Bombay High Court
HI ROCK CONSTRUCTION COMPANYversusMEENA LUTHRIA
- Decided
- Disposal
- Dismissed
- Bench
- N JAMADAR
Holding
The City Civil Court, Mazgaon, had jurisdiction under clause (b) of Section 20 of the CPC, and the writ petitions challenging its jurisdiction were dismissed.
Summary
The petitioners, Hi Rock Construction Company, challenged orders of the City Civil Court, Mazgaon, which had refused to return summary suit plaints filed by the respondents alleging fraud and non‑payment of advances. The petitioners argued that the Court lacked jurisdiction because the partnership firm (Defendant No.1) had its registered office outside the Court’s local limits and that the Explanation to Section 20 of the CPC does not treat a partnership as a "Corporation". The Court examined the meaning of "Corporation" in the Explanation, relying on several Supreme Court decisions, and concluded that a partnership firm is not a legal person and therefore the presence of partners residing and working within the Court’s jurisdiction sufficed for jurisdiction under clause (b) of Section 20. The Court found that the plaints adequately alleged that the partners induced the plaintiffs and worked for gain within the local limits, satisfying the jurisdictional test. Consequently, the writ petitions were dismissed.
Issues considered
- The expression 'Corporation' in the Explanation to Section 20 of the CPC, 1908, does it include a registered partnership firm?
- Whether the City Civil Court, Mazgaon, has jurisdiction to entertain the summary suits when the partnership firm's registered office is outside its local limits but its partners reside and work within the local limits.
- Whether a cause of action arose within the local limits of the Court's jurisdiction.
- Whether leave of the Court under clause (b) of Section 20 is required when only some partners reside within the jurisdiction.
Legislation cited
Subjects
- jurisdiction
- Section 20 CPC
- partnership firm
- corporation definition
- civil procedure
- cause of action
- branch office
- registered office
- leave of court
- summary suit
Judgment
2026:BHC-AS:17761
22 wp 3490 of 2026.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.3490 OF 2026
Hi Rock Construction Company ... Petitioner
versus
Divya P. Vora … Respondent
WITH
WRIT PETITION NO.3492 OF 2026
Hi Rock Construction Company … Petitioner
versus
Nirmala Dialani … Respondent
WITH
WRIT PETITION NO.3493 OF 2026
Hi Rock Construction Company … Petitioner
versus
Meena Luthria … Respondent
Dr. Abhinav Chandrachud with Mr. Aadil Parsurampuria, Mr. Aalam
Parsurampuria, Ms. Kekesjro Thakar i/by Mr. Prashant Parsurampuria, for
Petitioner in WP No.3490 of 2026.
Mr. Aadil Parsurampuria with Mr. Aalam Parsurampuria with Ms. Kejeshri
Thakar i/by Mr. Prashant Parsurampuria, for Petitioner in WP No.3492 and
3493 of 2026.
CORAM: N.J.JAMADAR, J.
DATE : 8 APRIL 2026
ORDER :
1. Heard Dr. Chandrachud, learned Counsel for the Petitioner.
2. The challenge in these Petitions is to the identical orders passed by the
learned Judge, City Civil Court at Mazgaon, Mumbai, in Notices of Motion
taken out by the Petitioner – Defendant No.1 for the return of the plaints in
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Summary Suits instituted by the Respondents – Plaintiffs on the ground that
the City Civil Court has no jurisdiction to entertain, try and decide the suits.
3. The Respondent instituted the Summary Suits for recovery of the
amounts purportedly advanced to the Defendant Nos.2 to 4, who are the
partners of Defendant No.1 firm. The substance of the claim of the
Respondent – Plaintiff was that, the Respondent – Plaintiff was induced to
part with substantial amounts by making dishonest and fraudulent
representations that the amounts would be repaid along with quarterly interest
@ 12% p.a. Despite acknowledging the liability by executing balance
confirmation, the Defendants failed and neglected to repay the amount along
with accrued interest. Thus, the Summary Suits to recover the amounts based
on the balance confirmation executed by the Defendants.
4. In the plaints, the Respondents – Plaintiffs averred that the Petitioner –
Defendant No.1, is a registered partnership firm. Defendant Nos.2 to 4 are
the managing partners of the Defendant No.1 firm. The registered office of
Defendant No.1 was situated at Dahisar (East). The Defendants also had
their office at Dadar (West), Mumbai. The Defendants were working for gain
within the territorial limits of the jurisdiction of the City Civil Court.
