Facts of the Case
- A transport company operates with a head office in Delhi and branch offices in Chennai, Jaipur, and Mumbai.
- Sam entered into a transaction with the company through its Chennai branch.
- A dispute arose from this specific transaction.
- Sam filed a suit against the company in the Court at Jaipur.
Issues in the Case
- Whether the Court at Jaipur has territorial jurisdiction to entertain the suit.
- Whether a branch office presence alone in a city confers jurisdiction on the local court for disputes arising elsewhere.
- Whether the cause of action has any connection with Jaipur.
Principles Associated with It
- Under Section 20 of the Code of Civil Procedure, a suit can be filed where the defendant resides, carries on business, or where the cause of action wholly or in part arises.
- The presence of a branch office does not necessarily confer jurisdiction unless the cause of action arises in that jurisdiction.
- Refer to Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740: Jurisdiction must be linked with the cause of action.
- In Shree Subhlaxmi Fabrics v. Chand Mal Baradia, AIR 2005 Bom 62: A branch office alone does not confer jurisdiction unless the transaction originated there.
- Patel Roadways Ltd. v. Prasad Trading Co., AIR 1992 SC 1514: Merely having a branch does not mean the court has jurisdiction unless the branch was involved in the cause of action.
Judgement
- The Court at Jaipur would not have jurisdiction merely because the company has a branch office there.
- Since the transaction took place through the Chennai office, and the cause of action arose there, only the Chennai Court (or the place of the company’s principal office if relevant) would have jurisdiction.
- The suit filed in Jaipur is likely to be returned or dismissed on the ground of lack of territorial jurisdiction.
