Place of Suits: Scope, Importance and Usage

By | November 19, 2019
Dicey’s Formulation of Rule of Law

The foremost thing which is to be determined during the filing of a suit is the place of suits. Which decides the place for trial and it has nothing to do with the competency of the court. Section 15 to 20 of the Code deal with the place of suing, that is the forum for an institution of suits in India.

Introduction

Suit is generally of various kinds depending upon nature. Such as properties, contracts, torts, matrimonial proceedings, and so on. The jurisdiction of a court to entertain, adjudicate and decide a suit is restricted bases on the circumstances of the suit.

The foremost thing which is to be determined during the filing of a suit is the place of suing. Which decides the place for trial and it has nothing to do with the competency of the court. Section 15 to 20 of the Code deal with the place of suing, that is the forum for an institution of suits in India. These sections are applicable only to those places where the Code of Civil Procedure is into effect.

Scope

Section 15

The object of this section is to prevent higher courts from over-burdening of suits.[1] “Section 15 is a rule of procedure and not of jurisdiction. And it lays down that a suit is instituted in the court of the lowest grade, it does not oust the jurisdiction of the courts of higher grades which they possess under the Act constituting them,” accordingly, does not apply while exercising original civil jurisdiction.[2]

Allahabad High Court in Radha Charan Das v. Mohini Behari[3], held that the court-fee payable and the valuation for the purpose of jurisdiction must be determined on the basis of allegations made and relief claimed in the suit. Defence in the written statement has no relevance for such determination.

An objection that the court has no jurisdiction to deal with the subject-matter of the dispute is not akin to an objection regarding territorial or pecuniary jurisdiction. If a party may not have raised the point that the court does not have the jurisdiction to decide the subject-matter of the dispute and ultimately suffers an order or a decree, such order/decree is nullity and that its invalidity may be raised wherever and whenever it is tried to be implemented or relied upon, even at the stage of execution and even in subsequent proceedings.[4]

 Section 16

Section 16 refers to Courts in India and to immovable properties situated in India. Though, under the Code of Civil Procedure, there is no definition of immovable property. However, it has been defined under Section 3(26) of the General Clauses Act, 1985.

Suits for the recovery of immovable property or for the determination of any other right to or interest in immovable property or for recovery of the movable property actually under distraint or attachment must be instituted in the Court within the local limits of whose jurisdiction the property is situated. The object of the section is to limit the territorial jurisdiction of Courts in regard to property. The explanation of Section 16 is clear that Courts does not have any power to entertain suits in respect of properties situated outside India. [5]

However, courts in India are not prevented from adjudicating any question in respect of property situated outside their territorial jurisdiction where such questions arise incidentally.

Section 17

This section is intended for the benefits of parties and to prohibit the multiplicity of suits. It is supplementary to provisions of Section 18 and is not applicable so far as Clause (f) of Section 16 is concerned.

This section provides that where a suit is to obtain relief in respect of property situated in the jurisdiction of different Courts, the suit can be transferred to anyone of the courts and such court can deal with the whole of the property though some portion of it is situated outside its jurisdiction. It is applicable to several properties either situated in different districts or the same property extends over several districts.

In Madhao Deshpande v. Madhav Dharmadhikaree[6] the Supreme Court held that “where dispute regarding properties was located within the jurisdiction of one of the courts, that court will have jurisdiction to entertain award. Returning of the award by the court for presentation to the court within  whose jurisdiction other properties forming the subject matter of the dispute were located, was not proper.”

Section 18

Where it is uncertain as to within whose jurisdiction of two or more courts the immovable property is situated any one of those courts may try the suit relating to that property after recording a statement as to uncertainty, “and thereupon proceed to adjudicate and dispose of the suit relating to that property and its decree in the suit shall have the same effect as if the property was situated within the local limits of its jurisdiction.[7]

Section 19

Under this section “a suit for compensation for the wrong done to the person or personal property may be brought at the option of the plaintiff either where the wrong is committed or where the defendant resides or carries on business or personally works for gain.”[8]

Within the meaning of this section, a wrong means the infringement of a legal right and is consequently an actionable wrong. The section applies only to actionable wrongs against any person or to movable property. Wrong to any person refers to the same thing which is termed as trespass to the person.

