The court within whose jurisdiction it has a subordinate office shall alone have jurisdiction over a plaint: Chhattisgarh High Court

1AFRHIGH COURT OF CHHATTISGARH BILASPUR M.A No.417Reserved on 09.08.2021Pronounced on 24.08.2021Jayant Jha S o Shri Ramakant Jha Prop. Ritika Enterprises RailwayCrossing Road Bijuri Distt. Anuppur M.P. At Present R o Ward No.1 Manendragarh Distt. Koriya Chhattisgarh .................Plaintiff AppellantVersus 1.South Eastern Coalfields Limited Through Chief General Manager S E CL Hasdeo Area South Jhagrakhand Ledri Distt. Koriya Chhattisgarh 2.Sub Area Manager S E C L Hasdeo Area Bijuri Sub Area Bijuri Distt.Anuppur M.P.3.Sub Area Engineer S E C L Hasdeo Area S E C L Hasdeo Area BijuriSub Area Bijuri Distt. Anuppur M.P.4.Manager Somna Collery Bijuri Anuppur M.P.5.Colliery Engineer Somna Colliery Bijuri Distt. Anuppur M.P..................Defendants RespondentsFor Appellant:Shri Parag Kotecha Advocate.For Respondents:Shri Vinod Deshmukh Advocate.Single Bench:Hon ble Shri Sanjay S. Agrawal JC A V Order 1.This Miscellaneous Appeal has been preferred by the Plaintiff underOrder 43 Rule 1(a) of the Code of Civil Procedure 1908questioning the legality and propriety of the order dated 23.12.2016passed in Civil Suit No.16 B 2011 whereby the trial court has directed forreturn of the Plaint holding it to be barred by territorial jurisdiction underSection 20 of CPC. The parties to this Appeal shall be referred hereinafteras per their description before the Court below. 2.Briefly stated the facts of the case are that the Plaintiff who is the 2Proprietor of Ritika Enterprises instituted a suit claiming recovery ofRs.7 47 499 by submitting interi alia that he supplied spare parts of themachine described in Plaint schedule A to the Defendants i.e. SomnaColliery Bijuri District Anuppurwhich is beyond its jurisdiction therefore the suit as framed andinstituted is barred by jurisdiction. 4.Based upon the aforesaid objection an issue namely issue No.3was framed which reads as under: “Whether the Court has territorial jurisdiction toentertain the suit ”5.After considering the aforesaid issue it was observed by the trialCourt while taking note of the explanation to Section 20 of CPC and thatby relying upon the principles laid down by the Supreme Court in thematter of Patel Roadways Limited Bombay vs. Prasad Trading Companyreported in4 Supreme Court Cases 270 that since the cause ofaction has arisen at Somna Colliery Bijuri District Anuppurwherethe disputed materials alleged to have been delivered therefore the causeof action has arisen at the said place which is beyond the territorial 3jurisdiction of this Court and accordingly the claim as made has been heldto be barred by jurisdiction under Section 20 of CPC and the Plaint hasbeen directed to be returned in exercise of the powers enumerated underOrder 7 Rule 10 of CPC for its presentation before the competent Courthaving its territorial jurisdiction by its separate order which was passed onthe same day i.e. 23.12.2016. This is the order which has been impugnedby way of this Appeal. 6.Learned Counsel for the Appellant Plaintiff submits that the Courtbelow while misinterpreting the provisions prescribed under Section 20 ofCPC has erred in holding that it has no jurisdiction to entertain the suit.According to him the suit can be instituted where Defendants reside orwhere the cause of action arises and since the business of Defendants isat Manendragarh therefore the suit ought not to have been held to bebarred by jurisdiction. 7.On the other hand learned Counsel appearing for the Respondentshas supported the order under Appeal as passed by the Court below.8.I have heard learned Counsel for the parties and perused the entirerecord carefully. 9.From perusal of the averments made in the Plaint and the noticeissued by the Plaintiff on 16.09.2009 it appears that the alleged spareparts of the machine were supplied to Defendant No.5 i.e. at SomnaColliery Bijuri District Anuppurrefers to a court within local limits of whose jurisdictionthe cause of action wholly or in part arises. Explanation to the aforesaidprovision is relevant in the instant matter in order to determine thejurisdiction of the court and the interpretation of it has been dealt with bythe Supreme Court in the matter of Patel Roadways Limited Bombay vs.Prasad Trading Companyat para 9 as under: “9…....... The first part of the Explanationapplies only to such a corporation which has itssole or principal office at a particular place. Inthat event the courts within whose jurisdiction 5the sole or principal office of the defendant issituate will also have jurisdiction inasmuch aseven if the defendant may not be actuallycarrying on business at that place it will “bedeemed to carry on business" at that placebecause of the fiction created by theExplanation. The latter part of the Explanationtakes care of a case where the defendant doesnot have a sole office but has a principal officeat one place and has also a subordinate officeat another place. The words "at such place"occurring at the end of the Explanation and theword "or" referred to above which is disjunctiveclearly suggest that if the case falls within thelatter part of the Explanation it is not the courtwithin whose jurisdiction the principal office ofthe defendant is situate but the court