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civil_laws:sections:section-20

Other suits to be instituted where defendants reside or cause of action arises

Section 20 of the Code of Civil Procedure, 1908.

Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.

Explanation: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Illustrations
(a) “A” is a tradesman in Calcutta, “B” carries on business in Delhi. “B”, by his agent in Calcutta, buys goods of “A” and requests “A” to deliver them to the East Indian Railway Company. “A” delivers the goods accordingly in Calcutta. “A” may sue “B” for the price of the goods either in Calcutta, where the cause of action has arisen or in Delhi, where “B” carries on business.
(b) “A” resides at Simla, “B” at Calcutta and “C” at Delhi “A, “B” and “C” being together at Benaras, “B” and “C” make a joint promissory note payable on demand, and deliver it to “A”. “A” may sue “B” and “C” at Benaras, where the cause of action arose. He may also sue them at Calcutta, where “B” resides, or at Delhi, where “C” resides; but in each of these cases, if the non-resident defendant object, the suit cannot proceed without the leave of the Court.

Legislative Changes

  1. The words “every suit’' have been substituted for the words “all other suits” in the corresponding Section 17 of the Code of 1882.
  2. Explanation III to the old Section has been omitted and the words “wholly or in part” in clause (c) have been newly added.
  3. Explanation I was omitted by Act No. 104 of 1976, sec. 7 (w.e.f. 1-2-1977).

Scope and principle of the Section

This Section enacts the rule as to the forum in cases of personal actions. Its provisions are to be read subject to the provisions of Sections 15 to 19 as is made clear by the opening words ”subject to the limitations aforesaid”. Under the scheme of the Code actions are either those which relate to immovable property, or those which relate to the person or moveable property, or mixed actions partly relating to immovable property and partly personal. The first and the third classes of suits have been dealt with under Sections 16 to 18. Sections 19 and 20 deal with the second class.

A Court gets jurisdiction under this Section if:

  1. the defendant resides or carries on business or personally works for gain within the local limits of its jurisdiction, or
  2. the cause of action arises wholly or in part within such local limits.

If several causes of action are joined against a defendant, it is necessary that the Court should have jurisdiction over all causes of action. The onus is upon the plaintiff to establish one or other of the two facts mentioned above. After the question of local jurisdiction is decided, the question of pecuniary jurisdiction may arise before any plea affecting the suit is entertained. The rules stated in the various portions of the Section are alternative and give a choice of forum to the plaintiff. This is based on the general principle of law that where a suit can be instituted in more Courts than one, the plaintiff has a right to select his own forum. And very strong reasons must be shown for depriving a plaintiff of such right. But a plaintiff cannot take advantage of his own default to choose his own forum. He cannot, after he has made his choice and selected the forum, be allowed to change the forum by withdrawing the suit to be filed elsewhere. Nor will a Court get jurisdiction, where, in order to bring a suit within the jurisdiction, the plaintiff makes a false averment. Where a Court once obtains jurisdiction over a suit, it is not deprived of it either by the fact that the place where the cause of action arises ceases to be situate within its jurisdiction, or by the defendant changing his residence to a place beyond the local limits of its jurisdiction.

Actually and voluntarily resides

A Court has jurisdiction to entertain a suit, if the defendant resides or all the defendants reside within its jurisdiction even if the cause of action arises outside it. But the residence must be an actual and not a constructive residence. Where a person actually resides outside the Court's jurisdiction but has his ancestral home within it, the latter fact would not give the Court jurisdiction. The word “reside” is not used in the same sense in all the Indian Acts or in other parts of the Code. It is in fact elastic and has been differently construed in different cases. In every case residence is a question of fact and it must depend upon the particular circumstances. It has also to be determined according to the intention of the Legislature as ascertained from the context and the particular provision in which the word occurs. Under the Code of 1869, the word used in this Section corresponding to this Section was “dwell”. Clause 12 of the Letters Patent also provides that suits, other than those for land, may be brought in Chartered High Courts if the defendant dwells or carries on business, or personally works for gain, within the local limits of the ordinary original jurisdiction thereof. Strictly speaking, the word “dwell” seems to have a more extended signification than the word “reside” and seems to imply a more permanent stay than that denoted by the word “reside”. Neither of the words, however, necessarily implies a permanent state of things.

