Calcutta High Court (Appellete Side)
Smithkline Beecham Consumer ... vs Manju Golcha & Ors on 11 June, 2012
Author: Soumen Sen
Bench: Soumen Sen
IN THE HIGH COURT AT CALCUTTA
Civil Revisional Jurisdiction
APPELLATE SIDE
Present :
The Hon'ble Justice Soumen Sen
C.O.355 of 2012
Smithkline Beecham Consumer Healthcare Ltd.
Vs.
Manju Golcha & Ors.
For the Petitioner : Mr. S.P. Roy Chowdhury,
Mr. Hiranmay Bhattacharya,
Mr. Protanu Deb Mukherjee
Heard on : 14.05.2012
Judgment on : 11.06.2012
Soumen Sen, J.:- The territorial jurisdiction of the City Civil Court at
Calcutta in receiving and trying the suit filed by the plaintiff is the subject-matter
of challenge in this revisional application.
The plaintiff claims to be the holder of 1000 Equity shares in the defendant
company. The plaintiff further claimed that consequent thereupon 600 bonus
shares were issued and recorded in their favour but the original 1000 Equity
shares sent for transfer in the month of April, 1997 were not received by the
plaintiff. The plaintiff also received dividends. On complaints being made by the
plaintiff regarding non-receipt of 1000 shares, the defendant No.1 company
forwarded photocopies of alleged transfer deeds purported to have been executed
by the plaintiff in favour of one Ashvin M. Shah. The plaintiff soon thereafter
denied such claim and demanded return of such shares from Ashvin M. Shah
being the opposite party No.2 in this proceeding. In respect of 300 shares, the
defendant No.1 company agreed to issue duplicate share certificates provided
certain obligations being fulfilled by the plaintiff. The plaintiff denied having sold
any such shares in favour of any third party and required the defendant
company to produce and deliver the said thousand shares which, however, the
defendant No.1 had failed to perform. In this background, the suit for
declaration claiming ownership over 1000 Equity shares and other reliefs has
been filed.
In the proceeding, the company invited the Court to adjudicate the issue
No.3 before deciding the other issues. The said issue No.3 is as follows:-
"Has this Court jurisdiction to try the instant suit."
The said issue was heard on the basis of an application filed under Order
XIV Rule 2 of the Code of Civil Procedure. The grounds for deciding the said
issue in favour of the defendant Company and against the plaintiff are as
follows:-
(a). The registered office of the defendant No.1 is situated at Patiala
Road, Nabha, Punjab and as such this learned Court does not have
the jurisdiction to try and determine the present suit.
(b). The plaint does not disclose any cause of action having arisen within
the territorial jurisdiction of this learned Court.
(c). Suits and other proceedings relating to shares should be filed in the
Court within whose jurisdiction the registered office is situated.
Mr. S.P. Roychoudhury, the learned Senior Counsel appearing on behalf of
the petitioner submits that the trial Judge should have decided the said issue
upon evidence and not merely on the basis of the pleadings. It is argued that the
trial Judge upon considering the evidence on record could have arrived at a
finding that no part of the cause of action has arisen within the jurisdiction of
the learned Court and, accordingly, could have declined to entertain the said
application by holding it to be premature. The learned trial Judge should have
decided the said issue along with other issues after conclusion of trial and
adducing of evidence by the parties instead of taking up the issue as to
jurisdiction since it involves mixed question of law and fact. The trial Judge
acted illegally and with material irregularity in deciding the said issue
conclusively.
In appreciating such submission, the application filed by the defendant
No.1 under Order XIV Rule II of the Code of Civil Procedure, the said provision is
required to be considered.
In the application under Order XIV Rule II, the following prayers have been
made by the petitioner:-
"(a). before framing other issues, the preliminary issue of jurisdiction of this
Ld. Court to try, entertain and determine this suit be taken up.
(b). such further order or orders and/or directions be given as Your Honour
may deem fit and proper."
