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2010 Supreme(Kar) 143
HIGH COURT OF KARNATAKA
THE HONOURABLE MR. JUSTICE ASHOK B. HINCHIGERI
The Chariman, The Institution of Engineers (India), Karnataka State Centre & Others
Versus
M. Nagaraj & Others
Writ Petition No. 26569 of 2009 (GM-CPC) C/w Writ Petition No.26568 of 2009
Date of Judgment : 08-02-2010
For the Petitioners:V. Sudhish Pai, Advocate. For the Respondent:R1 to R4, Ajoy Kumar Patil, Advocate.
Headnote:CODE OF CIVIL PROCEDURE, 1908 - Section 20 & Indian Contract Act, 1872, Section 28: [B.Hinchigeri, J] Jurisdiction of Court - Agreement between the parties to exclude jurisdiction of a Court - Validity of - Held, It is not open to the parties by an agreement to confer jurisdiction on a Court, which it does not possess under the Code of Civil Procedure. But where two Courts or more have, under the CPC, the jurisdiction to try a suit or proceedings, an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy and such an agreement does not contravene Section 28 of the Contract Act.
The agreement between the parties does not oust the jurisdiction of the Court. It may operate as estoppels against the parties, but it cannot deprive the Court of its power to do justice. The Court would ordinarily have regard to the choice of the parties but where however, the Court whose jurisdiction has been ousted is satisfied that the stipulation would operate harshly, is oppressive in character, inequitable or unfair, for the ends of justice it can relieve the party of the bargain. The ouster clause can be ignored.
Parties cannot confer jurisdiction on Court by agreement when such Court is incompetent to entertain the suit. An ouster of jurisdiction cannot divest jurisdiction of Courts where part of cause of action arose and invest in the Court where no cause of action arose.
CODE OF CIVIL PROCEDURE, 1908 - Section 20: [B.Hinchigeri, J] Suit against Corporation - Place of Suing - Held, A Corporation is deemed to carry on business at its sole or principal office in India, or in respect of a cause of action arising at any place where it has also a subordinate office at such place. A Corporation cannot be sued at a place where it has a subordinate office except in respect of a cause of action arising at such subordinate office. Conversely, if no part of cause of action accrues at the place of the branch office, the mere fact of the Corporation having a branch office will not give the Court of that place jurisdiction to entertain a suit.
A Corporation can be said to carry on business at the head office or at he place where it has a branch in respect of a cause of action which arises, wholly or in part, at the place where the branch office is situated. If no part of the cause of action arises at the place of the branch office, the corporation cannot be said to transact business at that place.
In the instant case, IEI is a juristic person, and therefore, the explanation embodied in Section 20 applies to the present case. In case of a corporation, for the purpose of clause (a) of Section 20 of the Code, the location of the subordinate office within the local limits of which a cause of action arises is to be the relevant place for the filing of a suit and not the principal place of business. The insistence of the petitioners for being sued only in Kolkata is not tenable.
CODE OF CIVIL PROCEDURE, 1908 - Order 6: [B.Hinchigeri, J] Cause of Action - Held, ’cause of action’ means the action for which the defendant is answerable to the Court. It gives a right to the plaintiff to seek the relief against the defendant. The fact or facts entitling a party to seek a decree in a Court of law constitutes cause of action. The entire bundle of facts pleaded need not constitute a cause of action; what is necessary to be proved before the plaintiff can obtain a decree is the material fact. Cause of action means any material fact which the plaintiff has to prove for succeeding in the suit. Facts which the plaintiff may allege incidentally would not necessarily constitute a part of the cause of action.
CODE OF CIVIL PROCEDURE, 1908 - Order 6: [B.Hinchigeri, J] Cause of Action - Whether the averments made in the plaint alone should be looked into? - Held, Yes. The cause of action must be judged mainly from the allegation in the plaint and not from the defense set up by the defendants. Cause of action is independent of the defense taken by the defendants.
(This writ petition is filed under Article 226 and 227 of the Constitution of India praying to call for the records in O.S. No. 7420 of 2008 pending on the file of the learned XXIV Additional City Civil & Sessions Judge, Bangalore City; and etc.)
As the question of facts and law involved in W.P.No. 26568/2009 and W.P.No.26569/2009 are the same, they are clubbed, heard together and are being disposed of by this common order.
2. The facts of the case in brief are that the Institution of Engineers (India), (hereinafter refereed to as ‘IEI’) is a body corporate incorporated by the Royal Charter in 1935. The IEI has several state and local centers. It has its headquarters at Kolkata. The respondent Nos. 1 to 4 in W.P.No.26569/2009 are all the members of IEI. They were the candidates in the election to the Council/Committee from different divisions. Alleging the electoral malpracties, they filed O.S. No. 7420/2008 and sought the declaratory relief that the election process is viod, that the constitution of the Committee is illegal etc. They further sought the relief of mandatory injunction directing the petitioner Nos. 2 and 3 to conduct fresh election. The Civil Court, by its order, dated 12.11.2008 directed the petitioners to maintain the status quo in respect of the election results.
3. When thus stood the state of affairs, the second petitioner issued the notification conveying 74th Annual General Meeting (hereinafter referred to as ‘A.G.M’) of the IEI for announcing the election results. Alleging that the status quo order granted in O.S.No.7420/2008 is being circumvented, Regulation 12(b) of IEI is being violated and directions of the first petitioner are being dishonoured, the respondents (in W.P. No.26569/2009) filed O.S.No.8039/2008. They sought the relief of permanent injunction restraining the petitioners from holding in A.G.M. of the IEI, Karnataka State Center till fresh notification for election is issued, etc.
4. The contesting defendants filed the I.A.No.2 for the return of the plaint for want of jurisdiction. The Trial Court, by its order, dated 2.2.2009 dismissed the said I.A. This was challenged by the petitioners and the Board of Scrutineers for Election (the defendant No.3) by filing W.P.No.7149/2009.This Court, by its order, dated 24.4.2009 set aside the Trial Court’s order on I.A. No.2 and directed the Trial Court to pass fresh orders after hearing both the parties on the points referred to in the said order of this Court.
5. Similar was the position in respect of O.S.No.8039/2008. The I.A. No.2 filed by the petitioner Nos.2 and 3 (defendant No.2 and 3) in O.S. No.8039/20008 was also dismissed by the Trial Court, by its order, dated 2.2.2009. The challenge to the said order in W.P.No.16288/2009 lead to its setting aside and for the remand of the matter to the Trail Court for fresh consideration vide this Court’s order, dated 22.6.2009.
6. Pursuant thereto, the Trial Court has passed identical orders in both the suits on 6.8.2009 dismissing the I.A. No.2 Aggrieved by the said orders, these two petitions are presented.
7. Sri V. Sudhish pai, the learned counsel appearing for M.N. Seshadri for the petitioners submits that the view taken by the Trial Court that it has the jurisdiction to entertain the suits is wholly erroneous. The Trial Court’s order suffers form non-application of mind. He further submits that it is not in keeping with the remand order passed by this Court in W.P.No. 7149/2009.
8. Sri Pai submits that when two or more competent Courts can entertain a suit, an agreement to confine jurisdiction to one such Court to try the dispute is valid. He submits that the IEI has its headquarters at Kolkata and that a part of the cause of action has arisen in Kolkata. As Bye-law No.124 of IEI’s Bye-laws specifies that only Kolkata Court has jurisdiction, the respondent –plaintiffs are not justified in raising the dispute before the Bangalore Civil Court. The said Bye-law reads as follows:
“Only an a