A traveller putting up at an hotel, may be said, in one sense to reside there, but a man can be said to “dwell” in the sense in which the term is used as giving jurisdiction, only in the place where he ordinarily and permanently resides; that is to say, in the place where his family or servants generally reside. The word “residence” has also been held to denote the place where a person eats, drinks and sleeps, or where his family or servants eat, drink and sleep. The word “dwell”, as used in the Letters Patent, and the word “reside” as used in Sections 16, 19 and 20, are however often treated as being synonymous and have been held to denote the fixed and permanent home of a man's wife and family, to which he has always an intention of returning. The decisions interpreting the former word may therefore be usefully looked to in construing the meaning of the latter.

Home non-existent or abandoned

Every person is deemed in law to have a dwelling or place of residence, and where he has none, he will be deemed to dwell at the place at which he may be actually staying at the time.

Compulsory residence

In order to give a Court jurisdiction on the ground of residence, it must he voluntary and actual, A person confined in jail cannot be said to reside there voluntarily though he may be residing there actually especially when there is nothing to show that he had no intention of returning to his former abode on the termination of his imprisonment.

Carries on business

It will be sufficient for a Court to get jurisdiction over a person that he should carry on business within the local limits of its jurisdiction. Thus, where the cause of action against the defendant residing in the Punjab arose in Kerala, but the defendant carried on business in Tamil Nadu, he can be sued in respect of such cause of action at Tamil Nadu. The word business, in its widest sense includes, every trade, occupation or profession. It is, however, used in the Section in a restricted sense. This is indicated by the words personally works for gain to be found in the same Section. The latter words would be unnecessary if the word “business” had been intended to be used in an unrestricted sense. In this Code, it means commercial business alone. The phrase 'carry on business' is itself one of varying import and has to be interpreted in each case according to the context and the apparent purpose of the Legislature.

Under Clause 12 of the Letters Patent the words “carry on business” have been held to relate to business in which a man may contract debts and become liable to be sued by the person having business transactions with him. A person is said to ‘carry on business’ when he controls or directs it or has a voice in its control or a share in the gain or loss. The test of carrying on business is not the continuity or the intermittency of the business, but the fact of owning interest in the business and receiving profits. Thus, where the owner of a ginning factory entered into a special contract of combination with other factory owners, under which his factory was to remain quiescent for some time and he derives a profit on account of such contract, it cannot be said that the factory-owner was not carrying on the business. The words 'carry on business’ mean the carrying on, of business by the person whose business it is, and mean to describe a person managing or conducting his own, and not somebody else’s business. But in order to determine whether a person is carrying on a business it must first be ascertained what his particular trade or occupation is, and then it must be seen whether the facts proved amount to a carrying on of that particular business within the jurisdiction. Thus, a guru or high priest of a community who receives offerings and presents from his disciples and keeps account of them, or a clerk Working in a Government office, or a butler employed to look after his master’s plate and perform other duties of his occupation, or a man who busies himself with science or politics and has a great deal of business to transact in respect of those matters, cannot be said to carry on business. Similarly, zamindari business does not constitute a carrying on of business. It is doubtful whether the mere letting of house property through an agent can be said to be carrying on business. To constitute “carrying on of business” at a particular place, it is conceived that the essential part of the business must take place there. Thus, where the essential part of the business of a retail dealer in the mufassil consisted in selling European goods imported by him and making profits, and he had an agent in Bombay who simply purchased and forwarded the goods to him, it was held that the dealer cannot be said to carry on his business at Bombay. Similarly, where defendants had no permanent office at Amritsar but only a travelling agent residing there who secured orders for them and forwarded them to the head office at Calcutta but who had no power to enter into any contract or to receive any money on their behalf, it was held that the defendants did not carry on business at Amritsar. But where the. defendant firm had its head office at Bombay and a sub-office at Amritsar and the sub-office conducted correspondence with its local customers, received orders, received and disbursed moneys and though the orders placed at Amritsar were not binding unless accepted by the head office, it was held that the defendant firm was carrying on business at Amritsar. The business need not, however, be carried on personally but may be carried on through servants or agents. It is not necessary that there should be a head office or a regular place of business in order to “carry on business”. Thus, a person residing at A who goes twice or thrice a week to a friend's house at G and does business there will be held to carry on business there.

