1. One Shiv Lal Chopra insured his life with the Life Insurance Corporation of India and took out three Policies Particulars whereof are as under:
Policy No, Date Place Amount 26988057 Dec. 1966 Kanpur 20,000,00 27061288 May 1967 Kanpur 20,000,00 8108987 Dec. 1967 Varanasi 25,000,00
2. Shiv Lal died on September 20, 1968 at Sopar in Bikar. His widow demanded the insurance money from the Life Insurance Corporation. The Life Insurance Corporation by their three letters dated February 20. 1970, repudiated the claim of the plaintiff on the around that Shiv Lal was suffering from heart ailment and consulted medical men and took treatment from them and did not disclose these facts in his statement and instead wave false answers. This was their reply with regard to two policies dated May, 1967 and December, 1967 which were taken at Kanpur and Varanasi. As regards the third policy taken out in December, 1966 from Kanpur the Corporation said that nothing was payable as Policy had lapsed by non-payment of the yearly Premium.
3. Shiv Lal's widow Shrimati Kamla Chopra has instituted the present suit for the recovery of Rs. 88,400/-, against the Life Insurance Corporation of India at Delhi.
4. The Corporation in its written statement has taken the preliminary objection that the suit is not triable at Delhi on March 14, 1972, the following preliminary issue was struck:
'Whether this Court has territorial jurisdiction to try the suit ?'
5. The parties have not led any evidence. Only the above three letters dated February 20, 1970, have been admitted by the Corporation. All the three are letters of repudiation of the plaintiff's claim. These letters were issued from the Central Zonal office of the Life Insurance Corporation at Kanpur. In the plaint it was admitted that the two policies were issued from Kanpur and the third policy was issued at Varanasi. In paragraph 17 it was said:
'Because parties to the suit reside and work for gain at Delhi where defendant No. 1 - Corporation has its zonal/divisional/regional/branch offices and the claim in suit is payable and. thereforee, this Court has jurisdiction to try the suit.'
6. In paragraph 1 of the plaint the plaintiff has said that defendant No. 1 is a statutory corporation with its central office at Bombay, Northern Zonal/Divisisional/Regional Office at Asaf Ali Road, New Delhi. It has also been said that the Corporation has Zonal/Divisional/Regional/Branch Office throughout India.
7. In the written statement the Corporation has denied that any cause of action arose at Delhi. It is said that the two insurance policies in suit were issued from Kanpur Office and the third insurance policy was issued from Varanasi and the cause of action arose at Kanpur and Varanasi where the contracts of insurance were entered into. It was denied that the payment was to be made at Delhi. Under the terms of the insurance policies the amount was payable at Kanpur in respect of the two policies and in respect of the third policy at Varanasi. It was also alleged that the central office of the Corporation is at Bombay and the mere fact that the Northern Zonal Office of the Corporation is in Delhi will not confer jurisdiction on this Court to try the suit.
8. In the replication the plaintiff has reiterated that the zonal office of the Corporation being at New Delhi and the claim under the Policies being payable at New Delhi this Court has jurisdiction to try this suit. It was not disputed that the central office of the Corporation is at Bombay.
9. Now the question is - Has this Court jurisdiction to try this suit ?
10. The learned counsel for the plaintiff has argued that this Court has jurisdiction on two, grounds. Firstly, it is said that the letters of repudiation were addressed to the plaintiff at New Delhi and were received by her at New Delhi. Secondly, he has said that since the Zonal Office of the Corporation is at New Delhi the suit can be brought here.
11. For his submission that this Court has jurisdiction to try the suit on the ground that the letters of repudiation were received by the plaintiff at New Delhi and that repudiation is a part of the cause of action the counsel has relied on a Division Bench ruling of the Madras High Court in T. R. S. Mani v. T. R. P. (Radio) Private Ltd.. Calcutta, : AIR1963Mad30 . That was a case where the appellant's services were terminated. The respondents were carrying on business at Calcutta. The letter terminating the appointment of the plaintiff was posted at Calcutta and was received by the appellant at Madras. The Court held that the termination took place at Madras and that a Part of the cause of action at least arose within the jurisdiction of the Court at Madras and, thereforee, the Court had jurisdiction to try the suit.
12. In this case the question is that the contracts of insurance were entered into at places outside Delhi and the policies were issued at Kanpur and Varanasi. Will a mere letter of repudiation of the plaintiff's claim constitute the cause of action such as can confer jurisdiction on this Court ?
13. The test for determining the place where the cause of action accrues in suits arising out of contract was originally clarified in the third Explanationn to Section 20 of the Code of Civil Procedure of 1882 which Provided that in suits arising out of contract the cause of action arises within the meaning of Section 20 at any of the following places, viz..
