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TMI Blog1985 (11) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... ants Nos. 2 to 6 approached the plaintiff-Union Bank of India, branch at Karimnagar, for granting loan facilities to the company. The plaintiff-bank sanctioned a limit of Rs. 1,00,000 to the first defendant-company under hypothecation. A pro-note was executed on July 5, 1973, on behalf of the first defendant-company as security at Karimnagar and a letter of hypothecation was also executed at Karimnagar on the same day in favour of the plaintiff-bank. Defendants Nos. 2 to 6 stood as guarantors undertaking personal liability and executed a letter of continuing guarantee on July 5, 1973, at Karim-nagar. The first defendant-company availed of the cash credit facility. The liability under the hypothecation account and the remaining confirmation letters admitting the liability were executed at Karimnagar. The plaintiff-bank also sanctioned a limit of Rs. 2 lakhs under pledge (cash credit) to first defendant-company. A pronote on behalf of the first defendant-company was executed in favour of the plaintiff-bank for Rs. 2 lakhs on January 25, 1974, as security for the pledge liability. Similarly, an agreement was also executed in favour of the plaintiff-bank on behalf of the first defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hypothecation account and an amount of Rs. 1,46,843.30 was due under the pledge account and that defendants Nos. 2 to 6 are personally and also jointly and severally liable to pay the amounts due to the plaintiff-bank. The plaintiff-bank laid the suit O.S. No. 101 of 1983 in the Court of the Addl. Chief Judge, City Civil Court, Hyderabad. The first defendant-company was represented by the official liquidator. In spite of service of summons, he did not appear in the court and hence he was set ex parte and, as such, no written statement was filed in the suit by the date of the impugned order on behalf of the official liquidator representing the first defendant-company. In the written statement filed by defendants Nos. 2 to 6, a preliminary objection was taken stating that the Court of the Addl. Chief Judge, City Civil Court, Hyderabad, has no jurisdiction to try the suit inasmuch as no part of the cause of action arose within the jurisdiction of that court. Further, it was stated that the first defendant-company was located at Karimnagar town of Karimnagar District; the other defendants were not residing or carrying on any business or trade within the jurisdiction of that cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case. Whereas, Sri T. S. Harinath, learned counsel for the plaintiff-bank contended that inasmuch as the winding-up order was passed by this court at Hyderabad and winding-up proceedings are still pending in the High Court at Hyderabad and the office of the official liquidator is located at Hyderabad, the Addl. Chief Judge, City Civil Court, Hyderabad, has jurisdiction to try the suit under section 20(a) and (c) of the Civil Procedure Code. The territorial jurisdiction of a court is in general determined by the provisions of section 20 of the Civil Procedure Code which reads as follows : "20. Other suits to be instituted where defendants reside or cause of action arises. Subject to the limitations aforesaid, every suit shall be instituted in a court within the local limits of whose jurisdiction : (a)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 (b)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, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ognition of the principle that the defect as to the place of suing under sections 15 to 20 may be waived. Independently of this section, the defendant may waive the objection and may be subsequently precluded from taking it. (Vide Hira Lal Patni v. Kali Nath, AIR 1962 SC 199, at page 201). In Bahrein Petroleum Co. Ltd. v. P. J. Pappu, AIR 1966 SC 634, it was observed that (headnote): "Where the defendant allows the trial court to proceed to judgment without raising the objection as to the place of suing and takes the chance of a verdict in his favour, he waives the objection, and will not be subsequently permitted to raise it. It is even possible to say that long and continued participation by the defendant in the proceedings without any protest may, in an appropriate case, amount to a waiver of the objection." In the present case, defendants Nos. 2 to 6 have raised the question of jurisdiction of the court at Hyderabad to try the case on the ground that the cause of action arose to the plaintiff-bank at Karimnagar and that the plaintiff-bank as well as the first defendant-company are located at Karimnagar. The plaintiff-bank stated in paragraph 14 of the plaint that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Hyderabad furnishes a cause of action to the plaintiff-bank to institute the suit against the defendants at Hyderabad. Whereas, Sri P. V. Narayanarao, learned counsel for the revision petitioners, i.e., defendants Nos. 2 to 6 contended that the mere location of the office of the official liquidator does not empower the plaintiff to file the suit at Hyderabad. His contention is that the official liquidator represents the first defendant-company which is located at Karimnagar. Mere residence of the official liquidator at Hyderabad does not enable the plaintiff to file the suit at Hyderabad. All the functions of the official liquidator in respect of the management of the property of the first defendant and carrying on its business have to be done only at Karimnagar. According to him, the location of the office of the first defendant at Karimnagar is material for the purpose of determining the local limits of the jurisdiction of the court where the suit has to be instituted and the place of residence of the official liquidator is not at all material for the purpose of determining the jurisdiction of the court under section 20 of the Code. Learned counsel contended that the real par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "voluntarily resides or carries on business or personally works for gain" refers only to natural persons and not to legal entities. (Vide Union of India v. Ladulal Jain, AIR 1963 SC 1681). In Badrinarayan v. Excise Commissioner [1962] 1 An WR 133; AIR 1962 AP 382, a Bench of this court, considering the very expression occurring in section 20, Civil Procedure Code, observed that these words clearly refer to natural persons and not to a legal entity. Hence, it cannot be said that the residence of the official liquidator who is the holder of a public office has no relevance for the purpose of determining the jurisdiction of the court under section 20 of the Code. Similarly, I cannot accept the contention of learned counsel for the plaintiff-bank that passing of winding-up orders by this court at Hyderabad furnishes any cause of action to file the suit against the defendants at Hyderabad. The passing of winding up orders by the High Court is only a statutory function discharged by this court and it has no relevance to give cause of action for laying of a suit. The High Court appointed the official liquidator for purpose of taking custody of the property of the first defendant- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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