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2010 DIGILAW 213 (MP)

Archana Sarees v. M. P. Handicraft and Handloom Development Corporation Ltd.

2010-02-19

PIYUSH MATHUR

body2010
JUDGMENT Piyush Mathur, J. 1. This Miscellaneous Appeal has been preferred on being aggrieved by the Return of the Plaint, by the First Additional District Judge, Mungaoli, District Guna, in Civil Suit No. 2-B/2005, M/s. Archana Sarees v. M.P. Handicraft and Handloom Development Corporation Ltd., vide Order Dated 21.08.2007, on the ground that no "cause of action" has accrued to the Plaintiff, within the Territorial Jurisdiction of the Trial Court. 2. M/s. Archana Sarees is a Proprietorship Firm, which has agreed to supply Chanderi Sarees to M.P. Handicraft and Handloom Development Corporation Ltd. (hereinafter referred as the 'Corporation') on 'Commission basis', while impressing upon the Branch Office of the Corporation situated at Ahamadabad that the Chanderi Sarees shall be sold by them in the State of Gujrat, on their behalf and the prescribed/agreed amount of Commission shall be deducted and the Price of the Sold-Out Sarees would be transmitted to the Plaintiff at Chanderi. 3. The Plaintiff demonstrate that he has forwarded a variety of Chanderi Sarees at the Ahamadabad Branch Office/Showroom of the Corporation and the total Valuation/Cost of the Sarees was about Rs. 1,39,240/- as against which the Corporation had made a part-payment of Rs. 30,000/-, however, the balance of the amount was never paid to the Plaintiff, which compelled him to file a Suit for recovery of the balance amount against the Corporation and the Branch Manager of Ahamadabad Branch, by invoking the jurisdiction of the Trial Court situated at Mungaoli, District Guna. 4. The Corporation while replying to the merits of the matter in its Written-Statement has specifically raised a plea about the Territorial Jurisdiction that since the entire "cause of action" has accrued at Ahamadabad, therefore, the Civil Court at Mungaoli shall have no jurisdiction to try the suit. Based upon the pleadings of the Plaintiff and the objections of the Corporation, taken in their respective Written-Statements, the Trial Court has framed as many as 6 Issues, out of which Issue No. 5 relate to the Territorial Jurisdiction of the Court. 5. I have heard Shri K.B. Chaturvedi, Learned Senior Advocate appearing with Shri G.P. Chourasiya, Advocate for the Appellant and Shri Aniket Naik, Learned Counsel for the Respondent-Corporation and have perused the record of the case. 6. 5. I have heard Shri K.B. Chaturvedi, Learned Senior Advocate appearing with Shri G.P. Chourasiya, Advocate for the Appellant and Shri Aniket Naik, Learned Counsel for the Respondent-Corporation and have perused the record of the case. 6. Shri K.B. Chaturvedi, Learned Senior Advocate, while questioning the legality of the Impugned Order passed by the Trial Court on Date 21.08.2007, submits that after recording of the statements of the witnesses of the Plaintiff and the Defendants and after hearing the Final Arguments, the Trial Court, instead of passing a Judgment on Merits, has considered Issue No. 5 and ordered for the Return of the Suit, upon finding that it has no Territorial Jurisdiction. Shri Chaturvedi further submits that Section 20 of the Civil Procedure Code clearly provide in Clause (c) that the Court within the local limits of whose jurisdiction the cause of action, wholly or partly arose, would have the jurisdiction and since the Sarees were forwarded from Chanderi and the payment against the Sale of Sarees was received by the Plaintiff at Chanderi, therefore, part of cause of action would arise at Chanderi and in this view of the matter, the Suit should have not been returned by the Trial Court, at the fag end of the entire Trial. 7. Shri K.B. Chaturvedi, Learned Senior Advocate heavily relied upon a fact that some of the Sarees were returned back to the Plaintiff from Ahamadabad, through Branch Office of the Corporation, situated at Chanderi and this act of the Corporation, would certainly confer jurisdiction upon the Trial Court. 8. Shri Aniket Naik, Learned Counsel appearing for the Corporation submits that the Explanation appended to Section 20 of the Code of Civil Procedure provide that the cause of action has to be gathered in relation to the 'place', where the Subordinate Office of a Corporation exist, however mere existence of a Branch Office would not entitle the Plaintiff to institute a Suit at a place where no cause of action has accrued, where merely the Branch Office of the Corporation exist and since from a plain reading of the averments of the Plaint, it appears that no cause of action has accrued to Plaintiff at Chanderi, therefore Trial Court has rightly ordered for the Return of Suit, upon having no Territorial Jurisdiction to try the Suit. 9. 