'(1) the place where the contract was made;
(2) the place where the contract wag to be performed or performance thereof completed:
(3) the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable.'
Although this Explanationn has been omitted from the present Code of 1'908 it still provides a working test for determining the place where the cause of action in suits arising out of contract arises. See Arthur Butler and Co. Ltd. v. District Board of Gava. : AIR1947Pat134 .
14. Now what is a cause of action Lord Esher, M. R. in Read v. Brown.(1889) 22 Qbd 128 defined a cause of action as 'every fact which it would be necessary for the plaintiff to prove if traversed in order to support his right to the judgment of the Court. It does not comprise every Piece of evidence which is necessary to prove each fact but every fact which is necessary to be proved.'
15. Delivering the judgment of the Privy Council in Mt. Chand Kaur v. Partap Singh. (1888) 16 Cal 98 Lord Watson said:
'Now the cause of action has no relation whatever to the defense which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set out in the plaint as the cause of action, or, in other words to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favor.'
16. Sir D. F. Mulla in his commentaries on the Code of Civil Procedure defines a cause of action as 'a bundle of essential facts which it is necessary for the plaintiff to prove before he can succeed in the suit.' (Volume I, Page 144. 13th Edition).
17. Applying this well known test to the facts of the case it is not the plaintiff case that the contract of insurance was made at Delhi nor has she been able to prove that the money under the policies is payable to her at Delhi in perforamnce of the contract. Though this is allowed in the Plaint, the counsel for the plaintiff at the stage of arguments could not show that the payment of the amount due under the policies was agreed to be made to the deceased at Delhi.
18. The Corporation has produced copies of the policies and the term as to payment in those policies says:
'The amount due under this policy is payable at the within-mentioned Divisional Office of the Corporation but the Corporation is at liberty at its absolute discretion to fix, at any time before the policy has become a claim, any alternative place of payment.'
19. The three copies of the policies have not been tendered in evidence and, thereforee, I shall not found my decision on this term as to payment. But the Corporation has said in the written statement that the payment was not to be made at Delhi and the plaintiff has not proved her allegation as to payment at Delhi. I will, thereforee mainly decide the question on the pleadings of the parties.
20. Now the rejection or repudiation of a claim in a contract of insurance is not a part of the cause of action Hardy, J. (as his Lordship then was) in Suit No. 407 of 1967, Mrs. Sunanda Bakshi v. Life insurance Corporation of India decided on May 6. 1969 (Delhi) where the facts were much the same said :
'Applying the test laid down in these decisions to the present case, it is apparent that it is not at all necessary for the plaintiff to prove for the success of her suit that the repudiation of liability under the policy was communicated by the defendant to her at Delhi. This fact has nothing to do either with the formation of the contract or with its performance nor has it anything to do with the payment of money by the defendant to the plaintiff in performance of the said contract.'
I am in respectful agreement with this view.
21. In Indian Pottery Works v. Dominion of India, (1962) 66 Cal Wn 29 it was held that the communication of rejection was no part of the cause of action. The learned Judge said:
'The communication of rejection does not, in my view, form the infringement of the right ... ... ... ...
The cause of action has already occurred or arisen.'
22. In that case the plaintiff entered into a contract with the Governor General for supply of goods. The Inspector rejected the goods. The plaintiff challenged the cancellation on these facts the learned Judge said:
'... .... .... .... .... .... .... .... .... ...the foundation of the cause of action for wrongful or illegal rejection is that the Officer-in- charge. Ordinance Inspection Depot did not perform the contractual obligations. The evidence in the present case is that the rejection occurred at a place outside the jurisdiction of this Court. I am thereforee of the opinion that the Plaintiff cannot contend that the whole cause of action has arisen within the jurisdiction of this Court.'
23. thereforee, on this aspect of the case my conclusion is that the plaintiff's case is only a case of repudiation of liability arising under the contract by one of the parties thereto on the ground that it is not bound to perform its Dart of the contract because it was induced to enter into the contract as a result of fraud and misrepresentation of the deceased.
24. It was then argued by the plaintiff's counsel that the Life Insurance Corporation has a Zonal Office/Divisional Office/Regional Office at Delhi and, thereforee, the suit can be instituted here. Let me examine this argument. Section 18 of the Life Insurance Corporation Act, 1956 -provides that:
'18. Offices, branches and agencies - (1) The central office of the Corporation shall be at such Place as the Central Government may by notification in the Official Gazette, specify
(2) The Corporation shall establish a Zonal office, it each of the following Place, namely Bombay, Calcutta. Delhi. Kanpur and Madras, and subject to the previous approval of the Central Government .It may establish such other Zonal offices as it thinks fit.
(3) the territorial limits of each zone slia-11 be such as may be specified by the Corporation.
