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Pratap Singh Vs. the Bank of America - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberO.C.J. Appeal No. 53 of 1976 in Suit No. 602 of 1969
Judge
Reported in(1976)78BOMLR549
AppellantPratap Singh
RespondentThe Bank of America
DispositionAppeal allowed
Excerpt:
letters patent of the bombay high court, clause 12-code of civil procedure (v of 1908), section 20-jurisdiction of courts in suits against foreign corporations and principles of private international law-companies act (i of 1956), section 592-bombay court-fees act (xxxvi of 1959), section 15-a suit may be filed on the original side of the bombay high court under clause 12 of the letters patent against a foreign corporation incorporated abroad if the defendant corporation carries on business within the limits of the ordinary original civil jurisdiction of the high court, though the cause of action has arisen wholly outside india.;the defendant corporation incorporated in the united states of america had a principal place of business in india located in bombay. the claim in the suit was a.....desai, j.1. this is an appeal from the decision of vimadalal j. given on the preliminary issue of jurisdiction. by his judgment and order dated february 24, 1976 he held that this court had no jurisdiction to entertain and try the appellant plaintiff's suit and answered the preliminary issue in the negative and against the plaintiff and consequentially the suit was dismissed with costs.2. the plaintiff had filed the suit against the bank of america, national trust and savings association (hereinafter referred to as the 'bank of america'), a corporation incorporated in the united states of america. the plaint, however, goes on to describe the defendant further as having a principal place of business in india located at 18, bruce street, bombay-1. the claim in the suit is a money claim for.....
Judgment:

Desai, J.

1. This is an appeal from the decision of Vimadalal J. given on the preliminary issue of jurisdiction. By his judgment and order dated February 24, 1976 he held that this Court had no jurisdiction to entertain and try the appellant plaintiff's suit and answered the preliminary issue in the negative and against the plaintiff and consequentially the suit was dismissed with costs.

2. The plaintiff had filed the suit against the Bank of America, National Trust and Savings Association (hereinafter referred to as the 'Bank of America'), a corporation incorporated in the United States of America. The plaint, however, goes on to describe the defendant further as having a principal place of business in India located at 18, Bruce Street, Bombay-1. The claim in the suit is a money claim for Rs. 5,40,000 (Rupee equivalent of 'U.S. Dollars 72,000) and for compensation and damages assessed by the plaintiff in respect of various items specified in para. 115 of the plaint. This claim for compensation and damages is claimed in respect of certain Time Certificates of Deposit issued by the Bank of America, two of which had been issued by its Banking Office at San Francisco and one by its Banking Office at Los Angeles in the State of California, U.S.A. The plaintiff claims to have lost these certificates in London together with a cashier's cheque for interest. The loss was reported to the two offices. The plaintiff claims that thereafter the defendant insisted upon various formalities being complied with by the plaintiff, which it was not entitled in law to do and was contrary to true legal position pertaining to the three Time Certificates of Deposit as also contrary to certain oral talks set out in the plaintiff's pleadings which are unnecessary to be referred to in this judgment. Although, according to the plaintiff, these demands were illegal and improper, he was forced to comply with the same in order to salvage his funds. The plaintiff also claims that this improper, invalid and illegal course of action was resorted to by the defendant on several improper considerations which are set out in para. 96 of the plaint. In the subsequent paragraphs of the plaint various acts of commission and omission on the part of the defendant and its several officers concerned with the plaintiff's application for issue of fresh certificates or for the reimbursement of the amount due under the lost three certificates have been set out, and in consequence the plaintiff has crystalised his monetary claim and the heads thereof in para. 115. It may be mentioned here that ultimately before the issue of fresh Time Certificates of Deposit the plaintiff was required to execute in favour of the defendant an Indemnity and Hold Harmless Agreement by which he, inter alia, agreed to indemnify the defendant Corporation against any and all loss, cost and expense by reason of the issue of the replacement Time Certificates of deposit. This agreement provided that it can be legally enforced in Punjab, India, as well as Los Angeles, California, United States of America. The claim of the plaintiff encompasses claims by way of compensation and damages for mental distress, worry, anxiety, injury to feelings, deterioration in health, loss of income of private practice, travelling expenses, cancellation of certain business arrangements and other expenses.

3. The following paragraphs in the plaint set out the plaintiff's submissions and contentions as to why this Court would have jurisdiction to entertain and try Ms suit:

124. That the defendant has a full-fledged branch at Bombay, which is not separately incorporated, and which constitutes the defendant in Bombay.

125. That the defendant is present and found in Bombay, resides and dwells in Bombay and carries on business in Bombay.

126. That it is fair to require the defendant to submit to the suit in Bombay.

127. That the defendant's office in Bombay is its principal office in India as well as its principal place of business in India.

128. That, assuming although not admitting, that the defendant does not reside, dwell or carry on business in India, the suit against it shall be maintainable in Bombay, as in that case the Bank of America, Bombay, would constitute the agent of the defendant in Bombay through whom it would be carrying on business in Bombay and on whom process and notice could be served and through whom it could be sued.

130. That the defendant has agreed to submit to the jurisdiction of the Courts in India and has authorised amongst others Mr. R.J. Gillis of the Defendant's Bombay Branch to accept on behalf of the defendant service of process and notices and other documents and the authorisation stands duly communicated to the Registrar of Companies, New Delhi.

131. That the defendant has ample property in Bombay and elsewhere in India and the judgment, the decree and the orders of the Hon'ble Court can be effectively executed against it.

A perusal of these paragraphs would clearly indicate that jurisdiction is claimed against the defendant in tile plaint not on account of any plea of accrual of the cause of action but by reason of the fact principally that it has a full-fledged branch at Bombay, which is not separately incorporated, and, therefore, according to the plaintiff, constitutes the defendant in Bombay; according to the plaintiff, the defendant, therefore, carries on business in Bombay. In the alternative, it is suggested that the defendant corporation carries on business through its branch in Bombay, which may be deemed to be its agent and on whom the processes and notices could be served and through whom it can be sued. It has been pleaded in the further alternative that the defendant has agreed to submit to the jurisdiction of the Courts in India and it bus authorised one R.J. Gillis of the defendant's Bombay branch to accept the service of processes, notices and other documents on behalf of the defendant and such authorisation has been duly communicated to the Registrar of Companies. This averment has to be co-related with the provisions to be found in Section 592 of the Companies Act, 1956.

4. These paragraphs of the plaint which are material for our purposes are dealt with in paras. 86, 87, 88 and 90 of the written-statement. However, it must be stated that initially in para. 2 of the written-statement the defendant-respondent has taken the plea of want of jurisdiction in the forefront and hence these paragraphs of the written-statement are required to be read together with the said paragraph. Paragraph 2 and paras. 86 to 90 of the written-statement read as follows:

2. Without prejudice to the aforesaid submission, the defendant in any event submits that this Hon'ble Court has no jurisdiction to entertain and try this suit as no part of the cause of action has arisen within the jurisdiction of this Hon'ble Court and the defendant does not carry on business in Bombay within the meaning of Clause XII of the Letters Patent. The defendant says that the defendant is a Corporation incorporated in the U.S.A. and has an office in Bombay only for the purpose of carrying on its banking business. The defendant in any event submits that the plaintiff's right to file the suit, if any, was in the United States or in the State of Punjab in view of the Indemnity and Hold Harmless Agreements entered into between the plaintiff and the defendant on 26th January 1968 and 9th February 1968 at San Francisco, California, U.S.A....

86. With reference to paras. 124, 127 and 128 of the plaint, the defendant denies that the branch of the defendant in Bombay constitutes the defendant in Bombay. The defendant is a company incorporated in U.S.A. The defendant further says that the entire transaction in suit is governed by the Californian law.

87. With reference to para. 125 of the plaint, the defendant denies that the defendant is at present found in Bombay or resides or dwells in Bombay. The defendant admits that the defendant carries on business in Bombay but denies that the Same gives jurisdiction to this Hon'ble Court under Clause XII of the Letters Patent. The defendant in any event submits that in respect of the alleged cause of action the plaintiff and the defendant are governed by the Californian laws and this Hon'ble Court has no jurisdiction to entertain and try this suit.

88. With reference to para. 126 of the plaint, the defendant denies that it is fair to require the defendant to submit to the suit in Bombay. The defendant says that on the contrary, it is highly improper for the plaintiff to have filed this suit in this Hon'ble Court when no part of the cause of action has arisen within the jurisdiction of this Hon'ble Court. The transaction referred to in the plaint arises outside India, all documents, papers, vouchers and the evidence of the parties is outside India and it would be highly inconvenient to defend the present suit in Bombay.

89. With reference to para. 129 of the plaint, the defendant craves leave to refer to Section 801 of the Californian Corporation Code and referred to in the said para. for its true interpretation. The defendant says that the said section applies only to a corporation formed under the Californian laws, The defendant says that the defendant is formed under the Federal laws and the said section does not apply to the defendant. The defendant in any event denies that the said section permits the suit being filed in any court in the world. The same only refers to a court within the State of California.