The petitioner invited the Court to decide the said issue on the grounds
mentioned hereinabove. It was on the basis of such application, the Court was
persuaded to consider the said issue No.3 and overruled the objection raised in
the said petition with regard to the territorial jurisdiction of the learned Court to
entertain the said petition.
Under the amended provision of Order XIV Rule II where issues both of law
and of fact arise in the same suit, and the Court is of opinion that the case or any
part thereof may be disposed of on an issue of law only, it may try that issue first
if that issue relates to -
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force.
The scope of the amended provision for settlement of issues was considered
in M/s. Pratap Ch Dey & Ors. v. Allahabad Bank & Ors. (AIR 1997 Cal 96).
The Hon'ble Justice Tarun Chatterjee (as His Lordship then was) in considering
the said amended provision held:-
"For the purpose of holding that O.14, R.2 of the Code of Civil
Procedure as it now stands can be applied in an appropriate case by the
Court in its discretion, it is necessary to consider the O.14, R.2 of the Code of
Civil Procedure before its amendment. It reads as follows:-
"Where issues both of law and fact arise in the same suit, and the
Court is of opinion that the case or any part thereof may be disposed
of on the issue of law only it shall try those issues first, and for that
purpose may, if it thinks fit, postpone the settlement of the issue of fact
until after the issues of law have been determined."
13. Before the amendment of O.14, R.2 of the Code of Civil Procedure it
was a well-settled rule that in appealable cases all issues arising in the suit
ought to be ordinarily tried and decided. The reason for the introduction of
this rule is to avoid piecemeal trial, protracted litigation and remand of the
cases where the Appellate Court sets aside the decision of the trial Court on
the preliminary issue upon which the trial Court has disposed of the suit.
Rule 2 of O.14 of the Code of Civil Procedure before its amendment was an
exception to the normal principle of trial. If the Court was of the opinion that
the case or any part thereof could be disposed of on issue of law only, it
was mandatory on the part of the Court to try such issue as preliminary
issue and dispose of the suit or any part thereof as the case might be on
such preliminary issue. From the unamended provision of R.2 of the O.14 of
the Code it is, therefore, evident that when the Court was of the opinion that
the case or any part thereof could be disposed of on the issue of law only, in
that case the Court had no jurisdiction to take up all the issues for trial
together with the issue of law. In that case it was mandatory on the part of
the Court to take up issues of law only and decide the suit on such question
of law by postponing the settlement of issues of facts until after the issues
of law had been determined. In that case the issue of law would be made
to be a preliminary issue. In the event the Court decides to take up such
preliminary issue then it need not say that the preliminary issue would be
decided at the time when the suit was tried. The word 'shall' used in the
unamended R.2 of O.14 of the Code, in my view, has a special significance.
In the unamended provision, in my view, when a preliminary issue is
framed the Courts have no other option but to decide the preliminary issue
first and to postpone settlement of the issues of facts until after the issue of
law had been determined. Therefore, in the unamended rule of O.14, R.2 of
the Code of Civil Procedure, in my view, there was no question of taking up
all the issues together if the preliminary issue is framed by the Court.
However, O.14, R.2 for the recent amendment has significantly changed the
position. Order 14, Rule 2 of the Code of Civil Procedure as now amended is
as follows:-
2.(1) Notwithstanding that a case may be disposed of on a preliminary
issue, the Court shall subject to the provisions of sub-rule (2), pronounce
judgement on all issues.
2) Where issues both of law and fact arise in the same suit, and the Court
is of opinion that the case or any part thereof may be disposed of on an
issue of law only, it may try that issue first if that issue relates to-
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force, and for
that purpose may, if it thinks fit, postpone the settlement of the other
issues until after that issue has been determined, and may deal with the
suit in accordance with the decision on that issue.
