Full Judgment Text
2015:BHC-OS:9682-DB
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sbw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO.541 OF 2015
IN
LEAVE PETITION NO.109 OF 2015
IN
PROPOSED SUMMARY SUIT (L)NO.313 OF 2015
KPL International Limited
212A, 216 & 222, Second Floor
Indraprakash, 21, Barakhamba Road
New Delhi110 001. : Appellant
(Orig. Plaintiff)
V/s.
API Industries Private Limited
701, Dev Plaza, Opposite Andheri
Fire Brigade, Andheri (West)
S.V. Road, Mumbai400 058. : Respondent
(Orig. Defendant)
......
Mr.Simil Purohit with Raj Panchmatia, Peshwan Jehangir and
Himanshu Vidhani i/b. Khaitan & Co. for the appellant.
......
CORAM: MOHIT S. SHAH, C.J. &
A. K. MENON, J.
DATE : 3 AUGUST 2015.
ORAL JUDGMENT ( Per Chief Justice ) :
This appeal is directed against the judgment and order
dated 18 June 2015 of the learned Single Judge declining leave
under clause 12 of the Letters Patent for institution of the
Summary Suit proposed to be filed by the appellantplaintiff against
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the respondentdefendant.
2. The respondentdefendant is a limited company with its
registered office at Bhavnagar in Gujarat. The defendant, however,
has its regional office in Mumbai within the territorial jurisdiction
of this Court. The learned trial Judge took the view that since the
registered office of the defendant, which is its principal place of
business is in Bhavnagar, Gujarat, the defendant cannot be taken to
be carrying on its business in Mumbai, even if its regional office
was situated at Mumbai. Of course, its subordinate regional office
in Mumbai may give this Court territorial jurisdiction, but only in
respect of any cause of action or a part thereof which has arisen in
Mumbai. For taking this view, the learned trial Judge relied upon
the explanation to section 20 of the CPC. The learned Judge then
held that since no cause of action or any part thereof had arisen
within the territorial limits of this Court, leave could not be
granted under clause 12 of the Letters Patent.
3. The learned counsel for the appellant submits that the
view taken by the learned Single Judge in the impugned order is
erroneous and contrary to the law settled by this Court in Pratap
Singh v. The Bank of America, 1976 Vol.78 Bom. L.R. 549 and
also by the Supreme Court in Jindal Vijaynagar Steel (JSW Steel
Ltd.) v. Jindal Praxair Oxygen Company Ltd., 2006 (11) SCC
521.
4. We have perused the plaint and the averments made by
the plaintiff that the defendant is a company registered the
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Companies Act, 1956 with registered office at Bhavngar in Gujarat
and with its regional office at the given address on S. V. Road,
Mumbai. In para 28A the plaintiff has also averred that most of
the directors of the defendant are ordinarily resident in Mumbai
and that it is only the registered office of the defendant which is
outside the territorial jurisdiction of this Court. The plaintiff has
also averred in para 30 that the defendant conducts its operation
through its office located at S.V. Road, Mumbai. The plaintiff has,
accordingly, sought relief under clause 12 of the Letters Patent for
filing the present suit for recovery of monies for the goods sold and
delivered to the defendants.
5. Clause 12 of the Letters Patent reads as under:
“ 12. Original jurisdiction as to suits : And we do
further ordain that the said High Court of Judicature at
Bombay, in the exercise of its ordinary original civil
jurisdiction, shall be empowered to receive, try and
determine suits of every description , if, in the case of
suits for land or other immovable property such land or
property shall be situated, or in all other cases if the cause
of action shall have arisen, either wholly, or, in case the
leave of the Court shall have been first obtained, in part,
within the local limits of the ordinary original jurisdiction
of the said High Court or if the defendant at the time of
the commencement of the suit shall dwell or carry on
business , or personally work for gain, within such limits ;
except that the said High Court shall not have such
original jurisdiction in cases falling within the jurisdiction
of the Small Causes Court at Bombay, or the Bombay City
Civil Court.”
(emphasis supplied)
6. Section 20 of the CPC with explanation reads as under:
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“20. Other suits to be instituted where defendants
reside or cause of action arises. Subject to the
limitations aforesaid, every suit shall be instituted in
Court within the local limits of whose jurisdiction
(a) the defendant, or each of the defendants where
there are more than one, at the time of the
commencement of the suit, actually and voluntarily
resides, or carries on business, or personally works for
gain; or
(b) any of the defendants, where there are more than
one, at the time of the commencement of the suit actually
and voluntarily resides, or carries on business, or
personally works for gain, provided that in such case
either the leave of the Court is given, or the defendants
who do not reside, or carry on business, or personally
work for gain, as aforesaid, acquiesce in such institution;
or
(c) the cause of action, wholly or in part, arises.
