Erroneous Decision On Territorial Jurisdiction Still Operates As Res Judicata Between Parties If Not Set Aside: Bombay High Court

The Bombay High Court has held that an erroneous decision on the question of territorial jurisdiction operates as res judicata between the parties when the subsequent application is filed in the same proceedings and on the same cause of action. The Court observed that objections relating to territorial jurisdiction pertain to procedural aspects of jurisdiction and such orders, even if erroneous, remain binding unless set aside.

Justice Rohit W. Joshi was hearing a civil revision application filed by the defendants challenging the order of the Trial Court rejecting their application under Order VII Rule 10 CPC seeking the return of the plaint. The plaintiff had instituted a suit at Nagpur. The defendants had earlier raised an objection to territorial jurisdiction, which was rejected by the Trial Court and the said rejection was upheld by the High Court and attained finality. Subsequently, relying on a later decision of the Supreme Court in a similar matter, the defendants filed a fresh application again seeking the return of the plaint on the ground that the Courts at Mumbai alone had jurisdiction. The Trial Court rejected the application, holding that the earlier decision on the issue of territorial jurisdiction, having attained finality, operated as res judicata.

The High Court examined the nature of jurisdictional errors and distinguished between a lack of inherent jurisdiction and defects relating to procedural aspects such as territorial jurisdiction. It observed that orders passed by a Court lacking inherent jurisdiction are treated as nullity, whereas orders suffering from defects of territorial jurisdiction are not nullity and are binding unless set aside in appropriate proceedings.

The Court further held that the principle of res judicata, embodied in Section 11 CPC, is mandatory in nature and applies to prevent re-litigation of issues already decided between the same parties. It observed that once an issue relating to territorial jurisdiction has been decided and the decision has attained finality, the same cannot be reopened in the same proceedings on the same cause of action.

Dealing with the contention based on a change in law due to a subsequent judgment, the Court noted that a subsequent decision of a superior Court in another case does not permit reopening of an issue already decided between the parties in the same proceedings. It observed that permitting such a course would amount to indirectly seeking review of an earlier order, which is barred in view of the statutory scheme.

“… although the interpretation of law has changed since passing of earlier orders, the cause of action is the same and therefore earlier decision, though erroneous in law, will operate as res judicata between the parties,” the Court observed.

The Court also examined the exceptions to the rule of res judicata and held that the present case did not fall within those exceptions, particularly as the issue pertained to territorial jurisdiction and not inherent lack of jurisdiction, and the subsequent application was filed in the same proceedings on the same cause of action.

Accordingly, the High Court dismissed the civil revision application and upheld the order rejecting the application for return of the plaint.

Case Title: HDFC Bank Limited & Ors. vs. Archana [Civil Revision Application No. 04 of 2026]

Citation: 2026 LiveLaw (Bom) 173

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