14. From a bare look to the amended provision of R.2 of O.14 of the Code
of Civil Procedure it is evident that the amended rule is divided into sub-rules
(1) and (2). Sub-rule (1) of Rule 2 of Order 14, of the Code of Civil Procedure
has recognised the unamended rule that all the issues arising in the suit
must be ordinarily tried notwithstanding that the case can be disposed of on
a preliminary issue. Sub-rule (2) of Rule 2 of Order XIV of the Code of Civil
Procedure provides a limited exception to the ordinary rule of trial. In Sub-
rule (2) of Rule 2 of Order 14 of the Code of Civil Procedure the incorporation
of the word 'may', in my view, has again some special significance. It is my
firm opinion that by the incorporation of the word 'may' instead of 'shall' as
was previously in the Order 14, Rule 2 of the Code of Civil Procedure before
its amendment the intention of the legislature was to make this sub-rule as
discretionary and not mandatory. Therefore, under sub-rule (2) of Rule 2 of
Order 14 of the Code even where both issues of law and fact arise in the
same suit and if the Court is of the opinion that the case or any part thereof
may be disposed of on an issue of law only it may try that issue first. A
comparative reading of the aforesaid provision as it existed prior to the
amendment and after the amendment would clearly indicate that the
consideration of a preliminary issue and its disposal has now been made
permissible only in limited cases. In the unamended Order 14, Rule 2 of the
Code, the categorisation was only between issues of law and of fact and it
was mandatory for the Court to try the issue of law at the first instance and
to postpone the settlement of the issues of fact until after the issues of law
had been determined. On the other hand, in the amended provision it is
mandatory on the part of the Court to pronounce judgment on all the issues
notwithstanding that the case may be disposed of on a preliminary issue.
The only exception to this is contained in sub-rule (2). Sub-rule (2) relaxes
the mandate to a limited extent by conferring discretion upon the Court if it is
of the opinion that the case or any part thereof can be disposed on the issues
of law only it may try that issue first. The exercise of this discretion is
further limited to the contingency that the issue to be so tried must be related
to the jurisdiction of the Court or to a bar to the suit created by a law in force.
In the 14th edition of Mulla's Code of Civil Procedure at page 1206 the Author
observed that the amended rule made a departure from the rule as it stood
before the amendment in three respects:
(i) that though a case may be capable of being disposed of on a
preliminary issue, the Court is given a mandate to try all the issues.
(ii) That exception is made to this mandate by giving discretion to try an
issue as to jurisdiction or a statutory bar to the suit as a preliminary
issue and for that purpose postpone the settlement of the rest of the
issues and
(iii) That in a given case the Court may decline to try even an issue
relating to its jurisdiction or to a statutory bar to the suit as a
preliminary issue if it considers expedient to do so.
15. From the discussions made hereinabove and considering the aforesaid
observations made by the Author in Mulla's Code of Civil Procedure 14th
Edition, it is, therefore, evident that the amended Order 14, Rule 2 of the
Code of Civil Procedure confers limited discretion to decide a preliminary
issue of law first before deciding the other issues."
The Hon'ble Supreme Court in Ramesh B. Desai & Ors. Vs. Bipin
Vadilal Mehta & Ors. reported in 2006 (5) SCC 638 considered the scope and
ambit of Order 14 Rule 2 CPC in Paragraph 13 of the said report which is
reproduced hereinbelow:-
"13. Sub-rule (2) of Order 14 Rule 2 CPC lays down that where
issues both of law and of fact arise in the same suit, and the Court is of the
opinion that the case or any part thereof may be disposed of on an issue of
law only, it may try that issue first if that issue relates to (a) the jurisdiction
of the Court, or (b) a bar to the suit created by any law for the time being in
force. The provisions of this Rule came up for consideration before this Court
in Major S.S. Khanna v. Brig. F.J. Dillon (AIR 1964 SC 497) and it was held
as under:
"Under Order 14 Rule 2, Code of Civil Procedure where issues
both of law and of fact arise in the same suit, and the Court is of
opinion that the case or any part thereof may be disposed of on the
issues of law only, it shall try those issues first, and for that purpose
may, if it thinks fit, postpone the settlement of the issues of fact until
after the issues of law have been determined. The jurisdiction to try
issues of law apart from the issues of fact may be exercised only
where in the opinion of the court the whole suit may be disposed of on
the issues of law alone, but the Code confers no jurisdiction upon the
Court to try a suit on mixed issues of law and fact as preliminary
issues. Normally all the issues in a suit should be tried by the Court;
not to do so, especially when the decision on issues even of law
depend upon the decision of issues of fact, would result in a lopsided
trial of the suit."
