K. Abdul Rayees v. Lysorm-Rushail Pharma-DIN (Pvt) Ltd and The Zonal Sales Manager Lysiform-Rushail Pharma-DIN (Pvt) Ltd

CRP No.114 of 2016 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **WEDNESDAY, THE 15[TH] DAY OF NOVEMBER 2023 / 24TH KARTHIKA, 1945 CRP NO. 114 OF 2016** **AGAINST THE ORDER/JUDGMENT OS 31/2012 OF ASSISTANT SESSIONS COURT/SUB COURT, KANNUR CMA 49/2013 OF ADDITIONAL DISTRICT COURT & SESSIONS COURT - III,** ## **THALASSERY** ## **REVISION PETITIONER/APPELLANT/PLAINTIFF:** K.ABDUL RAYEES, S/O. K.AHAMED, MARKETING EXECUTIVE, MARATHAKAM, NEAR RAMANANDA MADAM, KUYYALI ROAD, TALASSERY, NOW RESIDING AT 12/35, BHARGAVI NILAYAM, NEAR SREE GANESHANKAVU,SATHRAM ROAD, P.O.DHARMADAM, TELLICHERRY - 670 016. BY ADVS. Manu Govind A.JAYASANKAR(J-114) ## **RESPONDENT/DEFENDANT:** 1 LYSORM-RUSHAIL PHARMA DIN (P) LTD. (FORMERLY) KNOWN AS RUSHAIL PHARMA-DIN (PVT) LTD, REPRESENTED BY CHAIRMAN MR.DEVANDU MEHTA, OFFICE AT G- 6, SHARDA CHAMBERS 15, NEW MARINE LINES ROAD, MUMBAI - 400 020. 2 THE ZONAL SALES MANAGER LYSOFORM-RUSHAIL PHARMA-DIN (PVT)LTD, 1-D, ROYAL NEST, PHASE II, CHINMAYA SCHOOL ROAD, FORT, THRIPUNITHURA P.O, ERNAKULAM - 682 031. BY ADV SRI.V.R.KESAVA KAIMAL THIS CIVIL REVISION PETITION HAVING COME UP FOR ADMISSION ON 10.11.2023, THE COURT ON 15/11/2023 DELIVERED THE FOLLOWING: CRP No.114 of 2016 2 ## **V.G.ARUN J.** ## **------------------------------------C.R.P.No.114 of 2016 --------------------------------Dated this the 15[th] day of November 2023** ## **O R D E R** The revision petitioner is plaintiff in OS No.31 of 2012 filed before the Subordinate Judge's Court, Kannur. The suit was filed for a direction to the first defendant company to pay a sum of Rs.1,68,753/- to the plaintiff with interest at the rate of 12% per annum. The averments in the suit are as under; The plaintiff was appointed as Marketing Executive of the first defendant company with effect from 01/08/2002 based on the letter dated 26/07/2002 issued by the the Marketing Director of the first defendant company. The plaintiff accepted the appointment and posted at Kannur. During his tenure, the plaintiff was reporting to the Regional Sales Manager at Cochin and all business activities were done in coordination with the Regional Sales Manager and under his instructions. Mr.K.Krishna Kumar, who was the Regional Sales Manager harassed the plaintiff to such an extent that the plaintiff was constrained to resign on 30/06/2006. Upon resignation, the plaintiff was not paid the bonus, incentives , arrears of salary and expenses, increment, etc. Further, the CRP No.114 of 2016 3 Provident Fund Contribution at the rate of 12% of the salary was not remitted by the first defendant. Hence, the suit is for realisation of the said amount. 2. The defendant entered appearance and filed written statement denying the allegation and contending that the Sub Court, Kannur, did not have territorial jurisdiction to try the suit since the first defendant company is situated in Mumbai and does not have any branch or administrative office in Kannur. It was also contended that no cause of action had arisen within the jurisdiction of the Sub Court, Kannur. 3. Based on the contentions, the court below considered the question of territorial jurisdiction as the first issue. After elaborate consideration, it was held that the court had no territorial jurisdiction to entertain and try the suit. Consequently, the plaint was returned for presentation before the proper court. Aggrieved by the order, the plaintiff preferred Civil Miscellaneous Appeal, which came to be dismissed affirming the order of the Sub Court. Hence, this Civil Revision Petition. 4. Learned Counsel for the petitioner contended that the Sub Court, Kannur was competent to entertain and try the suit going by Sections 19 and 20 of the Code of Civil Procedure. As per Section 19, suit for compensation can be instituted in the court within the local limits of which the wrong was done to the plaintiff. In the case at hand, the CRP No.114 of 2016 4 wrong was done to the revision petitioner in Kannur and hence, the court at Kannur has jurisdiction. As per Section 20(a), suit can be instituted in a court within the local limits of whose jurisdiction the defendant carries on business. In so far as the first defendant had been carrying on business in Kannur through the revision petitioner, the suit was maintainable before the Sub Court, Kannur. Even otherwise, the cause of action for filing the suit had arisen at Kannur and hence, the suit could be instituted before the Sub Court, Kannur in view of Section 20(c) of the Code. In support of this contention, learned Counsel relied on the decisions of the Apex Court in **Dhodha House & Patel Field Marshal Industries & Ors. v. S.K.Maingi & P.M.Diesel Ltd. [2006 (9) SCC 41]** and **Rajasthan High Court Advocates' Association v. Union of India & Ors [2001 (2) SCC 294]** . 