The Union of India is not a legal entity and does not carry on business in Delhi in the traditional sense. Therefore, the Delhi Court lacked jurisdiction under Section 20 of the Code of Civil Procedure.

( 1 ) THIS appeal is directed against the judgment delivered by Anand J. in Suit No. 511-A of 1980, on an application under Sections 14 and 17 of the Arbitration Act, 1940. The judgment is confined to issue of jurisdiction only which was the preliminary issue.

( 2 ) THE award in question was given by Brigadier Joginder Singh on 28th October, 1981, and the contract out of which the dispute arose was one for execution of Civil Works, i. e. , modernisation and augmentation of the Ordnance Factory at Moradnagar. It is undisputed that the contract was executed at Bareilly and the work was to be done in Moradnagar, both in the State of Uttar Pradesh. No part of the cause of action arose in Delhi.

( 3 ) THE jurisdiction of the Delhi Court was invoked (a) on the ground that the Union of India was carrying on business at its principal seat at Delhi and (b) on the ground that the Full Bench decision of this Court in Shri Ram Rattan Bhartia v. Food Corporation of India and another, A. I. R. 1978, Delhi 183, had settled the question that proceedings under the Arbitration Act could be taken at the place where the defendant resided or carried on business or personally worked for gain.

( 4 ) IT may be pointed out that the said Full Bench decision related to the Food Corporation of India and not to the Union of India. If the defendant was a statutory Corporation, then jurisdiction would be conferred on the Court within whose jurisdiction the principal place of business was located. But, the the Union of India is not a Corporation.

( 5 ) THE learned Single Judge has held in effect that the Union of India carries on business at Delhi and has given many reasons for holding that the Union of India does carry on business at Delhi. However, this test appears to be illusory because the Union of India equally carries on business all over India and it would not be possible for us to hold that a suit against the Union of India can be instituted in any Court in India merely because the Union of India is located throughout India and, therefore, the Union of India carries on business throughout India.

( 6 ) WITHOUT going into any greater details, it is sufficient to say that this point has been decided by a Division Bench of this Court in Binani Bros. (P) Ltd. v. Union of India, I. L. R. 1975 (2) Delhi 196. It was there held that the expression voluntarily resides, carries on business and personally works for gain are references to natural persons and not to legal entities. That was also an appeal under the Arbitration Act, but the learned Single Judge in that case had held that the Courts in Delhi did not have jurisdiction. The contract in that case was also a similar one entered into by the Director General of Supplies and Disposals on behalf of the Director of Supplies and Disposals, Bombay. The contract in that case was for the supply of pig-lead and no part of the cause of action arose at Bombay. The only question raised was whether the Delhi Court had jurisdiction because of Section 20 of the Code of Civil Procedure. The Court rejected this contention and held that the decision in Union of India and another v. Ladulal Jain, A. I. R. 1963, S. C. 1681, relating to a railway contract for the carriage of goods was limited to those cases in which the Government was carrying on commercial activities as opposed to sovereign activity. However, it was expressly held as follows :

"we do not read the cited case, therefore, to be laying down the rule that the courts at Delhi will have jurisdiction in regard to all disputes relating to all contracts executed by Union of India simply because the Union of India has its office at Delhi. "we respectfully follow this decision and held that the Delhi Courts have no jurisdiction.

( 7 ) ONE question that arose at the hearing of this appeal may be mentioned. That question was whether an appeal lay under the Letters Patent or Section 10 of the Delhi High Court Act. It may be observed that Section 39 of t