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 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.
1[* * *]
2[Explanation].-A corporation shall be deemed to carry on business at its sole or principal office in 3[India] or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
(a) A is a tradesman in Calcutta, B carries on business in Delhi. B, by his agent in Calcutta, buys goods of A and requests A to deliver them to the East Indian Railway Company. A delivers the goods accordingly in Calcutta. A may sue B for the price of the goods either in Calcutta, where the cause of action has arisen or in Delhi, where B carries on business.
(b) A resides at Simla, B at Calcutta and C at Delhi A, B and C being together at Benaras, B and C make a joint promissory note payable on demand, and deliver it to A. A may sue B and C at Benaras, where the cause of action arose. He may also sue them at Calcutta, where B resides, or at Delhi, where C resides; but in each of these cases, if the non-resident defendant object, the suit cannot proceed without the leave of the Court.
(i) Facts pleaded which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the Court concerned. For that fact pleaded must have relevance to the lis/dispute; Union of India v. Adani Exports Ltd., AIR 2002 SC 126.
(ii) Where the agreement stated that jurisdiction regarding all disputes is at Delhi where the agreement has been signed and executed while the agreement by parties was not signed at Delhi but at some other place, then the agreement cannot be said to be conferring exclusive jurisdiction to Civil Court at Delhi. Party can file a suit under section 20(c) at place where cause of action wholly or partly arose; Jabalpur Cable Network Pvt. Ltd. v. E.S.P.N. Software India Pvt. Ltd., AIR 1999 MP 271.
(iii) Where the agreement was an agreement for sale of movable property then sections 16 and 19 would not govern the cause of action in such case but section 20 of the Code would be attracted for determining jurisdiction of Court; Jabalpur Cable Network Pvt. Ltd. v. E.S.P.N. Software India Pvt. Ltd., AIR 1999 MP 271.
1. Explanation I omitted by Act No. 104 of 1976, sec. 7 (w.e.f. 1-2-1977).
2. Subs, by Act No. 104 of 1976, sec. 7, for “Explanation II” (w.e.f. 1-2-1977).