Explanation. A corporation shall be deemed to carry
on business at its sole or principal office in India or, in
respect of any cause of action arising at any place
where it has also a subordinate office, at such place .”
(emphasis supplied)
Section 120 of Code of Civil Procedure, 1908 reads as under :
"S.120. Provisions not applicable to High Court
in original civil jurisdiction :
(1) The following provisions shall not apply to the
High Court in the exercise of its original civil
jurisdiction, namely, sections 16, 17 and 20."
7. An analysis of clause 12 would indicate that in exercise
of ordinary original civil jurisdiction of Letters Patent by itself, the
High Court of Judicature at Bombay is empowered to receive, try
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and determine suits of every description:
(1) if, in the case of suits for land or other immovable
property such land or property is situated within Mumbai, or
(2) if the cause of action has arisen wholly in Mumbai, or
(3) if the cause of action has arisen in part in Mumbai, the
leave of the Court shall have been first obtained, or
(4) if the defendant at the time of the commencement of the
suit dwells or carries on business, or personally works for
gain in Mumbai.
It is thus clear that the fourth category of cases do not require
consideration of the question whether the cause of action has arisen
in Mumbai, whether in whole or in part or not at all.
8. The questions that arise for consideration are :
(i) Whether the defendant can be said to be carrying
on business in Mumbai, where it does not have its principal place of
business, a regional office?
(ii) Whether the learned Trial Judge was right in reading
the explanation to Section 20 into Clause12 of the Letters Patent,
for taking the view that in case of such a defendant having only a
regional office in Mumbai, a part of the cause of action must also
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arise in Mumbai.
9. In Pratap Singh v. The Bank of America, 1976
Vol.78 Bom. L.R. 549, a Division Bench of this Court has in terms
held that for the purposes of Clause12, the defendant may carry on
business through an agent or agents and, therefore, a defendant
having a branch office or a regional office in Mumbai has to be
treated as carrying on business in Mumbai. The Division Bench
also held that where a company carries on business in Mumbai, the
question whether the cause of action accrued wholly or in part
within or without Mumbai is wholly irrelevant.
10. In the above case, the Division Bench observed as
under:
"3. The word 'defendant' occurring in cl. 12 of the
Letters Patent or in s. 20 of the Code of Civil Procedure
must be given its proper meaning and would include
within its compass both natural and artificial persons
i.e. living beings as well as corporations and no
distinction is made in law between corporations as are
incorporate in India and corporations as are
incorporated outside India (i.e. foreign corporations).
4. Under the last part of cl. 12 of the Letters Patent a
suit can be brought on the Original Side of this Court
if the defendant at the time of institution of the
suit dwells or carries on business or personally works
for gain within the limits of such original
jurisdiction of this High Court. For consideration
of jurisdiction under this head, the consideration
whether the cause of action has accrued wholly or
in part within or without the limits of the said
jurisdiction is wholly irrelevant .
5.
In this part of cl. 12 of the Letters Patent a clear
distinction has been made between carrying on of
business and working for gain. In the latter case the
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legislative requirement is that the defendant should
personally work for gain, whereas no such requirement
is postulated for the carrying on of business. It means
therefore that the defendant may carry on business
himself or through an agent or agents.
6. We are concerned here with a defendant
having a branch office within the limits of the
jurisdiction of this High Court. It was submitted
that the defendant could carry on business only at
its' principal office i.e. the Head Office at San
Francisco, U.S.A., where there exists their Board of
Directors which can take final decisions. It was
submitted that it was only at this place that the
defendant could be said to be carrying on business. It
is impossible to accept this restrictive meaning
which has not found favour with either the High Court
of Allahabad or the High Court of Calcutta.
7. Whether the defendant carries on business within
the limits of the jurisdiction of a Court is a question of
fact. Where an allegation to this effect is made in the
plaint and properly traversed by the defendant in the
written statement, the onus of proving such allegation
would be on the plaintiff, though the defendant would
be required to prove the facts as may be deemed to be
within his special knowledge. If there is a proper denial
of such allegation, then the answer to the issue of
jurisdiction may be required to be given after necessary
evidence is taken. However, for the purpose of
considering this question it is not required that at the
place which is within the jurisdiction of the Court there
must be some person or agency not subject to
supervision or regulation from outside. All that is
required is whether within the limits of
jurisdiction of this Court is the defendant by itself
or through its agent carrying on all or some of the
business which it does?
