WHETHER SUIT HAS TO BE FILED WHEREVER REGISTERED OFFICE OF THE

PLAINTIFF COMPANY HAS ITS EXISTENCE AND PRESENCE?

Section 20 CPC:
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 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.

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 Varanasi, B
and C make a joint promissory note payable on demand, and deliver it to A. A may sue B and
C at Varanasi, 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.
It is apparent from the above that foreigners are not exempt from the jurisdiction of Indian
Courts.

The plaintiff sent his watch for repairs to the defendant in Bombay, asking the defendant to
send an estimate of repairs. When the parcel was opened, according to the defendant, he
found nothing in it. The plaintiff brought the suit for recovery of the price of watch and
damages at Ujjain where he resided.

It was held that the cause of action whether in contract or tort arose entirely in Bombay and
the Ujjain court had no jurisdiction. Where an order for work is sent by post and without
formal acceptance the work is carried out in the district where the order is received, the whole
cause of action arises in the latter district.

In so far as the suit was one in tort section 19, C.P.C. applied and as the wrong to the watch
was done at Bombay where the defendant carried on business, the Ujjain court had no
jurisdiction.

Cause of action:
“Cause of action” means the cause or the set of circumstances which leads up to a suit. It may
compendiously be defined as being the fact or facts which establish or give rise to a right of
action or the existence of which entitles a party to seek redress in a court of law.

The term connotes all congeries of facts which it is necessary for the plaintiff to prove, if
traversed, in order to entitle him to a decree in the suit. It does not, however, compromise
every piece of evidence which is necessary to prove each fact, but every fact which is
unnecessary to be proved to entitle the plaintiff to a decree.

It is, in other words, a bundle of essential facts, which it is necessary for the plaintiff to prove
before he can succeed in the suit. It is the media upon which the plaintiff asks the court to
arrive at a conclusion in his favour but has no reference to the relief claimed or the defence
set up. In its restricted sense, it means the immediate occasion for the action.

Where the cause of action is fraud, discovery of fraud is no part of the cause of action. The
cause of action must be antecedent to the institution of the suit, and no cause of action can be
founded on any allegations made in the proceedings. Every plaint must disclose a cause of
action when alone the court will be able to proceed to a determination of the dispute.
Lord Esher in Read v. Brown, stated that the cause of action means “Every fact which it
would be necessary for the plaintiff to prove, if traversed, in order to support his right to the
judgment of the court. It does not compromise every piece of evidence which is necessary to
prove each fact, but every fact which is necessary to be proved.” Fry L.J. observed in the
same ruling.

“Everything which, if not proved, gives the defendant an immediate right to judgment must
be part of the cause of action.” Lord Watson in Mt. Chand Kour v. Pratap Singh, observed.

“Now the cause of action has no relation whatever 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 ground set forth in the plaint as the cause of action, or, in other words, to
the media upon which the plaintiff asks the court to arrive at a conclusion in his favour”.

(Referred to with approval in Vijaya Bank, Egnore v. Kiran & Co., Madras, and State of
Madras v. C.P Agencies)

By ’cause of action’ it is meant every fact, which, if traversed, it would be necessary for the
plaintiff to prove in order to support his right to a judgment of the Court. In other words, a
bundle of facts which it is necessary for the plaintiff to prove in order to succeed in the suit.

The Supreme Court had occasion to refer to the case of Cooke in A.K. Gupta and Sons Ltd.
v. Damodar Valley Corpn., and stated thus:

The expression ’cause of action’ in the present context does not mean ‘every fact which it is
material to be proved to entitle the plaintiff to succeed’ as said in Cooke v. Gill in a different
context, for if it were so, no material fact could ever be amended or added and, of course, no
one would want to change or add an immaterial allegation by amendment.

The expression for the present purpose fully means, a new claim made on a new basis
constituted by new facts. Such a view was taken in Robinson v. Unicos Property
Corporation Ltd., and it seems to us to be the only possible view to take.

Any other view would make the rule futile. The words ‘new case’ have understood to mean
‘new set of facts’. This also seems to us to be a reasonable view to take. No amendment will
be allowed to introduce a new set of ideas, to the prejudice of any right acquired by any party
by lapse of time.”

Part of cause of action—when jurisdiction not conferred:

In a limitation action by owner of ship, the plaintiffs were foreign companies or foreigners
and claimants and some defendants were foreigners. The claimants were not within
jurisdiction of Bombay High Court and were not carrying on business within the jurisdiction
of High Court. All claims were filed by them in U.S.A. There was no likelihood of any claim
being filed in Bombay High Court. Though part of cause of action has arisen within High
Court, still no jurisdiction is conferred thereby.

A Government servant filed suit for payment of pension in another State where he was not
serving and no part of cause of action had arisen there. The court of another State has no
jurisdiction to entertain such suit.
Where contract was executed within jurisdiction of a High Court and it was performed within
the jurisdiction of that High Court, the execution of bank guarantee within the jurisdiction of
another High Court does not mean that part of action arose within the jurisdiction of another
High Court. Another High Court had no jurisdiction to enforce the bank guarantee.

Suits on contract:
In suits arising out of contract the cause of action arises at the place where the contract was
made, the place where the contract was to be performed or performance completed or at the
place where in performance of the contract any money to which the suit relates was expressly
or impliedly payable, and the suit can be filed at the three places.

A suit can be filed by the plaintiff at a place where he is residing or carrying on business or
personally works for gain. He need not travel to file a suit to a place where defendant is
residing or cause of action wholly or in part arises. However, if the plaintiff is residing or
carrying on business etc. at a place where cause of action, wholly or in part, has also arisen,
he has to file a suit at that place, as discussed above. Thus, for the aforesaid
reasons mentioned by us in the judgment, we are not inclined to interfere with the orders
passed by the High Court. Appeals are hereby dismissed.