5. The Petitioner took out Notices of Motion seeking return of the plaints
contending, inter alia, that the Defendant No.1 firm was carrying on business
at its registered office at Dahisar, which was beyond the local limits of the
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jurisdiction of the City Civil Court. The Plaintiffs had resorted to clever drafting
by showing the branch office as the address of Defendant No.1 firm. Since
no part of cause of action arose within the jurisdiction of the City Civil Court,
the plaints were required to be returned to the Plaintiffs for presentation to the
proper Court.
6. After hearing the parties, by the impugned order, the learned Judge,
City Civil Court, was persuaded to reject the Notices of Motion holding, inter
alia, that there were specific averments in the plaints that the Defendant No.1
was also having its office at Dadar (West), Mumbai and Defendant Nos.2 to 4,
partners of Defendant No.1 firm, were residing and working for gain within the
local limits of the jurisdiction of the City Civil Court. Since the Defendants had
not raised any objection to the territorial jurisdiction of the City Civil Court in
the affidavit filed seeking leave to defend the suits, the assertion that the
Defendants were carrying on business at its branch Office at Dadar (W),
remained uncontroverted.
7. Dr. Chandrachud, learned Counsel for the Petitioners, submitted that,
the learned Judge, city Civil Court has misconstrued the provisions contained
in Section 20 of the Code of Civil Procedure, 1908. If the learned Judge, City
Civil Court professed to exercise the jurisdiction on the premise that
Defendant Nos.2 to 4 were residing within the local limits of the jurisdiction of
the City Civil Court, then the suit could not have been entertained in the
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absence of the leave of the Court to institute a suit against Defendant No.1,
whose registered office is admittedly situated at Dahisar.
8. Secondly, the mere fact that the Branch office of Defendant No.1 was
situated at Dadar (W), would not confer jurisdiction on the City Civil Court,
Mumbai, unless it could be demonstrated that the cause of action also arose
at the place where the Defendant No.1 has a Branch office. Inviting the
attention of the Court to the Explanation to Section 20 of the Code, 1908, Dr.
Chandrachud strenuously submitted that the term ‘Corporation’ used in the
said Explanation is of wide amplitude and covers in its fold a partnership firm
also. The learned Judge, City Civil Court, did not advert to this aspect of the
matter, and, thus, committed an error in holding that the City Civil Court at
Mumbai had the jurisdiction to entertain, try and decide the suits.
9. To buttress the aforesaid submissions, Dr. Chandrachud placed a very
strong reliance on the judgment of the Supreme Court in the case of Hakam
Singh V/s. Gammon (India) Ltd.1, wherein it was enunciated that the
expression ‘Corporation’ used in the Explanation to Section 20 is not
restricted to a statutory Corporation, but also includes the legal person and
includes the Company registered under the Companies Act.
10. Dr. Chandrachud also placed reliance on the judgment of the Supreme
Court in the case of Dashrath Rupsingh Rathod V/s. State of Maharashtra
1 (1971) 1 SCC 286
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and Anr.2, wherein in the context of the jurisdiction of the Court to take
cognizance of an offence punishable under Section 138 of the Negotiable
Instruments Act, 1881, a three-Judge Bench of the Supreme Court,
enunciated that the Corporations and partnership firms, and even sole
proprietorship concerns could well be transacting business simultaneously in
several cities, and if the Defendant’s location is to form the fulcrum of
jurisdiction, the Plaintiff is precluded from instituting the suit anywhere else,
than the place where the Defendant has a branch Office and the cause of
action has accrued.
11. Reliance was also placed on a decision of a learned Single Judge of
this Court in the case of Lyka Labs Limited and Anr. V/s. State of
Maharashtra and Anr.3, wherein a distinction was sought to be drawn
between the legal person and the juristic person to the effect that a legal
person is any subject-matter other than a human being to which the law
attributes personality. A juristic person is a body of persons, a corporation or
company, a partnership or other legal entity recognized by law as the subject
of rights and duties, also called an artificial person.
12. Banking upon the aforesaid pronouncements, Dr. Chandrachud would
urge that a registered partnership firm does satisfy the description of the
‘Corporation’ within the meaning of the Explanation to Section 20 of the Code.
