Rameshwar Lal Ram Karan & Ors. v. Gulab Chand Puranmal

 

(d) In Rameshwar Lal Ram Karan & Ors. v. Gulab Chand Puranmal, AIR 1960 Raj. 243, it was held that a suit can be filed in a court within whose jurisdiction a negotiable instrument was executed and the Court, in whose territorial jurisdiction an assignment was made, could not have jurisdiction as no cause of action, even in part, occurred therein, for the reason that such an assignment might have been made to defeat the statutory provisions contained in Section 20 (c) of the Code.

While deciding the said case, the learned Single Judge of this Court considered two contrary judgments by the Division Bench of this Court on the same point, viz., Mishrimal v. Moda, 1951 R.L.W. 433 and Abdul Gafoor v. Sensmal & Ors., AIR 1955 Raj. 53 and followed the former one, observing as under:-

“..... If the assignment were to be treated as forming part of cause of action for the purpose of giving jurisdiction, the defendant could be compelled to defend the suit at the choice of the plaintiffs and this would cut at the basic principle underlying Section 20 CPC.”

Subodh Kumar Gupta v. Shrikant Gupta & Ors.

 

(a) In Subodh Kumar Gupta v. Shrikant Gupta & Ors., (1993) 4 SCC 1, the Supreme Court considered a case wherein a partnership firm having its registered office at Bombay and factory at Mandsore. Two partners - defendants were residing at Mandsore while the third partner-plaintiff shifted to Chandigarh and an agreement had been drawn up between the partners at Bhilai for dissolution of the firm and distribution of assets. The suit was filed by the plaintiff in the Court at Chandigarh for dissolution of the firm and rendition of account on the ground that the defendants at Mandsore misappropriated partnership’s fund and the aforesaid agreement was void and liable to be ignored. The Court held that in view of the provisions of Section 20 of CPC, suit can be entertained in a place where cause of action had arisen fully or partly. The mere bald allegation by the plaintiff for the purpose of creating jurisdiction would not be enough to confer jurisdiction or allege that the agreement was void would not be enough unless the agreement was set-aside by the competent court. The court must find out by examining the provisions carefully, as to whether the suit can be entertained by it. Generally, cause of action would arise at the place where the defendant resides, actually and voluntarily, or carries on business or personally works for gain or the cause of action arises wholly or in part.

Union of India & Ors. v. Adani Exports Ltd. & Anr

 

In Union of India & Ors. v. Adani Exports Ltd. & Anr., (2002) 1 SCC 567, the Supreme Court considered the scope of Section 20 of CPC and Clause (2) of Article 226 of the Constitution while examining whether in that case the Gujarat High Court had territorial jurisdiction. The Court held that the facts which may be relevant to give rise to the “cause of action”, are only those which have “a nexus or relevance with the lis involved in the case and none else.” In the said case, the respondent had filed an application before the Gujarat High Court claiming the benefit of Pass-book Scheme under the provisions of the Import Export Policy introduced w.e.f. 1-4-1995 in relation to certain credits to be given on export of shrimps. However, none of the respondents in the civil application was stationed at Ahmedabad. Even the Pass-book, was to be issued by an Authority stationed at Chennai; the entries in the pass-book under the Scheme concerned were to be made by the Authority at Chennai and the export of prawns made by them and import of the inputs, benefit of which the respondents had sought in the application, were also to be made at Chennai. The Court held that the Gujarat High Court had no territorial jurisdiction, in spite of the fact that the respondents were carrying on their business of export and import from Ahmedabad, the orders of export and import were placed from and were executed at Ahmedabad, documents and payments of export and imports were sent/made at Ahmedabad, the credit of duty claimed in respect of export were handled from Ahmedabad, the respondents had executed a bank guarantee through their bankers as well as a bond at Ahmedabad, non-grant or denial of utilization of the credit in the pass-book might affect the company’s business at Ahmedabad. The court held as under:-

“......In order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in part, arisen within its jurisdiction...... each and every fact pleaded by the respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court’s territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned. If we apply this principle then we see that none of the facts pleaded in para 16 of the petition, in our opinion, fall into the category of bundle of facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad. ...... the fact that the respondents are carrying on the business of export and import or that they are receiving the export and import orders at Ahmedabad or that their documents and payments for exports and imports are sent/ made at Ahmedabad, has no connection whatsoever with the dispute that is involved in the applications. Similarly, the fact that the credit of duty claimed in respect of exports that were made from Chennai were handled by the respondents from Ahmedabad have also no connection whatsoever with the actions of the appellants impugned in the application. The non-granting and denial of credit in the passbook having an ultimate effect, if any, on the business of the respondents at Ahmedabad would not also, in our opinion, give rise to any such cause of action to a court at Ahmedabad to adjudicate on the actions complained against the appellants.”

