THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY AND THE HON’BLE SRI JUSTICE P.DURGA PRASAD C.C.C.A.No.149 of 2003 25th March, 2011 Between :- M/s.S.R.K.Soni Chit Funds, Rep. By its Proprietor Rajan Soni and another .. Appellants. And Smt.Saroj Chadda .. Respondent THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY AND THE HON’BLE SRI JUSTICE P.DURGA PRASAD C.C.C.A.No.149 of 2003 JUDGMENT:​- (per HON’BE SRI JUSTICE B.SESHASAYANA REDDY) This appeal is directed against the Judgment and Decree dated 31-12-2002 passed in O.S.No.332 of 1996 on the file of the IV-Senior Civil Judge, City Civil Court, Hyderabad, whereby and whereunder, the suit filed by the plaintiff for recovery of Rs.4,64,400/- came to be decree in part for a sum of Rs.2,70,000/- with interest at 18% per annum on the principal amount of Rs.2,70,000/- from March, 1993 till the date of realization. 2. The plaint averments in brief are:- The plaintiff is doing business in poultry and one R.K.Soni conducted a Chit Fund business in the name and style of R.K.Soni Chit Funds, which is registered under the Chit Fund Act. The plaintiff joined as a member in the chit conducted by R.K.Soni Chit Funds in series A-33 for Rs.5,00,000/-. The monthly subscription of the said chit was Rs.10,000/-. The duration of the chit was 50 months. The chit was commenced in the month of January, 1991 and it was to be ended in the year 1995. R.K.Soni, who was conducting the chit, died on 17- 5-1992. After his death, his son Rajan Singh continued the chit for some time and thereafter he discontinued the said chit. R.K.Soni Chit Funds is a proprietory concern and legal representatives of R.K.Soni are his widow and son, who are appellants herein, are liable to pay the amounts paid by the plaintiff. The plaintiff claims that she paid 27 instalments. Therefore she filed the suit for recovery of the instalment amounts inclusive of dividend. 3. The appellants/defendants filed written statement disputing the claim of the plaintiff. It is the plea of the defendants that the plaintiff paid only 10 monthly instalments and subsequently she became a defaulter and therefore she is not entitled to claim any amounts. The appellant/defendant also pleaded that no part of cause of action arose within the jurisdiction of Courts situated at Hyderabad and therefore suit is liable to be dismissed for want of territorial jurisdiction. 4. Basing on the above pleadings, the Trial Court settled the following Issues for trial:- 1) Whether the defendant No.1 Chit Fund company is the proprietory firm or company and whether it exists after the death of R.K.Soni/ 2) Whether the Court has no jurisdiction to try the suit? 3) Whether the plaintiff is entitled for the recovery of Rs.4,64,000/- from the defendants? 4) To what relief? 5. On behalf of the plaintiff, one witness was examined as P.W.1 and 24 documents were marked as Ex.A.1 to Ex.A.24. On behalf of the defendants, one witness was examined as D.W.1. 6. The Trial Court on considering the evidence brought on record and on hearing the Counsel appearing for the parties, came to the conclusion that the Court has jurisdiction to try the suit and that the defendants are liable to pay Rs.2,70,000/- with interest at 18% per annum and accordingly decreed the suit in part for Rs.2,70,000/- with interest at 18% per annum by Judgment dated 31-12-2002. Hence, this appeal. 7. Though the respondent/plaintiff entered appearance through a Counsel, there is no representation on behalf of the respondent/plaintiff when the appeal came up for consideration. After hearing the Counsel appearing for the appellants/defendants, the case came to be listed under the caption ‘for Judgment’ so as to enable the respondent/plaintiff to address arguments on her behalf. Despite the matter being listed under the caption ‘for Judgment’, there is no representation on behalf of the respondent/plaintiff. 8. Learned Counsel appearing for the appellants/defendants submits that the IV-Senior Civil Judge, City Civil Court, Hyderabad, has no jurisdiction to entertain the suit since no part of the cause of action arose within the jurisdiction of the said Court. Learned Counsel took us to the finding of the Trial Court on issue No.2 which deals with the jurisdictional aspect. 