90. With reference to para. 130 of the plaint, the defendant denies that the defendant agreed to submit to the jurisdiction of the Courts in India for the reasons mentioned therein.

5. It is in the background of these pleadings that the learned single Judge on the Original Side framed the preliminary issue as follows: 'Whether this Court has jurisdiction to try the suit'. As stated earlier, the answer to the issue was given in the negative and against the plaintiff; and holding that the Court had no jurisdiction to entertain and try the suit, the learned single Judge proceeded to dismiss the same with costs. The discussion proceeded before the learned single Judge on the admitted footing, which must also be the tooting before us, that no part of the cause of action in the suit had arisen within the limits of the ordinary original civil jurisdiction of this Court. It was, however, submitted before us that the learned single Judge was in error in dismissing the suit on the footing that this Court had no jurisdiction; and it becomes necessary therefore to examine the rival contentions which were raised before the learned single Judge and the respective arguments on which the same are based, which contentions were substantially repeated before us.

6. From a perusal of the impugned judgment we found that it involves construction and appreciation of Clause 12 of the Letters Patent as well as the question of impact of the provisions therein contained as also the principles of private international law in England as well as in India. The appellant-plaintiff had appeared in person before the learned single Judge and he also proposed to argue this appeal in person before us. As we felt that this was a matter wherein both the points of view should be properly presented by trained lawyers, we requested Mr. Andhyarujina and Miss P. Anklesaria (as junior) to appear amicus curiae. Indeed, the matter has been very ably argued by both sides and we must express our gratitude for the well-considered and succinct arguments advanced at the bar on the rather complicated question that falls for our determination. We may add here that we also allowed the appellant to address us briefly on certain other aspects on which we did not require assistance from Mr. Andhyarujina.

7. The appellant claims that this Court has jurisdiction on two broad heads: (i) that the defendant had submitted to the jurisdiction of this Court or must be deemed to have abandoned or waived the plea as to want of jurisdiction, and (ii) the defendant corporation was carrying on business within the limits of the ordinary original civil jurisdiction of this Court through its branch at Bruce Street, Bombay, which branch had also been disclosed as its principal place of business in India as provided in Section 592(1)(e) of the Companies Act, 1956. As the defendant had also furnished the names and addresses of persons authorised to accept service of process on its behalf it was urged that the defendant must be deemed to have submitted to the. jurisdiction of this Court.

8. We propose to deal with the first aspect of the contention as to jurisdiction earlier as, in our opinion, it does not admit of any detailed discussion and the conclusions of the learned single Judge appear to us to be fully justified. It has been submitted by the appellant that one of the acts of the defendant Bank which amounted to waiver of objection as to jurisdiction was the inclusion of a clause to be found in the Indemnity and Hold Harmless Agreement earlier referred to, by virtue of which clause a suit on the said agreement could be filed in Los Angeles or in Punjab in India. In our opinion, the presence of such a clause in the said agreement would have no relevance and cannot be construed in the manner sought for by the appellant. The clause would apply only to a suit by the Bank of America to enforce the indemnity, which is not the nature of the present suit. In any case the clause provides that such a suit may be filed in the State of Punjab and such a clause could have no relevance to a plea as to waiver of jurisdiction in the matter of a suit filed in Bombay. By no stretch of imagination can such a clause be held to confer any right on the appellant to file this suit in Bombay which is not one of the places specifically mentioned in the said agreements.

9. The appellant then contended that by filing an appearance in the present suit, which was not an appearance under protest, and further by filing a written-statement in which defences had been set out on merits and by subsequently filing various affidavits and participating in the several interlocutory proceedings the respondent Bank had submitted to the jurisdiction of this Court or must be deemed to have waived or abandoned its plea of want of jurisdiction.

10. It becomes necessary to consider whether there is any substance in these contentions. A single Judge of the Bombay High Court had occasion to consider the practice of filing appearance under protest in Nuruddin Abdulhusein v. Abu Ahmed : AIR1950Bom127 . This was, however, in connection with a notice of motion for stay of the suit under Section 34 of the Indian Arbitration Act, 1940. It was observed that this practice was of doubtful import and utility and need not be followed. The observations made in the context of a motion for stay under Section 34 would be equally apposite and apply perhaps with even greater force to appearance which was required to be filed even to put in a written-statement in which the plea of want of jurisdiction was required to be taken up in order that the plea can be adjudicated upon by the Court. It may be pointed out that there is no provision in the High Court Rules for filing an appearance under protest and such an appearance is required to be filed under the Civil Procedure Code only in actions, where a person is served as an alleged partner in the defendant firm and wishes to dispute his status as a partner. The position is different in England where there is provision for what is described in Nuruddin's case as conditional appearance which is also sometimes called appearance under protest.

11. In the present suit the defendant has filed a written statement in which the plaintiff's allegations in the plaint had been traversed on merits in addition to the pleas as to want of jurisdiction, which pleas have been earlier set out in this judgment earlier. It appears the position in England is that this may amount to submission to jurisdiction of the Court. A similar view was taken by a Division Bench of the Rajasthan High Court in Ramanlal v. Ramgopal A.I.R. [1954] Raj. 135 where in para. 9 it was observed that when the defendant appears not only to protest jurisdiction but also pleads to the merits, such an appearance amounts to voluntary submission on his part and the fact that he has in the pleadings also protested to the jurisdiction would not detract from the principle of submission. It was held that by the conduct the defendant who pleads as to merits must be deemed to have precluded himself from objecting to the jurisdiction of the Court (see para. 9 of the report). The position appears to be well-settled by the decision of the Supreme Court in Bahrein Petroleum v. P.J. Pappu : (1966)IILLJ144SC . In the said matter the Supreme Court was dealing with an appeal from the decision of the High Court of Kerala which had, inter alia, held that the defendants had by filing a written-statement on merits waived objection as to the territorial jurisdiction of the trial Court. It was held by the Supreme Court that Section 21 of Civil Procedure Code is a statutory recognition of the principle that a defect as to place of suing may be waived and such waiver may be independent of Section 21. The Supreme Court, however, was unable to agree that the defendants by their conduct in pleading on the merits while simultaneously disputing jurisdiction of the Cochin Court could be deemed to have waived the objection as to jurisdiction of the Cochin Court. The relevant paragraph containing the observations is to be found at p. 463 of the report where Bachawat J. speaking for the Supreme Court observed:

Counsel for the plaintiff further submitted that, as a matter of fact, the defendants by their conduct have waived the objection. Though this submission found favour with the High Court, we are unable to accept it. If the defendant allows the trial Court to proceed to judgment without raising the objection as to the place of suing and takes the chance of a verdict in his favour, he clearly waives the objection, and will not be subsequently permitted to raise it. It is even possible to say that long and continued participation by the defendant in the proceedings without any protest may, in an appropriate case, amount to a waiver of the objection. But, in this case, we find no conduct of the defendants which amounts to a waiver, or which precludes them from raising the objection.

In our opinion, this authority of the Supreme Court is a complete answer to the appellant's contention that by filing a written-statement pleading to the merits of the case simultaneously with the taking of the objection as to jurisdiction, the respondent must be deemed to have waived its objection as to jurisdiction or abandoned the plea of want of jurisdiction. In view of this decision of the Supreme Court, it must be stated that the observations in favour of the appellant in Ramanlal's case are no longer good law. The question, however, remains of considering whether after the filing of the written-statement there has been long and continued participation by the Bank of America in the proceedings without any protest. It was the contention of the appellant that in a number of interlocutory proceedings the Bank of America had filed affidavits and it was urged that a number of proceedings had to be taken out because of the defendant's defaults. It was urged that in fact it was this conduct which made necessary these interlocutory proceedings and that the defendant in the circumstances could be said to fall within the principle of long and continued participation enunciated by Bachavat J, in Bahrein Petroleum' case. In these circumstances it becomes necessary to consider the various stages in the progress of the suit.

12. The plaint was lodged on June 24, 1969 and admitted on the 26th of the, said month; the summons appears to have been served on July 4, 1960 and the attorneys for the Bank of America put in their appearance on July 5, 1969. On November 14, 1969 the plaintiff-appellant took out a notice of motion for judgment for want of written-statement as the Bank of America failed to file the written-statement on or before August 2, 1969 which was the due date. This motion was taken out after correspondence addressed to the defendant's attorneys by the plaintiff requiring them to file the written-statement. In reply to this motion the assistant cashier of the defendant's Bombay branch filed an affidavit. In this affidavit it was contended that the Bank of America could not file the written-statement within the time allowed as the plaintiff had chosen to file the suit in a forum where no part of the cause of action had accrued. It was submitted that the plaintiff had filed the suit in a Court which had no jurisdiction; the result of this choice of forum, it was submitted, was that the defendant's Bombay branch had to seek instructions from Los Angeles, California, as also to obtain necessary documents from that place. Ultimately on this motion the learned Chamber Judge directed the Bank of America to file the written-statement on or before January 27, 1970; it was further ordered to pay to the plaintiff the costs of the notice of motion.