Though there has been a slight amendment in the language of Order 14 Rule
2 CPC by the amending Act, 1976 but the principle enunciated in the
abovequoted decision still holds good and there can be no departure from the
principle that the Code confers no jurisdiction upon the Court to try a suit on
mixed issues of law and fact as a preliminary issue and where the decision
on issue of law depends upon decision of fact, it cannot be tried as a
preliminary issue."
However, the fact remains that the defendant Company having invited the
Court to decide the said issue before other issues cannot turn around and
contend that the Court was not justified in deciding the said application after
having suffered an adverse finding. The petitioner cannot be permitted to take a
chance and once the petitioner invited the Court to decide the matter and
insisted that such matter should be decided first before deciding other matters
having suffered an unfavourable order in the said proceeding cannot turn around
and question the jurisdiction or propriety of such order. The petitioner cannot
complaint that the Court should have decided the said issue after conclusion of
evidence and with other issues. The petitioner is clearly estopped from raising
any such objection at this stage after having suffered an order in the application
in which it had invited the Court to decide the question of jurisdiction first before
deciding other issues.
The cause of action in the plaint is failure to deliver the shares to the
plaintiffs which the plaintiffs claimed to have purchased at Calcutta. The non-
receipt of the shares at Calcutta is the cause of action in the suit. The plaintiff is
residing at Calcutta. The plaintiffs applied for the shares and paid consideration
for acquiring such shares at Calcutta. The said shares were purchased from a
stock broker having its office at Lalbazar Street, at Calcutta and after purchasing
the said shares they were sent to the petitioner for recording transfer. The bonus
shares were received at Calcutta. The plaintiff, however, did not receive the 1000
shares which were sent for recording transfer, according to the plaintiff, in the
month of April, 1997 and which subsequently as is contended, had been illegally
transferred in favour of the opposite party No.2. The defendant contended that
no cause of action had arisen within the territorial jurisdiction of the Civil Court
at Calcutta on the grounds mentioned hereinabove.
The learned senior Counsel appearing on behalf of the petitioner on the
basis of the decisions in Morgan Stanley Mutual Fund Vs. Kartick Das
reported in 1994 (4) SCC 225 and Jayaram Vs. ICICI Ltd. reported in 1999
(10) JT-55, submitted that the residence of a company is where the registered
office is located and the cases should normally be filed only where the registered
office of the company is situated. It is contended that since the issue is relating
to non-delivery of shares, the suit is required to be filed at New Delhi where the
registered office of the company is situated. It was further contended that the
locality of the shares of a company is that of the register of register of shares and
since such register is maintained at the said office at New Delhi, the offence, if
any committed at the place where the registered office is situated normally which
is at New Delhi and the City Civil Court at Calcutta has no territorial jurisdiction
to try, entertain and determine the said suit.
The said submission is based on the analogy of Section 10 of the
Companies Act, 1956. The said Section, however, does not apply in the instant
case.
In Jayaram (supra), the Hon'ble Supreme Court was considering the
territorial jurisdiction of a Court to try offences punishable under Section 113(2)
of the Companies Act. The Hon'ble Supreme Court upon consideration of Section
53 and 113 of the Companies Act and Section 201 of the Criminal Procedure
Code held that the complaint is to be filed in Court having jurisdiction where the
registered office of the Company is situated and not where the share-holder was
to receive the share certificates. Since the cause of action for the default of not
sending the share certificates within the stipulated time would arise at the place
where the registered office of the company is situated as from that place the
share certificates can be posted and are usually posted and having regard to the
fact that what is punishable under sub-section (2) of Section 113, is non-delivery,
in accordance with the provisions laid down under Section 53, of the share
certificates of shares within the prescribed time, it was held that the complaint is
required to be filed in Court having jurisdiction where the registered office of the
company is situated.
