The principal place of business of the railways is the headquarters of the railway, and that suits against the railways must be brought within the jurisdiction of the courts where the headquarters of the railway is situate.

( 1 ) THIS matter has been referred by a Division Bench by its order dated 8th March, 1983 to a larger Bench. The questions referred are as follows :

1. Can all suits against the Union of India be instituted at Delhi irrespective of the nature of the cause of action, on the ground that the Union of India resides at Delhi, or carries on business at Delhi ?

2. Can such suits also be instituted at all other places in India because the Union of India resides there, or carries on business there ?

3. Is there a difference in the jurisdiction of the court, depending on whether the contract in question is for constructing or, providing material to be used in business by the Government, or buildings or material to be used for purely sovereign purposes by the State ?

4. In the matter of construction work for railways, such as quarters, stations, or railway lines, etc. , is the contract to be treated as a sovereign contract and does this have any bearing on the jurisdiction of the Court, particularly this Court to deal with the matter ?

( 2 ) IN response to the invitation to tender issued from the Divisional Superintendent Office, Lucknow the plaintiff submitted his tender which was for white washing and annual repairs of the staff quarter^ in various places, all within the operational jurisdiction of Divisional Superintendent, Lucknow.

( 3 ) DISPUTES having arisen the petitioner filed an application under Section 20 of the Arbitration Act to file the arbitration agreement and to refer the dispute to arbitration. The railways took the preliminary objection to the jurisdiction of this Court on the ground that Divisional Ofiice in Lucknow, within which the work was to be performed was outside the territorial jurisdiction of Delhi Courts and the agreement was also arrived at outside the jurisdiction of this Court. The matter was initially heard by D. K. Kapur, J. who by his order of 6th February, 1979 referred the matter to the Division Bench, which again referred it to Full Bench. That is how the matter is before us.

( 4 ) IT is by now well settled that the Union of India does Hot voluntarily reside or personally works for gain (see Union of India and another v. Sri Ladulal Jain AIR 1963 SC (1681)

( 5 ) MR. Sayal then sought to suggest that white washing or repairs of quarters should be distinguished from running of the railways and, therefore, though running of the railways could be treated to be carrying on business by the Union of India, white washing of the staff quarters is an activity of a category other than commercial and more akin to being sovereign. In our view the argument is unacceptable. The building or mainte- nance of the staff quarters are all necessary and incidental adjuncts to the business of running of the railways. The running of railways does not only mean the transporting of passengers and goods but would inevitably include within it all the works like building quarters, laying down rails and all acts connected with the running of the railways. In our view, therefore, the staff quarters repairs or white washing of them etc. are an integral part of the function of running of the business of railways.

( 6 ) MR. Sayal had sought to urge that as the regional office which had issued and accepted tender was the Divisional office at Lucknow the principal office and management must be taken to be Lucknow which would be outside the jurisdiction of this Court. We do not agree. We can find no justification to split up the concept of principal place of business by seeking to subdivide or itemwise the place of running by relating to each tender. Principal place of business cannot be made to depend on each tender for it is well known that tenders are issued by various authorities depending upon their respective financial powers. Principal place of business must be a regular, fixed place independent of each tender. It may be noted that under Section 80 of the Code of Civil Procedure where a notice has to be given it is provid