the
Seoni
auit to Madras would cause an increa,e in expenses of litigation and incon·
venience to them is not well founded.
Both the suits are more or leS8 at
the same etaae.
Common evidence is to be found locally in Madrae.
The
fourth respondents who were the guarantors, had no objection to the tramfe.
of the Seoni suit to Madras. The balance of convenience is also in favour
of the Seoni euit being transferred to the Madral! High Court which is a
auperior forum than the District Court at S;eoni.
[927C·D]
ORIGINAL JuRISDICTION : Transfer Petition No. 26 of 1978.
S. T. Desai, K. layaram and K. Ramkumar for the Petitioner.
T. S. Vishwanatha Rao and A. T. M.
Sainpath for Respondent No. 1
B. D. B11l and MrJ. JayaJhree Wad for Respondent No.2
The Judgment of the Coun was delivered by
SARKARIA, J.-This is a petition under Section 25 of the
Civil
Procedure •Code 1908, as amended by Act 104 of 1976 for transfer
B
c
D
E
p
of suit IB of 1972 instituted in the Court of District Judge, Senoi,
Madhya Pradesh by the !iecond respondent herein, against the petitioner and respondents 1, 3 & 4 to the file of the High Court of Madras
G
(Original Side). The facts material to this petition are as under:
. The first respondent, M/s. Chemical Construction Company, is a
regiStered partnership having its registered office at No. 14, Milestone
Mathura Road, Faridabad, Haryana and Head Offise at Madras. It
is represe:nttd by its partners Shri T. V. P. Nrunbiar, Shri 0. P. NamH
'biar, Shri 0. V. Nambiar, Smt. Uela Nambiat and Smt. Nlrmala
Nambiar.
·
3-409 SCij79
8
c
. 922 .
SUPREME COURT' R.E.POUS
[1979]. 3 S.C.R .
The second respondent, Rajadhiraj. Industries· Pvt. Ltd.,· has - its
·registered office· at Seoni, Madhya Pradesh. It -is represented by its
Managing Director,· Shri Harishchandra Singhania.
The third respondent, Industrial Development Bank of India Ud.
has its registered office at Bombay and branch offices at other placet·,
including one at Madras.
·
.
·
The fourth respondent is Madhya Pradesh Financial Corporation,
·incorporated under the State Financial Corporation Act, 1957, hav·
int~; its registered office in Indore, Madhya Pradesh.
The first respondent (manufacturer) entered into a contract on
November 11, 1969 with the second respondent to erect a plant for
manufacture of hydrogenated vegetable oil. There was a supplement&ry agreement between them on Jan'Uary 24, 1970. The cost of the
plant was Rs. 25,00,000/-. The third respondent (for short called
the Industrial Bank), agreed to finance the manufacturer (first res_pondent) under a Scheme called the "Bills Rediscounting. Scheme".
Under that Scheme the manufacturer would obtain in convenient
mutually agreed instalments the value of the machinery supplied within !!. few days of its delivery by discounting with his banter the bi~
of exchange arising out of the sale of the machinery, either before dr
after acceptance ·by the second respondent (purchaser).
The bankers
E
of the manufacturer/seller would tAke up the discounted bills and get
them :i-ediscounted by the Industrial BanJc, prior to their due dates, thus
reimbursing themselves with the amounts paid to the manufacturer.
The discounting bank would be liable to pay to the Industrial Bank
the amounts under the bills on their due dates.
·p
.G
H
The discounting bank would normally requires the ~econd respondent to accept the bills/promissory notes, a~er the payment had beeli
guaranteed on his behalf by its banker or the fourth re~pondent (thiState Financial Corporation) etc.
•
The petitioners, it is alleged, acted as discounting bank under the
Scheme.
The first respondent and the second respondent took advaJJ~
tage of the Scheme, and pursuant to an agreement for supply of materials between the first and second respondents, the fourth respondenl
executed an irrevocable guarantee on November 3, 1970 and a suP"
plementary guarantee_ on February 18, 1971 in favour of the petitioner
. on, behalf of second respondent.