It was held that the jurisdiction for receiving such complaint arising out of
an offence punishable under Section 113 of the Companies Act would be the
place where the registered office of the Company is situate having regard to the
fact that once there is a statutory mode of delivering the document by post and
deeming provision of such delivery, the place where such posting is done is the
place of performance of statutory duty and the same stands discharged as soon
as the document is posted. Hence the cause of action for the default of not
sending the share certificates within the stipulated time would arise at the place
where the registered office of the company is situated as from that place the
share certificates can be posted and are usually posted. If the addressee is
available at the same locality where the registered office of the company is
situated, it is reasonable to think that service of documents may be effected by
personally delivering to him. But if the addressee is residing at a distant place it
is unreasonable to expect the company to depute somebody to travel up to that
distance to personally deliver it to him. The only usual mode which any company
would then adopt is to send it to him by post. For such default, as contemplated
under Section 113(1), there is no question of any cause of action arising at the
place where the complainant was to receive postal delivery. What is punishable
under sub-section (2) of Section 113 is non-delivery, in accordance with the
provision laid down under Section 53, of the certificates of shares within the
prescribed time. So, if the documents are posted within the stipulated time,
there would be compliance with Section 113 and that there would not be any
offence.
It was held that the place where the share certificates and documents
would be posted is the place where the company is having its registered office
and the offence under Section 113(2) would also occur at the place where failure
to discharge the obligation arises, namely, the failure to send the share
certificates within the stipulated time.
In Morgan Stanley (supra) the Hon'ble Supreme Court was considering
the jurisdiction of Consumer Disputes Redressal Forum in entertaining a
complaint of unfair trade practice in terms of Section 2(1)(c)(i) and (1)(r) of the
Consumer Protection Act, 1986. The Hon'ble Supreme Court was considering the
propriety of passing an ex parte ad interim injunction and the jurisdiction of the
District Consumer Forum in entertaining a complaint arising out of sale of
shares. It was held that an applicant for allotment of shares is only a prospective
investor in future goods and does not come within the definition of "consumer" in
terms of Section 2 (1)(d)(i), 2(1)(i) and 2(1)(c). The Hon'ble Supreme Court also
laid down the factors which should weigh with the Court in granting ex parte
injunction. While deciding the said issues, the Hon'ble Supreme Court also
observed in Paragraph 41 and 42 that as far as India is concerned, the residence
of the company is where the registered office is located. Normally, cases should
be filed only where the registered office of the company is situate. The Hon'ble
Supreme Court also quoted Halsbury's Laws of England as to the effect of
incorporation in which Lord Halsbury observed:-
"When incorporated, the company is a legal entity or personal distinct
from its members, and its property is not the property of the members. The
nationality and domicile of a company is determined by its place of
registration. A company incorporated in the United Kingdom will normally
have both British nationality and English of Scottish domicile, depending
upon its place of registration, and it will be unable to change that domicile.....
The residence of a company is of great importance in revenue law, and
the place of incorporation is not conclusive on this question. In general,
residence depends upon the place where the central control and
management of the company is located. It follows that if such central control
is divided, the company may have more than one residence. The locality of
the shares of a company is that of the register of shares."
It was on the basis of the aforesaid observations, it is contended that the
City Civil Court at Calcutta has no territorial jurisdiction.