(4) There may be established as many divisional offices and branches in each zone as the Manager thinks fit.'
25. Bombay is the Place where the central office of the Corporation is situated. This was so specified by Sro 1939 dated August 30, 1956 vide Gazette of India. Extraordinary Part 11. Section 3, Page 1799. Five zonal offices are at Calcutta, Bombay, Delhi, Kanpur and Madras. The Zonal Manager of each zone may establish as many divisional offices and branches in each zone as he thinks fit. There can be no doubt that the suit against the Corporation can be brought, at its sole or principal office or at places its subordinate office is situated in respect of any cause of action arising at that place. Explanationn 2 of Section 20 reads as under :
'Explanation II-A corporation shall be deemed to carry on business at its sole of 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.'
26. There is no doubt that the central office of the Corporation being at Bombay the plaintiff, if she so chooses, can bring her suit at Bombay. The question is whether there is a subordinate office at Delhi. Assuming: that Delhi is a subordinate office but if no part of the cause of action has arisen at the place where the branch of subordinate office is situated the mere fact of the corporation having a branch office will not give the Court of that place jurisdiction to entertain a suit. The law is well settled that if no part of the cause of action arises at the place of the branch office, the mere fact of the Corporation having a branch office at the place will not give the Court jurisdiction: See Bhola Nath Aggarwal v. The Empire of India Life Assurance Co. Ltd., Air 1948 Lah 56; Bharat Insurance Co.. Delhi v. Wasudeo Ramchandra- Air 1956 Nag 203 and Nedungadi Bank Ltd. v. Central Bank of India Ltd.. : AIR1961Ker50 .
27. In my opinion, it is clear that the principal office of the Corporation is at Bombay. The statute styles it as Central Office' of the Corporation. Zonal Office at Delhi is not a principal office within the meaning of the Code. The residence and domicile of a trading corporation is its principal place of business i.e., the place where the administrative business of the company is conducted which may not be the place where its manufacturing or other business operations are carried on : See Tutika Basava raju v. Parry & Co.. (1904) 27 Mad 315. In Palmer v. Caledonian Railway Co (1892) 1 Qb 823 the term principal office was explained by Lord Esher M. R. He said:
'That being so, we have a Scotch company to be served with a writ, and the question is whether Carlisle is the principal office, or one of the principal offices, of the company. I should have thought without any authority that the principal office of the company must be the place at which the business of the company is controlled and managed. The Only office that answers this description is the company's office at Glasgow. No part of the business of the company is controlled or managed, in the sense that it is independently controlled or managed at Carlisle. The directors meet at Glasgow, and the office from which and through which they manage the business of the company is at Glasgow. If the expression 'principal office' means the office at which the business of the company, is managed, it does not apply to Carlisle; and the service of the writ at the office there was not a service at the principal office of the company, and must be set aside.'
Lopes, L. J. said:
'It was contended that the Caledonian Railway Company was in point of fact two companies - one Scotch and the other English; one domiciled and resident in England, and the other in Scotland. I cannot agree to this. It appears to me to be one company and that a Scotch company, having its principal office at Glasgow, What I understand by principal office is that office where the General Superintendence and management of the business of the railway is carried on, and as to that I may refer to Garton v. Great Western Rly. Co., (EB & E 837).'
28. thereforee, the plaintiff was, entitled to sue the Corporation either at: its principal office at Bombay or at its subordinate office at Kanpur where the cause of action arose in respect of the two policies and at Varanasi where the cause of action arose in respect of the third policy. Term of -payment in the policies also shows that the Corporation has reserved to itself the right to make payment at Kanpur and Varanasi. The plaintiff cannot institute the action at Delhi. If the plaintiff's argument were accepted it will lead to anomalous results. Having taken a policy at Kanpur the party may sue the Corporation's Zonal office at Madras. Now Madras zonal office has nothing to do with the policy. It is neither the central office nor the office which issued the policy nor the place where the payment is to be made.
29. T. R. S. Mani, : AIR1963Mad30 (supra) on which the counsel relies is entirely distinguishable. In that case the letter of termination of the services gave rise to a cause of action to the plaintiff it is not so in the present case. I have already held that repudiation is not a part of the cause of action in a contract of insurance. The cause of action in respect of a contract arises in the way enacted by the Explanationn to the old Code of 1889.
30. The Plaintiff's counsel submitted that he may be allowed to amend the plaint so as to plead that the place where the letter of repudiation was received has jurisdiction to try the suit. Since I have considered this argument and rejected it the amendment if allowed to be made, will be useless.
31. As a result I decide the preliminary issue in favor of the Corporation and hold that this court has no jurisdiction to try the suit. The plaint is thereforee directed to be returned to the plaintiff. The parties are however, left to bear their own costs.
32. Order accordingly.