It is further alleged that in pW'!uance of the independent agr~
tnent, the petitioner bad discounted a total of 9 Usance Bills to tM
oitent of Rs. 9.42 lacs which were drawn by the first rest:>ondent lllld
(
)
)
OVE~SEAS BANK V. CHEMI(;AL <;ONS!RU<?TI<?~. c;o. (Sarkaria, J.) 92_ J:, ~
accepted by the. S.econd. respPitdent. _The_ fir$t .eight of thes~ b.ills were
rediscounted by the petitioner with the third· respondent. (the lndust..;. .
rial Bank) for ·a total sum of Rs. ~6.99 lacs, which am01W,t was ilUQ&e-.
quently P!!:id over to the 'third respondent by the
petitioner but
none of these eight bills was paid by the second respondent to the
petitioners on the due dates.
The remaining bill for Rs. 2,43,376/,.
was not rediscounted by the petitioner with the third respondent.
In September 1972, the dr~wees of the bills (second respondent)
filed suit No. IB/1972 in the District Court, Seoni against the :etltioner and the respondents 1, 3 & 4, seeki,ng a decree for (a) one 1ac
of rupees against the first respondent on account of damages for
breach of contract; (b) directing the petitioners
(Indian
Overseas
Bank) and re~pondents 1 & 3 jointly and severally to deliver up the
guarantee deeds dated November 3·, 1970 and February 18, 1971 and
the 9 Usance Bills and for cancellation of the same by the Court; (c)
permane1it injunction restraining the petitioner Bank and respondents
1 & 3 from enforcing the aforesaid guarantee and the 9 Usance Bills;
(d) permanently restraining the guarantor (fouith respondent) from
discharging any liability under the aforesaid guarantees, dated November 3, 1970 and February 18, 1971. It w~s alleged in the plaint by
the second respondent that acceptance of the bills was vitiated by false
representation made by the agent of the petitioner Bank. The defendants in the Sooni suit (petitioner and respondent 1 herein) filed their
written statements denying the allegations and claim made in
the
plaint In March 1978, the District Judge, Seoni framed issues in
that suit.
In the Seoni Suit, the second respondent made an application for
interim. injunction restraining the petition~r from enforCing the right8
in respect of the Usance Bills accepted by the second respondent and
regarding the guarantees furnished by the fourth respondent.
·The
District Judge dismissed that application; but on appeal, the
High
Court of Madhya Pradesh granted the interim injunCtion a~ prayed
for.
On appeal by the petitioner, this Court by
it~ order, dated
March 20, 1974, set aside the High Court's order and vacated ·the
interim injunction as regards the petitioner and the fourth respondent
subject to the petitioner undertaking to reimburse the fourth respon..
dent in accordance with the directions of the· Court' depending upon
the res~l~ of the Seoni S~it. As a result the irppedime:"t in the way of
the pehhOnet: for enforcmg its rights was removed.
· · · ·
· · ·
. '
.
.
..
· The petitio?er bank filed suit C.~.-No. -143/75 in the High Coqrt
of Madras agamst respondents ·1·& 4 herein (as also :five other. d.efenD
G
ll
SUPREME COURT U:PORTS
[1979] 3 S.C.ll.
A
dants, who ~e partners of the first respondent two of whom had furnished collateral securities by way of equitable mortgages. In this
Madras sui!, the petitioner herein, has prayed for the followiiig reliefs :
•
D
(i) Directing the respondents, herein, (except
respondent 3),
jointly and severally to pay to the plaintiff-petitioner the swp. of
Rs. 10,62,364.57 under the Bills Purchase Acco.unt together With
interest OQ. the said nine Usance Bills.
(ii) Directing the first respondent herein, and their partners to pay
to the plaintiff-petitioner the sum of R~. 1,28,154.57 under the overdraft account of the first defendant firm together with interest.
P~ss
ing of a mortgage preliminary decree a_gains~ ~efendants S and 6 ~ere
in, (two of the par!IJ.ers of the first respondent, herein).
It is note-wDrthy that respondents 1, 2 and 4 herein, have filed
their written statements in th~t suit before the Madras High Court,
which on November 2, 1977, framed 12 issues.
Issues 1 and 6 run
as follows:
(1) Whether the defendant (first respondent, herein) is liable
to pay the suit claim under the Bills purchase account ?
