Case Note & Summary
The appellant, KPL International Limited, filed an appeal against the judgment and order dated 18 June 2015 of the learned Single Judge of the Bombay High Court, which declined leave under Clause 12 of the Letters Patent for institution of a Summary Suit proposed to be filed by the appellant-plaintiff against the respondent-defendant, API Industries Private Limited. The respondent-defendant is a company registered under the Companies Act, 1956 with its registered office at Bhavnagar, Gujarat, but it has a regional office in Mumbai within the territorial jurisdiction of the Bombay High Court. The appellant sought to recover monies for goods sold and delivered to the defendant. The learned Single Judge held that since the registered office of the defendant is its principal place of business in Bhavnagar, the defendant cannot be taken to be carrying on business in Mumbai merely because it has a regional office there. The Judge further held that the regional office may confer jurisdiction only in respect of a cause of action or part thereof that has arisen in Mumbai, and since no cause of action arose in Mumbai, leave could not be granted. The appellant contended that this view was erroneous and contrary to the law settled in Pratap Singh v. Bank of America (1976) 78 Bom. L.R. 549 and Jindal Vijaynagar Steel (JSW Steel Ltd.) v. Jindal Praxair Oxygen Company Ltd. (2006) 11 SCC 521. The Division Bench of the Bombay High Court, consisting of Chief Justice Mohit S. Shah and Justice A. K. Menon, allowed the appeal. The court held that the learned Single Judge erred in relying on the Explanation to Section 20 of the Code of Civil Procedure, 1908 (CPC) to restrict jurisdiction. The court clarified that Clause 12 of the Letters Patent is a special provision and the Explanation to Section 20 CPC does not override it. The defendant's regional office in Mumbai constitutes 'carrying on business' within the jurisdiction, and therefore leave under Clause 12 can be granted even if no part of the cause of action arose in Mumbai. The court set aside the impugned order and granted leave to the appellant to file the summary suit in the Bombay High Court.
Headnote
A) Civil Procedure - Territorial Jurisdiction - Clause 12 Letters Patent - Section 20 CPC - Explanation - The court held that a defendant company can be said to be 'carrying on business' at its regional office in Mumbai even if its registered office is elsewhere, and therefore the Bombay High Court has jurisdiction under Clause 12 of the Letters Patent to grant leave to file a suit, irrespective of where the cause of action arose. The learned Single Judge erred in relying on the Explanation to Section 20 CPC to restrict jurisdiction to only those causes of action arising in Mumbai. (Paras 2-6) B) Civil Procedure - Territorial Jurisdiction - Carrying on Business - Regional Office - The court clarified that the Explanation to Section 20 CPC does not override Clause 12 of the Letters Patent, which is a special provision. The defendant's regional office in Mumbai constitutes 'carrying on business' within the jurisdiction, and leave can be granted under Clause 12 even if no part of the cause of action arose in Mumbai. (Paras 5-6)
Issue of Consideration
Whether the Bombay High Court has territorial jurisdiction to entertain a summary suit against a defendant company whose registered office is in Gujarat but which has a regional office in Mumbai, when no part of the cause of action arose in Mumbai.
Final Decision
The appeal is allowed. The impugned judgment and order dated 18 June 2015 is set aside. Leave under Clause 12 of the Letters Patent is granted to the appellant to file the summary suit in the Bombay High Court.
Law Points
- Territorial jurisdiction
- Clause 12 Letters Patent
- Section 20 CPC
- Explanation to Section 20
- Carrying on business
- Regional office
- Registered office
- Cause of action