10. Explanation II to S.20 of the Code of Civil
Procedure must in these circumstances be construed as
plain words of limitation designating one place out of
many where a corporation which may be carrying on
business at several places may be sued irrespective of
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the accrual of the cause of action. Under s.20 read
together with Explanation II, a corporation can be
sued only at its principal place of business in India or
at all other places of business i.e. where it carries on
business provided the cause of action has arisen at
such place."
(emphasis supplied)
10. Though principle no.10 in the Division Bench judgment
made a reference to explanation under section 20 of the Code of
Civil Procedure, in our view, it is not necessary to dwell further on
the Division Bench judgment, because subsequently in Jindal
Vijaynagar Steel case (supra), the Supreme Court has rejected the
argument of reading the explanation to Section 20 into Clause12
of Letters Patent, because section 120 of the CPC expressly provides
that Section 20 shall not apply to the High Court in the exercise of
its original civil jurisdiction .
11. In the above case before the Supreme Court, the
respondent had the registered office in Bangalore and a corporate
office Mumbai. Several disputes had arisen between the parties
and an agreement was arrived at between the parties to settle the
disputes. The settlement agreement was approved by the Board of
Directors of both the parties in Bangalore. The interpretation of the
obligations of the parties under various provisions of the settlement
agreement was in dispute in arbitration invoked by the respondent
against the appellant. The respondent filed a petition under section
9 of the Arbitration Act in this Court. This Court held that the
jurisdiction of the Court under the provisions of the Arbitration Act
may be assumed by the Court exercising jurisdiction in a place
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where no part of the cause of action has arisen, if the respondent
being a company has a corporate office at the place where the
Court is moved.
12. The appellant contended before the Supreme Court that
the Bombay High Court had no jurisdiction to entertain the petition
under section 9 of the Arbitration Act; that the High Court erred in
holding that by virtue of Clause 12 of the Letters Patent, the
Bombay High Court had jurisdiction to entertain the petition filed
by the respondent in the Bombay High Court; and that the settled
law was that it is the situs of the cause of action and not the place
of business which is the deciding factor in determining jurisdiction
under section 2(1)(e) of the Arbitration Act.
It was also contended that the principle in the
explanation to section 20 of the Code of Civil Procedure must be
applied to clause 12 of the Bombay Letters Patent, although section
20 of the Code of Civil Procedure does not, in terms, apply to the
High Court in exercise of its original civil jurisdiction because as per
the settled position, the principles of the CPC should nevertheless
be applied, as far as possible, to proceedings of a civil nature, even
where the application of the CPC has been barred.
It was further contended before the Supreme Court that
there is no conflict whatsoever between clause 12 of the Letter
Patent and section 20 of CPC. It was submitted that clause 12 of
Letters Patent and section 20 of the CPC are in pari materia and set
out similar test for determination of where a suit may be filed and
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that the appellant is merely seeking to apply the additional
clarificatory principle relating to corporate defendants stated in
section 20 of CPC to clause 12 of the Letters Patent. That was the
argument before the Supreme Court which commended to the
learned Single Judge in the instant case, but which has not been
accepted by the Supreme Court.
13. The respondent submitted that the Bombay High Court
would have jurisdiction under Clause12 of the Letters Patent, if the
defendant carries on business within the limits of Mumbai. It was
specifically contended that when the jurisdiction is invoked on the
above ground, whether the cause of action has arisen wholly or in
part within or without Mumbai, is wholly irrelevant.
14. The Supreme Court rejected the appellant's contentions
and held that applying the explanation in section 20 to clause 12 of
the Letters Patent would render section 120 of the CPC nugatory
and otiose since section 120 expressly refers to sections 16, 17 and
20 and makes them inapplicable to the Letters Patent. The Letters
Patent, is a special charter conferring jurisdiction on Chartered
High Courts. When there is a special enactment such as the Letters
Patent, which expressly lays down the criteria on the jurisdiction of
the Chartered High Court, it is totally unnecessary and in fact futile
to refer to another legislation such as the CPC (which is not
applicable) to determine the jurisdiction of Chartered High Court.