{6) Whether the defendant (second respondent, herein) is
not
E
liable for the suit claim as an acceptor under the Bills Purchase AcI'
G
H
count.
A comparative study of the issues framed in the two suits, one at
Seoni and the other at M_adras, shows that the principal common ques·
tion arising in each of these two suits, is : whether the second responde!lt and the fourth resJLondent, herein, are bound to make payment, the second respondent as acceptor of the bills of exchange and
the fourth respondent as guarantors for due payment thereunder. The
receiving party in both the suits is the petitioner, herein. According to
the allegation~ in the present petition, the bills of excillinge were drawn
in Madras and discounted in Madras and also rc~:discounted with the
Industrial Bank and payments were to be made expressly in Madras.
Under an interim order dated April 9, 1976 passed by the High
Court of Madras in the said suit, the fourth respondent has deposited
with the petitioner herein, a ·sum of Rs. 10 lacs as and by way of
deposit. Apart from a claim for damages of Rs. 1 lac against the
first respondent herein, (the .manufacturers), no money claim has been
made against the petitioner in the Seoni Suit. Nor has the petiti~ner
made any counter-claim in the Senoi Suit.
OVI!I.SBAS BANK v. CHEMICAL CONSTI.UCTION CO. (Sarkaria, J.) g 25
W c are of opinion, this petition must succeed. Section 25 of the
Code of Civil Procedure as ~u,.b&tituted for the former section by the
Code of Civil Procedure (Amendment) Act, ·1976, empowen this
Court to direct that any suit, appeal or other . proceeding be transfer·
rod from a ~igh Court or other Civil Court in one State to a High
Court or other Civil Court in any dther State, if it is satisfied that such
an order is "expedient in the ends of justice". The former Secti~ 25
empowered the State Government to transfer, on receiving a report
from the Judge concerned of the High Court to transfer suits or pro-
• 1'_..._ _ ceedings in certain circumstances from one High Court to another
- ~- High Court.
The scope of the former Section was very restricted as
it provided only for transfer of any proceeding pending iri a High Court
presided by a Single Judge.
It was thought that the State Government was not the appropriate agency for exercising this power of transfer, obviously because such exercis~ is a judicial function. For these
reasons, the new Section 25 which has beeri substituted for the former
one, confers on this Court very wide po~ers of transfer which are as
extensive as its powers under Section 406 of the Code of Criminal
Procedure, 1973.
The principle governing the general power of transfer and withdrawal under Section 24 of the Code is that the plaintiff is the dominus
litis and, as such, entitled to institute his suit in any forum which the
A
..
c
D
law allows him.
The Court should not lightly change that forum and
~
compel him t~ go to another Court, with consequent increase in inconvenience and expense of prosecuting his suit.
A mere balance of
convenience in favour of proceedings in another Court, albeit ii material consideration may not always be a sure criterion justifying transfer.
As compared with Section 24, the power of transfer of a civil proceeding to an~ther Court, conferred under. the new Section 25 on the
Supx:eme Court, ~far wider.
And, so is the amplitude of the expression, "expedient in the interest of justice" which furnishe~ a general
guideline for the exercise of the power.
Whether it is expedient or
desirable in the interest of justice to transfer a proceeding to another
G
Court is a question which depends on the circumstances of the particular case.
Although the exercise of this discretionary power cim not be imprisont:d within them 8traight jacket of any cast iron formula uniformly
app1icable to all situations; yetj certain broad propositions as to what
H
may constitute a ground for ttansfel' ean be deduced from judicial
deei&ions.
One of them is that where two suit's raising common ques-
...
B
c
D
E
G
H
. 926 .
SUPREME COURT REPORTS
[1979) 3 S.C.R.
tions :.of
-~acts 'and laws between parties common to both the suits,
=a~e pending iri two -different courts, it i~ generally in the intere!lt of
justice to transfer one of those suits to the other forum to be tried by
the _
s;im~ Court, with consequent ~voidance of ll!ultiplicity in the trial
of the same issues and !_he risk of conflicting decisions thereon. The
instant case falls squarely within this category.
