(July 12, 2001) 2001 (TLS)125344

2001-DLT-93-143 :: 2001-AD (Del)-6-256

PRAMOD KUMAR GUPTA Vs. Skylink Chemicals

J. D. Kapoor

( 1 ) DEFENDANT has challenged the territorial jurisdiction of this Court to try this suit and by way of an application under Order 7 Rule 10 of the Code of Civil procedure has sought return of the plaint to the plaintiff.

( 2 ) THE defendant is a private limited company having its registered office at Bhavnagar 1 It approached the plaintiff sometime in the month of April 1996 with a view to have business relationship. As a result of various discussions the defendant appointed him as its representative/agent initially for the Northern Region. Amongst other terms and conditions it was also agreed between the parties that the billing of material would be done by the defendant directly on various clients and documents shall be negotiated directly to such clients as per terms and conditions of the purchase order. It was further agreed that the defendant shall settle the commission amount every quarter by way of cheques. Plaintiff has sought recovery of Rs. 15,14,872. 50 p. towards commission for the period ending 31st of March, 1998.

( 3 ) THE plaintiff has invoked jurisdiction of this court on account of cause of action having arisen in Delhi inasmuch as that the defendant had approached the plaintiff at Delhi and appointed the plaintiff as. its agent at Delhi and as per the terms and conditions of the agreement the commission was payable at Delhi and as such the entire cause of action has arisen at Delhi.

( 4 ) THE main gravemen of the contention of the learned counsel for the defendant is that Explanation attached to clause (c) of Section 20 of the Code of Civil procedure provides that territorial Jurisdiction of the court in case of a Company is either at a place where it carries on the business or at a place where it has also a subordinate office. Learned counsel contends that Clause (c) provides that a place where the cause of action wholly or in part arises will be the territorial jurisdiction of the court but by of Explanation it has been clarified that a Corporation shall be deemed to carry on its business at a place where its principal office is situated or where it has also a subordinate office.

( 5 ) IN order to appreciate the contention of the learned counsel in correct perspective the provisions of section 20 of the CIVIL PROCEDURE CODE need to be reproduced - other suits to be instituted where defendants reside or cause of action arises : -

"20. 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 works for gain, as aforesaid, acquiesce in such institution; (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. It Is contended by the learned counsel that the purpose of the explanation was to avoid the plaintiff to travel to the place where the corporation has its principal office as it may cause great hardship and therefore allowed him to sue at a place where the corporation has a subordinate office also. "

( 6 ) AS is apparent, clauses (a) and (b) of Section 20 a refer to a Court within the , local limits of whose jurisdiction the defendant inter alia "carrie