15. The Supreme Court specifically held as under:
“27. In our opinion, the argument of Mr. Nariman
that the principles of Section 20 of the Code can be
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applied to Letters Patent has no substance and merit.
The principles of Section 20 cannot be made applicable
to Clause 12 of the Letters Patent since the CPC itself by
Section 120 specifically excludes the applicability of
Section 20 of the CPC to Chartered High Courts. …......
28. ….......
29. The appellant has urged that P.S. Satthappan's
case will apply only in case there is a conflict between
the Letters Patent and the CPC and that there is no
conflict. Such a submission, in our view, is clearly
fallacious for the following reasons:
(i) the Letters Patent and CPC operate in separate
fields, i.e. The Letters Patent specifically conferring
jurisdiction on Chartered High Courts and the CPC
conferring jurisdiction on all other Courts.
(ii) There is clearly a difference between the scope of the
Letters Patent and the CPC. The difference being
evident upon a plain reading of Section 120 of the
CPC.”
16. In view of the aforesaid principles laid down by the
Supreme Court in Jindal Vijaynagar Steel Ltd. case (supra) on the
issue regarding non applicability of explanation to Section 20 to
Clause12 of Letters Patent, we are of the view that since the
defendant is carrying on business within the limits of jurisdiction
of this Court through its regional office as averred in the plaint, it is
not necessary to consider whether the cause of action or any part
thereof arose within the territorial limits of this Court. The
requirements of clause 12 of the Letters Patent are clearly satisfied
once the defendant is stated to be carrying on its business through
a regional office within the territorial limits of this Court. As held
by a Division Bench of this Court in Pratap Singh case (supra), for
consideration of jurisdiction under this head, the consideration
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whether the cause of action has accrued wholly or in part within or
without the territorial limits of jurisdiction of this Court is wholly
irrelevant.
17. In the result, the appeal is allowed.
The impugned order of the learned Single Judge is set
aside and it is held that Summary Suit (L) No.313 of 2014 is
maintainable in this Court under Clause12 of the Letters Patent.
Accordingly, the registry shall register the plaint subject
to compliance with all the formalities.
CHIEF JUSTICE)
(A. K. MENON, J.)
wadhwa
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sbw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (L) NO.541 OF 2015
IN
LEAVE PETITION NO.109 OF 2015
IN
PROPOSED SUMMARY SUIT (L)NO.313 OF 2015
KPL International Limited
212A, 216 & 222, Second Floor
Indraprakash, 21, Barakhamba Road
New Delhi110 001. : Appellant
(Orig. Plaintiff)
V/s.
API Industries Private Limited
701, Dev Plaza, Opposite Andheri
Fire Brigade, Andheri (West)
S.V. Road, Mumbai400 058. : Respondent
(Orig. Defendant)
......
Mr.Simil Purohit with Raj Panchmatia, Peshwan Jehangir and
Himanshu Vidhani i/b. Khaitan & Co. for the appellant.
......
CORAM: MOHIT S. SHAH, C.J. &
A. K. MENON, J.
DATE : 3 AUGUST 2015.
ORAL JUDGMENT ( Per Chief Justice ) :
This appeal is directed against the judgment and order
dated 18 June 2015 of the learned Single Judge declining leave
under clause 12 of the Letters Patent for institution of the
Summary Suit proposed to be filed by the appellantplaintiff against
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the respondentdefendant.
2. The respondentdefendant is a limited company with its
registered office at Bhavnagar in Gujarat. The defendant, however,
has its regional office in Mumbai within the territorial jurisdiction
of this Court. The learned trial Judge took the view that since the
registered office of the defendant, which is its principal place of
business is in Bhavnagar, Gujarat, the defendant cannot be taken to
be carrying on its business in Mumbai, even if its regional office
was situated at Mumbai. Of course, its subordinate regional office
in Mumbai may give this Court territorial jurisdiction, but only in
respect of any cause of action or a part thereof which has arisen in
Mumbai. For taking this view, the learned trial Judge relied upon
the explanation to section 20 of the CPC. The learned Judge then
held that since no cause of action or any part thereof had arisen
within the territorial limits of this Court, leave could not be
granted under clause 12 of the Letters Patent.