· Here, in the two- suits, one in the District Court, Seoni, Madhya
Pradesh, and the other 1iled by the petitioner in the High Court of
Madras, the parties are the same except that in the Madras suit five __ .,.Y
4
•
other persons who are alleged to be partners of the first respondent, ~
herein and two of whom furnished collateral securities, have also been
joined as defendants.
Further, the material issues in both the suits
are common or interdependent.
For instance, issue No. 14 in the
Seoni Suit is substantially the same as issue No. 7 framed by the
Madra9 High Court in the suit filed there by the petitioner.
The
questiOiii i~volved, inter alia, in issues 9, 10, 12, 18, 19 and 20 in
the Seor~i Suit have a substantial bearing on the decision of issues 1,
2, 6, 8, 9 and 10 framed in the Madras Suit.
The basic question
commonly arising in each of the two suits concerns the liability of the
second respondent and the fourth respondent to make payment as
the acceptor of the bills of exchange and the guarantors, respectively,
for due payment under those bills. If the two suits are allowed .to
continue in their original forums there is a possibility of conflicting
findings on the question of liability under the Usance Bills and lllider
the gu_~rantees. It is not disputed (we are told)•that the payment of
the bills were to be made to the petitioner bank at MadrM.
The
evidence in both the suits would mostly be common and locally available at Madras.
Transfer of the Seoni suit to Madras High Court
will avoid multiplicity in the trial of the common issues and obviate
the risk of conflicting decisions.
Under the circumstances, it is manifestly "expedient in the interest of justice" that both the suits should
be tried by the Madra9 High Court on i!s Original Side by the same
Judge/Judges.
Mr. Bal appearing for the second respondent, opposed thil'l petition for transfer.
Learned counsel submitted that for a small company like respondent 2 it will simply be impossible to fight the litigation at Madras, and the extra expenditure that will have to be incurred by his · clients in undertaking frequent visitl'l to Madra~ which is
about 1000 miles from Seoni, may prove too heavy a financial burden
for it. . Another apprehension expres~ed by the· counsel was that the
objection as to want of territorial juri~d'iction in the Madras ·Court
(
L
,_
oVERSEAS BANK V. CHEMICAL CONST.RUCTION co. (Sar!«Jria, 1.) 92"1:
til-ken by the second ·respondent, ·will, in effect, be rendered sterile b
~
the proposed transfer of Seoni suit to Madras. Counsel suggested thi
the proper course is to stay the subsequently instituted &uit at Mad!f
under Section 10 of the Code of Civil Procedure tin tho disposal f
the suit !it Seoni by the District Judge.
-
We are unable to accept any of these arguments. Both the suits
at Madras and Sconi are more or less at the same stage.
Evidence
has not yet commenced i.r). either o! the suits.. The defendants in both
the suits have filed their written st'!t~ments. The second respondent
has appeared in the Madras High Court and joined issue with the
petitioner-plaintiff there. It seellls that the common evidence, which
will mostly be documentary, is to be found locally at Madras. The
fourth respondents who arc the guarantors, have no objection to the
transfer of the Seoni suit to Madras. The second respondents' apprehensions, therefore, about the transfer causing extraordiriary increase
in expe.nses of litigation and inconvenience to them, are much too exaggerated.
Rather, the balance o! <;onvenience i~ iii favour ol · the
Seoni suit being t.:ransferred to the Madras High Court which i~ a
superior forum than the District Court, Seoni. ·
·
·
As regards the second submis:o~ion of Mr. Bal, we make it clear
tknt the transfer o[ the Seoni suit to Madras will be without prejudice
.8
c
to the objection raised by the second respondent, herein, ns to the
Madras High Court's jurisdiction to try the suit, already instituted there
E
by the petitioner.. .
.
Mr. Bal's argument founded. on Sectio~ 10 of the Code _of Civil
Procedure c.Joc!' not arise in this transfer petition, and we express no
opinion on it.
For the forecoing reasons. we allow this ·p~tition and. t.ransfer suit
F
No. m of t97£ filed by the second respondent l;CTein in the Co_urt
of. the District Judge, St:oni, · ~!adhya · Pradesh; to the file. of the H1~h
Court of judicature at .Madras (Original Side). ·
·
'
·
'
I
~
•
P.B.R.
. P~titio11 allowtd.
. ..
. ..
·.i
'
I
; ..
~-i,