9. It is evident from the perusal of the record that the Trial Court has entertained the Plaint and the Written-statement and has framed the Issues, wherein Issue No. 5 was framed in relation to the Territorial Jurisdiction of the Court, but it emerges from the record of proceedings that no effort was ever made either on behalf of the Litigating Parties or the Court itself to try Issue No. 5 as a Preliminary Issue and surprisingly when the entire evidence of the Plaintiff and the Defendant was recorded and the Final Arguments were heard in the Suit and the Judgment was expected to be delivered on merits, the Trial Court simply passed an Order on Issue No. 5, by giving a finding that it has no Territorial Jurisdiction. Since the pleadings contained in the Plaint and the Written-statement make out a foundation for the preparation of the litigable issues, which a Presiding Officer frames, before the commencement of the Trial, it is always expected from him/her to have focused its attention to those issues, which could be tried as Preliminary Issues, for avoiding the conduction of a Regular Trial, as also for imparting justice to the Litigants at the earliest possible opportunity. 10. The Plaintiff has averred in his Plaint that the Plaintiff-Firm carries on business of selling Chanderi Sarees and the Firm had directly entered into transactions, with the Branch Office of the Corporation, situated at Ahamadabad, for selling the Sarees, amounting to Rs. 1,39,240/- and an amount of Rs. 30,000/- was actually received by the Plaintiff at Chanderi, however, against the price of the rest of the Sarees, the Plaintiff could not receive any amount from the Branch Office, as the Showroom of the Branch Office caught fire on account of "Godhra Incident", but the Plaintiff had not averred in the plaint as to how the cause of action for filing of the suit accrued to him at Chanderi, except by offering an explanation in his statement that he has forwarded the consignment from Chanderi and received a part payment at Chanderi. 11. 11. The term 'cause of action' has certainly been not defined in the Civil Procedure Code, but the Courts of India have perceived the entire bundle of facts to be the relevant facts for constituting a cause of action, which relate to the place of occurrence and since none of the cause of action, as alleged in the Plaint for the recovery of the balance amount against the Corporation, accrued to the Plaintiff at Chanderi, it could not be said that the Trial Court was having a Territorial Jurisdiction of trying the Suit, based upon the nature and description of the cause of action given by the Plaintiff in its plaint. 12. Shri K.B. Chaturvedi, Learned Senior Advocate appearing for the Plaintiff-Appellant has relied upon a Judgment of the Supreme Court reported as (2007) 6 SCC 769 Ambica Industries v. Commissioner of Central Excise, wherein the Supreme Court was equating effect of introduction of the Phrase "Cause of Action" in Article 226 of the Constitution of India while comparing it with Section 20 C.P.C., wherein the Supreme Court has found that even a small fraction of accrual of "Cause of Action" would clothe the Court with the jurisdiction to entertain a Writ Petition. 13. A bare perusal of Section 20 of C.P.C. demonstrate that the accrual of the "Cause of Action" has been envisaged for the purposes of determination of the Territorial Jurisdiction of a Court and the Explanation appended to Section 20(c) of CPC, clarifies that the "Cause of Action" has to arise in respect of a 'place' where it accrues. For ready reference, Section 20 of CPC is quoted herein below; 20. Other suits to be instituted where defendants reside or cause of action arises. For ready reference, Section 20 of CPC is quoted herein below; 20. Other suits to be instituted where defendants reside or cause of action arises. 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 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, 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. 