Rajasthan High Court Advocates’ Association v. Union of India & Ors

 

In Rajasthan High Court Advocates’ Association v. Union of India & Ors., AIR 2001 SC 416, the Supreme Court considered the question of territorial jurisdiction of the Principal Seat of the Court at Jodhpur and the Bench at Jaipur and explained the meaning of “cause of action” observing as under:-

“The expression ‘cause of action’ has acquired a judicially settled meaning. In the restricted sense, ‘cause of action’ means the circumstance forming the infraction of the right or the immediate occasion for the action. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the rights, but the infraction coupled with the right itself. Compendiously the expression means every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Every fact which is necessary to be proved, as distinguishing from every piece of evidence which is necessary to prove each fact, comprises in a ‘cause of action.’ It has to be left to be determined in each individual case as to where the cause of action arose.”

Navinchandra N. Majithia v. State of Maharashtra & Ors

 

In Navinchandra N. Majithia v. State of Maharashtra & Ors., AIR 2000 SC 2966, the Supreme Court while considering the provisions of Clause (2) of Article 226 of the Constitution, observed as under:-

“In legal parlance the expression ‘cause of action’ is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal; a group of operative facts giving rise to one or more basis for suing; a factual situation that entitles one person to obtain a remedy in court from another person......’Cause of action’ is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact, which, if traversed, the plaintiff must prove in order to obtain judgment......the meaning attributed to the phrase ‘cause of action’ in common legal parlance is, existence of those facts which give a party a right to judicial interference on his behalf.”

The Apex Court held that while considering the same, the court must examine as to whether institution of a complaint/ plaint is a mala fide move on the part of a party to harass and pressurise the other party for one reason or the other or to achieve an ulterior goal. For that consideration, the relief clause may be a relevant criterion for consideration but cannot be the sole consideration in the matter.

Oil & Natural Gas Commission v. Utpal Kumar Basu & Ors

 

In Oil & Natural Gas Commission v. Utpal Kumar Basu & Ors., (1994) 4 SCC 711, the Supreme Court considered the provisions of Clause (2) of Article 226 of the Constitution of India, which provides for territorial jurisdiction of the High Courts. The Apex Court held that while deciding the territorial jurisdiction of the Court, within which the cause of action, wholly or partly, arises, the facts must first be decided. It must also be ascertained which facts are true and the other facts must be disregarded, because the facts form integral part of the cause of action. In the said case, facts involved were that ONGC decided to set-up a Kerosene Processing Unit at Hajaria (Gujarat). EIL was appointed by the ONGC as its consultant and in that capacity, EIL issued advertisement from New Delhi calling for tenders and this advertisement was printed and published in all leading news papers in the country including The Times of India in circulation in West Bengal. In response to which tenders or bids were forwarded to EIL at New Delhi, which were scrutinized and finalized by the ONGC at New Delhi. However, the writ petition had been filed in the Calcutta High Court challenging the acceptance of tenders of the other party. Before the Supreme Court, it was contended that the Calcutta High Court had no jurisdiction as no cause of action had arisen, even partly, in its territorial jurisdiction. Mere communication to any person at a particular place or publication or reading of the news or notice etc. does not confer jurisdiction. After examining the facts of that case, the Apex Court came to the conclusion that the Calcutta High Court lacked jurisdiction. While deciding the said case, the Supreme Court placed reliance upon the judgment in Chand Koer V. Partab Singh, 15 Ind. Appeals 156, wherein it had been observed as under:-

“The cause of action has no relation whatsoever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set-forth in the plaint as the cause of action; in other words, to the media upon which the plaintiff asked the court to arrive at a conclusion in his favour.”

Therefore, in determining the objection of lack of territorial jurisdiction, the court must take all the facts pleaded in support of the cause of action into consideration albeit without embargo upon an inquiry as to the correctness or otherwise of the said facts.

Suit to include the whole claim: O2 R2

 

Code of Civil Procedure

 

2. Suit to include the whole claim.—(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.

(2) Relinquishment of part of claim.—Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.

(3) Omission to sue for one of several reliefs.—A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.

Explanation.—For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action.

Illustration: A lets a house to be at a yearly of rent Rs. 1,200. The rent for the whole of the years 1905, 1906 and 1907 is due and unpaid. A sues B in 1908 only for the rent due for 1906. A shall not afterwards sue B for the rent due for 1905 or 1907.

 

Part in Red is original provisions from CPC reproduced here for reference.

Code of Civil Procedure

Simplified Explanation of provisions:

Explanation (4) of Section 11 of CPC also governs this rule. It is based on the doctrine of Res Judicata. 

Reference:

1) http://www.nja.nic.in/16%20CPC.pdf