Business through agent

As has been seen already, a business may be carried on through an agent and it is not necessary that the principal should have ever gone to the place of business at all. But it is essential that the agent must be an agent in the strict sense of the term and must attend exclusively to the business of the principal. A person conducting business at a place through commission agents or brokers or general agents cannot be held to carry on business there. A manager of a joint Hindu family is not an agent in the strict sense and the members of the family cannot be said to carry on business through him at any place.

Government

The words “carry on business” are inapplicable to the Government. Nor do the words “actually and voluntarily resides” apply to the Government. They refer only to natural persons and not to legal entities.

Personally works for gain

It is sufficient to give a Court jurisdiction if the defendant personally works for gain within the local limits of its jurisdiction. To constitute work there must be some physical or mental effort. A guru according presents and offerings from his chelas and invoking blessings them in return cannot be said to be personally working for gain. An Advocate, who though residing outside the station where the High Court is located, appears in the High Court whenever he is engaged, works for gain within the local limits of the jurisdiction of the High Court. Similarly, a person residing at A and coming constantly to Calcutta for making contracts, works for gain within Calcutta. As already observed, the carrying on of business may be either in person or through agents; but the work for gain must be in person. On this ground a person carrying on business through an agent cannot be said to personally work for gain where the agent carries on the business. The Government of India cannot be said to “work for gain” anywhere as the income obtained by it is held for the benefit of the Indian Exchequer.

Leave of Court

Clause (b): Where no part of the cause of action arises within the jurisdiction and some of the defendants reside outside it, leave to sue them all should be obtained, unless they acquiesce in the institution of the suit. No leave is necessary where the cause of action arises within the Court's jurisdiction though some of the defendants reside outside it. The clause is not to be read as limited to persons merely residing outside the limits of the territorial jurisdiction of the Court but within India. It makes no difference whether the defendants, in respect of whom leave is asked, are residents of India though outside the local limits of the Court's jurisdiction or are residents outside India.

Under Clause 12 of the Letters Patent, it is necessary that the leave should be obtained before the institution of the suit. Under clause (b) of this Section, however, the leave may be granted even after the institution of the suit. The leave may be given even after the decision of the preliminary issue as to jurisdiction, but before the plaint is ordered to be returned for presentation to the proper Court. But it is necessary that the grant of leave should be distinctly sought and obtained and cannot be inferred from the plaintiff being allowed to continue the suit. In exercising its power to grant or refuse leave to sue, the question of convenience of parties should be taken into consideration. No notice is necessary to the defendants residing outside jurisdiction, of an application for grant of leave to sue under this Section. But the leave cannot be given arbitrarily, and when the defendants who reside outside jurisdiction do not appear, the Court is bound to consider their position before granting leave. This obligation is in no way lessened when they do appear and object, especially when the objecting defendant is the real person against whom the plaintiff wants to proceed. Where leave is granted under this clause without issuing notice to the opposite party, the Court can in the exercise of its inherent powers hear any objection against the grant of such leave and pass such orders as are necessary in the interests of justice.

Acquiescence in institution

Under Section 20 of the Code of 1882, which provided that any defendant not applying for stay of proceedings before the issues are settled “shall be deemed to have acquiesced in the institution of the suit,’’ it was held that if a non-resident defendant did not apply for a stay of proceedings, he should be taken to have “acquiesced” in the institution though he objected to the jurisdiction in his written statement. But the said Section has not now been re-enacted in the present Code as sufficient provision for transfer of suits has been made in Sections 22 to 25 of the Code. A defendant who objects to the jurisdiction will not be deemed to have acquiesced in the institution simply because he did not apply for transfer of the case. A defendant who appears and does not object to the jurisdiction, may, it is conceived, be held to have acquiesced in the institution. Where a suit is brought against defendants some of whom reside within, and some without the jurisdiction of the Court, and neither the leave of the Court has been obtained nor acquiescence shown on the part of the defendants not residing within jurisdiction, the suit cannot proceed against those only of the defendants within jurisdiction.