2 (2014) 9 SCC 129
3 2023 SCC Online Bom 560
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Thus, if it is not the case of the Plaintiffs that, a part of the cause of action
arose within the local limits of the jurisdiction of the City Civil Court, where the
branch office of Defendant No.1 is situated, the City Civil Court lacked the
jurisdiction to entertain, try and decide the suits.
13. In substance, the question as to whether the partnership firm falls within
the ambit of the expression ‘Corporation’ within the meaning of the
Explanation to Section 20 of the Code, 1908, wrenches to the fore.
14. Section 20 of the Code, 1908, reads as under :
“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, 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 on 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
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subordinate office, at such place.”
15. On a plain reading, it becomes evident that, the aforeextracted
Explanation to section 20 addresses two distinct situations. First part of the
Explanation applies to such a corporation which has its sole or principal office
at a particular place. In such cases, notwithstanding the fact that, such
defendant – corporation might not be actually carrying on business at the
place where the sole or principal office of the defendant is situated, the courts
within whose jurisdiction the sole or principal office of the defendant is
situated, will have jurisdiction to entertain, try and decide the suit as such
corporation ‘will be deemed to carry on business ‘ at that place. The first part
of the Explanation, thus, incorporates a deeming fiction.
16. The second part of the Explanation governs the case where the
defendant does not have the sole office, but has principal office at one place
and also has a subordinate office at another place. Two parts are separated
by ‘or’, a disjunctive. If the case is covered by the second part of the
Explanation, it is not the Court within whose jurisdiction the principal office of
the defendant is situated, but the Court within whose jurisdiction it has a
subordinate office, which alone shall have jurisdiction ‘in respect of any cause
of action, at any place, where it has also a subordinate office’. Thus, if the
defendant – corporation has a subordinate office where the cause of action
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arises, the suit must be instituted at that place alone irrespective of the
options available to the Plaintiff to institute a suit at the other places,
postulated under Section 20 of the Code. (Patel Roadways Limited,
Bombay v/s. Prasad Trading Company4).
17. In the case at hand, the Petitioner asserts a converse scenario. It is the
claim of Defendant No.1 firm that the plaints do not disclose that a part of the
cause of action has arisen within the local limits of the branch office of
Defendant No.1 firm at Dadar (West), Mumbai, and, therefore, the suits ought
to have been instituted in the Court within the local limits of whose jurisdiction
the registered office of the Defendant No.1 is situated.
18. To this end, Dr. Chandrachud wants the Court to construe the
expression ‘Corporation’ to include the partnership firm. Indeed, in the case
of Hakam Singh (supra), the Supreme Court repelled the submission that the
expression ‘Corporation’ in Explanation II to Section 20 of the Code, as it then
stood, includes a statutory corporation only and not the company registered
under the Companies Act. It was postulated that the Code uses the
expression ‘Corporation’ as meaning a legal person and includes a company
registered under the Indian Companies Act. Order XXIX of the Code deals
with suits by or against a corporation and there is nothing in the Code that a
Corporation referred to under Order 20 means only a statutory corporation
4 (1991) 4 SCC 270
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and not a company registered under the Indian Companies Act.
19. In the case of S.S.Dhanova V/s. Municipal Corporation5, the
Supreme Court further expounded the import of the expression ‘Corporation’,
as under :
“8. A corporation is an artificial being created by law having
a legal entity entirely separate and distinct from the individuals
who compose it with the capacity of continuous existence and
succession, notwithstanding changes in its membership. In
addition, it possesses the capacity as such legal entity of taking,
holding and conveying property, entering into contracts, suing
and being sued, and exercising such other powers and
privileges as may be conferred on it by the law of its creation just
as a natural person may…….”
20. The aforesaid pronouncements, however, do not advance the cause of
the submission on behalf of the Petitioner to the extent desired by the
Petitioner. The expression ‘Corporation’ is not elastic enough to include all
forms of associations of persons. Juristic and independent personality and
perpetual succession are the hallmarks of ‘Corporation’, statutory or
incorporated. Those inseparable attributes of a corporate entity cannot be
found in all firms of assocations. The fundamental distinction between a
Corporation and a registered partnership firm, cannot be lost sight of. The
partnership firm is not a legal person, even though it has some attributes of
5 (1981) 3 SCC 431
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personality. The partnership is, in a sense, certain relations between persons
who have agreed to share profits of the business. Partnership firm has no
independent juristic personality. The firm, as such, has no legal recognition.
