FORUM FOR INSTITUTION OF SUITS
Q : ‘A’ is tradesman in Calcutta, ‘B’ carries on business in Delhi. ‘B’ by his agent in Calcutta buys goods from ‘A’ and requests ‘A’ to deliver them to the Eastern Railway in Calcutta. ‘A’ delivers goods accordingly in Calcutta. At which place ‘A’ may sue ‘B’ for the price of goods?
Bihar Judicial Service Exam. 1991
U.P. Judicial Service Exam. 1997
West Bengal Judicial Service Exam. 1992 and 1998 and 2000 Rajasthan Judicial Service Exam. 1986
Ans: ‘A’ may sue ‘B’ for the price of goods either in Calcutta or in Delhi—Section 20 of C.P.C.
Reasons: Sections 16 to 20 of C.P.C. deals with provisions relating to forum for the institution of suits.
This problem is based on Section 20 of C.P.C. Section 20 determines the forum for the institution of a suit which is not covered by Sections 16 to 19. The present case is not covered by Sections 16 to 19 and therefore its forum for instituting the suit will be determined by Section 20.
The relevant part of Section 20 on which this problem is based provides that when a case is covered by this section (Section 20) then the suit by the plaintiff may be instituted either in a court within the local limits of whose jurisdiction course of action (wholly or partly) arises or in a court within the local limits of whose jurisdiction defendant resides/carries on business/personally works for gain.
The basis of suit in the given problem is contract and not covered by Sections 16 to 19 and thus, covered by Section 20. In this case ‘A’ may sue ‘B’ for the price of goods either in the court of Calcutta/Kolkata where the cause of action arose (contract was made) or in the court of Delhi where ‘B’ (defendant) carries on business.
Note: (1) Cause of action: A bundle of essential facts which the plaintiff has to prove in order to succeed in a suit, is known as cause of action.
(2) The facts of this problem have been taken from Illustration (a) of Section 20.
(3) It is notable that laws relating to institution of suit regarding contracts on the basis of cause of action, are as follows:—
Suits on Contract: In case of a suit arising out of contract the cause of action arises at the place where the contract was entered into, the place where the contract was to be performed or performance completed or at the place wherein performance of the contract any money to which the suit relates was expressly or impliedly payable. Thus, suits relating to contract can be instituted in any of the aforesaid places.