5. According to the learned Counsel for the respondent, the concurrent findings of the courts below warranted no interference. It is contended that the first defendant company had no branch office at Kannur and the petitioner being only a Marketing Executive entrusted with the duty of canvassing orders for the company, his activity does not amount to carrying on of business by the company. Further, the petitioner having voluntarily resigned by sending his resignation to the Head Office of the Company at Mumbai, it is not open for him to contend that part of the cause of action had arisen at Kannur. CRP No.114 of 2016 5 6. I am of the considered opinion that the contention based on Section 19 of the Code was rightly rejected by the courts below since that provision will apply only if the suit is filed claiming compensation for wrongs done to the plaintiff. Although learned Counsel for the revision petitioner made an attempt to impress this Court that the releifs sought in the suit would also fall within the meaning of compensation, the said attempt has to fail in the light of the pleadings and the prayers in the suit. Undoubtedly, the pleading is with respect to non payment of service benefits due to the petitioner and the prayer is to direct the company to disburse the benefits with interest. In such circumstances the relief cannot, by any stretch of imagination, be treated as a claim for compensation. 7. The next contention is based on Section 20(a) of the Code which enables the plaintiff to institute the suit at a place where the defendant is carrying on business. Here, the contention is that the company had carried out business at Kannur through the petitioner. To substantiate this contention, certain communications issued by the company to the petitioner's address at Kannur is also produced. At the same time, the fact that the petitioner was a Marketing Executive of the company and the nature of his work required the petitioner to canvass business/order and forward it to the company is not in dispute. In almost similar circumstances, the Division Bench of this Court in CRP No.114 of 2016 6 ## **Mohammed Kasim Haji Ahamed Kunju v. Sree Hanuman Industries [1956 KLT 2148]** has held as under; “7. There is plenty of authority for the position that a Firm cannot be said to carry on business where it has only canvassers or agents for the purpose of obtaining offers of business and attending to matters ancillary to its business and that the business of the Firm will be taken to be as being carried on where the contracts relating to the business are entered into or wherefrom effective control is exercised. Whether a Firm or a person carries on business at a particular place or not is a question of fact. So early as 1865 a Division Bench of the Bombay High Court held in Eramji Kavasji Marker v. Hormasji Kavasji Marker - 1 Bombay High Court Reports 220 - that where that which is the essential ingredient in a persons business does not take place within the local limits of the jurisdiction of a court, it cannot be said that that person has been carrying on business within the limits of that court, even though he may have an agent therefore certain purposes connected with his business. The defendant Firm manufactured and sold, among other things, G.I.R. buckets and they can, therefore, be said to carry on their business in a place or places where the manufacture or the sales take place. In Firm Hira Nand-Murli Dhar v. Firm Garmukh Rai Radha Kishen - (1923) 73 Indian Cases 205 (Lahore) - the defendants carrying on business at Calcutta sold goods to the plaintiffs who carried on business at Amritsar. They consigned the goods to themselves at Amritsar, and endorsed the Railway CRP No.114 of 2016 7 Receipt in favour of a Bank at Amritsar, instructing the latter to realise the price of the goods from the plaintiffs before handing over the Railway Receipt to them and endorsing it in their favour. The plaintiffs sued defendants to recover damages for non delivery of some of the goods and the suit was instituted at Amritsar. It was found that the defendants had a travelling agent at Amritsar who secured orders for them and forwarded them to the Head Office at Calcutta. He had, however, no power to enter into any contracts or to receive any monies on behalf of the defendants. It was held that it could not be said that the defendants carried on business at Amritsar within the meaning of S.20 of the Civil Procedure Code.” 8. Although learned Counsel for the petitioner relied on the decision in **Dhodha House,** (supra) to contend that the business can be carried out at a place through an agent or a manager or through a servant. A careful scrutiny of the said decision shows that an agent, manager or servant can be held to carry on the business only on certain conditions being satisfied. This position is clear from paragraph 46 of the judgment extracted hereunder. “ **46.