withinwhose jurisdiction it has a subordinate officewhich alone shall have jurisdiction "in respect ofany cause of action arising at any place where ithas also a subordinate office".And that by considering the intention of the legislature in enacting theExplanation to the said provision it was observed further atparagraphs 12 and 13 as under: “12.........The Explanation is really anExplanation to clauseviz. asto where the corporation can be said to carry onbusiness. This it is clarified will be the placewhere the principal office is situatedorthe place where a business is carried on givingrise to a cause of actionso long as there is a subordinate officeof the corporation situated at such place. Thelinking together of the place where the cause ofaction arises with the place where asubordinate office is located clearly shows thatthe intention of the legislature was that in thecase of a corporation for the purposes ofclausethe location of the subordinate office within the local limits of which a cause of actionarises is to be the relevant place for the filingof a suit and not the principal place ofbusiness. If the intention was that the location ofthe sole or principal office as well as thelocation of the subordinate officeare tobe deemed to be places where the corporationis deemed to be carrying on business thedisjunctive "or" will not be there. Instead thesecond part of the Explanation would haveread "and in respect of any cause of actionarising at any place where it has a subordinateoffice also at such place”.“13........The clear intendment of theExplanation however is that where thecorporation has a subordinate office in theplace where the cause of action arises itcannot be heard to say that it cannot be suedthere because it does not carry on business atthat place. It would be a great hard ship if inspite of the corporation having a subordinateoffice at the place where the cause of actionarisessuch plaintiff is to becompelled to travel to the place where thecorporation has its principal place. That placeshould be convenient to the plaintiff and sincethe corporation has an office at such place itwill also be under no disadvantage. Thus theExplanation provides an alternative locus forthe corporation s place of business not anadditional one.”12.The aforesaid principles have been reiterated by the Supreme Courtin the matter of New Moga Transport Co. through its Proprietor Krishan LalJhanwar vs. United India Insurance Co. Ltd and others reported inbefore the word "or"appearing between the words "office in India"and the word "in respect of" andthe otherthereafter. The Explanation applies to adefendant which is a corporation which termwould include even a company. The first part ofthe Explanation applies only to such corporationwhich has its sole or principal office at aparticular place. In that event the court within 7whose jurisdiction the sole or principal office ofthe company is situate will also have jurisdictioninasmuch as even if the defendant may notactually be carrying on business at that place itwill be deemed to carry on business at thatplace because of the fiction created by theExplanation. The latter part of the Explanationtakes care of a case where the defendant doesnot have a sole office but has a principal officeat one place and has also a subordinate officeat another place. The expression "at suchplace" appearing in the Explanation and theword "or" which is disjunctive clearly suggestthat if the case falls within the latter part of theExplanation it is not the court within whosejurisdiction the principal office of the defendantis situate but the court within whose jurisdictionit has a subordinate office which alone has thejurisdiction "in respect of any cause of actionarising at any place where it has also asubordinate office". 11. Section 20 before the Amendment by CPCin 1976 had two Explanations beingExplanations I and II. By the Amendment Act Explanation I was omitted and Explanation IIwas renumbered as the present Explanation.Explanation which was omitted reads asfollows: “Explanation 1. Where a person has a permanent dwellingat one place and also temporary residence at another place he shall be deemed to reside at both places in respect of anycause of action arising at the place where he has suchtemporary residence." 12. This Explanation dealt with the case ofplace of residence of the defendant andprovided with regard to a person having apermanent dwelling at one place and alsotemporary at another place that such personshall be deemed to reside at both places inrespect of any cause of action arising at theplace where he has such temporary residence.The language used in Explanation II on theother hand which is the present Explanation was entirely different. Had the intention beenthat if a corporation had its principal office atone place and a subordinate office at anotherplace and the cause of action arose at the placewhere it had its subordinate office it shall bedeemed to be carrying on business at bothplaces the language used in Explanation IIwould have been identical to that of Explanation 8I which was dealing with a case of a personhaving a permanent dwelling at one place andalso temporary residence at another place.”13.Applying the aforesaid principles to the case in hand whereadmittedly no cause of action either wholly or in part as