3. The learned counsel for the appellant submits that the
view taken by the learned Single Judge in the impugned order is
erroneous and contrary to the law settled by this Court in Pratap
Singh v. The Bank of America, 1976 Vol.78 Bom. L.R. 549 and
also by the Supreme Court in Jindal Vijaynagar Steel (JSW Steel
Ltd.) v. Jindal Praxair Oxygen Company Ltd., 2006 (11) SCC
521.
4. We have perused the plaint and the averments made by
the plaintiff that the defendant is a company registered the
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Companies Act, 1956 with registered office at Bhavngar in Gujarat
and with its regional office at the given address on S. V. Road,
Mumbai. In para 28A the plaintiff has also averred that most of
the directors of the defendant are ordinarily resident in Mumbai
and that it is only the registered office of the defendant which is
outside the territorial jurisdiction of this Court. The plaintiff has
also averred in para 30 that the defendant conducts its operation
through its office located at S.V. Road, Mumbai. The plaintiff has,
accordingly, sought relief under clause 12 of the Letters Patent for
filing the present suit for recovery of monies for the goods sold and
delivered to the defendants.
5. Clause 12 of the Letters Patent reads as under:
“ 12. Original jurisdiction as to suits : And we do
further ordain that the said High Court of Judicature at
Bombay, in the exercise of its ordinary original civil
jurisdiction, shall be empowered to receive, try and
determine suits of every description , if, in the case of
suits for land or other immovable property such land or
property shall be situated, or in all other cases if the cause
of action shall have arisen, either wholly, or, in case the
leave of the Court shall have been first obtained, in part,
within the local limits of the ordinary original jurisdiction
of the said High Court or if the defendant at the time of
the commencement of the suit shall dwell or carry on
business , or personally work for gain, within such limits ;
except that the said High Court shall not have such
original jurisdiction in cases falling within the jurisdiction
of the Small Causes Court at Bombay, or the Bombay City
Civil Court.”
(emphasis supplied)
6. Section 20 of the CPC with explanation reads as under:
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“20. Other suits to be instituted where defendants
reside or cause of action arises. Subject to the
limitations aforesaid, every suit shall be instituted in
Court within the local limits of whose jurisdiction
(a) the defendant, or each of the defendants where
there are more than one, at the time of the
commencement of the suit, actually and voluntarily
resides, or carries on business, or personally works for
gain; or
(b) any of the defendants, where there are more than
one, at the time of the commencement of the suit actually
and voluntarily resides, or carries on business, or
personally works for gain, provided that in such case
either the leave of the Court is given, or the defendants
who do not reside, or carry on business, or personally
work for gain, as aforesaid, acquiesce in such institution;
or
(c) the cause of action, wholly or in part, arises.
Explanation. A corporation shall be deemed to carry
on business at its sole or principal office in India or, in
respect of any cause of action arising at any place
where it has also a subordinate office, at such place .”
(emphasis supplied)
Section 120 of Code of Civil Procedure, 1908 reads as under :
"S.120. Provisions not applicable to High Court
in original civil jurisdiction :
(1) The following provisions shall not apply to the
High Court in the exercise of its original civil
jurisdiction, namely, sections 16, 17 and 20."
7. An analysis of clause 12 would indicate that in exercise
of ordinary original civil jurisdiction of Letters Patent by itself, the
High Court of Judicature at Bombay is empowered to receive, try
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and determine suits of every description:
(1) if, in the case of suits for land or other immovable
property such land or property is situated within Mumbai, or
(2) if the cause of action has arisen wholly in Mumbai, or
(3) if the cause of action has arisen in part in Mumbai, the
leave of the Court shall have been first obtained, or
(4) if the defendant at the time of the commencement of the
suit dwells or carries on business, or personally works for
gain in Mumbai.
It is thus clear that the fourth category of cases do not require
consideration of the question whether the cause of action has arisen
in Mumbai, whether in whole or in part or not at all.
8. The questions that arise for consideration are :
(i) Whether the defendant can be said to be carrying
on business in Mumbai, where it does not have its principal place of
business, a regional office?
(ii) Whether the learned Trial Judge was right in reading
the explanation to Section 20 into Clause12 of the Letters Patent,
for taking the view that in case of such a defendant having only a
regional office in Mumbai, a part of the cause of action must also
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arise in Mumbai.
9. In Pratap Singh v. The Bank of America, 1976
Vol.78 Bom. L.R. 549, a Division Bench of this Court has in terms
held that for the purposes of Clause12, the defendant may carry on
business through an agent or agents and, therefore, a defendant
having a branch office or a regional office in Mumbai has to be
treated as carrying on business in Mumbai. The Division Bench
also held that where a company carries on business in Mumbai, the
question whether the cause of action accrued wholly or in part
within or without Mumbai is wholly irrelevant.
