City Bank of Lahore and Others vs Duni Chand and Others

Harnam Singh, J.—On the 15th of February 1949, the City Bank of Lahore, Limited (in liquidation) instituted Civil Suit No. 5/3 of 1949 for the recovery of Ra. 22,153/1/9 from Messrs. Duni Chand and Sons, Sham Lal and Gopal Krishan.

Defendants Nos. 1 and 2 resisted the suit pleading ''inter alia'' that the suit could not be instituted in the Civil Courts at Simla.

Finding that the suit could not be instituted in the Civil Courts at Simla, the Court of first instance has rejected the plaint under Rule 11 of Order VII of the Code of Civil Procedure. The plaintiff-bank appeals:

"6. That defendants Nos. 2 and 3 carry on the Hindu joint family business called and known as Messrs. Duni Chand and Sons (defendant No. 1), and defendant No. 2 was and is the ''karta'' or manager of the said Hindu joint family business. The said business had branches in Lahore and Simla.

That cause of action arose finally on 16th October 1948, when the last demand was made. As the Hindu joint family business is being carried on at Simla at No. 11. The Mall, by defendant No. 2, on behalf of himself and defendant No. 3 and as defendant No. 2 also resides at Simla, this Court has jurisdiction to try the suit. In any case, leave, of the Court u/s 20 of the CPC has also been obtained to institute the suit at Simla against defendant No. 3".

Defendants Nos. 1 and 2 put in a written statement. Paragraphs Nos. 6 and 12 of the written statement read:

"6. Para. 6 of the plaint is admitted to this extent that the firm Duni Chand and Sons was and is a joint Hindu family firm and defendant No. 2 is the ''karta'' of the joint Hindu family firm. The parent shop was and still is at Lahore and at Simla there is only a branch which is only opened during the summer months.

Para 12 of the plaint: The plaintiff-bank has ho cause of action to sue at Simla, nor this Court has jurisdiction to try this suit.

The dealing took place at Lahore and matter concerns Lahore shop and defendant No. 3 does not reside at Simla. Sanction, even if obtained from Court, is not valid. Leave of the Court how it could be obtained before the filing of the suit and how its mention is made in the plaint is a matter of surprise to the defendants."

From the pleadings of the parties set out above, it appears that it was admitted that defendant No. 1 is a joint Hindu family firm and that defendant No. 2 is the ''karta'' of that firm. In paragraph No. 17 of the written statement, it is admitted that defendant No. 2 carries on business at Simla. Sham Lal defendant gave evidence that Messrs. Duni Chand and Sons carry on business at Simla for 3 months in a year,

On the 15th at February 1949, the Court of first instance gave leave to the plaintiff-bank to institute the suit at Simla. This became necessary for Gopal Krishan defendant No. 3 did not reside at Simla.

On the pleadings of the parties the Court of first instance fixed the following preliminary issue:

"Whether the Civil Courts at Simla have Jurisdiction to try the suit?"

Madan Lal Malhotra, P. W. 1 gave evidence for the plaintiff-bank, while Ram Lal D. W. 1 and Sham Lal D. W. 2 gave evidence for defendants Nos. 1 and 2. Ex parte proceedings were taken against defendant. No. 3.

In deciding the point covered by the preliminary issue, the Court of first instance seems to think that the case did not tome within Section 20(b) of the CPC and that leave to institute the suit at Simla ought not to have been given.

The relevant provisions of Section 20 of the Code provide:

"20. Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, provided that in such case either the leave of the Court is given or the defendants who do not reside acquiesce in such institution."

In order to bring the suit within Section 20(b) of the Code, the plaintiff-bank, had to establish that any of the defendants at the time of the commencement of Civil Suit No. 5/3 of 1949 actually and voluntarily resided at Simla or carried on business at Simla. That Sham Lal, defendant No. 2, resided at Simla is proved by the evidence given by Madan Lal Malhotra P. W. 1, Ram Lal D. W. 1 and Sham Lal D. W. 2. Indeed, it is admitted in paragraph No. 17 of the written statement that Sham Lal defendant carried on business at Simla. Paragraph No. 6 of the written statement shows that defendant No. 1 carries on business at Simla. Clearly, the case falls within Section 20(b) of the Code.

In Civil Suit No. 5/3 of 1949 there is no proof of acquiescence in the institution of the suit on the part of defendant No. 3. Leave was given on the 15th February 1949, but in deciding the preliminary issue, the Court has revoked that leave.

Mr. Shambhu Lal Puri appearing for the plaintiff-bank urges that in the circumstances of the case leave given on the 15th of February 1949, ought not to have been revoked.

As stated above, defendant No. 1 resides, and carries on business at Simla. Defendant No. 2 is the karta of the Joint Hindu Family known as Messrs. Duni Chand and Sons and, the business is the business of the joint Hindu family. Defendant No. 3 is one of the members of the joint Hindu family. In rejecting the plaint, the Court of first instance thought that the case did not come within Section 20(b) of the Code. In so thinking, the Court failed to take into consideration the facts admitted by the answering defendants and proved at the trial. Admittedly defendant No. 2 resides and carries on business at Simla and the joint Hindu family carries on business at Simla. If so, the case falls within Section 20(b) of the Code.

In the judgment under appeal, there is, an elaborate discussion supported by citation, of authorities on the point covered by the preliminary issue. In my judgment that discussion has no bearing on the point that arises in, the case. That the promissory note was executed at Lahore and the transaction related to the business of the joint Hindu family at Lahore or that the promissory note was still at Lahore have no bearing on the question that, arises u/s 20(b) of the Code.

For the foregoing reasons, I set aside the judgment and decree of the Court of first instance and allow the appeal with costs.

From what I have said it is plain that Civil Suit No. 5/3 of 1949 was dismissed on the preliminary issue. That being so, I remand the case to the Court of first instance under Order XLI. Rule 23 of the CPC to be dealt with in accordance with law and direct the refund of the court-fee paid on the memorandum of appeal.

Parties are directed to appear in the Court of first instance on the 1st of July 1052

Khosla, J.

I agree.