In the instant case, the plaintiff did not initiate any proceeding under
Section 113(2) of the Companies Act, 1956. It is a civil suit simplicitor in which
the declaration of status and entitlement to such shares have been claimed. In
Morgan Stanley (supra) the Hon'ble Supreme Court was considering the
jurisdiction of Consumer Forum to entertain a complaint filed by a prospective
investor and propriety of an ex parte ad interim order. The territorial jurisdiction
of a Civil Court to entertain a suit of like nature was not the issue before the
Hon'ble Supreme Court and, accordingly, the said decision cannot assist the
petitioner. In fact, in Paragraph 42, the Hon'ble Supreme Court held has
follows:-
"Courts outside the place where the registered office is located, if
approached, must have regard to the following. Invariably, suits are filed
seeking to injunct either the allotment of shares or the meetings of the Board
of Directors or again the meeting of general body. The Court is approached
at the last minute. Could injunction be granted even without notice to the
respondent which will cause immense hardship and administrative
inconvenience. It may be sometimes difficult even to undo the damage by such an interim order. Therefore, the court must ensure that the plaintiff comes to court well in time so that notice may be served on the defendant and he may have his say before any interim order is passed. The reasons set out in the preceding paragraphs of our judgment in relation to the fact which should weigh with the court in the grant of ex parte injunction and the rulings of this Court must be borne in mind."
The expression 'cause of action' has not been defined in the code but has received judicial interpretations. The Courts over the years have defined the said expression. The classic definition of the expression 'cause of action' is found in the observations of Lord Brett in Cooke v. Gill (1873 LR 8 CP 107) in which His Lordship stated:-
"Cause of action means 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." Or, in referring to the definition by Fry, L.J., in Read v.
Brown, (1888) 22 QB 128:
"Everything which, if not proved, gives the defendant an immediate right to judgment must be part of the cause of action."-
a definition which, as Gajendragadkar, J., then presiding over a division of the Bombay High Court in Baroda Oil Cake Traders v. Parshottam Narayandas, ILR (1954) Bom 1137= AIR 1954 Bom 491, puts it, has become a class on the suject. (Ujjal Talukdar v. Netai Chand Koley, AIR 1969 Calcutta 224) The cause of action has no relation whatsoever to the defence that may be set up by the defendant, nor does it depend on the character of the relief prayed for by the plaintiff. It refers "to the media upon which the plaintiff asks the court to arrive at a conclusion in his favour." (Muss. Chand Kour v. Partap Singh, (1887-88) 15 Ind APP 156 (PC).
The said definition has been adopted and followed by different High Courts including the Hon'ble Supreme Court.
In Laxman Prasad Vs. Prodigy Electronics Ltd. & Anr. (2008(1) SCC
618) it was held that 'cause of action' simply stated would mean a right to sue.
The relevant observations of the Hon'ble Supreme Court are set out hereinbelow:-
"30. We find considerable force in the submission of the learned Counsel for the respondent Company. In our view, "cause of action" and "applicability of law" are two distinct, different and independent things and one cannot be confused with the other. The expression "cause of action" has not been defined in the Code. It is, however, settled law that every suit presupposes the existence of a cause of action. If there is no cause of action, the plaint has to be rejected [Rule 11(a) of Order 7]. Stated simply, "cause of action" means a right to sue. It consists of material facts which are imperative for the plaintiff to allege and prove to succeed in the suit. The classic definition of the expression ("cause of action") is found in the observations of Lord Brett in Cooke v. Gill (1873 LR 8 CP 107). His Lordship stated:
"Cause of action means 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."
31. In A.B.C. Laminart (P) Ltd. v. A.P. Agencies (1989 (2) SCC 163) this Court said: (SCC p.170 Para 12) "12. A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it 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."
32. Now, Sections 16 to 20 of the Code deal with territorial jurisdiction of a court (place of suing). Whereas Sections 16 to 18 relate to immovable property, suits for compensation for wrongs to persons or movables have been dealt with under Section 19. Section 20 of the Code is a residuary provision and covers all cases not falling under Sections 16 to 19.
33. The relevant part of Section 20 reads thus:
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.
34. Bare reading of Clause (c) leaves no room for doubt that a suit would lie in a court within the local limits of whose jurisdiction the cause of action has arisen, wholly or partly.