13. It appears that the written-statement was not filed by the due date and accordingly the plaintiff took out another notice of motion dated January 30, 1970. In the said notice of motion also an affidavit in reply was filed on behalf of the defendant, where it was pointed out that a copy of the written-statement had been furnished to the plaintiff before the motion was served on the defendant, but that the original thereof had been sent to San Francisco for approval. The said motion came up for hearing on February 6, 1970 when the written-statement duly affirmed was tendered and taken on file. No order was accordingly made on the motion except that the Bank of America was directed to pay the costs of the same to the plaintiff within four weeks. Thereafter the plaintiff took out the usual summons for directions prescribed by the rules in long causes. This came up for hearing before the Chamber Judge on April 24, 1970 when the parties were directed to make and file their respective affidavits of documents within eight weeks and give inspection forth-with thereafter to the opposite party; liberty was given to the plaintiff to take out appropriate proceedings by way of a chamber summons for issue of commission. The plaintiff's affidavit of documents was filed on August 26, 1970 and the Bank of America filed its affidavit of documents on April 13, 1970. It may be mentioned, however, that, subsequently two supplemental affidavits of documents were filed on behalf of the Bank dated October 31, 1974 and November 29, 1974 respectively. The plaintiff also filed a supplemental affidavit of documents dated August 25, 1975.

14. On February 14, 1974 the plaintiff took out a chamber summons for amending the plaint. In this chamber summons the defendant filed an affidavit in reply, inter alia, contending that the chamber summons was an abuse of the process of the Court. This chamber summons was made absolute by the Chamber Judge on February 22, 1974 and the plaintiff thereafter carried out the amendments on February 25, 1974. The plaintiff thereafter took out another notice of motion dated March 7, 1974 praying that the defence of the Bank of America be struck off inasmuch as the defendant had not given inspection of some of the original documents, but of photo copies thereof. The Bank of America filed an affidavit in reply to the said motion in which it had been pointed out that the original documents were with the bank's head office at San Francisco, U.S.A., from where all the original documents except certain items mentioned in para. 9 of the said affidavit had been received. According to the deponent of the affidavit, originals of the fifteen items indicated in para. 9 of the said affidavit were not sent to Bombay as the head office was unable to locate the same. On March 19, 1974. this notice of motion was dismissed with costs. Thereafter the plaintiff took out a chamber summons dated August 1, 1974 for issue of commission or letter of request, for examination on interrogatories of one Mansfield Davis, a resident of San Francisco and for viva voce of examination of his own son and one Vishwa Sharma, both of California. The interrogatories sought to be submitted to Mansfield Davis pertained to Californian law which, according to the plaintiff, would be applicable. In this chamber summons an affidavit in reply was filed on behalf of the Bank of America and in para. 1 of this affidavit it had been pointed out that it had already been submitted in the written-statement that this Court had no jurisdiction to entertain and try the suit. In the Said affidavit in reply the application for issue of commission was opposed but in para. 4 thereof it was urged further that if a commission was granted despite such opposition, the defendant corporation required its Vice-President, one Dan Deichmeister, also to be examined on commission. Before this chamber summons for issue of commission was disposed of the plaintiff had taken out a further chamber summons dated August 16, 1974 for further disclosure on the part of the defendant of forty-one documents indicated in the list annexed to the said chamber summons. In this chamber summons also on behalf of the defendant several affidavits had been filed opposing the chamber summons. Ultimately the plaintiff's chamber summons dated August 1, 1974 was disposed of by the order dated November 1, 1974 (although the date shown in the minutes is incorrectly given as October 31, 1974'). Counsel appearing on behalf of the defendant stated that he had no objection to the provisions of such laws as were indicated in para. 3 of the affidavit in support being proved by the two books referred to in para. 4 of the said affidavit, viz. (1) Parker's Uniform Commercial Code of California and (2) Dearing's California Civil Practice Codes (published by Bancroft-Whitney). This, however, was without prejudice to the defendant's contention as to the relevance and applicability of these statutory provisions to the dispute between the parties. As far as the application to examine the plaintiff's son and another person on commission to prove the plaintiff's monetary distress was concerned, no order was made on the chamber summons, but it was indicated that the plaintiff would be entitled to apply to the Court at the appropriate stage at the hearing of the suit for an adjournment to produce such evidence or for such examination and that at that time an appropriate order could be passed by the Judge hearing the long cause. In the plaintiff's chamber summons dated August 16, 1974, the defendant filed affidavits and tendered supplemental affidavits making further disclosures. An affidavit was sought to be tendered to the Court on October 31, 1974 which was found to be unacceptable and which was described in the order (which was incidentally made by me) as one 'frivolously made without any sense of seriousness or responsibility'. Certain directions as to proper affidavits to be filed were given and the defendant was ordered to pay the costs of the adjournment. The matter was further adjourned on December 6, 1974 when three affidavits made on behalf of the defendant were taken on file despite the plaintiff's objection. Ultimately on January 10, 1975 the said chamber summons was disposed of with no order thereon on the footing that the requirements indicated therein had been substantially complied with by the defendant. Certain directions were also given regarding specimen signature cards.

15. Qn July 11, 1975 the plaintiff took out a notice of motion for fixing an early date of hearing of the suit, inter alia, on the footing that he was seventy years old and not keeping good health. On this notice of motion the learned Chamber Judge on August 13, 1975 fixed the suit for hearing on November 24, 1975 and gave various directions as to further disclosure, inspection and particulars. Thereafter the suit came up for hearing for the first time on November 26, 1975. From this date it was postponed on two or three occasions and ultimately disposed of by Vimadalal J. on February 24, 1976, holding on the preliminary issue that this Court had no jurisdiction to entertain and try the suit. The suit was accordingly dismissed.

16. Now, the above summary indicates that the defendant has itself not initiated any interlocutory proceedings in the matter nor has it by application or con duct prolonged the proceedings in the sense of the postponement of the hearing of the matter. Even in some of the affidavits in the interlocutory proceedings taken out by the plaintiff the defendant reiterated the plea which it had earlier taken up in the written-statement that this Court had no jurisdiction to entertain and try the suit. The conduct of the defendant, therefore, in resisting the various interlocutory application by filing affidavits will not in our opinion amount to waiver of objection to jurisdiction. The appellant-plaintiff had applied to the Court that the suit may be placed on board for judgment for want of written-statement or that the defences may be struck off, and the defendant was bound to appear in Court and resist the application. If it had put in unsatisfactory affidavits in some of the interlocutory proceedings, it is found that it has been penalised appropriately for such conduct. The conduct of the Bank of America in not filing proper affidavits of documents or its refusal or inability to give inspection as ordered cannot be commended; but the consequence of such conduct can be penalty in costs. Such conduct, howsoever unsatisfactory, Cannot be regarded as tantamount to waiver or abandonment of the plea of want of jurisdiction.

17. In his judgment the learned single Judge also considered the question of declaration and furnishing of information under Section 592 of the Companies Act in conjunction with the plea of submission to jurisdiction. This aspect, in our opinion, is required to be considered in the proper perspective a little, later on in this judgment. But it must be pointed out here that what we are concerned with in the first branch of the argument is the question of waiver or abandonment of the plea of want of jurisdiction. The principle of submission to jurisdiction is in our opinion a different aspect of the matter which has been emphasised greatly in England because of the rule of common law conferring jurisdiction in all cases in which a defendant to an action can be served with the writ of the Court. Where such a rule exists, the aspect of submitting to jurisdiction may assume importance. Where the principles of assumption of jurisdiction are differently constituted, this aspect in our opinion may not be required to be considered with that much importance as it has been done in England. We think it appropriate to indicate briefly the position in England as some confusion has been caused by application of English principles of submission to jurisdiction to conditions in India.

18. In England at common law for actions in personam 'whoever is served with the King's writ and can be compelled consequently to submit to the decree made is a person over whom the Courts have jurisdiction'. In other words, jurisdiction depends upon the presence of the defendant in England. Once the Court has ascertained its power by service of process upon the defendant personally, it is not rendered incompetent by his subsequent departure from its jurisdiction. Order 11 and Order 65 of the Rules of the Supreme Court, 1965, may be referred to for the purpose of ascertaining the statutory principles) governing the service of process applicable in relation to all proceedings in the Supreme Court.

