HCL INFO SYSTEMS LIMITED Vs. ANIL KUMAR

JUDGEMENT

(1.) The question that arises for consideration is whether a civil court will have territorial jurisdiction to entertain a suit against a company having a branch office within its jurisdiction in respect of a cause of action that did not arise at least in part within its jurisdiction.

(2.) Ext.P5 judgment of the Sixth Additional District Judge, Ernakulam in C.M.A. No. 981 of 2002 by which the finding in Ext.P4 order entered by the Second Additional Subordinate Judge, Ernakulam on issue No. 5 regarding the territorial jurisdiction of the court has been set aside, is under challenge in these proceedings under Article 227 of the Constitution of India.

(3.) The defendant in the suit is M/s. HCL Info Systems Ltd., a Company incorporated under the Companies Act. The contention which was seriously raised by the plaintiff answering the question of jurisdiction was that the defendant having submitted to the jurisdiction of the court is not entitled to contend at a later stage that the court has no territorial jurisdiction to entertain the suit. The above contention was rightly overruled by the learned Sub Judge who found that going by the amended plaint, the cause of action for the claim (arrears of incentives due to the respondent-plaintiff, a former employee of the Company) arose partly at Madras and partly at Bombay and accordingly found, applying the Explanation to Section 20 of the Code of Civil Procedure, that the suit could be maintained at New Delhi where the Registered Office of the Company is situated or at Madras or Bombay where the cause of action had arisen in part. C.M.A. No. 981 of 2002 was preferred by the respondent-plaintiff and in the C.M. Appeal also the learned Additional District Judge was not inclined to uphold the plea of waiver which was pursued by the respondent. But the learned Judge noticed that going by the address and seal of the defendant-Company contained in the written statement, the defendant-Company is situated at Cochin within the jurisdiction of the trial court. Observing that the defendant does not have a case that the Company at Cochin is a branch or that the Company's Head Office or Principal Office is elsewhere and taking note of the submission of the defendant's counsel that the Company is running business at Cochin, the learned District Judge applied Clause (a) of Section 20 of the Code to hold that the Ernakulam Sub Court is having territorial jurisdiction since the Company-defendant is carrying on business within the territorial limits of that court.