Cause of action

As has been seen already above, a Court will have jurisdiction over a matter if the cause of action arises within the local limits of its jurisdiction. And such jurisdiction is not affected by the death of the person originally liable. The words “cause of action” are sometimes used in a restricted sense and sometimes in a wider sense. In the restricted sense it means the circumstances forming the infringement of the right or the immediate occasion for the action. In its wider sense it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right but the infraction coupled with the right itself. It has been compendiously defined to mean 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. In other words, it means, the whole bundle of material facts which it is necessary for the plaintiff to prove in order to entitle him to succeed in the suit. In delivering the judgment of the Board, in Chand Kuar v. Partab Singh1), Lord Watson observed as follows: “Now the cause of action has no relation whatever to the defence 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 forth 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 favour.” Whether any particular facts constitute a cause of action has to be determined with reference to the facts of each case and with reference to the substance rather than the form of the action. The cause of action must, however, be antecedent to the institution of the suit and cannot be furnished by the pleadings themselves. Where two or more causes of action against a defendant are sought to be joined in one suit, the Court to which the plaint is presented must have jurisdiction over both the causes of action.

Wholly or in part arises

This clause makes it clear that in all cases covered by this Section a suit may be instituted where a part of the cause of action arises. Where a right and an infringement thereof are both necessary to be proved before relief can be granted, the cause of action arises partly where the right was created and partly where it was infringed. Thus, where freight was collected from the plaintiff at Calicut, but the goods were short delivered, the cause of action for refund of the freight and for price of goods short delivered arises in part at Calicut.

If the creation of the right and the infringement thereof both happen at a particular place, the whole cause of action will he said to arise there. But if they take place in different places, parts of the cause of action arise in the different places. Where the infringement itself is in respect of several items, parts of the cause of action arise in the several places of infringement in respect of those items. The corresponding Section of the Code of 1882 was amended by the addition of an Explanation, being Explanation III, which provided that in suits arising out of contract the cause of action arose within the meaning of the Section at any of the following places, namely

  1. The place where the contract was made.
  2. The place where the contract was 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.

This Explanation had been added to the old Section to make it clear that suits arising out of contract could be instituted in the Court within the local limits of whose jurisdiction the cause of action arose either wholly or in part. But this gave rise to doubts whether other classes of suits could be instituted in a Court within the local limits of whose jurisdiction part only of the cause of action arose. It was, however, held in the undermentioned case2), following older decisions, that the intro-duction of the said Explanation did not effect any change in the law and Court would have jurisdiction if the material part of the cause of action arose within its jurisdiction. The effect of the present addition of clause (c) of the Section in substitution of the old Explanation III is to leave no room for doubt that all classes of suits can be instituted where the cause of action arises wholly, or in part. The old Explanation III has now been omitted, but the cases decided thereunder are still good law in cases arising out of contract. It must, however, be noted that a party to a contract cannot rely, at his option, on any of the alternatives mentioned in the old Explanation III in order to sue in any particular forum. It depends in each case upon the allegations in the plaint in support of the relief claimed. Thus, where under a contract goods had to be delivered at A and the price was payable at B, the cause of action for the non-delivery of the goods will arise at A alone, and that for the non-payment of the price will arise at B alone.

Suits on contracts

The meaning of the expression “cause of action” when applied to suits based on contracts should be ascertained by a consideration of the meaning of the expression in the past in the course of the development of legislation in India and the case law based thereon. In a suit based on a contract the cause of action will consist of the making of the contract and of its breach at the place where it is to be performed. An action therefore for breach of a contract can, at the option of the plaintiff, be brought either at the place where the contract was made or the place where the breach was committed. Originally the place of making the contract alone was regarded as the proper forum of action and it was only afterwards that the place of performance and the place of breach came also to be regarded as forums of action.