19. Even the mere transient presence of a person in England suffices to render him amenable to the jurisdiction of the Court. For example, if a writ is served on a Frenchman during his visit of a few hours to Brighton, an action may then be tried against him concerning a matter totally unrelated to anything that has occurred in England. This is the position in domestic law because of the procedural significance of the writ of summons, however weak may be the position of the decree passed in that action in international law. In many cases judgments given by English Courts assuming jurisdiction based on flimsy grounds might not be such judgments as would be recognised by foreign Courts. Even then, as far as common law is concerned, there would be jurisdiction to entertain and try an action provided the writ could be served on the defendant. The principle which would govern the matter in the case of an individual viz. that he is subject to the jurisdiction of English Courts if he is to be found in England is also applicable in the case of a corporation. In an 1899 decision Lord Halsbury referring to a French shipping company which leased an office in England and employed an agent there to make contracts on its behalf, tersely remarked 'They are here, and if they are here they may he served'. The critical question, therefore, is, in the case of a foreign corporation, that what is the analogous position to the physical presence which is requisite for an individual. The answer given by English law is that the only way in which an artificial entity can show its presence within the jurisdiction is by the transaction of business within that jurisdiction. To add precision to the above test the Courts have laid down two requirements: (i) that the business must have been done in England and not with England; the agent employed in England who may be a natural person or an artificial entity must have authority to enter into transactions binding upon the corporation and the agent's functions must not he merely to transmit offers abroad for acceptance or rejection by the principal; and (ii) that the agent must have operated at a fixed place of business for a definite period of time. However, neither the impermanency of the place nor the brevity of time would be sufficient to render the corporation immune from process.

20. It is in the context of this position of the English common law that the principle of submission to jurisdiction is required to he considered. In England Section 406 of the Companies Act, 1948, provides for overseas corporations to file with the Registrar of Companies the names and addresses of some one or more persons authorised to accept service of process on their behalf. This then assumes importance because in England jurisdiction depends upon service of process. In addition to this facility, the English law also recognises that a defendant may confer jurisdiction on the Court by submitting thereto and that this may be done in a variety of ways such as entry of an unconditional appearance, instructing solicitors to accept service on its behalf, commencement of action as a plaintiff and contesting the case on its merits. By these ways a defendant to an action can be said to have submitted to the jurisdiction of the Court and thereby conferred jurisdiction for the action. Further, it appears-which is not the position in India--that in England any person may contract either expressly or by necessary implication to submit to the jurisdiction of a Court to which he was not otherwise subject. This is generally done in international contracts and the party to such a contract having consented to the jurisdiction cannot afterwards contest the binding effect of the judgment.

21. The foregoing discussion, somewhat elaborate, is necessary because in our opinion there can be a misunderstanding about the nature of jurisdiction over foreign corporations exercised by English Courts. The principles, in our opinion, above set out, which govern the exercise of such jurisdiction in England, are the principles of common law, the domestic law of England, and are not principles of jurisdiction dependent upon any application by English Courts of principles of private international law.

22. It now becomes necessary therefore to consider the basic question involved in this appeal, since we are unable to accept the contention of the appellant (that the respondent-defendant can be said to have waived or abandoned its plea of want of jurisdiction or submitted to the jurisdiction by the facts here-in above mentioned. In order to substantiate jurisdiction in the Court then the appellant must show clearly that this Court had jurisdiction to entertain and try the suit de hors the concept of waiver, abandonment or submission. Before discussing this aspect further in depth, we think it would be appropriate to set out fully the provisions of Clause 12 of the Letters Patent, for this High Court which are in almost the same terms as the Letters Patent for the High Courts of Calcutta and Madras also. The said provisions read as under:

12. ORIGINAL JURISDICTION AS TO SUITS. And We do further ordain, that the said High Court of Judicature at Bombay in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immoveable property, such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly, or, in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court, or if the defendant at the time of the commencement of the suit shall dwell, or carry on business, or personally work for gain within such limits; except that the said High Court, shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Cause Court at Bombay, in which the debt or damage, or value of the property sued for, does not exceed one hundred rupees.

An analysis of this clause would show that barring certain suits specified at the end of this clause, the High Courts of Calcutta, Madras and Bombay are empowered to try the following suits in the exercise of their original civil jurisdiction, viz. (i) suits for land or other immoveable property if the land or property is situate within the local limits of the ordinary original civil jurisdiction of the High Court, and (ii) suits other than those for land (a) if the cause of action has arisen wholly within the said limits, or (b) where the cause of action has arisen in part only within the said limits, if the leave of ;the Court shall have been first obtained; or (c) if at the time of the commencement of the suit the defendant dwells or carries on business or personally works for gain within the said limits.

23. It will be appropriate also to set out the provisions of Section 20 of the Code of Civil Procedure inasmuch as in the course of the judgment of the learned single Judge an argument had been based on these provisions which are substantially in pari materia but not identical with Clause 12. Section 20 of the Code provides as under:

Section 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 I.-Where a person has a permanent dwelling at one place and also a temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he has such temporary residence.

Explanation II.-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.

24. It may be noted that under Section 20 the Court would have jurisdiction in case a part of the cause of action has arisen within its jurisdiction, whereas under Clause 12 of the Letters Patent before such a suit is filed leave of the Court is required to bo obtained. Further, judicial interpretation has established that part of the cause of action within the meaning of Clause 12 of the Letters Patent must be a material part of the cause of action, otherwise leave should ordinarily be refused. Similarly the further provision in Explanation II which is found in Section 20 is not found in Clause 12 of the Letters Patent. The other difference is that' for exercise of the jurisdiction of the Court, Clause 12 talks of the defendant dwelling within the jurisdiction, whereas Section 20 of the Code requires the defendant to actually and voluntarily reside.

25. An analysis of the impugned judgment of the learned single Judge shows that the learned Judge was of the opinion that Clause 12 of the Letters Patent, which governs the jurisdiction of the three High Courts of Calcutta, Madras and Bombay, and Section 20 of the Code of Civil Procedure, embody provisions of municipal law dealing only with, domestic jurisdiction of Courts in this country and had nothing to do with the suits against the defendant which was a foreign (Corporation and where the cause of action had not accrued even in part within the limits of jurisdiction of this Court and had admittedly arisen wholly outside India. Accordingly he was of opinion that such jurisdiction, if any, will have to be sought for in the principles of private international law as arc properly applicable in India by the Indian Courts. Thereafter the learned Judge, after referring to standard works on private international law and conflict of laws such as Graveson, Cheshire and Dicey, came to the conclusion that private international law is not the same in all countries, there being no one system that can claim universal recognition. The learned Judge further opined that the principles of jurisdiction adopted in England for governing such a case were peculiar to England and could not be applied by Indian Courts and, therefore, came to the conclusion that he was required to evolve the proper rule to be applied in this country as a rule of private international law in cases in which a foreign company i.e. a company incorporated in a foreign country is sought to be sued in respect of a cause of action that has arisen wholly outside India as in the present case. He then considered the basis of such a rule, which, according to him, should be a rational one and not one that might lead to injustice, that it should be which would command recognition in foreign countries; and keeping these approaches in mind he held that the proper rule to be evolved and applied in the ease of the present suit would be to hold that a foreign corporation which has merely an office within the jurisdiction of the Court cannot be sued in that Court except in case where the cause of action has arisen wholly or in part at the place where such office is located. He also expressed the opinion that the fact that the office in question may have been registered with the Registrar of Companies as the principal place of business of such foreign corporation in India under Section 592(1) of the Companies Act, 1956, would make no difference. It falls to us therefore whether the steps taken by the learned single Judge in evolving the rule are correct and ultimately whether that rule commends itself for acceptance and application. The basic question, according to us is whether the learned single Judge is right in holding that Clause 12 of the Letters Patent and Section 20 of the Code of Civil Procedure only embody the rules of municipal law for regulating the internal domestic jurisdiction of the Court and would not apply to cases involving foreign elements viz. foreigners including foreign corporations.

26. It appears that the learned single Judge in the view that he took found support in the decision of a single Judge of the Madras High Court (Venkataraman J.) in Anant Narayan v. Massey Ferguson, Ltd. [1965] I Comp. L.J. 269 where it was observed that 'the criteria prescribed in Clause 12 of the Letters Patent governing jurisdiction of this Court are primarily intended to demarcate the sphere of jurisdiction of this Court and the subordinate Courts in this State or of other Courts in this country and are not directed to the determination of the jurisdiction from the international point of view'. In the said Madras case the plaintiff brought a suit in the High Court of Madras for damages for breach of contract of lifetime service and for wrongful dismissal against two foreign companies; defendant No. 1 was Massey Ferguson Ltd., Toronto, Canada, and the defendant No. 2 was Massey Ferguson (India) Limited, 12, McLean Street, Madras 1. The defendant No. 1 company was incorporated in Toronto and the defendant No. 2 company in the United Kingdom. It was the admitted position that upto 1960 the plaintiff had received training in Canada and had worked for the defendant companies at various places in India. In 1960 the Canadian company of which the United Kingdom Company was a 'part' evolved a plan to start a new company to be registered in India to manufacture Massey Ferguson Products. Almost all the permanent employees of the defendant No. 2 company excepting the plaintiff and some others were absorbed by the newly formed company and the plaintiff's services were terminated by a notice dated November 30, 1960 with effect from January 1, 1961. The defendant No. 2 company shifted their office to Madras with effect from March 3, 1961, which had been only notified to the Registrar of Companies as the principal place of business in India and they had also made a declaration under Section 592(1)(d) of the Companies Act, 1956, naming M/s. Fraser and Ross, at No. 12, McLean Street, Broadway, Madras-1, as persons resident in India authorised to accept service of process and other notices or documents on their behalf. It was held by the learned single Judge of the Madras High Court that the furnishing of the address at Madras as the principal place of business of defendant No. 2 company in India and the name of M/s. Fraser and Ross in Madras as the persons authorised to accept service of process on behalf of defendant No. 2 company under Section 592(e) and (d) was sufficient to confer jurisdiction on the High Court of Madras according to the Rules of Private International Law so far as defendant No. 2 was concerned, and that by registering the principal place of business in India and furnishing of the name of Messrs. Fraser and Ross in this manner, the defendant No. 2 company bad in advance submitted to the Jurisdiction of the High Court and such submission would clothe the Court with jurisdiction in the international sense. Applying the rules of private international law and the provisions of Sections 592 to 596 of the Companies Act, it was held that the defendant No. 2 company was present in Madras. It was further held that defendant No. 2 had pleaded on merits also and had accordingly submitted to the jurisdiction. In our ease the learned single Judge appears to have accepted the reasoning of the learned single Judge of the Madras High Court as far as the first step is concerned viz. that in such case jurisdiction had to be sought for in the principles of private international law and provisions of Clause 12 of the Letters Patent (as also of Section 20 of the Civil Procedure Code) were not available, these provisions being only concerned with the internal regulation of domestic jurisdiction.