35. Section 20 has been designed to secure that justice might be brought as near as possible to every man's hearthstone and that the defendant should not be put to the trouble and expense of travelling long distances in order to defend himself."
The expression "cause of action" was considered in Om Prakash Srivastava v. Union of India, 2006 (6) SCC 207 and it was held:-
"12. The expression 'cause of action' has acquired a judicially settled meaning. In the restricted sense 'cause of action' means the circumstances forming the infraction of the right or the immediate occasion for the reaction. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but also the infraction coupled with the right itself. Compendiously, as noted above, the expression means 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. Every fact, which is necessary to be proved, as distinguished from every piece of evidence, which is necessary to prove each fact, comprises in 'cause of action'."
The said observation of the Hon'ble Supreme Court was subsequently approved and followed in Eastern Coalfields Ltd. & Ors. v. Kalyan Banerjee, 2008 (3) SCC 456.
The term 'cause of action' is of wide import. It has different meanings in different contexts, that is when used in the context of territorial jurisdiction or limitation or the accrual of right to sue. Generally, it is described as "bundle of facts", which if proved or admitted entitle the plaintiff to the relief prayed for. Pithily stated, "cause of action" means the cause of action for which the suit is brought. "Cause of action" is cause of action which gives occasion for and forms the foundation of the suit. (Kandimalla Raghavaiah & Company Vs. National Insurance Company & Ors., 2009(7) SCC 768) In Ujjal Talukdar v. Netai Chand Koley (AIR 1969 Cal 224) the learned single Judge held as follows:-
"Everything which, if not proved, gives the defendant an immediate right to judgment must be part of the cause of action. Cause of action does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved. Evidence of a fact should not be confused with the fact itself. Even an infinitesimal fraction of a cause of action and confer jurisdiction on the Court within the territorial limits of which that little occurs."
The Division Bench of our High Court in M/s. Inter Sales v. M/s. Reliance Industries Ltd. & Ors. reported in 1998 (1) CLJ 531 held that the question whether a part of the action arose within the jurisdiction of the Court in West Bengal is to be determined with reference to the allegations made in the plaint and if from the allegations so made, an obligation arises in favour of the plaintiff and against the defendants, there can be no doubt that the part of the cause of action for the reliefs claimed has arisen within the jurisdiction of the Court in West Bengal.
In the said decision, the learned Counsel for the respondent raised an objection with regard to the jurisdiction City Civil Court to entertain the said suit filed by the plaintiff for a decree of declaration that the plaintiff is the lawful owner of 2000 shares in M/s. Reliance Industries and the defendant is bound to transfer or issue duplicate share certificates in the name of the plaintiff. The plaintiff also claimed mandatory injunction, directing the defendants to make over such transfer shares in the name of the plaintiff or to issue duplicate shares. One of the grounds for lack of territorial jurisdiction is that all the defendants reside or work at Bombay which is the outside jurisdiction of the Courts of West Bengal and no part of the cause of action arose within West Bengal. The said objection was considered in Paragraph 9 by Their Lordships, the relevant portion whereof is set out hereinbelow:-
"The question whether a part of the action arose within the jurisdiction of the Court in West Bengal is to be determined with reference to the allegations made in the plaint and if from the allegations so made, an obligation arises in favour of the plaintiff and against the defendants, there can be no doubt that the part of the cause of action for the reliefs claimed has arisen within the jurisdiction of the Court in West Bengal. Furthermore, the presumption arises only where the registered post has been properly addressed."
The right and its infringement constitute the cause of action and it can be concluded on the basis of the averments made in the plaint that the Civil Court at Calcutta is having territorial jurisdiction since a part of the cause of action arose within its jurisdiction.
In view thereof the objection as to the territorial jurisdiction of the Civil Court is unsustainable. This Court finds no infirmity in the Order.
The revisional application fails. However, there shall be no order as to costs.
Urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.
(Soumen Sen,J.)