14. A close analysis of the latest Judgment of the Supreme Court demonstrate that the Phrases "Cause of Action" and "Territorial Jurisdiction" have been meticulously examined by the Supreme Court, in the context of a variety of Laws, for ascertaining the accrual of the cause of action and in a recent Judgment reported as (2010) 1 SCC 135 Sonic Surgical v. National Insurance Co. the Supreme Court, while analyzing Section 17 of the Consumer Protection Act, has clarified about the accrual of a cause of action at the Branch Office that a 'Branch Office' of a Corporation would mean only 'that Branch Office', where the cause of action has actually arisen and not all the Branch Offices of a Corporation. Relevant Paragraphs of this Judgment are quoted herein below ; 10. In our opinion, an interpretation has to be given to the amended Section 17(2)(b) of the Act, which does not lead to an absurd consequence. Relevant Paragraphs of this Judgment are quoted herein below ; 10. In our opinion, an interpretation has to be given to the amended Section 17(2)(b) of the Act, which does not lead to an absurd consequence. If the contention of the learned Counsel for the appellant is accepted, it will mean that even if a cause of action has arisen in Ambala, then too the complainant can file a claim petition even in Tamil Nadu or Gauhati or anywhere in India where a branch office of the Insurance Company is situated. We cannot agree with this contention. It will lead to absurd consequences and lead to bench-hunting. In our opinion, the expression "branch office" in the amended Section 17(2) would mean the branch office where the cause of action has arisen. No doubt this would be departing from the plain and literal words of Section 17(2)(b) of the Act but such departure is . sometimes necessary (as it is in this case) to avoid absurdity. (Vide G.P. Singh's Principles of Statutory Interpretation, 9th Edn., 2004. 11. In the present case, since the cause of action arose at Ambala, the State Consumer Disputes Redressal Commission, Haryana alone will have jurisdiction to entertain the complaint. 15. In yet another Judgment of the Supreme Court reported as (2009) 7 SCC 768 Kandimalla Raghavaiah and Co. v. National Insurance Co., the Court, while dealing an Insurance matter has found that the cause of action, which gives rise to the filing of the Suit alone, has to be evaluated for the purposes of ascertaining the cause of action, in as much as the bundle of facts, which gave rise to filing of the Suit, have to be seen in context to the actual place, where they accrued/occurred. The relevant Paragraph of the Judgment is quoted herein below ; 18. The term "cause of action" is neither defined in the Act nor in the Code of Civil Procedure, 1908 but is of wide import. It has different meanings in different contexts, that is when used in the context of territorial jurisdiction or limitation or the accrual of right to sue. Generally, it is described as "bundle of facts", which if proved or admitted entitle the plaintiff to the relief prayed for. Pithily stated, "cause of action" means the cause of action for which the suit is brought. Generally, it is described as "bundle of facts", which if proved or admitted entitle the plaintiff to the relief prayed for. Pithily stated, "cause of action" means the cause of action for which the suit is brought. "Cause of action" is cause of action which gives occasion for and forms the foundation of the suit. (See Sidramappa v. Rajashetty4.) In the context of limitation with reference to a fire insurance policy, undoubtedly, the date of accrual of cause of action has to be the date on which the fire breaks out. 16. The issue about the cause of action has drawn attention of the Supreme Court in a matter concerning Negotiable Instruments Act, where in a Judgment reported as (2009) 1 SCC 720 , Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd., the Supreme Court has observed as follows ; 20. Indisputably all statutes deserve their strict application, but while doing so the cardinal principles therefore cannot be lost sight of. A court derives a jurisdiction only when the cause of action arose within its jurisdiction. The same cannot be conferred by any act of omission or commission on the part of the accused. A distinction must also be borne in mind between the ingredient of an offence and commission of a part of the offence. While issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. Only on a service of such notice and failure on the part of the accused to pay the demanded amount within a period of 15 days thereafter, the commission of an offence completes. Giving of notice, therefore, cannot have any precedent over the service. It is only from that view of the matter that in Dalmia Cement (Bharat) Ltd. v. Galaxy Traders and Agencies Ltd?