27. Apart from the Madras case where the main attempt on the part of the plaintiff's counsel was from the outset to sustain jurisdiction not so much on the provisions of Clause 12 of the Letters Patent but on the ground of the rules of private international law relating to foreign companies as defendants, the learned single Judge whose decision is questioned before us in this appeal was of the opinion that to hold that Clause 12 of the Letters Patent and Section 20 of the Civil Procedure Code apply to foreign corporations would lead to a curious result that there would be two different rules of private international law on that point-one for the chartered High Courts and the other for the remaining Courts in this country. In our opinion, at various points the provisions of the Letters Patent diverge from the provisions to be found contained in the Code of Civil Procedure. For example, what is an appealable decision or order under the Civil Procedure Code is not necessarily one under Clause 15 of the Letters Patent; and we find nothing curious if the Legislature confers different jurisdiction for High Courts in the Presidency Towns, which jurisdiction is different or distinct from the jurisdiction conferred on other civil Courts. As pointed out earlier, even as regards confernment of jurisdiction by reason of the part of the cause of action accruing within the limits of the territorial jurisdiction of the Court, the provisions are materially different. For the High Court part of the cause of action which has accrued within its jurisdiction has been judicially interpreted to mean material part of the cause of action; and further even if a material part of the cause of action has arisen within the limits of its territorial jurisdiction, a plaintiff does not automatically get the right of preferring a suit in the Chartered High Courts. He has to obtain leave, which on the plain reading of the words of Clause 12 of the Letters Patent has to be obtained before the action is initiated. These are different provisions for different Courts and no curious result can be said to occur by reason of such difference whether in respect of cases concerning Indians or Indian corporations or cases involving foreigners and foreign corporations. As explained earlier, the principles governing jurisdiction of Courts in England for action in personam which have been dealt with in some detail properly regarded are principles of common law i.e. the principles of domestic law of England and not rules of private international law. The other argument on the basis of which the learned single Judge, whose decision is impugned in this appeal, gives a limited or restricted application to Clause 12 is on the footing where he considers an order for returning of the plaint which could be made under Order VII, Rule 10 of the Code of Civil Procedure. According to him, such an order for the return of plaint can be made under this provision only in cases in which the proper Court to which the plaint is to be represented is situate in this country. Now the plain words of Order VII, Rule 10 of the Code of Civil Procedure do not warrant any such conclusion. The plaint is to be returned to the plaintiff who may then file it in the appropriate Court or not. It is not necessary nor required by the 'wording of that rule to indicate the Court in which the plaint is required to be filed. The return is further to the party and the Court is not required to transfer the pleading to a Court, which, in the opinion of the Court ordering the return, is the appropriate Court. There is good reason for the absence of such provision. It may be that the Court passing the order may not have jurisdiction; but there may be two or three Courts in which the plaintiff may have the choice to refile the suit. That discretion must be left to the plaintiff. Further, the plaintiff may choose not to refile the suit in the appropriate Court as it would not be convenient for him to file the suit in that Court. He may even give up a good claim on account of considerations of inconvenience or because of lapse of time. It appears to us that the learned single Judge was in error in holding that an order for return of the plaint under Order VII, Rule 10 could only be made in cases where the proper Court to which the plaint is to be presented was situate in India.

28. In this connection it will be appropriate to refer to some authorities in which the effect of the principles of international law has been considered visa-vis the domestic or municipal law. The position was adverted to by the Privy Council in Sirdar Gurdyal Singh v. Rajah of Faridkote (1894) L.R. 21 I.A. 171. The observations at p. 185 of the report would show that a decree can be passed in the country of the forum by which it was pronounced if it is so authorised to do by local legislation, although such a decree may be regarded as a nullity by the Courts of every nation except that of the forum where the decree was pronounced.

29. The Supreme Court had occasion to consider this aspect of the matter in Viswanathan v. Abdul Wajid : [1963]3SCR22 . The Supreme Court in that decision was considering Section 20 of the Mysore Code of Civil Procedure which is pari materia with Section 20 of our Code of Civil Procedure, and Shah J. speaking- for the Court observed as follows with reference to the rules providing for jurisdiction of the Courts (p. 16) :

Undoubtedly, these rules deal with the territorial jurisdiction of courts in respect of all suits other than those relating to immovable property or for recovery of movable property under distraint or attachment. But in their application they extend to all persons whether domiciled or not within jurisdiction. Section 20 of the Code extends the jurisdiction of the courts to persons or transactions beyond the territorial limits of the courts. Such jurisdiction in personam which transcends territorial limits is conferred on the courts by the law-making authority of many States.

30. It was further observed (p. 16) :there is no general rule of private international law that a court can in no event exercise jurisdiction in relation to persons, matters or property outside jurisdiction. Express enactment of provisions like Section 20, Civil Procedure Code, Act V of 1908 and Order XI, Rule 1 of the Supreme Court Rules in England, negative such an assumption. The courts of a country generally impose a threefold restriction upon the exercise of their jurisdiction: (1) jurisdiction in rem (binding not only the parties but the world at large) by a court over res outside the jurisdiction will not be exercised, because it will not be recognised by other courts; (2) The court will not deal directly or indirectly with title to immovable property outside the jurisdiction of the State from which it derives its authority; and (3) Court will not assist in the enforcement within its jurisdiction of foreign penal or revenue laws.

31. It would appear to us that in the circumstances the question whether or not this Court has jurisdiction to entertain and try this suit would be required to be governed by considering whether it falls within the limits of jurisdiction prescribed by Clause 12 of the Letters Patent, and such jurisdiction cannot be sought with reference to any principle of private international law, English or otherwise. It appears further that the plain words of Clause 12 of the Letters Patent (and this observation would equally seem to apply to Section 20 of the Code of Civil Procedure) cannot be restricted or limited (or even their ambit enlarged) by reference to principles of private international law or similar considerations. If the Legislature acting within the sphere of its competence has enacted a legislation conferring jurisdiction, then it would be improper to refuse to exercise such jurisdiction on the supposed ground that a decree passed against a non-resident foreigner or a foreign corporation may not be recognised or given effect to by foreign Courts. Domestic legislation in this sense is not subject to principles of international law. Such consideration as the principles of international law can at the highest afford only a useful principle of interpretation where the provisions of law are ambiguous and uncertain, if the provisions of domestic law are clear and unambiguous, then the Court must give effect to it and cannot moderate or bend the legislation to render it in conformity with what the Court considers the proper rule of international law. The question then arises for consideration viz. whether the defendant is liable to be sued in respect of the cause of action arising wholly outside India and for this the plaintiff would be entitled in our opinion only to rely on the third category which we have enunciated whilst analysing Clause 12 of the Letters Patent and that part of it viz. that the suit may be filed on the Original (Side of this High Court since the defendant carries on business within the limits of the ordinary original civil jurisdiction of this High Court. It becomes necessary now to examine whether this contention is correct or not, and we may immediately refer to two decisions of the Bombay High Court which, in our opinion, throw considerable light on the correct position in law.

