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HIGH COURT OF CALCUTTA
P. B. Mukharji, S. A. Masud
BIRATNAGAR JUTE MILLS LTD. - Appellant
Versus
LALTA PRASAD GOENKA - Respondent
Appeal 241 Of 1961
Decided On : JULY 02, 1965
JURISDICTION - CARRYING ON BUSINESS - LETTERS PATENT, 1865, CLAUSE 12 - INTERPRETATION - COMPANY - BUSINESS ACTIVITIES - EVIDENCE - BURDEN OF PROOF - SHIFTING OF OFFICE - PRESUMPTION - DEBTURES - SUIT FOR MONEY - TRANSFER OF PROPERTY ACT, 1882, SECTION 68(2) - APPLICABILITY.
Fact of the Case:
The plaintiff filed a suit for recovery of Rs. 8,05,545 for interest and cost in connection with certain transactions between the parties in raw jute. The defendant company contended that the suit should be dismissed as it did not carry on business within the original jurisdiction of the Calcutta High Court on the date of the institution of the suit and as such, the trial court had no jurisdiction to decide it. The trial court held that no part of the cause of action had arisen within the original jurisdiction of this court but held that the court had jurisdiction to decide the suit inasmuch as the defendant carried on business within the jurisdiction of the trial court at the time when the suit was filed.
Finding of the Court:
The court held that the defendant company was carrying on business within the jurisdiction of the Calcutta High Court within the meaning of the expression used in clause 12 of the Letters Patent. The court found that the defendant company had a Calcutta office at No. 178, Harrison Road, Calcutta, where it carried on business activities such as export of jute, receipt of imported goods, purchase of stores and spares for the jute mill in Nepal, and maintenance of banking accounts. The court also found that the defendant company had a Calcutta representative who resided at No. 31/1, Lansdowne Road, Calcutta, but that this did not mean that the company's business was carried on outside the jurisdiction of the court.
Issues: 1. Whether the defendant company was carrying on business within the jurisdiction of the Calcutta High Court within the meaning of clause 12 of the Letters Patent, 1865? 2. Whether the suit was maintainable in the Calcutta High Court?
Ratio Decidendi: 1. The court held that carrying on business involves two conditions: (1) existing of a business and (2) discharging its normal activities. Discharge of normal activities must include not only transactions of business giving rise to profit or loss but also discharge of all obligations, statutory or otherwise. A company does not cease to carry on business in a particular place until and unless all its activities are completely closed. 2. The court found that the defendant company had a Calcutta office where it carried on various business activities, including export of jute, receipt of imported goods, purchase of stores and spares for the jute mill in Nepal, and maintenance of banking accounts. The court also found that the defendant company had a Calcutta representative who resided at No. 31/1, Lansdowne Road, Calcutta, but that this did not mean that the company's business was carried on outside the jurisdiction of the court.
Final Decision: The court dismissed the appeal and the cross-objection with costs.
( 1 ) THE only point urged by the defendant appellant in this appeal against the judgment and decree of Ray, J. is that the suit should have been dismissed inasmuch as the defendant company did not carry on business within the original jurisdiction of the Calcutta High Court on the date of the institution of the suit and as such, the trial court had no jurisdiction to decide it. The suit was instituted for the recovery of Rs. 8,05,545 for interest and cost in connection with certain transactions between the parties in raw jute as a result whereof the defendant became liable to pay to the plaintiff a sum exceeding Rs. 12,00,000. As the defendant could not pay the sum as set out in paragraph 2 of the plaint, it was agreed that the defendant would issue in favour of the plaintiff debentures for a sum of Rs. 6,00,000 and hundies for a sum of Rs. 6,00,000. It was further agreed according to the plaintiff that defendant would pay the balance in cash and that all the payments should be made by the defendant to the plaintiff in Calcutta within the original jurisdiction of the Calcutta High Court. Pursuant to the said agreement the defendant company on or about 18th October, 1952 issued 600 debentures of the value of Rs. 1,000 each in favour of the plaintiff in his business of Babulal Mohanlal. The defendant company according to the paragraph 3 of the plaint duly delivered the said debentures to the plaintiff at the plaintiff's place of business at No. 60a, Kali Krishna Tagore Road, Calcutta. The defendant company also drew Hundies for a sum of Rs. 6,00,000 in favour of the plaintiff and payable to the plaintiff in Calcutta within the same jurisdiction. The said debentures provide, inter alia, us follows: (a) The principal sum of Rs. 1,000 on each of the said debentures would be repaid to the plaintiff by the end of 10th October, 1957. (b) The principal sum of Rs. 1,000 on each of the debentures would carry interest at the rate of 7 per cent per annum, (c) The said interest would be paid every six months, i. e. at the end of the month or Chaitra-Aswin Nepali. Sambat, and interest would be paid on production of interest coupons attached to the said debentures. (d) On maturity of debentures an application would have to be filed with the defendant company by the end of the month Aswin 2014 (Nepalese Sanibat) for payment of the said debentures interest coupon due thereon. (e) At least two months before the date of payment of debenture money the registered holders would be informed by registered post or through personal service.
( 2 ) THE said debentures matured on or about 16th October, 1957 and the principal sum of Rs. 6,00,000 under the said debentures became due and payable by the defendant to the plaintiff together with Rs. 63,000 being the interest on the said principal sums. No payment was made in respect of the said debentures and the plaintiff has claimed a sum of Rs. 8,05,545 particulars of which are stated as below;-------------------------------------------------------------------------------
( 3 ) THE plaintiff has not claimed sums due under or in respect of the said Hundies in this suit, The main defence in the written statement was that the suit should be dismissed inasmuch as the defendant company at the relevant time did not carry on any business at No. 178, Harrison Road, Calcutta as stated in the plaint and that no part of the cause of action had arisen within the original jurisdiction of the Calcutta High Court. The learned trial Judge came to the conclusion that no part of the cause of action had arisen within the original jurisdiction of this court but he held that the court had jurisdiction to decide the suit inasmuch as the defendant carried on business within the jurisdiction of the trial court at the time when the suit was filed The learned trial Judge did not, however, accept the plaintiff's claim for Rupees 1,42,545 but passed a decree for Rs. 6,63,000, interest on judgment on the principal sum of Rs.
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