UNION OF INDIA Vs. H CANDOLKAR AND SONS

JUDGEMENT

(1.) THIS is a revision application against the Order dated 23rd October 1996 passed in Special Civil Suit No. 208/94/a by the Civil Judge, Senior Division at Panaji. By the impugned Order the trial Court had held that it had jurisdiction to try and entertain the application filed by the respondents herein under section 8 read with section 20 of the Arbitration Act, 1940 against the petitioner. From the pleadings in the application filed before the trial Court it appears that some dispute had arisen in relation to the execution of the work tendered to the respondents under Work Order dated 3rd October 1992. Undisputedly the work order was issued at Nasik, State of Maharashtra and the work consisted of construction of 6 B type and 6 C type staff quarters for postal Civil Division at Ratnagiri, again within the State of Maharashtra. The trial Court, observing that as per the Explanation to section 20 of Civil Procedure Code the petitioners shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has also a subordinate office at such place and that the petitioner No. 5 can be deemed to carry on business where it has a subordinate office irrespective of nature of work that is actually carried on, held that the Civil Court at Panaji had jurisdiction to entertain the said application. Aggrieved, the petitioners have preferred the present revision application.

(2.) THIS Court in the matter of (Union of India v. M/s. Ajit Mehta and Associates, Pune and others) A. I. R. 1990 Bombay 45 held in clear terms that the expression carries on business in section 20 (a) of the Civil Procedure Code, when used in reference to the State or the Government, does not refer to all its activities but only the commercial activities, if there are any. Indeed in cases where the activity is not of a commercial nature, the suit must be filed against the Government at the place where the cause of action arises wholly or in part. It is further observed in the said case that even where the activity is of commercial nature, the suit has to be filed either at the principal place of business or the principal office, which is Delhi in the case of Union of India, or at the place where the cause of action arises wholly or in part. In the present case, the work order was issued at Nasik and the respondents entered into an agreement for the construction in question with the petitioners also at Nasik.

(3.) HAVING realized the difficulty faced pursuant to the judgment of this Court in Union of India v. M/s. Ajit Mehta and Associates, Pune and others (supra), Shri Menezes, learned advocate appearing for the respondents, sought liberty of this Court to withdraw the Arbitration Application filed by the respondents under section 8 read with section 20 of the Arbitration Act, 1940 in the trial Court and also has filed an application to the effect that the respondents be permitted to withdraw the said application being Special Civil Suit No. 208/94/a alongwith Civil Miscellaneous Application No. 27/1996/a, to be presented in a Court of proper jurisdiction. Shri S. R. Rivenkar, the learned Addl. Standing Counsel appearing for the petitioners, under instructions from the petitioners herein, state that the petitioners have no objection for grant of the relief prayed for in the said application in terms of Order VII, Rule 10 of Civil Procedure Code.