32. In Kessowji Damodar Jairam v. Khimji Jairam I.L.R. (1888) 12 Bom. 507 the view was taken by the learned single Judge (Scott J.) that Clause 12 of the Letters Patent was required to be read in the light of the general principles of municipal jurisdiction and all legislation was prima facie territorial. In the light of these observations the words 'if the defendant... shall... carry on business' occurring in Clause 12 were interpreted to mean 'if the defendant being a British subject... shall... carry on business'. It was further observed that where the liability of a foreigner was in question, the 'carrying on business' must include actual residence. Applying this principle it was held that a person not a British subject residing out of the jurisdiction but carrying on business at a branch in Bombay through an agent was not liable to be sued in the High Court at Bombay where the cause of action had arisen wholly outside the jurisdiction, These principles enunciated in Kessowji's case certainly lay down the principles which could be availed of by the defendant and had that decision stood, the defendant could have certainly relied upon it for the support of its contention that the same principle as was made applicable to a foreigner should be applied to a foreign corporation and such a corporation was not liable to be sued in Bombay in respect of the cause of action which had wholly arisen outside Bombay. It appears, however, that subsequently a Division Bench of this High Court in Girdhar Damodar v. Kassigar Hiragar I.L.R. (1893) 17 Bom. 662 did not find the earlier decision as laying down good law. In Girdhar Damodar's case the Division Bench of the Bombay High Court was considering the provisions contained in h. 18 of the Presidency Small Cause Courts Act (15 of 1882), which provisions are very similar to the provisions of Section 20 of our Code of Civil Procedure with slight differences. It was observed in the said case that although it is true that a non-British subject, who does not personally carry on business within the territorial limits of the Court, does not make himself personally subject to the municipal law of British India, still, by establishing his business in British India, from which business he expects to derive profit, lie accepts the protection of the territorial authority for his business and his property resulting from it, and may be fully regarded as submitting to the Courts of the country.

33. Now it is clear from the decision that both the Judges were dealing with Clause (b) of Section 18 of the Small Cause Courts Act and the judgment therefore was not based on consideration of the accrual of the cause of action. In his separate but concurring judgment Starling J. with unusual clarity had laid down the approach, which approach has appealed to us and which is contrary to the approach followed by the learned single Judge whose decision is impugned in the present appeal before us, and of the learned single Judge of the Madras High Court viz. Venkataraman J. Starling J. observed (p. 668):

Now it seems to me that, in this case, we have nothing to do with questions of international law. All we have to do is to determine whether the defendant is a person against whom the Legislature has permitted a suit to be filed in the Courts of this country, in which a decree can be passed and executed in this country against the property of the defendant within the jurisdiction, and against his person if he comes within the jurisdiction; and I am of opinion that the defendant, who admittedly has a firm in Bombay in which he carries on business through his munim, is such a person.

34. Mr. Bhatt on behalf of the respondent-defendant referred us to observations to be found in Annamalai Chetty v. Murugasa Chetty (1903) L.R. 30 I.A. 220 :5 Bom. L.R. 494 are to be found the observations on which reliance was placed and these are as follows:

In both Courts in India it was apparently assumed that the question of jurisdiction turned on Section 17 of the Code of Civil Procedure, and that although the defendant was a foreigner, and although the cause of action arose in a foreign country, and although the defendant did not personally reside within the local limits of the jurisdiction of any Court in British India, and was not even temporarily in Arcot when sued there, yet he could be sued in the Arcot Court if he carried on business through an agent in the local limits of that Court's jurisdiction.

This assumption appears to their Lordships to require more attention than it has received.

As far as the case of Girdhar Damodar was concerned, it was observed that the same was correctly decided; but, according to the Privy Council, this was because the cause of action had arisen within the local limits of the jurisdiction of the British Indian Court in which the action was brought. 'With respect, it may be pointed out that this aspect is not touched in the decision of either of the Judges of the Bombay High Court in Girdhar Damodar v. Kassigar Hiragar.

35. Mr. Bhatt urged us to follow the observations of the Privy Council and reconsider the case of a foreign corporation which was sought to be sued in respect of the cause of action arising outside India. According to his submission, these observations in Annamalai Chetty v. Murugasa Chetty clearly establish that the decision in Girdhar Damodar v. Kassigar Hiragar had kept the question open and had not decided it in favour of the appellant as Mr. Andhyarujina wishes us to consider. According to Mr. Andhyarujina, the observations made in Girdhar Damodar v. Kassigar Hiragar with respect to the position of a foreigner, a natural person, were equally applicable to an artificial person, a foreign corporation viz. the respondent-defendant before us. If such a corporation chooses to carry on business within the jurisdiction of this Court by having a branch office situated within such jurisdiction, then, according to Mr. Andhyarujina, such fact was sufficient to bring it within the scope of jurisdiction conferred on this Court by Clause 12 of the Letters Patent; the factum of carrying on this business was independent of the accrual of the cause of action and sufficient in itself, according to the learned Counsel, to confer jurisdiction on this Court to entertain and try the suit.

36. It may be pointed out that the view which we have taken of Girdhar Damodar's case is identical with the view expressed by the Division Bench of the Madras High Court about that ease in Janoo Hassan v. Batchu Kamandu A.I.R. [1924] Mad. 158. It is expressly observed by the Division Bench in the said case that the case which was decided by the Division Bench of the Bombay High Court under the Bombay Small Cause Courts Act must apply to a case concerned with the Letters Patent since the words of the Act and of the Letters Patent are identical. It was further observed that the decision in Girdhar Damodar's case was correct and the earlier case of Kessowji Damodar must be considered to be overruled by the subsequent Division Bench decision. In the above Madras ease it is indicated that the word 'defendant' cannot be differently construed for different parts of the clause of the Letters Patent arising for consideration before that Court.

37. It may be pointed out before leaving this aspect of the matter that in Chunnilal v. Dundappa : AIR1951Bom190 a Division Bench of this Court referred to Girdhar Damodar's case and Annamalai Chetty's case and held that the Division Bench decision in Girdhar Damodar v. Kassigar Hiragar was good law. There are also observations in this latter judgment of the Bombay High Court which may be referred to. It has been observed that the competency of a Court to try a suit had to be determined by the municipal law and from the observations of Lord Esher M.R. in Companhia De Mocambique v. British South Africa Co.: De Sousa v. Same [1892] 2 Q.B. 358 the following words were referred to with approval; the passage quoted at page 192 of the report in Chunnilal's case reads as follows:

'The question, whether the Courts of a nation will or will not entertain jurisdiction of any dispute, is to be determined exclusively by the nation itself-i.e., by its municipal law. If by express legislation the Courts are directed to exercise jurisdiction, the Courts must obey. If there is a proper inference to the same effect, the result is the same.'

Reference was also made to an Allahabad case in Baroda State By. v. Habib Ullah : AIR1934All740 where it was observed that if the case fell within the plain words of Section 20 of the Code of Civil Procedure, the Court must exercise jurisdiction and whether sanctity will attach to its decree as far as a foreign Court is concerned was a different question. The same observation would seem to apply to the jurisdiction conferred by Clause 12 of the Letters Patent.

38. We may now examine the authorities which were cited at the bar. In Guardian Assurance Co. v. Shiva Mongol Singh : AIR1937All208 a Division Bench of the Allahabad High Court had occasion to consider Clause 12 of the Letters Patent. One of the questions arising for consideration before the Allahabad High Court was whether the appellant before it viz. the Guardian Assurance Co. Ltd. was carrying on business in India within the meaning of Clause 12 of the Letters Patent of that High Court. It had rented premises in Calcutta and separate account books were maintained in respect of the business of the company in Calcutta. It was observed further that the company had an agent in Calcutta who had been authorised under a duly executed power of attorney to accept insurance proposals, issue cover notes and policies and to pay all claims. Even on these facts it was contended on behalf of the company that the law as regards the residence and the carrying on of business by corporations is different from the law applicable to ordinary business people. The contention was that a corporation could carry on business only where it dwells and that a corporation can dwell only at the place at which its directors hold their meetings and carry on the principal business of the corporation. It was found by the Court that the appellant company had got itself registered under Section 277 of the Indian Companies Act (corresponding to Section 592 of the Companies Act, 1956). It was observed that the provisions of the Companies Act recognised the obvious fact that foreign companies may carry on business in India. On these considerations it was held by the Allahabad High Court that the Guardian Assurance Company Ltd. was carrying on business at its office at Calcutta.

39. A somewhat similar question arose for consideration before the Punjab High Court in The Frontier Bank, Ltd. v. Shrimati Prakash Wati Bahl [1955] Punj. 633. The Court was considering the question of jurisdiction and observed as under (p. 636);

Broadly speaking, the power to determine the place at which a particular class of actions should be tried vests exclusively in the Legislature. To put in a slightly different language, the right or privilege of resorting to the Courts of one country for the enforcement of a cause of action arising in another country depends upon the municipal law of the country where the suit is brought. Sections 15 to 20 of the Code of Civil Procedure regulate the forum for the institution of suits in this country. Sections 16 to 18 deal with suits relating to immovable property and suits relating to mixed actions, Section 19 deals with suits for compensation for wrongs to persons or movables, and Section 20 with other suits. Section 20 declares in unambiguous language that every suit shall be instituted in a Court within the local limits of whose jurisdiction either the defendant voluntarily resides or carries on business or works for gain or within, the jurisdiction of a Court within the local limits of which the cause of action, wholly or in part, arises. The legal consequences which flow from these provisions are-(1) that a Court has jurisdiction to entertain a suit if the cause of action arises within the local limits of the jurisdiction of the Court, even if the defendant does not reside within such limits; and (2) that a Court has jurisdiction to entertain a suit if the defendant carries on business within its jurisdiction even if the cause of action arises outside it.