provided underclauseof Section 20 CPC arose in the Court of Manendragarh theHead Office of the Defendants and as the disputed spare parts of themachine alleged to have been supplied to the Office of Somna Colliery Bijuri District Anuppurthe cause of action has therefore arisen atthe said place which is beyond the territorial jurisdiction of the Courtbelow. In view of the said background the trial Court has not committedany illegality in returning the Plaint in exercise of the powers under Order 7Rule 10 of CPC and I do not find any legal infirmity in the same so as tocall for any interference in this appeal. The concerned trial Court shallreturn the Plaint to the Plaintiff Appellant along with all the necessarypapers with appropriate endorsement under its seal for its presentationbefore the Court having its territorial jurisdiction. 14.The Appeal is accordingly dismissed with the aforesaid observation.No order as to costs. Sd JUDGEPriya 

Summary: Asper section 20 of CPC, when a plaint is filed against a company who has a principal office and a subordinate office, it is not the court within whose jurisdiction the principal office of the defendant is situate but the court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction where such a cause of action arose. This was held by Hon’ble Justice Shri Sanjay S. Agrawal in the case of Jayant Jha Vs. South Eastern Coalfields Limited and Ors. [M.A No.40 of 2017] on the 24th of August 2021, before the Hon’ble High Court of Chhattisgarh at Bilaspur. The brief facts of the case are, the plaintiff who is the Proprietor of Ritika Enterprises, instituted a suit claiming recovery of Rs.7,47,499/- by submitting interi alia that he supplied spare parts of the machine described in Plaint schedule-‘A’ to the Defendants i.e. Somna Colliery, Bijuri, District Anuppur (M.P.). According to the Plaintiff, the Defendants have failed to make their payment despite the delivery of the alleged materials, which led to the issuance of the Demand Notice dated 16.09.2009. However, in spite of that, the same was not paid, therefore, he has been constrained to institute the suit in the instant nature instituted on 25.09.2010. While contesting the claim, an objection was raised by the Defendants regarding territorial jurisdiction of the Court by submitting inter alia that the Plaintiff’s office is at Bijuri and the disputed materials alleged to have been delivered was at Somna Colliery, Bijuri, District Anuppur (M.P.), which is beyond its jurisdiction, therefore the suit as framed and instituted, is barred by jurisdiction. After considering the aforesaid issue, it was observed by the trial Court while taking note of the explanation to Section 20 of CPC since the cause of action has arisen at Somna Colliery, Bijuri, District Anuppur (M.P.), where the disputed materials alleged to have been delivered, therefore, the cause of action has arisen at the said place which is beyond the territorial jurisdiction of this Court and accordingly, the claim as made has been held to be barred by jurisdiction under Section 20 of CPC and the Plaint has been directed to be returned in exercise of the powers enumerated under Order 7 Rule 10 of CPC for its presentation before the competent Court having its territorial jurisdiction by its separate order, which was passed on the same day, i.e. 23.12.2016. This is the order, which has been impugned by way of this Appeal. The counsel for the plaintiff submitted that, the Court below, while misinterpreting the provisions prescribed under Section 20 of CPC, has erred in holding that it has no jurisdiction to entertain the suit. According to him, the suit can be instituted where Defendants reside or where the cause of action arises and since the business of Defendants is at Manendragarh, therefore, the suit ought not to have been held to be barred by jurisdiction. The counsel for the respondent however supported the order passed by the trial court and submitted that the plaint ought to be barred by jurisdiction. The learned judges heard both the counsels and relied on the judgement in the case of Patel Roadways Limited, Bombay vs. Prasad Trading Company (1991) 4 Supreme Court Cases 270, wherein it was held that, “The Explanation is really an Explanation to clause (a). It is in the nature of a clarification on the scope of clause (a) viz. as to where the corporation can be said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a subordinate office of the corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on business, the disjunctive “or” will not be there. Instead, the second part of the Explanation would have read “and, in respect of any cause of action arising at any place where it has a subordinate office, also at such place. The clear intendment of the Explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry-on business at that place. It would be a great hard-ship if, in spite of the corporation having a subordinate office at the place where the cause of action arises (with which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its principal place. That place should be convenient to the plaintiff; and since the corporation has an office at such place, it will also be under no disadvantage. Thus, the Explanation provides an alternative locus for the corporation’s place of business, not an additional one.”