Arvee Industries and Ors. v. Ratan Lal Sharma, AIR 1977 SC 2429

The petitioners, Arvee Industries & Others, who reside and conduct business in Delhi, had earlier filed a suit (Suit No. 262 of 1974) against their landlord’s son, seeking a perpetual injunction to restrain interference in their peaceful possession of a rented premises. The suit was, however, dismissed for default. Following this, the respondent, Ratan Lal Sharma, filed an application under Section 95 read with Section 151 CPC, seeking ₹3,000 as compensation for what he termed a malicious and vexatious prosecution of the previous suit.

In response, the petitioners submitted a written statement in the compensation application, which the respondent claimed contained defamatory allegations that lowered his public esteem and reputation. As a result, the respondent initiated Suit No. 690 of 1975 on the original side of the Calcutta High Court, seeking ₹2,00,000 in damages for libel.

Challenging this, the petitioners filed a transfer petition before the Supreme Court, arguing that: The suit was filed in Calcutta High Court to harass them, as they would face undue hardship defending it away from their place of residence and business. The cause of action arose in Delhi, and thus, Calcutta High Court lacked territorial jurisdiction. No court fees were required in Calcutta for such suits, making it easier for the respondent to file a high-value claim there.

The Supreme Court, while analyzing Section 25 CPC (as amended by the Code of Civil Procedure (Amendment) Act, 1976), observed that:

The amended Section 25 CPC grants the Supreme Court wide discretionary power to transfer suits between High Courts or Civil Courts in different states whenever necessary for the “ends of justice.” Previously, such power rested with the State Government under the unamended provision.

The Court noted that the alleged defamatory statements were made in Delhi, and the cause of action primarily arose there. While the Calcutta High Court had granted ex parte leave under Clause 12 of its Letters Patent, the Supreme Court observed that this did not automatically preclude transfer under Section 25 CPC.

The Court emphasized that all petitioners reside and conduct business in Delhi, making their defense in Calcutta financially and logistically burdensome. The respondent, on the other hand, had two sons residing in Delhi and had previously litigated against the petitioners in Delhi courts.

The Court ruled that even though jurisdictional objections could be raised before the Calcutta High Court itself, the fact that the suit was potentially instituted in a wrong court was a relevant consideration for transfer. What is expedient for the ends of justice under Section 25 CPC will have to be judged upon the totality of facts and circumstances in a given case.