Punjab-Haryana High Court
Shrikant Gupta And Ors. vs Subodh Kumar Gupta And Anr. on 8 July, 1993
Equivalent citations: (1993)104PLR621
JUDGMENT V.K. Jhasji, J.
1.This civil revision is directed against the order of the trial Court whereby the application of the petitioners for the dismissal of the suit for want of territorial jurisdiction was dismissed.
2. Respondent-Subodh Kumar Gupta filed suit in the Court of Senior Sub Judge, Chandigarh against Shrikant Gupta and others for rendition of accounts and dissolution of the firm known as "Rajaram and Brothers". The factory of the firm is situated at Mohow Neemuch Road, Mandsaur (Madhya Pradesh). Its Head Office is at Bombay. Plaintiff is also seeking partition of the assets as well as decree for permanent injunction restraining the defendants from transacting any business, collecting any money, operating any account etc and to use the name and style of the firm "Rajaram and Brothers". After service, defendant No. 1, namely. Shrikant Gupta made an application under Section 151 of Code of Civil Procedure for the dismissal of suit being beyond jurisdiction for the Court at Chandigarh. In the application, it was stated that according to the facts disclosed in the plaint and perusal of the prayer made therein clearly indicate that the plaintiff is seeking rendition of accounts and dissolution of the firm situated at Mandsaur (Madhya Pradesh). According to defendant No. 1 cause of action, if any has arisen at no other place than Mandsaur (Madhya Pradesh). According to him, the business of the firm is carried on at Mandsaur and accounts are also prepared and maintained at Mandsaur. Property of the partnership firm is s tuated at Mandsaur having its Head Office at Bombay and according to the provisions of the Civil Procedure Code, it is the Civil Court at Mandsaur which has the jurisdiction to entertain the suit for dissolution of the firm. It was further stated that the partners of the partnership firm are re siding at Mandsaur, outside the territorial jurisdiction of the Court at Chandigarh. It was thus prayed that the suit filed by the plaintiff be dismissed as being not maintainable at Chandigarh as neither any business, office, employee or any property nor any bank account is at Chandigarh. Plaintiff filed reply to the application and submitted that the application cannot be decided before filing of the written statement by the defendants. Trial Court dismissed the application after finding that a part of cause of action accrued at Chandigarh.
3. Counsel for the petitioner, after reading the plaint in extense, contended that the Civil Court at Chandigarh has no jurisdiction to entertain the suit. The precise submission was that neither the defendants are residing within the territorial jurisdiction of Court at Chandigarh nor the property of the partnership firm is situated with,- In the territorial jurisdiction of Court at Chandigarh where the suit has been filed.
4. Mr. H L. Sibal, Senior Advocate, counsel for the plaintiff (respondent herein) relied on clause (c) of Section 20 of Code of Civil Procedure (for short the Code) to contend that suit can be filed where the cause of action, wholly or in part, arises. According to him part of cause of action arose at Chandigarh and, there for, suit was filed at Chandigarh.
5. Sections 15 to 20 of the Code of Civil Procedure regulate the forum for the institution of suits. Section 20 of the Code, reference to which has been made by counsel for the plaintiff inter alia provides that subject to the limitations prescribed in Sections 16 to 19 of the Code of Civil Procedure, a suit shall be instituted in a Court within the deal limits of whose jurisdiction 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 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, acquiesce in such institution. Clause (c) of Section 20 of the Code of Civil Procedure provides that the suit shall be instituted where the cause of action, wholly or in part, arises. Explanation to Section 20 of the Code of Civil Procedure provides that 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 at any place where it has also a subordinate office at such place.
6. On perusal of the averments made in the plaint and in the light of aforesaid provis on of the Code of Civil Procedure, I find that no cause of action, on the bads of which relief is being claimed, his arisen within the territorial jurisdiction of Court at Chandigarh and, therefore, clause (c) of Section 20 of the Code of Civil Procedure would not apply as contended by counsel for the plaintiff.