In the ease before the Punjab High Court the cause of action had arisen in Pakistan. In spite of this admitted position it was held that the suit was maintainable in Delhi inasmuch as the defendants were carrying on business in Delhi. It must be observed, however, that the New Delhi office of the Bank was their sole office in India. Again, it is possible to distinguish this case as Mr. Bhatt has sought to do on the footing that this was not a case of a foreign corporation, His argument proceeded upon the footing that the jurisdiction conferred by Clause 12 of the Letters Patent was not sought to be applied to foreign corporations or, at any rate, to foreign corporations where the cause of action had also accrued outside India.

40. A single Judge of the Calcutta High Court, Bijayesh Mukherji J., had occasion to consider a similar question in Babulal Choukhani v. Caltex (India) Ltd : AIR1967Cal205 . After considering the provisions of Section 20 of the Code of Civil Procedure and Clause 12 of the Letters Patent, it was observed that the deeming provisions to be found in Explanation II to Section 20 of the Code were not relevant to consideration of exercise of jurisdiction under Clause 12 of the Letters Patent inasmuch as these provisions were excluded from application to the High Court in the exercise of its original civil jurisdiction by reason of Section 20 of the Code of Civil Procedure. The learned single Judge of the Calcutta High Court was considering a suit for money claim filed in that High Court against Caltex (India) Ltd., which was admittedly a foreign corporation. The third category of Clause 12 of the Letters Patent as we have analysed earlier was the only category for consideration before the learned single Judge of the Calcutta High Court. He found that the defendant corporation did carry on business in Calcutta when the suit was instituted. He further observed that although the general supervision was from the head office at Bombay, it did not mean that the head office alone carried on business at Bombay and the Calcutta office did not. He further observed that as there was no provision such as Explanation II to be found in Clause 12 of the Letters Patent, Caltex carried on business in Bombay, Calcutta or in as many places as their business enterprise takes them to. According to the learned single Judge, 'Not to hold so would be to shut one's eyes to the plain reality to be seen'. The learned single Judge also referred in this connection to the earlier Division Bench judgment of the Calcutta High Court in Peoples Insurance Co, v. Benoy Bhusan : AIR1943Cal199 . It was observed in this decision that once it was established that the corporation had got a branch office at any place, it must be deemed in the eye of law to carry on its business at that place irrespective of the nature of the work that was actually carried on there. These observations although uttered in connection with a case arising under the Code of Civil Procedure would seem to be equally apposite to a case under Clause 12 of the Letters Patent. It may be mentioned that Babulal Choukhani's case was cited before the learned single Judge below and, according to him, since in that ease the whole cause of action had arisen in Calcutta itself, the case could be distinguished and had no application to the question arising for consideration before him. With respect, it must be stated that if it had been found by the learned single Judge of the Calcutta High Court that the entire cause of action had arisen within the limits of the ordinary original civil jurisdiction of the Calcutta High Court, then the entire discussion to be found in paras. 15 to 28 of the report would be obiter and unnecessary. It appears to us that the learned single Judge was directly considering this aspect of the matter only and the argument which had been advanced before him was that the suit ought to have been filed in Bombay. He was also required to consider directly the question whether the defendant corporation carried on business in Calcutta, since jurisdiction was sought to be conferred on the Court only by reason of that consideration. It appears to us that jurisdiction was required to be considered on this footing because it could not be said that the whole cause of action had arisen and that if it was held that only a part of the cause of action had arisen, then the leave of the Court had not been taken, so that the Court was required to consider jurisdiction only on the footing whether the defendant corporation carried on business at Calcutta or not.

41. Mr. Bhatt during the course of the arguments referred us to observations in a recent decision of the Supreme Court in Satya v. Teja Singh : 1975CriLJ52 . These observations, which need not be set out in full, would appear to suggest to us that once we accept the first step taken by the learned single Judge that the matter is outside the purview of Clause 12 of the Letters Patent, then perhaps it must be held that the subsequent steps taken by him were correct and he was right in departing from the learned single Judge of the Madras High Court who applied the English principles of jurisdiction which were obviously not applicable to India. As observed by the Supreme Court in Satya's case, private international law is not the same in all countries and there is obviously no system of private international law which can claim universal recognition. As indicated by Chandrachud J. speaking for the Court, our country must have its own system of conflict of laws; that the Indian Courts could not therefore adopt mechanically each rule of private international law followed by other countries; and that in an appropriate ease, therefore, the step taken by the Court of law in rejecting the principles of private international law as recognised and applied in England and evolving a proper principle of private international law would be required to be upheld. We are also in agreement with Mr. Bhatt's argument that if this is required to be done, the appellate Court should not easily set aside the principle evolved by the learned single Judge unless it is able to evolve a better principle, a more reasonable and more just principle. In all these aspects of the matter we are inclined to agree with the submissions of Mr. Bhatt. It has not been demonstrated to us, if principles of private international law were required to be applied, that there is a well-settled principle of Indian private international law which would govern the case, nor are we satisfied that the learned single Judge has evolved a principle of private international law which is improper in the sense that a more reasonable, more rational and a more just principle commends itself for acceptance. However, we find difficulty only in agreeing with the first step of reasoning which commended itself to Vimadalal J. In our opinion, the problem arising for consideration before us is principally the problem of application of municipal law enacting provisions regulating the jurisdiction of this Court and not the problem of application of any principle or provision of conflict of laws. This case which has come up for consideration and the question of jurisdiction which is directly involved is required to be decided only in accordance with Indian law i.e. in accordance with the provisions contained in Clause 12 of the Letters Patent.

42. What then is the result of the foregoing discussion In our opinion, the correct legal position may be stated as follows:

1. The jurisdiction of a Court taking cognizance of a civil case in India is to be found in Clause 12 of the Letters Patent for the High Court of Bombay (and in similar provisions for the other High Courts having their respective charters) and in Sections 15 to 20 of the Code of Civil Procedure and nowhere else. It is not possible to accept the view that Clause 12 and Sections 15 to 20 merely demarcate the sphere of jurisdiction of this Court and the subordinate Courts within the country and are not directed to the determination of the jurisdiction from the international point of view. In this view of the matter we differ from the view taken by the learned single Judge of the Madras High Court in Anant Narayan's case, which approach also commended itself to the learned single Judge below.

2. The plain words of Section 20 of the Code of Civil Procedure or Clause 12 of the Letters Patent cannot be restricted or limited (and perhaps also given an enlarged ambit) by recourse to principles of private international law or similar considerations. If these provisions confer jurisdiction expressly or by necessary implication, then it would not be proper for a Court of law not to exercise the same on the ground that the decree passed pursuant to the jurisdiction may not be recognised or given effect to by foreign Courts or even on the ground that such a decree would be a nullity by reason of some principle of private international law. In other words, if the Legislature acting within its admitted sphere of competence and without any conflict with the fundamental law i.e. the constitutional law, enacts legislation, the Courts are bound to give effect to the same and cannot refuse to follow the same on the basis that such legislation is in contravention of the generally accepted principles of private international law. Such considerations can at the highest afford only a useful principle of interpretation when the law enacted by the Legislature, which law the Courts are bound to obey, is ambiguous or capable of more than one interpretation. Judges when attempting to ascertaining the meaning to be given to a legislative enactment will ordinarily presume that the Legislature did not intend to violate the doctrine of international law, public or private, and will therefore wherever possible give such interpretation as to make the enactment consistent with such doctrine. Where, however, the language of the statute is clear and does not admit of any ambiguity or more than one interpretation, the Court must give effect to the statutory provision as it stands notwithstanding the fact that these provisions will run against the commonly accepted doctrines of international law.

3. The word 'defendant' occurring in Clause 12 of the Letters Patent or in Section 20 of the Code of Civil Procedure must be given its proper meaning and would include within its compass both natural and artificial persons i.e. living beings as well as corporations and no distinction is made in law between corporations as are incorporated in India and corporations as are incorporated outside India i.e. foreign corporations.

4. Under the last part of Clause 12 of the Letters Patent a suit can be brought on the Original Side of this Court if the defendant at the time of institution of the suit dwells or carries on business or personally works for gain within the limits of such original jurisdiction of this High Court. For consideration of jurisdiction Under this head, the consideration whether the cause of action has accrued wholly or in part within or without the limits of the said jurisdiction is wholly irrelevant.

5. In this part of Clause 12 of the Letters Patent a clear distinction has been made between carrying on of business and working for gain. In the latter case the legislative requirement is that the defendant should personally work for gain, whereas no such requirement is postulated for the carrying on of business. It means therefore that the defendant may carry on business himself or through an agent or agents.