** The expression “carries on business” and the expression “personally works for gain” connote two different meanings. For the purpose of carrying on business only presence of a man at a place is not necessary. Such business may be carried on at a place through an agent or a manager or through a servant. The owner may not even visit that place. The phrase “carries on business” at a CRP No.114 of 2016 8 certain place would, therefore, mean having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control thereover. The expression is much wider than what the expression in normal parlance connotes, because of the ambit of a civil action within the meaning of Section 9 of the Code. But it is necessary that the following three conditions should be satisfied, namely, “( _1_ ) The agent must be a special agent who attends exclusively to the business of the principal and carries it on in the name of the principal and not a general agent who does business for anyone that pays him. Thus, a trader in the mofussil who habitually sends grain to Madras for sale by a firm of commission agents who have an independent business of selling goods for others on commission, cannot be said to ‘carry on business’ in Madras. So a firm in England, carrying on business in the name of A.B. & Co., which employs upon the usual terms a Bombay firm carrying on business in the name of C.D. & Co., to act as the English firm's commission agents in Bombay, does not ‘carry on business’ in Bombay so as to render itself liable to be sued in Bombay. ( _2_ ) The person acting as agent must be an agent in the strict sense of the term. The manager of a joint Hindu family is not an ‘agent’ within the meaning of this condition. ( _3_ ) To constitute ‘carrying on business’ at a certain place, the essential part of the business must take place in that place. Therefore, a retail dealer who sells goods in the mofussil cannot be said to ‘carry on business’ in Bombay merely because he has an agent in Bombay to import and purchase his stock for him. He cannot be said to carry on business in Bombay unless his agent made sales there on his behalf. A Calcutta firm that employs an agent at Amritsar who has no power to receive money or to enter into contracts, but only collects orders which are forwarded to and dealt with in Calcutta, cannot be said to do business in Amritsar. But a Bombay firm that has a branch office at Amritsar, where orders are received subject to confirmation by the head office at Bombay, and where money is paid and disbursed, is carrying on business at Amritsar and is liable to be sued at Amritsar. Similarly a life assurance company which carries on business in Bombay and employs an agent at Madras who acts merely as a post office forwarding proposals and sending moneys cannot be said to do business in Madras. Where a contract of insurance was made at place ‘A’ and the insurance amount was also payable there, a suit filed at place ‘B’ where the insurance CRP No.114 of 2016 9 company had a branch office was held not maintainable. Where the plaintiff instituted a suit at Kozhikode alleging that its account with the defendant Bank at its Calcutta branch had been wrongly debited and it was claimed that that court had jurisdiction as the defendant had a branch there, it was held that the existence of a branch was not part of the cause of action and that the Kozhikode Court therefore had no jurisdiction. But when a company though incorporated outside India gets itself registered in India and does business in a place in India through its agent authorised to accept insurance proposals, and to pay claims, and to do other business incidental to the work of the agency, the company carries on business at the place of business in India.” [See _Mulla on the Code of Civil Procedure_ , 15th Edn., Vol. I, pp. 246-47.]” 9. The legal position emanating from the judgment is that under certain situations, the business can be carried out in a place through an agent, manager or servant. At the same time, to constitute ‘carrying on business’ at certain place, the essential part of the business must take place in that place. The mere presence of Marketing Executive at a place and canvassing of orders by that person will not constitute 'carrying on business on that place'. Therefore, the courts below was right in holding that the petitioner's activity in Kannur as part of his employment will not amount to carrying on of business by the first defendant company or confer jurisdiction on the Sub Court at Kannur. 10. The final contention is that, part of the cause of action had arisen at Kannur and hence the suit is maintainable in view of Section 20(c) of the Code. As has been often repeated, cause of action is a fact or a bundle of facts which gives a person right to judicial redress or relief against another. It must include some act done by the defendant since CRP No.114 of 2016 10 in the absence of such an act no cause of action can possibly accrue. Facts which have no bearing with lis or the dispute involved in the case will not give rise to a cause of action so as to confirm territorial jurisdiction on the court concerned. In the case at hand, the petitioner's case is that he was compelled to resign the job due to the harassment meted out by the Regional Sales Manager stationed at Ernakulam. The resignation letter sent by the petitioner was accepted at Mumbai and the petitioner's claim for benefits is denied by the Head Office. His grievance being regarding the denial, no part of the cause of action has arisen in Kannur. Merely for the reason that the petitioner had worked at Kannur, that will not give rise to a cause of action with respect to his claim for service benefits. Hence, rejection of petitioner's contention based on Section 20(c) of the Code is also well founded. In the result, the Crl. Revision Petition is dismissed. **==> picture [44 x 13] intentionally omitted <==** **V.G.ARUN JUDGE** dpk