21. A useful reference can be made to a judgment of the Supreme Court in
the case of Commissioner of Income Tax, Madras V/s. R.M.Chidambaram
Pillai and Ors.6, wherein the Supreme Court, inter alia, considered the
question, ‘is the firm a person or a mere shorthand name for a collection of
persons ? The observations of the Supreme Court in paragraphs 15 to 17 are
instructive and, hence, extracted below :
“15. Is the firm a person or a mere shorthand name for a
collection of persons, commercially convenient but not
legally recognised? Under Section 3 of the Partnership Act it
is not a person, but a relationship among persons. Lindley,
on Partnership7 has this:
“The firm is not recognised by English lawyers
as distinct from the members composing it. In taking
partnership accounts and in administering partnership
assets, courts have to some extent adopted the mercantile
view, and actions may now, speaking generally, be brought
by or against partners in the name of their firm; but,
speaking generally, the firm as such has no legal
recognition. The law, ignoring the firm, looks to the partners
composing it; any change amongst them destroys the
identity of the firm; what is called the property of the firm is
their property, and what are called the debts and liabilities of
6 (1977) 1 SCC 431
7 12th Edition, P. 28, Sweet and Maxwell
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the firm are their debts and their liabilities. In point of law,. a
partner may be the debtor or the creditor of his copartners,
but he cannot be either debtor or creditor of the firm of which
he is himself a member, nor can he be employed by his firm,
for a man cannot be his own employer."
16. The Indian law of partnership is substantially the same
and the reference in counsel's submissions to the Scottish
view of a firm being a legal entity is neither here nor there.
Primarily our study must zero on the Indian Partner- ship Act
and not borrow courage from foreign systems. In Bhagwanji
Morarji Gokuldas8 the Privy' Council ruled that the the
Indian Partnership Act went beyond the English Partnership
Act, 1890, the law in India. attributing personality to a
partnership being more in accordance with the law of Scoff
and. Even so, Sir John Beaumont, in that case, pointed out
that the Indian Act did not make a firm a corporate body.
Moreover, we are not persuaded by that ruling of the Privy
Council, particularly since a pronouncement of this court in
Dulichand9 strikes a contrary note. We quote :
“In some systems of law this separate personality of a
firm apart from its members has received full and formal
recognition as, for instance, in Scotland. That is, however,
not the English common law conception of a firm. English
lawyers do not recognise a firm as an entity distinct from the
members composing it. 'Our partnership law is based on
English law and we have also adopted notions of English
lawyers as regards a partnership firm."
The life of the Indian law of partnership depends on its
own . terms although habitually courts, as a hangover of the
8 AIR 1948 PC 100
9 1956 SCR 154
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past, have been referring to the English law on the point.
The matter is concluded by the further observations of this
Court :
“It is clear from the foregoing discussion that the law,
English as well as Indian, has, for some specific purposes,
some of which are referred to above, relaxed its rigid notions
and extended a limited personality to a firm. Nevertheless,
the general concept of a partnership, firmly established in
both systems of law, still is that a firm is not an entity or
'person' in law but is merely an association of individuals
and a firm name is only 'a collective name of those
individuals who constitute the firm. In other words, a firm
name is merely an expression, only a compendious mode of
designating the persons who have 'agreed to carry on
business in partnership. According to the principles of
English jurisprudence, which we have adopted, for the
purposes of determining legal rights 'there is no such thing
as a firm known to the law' as was said by James L.J., in Ex
parte Corbett: In re Shand 10. In these circumstances to
import the definition of the word 'person' occurring in section
3(42) of the General Clauses Act, 1897, into section 4 of the
Indian Partnership Act will, according to lawyers, English or
Indian, be totally repugnant to the subject of partnership law
as they know and understand it to be."
In Narayanappa11 the view taken by this court accords with
the position above stated.
17. The necessary inference from the premise that a
partner- ship is only a collective of separate-persons and not
a legal person in itself lends to the further conclusion that
10 (1880) 14 Ch D 122
11 AIR 1966 sc 1300
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the salary stipulated to be paid to a partner from the firm is
in reality a mode of division of the firm's profits, no person
being his own Servant in law since a contract of service
postulates two different persons.”
