In the said judgment it has been categorically mentioned that the suit should have been filed at the place where the cause of action arose whether it was at principal office or at sub-ordinate office. The learned counsel for the defendant was insisting that the cause of action was arising only in Tuticorin as per the work order and as per the principles of the Hon'ble Apex Court under Section 20 CPC, the suit ought to have been filed within the jurisdiction of Tuticorin and the present suit is not in accordance with Section 20 CPC.
39. Under clauses (a) to (c) of Section 20 CPC, a plaintiff
has a choice of forum and cannot be compelled to go to a
place of business or residence of the defendant and can file a
suit where the cause of action arises. The intendment of the
Explanation has also been taken into consideration by this
Court in New Moga Transport Co. v. United India
Signature Not VerifiedDigitally Signed By:SUNILSINGH NEGI I.A. 4397/2020 IN CS (COMM) 166/2020 Page 36 of 54Signing Date:16.10.202017:36:36
Insurance Co. Ltd., (2004) 4 SCC 677 thus: (SCC pp. 681-
82, paras 9-10)
"9. Normally, under clauses (a) to (c) the plaintiff
has a choice of forum and cannot be compelled to go
to the place of residence or business of the defendant
and can file a suit at a place where the cause of action
arises. If the defendant desires to be protected from
being dragged into a litigation at some place merely
because the cause of action arises there it can save
itself from such a situation by an exclusion clause. The
clear intendment of the Explanation, however, is that
where the corporation has a subordinate office in the
place where the cause of action arises it cannot be
heard to say that it cannot be sued there because it
does not carry on business at that place. Clauses (a)
and (b) of Section 20 inter alia refer to a court within
the local limits of whose jurisdiction the defendant
inter alia 'carries on business'. Clause (c) on the other
hand refers to a court within the local limits of whose
jurisdiction the cause of action wholly or in part
arises.
In the matter of New Moga Transport Co. v. United India Insurance Co. Ltd. (supra), the Supreme Court while interpreting Section 20 of CPC has observed that under Clauses (a) to (c) of Section 20 the plaintiff has a choice of forum and cannot be compelled to go to the place of residence or business of the defendant and can file a suit at a place where the cause of action arises but at the same time the Supreme Court observed that if two Courts or more have jurisdiction under the Code of Civil Procedure to try suit or proceeding, the parties can enter into the agreement excluding the jurisdiction of some Courts and conferring absolute jurisdiction on one Court. In the present matter Clause 32 of the agreement says that in case of any dispute or difference whatsoever arising between the parties out of or relating to the construction, meaning and operation or effect of this Agreement or breach of any terms thereof shall in the first instance be referred to the arbitration of an Advocate as may be appointed by the Managing Director, Mysore Cements Ltd., M/s Mysore Cements Ltd., in fact, is the Proprietor of M/s Diamond Cements, respondent No. 1. If they have their registered Head Office at Bangalore then the Bangalore Court would have jurisdiction. The factory is situated at Damoh, the agreement was entered into between "the parties at Damoh and the goods were to be supplied only from Damoh. It is also be seen that the total correspondence between the parties was done either from Damoh or to Damoh. Under such circumstances it cannot be gain said that no cause of action accrued at Damoh. It also cannot be said that Damoh Court would have no jurisdiction. Assuming for a minute that non-action on the part of the defendants gave a cause of action to the Patna Court but Clause (c) of Section 20 of the Code would be overriden by Clause (b) of Section 20 and the agreement entered into between the parties.
42. Undoubtedly from explanation to Section 20 CPC it is
evident that where cause of action has arisen in jurisdiction where
subordinate office of corporation is situated then the Court where said
subordinate office is situated would have territorial jurisdiction. The same
is the ratio of Judgments New Moga Transport Company Vs. United India
Insurance Company Ltd. & Ors., (2004) 4 SCC 677; Patel Roadways
Limited Bombay Vs. Tropical Agro Systems Pvt. Ltd. & Anr., (1991) 4
SCC 270; Unimers India Limited Vs. IFCI Limited & Ors., 2012 (129) DRJ
608 relied upon by the defendant no.1.