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2011 Supreme(Ker) 914

K.HARILAL, PIUS C.KURIAKOSE
Joy P. Chungath – Appellant
Versus
M/s Lawkin Ltd. – Respondent


Advocates Appeared:
For the Appellant:A. Kumar, Advocate.
For the Respondent:Martin P Jose P.K. Soyuz, Advocates.

Judgement Key Points

Certainly. Here are the key points derived from the provided legal document regarding the issue of territorial jurisdiction under Section 20 of the Civil Procedure Code:

  • The primary issue concerns the interpretation of Section 20, including its purpose, legal effect, and the role of the Explanation attached to it, especially in relation to corporations (!) (!) .

  • The suit was initially dismissed on the ground that the court lacked territorial jurisdiction because the defendant's principal place of business is in Mumbai, and no part of the cause of action was alleged to have arisen in Ernakulam (!) .

  • The defendant contended that the entire transaction, including the signing of the Memorandum of Understanding (MOU), took place at Mumbai, and the defendant does not maintain an office or carry on business in Ernakulam, thus no part of the cause of action arose there (!) (!) .

  • The court below accepted this contention, relying on the explanation to Section 20, which deems a corporation to carry on business only at its principal or subordinate offices. Since no subordinate office exists in Ernakulam, the court found the suit lacked jurisdiction (!) (!) .

  • The appellant argued that a part of the cause of action arose at Ernakulam because the plaintiff took a building on rent, incurred expenses for renovation, and conducted negotiations there, which constitute a part of the transaction giving rise to the claim (!) (!) (!) .

  • The appellant emphasized that each clause of Section 20 is disjunctive and must be interpreted independently, meaning that the suit could be filed in Ernakulam if any part of the cause of action arose there, regardless of the defendant's subordinate office status (!) (!) .

  • The court analyzed the legal meaning of "cause of action," concluding that it includes all facts necessary to support the right to sue, and that a part of the cause of action can arise from transactions or events that occur at different locations (!) (!) (!) .

  • The court recognized that pleadings indicated that significant parts of the transaction, including negotiations, infrastructure setup, and expenses, occurred in Ernakulam, thus establishing that a part of the cause of action arose there (!) (!) (!) .

  • The purpose of the Explanation to Section 20 is to clarify the meaning of "carry on business" for corporations, and it does not restrict jurisdiction solely to the principal or subordinate offices, especially when the cause of action or part thereof arises at a different location (!) (!) (!) .

  • The court concluded that since a part of the cause of action arose in Ernakulam, the suit is properly instituted there, and the order returning the plaint for lack of jurisdiction was erroneous (!) (!) .

  • It was also clarified that the defendant's principal office being in Mumbai does not preclude jurisdiction in Ernakulam if the cause of action or part of it occurred there. The plaintiff has the right to choose the court where a part of the cause of action has arisen, and the suit could have been filed in Ernakulam accordingly (!) (!) .

  • The appellate court set aside the order dismissing the suit for want of jurisdiction and directed that the suit could be refiled in the proper court in Ernakulam, affirming the court's jurisdiction based on the facts established (!) .

These points collectively emphasize that under Section 20, a suit can be instituted in a jurisdiction where any part of the cause of action has arisen, and the interpretation of the section, including its Explanation, should be harmonized with the purpose of ensuring access to justice and proper adjudication of disputes.


Judgment :

1. The determination of ‘territorial jurisdiction’ under Section 20 of the Civil Procedure Code and the intent, purpose and legal effect of the ‘Explanation’ to that section are the issues arose for our consideration in this appeal.

2. An order directing that the plaint be returned for presentation before the proper court in which the suit should have been instituted, passed by the IInd Additional Subordinate Court, Ernakulam in O.S.No.228/2005 under Order VII Rule 10 of the Civil Procedure Code, on the premise that the above said court has no territorial jurisdiction to try the suit, is challenged in this appeal. The plaintiff is a consultant (Pediatric and Hospital service) at Kochi and represented by his power of attorney holder. The defendant is a company incorporated under the Companies Act and having its registered office at Firosh Nagar, Mumbai.

3. Facts:

The facts relevant in the context of issue involved in this appeal can briefly be stated as follows:

In response to an advertisement made by the defendant Company calling for appointing a franchisee at Kochi for their ITES Division, plaintiff applied and defendant chose the plaintiff as their franchisee in Kerala.
























































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