22. Reliance sought to be placed by Dr. Chandrachud on the judgment of
the Supreme Court in the case of Dashrath Rupsingh Rathod V/s. State of
Maharashtra (supra) and a judgment of this Court in the case of Lyka Labs
Limited and Anr. (supra), to bolster up a submission that the partnership
firm has some sort of legal personality, is not of much assistance. The
partnership firm is a compendious mode of designating persons who have
agreed to carry on business in partnership. That, however, does not
necessarily imply that, in law, the firm is an entity incorporated by persons. It
is essentially an association of individuals. Firm name is a collective name of
those individuals who constituted the firm. To put in other words, the
partnership registered under the Partnership Act, 1932, is neither a person
nor a legal entity.
23. A useful reference in this context can be made to a recent
pronouncement of the Supreme Court in the case of Dhanasingh Prabhu
V/s. Chandrasekar and Anr.12 wherein, in the context of the provisions
contained in Section 141 of the Negotiable Instruments Act, 1881, the
Supreme Court enunciated in no uncertain terms that the partners and the
12 (2025) 10 SCC 96
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partnership firm are one and the same. Unlike a company, a partnership firm
has no independent corporate existence and has no distinct legal persona
independent of its partners. The relevant observations in paragraph Nos.41
to 43 read as under :
“41. A partnership firm, unlike a company registered
under the Companies Act, does not possess a separate
legal personality and the firm’s name is only a
compendious reference for describing its partners. This
fundamental distinction between a firm and a company
rests on the premise that the company is separate from
its shareholders. In that context, the words of Lord
Macnaghten in Salomon vs. Salomon & Co. Ltd. 13
(“Salomon”) are instructive :
“..… The company is at law a different person
altogether from the subscribers...… and though it may be
that after incorporation the business is precisely the
same as it was before and the same persons are
managers and the same hands receive the proceeds, the
company is not in law, the agent of the subscribers or
trustee for them. Nor are the subscribers as members
liable, in any shape or form, except to the extent and in
the manner provided by the Act.”
42. This distinction does not, however, continue to hold
true for a partnership firm. In the seminal case of Bacha
F. Guzdar V/s. CIT14, this Court had an opportunity to
13 1897 AC 22(HL)
14 (1954) 2 SCC 563
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briefly address this distinction between a partnership firm
and a company, wherein it was observed thus:
“13. It was argued that the position of
shareholders in a company is analogous to that of
partners inter se. This analogy is wholly inaccurate.
Partnership is merely an association of persons for
carrying on the business of partnership and in law the
firm name is a compendious method of describing the
partners. Such is, however, not the case of a company
which stands as a separate juristic entity distinct from the
shareholders.”
43. The partnership name being only a compendious
method of describing the partners, it stands to reason
that a reference to the partners in their capacity as
partners of the firm will be sufficient to impute liability on
the partners themselves, whereas directors of a company
are made liable vicariously through the company, upon
whom falls the primary liability. Thus, the partners and
the partnership firm are one and the same. Unlike a
company, a partnership firm has no independent
corporate existence and has no distinct legal persona
independent of its partners. Similarly, the partners of a
firm are co-owners of the property of the firm unlike
shareholders in a company who are not co-owners of the
property of the company.……..”
24. The aforesaid being the position in law, the submission on behalf of the
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Petitioner that the expression ‘Corporation’ in the Explanation to Section 20 is
expansive enough to cover the partnership firm, cannot be readily acceded to.
Consistent with the aforesaid legal position, in the facts of the case, if it is held
that Defendant No.1 firm is a mere collection of individuals i.e. Defendant
Nos.2 to 4, and since Defendant Nos.2 to 4 are residing and working for gain
within the local limits of the jurisdiction of the City Civil Court, the submission
on behalf of the Petitioner that the suits are not maintainable without the leave
of the Court under clause (b) of Section 20 of the Code, does not merit
acceptance.
25. The Court also finds that, in the plaint, there are adequate averments to
show that Defendant Nos.2 to 4 had induced the Plaintiff to part with the
amounts and that Defendant Nos.2 to 4 were working for gain within the local
limits of the jurisdiction of the City Civil Court. It is specifically asserted that
the balance confirmations were executed by Defendant No.2, for and on
behalf of Defendant Nos.1 to 4. Thus, it cannot be urged that there are no
averments in the plaint to demonstrate that, a part of the cause of action has
arisen within the local limits of the jurisdiction of the City Civil Court.
Resultantly, the Writ Petitions deserve to be dismissed.
26. Hence, the Writ Petitions stand dismissed.
( N.J.JAMADAR, J. )
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Signed by: S.S.Phadke
Designation: PS To Honourable Judge
Date: 16/04/2026 14:57:54
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