10. In the above case, the Division Bench observed as
under:
"3. The word 'defendant' occurring in cl. 12 of the
Letters Patent or in s. 20 of the Code of Civil Procedure
must be given its proper meaning and would include
within its compass both natural and artificial persons
i.e. living beings as well as corporations and no
distinction is made in law between corporations as are
incorporate in India and corporations as are
incorporated outside India (i.e. foreign corporations).
4. Under the last part of cl. 12 of the Letters Patent a
suit can be brought on the Original Side of this Court
if the defendant at the time of institution of the
suit dwells or carries on business or personally works
for gain within the limits of such original
jurisdiction of this High Court. For consideration
of jurisdiction under this head, the consideration
whether the cause of action has accrued wholly or
in part within or without the limits of the said
jurisdiction is wholly irrelevant .
5.
In this part of cl. 12 of the Letters Patent a clear
distinction has been made between carrying on of
business and working for gain. In the latter case the
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legislative requirement is that the defendant should
personally work for gain, whereas no such requirement
is postulated for the carrying on of business. It means
therefore that the defendant may carry on business
himself or through an agent or agents.
6. We are concerned here with a defendant
having a branch office within the limits of the
jurisdiction of this High Court. It was submitted
that the defendant could carry on business only at
its' principal office i.e. the Head Office at San
Francisco, U.S.A., where there exists their Board of
Directors which can take final decisions. It was
submitted that it was only at this place that the
defendant could be said to be carrying on business. It
is impossible to accept this restrictive meaning
which has not found favour with either the High Court
of Allahabad or the High Court of Calcutta.
7. Whether the defendant carries on business within
the limits of the jurisdiction of a Court is a question of
fact. Where an allegation to this effect is made in the
plaint and properly traversed by the defendant in the
written statement, the onus of proving such allegation
would be on the plaintiff, though the defendant would
be required to prove the facts as may be deemed to be
within his special knowledge. If there is a proper denial
of such allegation, then the answer to the issue of
jurisdiction may be required to be given after necessary
evidence is taken. However, for the purpose of
considering this question it is not required that at the
place which is within the jurisdiction of the Court there
must be some person or agency not subject to
supervision or regulation from outside. All that is
required is whether within the limits of
jurisdiction of this Court is the defendant by itself
or through its agent carrying on all or some of the
business which it does?
10. Explanation II to S.20 of the Code of Civil
Procedure must in these circumstances be construed as
plain words of limitation designating one place out of
many where a corporation which may be carrying on
business at several places may be sued irrespective of
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the accrual of the cause of action. Under s.20 read
together with Explanation II, a corporation can be
sued only at its principal place of business in India or
at all other places of business i.e. where it carries on
business provided the cause of action has arisen at
such place."
(emphasis supplied)
10. Though principle no.10 in the Division Bench judgment
made a reference to explanation under section 20 of the Code of
Civil Procedure, in our view, it is not necessary to dwell further on
the Division Bench judgment, because subsequently in Jindal
Vijaynagar Steel case (supra), the Supreme Court has rejected the
argument of reading the explanation to Section 20 into Clause12
of Letters Patent, because section 120 of the CPC expressly provides
that Section 20 shall not apply to the High Court in the exercise of
its original civil jurisdiction .
11. In the above case before the Supreme Court, the
respondent had the registered office in Bangalore and a corporate
office Mumbai. Several disputes had arisen between the parties
and an agreement was arrived at between the parties to settle the
disputes. The settlement agreement was approved by the Board of
Directors of both the parties in Bangalore. The interpretation of the
obligations of the parties under various provisions of the settlement
agreement was in dispute in arbitration invoked by the respondent
against the appellant. The respondent filed a petition under section
9 of the Arbitration Act in this Court. This Court held that the
jurisdiction of the Court under the provisions of the Arbitration Act
may be assumed by the Court exercising jurisdiction in a place
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where no part of the cause of action has arisen, if the respondent
being a company has a corporate office at the place where the
Court is moved.
