Code
of Civil Procedure Section
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 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 works for
gain, as aforesaid, acquiesce in such institution; or
(c) The cause of action,
wholly or in part, arises.
1* *
* * *
2[Explanation].—A
corporation shall be deemed to carry on business at its sole or principal
office in 3[India] or, in respect of any cause of action arising at
any place where it has also a subordinate office, at such place.
Illustrations
(a) A is a tradesman in
Calcutta, B carries on business in Delhi. B, by his agent in Calcutta, buys
goods of A and requests A to deliver them to the East Indian Railway Company. A
delivers the goods accordingly in Calcutta. A may sue B for the price of the
goods either in Calcutta, where the cause of action has arisen, or in Delhi,
where B carries on business.
(b) A resides at Simla, B at
Calcutta and C at Delhi. A, B and C being together at Benaras, B and C make a
joint promissory note payable on demand, and deliver it to A. A may sue B and C
at Benaras, where the cause of action arose. He may also sue them at Calcutta,
where B resides, or at Delhi, where C resides; but in each of these cases, if the
non-resident defendant objects, the suit cannot proceed without the leave of
the Court.
Note 1: Explanation 1
omitted by Act 104 of 1976, s. 7 (w.e.f. 1-2-1977).
Note 2: Subs. by s. 7,
ibid., for “Explanation II” (w.e.f. 1-2-1977).
Note 3: Subs. by Act 2 of
1951, s. 3 for “the States”.
Part in Red is
original provisions from CPC reproduced here for reference.
Code
of Civil Procedure Section
Simplified Explanation:
Section
20 provides for institution of the suits not covered by earlier provisions where
defendants reside or cause of action arises.
Cause of Action:
A “cause of action” is a bundle of facts which, taken with the law applicable, gives the plaintiff a right to relief against the defendant. However, it must include some act done by the defendant, since in the absence of an act, no cause of action can possibly occurred.
In the
case of a cheque where it is drawn on a bank at place ‘A’ but the creditor hands
it over to its banker at place ‘B’ for collection, the Court at place ‘A’ has
jurisdiction as payment, which is part of cause of action, takes place at place
‘A’.
Therefore,
for determining a “cause of action”, it must be determined what the place is
where the right is created even though infringement of the right might have taken
place at some other place.
An assignment constitutes the cause of action and is sufficient to give jurisdiction to the Court. Another different view has also been taken to the extent that an assignment/ endorsement, which merely authorises the endorsee to take delivery of the goods, will not create jurisdiction.
Where an
endorsement was made on back of promissory note in favour of plaintiff,
endorsement was only to recover interest and not the whole amount. It was made
unilaterally without the consent of the party. As it was not found to be bona
fide and made to defeat provisions of Section 20(c), therefore, it could not
confer jurisdiction on Court within whose jurisdiction interest was directed to
be paid.
The fact must have direct relevance in the lis involved. It is not that every fact be treated as a cause of action in part and may create a jurisdiction of the court, in whose territorial jurisdiction it has occurred. The condition precedent for creation of jurisdiction is that the facts occurred therein must form an integral part of the cause of action. A mere allegation by a plaintiff for the purpose of creating a jurisdiction should not be enforced for conferring jurisdiction. More so, a fact, which does not have any direct relevance with the lis but is made to occur only to defeat to statutory provisions of Section 20 (c) of the Code in order to deprive the court which must have territorial jurisdiction over the subject matter of the suit, should not be accepted for the reason that the act has knowingly or purposely been performed to harass the defendant and deprive the court of territorial jurisdiction over the subject matter and to try the suit.
The Court is bound to determine exclusively jurisdictional issue before granting relief.
Reference:
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