PART CAUSE OF ACTION

[DR.MARIAPPAN GOVINDARAJAN]

Cause of action

The term “cause of action” has not been defined in the Code of Civil Procedure, 1908. It has been left for the Judiciary to interpret. But in simplest terms, a “cause of action” can be defined as a legal claim that an individual or entity can bring against another person or entity.

Section 20 of the Civil Procedure Code, 1908 provides that every suit shall be instituted in a Court within the local limits of whose jurisdiction-

1. the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
2. any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally works for gain, as aforesaid, acquiesce in such institution; or
3. The cause of action, wholly or in part, arises.

Part Cause of action

The Court will have jurisdiction where a part of cause of action arised in its territorial jurisdiction.  The same is very much illustrated in M/S. GAMMON INDIA LIMITED VERSUS V. LAWRANCE, S/O. VANATHAIYAN, PROPRIETOR M/S. JESSI CONSTRUCTIONS - 2025 (3) TMI 891 - MADRAS HIGH COURT

In the above said case, Lawrence (the respondent in the present appeal) filed a suit in O.S. 167 of 2013, before the Principal District Court, Cuddlore seeking a decree for the payment of a sum of Rs.88,55,12-/- with interest Rs.58 lakhs at 12% from the date of plaint till date of decree and thereafter @ 6%.  Gammon India Limited, the defendant (appellant in the present appeal) hired a truck on a monthly rent of Rs.4.25 lakhs for a period of 24 months commencing from 20.12.2017.  The defendants would pay for grease and oil consumed by the machinery.  The machinery was despatched to Bellary on 17.12.2007 and became operational on 20.12.2007. The said machine was used in Bellary till March 2008.  Then the said machinery was sent to Cudappah from April 2008 and it was operational till the contract period i.e., December 2009. 

The rent was paid by the defendants by cheques which were realized at Neyveli.  The payment of rent was stopped from September 2008.  The plaintiff sent emails to the defendant demanding the rent.   Since no payment has been made, the plaintiff sent a legal notice dated 21.01.2010 calling upon the defendants to pay Rs.68 lakhs with interest.  On 02.02.2010 the defendant required the plaintiff to meet its officers to look into the issue.  The plaintiff sent another notice on 07.04.2010.  The defendant paid Rs.10 lakhs to the plaintiff.  Since the defendants did not pay the balance of rent, the plaintiff unable to pay the monthly instalments of the machinery, was forced to sell the machinery to settle the outstanding loan.  The petitioner filed the present suit before District Court, Cuddalore, on the ground that part of cause of action arose within the jurisdiction of District Court, Cuddalore. 

The defendants contended that the District Court, Cuddalore, has no jurisdiction to entertain the suit.  The suit should have been filed either at Mumbai where the defendants company is carrying on business or at Bellary or Cudappah where the machinery was actually put into use.  Further the suit was barred by limitation.  The plaint is vague and unambiguous.  There was a breach on the side of the plaintiff. 

At the trial Lawrence and one ex-employee were examined.  The plaintiff filed 18 documents in support of its case.   The Trial Court held that the documents would demonstrate that there was a concluded contract for hiring the machinery between the plaintiff and the defendants.  The Trial Court held that the defendants were liable to pay the suit claim.  In regard to jurisdiction the Trial Court held that since the cheque was issued at Neyveli and the same was encashed at Neyveli the Principal District Court would have the jurisdiction to entertain the suit.  Therefore, the Trial granted the decree as prayed for.  Against this order the defendant filed the present appeal before the Madras High Court.

The appellant submitted the following before the High Court-

• Though the machine was hired the same was not put into use throughout the hire period.
• The machine had broken down at Cudappah and therefore the defendants are not liable to pay the rent. 
• The machinery was not used in Bellary, since the scope of the contract was modified by the Principal at Bellary, out of goodwill and in view of the long-standing relationship between the parties, the defendants had transported the machinery to Cudappah and used it there. 
• The encashment of cheque at Neyveli would not confer jurisdiction on the Court at Cuddalore.

The respondent submitted the following before the High Court-

•   The defendants have never denied the contract or their liability to pay the rent.
• There is no plea regarding break down in the written statement.
• There is not even a scrap of paper to show that the defendant had complained of the machinery breaking down during the course of the entire contract period for 24 months. 
• The witnesses admitted that the defendants are liable to pay rent and they only sought for waiver on the ground that the machinery was put to use in Cudappah.
• Since the part of cause of action arose in Neyveli there is no jurisdictional question arised.

The High Court considered the submissions of both the parties.  Two issues were framed by the High Court as given below-

• Whether the plaintiff is entitled to a decree for money as prayed for and
• Whether the District Court, Cuddalore had the jurisdiction to try the suit?

In regard to point no. 1, the High Court observed that the contract for hiring the machine has been admitted.  There is no claim in the reply to the legal notices issued for making payment of the rent about the brokage of the machines.  It is not claimed that there was no liability to pay the rent at any time.  The DW1 deposed that as per the terms and conditions of the contract the rent was bound to be paid.  The only concession requested to the plaintiff was that to waive the rent for the period when the machine was not put use.  They never informed the plaintiff about the breakdown of the machine.  The defendants in fact claim no knowledge regarding the fact as to whether the machinery was put in use in Nagpur or not.  Therefore, the High Court answered the question No. 1 in favour of the respondent/plaintiff. 

In regard to question No. 2 about the jurisdiction of the District Court, Cuddalore the High Court observed that the cheque was encashed at Neyveli within the jurisdiction of the Trial Court.  Therefore, a part of the cause of action has arisen within the jurisdiction of the Principal District Court, Cuddalore.  In the present case the offer was made from Neyveli and it was accepted from the Head Office of the defendant at Mumbai.  The payments were made by the cheques and the cheques were encashed at Neyveli.  In order to invoke Section 20 (c) of Civil Procedure Code, it is sufficient if the plaintiff is able to demonstrate that at least part of the cause of action arose within the jurisdiction of the Trial Court.  The fact that the offer was made from Neyveli and it was accepted without any reservation coupled with the fact that the cheques were encashed at Neyveli would definitely amount to part of the cause of action arising at Neyveli within the jurisdiction of the Trial Court, the District Court, Cuddalore.  The High Court also answered the question No. 2 in favour of the respondent/plaintiff.

The High Court, therefore, dismissed the appeal.