Territorial Jurisdiction of Court

Determination of territorial jurisdiction of court

CPC, Section 15 to 20 govern territorial jurisdiction:

Section 15 to 20 of the Code of Civil Procedure indicate the place where a suit can be instituted. Section 15 states that every suit shall be instituted in the court of the lowest grade competent to try it. Section 16 then proceeds to state that the the suit shall be instituted where the subject-mater is situate. Then comes Section 20 which is relevant for our purposes. It reads as under:

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 a Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the. defendants where there are more then 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.

Application of clause (c) of section 20 of CPC:

It will thus be seen that Clauses (a) and (b) are not attracted in the facts of this case. None of defendants at the time of the commencement of the suit actually and voluntarily resides or carried on business or personally worked for gain within the territorial jurisdiction of the Chandigarh Court. Clause (b) can apply only if atleast one of the defendants actually and voluntarily resided or carried on business or personally worked for gain while the others did not. But that is not the case here. The case must, therefore, be governed by Clause (c) which requires that the whole or part of the cause of action must be shown to have arisen within the territorial limits of the Chandigarh Court. Now as is evident from the averments in the plaint no part of the cause of action arose within the territorial jurisdiction of the Chandigarh Court. On the averments in the plaint taken at their face value the case set up by the plaintiff is that after his father left Mandsaur his two brothers joined hands, manipulated the accounts and siphoned away the funds belonging to the partnership firm. The entire dispute is in relation to what happened at Mandsaur. Secondly, it must also be remembered that even according to the plaintiff after his father returned to Mandsaur there was some talk of settlement of the dispute and consequently an agreement was executed on 26th November, 1992 at Bhilai by which the partnership was dissolved and it was agreed that the liabilities would be settled within one month. Now this agreement was executed outside the territorial jurisdiction of the Chandigarh Court. Unless this agreement is set aside there is no question of the Chandigarh Court entertaining a suit for dissolution of the partnership and rendition of accounts. The plaintiff cannot wish away the agreement by merely suiting that it is a void document. He cannot rest content by alleging that the document has no efficacy in law and must, therefore, be ignored. If it is the case of the plaintiff that this document was obtained by fraud or misrepresentation by suppression of material facts or for any other like reason he must have the agreement set aside through Court and unless he docs that he cannot go behind the agreement, ignore it as a void document and proceed to sue for dissolution of the partnership and rendition of accounts. It is not a matter of the volition of the plaintiff to disregard the document as void and proceed to ignore it altogether without having it declared void by a competent Court. It, therefore, appears clear to us that no part of the cause of action arose within the territorial jurisdiction of the Chandigarh Court.

Averments about territorial jurisdiction in plaint:

Para 7 of plaint stated as under:

That the plaintiff himself was doing business of the firm from Chandigarh and in that connection had been engaged in all operations necessary for conduct of business. In fact, the Head Office of the firm was at Bombay where the firm was registered. The factory/plant was located at Mandsaur. Chandigarh was one of the Branch Office of the firm M/s. Rajaram and Brothers. Not only this, the stationary printed by the firm also showed that Chandigarh is the Branch Office of the firm. The stationery has been in continuously use since the year 1974.

Vague description of activity can not help:

The averment does not say that any of the defendants were involved in carrying on business at Chandigarh. The plaintiff is quite vague as to the type of business activity as was carrying on. He also does not say whether it was with the consent of the other partners or his own. There is no averment that intimation of the opening of the branch at Chandigarh was given to the Registrar of Firms as required by Section 61 of the Partnership Act. Printing of stationery is neither here nor there. It is not the plaintiffs say that accounts were maintained in respect of business at Chandigarh. Mere bald allegation that he was having a branch office of the firm at Chandigarh will not confer jurisdiction unless it is shown that a part of the cause of action arose within the territorial jurisdiction of that Court. None of the defendants was ever residing in Chandigarh or did any business whatsoever in Chandigarh and, therefore, suit was not maintainable.

[Source: Subodh Kumar v. Shrikant Gupta. (Supreme Court of India)]