When a contract is both made and broken at a particular place, the whole cause of action will arise there. Thus, where a promissory note is made and delivered in Calcutta, and is also payable to a payee who resides in Calcutta, the whole cause of action arises at Calcutta. Similarly, where A sends money to B at Bombay who receives it undertaking to buy goods there and ship them to A at Karwar, but fails to do so and A sues B for the return of the money, it was held that the making of the contract (i.e., receipt of the money and the undertaking) and the breach (i.e., for failure to ship goods from Bombay) both having occurred at Bombay, the whole cause of action arose there.

The place where the cause of action arises in respect of any contract must be determined with reference to the terms of the original contract itself and not by subsequent negotiations thereafter.

Place of making the contract

As has been seen in the above Note, the making of the contract itself is a part of the cause of action. But antecedent transactions in respect of which a contract is made will not furnish a cause of action for a suit on the contract. Thus, where A executes a hundi in favour of B, at Bassum in respect of an antecedent transaction which had taken place at Bombay, the Court at Bombay has no jurisdiction to entertain a suit on the contract.

A contract is made when an offer of one party is accepted by the other party. An offer, however, must be distinguished from an invitation to offer. Where a catalogue is sent by a firm to any person, and he orders for an article mentioned therein, it is he who is really making the offer, the catalogue being merely an invitation to offer. The offer itself is a part of the cause of action for a suit based on the contract. Where the parties personally meet at any place and the proposal of one is accepted by the other, that place, of course, will be the place of making the contract. If the proposal and acceptance thereof are made in different places, the place of acceptance will be the place where the contract is made. The whole correspondence, if the contract was made by correspondence, must be looked into in order to find out where the proposal was accepted. Where the contract is entered into by postal communication, the contract will be deemed to be made where the letter of acceptance is posted, and not where it is received. The communication of the acceptance of the proposer only affects the time of the coming into force of the contract and not the place of making the contract. If the acceptance of a proposal consists of the performance of a condition of the proposal, the contract will be deemed to be made where the condition is performed. If an agreement is to be executed by the plaintiff, part of the cause of action arises where the agreement is executed. Where the contract purports on the face of it to have been made at any particular place, as for instance a promissory note dated at X, it will be presumed to have been made there, though it might actually have been made elsewhere. Where in a suit upon the breach of a contract to deliver goods, it did not appear where the contract, if any, was made, the mere fact that an advance on account of the contract was made at a particular place would not give the Court of that place jurisdiction in the suit. The principles enunciated above apply both to express as well as implied contracts and to obligations resembling those under contracts. Thus, where excess of freight is paid to a Railway Company at a particular place, there is an implied contract on the part of the Company to return the excess and a cause of action for a suit for return of the excess will arise, in part, where the obligation to return came into existence, namely where the excess was paid. Similarly where plaintiff sent a larger quantity of goods to defendant than that ordered for, and the latter returned the same and the plaintiff filed a suit for damages, it was held that the cause of action arose wherefrom the defendant returned the goods. Similarly where goods were lost in one district and found in another, the finder is under an obligation to return them at the place where he found them and the Court of that place will have jurisdiction to entertain a suit for the recovery thereof.

Place of breach or non-performance in general

As has been mentioned already, the place of breach will also furnish the forum for a suit on contract, even though the place of making it be not within the forum. The place of breach is the place where the contract is to be performed, that is, the place where the contract is to be completely performed, or where the performance is to be in several places, where it is to be completed.

Illustrations.

  1. A purchases goods of B at M but it is agreed that the delivery of the goods and the payment therefor should be made at N. In this case it is clear that the contract is to be completely performed at N and the Court of that place will have jurisdiction to try a suit in respect of the breach of the contract.
  2. It is agreed between A and B that goods sent by B to A should be measured at M and delivered at P. B fails to deliver the goods and A sues him for damages for non-delivery. The cause of action arises at P where the performance was to be completed.

In cases of contracts for the sale of goods, the place where the goods had to be delivered is the place of performance and the Court of that place will have jurisdiction to entertain a suit in respect of non-delivery according to contract. A delivery to a common carrier is, under Section 91 of the Contract Act, a delivery to the buyer. Thus, where defendants contracted at Bombay to sell goods to plaintiff at Amritsar, the cause of action for the breach of the contract would arise in Bombay, as delivery of the goods to the Railway Company at Bombay would have operated as a delivery to the plaintiff.