9. The Trial Court proceeded to answer the jurisdictional issue in favour of the plaintiff on the ground that the plaintiff issued the cheques towards the instalments and the cheques came to be encashed through her account in a bank which is situated within the limits of Hyderabad. For better understanding, we may refer to the relevant portion of the Judgment impugned in the appeal, which reads as hereunder:- “The learned Counsel for the plaintiff contended that the payment of instalments by issuing the cheques from the place of the plaintiff in Hyderabad and its encashment in the bank account of the plaintiff within the limits of Hyderabad can be taken as part of cause of action arises for filing of the present suit thereby this Court has got jurisdiction to try the suit. In support of the said contention, reliance is placed on the judicial precedent of High Court of Andhra Pradesh in D.SURYA RAO v. B.DASARATHA RAMA REDDY reported in 1988 (2) APLJ 54 (S.N.) that “suit for recovery of deposit from a defunct company. Deposit made at a place within the jurisdiction of the Court where plaintiff resides. Suit is maintainable. In a suit like this, it cannot be said that the plaintiff is not entitled to file a suit within the territorial limits of the Court in which he is residing and that it is he who should seek out the place of residence of creditors to file a suit for recovery of the debts due to him. So also the judicial precedent of Delhi High Court in M/s.KIG SYSTEL LTD. V. M/S.FUNITSU ICIM LTD. Reported in AIR 2001 DELHI 357 that “Section 20 of the CPC recognizes the territorial jurisdiction of Courts, inter alia, wherever the cause of action wholly or in part arises. The defendant/applicant has admitted that it has a Branch Office at 5A Bahadur Shah Zafar Marg, New Delhi and 5 Sansad Marg, New Delhi, and therefore the present lease is not of the genre where the defendant has been put to a disadvantage, because of the plaintiffs choice of filing the suit in New Delhi. Even if the convenience consideration is set apart I am satisfied that the cause of action had arises at Delhi. The plaintiff has asserted in the plaint that the order was accepted in Delhi and this fact has not even been denied or even traversed by the defendant. It is immediately whether dealings between the parties were through the defendants Madras Office or delivery of the software was to be effected in question. It is trite to state that the cause of action arises at6 different times, and at different places, and any of these would be a legitimate venue for suing. Following the above judicial proceedings part of cause of action in part arise in Hyderabad in respect of suit transaction thereby this Court has got jurisdiction to try the suit. Hence, this issue is answered negative and against the defendants.” 10. Section 20 of the C.P.C. deals with other suits to be instituted where defendants reside or cause of action arises and it reads as hereunder:- “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 mo 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 work for gain, as aforesaid, acquiesce in such institution; or 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.” 11. Indisputably, the appellants/defendants have their business beyond the jurisdiction of the IV-Senior Civil Judge, City Civil Court, Hyderabad. More precisely, the place of business of the appellants/defendants is situated in Secunderabad. The respondent/plaintiff has not pleaded in plaint that the appellants/defendants used to collect the instalments through their agents at her place of residence. Para No.11 of the plaint reads as hereunder:- “That the cause of action for the suit initially arose in the month of January, 1991 and subsequently on 26-3-1993 when the last subscription amount was paid by the plaintiff and the cause of action finally arose on 13-3-1996 when the plaintiff got issued a legal notice under certificate of posting and also registered post with acknowledgment due and the defendants neither replied nor paid the suit claim to the plaintiff.” 12. The respondent/plaintiff has not adduced any evidence to show that the instalments were collected at her residence by the agents of the appellants/defendants. The Trial Court has thoroughly misread the evidence in recording a finding that part of cause of action arose within the jurisdiction of Hyderabad. Therefore the issue as to the jurisdiction has to be answered in favour of the appellants/defendants. Once the IV-Senior Civil Judge, City Civil Court, Hyderabad, has no jurisdiction to entertain the suit, the plaint is to be returned to the plaintiff for presenting in a proper Court. 13. Accordingly, the appeal is allowed setting aside the Judgment and Decree dated 31-12-2002 passed by the IV-Senior Civil Judge, City Civil Court, Hyderabad, and consequently the plaint presented by the plaintiff is to be returned under Order VII Rule 10 of C.P.C. for presentation in proper Court. The Registry is directed to return the plaint to the respondent/plaintiff for presentation before the proper Court. Time for representing the plaint before the proper Court is on or before 30th April, 2011. No costs. _________________________ B.Seshasayana Reddy, J ________________________ P.Durga Prasad, J 25th March,2011 smr