7. Admittedly, defendants in the suit are not residing within the territorial jurisdiction of Court at Chandigarh Most of the defendants are residing at Mandsaur. Mr. Surya Kant Gupta, defendants No. 2 and Mr. K. K. Jindal, defendant No. 4 are also reading in Madhya Pradesh. What is being alleged by the plaintiff in the suit is that initially he was working at Mandsaur alongwith his father but shifted to Chandigarh in the year 1974 and he goes to Mandsaur off and on in connection with the business of the firm. It is also not being denied that the partnership firm is registered at Bombay and its factory is situated at Mandsaur. Accounts and Balance Sheet are prepared and maintained at Mandsaur. Petitioner has also alleged that the agreement dated 26 11.1992 to dissolve the firm is not binding on him. He has not denied the execution of the agreement, The agreement of dissolution was executed at Bhilai. According to the Deed of Dissolution, plaintiff severed his connection from the partnership firm and was allotted some of the assets of the firm, details of which are given in the Deed of Dissolution. In my view, merely" because the plaintiff is residing at Chandigarh or had been corresponding on behalf of the firm at Chandigarh or had been receiving statements of accounts at Chandigarh, as alleged by him in the suit, will not confer territorial jurisdiction on Courts at Chandigarh. With regard to the allegation made by the plaintiff that the firm has its branch office at Chandigarh, suffice it to say that apart from the bald allegation made in the plaint, there is nothing on record to prove that the firm has any regular branch office at Cnandigarh. Moreover, the fact that the firm has a branch office at Chandigarh is also not sufficient enough to confer jurisdiction on a Court at Chandigarh unless it is establish- ed that cause of action, on the basis of which relief is being claimed, has arisen within the territorial jurisdiction of that Court. In the present case, apart from other, the factory of the firm as well as the assets of the firm are also situated outside the territorial jurisdiction of Court at Chandigarh. The relief sought in the suit is the dissolution of the firm and rendition of accounts of a firm which has its factory at Mandsaur and Head Office at Bombay. In this view of the matter, I am of the considered view that the Court at Chandigarh has no jurisdiction to entertain the suit.
8. During the course of arguments, counsel for the plaintiff placed reliance upon a judgment of the Madias High Court in Thimmappa v. Balakrishna, A. I. R. 1926 Mad. 427. and a judgment, of the Lahore High Court in Kanshi Ram v. Dule Rai & O. A. I. R. 1933 Lah. 11. Both these judgments have no application to the facts of the present case. In Thimmappa's case (supra), partnership business was being carried on at two places ; cause of action accrued at both the places and in such circumstances, it was held that the Courts at either of these places, shall have jurisdiction to entertain the suit. In Kansh.i Ram's case (supra), the firm had its Head Office at Bombay and evidence showed that it had a regular sub office at Amritsar. Because of various activities of the firm which were being carried out at Amritsar, the Court at Amritsar was found to have jurisdiction to entertain the suit.
9. In the impugned order, the trial Court has made a mention of some of the documents upon which the plaintiff relied upon during the course of his arguments before it. In para 12 of the order of the trial Court, it is stated that there is nothing on record from the side of the defendant in dispute the correctness of the documents referred to in para 11. On perusal of the documents, trial Court observed "perusal of the documents tend to show that there was a Branch Office of the firm at Chandigarh which remained actively involved in the sale and purchase of goods from various places". In order to peruse these documents, I summoned the file but on perusal, I find that it contains no such document. I fail to understand as to how the trial Court has made a reference to the documents which are not even on the file,
10. Before parting with this order, I cannot help but observe that the trial Court acted in haste in passing ex-parte ad-interim order of injunction as well as entertaining the prayer of the plaintiff for appointment of receivers. Suit was received by entrustment en 12-3-1993. On that very day, the trial Court, without issuing notice to the defendants, not only prima facie held that under Section 20 of the Civil Procedure Code, the suit is maintainable but also directed the defendants not to remove or dispose of the property of the firm and also not to use the name and style of the firm till further orders. The other prayer in the application for appointment of receivers was also allowed and accordingly Raja Ram Gupta, one of the defendants and the District Collector, Mandsaur (Madhya Pradesh) were appointed receivers. Plaintiff being not satisfied with this relief, made another application in the garb of getting some mistake corrected, for restraining the defendants from transacting any business on behalf of the firm collecting money, operating any accounts, interfering in in the premises in any manner whatsoever or in the alternative, defendants were sought to be restrained from entering the premises of the firm. This application was disposed of with the following observations :-
"I have already appointed Receivers requiring them to take into their safe custody all the books of accounts and records of the firm and further to do all acts which are considered to be necessary for that purpose and also for the purpose of collecting amounts of the firm and to deposit the same with Punjab National Bank, Mandsaur and also to use the funds for the purpose of the management and transacting the business and also to disburse the salaries of the employees of the firm. This order is more than clear that virtually the management of the factory is to be conducted by the Receivers. Therefore, I do not feel it necessary to make any clarification as prayer and the application stands disposed of accordingly."
11. Thus, vide order dated 15-3-1993, the management of the firm was handed over to the receivers without affording any opportunity of hearing to the defendants The trial Court in its order dated 12-3 1993 or 15-3-1993 has not disclosed the urgency which led to passing of an ex parte order. The order passed does not speak or show that the Court has applied its mind to the requirements of law as contained in Order 39 Rule 1 and 2 of the Code or Order XL Rule 1 of the Code. Apart from the plaint, there is no other document or material on record from which the Court could form satisfaction that the defendants were about to dispose of the whole or any part of the property. As a matter of fact, running business was brought to standstill. Orders of appointment of receivers or injunction are very important and such extraordinary orders arc not expected to be passed in a casual manner without satisfying the requirement of law.
12. Consequently, the order of the trial Court holding that the Court at Chandigarh has jurisdiction is hereby quashed and the plaint is ordered to be returned to the plaintiff to be presented in a competent Court. Records be sent back forthwith.