1951 (9) TMI 27 - HC - Companies Law

Summary

Issues: Jurisdiction of Delhi Courts in a suit involving insurance claim with a warranty clause designating Lahore as the jurisdiction.

In this judgment, the issue at hand was the jurisdiction of the Delhi Courts to try a suit involving an insurance claim for goods looted by a riotous mob, where the policy contained a warranty clause designating Lahore as the jurisdiction for any claims arising. The Subordinate Judge of the 1st Class, Delhi, had held that Delhi Courts had jurisdiction to try the suit, based on a letter (Ex. P8) indicating a shift of the insurance company's office from Lahore to New Delhi. The petitioner challenged this decision through a rule directed against the Subordinate Judge's order.

The judgment analyzed the relevant legal provisions, including Explanation II to section 20 of the Code of Civil Procedure, which determines the place of suing for corporations. It was highlighted that the cause of action in contracts arises at the place where the contract was made, performed, or where any money related to the contract was paid. The judgment emphasized that the domicile of a company is fixed by the location of its principal place of business, and the mere relocation of an office does not automatically transfer the right to bring a suit to the new location. The court clarified that an incorporated company can be sued at its principal place of business or at a place where the cause of action arose if it has a subordinate office there, neither of which applied in this case.

The judgment rejected the argument that the change in office location to New Delhi gave rise to jurisdiction for Delhi Courts, emphasizing that a cause of action is not established solely based on administrative changes. The court concluded that the Delhi Courts did not have jurisdiction to try the suit and allowed the petition, setting aside the trial court's order. The plaintiff was directed to file the suit in a court of competent jurisdiction, and the opposite party was ordered to pay the costs of the petitioner in the High Court.