Section 20 CPC: Other suits to be instituted where defendants reside or cause of action arises

Section 20 of Code of Civil Procedure: Other suits to be instituted where defendants reside or cause of action arises

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

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, 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 work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

Explanation.— A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Legal Commentary & Landmark Judgments: Section 20

Section 20 of the Code of Civil Procedure, 1908 is the general residuary provision governing territorial jurisdiction for all suits not covered by Sections 15 to 19, including contractual and commercial claims.

Core Legal Standard: The Explanation clarifies that a corporation is deemed to carry on business at its sole or principal office in India, or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
Procedural Rule & Jurisdiction: Where more than one court has jurisdiction under Section 20, parties may validly enter into an 'exclusive jurisdiction clause' selecting one of those competent courts to the exclusion of others.

To draft an effective forum selection clause, counsel must ensure that the chosen court possesses at least partial cause of action under Section 20(c).

Key Landmark Precedents:

A.B.C. Laminart (P) Ltd. v. A.P. Agencies, (1989) 2 SCC 163: The Supreme Court held that where more than one court has jurisdiction under Section 20(c) because cause of action arose in part in each, an agreement restricting jurisdiction to one such competent court is valid; however, parties cannot confer jurisdiction on a court that inherently lacks it.
Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd., (2003) 4 SCC 341: The Supreme Court affirmed the validity of exclusive jurisdiction clauses in domestic and international contracts under Section 20.
Patel Roadways Ltd. v. Prasad Trading Co., (1991) 4 SCC 270: The Supreme Court held that under the Explanation to Section 20, if a corporation has a subordinate office where the cause of action arose, the suit must be filed there, and cannot be filed at the principal office if no cause of action arose at the principal office.

Legal Commentary:

Section 20 is the engine of contractual and commercial litigation. A plaintiff can sue where the contract was executed, where payment was to be made, where goods were to be delivered, or where the defendant resides. To draft an effective forum selection clause, counsel must ensure that the chosen court possesses at least partial cause of action under Section 20(c).

Section 20: Other suits to be instituted where defendants reside or cause of action arises

Section 20 of Code of Civil Procedure: Other suits to be instituted where defendants reside or cause of action arises

Legal Commentary & Landmark Judgments: Section 20