-emphasis has been laid on service of notice. 17. Giving of notice, therefore, cannot have any precedent over the service. It is only from that view of the matter that in Dalmia Cement (Bharat) Ltd. v. Galaxy Traders and Agencies Ltd?-emphasis has been laid on service of notice. 17. The Scope of the application of Section 20 of C.P.C., as compared to Article 226 of the Constitution of India, has also been examined by the Supreme Court, in the context of the amendment carried out in Article 226 of the Constitution of India, in the Year 1963 while pronouncing its Judgment, reported as (2008) 3 SCC 456 , Eastern Coalfields Ltd. v. Kalyan Banerjee, wherein the Court has observed that the cause of action for the purposes of Article 226, for all intent and purport, must be assigned the same meaning as is envisaged under Section 20(c) of C.P.C., as the existence of a Head Office or a Branch Office at that place alone would not confer any jurisdiction automatically to a Court, but that Head Office/Branch Office alone would have the jurisdiction, where the cause of action has actually accrued. The relevant discussion of the Judgment is quoted herein below; 6. The jurisdiction to issue a writ of or in the nature of mandamus is conferred upon the High Court under Article 226 of the Constitution of India. Article 226(2), however, provides that if cause of action had arisen in more than one court, any of the courts where part of cause of action arises will have jurisdiction to entertain the writ petition. 7. Cause of action", for the purpose of Article 226(2) of the Constitution of India, for all intent and purport, must be assigned the same meaning as envisaged under Section 20(c) of the Code of Civil Procedure. It means a bundle of facts which are required to be proved. The entire bundle of facts pleaded, however, need not constitute a cause of action as what is necessary to be proved is material facts whereupon a writ petition can be allowed. 18. In yet another Judgment, reported as (2007) 2 SCC 337, Alchemist Ltd. and Anr. It means a bundle of facts which are required to be proved. The entire bundle of facts pleaded, however, need not constitute a cause of action as what is necessary to be proved is material facts whereupon a writ petition can be allowed. 18. In yet another Judgment, reported as (2007) 2 SCC 337, Alchemist Ltd. and Anr. v. State Bank of Sikkim and Ors., the Supreme Court has clarified that all the essential, substantial, material and integral facts constituting a cause of action becomes available for evaluating the Territorial Jurisdiction of a Court and unless these important elements exist at a place, the accrual of the cause of action could not be even inferred. Therefore in view of this judgment of the Supreme Court, the Judgment cited on behalf of the Plaintiff-Appellant reported as (2007) 6 SCC 769 Ambica Industries v. Commissioner of Central Excise, gets further clarified than even for the purposes of evaluating existence of a cause of action, for invoking Article 226 of the Constitution of India, the elements prescribed in Section 20 of CPC have to be ascertained first, for determining Territorial Jurisdiction of a Court. 19. The facet of 'cause of action' would postulate accrual of all relevant facts at a "place" for attracting "Territorial Jurisdiction" of a Court and as such the phrase "...in respect of any cause of action arising at any place where it has also a subordinate office, at such place" used in the Explanation appended to Clause (c) of Section 20 C.P.C. would acquire prominence for appreciating the fact of the accrual of the cause of action at a particular place. 20. Therefore a perusal of the entire facts of the case at hand and the Judgments of the Supreme Court conclusively demonstrate that the Trial Court has not committed any error in finding that it has no Territorial Jurisdiction, as no cause of action has accrued within the Territorial Jurisdiction of the Trial Court and as such this Court is of the considered view that the Trial Court has not committed any legal or jurisdictional error in ordering for the Return of the Plaint to the Plaintiff, for its presentation before the appropriate Court, having Territorial Jurisdiction to try the Suit, based upon the accrual of the cause of action, in relation to the peculiar facts of the present case. 21. 21. Consequently, this Appeal fails and is hereby dismissed. However, there shall be no order as to Costs.