According to Bombay High Court, a suit for damages for malicious prosecution can be entertained by Courts at the place where the plaintiff was served with the summons in the criminal case as the service of the summons is a part of wrong done to the person.[9]

The aforesaid principle would not be applicable in case of suits to be instituted against the government for arrears of salary and travelling allowances at a place where the employee was residing throughout but was employed at a place other than a place of his residence.[10]

Section 20

Section 20 enacts the rule as to the forum in cases of personal actions and has to be read subject to the provisions of section 15 to 19 of the code. “The section designed to secure that justice might be brought as near as possible to every man’s heart-stone and that the defendant should not be put to the trouble and expense of travelling a long distance in order to defend himself. The Principle behind the provisions of clauses (a) and (b) of section 20 is that the suit is instituted at a place where the defendant is able to defend the suit without undue trouble.”[11]

It has been held that “A plain reading of section 20 of the Code of Civil procedure arguably allows the plaintiff a multitude of choices in regard to where it may institute its lis, suit or action. Obviously, this is also because every other place would constitute a forum non-conveniens.

The Supreme Court has harmonised the various hues of the conundrum of the place of suing in several cases and has gone to the extent laying down that it should be court’s endeavour to locate the place where the cause of action has substantially arisen. It has even been held that if the defendant corporation has a subordinate office in the place where the cause of action arises, litigation must be instituted at that place alone, regardless of the amplitude of options postulated in section 20 of the Code of Civil Procedure”[12]

Jurisdiction of Court for Contract

A suit for breach of contract can be filed at the place where the contract was entered into. It can also be filed at the place of performance which is also part of the cause of action. Where an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts.

“The stipulation is that the contract shall be deemed to have been made at a particular place. This would provide the connecting factor for jurisdiction to the court of that place in the matter of any dispute on or arising out of that contract. It would not, ipso facto take away the jurisdiction of other courts.”[13]

 Suit between Principal and Agent

Suits in respect of accounts against an agent can be instituted where the contract of agency was entered into or where the accounts are to be rendered and the payment to be made by the agent. Suit by an agent against the principal for recovery of loss would lie at the place of residence of the defendant.[14]

Suit for accounts by the principal against agent would not lie at the place where accounts were demanded and refused.[15]

Suit between Banker and Customer

Where demand is made in a Bank, the place of repayment is to be determined from the terms of the receipt. In the absence of such terms, the money becomes payable at the place where the Bank does its business.

In the current account, the obligation of the banker to repay arises on demand and is limited to the office where the account is kept. “The customer must make a demand for payment at the branch where his current account is kept before he can have a cause of action against the Bank. The rule is the same whether the account is a current or” deposit.[16]

Suit against Corporation

As Explanation II of Section 20 of the Code  “Corporation” includes not only a statutory corporation but also a company registered under Companies Act.[17]

The incorporation, registration and corporate office of a trading company is its principal place of business, i.e. the place where the administrative business of the company is conducted, which may not be the place where its manufacturing or other business operations are carried on. Thus, irrespective of the provisions of the Companies Act, the domicile of a trading company will be the place of its suing.

The test to be conducted before filing a suit against a company is: Whether the company carried on business at the place where it has been sued at the time of commencement of the suit.[18]

 Suits against Foreigners

Jurisdiction over persons and property apart from principles of International Law, where foreign subjects are involved is governed by legislation passed in the country where it is sought to be exercised.

The code does not exempt foreigners from the jurisdiction of Indian Courts.[19] As regards residence, even a temporary residence is sufficient to give jurisdiction. foreigner carrying on business through an agent within the jurisdiction will become amenable to the jurisdiction of the Court.

