2002(4) ALL MR 371
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

R.M.S. KHANDEPARKAR, J.

Madan Ganpatrao Babar Vs. Kshetrapal Finance Pvt. Ltd.

Civil Revision Application No.905 of 2000

21st June, 2002

Petitioner Counsel: Mr. S. G. DESHMUKH
Respondent Counsel: Mr. ANILKUMAR K. PATIL

Civil P.C. (1908), Ss.19, 20 - Territorial jurisdiction - Plaintiff obtaining a loan from defendant for purchase of mini bus - Agreement and other documents executed in the district of Belgaum - Mini bus required some repairs and hence the bus was being sent to a garage at Sangli - Bus was forcibly taken possession of by employees of defendant before it reached Sangli - Held court at Sangli had jurisdiction to entertain the suit - Fact that defendant had no office or business establishment at Sangli or that agreement limited jurisdiction to entertain dispute only to courts in Belgaum cannot oust jurisdiction of court at Sangli.

It is well-established that the parties by an agreement cannot oust jurisdiction of the Court if the cause of action arises within the territorial limits of such Court. If the cause of action arises at Sangli, the Sangli Courts have jurisdiction to entertain suit in respect thereof. Even assuming that in terms of the agreement between the parties, proceedings can be initiated in the Court at Belgaum, considering the provisions in section 19, it will be at the discretion of the plaintiff to decide as to in which of these two places the plaintiff would like to file the suit. [Para 8]

The subject dealt with by the explanation clause is apparently in relation to clauses (a) and (b) of section 20 and by no stretch of imagination it can refer to clause (c). The explanation nowhere refers to the incident of cause of action either wholly or partly arising at a particular place but it refers to the limits of the administrative and business activities of a Corporation. The clauses (a) and (b) refer to residence and business activities of the defendants - Hence it would be wrong to say that as the defendant had no business or office at Sangli, the court at Sangli had no jurisdiction to entertain the suit. [Para 7]

AIR 1992 SC 1514 Rel on.

Cases Cited:
M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company, AIR 1992 SC 1514 [Para 7]


JUDGMENT

JUDGMENT :- Heard Advocates for the parties. Perused the records.

2. The applicant challenges the order, dated 27-7-2000, passed by the II Joint Civil Judge, Senior Division, Sangli in Special Civil Suit 142 of 2000, answering the issue pertaining to lack of territorial jurisdiction to entertain the said suit in the affirmative, the trial Court by the impugned order has directed the return of the plaint for the purpose of presentation thereof in a Court having jurisdiction to entertain the same. The issue regarding lack of territorial jurisdiction was answered in the affirmative on two grounds, namely (i) that the respondent has no subordinate office at Sangli, and (ii) clause 16 of the agreement between the parties provides for the jurisdiction of the Courts in Belgaum for any dispute arising out of or under the agreement between the parties.

3. The applicant obtained a loan of Rs.2,50,000/- from the respondent for the purchase of a mini bus and the said loan was granted on execution of various documents, including the agreement between the parties in relation to the terms and conditions of repayment as well as hypothecation of the said mini bus in favour of the respondent towards the security for repayment of the loan amount. It is the case of the applicant that some time in January, 2000 some repairs were required to be carried out to the mini bus and therefore the same was sent to a garage at Sangli. It is further case of the applicant that while the vehicle was at Ankli Phata in Sangli, some of the employees of the respondent forcibly took away the said vehicle from the applicant. The applicant thereafter filed a criminal case as well as the present suit. Consequent to the service of summons in the suit, the respondent herein raised a preliminary objection in relation to the territorial jurisdiction of the Court at Sangli to entertain the suit. The objection was two-fold. Firstly, all the agreements between the parties were executed at Belgaum and in accordance with the terms of the agreements, dispute, if any, regarding the vehicle could be raised before any Court at Belgaum and the respondent-company having no office at Sangli and its business being at Ainapur within district of Belgaum, the jurisdiction vest in the Court at Athani, District Belgaum, and secondly, in terms of the explanation clause to section 20, the cause of action can be said to have arisen only at Belgaum. The trial Court proceeded to frame a preliminary issue as to whether the trial Court has jurisdiction to entertain and try the said suit and after hearing the parties, held that the Court at Sangli does not have territorial jurisdiction to entertain and try the present suit by the impugned order.