6. We are concerned here with a defendant having a branch office within the limits of the jurisdiction of this High Court. It was submitted that the defendant could carry on business only at its principal office i.e. the Head Office at San Francisco, U.S.A., where there exists their Board of Directors which can take final decisions. It was submitted that it was only this place that the defendant could be said to be carrying on business. It is impossible to accept this restrictive meaning which has not found favour with either the High Court of Allahabad or the High Court of Calcutta.

7. Whether the defendant carries on business within the limits of the jurisdiction of a Court is a question of fact. Where an allegation to this effect is made in the plaint and properly traversed by the defendant in the written statement, the onus of proving such allegation would be on the plaintiff, though the defendant would be required to prove the facts as may be deemed to be within his special knowledge. If there is a proper denial of such allegation, then the answer to the issue of jurisdiction may b required to be given after necessary evidence is taken. However, for the purpose at considering this question it is not required that at the place which is within the jurisdiction of the Court there must be some person or agency not subject to supervision or regulation from outside. All that is required is whether within the limits of jurisdiction of this Court is the defendant by itself or through its agent carrying on all or some of the business which it does? In the instant case the defendant has a full-fledged branch within such jurisdiction, at which branch banking business is carried on. The defendant has not chosen to indicate in its pleadings or led any evidence, apart from the general argument indicated above, why such branch should not be regarded as the defendant itself carrying on business within the limits of the jurisdiction of this Court. This branch may be subject to supervision and control from the regional office or even from the Head Office. This branch cannot control the defendant corporation in the sense that the Board of Directors or the Head Office does; but that in our opinion is not required to bring the case within the third part of Clause 12 of the Letters Patent i.e. in order to answer the question whether the defendant carries on business. The branch obviously is not a forwarding agency in the sense that it collects proposals or questions for consideration of some outside agency, which outside authority takes the decision. It carries on banking business within the limits of the jurisdiction of this Court, and normally this is sufficient; whether it does so in two rooms or an entire flat or an entire building would seem to make no difference.

8. In the view that we have taken, the proceedings taken under Section 582 of the Companies Act by registering certain details with the Registrar would at the highest have merely an evidentiary value. As indicated earlier, the principle of submission to jurisdiction and the common law principle that the Court would have jurisdiction to entertain an action where a writ can be served on the defendant cannot be accepted and applied in India. It is possible to hold, however, that where a foreign corporation has made the necessary registration under Section 592 of the Companies Act with all attendant formalities, it would be easy to answer affirmatively the question whether it does carry on business at the place in respect of which the necessary registration has been made under Section 592(1)(e). As far as the requirement of Explanation II to Section 20 of the Code of Civil Procedure is concerned, such a declaration would appear to be conclusive of the question and normally no question would arise of any evidence being allowed to be led on the question whether the place indicated in the registration as the principal place of business in India is in fact such principal place or not.

9. As a necessary corollary to what is stated above, in our opinion, apart from this evidentiary value, registration under Section 592 of the Companies Act and in particular the furnishing of the names and addresses of the persons on whom the process may be served, would not confer jurisdiction and cannot be deemed to restrict or enlarge the ambit of jurisdiction of civil Courts either under Clause 12 of the Letters Patent or under Section 20 of the Code of Civil Procedure. This is because of the view that has found favour with us that the principle of submission to jurisdiction enunciated by English Courts is not the proper principle to be followed in this country. In our opinion, we have to seek jurisdiction in Clause 12 of the Letters Patent or in Section 20 of the Code of Civil Procedure and apart from these provisions the only other aspect required to be considered is whether the defendant can be considered to have waived or abandoned its plea of want of jurisdiction. The latter aspect of the argument would substantially be an aspect of the principle of estoppel.

10. Explanation II to Section 20 of the Code of Civil Procedure must in these circumstances be construed as plain words of limitation designating one place out of many where a corporation which may be carrying on business at several places may be sued irrespective of the accrual of the cause of action. Under Section 20 read together with Explanation II, a corporation can be sued only at its principal place of business in India or at all other places of business i.e. where it carries on business provided the cause of action has arisen at such place.

The application of the principles above enunciated causes no difficulty in the instant case. In the paragraphs of the plaint and in the title it has been averred that the defendant has a branch in Bombay. It has been admitted in the written-statement that this branch office in Bombay carries on its banking business. If the defendant then carries on its banking business within the limits of the jurisdiction of this Court and no other special fact has been pleaded in the written statement or sought to be proved before the learned single Judge, it would appear to us that the question whether the defendant carries on business in Bombay must be answered in the affirmative. The fact that this branch office which is within the limits of the jurisdiction of this Court has been designated as its principal place of business in Bombay would put the issue beyond any controversy. It must be held by reason of the pleadings, by reason of the failure of the defendant to prove any further fact and by reason of the registration under Section 592(1)(e) of the Companies Apt that the defendant carries on business within the limits of the original jurisdiction of this Court. If that is so, then in our view there is no warrant for restricting the word 'defendant' in Clause 12 of the Letters Patent to Indian citizens or natural persons who reside within the limits of this jurisdiction or Indian corporations. In the facts and circumstances of the case, the express words of Clause 12 of the Letters Patent confer jurisdiction on this Court and this jurisdiction cannot be refused to be exercised on the basis that any decree passed pursuant to this jurisdiction may not be given effect to or recognised as valid by foreign Courts.

43. In the result the decision of the learned single Judge answering the preliminary issue in the negative and against the plaintiff-appellant is required to be set aside. In our view the said preliminary issue has to be answered in the affirmative. It is accordingly so answered and it is held that this Court has jurisdiction to entertain and try the suit. In the view that we have taken, the further trial of the suit will have to be proceeded with. The matter was expedited by Madon J. on the plaintiff's notice of motion and in view of that order the suit will have to be given precedence over earlier suits matters. We accordingly direct that the suit be placed on the board of the learned Judge taking long causes on August 23, 1976 for fixing such date of further hearing as may appear to be appropriate in the circumstances of the case.

44. The appellant has submitted that by reason of the provisions contained in Section 15 of the Bombay Court-fees Act, 1959 (Act 36 of 1959), the appellant is entitled to an appropriate order authorising him to receive back the full amount of fees paid on the memorandum of appeal. Section 15 of the said Act talks of rejection of the plaint. Rejection of plaints is dealt with in Order VII, Rule 11 of the Code of Civil Procedure, whereas Order VII, Rule 10 of the said Code talks of return of plaints. It is pertinent, however, to note that Section 15 of the Bombay Court-fees Act does not restrict the eases of rejection of plaints only to cases falling within the provisions of Order VII, Rule 11 of the Code. It has been held even under Order VTI, Rule 11 that the grounds of rejection given in Rule 11 are not exhaustive. It would appear to us that the word 'rejected' in Section 15 of the Bombay Court-fees Act must be given a natural and wide meaning and not an. artificial meaning as may lie indicated by the provisions contained in Order VII, Rule 11. This is particularly because the suit in the appeal before us was dismissed on the preliminary ground viz. one of jurisdiction from which the plaintiff had to file this appeal on payment of full Court-fees which are over Rs. 7,000. It would not be fair to the appellant or to the respondent, who otherwise may have to reimburse the amount of Court-fees to the successful appellant, not to make an order for refund of this Court-fee if justified by the words of Section 15 of the Bombay Court-fees Act. Accordingly we think this is a fit case falling within Section 15 of the said Act. Mr. Andhyarujina points out that this would also be covered by Order XLI, Rule 23 of the Code of Civil Procedure, as our order for continuation of trial of the suit would amount to a remand within the meaning of that provision and that provision of the Code is referred to in the second part of Section 15 of the Bombay Court-fees Act. Bearing all these considerations in mind, we think that the proper order to be made would be to direct the full Court-fees to be refunded to the appellant. There will be an order accordingly.

45. Mr. Bhatt at this stage says that he will be making the necessary application for leave to appeal to the Supreme Court of India and will be applying for stay of further hearing of the suit. He submits that in the application for leave, which we require him to make in writing, he will be applying for stay which must be granted as this is a decision on a preliminary issue. On the other hand, it has to be borne in mind that the trial has been held up of a suit filed in 1969 and irrespective of the question whether or not leave is required to be granted and what questions are to be indicated as fit questions requiring determination by the Supreme Court, this does not appear to us to be a matter in which the further trial should be held up merely on the footing that the respondent should have an opportunity of having the preliminary issue agitated before the Supreme Court.

46. The appellant applies for costs. He points out that he is a resident of Jullundur and has incurred costs of travelling to Bombay, has incurred hotel expenses and further expenses for travelling from the hotel to the Court and back. He has also incurred expenses for obtaining the certified copy of the judgment and for preparing the appeal paperbook. He suggests that he should be awarded costs in the aggregate of Rs. 2,000.

47. Mr. Bhatt submits to the orders of the Court but says that reasonable costs only should be awarded.

48. Bearing all the circumstances in mind and the fact that this appeal has been heard for nearly four days, we direct the respondent to pay to the appellant the costs of this appeal quantified at Rs. 1,000 (Rupees one thousand).


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