“If a cause of action against a non-resident foreigner arises within the territory than in itself, is sufficient ground of jurisdiction. The presence of a foreign defendant who appears under protest to contest jurisdiction cannot be considered as conferring jurisdiction on the court to take action.”[20]

“Unless a foreign defendant either resides within the jurisdiction or voluntarily appears or has contracted to submit to the jurisdiction of the court, it is not possible to hold that the court will have jurisdiction against a foreign defendant.”[21]

A decree passed in a suit against non-resident foreigners is not enforceable in foreign courts.[22]

Consent of Parties to Jurisdiction

It is a well-established principle of law that jurisdiction is conferred upon courts by the legislatures only. The consent of parties cannot, therefore, confer jurisdiction upon a court, when it does not possess it. This principle, however, does not apply when the parties agree to submit to the exclusive or non-exclusive jurisdiction of a foreign court. [23]

In a suit for damages against a corporation, having its branch office in a place where the cause of action arose, the court at such place would have jurisdiction. the parties cannot confer jurisdiction on the court where the corporation has its registered office.[24]

The parties can’t by agreement vest in a jurisdiction on a court that isn’t governed as per the Code of Civil procedure. An agreement that one of the courts having such jurisdiction alone will adjudicate the suit, isn’t contrary to public policy. It does not contravene section 28 of the Contract Act.[25]


[1] UOI v. Ladulal Jain, AIR 1963 SC 1681

[2] Srinivas v. State of Madras, AIR 1951 Mad 93

[3] AIR 1975 All 368

[4] Hindustan Petroleum Corporation Ltd. V. Barun Shankar Chatterjee, AIR 2012 Cal 255

[5] Kondamudi Sriramulu v. Myneni Pundarikshyaya, (1950) 11 FCR 65

[6] AIR 1988 SC 1347

[7] Gokaldas Melaram v. Baldeodas, AIR 1961 Mys 188

[8] Harelishah v. Shaik Painda, AIR 1926 PC 88

[9] Khanchand v. Harumal, AIR 1965 Bom. 109

[10] State of UP v. Raja Ram, AIR 1966 All 159

[11] UOI v. Ladulal Jain, AIR 1963 SC 1681

[12] Dashrath Rupsingh Rathod v. State of Maharashtra, AIR 2014 SC 3519

[13] ABC Laminart Pvt. Ltd. V. AP Agencies, Salem, AIR 1989 SC 1239

[14] Krishan Lal v. Bhanwar Lal, AIR 1954 SC 500

[15] Dharam Datt v. Ram Lal Suri, AIR 1961 Punj. 567

[16] Allahabad Bank Ltd. V. Gulli Lal, AIR 1940 All 243

[17] Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740

[18] Babulal v. Caltex India Ltd., AIR 1967 Cal 204

[19] Muthakanni v. Andappa, AIR 1955 Mad 96

[20] H Ahmed & CO. v. Kohinoor Glass Factory, AIR 1961 AP 476

[21] World Tanker Carrier Corpn v. SNP Shipping Services Pvt. Ltd., AIR 1998 SC 2330

[22] Maloji Nar Singh Rao v. Shankar Sharan, AIR 1962 SC 1737

[23] Modi Entertainment Network v. WSG Cricket, AIR 2003 SC 1177

[24] Patel Roadways Ltd v. Tropical Agro Systems Pvt. Ltd., AIR 1992 SC 1514

[25] Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740


  1. History of the Code of Civil Procedure (CPC)(Opens in a new browser tab)
  2. Res Sub Judice and Res Judicata(Opens in a new browser tab)
Subham Agrawal
Author: Subham Agrawal

Shubham is a student of National Law University, Visakhapatnam. He has been engaged with High Stake and Key issues, by interning under Senior Advocates of Supreme Court, Additional Solicitor General, AOR and Tire-I law office.

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