Where the contract itself does not stipulate the place of performance, it is the duty of the promisor under Section 49 of the Contract Act to apply to the promisee to appoint a reasonable place for the performance of the promise. Where this has not been done, the place of performance should be determined with reference to the intention of the parties as gathered from their acts, the terms of the contract and the surrounding circumstances. Where no actual intention can be inferred, recourse may be had to presumptions.

In many cases the place of performance will be determined by the course of business to which the contract relates or by the nature of the act to be done under the contract. Thus, in a contract of service the salary is payable at the place of work. In a contract of bailment, the remuneration of the bailee is payable where the goods bailed are stored. Where the performance consists of work done on immovable property, the place where it is situated will obviously be the forum. Similarly, where an agreement relates to the execution of a document which requires registration at a particular place, that place will be the place where a suit will lie for compelling the registration.

Place where money is payable

The payment of money under a contract is a part of the performance of the contract and will furnish a cause of action. As per the principles set forth above, the place where money is expressly or impliedly payable will be a forum of action. Thus the place where the money is payable under a promissory note or a bond will be a proper forum though the document itself was executed and the executant resides outside the forum. Similarly, in the case of goods sold and delivered, a suit for the price thereof will lie where the same is to be paid, even though both the sale and the delivery should have been made in another place. An action to recover money due on a life insurance policy can be instituted in the place where the death of assured takes place, as the death furnishes the cause of action for the payment. Similarly, in a contract of insurance against burglary, the burglary is a part of the cause of action entitling the plaintiff to sue, and a claim for the insurance amount can be made at the place where the burglary was committed.

From what has been stated above, it follows that where the place of payment is not indicated in the contract, it is to be ascertained with reference to the intention of the parties and the circumstances of the case. Thus, where a hatchitta was executed and the parties were also resident at a particular place, the money is presumably repayable there.

The rule that debtor must find the creditor: Under the Common Law in England, the general rule, in the absence of a contract to the contrary, is that a debtor is bound to find the creditor for making the payment, i.e., the place of payment is the place where the creditor resides. The same rule has been held to apply in India also.

Suit for accounts against agent

In accordance with the general principles mentioned above, a suit for accounts against an agent can be filed where the contract of agency was made or where the accounts are to bo rendered and payment made by the agent. Where the contract does not specifically provide for the place where the accounts are to be rendered, it is to be ascertained by reference to the intention of the parties as gathered from the circumstances of the case. Thus, a payment will be intended to be made where the accounts are settled and the balance struck. Where the intention is not clear, the rule that the debtor must seek the creditor will apply in a suit by a principal against an ordinary agent, for accounts.

Suit for accounts in partnership cases

The place of performance in the case of a contract of partnership is the place where the business of the partnership is carried on. Where the business is carried on in more places than one, a suit may be filed in any one of such places. A contract of partnership was entered into by P firm with D firm, both of whom had their head offices at Calcutta. The P firm had a branch in the District of Muzaffarpur; the contract was that jute was to be purchased by the P firm at “K” in the Muzaffarpur District and was to be sent to Calcutta to the D firm for sale. Accounts of the partnership, that is accounts of sale and of profit and loss of the business, were kept at Calcutta. It was held that the purchase of jute for the purposes of business could not necessarily be the carryying on of the business of the partnership, and that the Court at K had therefore no jurisdiction to try a suit for the dissolution of the partnership.

Suits on negotiable instruments

A suit may be filed where a promissory note is made or bill of exchange is drawn. It may also be filed where the instrument is payable though it is executed in a different district.’ A promissory note, which on its face purports to have been made at a particular place, will be presumed to have been made there. Where a promissory note payable on demand was executed by the defendant and handed over by him to the plaintiff at B, but the note described the plaintiff as a resident of, it was held that the Court at M had no jurisdiction to entertain a suit on the note, but only the Court at B. Where a negotiable instrument is drawn at one place and accepted at another, part of the cause of action will arise at the place of acceptance. The liability of the acceptor does not attach, however, by merely writing his name upon the bill. It attaches only when the instrument so signed is delivered, or the fact of acceptance is communicated to the person entitled to the bill. The indorsement of a negotiable instrument or the assignment of a promissory note will also give rise to a cause of action at the place of indorsement or assignment though the mere negotiation of an instrument does not constitute a payment of the instrument. The dishonour of a negotiable instrument will also furnish a cause of action and a suit may be brought at the place where it was dishonoured. Even a notice of dishonour will be a part of the cause of action and the Court of the place where from it is given will have jurisdiction.