12. The appellant contended before the Supreme Court that
the Bombay High Court had no jurisdiction to entertain the petition
under section 9 of the Arbitration Act; that the High Court erred in
holding that by virtue of Clause 12 of the Letters Patent, the
Bombay High Court had jurisdiction to entertain the petition filed
by the respondent in the Bombay High Court; and that the settled
law was that it is the situs of the cause of action and not the place
of business which is the deciding factor in determining jurisdiction
under section 2(1)(e) of the Arbitration Act.
It was also contended that the principle in the
explanation to section 20 of the Code of Civil Procedure must be
applied to clause 12 of the Bombay Letters Patent, although section
20 of the Code of Civil Procedure does not, in terms, apply to the
High Court in exercise of its original civil jurisdiction because as per
the settled position, the principles of the CPC should nevertheless
be applied, as far as possible, to proceedings of a civil nature, even
where the application of the CPC has been barred.
It was further contended before the Supreme Court that
there is no conflict whatsoever between clause 12 of the Letter
Patent and section 20 of CPC. It was submitted that clause 12 of
Letters Patent and section 20 of the CPC are in pari materia and set
out similar test for determination of where a suit may be filed and
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that the appellant is merely seeking to apply the additional
clarificatory principle relating to corporate defendants stated in
section 20 of CPC to clause 12 of the Letters Patent. That was the
argument before the Supreme Court which commended to the
learned Single Judge in the instant case, but which has not been
accepted by the Supreme Court.
13. The respondent submitted that the Bombay High Court
would have jurisdiction under Clause12 of the Letters Patent, if the
defendant carries on business within the limits of Mumbai. It was
specifically contended that when the jurisdiction is invoked on the
above ground, whether the cause of action has arisen wholly or in
part within or without Mumbai, is wholly irrelevant.
14. The Supreme Court rejected the appellant's contentions
and held that applying the explanation in section 20 to clause 12 of
the Letters Patent would render section 120 of the CPC nugatory
and otiose since section 120 expressly refers to sections 16, 17 and
20 and makes them inapplicable to the Letters Patent. The Letters
Patent, is a special charter conferring jurisdiction on Chartered
High Courts. When there is a special enactment such as the Letters
Patent, which expressly lays down the criteria on the jurisdiction of
the Chartered High Court, it is totally unnecessary and in fact futile
to refer to another legislation such as the CPC (which is not
applicable) to determine the jurisdiction of Chartered High Court.
15. The Supreme Court specifically held as under:
“27. In our opinion, the argument of Mr. Nariman
that the principles of Section 20 of the Code can be
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applied to Letters Patent has no substance and merit.
The principles of Section 20 cannot be made applicable
to Clause 12 of the Letters Patent since the CPC itself by
Section 120 specifically excludes the applicability of
Section 20 of the CPC to Chartered High Courts. …......
28. ….......
29. The appellant has urged that P.S. Satthappan's
case will apply only in case there is a conflict between
the Letters Patent and the CPC and that there is no
conflict. Such a submission, in our view, is clearly
fallacious for the following reasons:
(i) the Letters Patent and CPC operate in separate
fields, i.e. The Letters Patent specifically conferring
jurisdiction on Chartered High Courts and the CPC
conferring jurisdiction on all other Courts.
(ii) There is clearly a difference between the scope of the
Letters Patent and the CPC. The difference being
evident upon a plain reading of Section 120 of the
CPC.”
16. In view of the aforesaid principles laid down by the
Supreme Court in Jindal Vijaynagar Steel Ltd. case (supra) on the
issue regarding non applicability of explanation to Section 20 to
Clause12 of Letters Patent, we are of the view that since the
defendant is carrying on business within the limits of jurisdiction
of this Court through its regional office as averred in the plaint, it is
not necessary to consider whether the cause of action or any part
thereof arose within the territorial limits of this Court. The
requirements of clause 12 of the Letters Patent are clearly satisfied
once the defendant is stated to be carrying on its business through
a regional office within the territorial limits of this Court. As held
by a Division Bench of this Court in Pratap Singh case (supra), for
consideration of jurisdiction under this head, the consideration
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whether the cause of action has accrued wholly or in part within or
without the territorial limits of jurisdiction of this Court is wholly
irrelevant.
17. In the result, the appeal is allowed.
The impugned order of the learned Single Judge is set
aside and it is held that Summary Suit (L) No.313 of 2014 is
maintainable in this Court under Clause12 of the Letters Patent.
Accordingly, the registry shall register the plaint subject
to compliance with all the formalities.
CHIEF JUSTICE)
(A. K. MENON, J.)
wadhwa
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