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TMI Blog1976 (2) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 1967, he happened to lose the said three time certificates of deposit which he had kept in one envelope, and in paragraph 19 of the plaint, it is stated that the plaintiff thereafter requested the defendant-bank to issue duplicates of the lost instruments. In paragraph 20 of the plaint, it is stated that the defendant-bank at its International Banking Office at San Francisco office, however, informed the plaintiff that before the said time certificates of deposit were replaced by it the plaintiff should furnish an indemnity bond by a Corporate Bonding Company, and in paragraphs 68 to 72 of the plaint, it is stated that the plaintiff, being in urgent need of funds and it being necessary for him to join his ailing wife in London who was in considerable distress, was under those circumstances forced to execute indemnity agreements covering the replacements of the said time certificates of deposit. It may be mentioned that there is a clause in the said indemnity agreements which provides that they could be legally enforced in Punjab in India as well as in California in the United States of America. On these facts, the plaintiff has filed the present suit in this court for a decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions of the plaintiff who appeared in person before me on the issue of jurisdiction were two-fold, viz , (1) the defendant-bank which is a corporation incorporated in the U.S.A. has, admittedly, office in Bombay which is its principle place of business in India, and can, therefore, be sued in this court by reason of the provisions of clause 12 of the Letters Patent of this court; and (2) the defendant-bank has, in any event, submitted to the jurisdiction of this court by what it has done both before and after the filing of this suit. It will be convenient to dispose of the second point relating to submission to jurisdiction first as, in my opinion, there is no substance in the same. It was submitted by the plaintiff that the note of the defendant-bank which amounted to waiver of the objection as to jurisdiction, even before this suit was filed, were that there was, admittedly, a clause in the agreements of indemnity under which the suit could be filed in California in the U.S.A. or in the State of Punjab in India; that the defendant-bank had, admittedly, registered with the Registrar of Companies under section 592 of the Companies Act, 1956, and the same address at which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, in an appropriate case, amount to a waiver of the objection. But, in this case, we find no conduct of the defendants which amounts to a waiver, or which precludes them from raising the objection". These observations of the Supreme Court leave no room for doubt that not only is there no obligation on a defendant who objects to the jurisdiction of the court to file an appearance under protest, but that the filing of a written statement in which, after objecting to jurisdiction, the defendant also pleads to the merits of the plaintiff's case, does not amount to waiver of the objection to jurisdiction. The filing of an appearance under protest and not filing a written statement is a course which is adopted when a party desires to apply for stay of a suit under section 34 of the Arbitration Act, but that is because the filing of an appearance simpliciter or filing a written statement might amount to taking "steps in the proceedings" within the terms of section 34 of the Indian Arbitration Act, 1940. No such question can, however, arise when an appearance, or a written statement objecting to the jurisdiction of the court, is filed by a defendant in a suit, unless an application u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the headquarters of the railway administration in question were located within the jurisdiction of the court in which the suit was filed did Dot give it jurisdiction under section 20 of the Code of Civil Procedure. Rejecting that contention, It was held by the Supreme Court (paras, 11 and 16) that the running of railways was "business" and the Union of India could be sued in the appropriate court within whose territorial jurisdiction the headquarters of the railway concerned were situated. The expression "voluntarily resides or personally works for gain" which is also used in clause 12 of the Letters Patent of this court, obviously, cannot apply to a bank but, having regard to the view taken by the Supreme Court in Ladulal Jain's case , it must be held that from that it cannot follow that the expression "carries on business" which also occurs in clause 12 would apply only to such persons to whom the other two expressions would apply. If the Government can carry on business, as held by the Supreme Court in Ladulal Jain's case ( supra ) a fortiori a bank can carry on business within the terms of clause 12, and, indeed, there would be no difficulty if the bank in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit at that branch office in the manner provided in Order 65, rule 3 of the Rules of the Supreme Court in England by reason of the provisions of section 407(1)( c ) read with section 412 of the English Companies Act, 1948. At common law, a foreign corporation which is so served with the writ is treated as being present in England for the purpose of jurisdiction, but the rule of English Common Law under which the rules as to the legal service of a writ define the limits of the court's jurisdiction over foreign corporations was never applied in India prior to the commencement of our Constitution and cannot, therefore, be held to have been preserved under article 372(1) of the Constitution. Indeed, it appears to me that the situation of a foreign corporation being sued in India in respect of a cause of action which arose abroad was never contemplated when the Queen granted the Letters Patent to this court in 1865, or when the legislature enacted section 20 of the Code of Civil Procedure in the year 1908. Section 20 of that Code contains a specific provision in Explanation II thereof that a corporation is to be deemed to carry on business at its sole or principal office in India, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Choukhani v. Caltex ( India ) Ltd. AIR 1967 Cal. 205, para. 23 but the judgment in the said case cannot be of any assistance for determining the question now before me. The facts of the said case show that the company in question was registered outside India, that its principal office in India was in Bombay, that it had a branch office in Calcutta and that the whole cause of action had arisen in Calcutta itself. The question as to whether the said company being a foreign company could be sued in India was not raised at all in the said case, but the only contention advanced was that it could be sued in Bombay where it had its head office in India, and not at Calcutta where it had its "district office" (see para. 16). Applying clause 12 of the Letters Patent, it was held (para. 23) that, with no such "legal fiction" in clause 12 as is to be found in Explanation II to section 20 of the Code of Civil Procedure, it had to be held that the company did carry on business also at Calcutta and could, therefore, be sued there. Moreover, the cause of action in the said case had arisen in Calcutta. Reliance was also sought to be placed upon the judgment of a Division Bench of the All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal rule that should be "voluntarily chosen" by our country for the purpose of deciding the question of jurisdiction that arises in the present case. As already stated above, there is no reason why the peculiar rule of English private international law based on the service of the writ should be adopted in this country. If causes of action arising out of business done by foreign corporations anywhere else in the world are to be entertained in our country by adopting the rule contained in clause 12 of the Letters Patent as a rule of private international law normally by reason of the fact that those foreign corporations may have a branch office within our country, it would lead to the absurd result that a suit could be filed by any person, including a foreigner, in Bombay against the Bank of America in respect of a cause of action relating to a transaction that may have arisen wholly in London, or Hongkong, or anywhere else in the world, such rule, if adopted as a rule of private international law by us, would not command recognition in foreign countries. In my opinion, the proper course to follow in a case like the present one is to extend the rule of municipal law contained in Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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