The term "carry on business" in Section 18(b) of the Presidency Small Cause Courts Act, 1882, should be construed in a narrow and restricted sense, referring to commercial business carried on for profit. Activities undertaken by the Government for the benefit of its citizens, such as running the railway, do not constitute business.

Headnote:
PRESIDENCY SMALL CAUSE COURTS ACT - SECTION 18(B) - JURISDICTION OF SMALL CAUSE COURT - UNION OF INDIA CARRYING ON BUSINESS - INTERPRETATION OF "CARRY ON BUSINESS" - GOVERNMENTAL ACTS VS. COMMERCIAL ACTIVITIES - DISTINCTION - WELFARE STATE ACTIVITIES - NOT BUSINESS - RAILWAY NATIONALISATION - NOT BUSINESS - CONSTRUCTION OF SECTION 18(B) - NARROW AND RESTRICTED MEANING OF "BUSINESS" - ACTIVITIES UNDERTAKEN BY GOVERNMENT FOR BENEFIT OF CITIZENS - NOT BUSINESS - JUDICIAL PRECEDENTS - CALCUTTA AND MADRAS HIGH COURTS - CONSENSUS OF JUDICIAL OPINION - UNION OF INDIA NOT CARRYING ON BUSINESS WITHIN JURISDICTION OF SMALL CAUSE COURT.
Fact of the Case:

Plaintiffs filed a suit in the Court of Small Causes, Bombay, against the Union of India representing the B.B.C.I. Railway for damages due to damage and non-delivery of goods sent by the plaintiffs from Agra Fort to Bikaner. The defendant raised a preliminary objection of jurisdiction, arguing that the cause of action accrued wholly outside the jurisdiction of the Court. The plaintiffs contended that the Union of India carries on business within the local limits of the Bombay Small Cause Court under Section 18(b) of the Presidency Small Cause Courts Act, 1882.
Finding of the Court:

The Court held that the Union of India, representing the B.B.C.I. Railway, cannot be said to carry on business within the meaning of Section 18(b) of the Presidency Small Cause Courts Act, 1882. The Court found that the word "business" in the context of the Act should be construed in a narrow and restricted sense, referring to commercial business carried on for profit. The Court distinguished between governmental acts and commercial activities undertaken by the Government, holding that activities undertaken by the Government for the benefit of its citizens, such as running the railway, do not constitute business.
Issues: 1. Whether the Union of India, representing the B.B.C.I. Railway, carries on business within the local limits of the Bombay Small Cause Court under Section 18(b) of the Presidency Small Cause Courts Act, 1882? 2. Interpretation of the term "carry on business" in the context of Section 18(b) of the Presidency Small Cause Courts Act, 1882.
Ratio Decidendi: 1. The Court interpreted the term "carry on business" in Section 18(b) of the Presidency Small Cause Courts Act, 1882, in a narrow and restricted sense, referring to commercial business carried on for profit. 2. The Court distinguished between governmental acts and commercial activities undertaken by the Government, holding that activities undertaken by the Government for the benefit of its citizens, such as running the railway, do not constitute business. 3. The Court relied on judicial precedents from the Calcutta and Madras High Courts, which held that the Government of India cannot be said to carry on business within the meaning of Section 18(b) of the Presidency Small Cause Courts Act, 1882.
Final Decision: The Court held that the Union of India, representing the B.B.C.I. Railway, cannot be said to carry on business within the meaning of Section 18(b) of the Presidency Small Cause Courts Act, 1882. The Court discharged the rule issued in the revisional application with costs.

Judgment - Gajendragadkar, J.

1. This revisional application raises a short but important question as to the jurisdiction of the Court of Small Causes at Bombay to entertain a suit against the Union of India representing the B. B. C. I. Railway having its head office at Bombay. The suit has been filed to recover Rs. 844-7-0 as the value of certain goods. The plaintiffs case is that these goods were sent by the plaintiff-company from Agra Fort to Bikaner to be carried over by the B. B. C. I. Railway. In the process of transport, the full consignment was damaged and was not delivered to the consignee. The value of the goods short-delivered is claimed by the plaintiffs as damages from the Union of India.

2. For the defendant a preliminary point of jurisdiction was raised. It was urged on their behalf that, since the cause of action had accrued wholly outside the jurisdiction of the Court of Small Causes, it was not competent to that Court to entertain the present suit. This plea was met by the plaintiffs on the ground that the Union of India carries on business within the local limits of the Bombay Small Cause Court within the meaning of Section 18, Sub-section (b), Presidency Small Cause Courts Act, 15 of 1882, and if that be so, the Court would have jurisdiction to entertain the suit. The learned trial Judge upheld the plaintiffs contention, found in their favour that he had jurisdiction to entertain the suit and decreed the claim as made in the plaint.

When the matter was taken by the defendant before the Full Court under Section 38, Presidency Small Cause Courts Act, the learned Judges who heard the application came to the conclusion that the Union of India could not be said to be carrying on business within the local limits of the jurisdiction of the Court of Small Causes, and so they held that the Court had no jurisdiction to entertain the suit. On that view, the application for summons presented by the plaintiffs to the trial Court was ordered to be returned to him for presentation to the proper Court. That is how the short question which we have to decide in the present revisional application is whether the Union of India, which represents the B. B. C. I. Railway having its Head Office at Bombay, can be said to carry on business within the meaning of Section 18, Sub-section (b), Presidency Small Cause Courts Act.

3. Section 18(b) confers jurisdiction on the Small Cause Court to try ail suits of a civil nature within its pecuniary jurisdiction where all the defendants at the time of the institution of the suit actually and voluntarily reside, or carry on business or personally work for gain, within the local limits of the Court. The words used in this Sub-section are identical with the words used in Section 20 Civil P. C. and substantially similar to the words used in Clause 12 of the Letters Patent of this Court. The clause "carry on business" in reference to the Government of India has been judicially interpreted by the Calcutta and the Madras High Courts. But there is no reported decision of this Court where this question has been considered. We may, therefore, first consider the clause itself apart from judicial authority.

4. In construing this clause, it must be borne in mind that the Union of India and the Governments of different States in the Union of India are liable to he sued in the Municipal Courts of the land. It is no doubt true that in considering the question as to the liability, of the State a distinction has to be made between acts of Government which are done in the purported exercise of what can conveniently be called the sovereign powers and those done in the course of undertakings which may be carried on by private individuals. Claims arising on torts or out of contracts fall in the latter category of acts, whereas acts done by the Government purely in exercise of its executive authority and in the course of governing the country may fall in the first category. The acts falling in the first categ

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