Read section 142(2)3) and 142-A)4) of the Negotiable Instruments Act for local jurisdiction relating to dishonour of cheque and prosecution under section 138 of the said Act.

Suits on assigned debts

A bona fide voluntary assignment of a debt affords a valid cause of action to the assignee to sue his assignor and the original debtor in the Court within whose jurisdiction the assignment is made. ===== Suit on torts ===== Section 19 as has already been seen, provides that a suit for compensation for wrong done to the person or to moveable property may be instituted either where the defendant resides or carries on business or personally works for gain or where the wrong was done. Where there are several tort-feasors and some of them only reside within jurisdiction, a suit will be maintainable against them at the place where they reside. The commission of a tortious act will be a part of the cause of action and the Court within the local limits of whose jurisdiction it is committed, is competent to try the suit. The damage resulting from the tort will also, it is submitted, furnish a cause of action. This is in accord with sound principle. In a suit in respect of a tort the plaintiff has to prove both a tortious act and a consequent injury or damage. The damage or injury is therefore a material fact which it is necessary for the plaintiff to prove in order to entitle him to succeed in the suit. Thus, where the defendant instituted criminal proceedings at D against the plaintiff, who. was residing at C, the cause of action for a suit for damages for malicious prosecution arises in part at C.

Administration suits

In a suit to administer an estate, the grant of probate and the undertaking to administer will furnish parts of the cause of action. It may be noted that a Court can grant letters of administration only if the deceased, at the time of his death, had any property or had a fixed place of abode, within its jurisdiction.

Suit to set aside decrees on the ground of fraud

A suit to set aside a decree on the ground of fraud can be brought where the defendant actually and voluntarily resides or where the cause of action, wholly or in part arises. The cause of action in such cases is the commission of the fraud and the obtaining of the fraudulent decree. The mere discovery of the fraud is not a part of the cause of action. Where a part of the fraud is committed within the jurisdiction of a Court, that Court will have jurisdiction to entertain the suit.

Thus, where A obtains a fraudulent decree against B at X and executes or applies for execution of the decree at Y, part of the cause of action arises at Y. But a mere transfer for execution to another Court without anything more being done will not enable the latter Court to entertain the suit to set aside the decree, though a suit for an injunction restraining the defendant from executing the decree is maintainable in that Court.

Suit to set aside documents on the ground of fraud

A suit to set aside a document on the ground that it was obtained by fraud will lie where the fraud was committed. Thus the cause of action for a suit to set aside a will on the ground that it is a forgery arises at the place where the alleged will is published. It will also arise where the fraudulent document takes effect against the plaintiff's interest. Thus in a suit to set aside, on the ground of fraud, a release deed executed in Calcutta, in respect of the plaintiff’s interest in certain property in Bombay, it was hold that since the release took effect and operated on the property in Bombay, part of the cause of action arose there.

Revision

No hard and fast rule as to revision can be laid down in cases of decisions as to jurisdiction under this Section and each case must, therefore, be decided on its own merits; ordinarily interference in revision is inadvisable in such cases and should only be exercised in exceptional cases to remedy an injustice. Where the defendant is, by law, entitled to have the case tried at Patna, it will be a grave injustice to him to insist on its trial at Jagraon in the Punjab, and in such a case the High Court will interfere in revision.

Chartered High Courts

This Section does not apply to Chartered High Courts in the exercise of their original civil jurisdiction. These are governed by the Letters Patent granted to them. In order to give the High Court jurisdiction under the Letters Patent, either the whole cause of action must have arisen within the local limits of its jurisdiction or the leave of the High Court must have been obtained.

1)
I. L. R. 16 Calcutta 98
2)
25 All 48
3)
Inserted by Act 55 of 2002
4)
Inserted by Act 26 of 2015