4. While assailing the impugned order, the learned Advocate for the applicant submitted that the trial Court while misconstruing the provisions contained in the explanation clause to section 20 has held that in view of the absence of any office or business establishment of the respondent within the territorial limits of the District of Sangli, no cause of action can be stated to have been arisen at Sangli. On the other hand, it was sought to be contended on behalf of the respondent that since the business activities of the respondent are restricted to the District of Belgaum and all the agreements having been executed at Ainapur, within the District of Belgaum, and considering the claim of the applicant being for enforcement of right in relation to the vehicle arising under the agreement between the parties, the jurisdiction to entertain any suit in that regard would be with the Court at Athani, within the District of Belgaum. Merely because the vehicle is taken away from Sangli, it cannot be said that the cause of action has arisen within the limits of Sangli District. Once it is apparent that seizure of the vehicle was on account of failure on the part of the applicant to comply with the terms and conditions of the agreement, the respondent is entitled to take possession of the said vehicle. Being so, no cause of action can be stated to have been arisen at Sangli and hence no fault can be found with the impugned order. Attention was also sought to be drawn to clause 16 of the agreement between the parties wherein the parties have stated to have agreed to refer the disputes to Courts within the District of Belgaum.

5. It is not in dispute that the applicant has filed a suit for recovery of the vehicle claiming its ownership and alleging that the same has been forcibly taken away by the respondent. The facts alleged in relation to the cause of action for filing the suit comprise of allegations of forcible taking away of the vehicle from a place called Ankil Phata at Sangli. Apparently, the acts constituting the cause of action to approach the Court against the respondent are stated to have occurred within the territorial limits of the District of Sangli. The relief prayed for is not in relation to specific performance of the agreement between the parties as such, but on account of seizure of the vehicle which is stated to be illegal and contrary to the alleged rights of the applicant in relation to the vehicle.

6. Section 19 provides that where suit is for compensation for wrong done to the person or to moveable property, if the wrong was done within the local limits of the jurisdiction of the Court and the defendant resides, or carries on business, or personally works for gain, within the local limits of the jurisdiction of another Court, the suit may be instituted at the option of the plaintiff in either of the said Courts. Section 20 provides that the suits other than which are referred to in sections 16 or 17 are to be instituted in a Court within the local limits of whose jurisdiction either the defendant resides, or carries on business, or personally works, or where the cause of action wholly or in part arises. The explanation thereto provides that 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. The trial Court has construed that the explanation to section 20 refers to clause (c) which speaks about the jurisdiction on account of cause of action wholly or partly arising at a particular place. The trial Court has held that as the respondent has no business or its office at Sangli, the Court at Sangli has no jurisdiction to entertain the suit filed by the applicant.

7. Section 20 of C.P.C. has three sub-clauses. Clause (a) speaks about the jurisdiction of the Court at a place in case where the defendant at the time of commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain; Clause (b) relates to jurisdiction of the Court at a place where any of the defendants (where there are more than one defendant) at the time of commencement of the suit actually or 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, acquiesce in such institution: and Clause (c) refers to the jurisdiction of the Court where the cause of action, wholly or in part arises. The said clauses are followed by the explanation clause, as stated above. Apparently, the explanation refers to the jurisdiction of the Court to entertain a suit within whose jurisdiction the Corporation has its principal or subordinate office, or carries on its business activities. In other words, the subject dealt with by the explanation clause is apparently in relation to clauses (a) and (b) of section 20 and by no stretch of imagination it can refer to clause (c). The explanation nowhere refers to the incident of cause of action either wholly or partly arising at a particular place but it refers to the limits of the administrative and business activities of a Corporation. The clauses (a) and (b) refers to residence and business activities of the defendants. This is also clear from the decision of the Apex Court in the matter of M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company, reported in AIR 1992 SC 1514. The Apex Court therein has clearly ruled: "The explanation is really an explanation to clause (a). It is in the nature of a clarification on the scope of clause (a) Viz., as to where the Corporation can be said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether of not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the Corporation is not located there) so long as there is a subordinate office of the Corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the Legislature was that, in the case of a Corporation, for the purpose of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, can also be the relevant place for the filing of a suit and not necessarily the principal place of business.

8. As regards the point sought to be raised about clause 16 of the agreement between the parties, it is well-established that the parties by an agreement cannot oust jurisdiction of the Court if the cause of action arises within the territorial limits of such Court. If the cause of action arises at Sangli, the Sangli Courts have jurisdiction to entertain suit in respect thereof. Even assuming that in terms of the agreement between the parties, proceedings can be initiated in the Court at Belgaum, considering the provisions in section 19, it will be at the discretion of the plaintiff to decide as to in which of these two places the plaintiff would like to file the suit. In any case, the objection for territorial jurisdiction of the Sangli Court was not raised on account of Clause 16 of the agreement between the parties but on account of the "explanation" clause to section 20 and on the ground that the agreement was executed at Ainapur, Athani, and therefore is not required to be decided in this revision application.

9. In the circumstances, therefore, the Court below has clearly erred in holding that the Court at Sangli had no jurisdiction to entertain the suit, and in returning the plaint. There being a case of improper exercise of jurisdiction by the Court below, the revision application succeeds. The impugned order is hereby set aside. The trial Court is directed to proceed with the suit in accordance with the provisions of law. Rule is made absolute in above terms with no order as to costs.

Revision allowed.