Authored By : B.K. Mukherjea, Blank

B.K. Mukherjea, J.

1. This rule is directed against an appellate order of J.De, Esq., District Judge, Dacca, dated 2lst August 1942, made in MiscellaneousAppeal No. 158 of 1942 by which an order of the Subordinate Judge, FourthCourt, of that place returning a plaint under Order 7, Rule 10, Civil P.C., wasreversed. The facts material for our present purposes may be shortly stated asfollows: The defendant petitioner is an insurance company having its registeredoffice at 1, Mission Road, Lahore. It has also a branch office at Bangla Bazarin the town of Dacca. One Bidhu Bhusan Bhowmik, who had his native village atHarina in the district of Dacca insured his life with the defendant company fora sum of Rs. 2000 and the company granted a policy bearing No. 10950 dated 2nd February1937. After paying a certain number of premia Bidhu Bhusan Bhowmik died at hisnative village on 16th September 1938, and thereafter a suit was instituted bythe plaintiffs opposite party, who are the heirs and legal representatives ofBidhu Bhusan Bhowmik in the Court of the Fourth Subordinate Judge at Dacca,being money suit No. 18 of 1941, against the petitioner company for recovery ofthe money due on the above policy of Bidhu Bhusan Bhowmik. The defendantcompany who resisted the suit contended inter alia that the Court of the FourthSubordinate Judge at Dacca had no territorial jurisdiction to try the suit.This issue on the question of jurisdiction was heard as a preliminary issue bythe trial Judge and by his judgment dated 30th May 1942, he came to theconclusion that the suit was triable only at Lahore, as the registered officeof the company was situated at that place and no part of the cause of actionarose outside it. The result was that the plaint was returned to be presentedto the proper Court. The plaintiffs filed an appeal against that order, and theDistrict Judge of Dacca, who heard the appeal, reversed the decision of thetrial Judge and held that the suit was entertain-able by the Dacca Court. It isthe propriety of this order that has been challenged before of us in this rule.

2. Mr. Bose, who appeared in support of the rule, hascontended before us that the Dacca Court had no jurisdiction to entertain thesuit. It has been pointed out, in the first place, that the contract for insurancewas completed outside the jurisdiction of the Dacca Court at the registeredhead office of the company at Lahore where the offer made by the assured wasaccepted. In the second place, it is said that under the express terms of thecontract between the defendant company and the assured the money was payable onthe death of the latter at the registered office of the company and nowhereelse. The third thing said is that the so-called branch office at Dacca ismerely an agency department of the company and its only function is to collectthe premia and remit the same to the head office. Mr. Chakrabarty, who appearedfor the plaintiffs opposite party has taken up the position that the DistrictJudge was right in holding that as the assured died within the jurisdiction ofthe Dacca Court, a part of the cause of action relating to the claim of thepolicy money did arise within the jurisdiction of that Court, which iscompetent to entertain the suit under the provision of Clause (c) of Section20, Civil P.C. It is further urged that as the company had a branch office atDacca the case would come within the purview of Expln. 2 to Section 20, CivilP.C.

3. Section 20, Civil P.C., enacts the rule for determiningthe forum in all personal actions, and under this section a Court would havelocal jurisdiction to try a suit either, if the cause of action has arisenwholly or in part within its territorial limits, or if the defendant resides,or carries on business, or personally works for gain within the same. The contentionof Mr. Bose is that the death of the assured does not constitute any part ofthe cause of action, upon which a suit for money due on a life insurance policycan be based, and hence the place where the assured died has no relevancywhatsoever in determining the forum of such suit. He relies very strongly upona decision of the Rangoon High Court, which is to be found in Jupiter GeneralInsurance Co. Ltd. v. Abdul Aziz A.I.R. 1924 Rang. 2. The other branch of Mr.Boses contention relating to this point is that when a suit is based upon acontract the cause of action could arise either at the place where the contractwas made or where it was to be performed, and it might also arise at the placewhere in performance of the contract, any money to which the suit relates, wasexpressly or impliedly payable. His argument is this that the suit cannot beinstituted in any other place, and this is clear from Explanation 3 attached toSection 17 of the old Code which corresponds to Section 20 of the present Code.It is true that the explanation has been dropped in the present Code but thelaw, it is said, remains the same. We have to examine both the branches of thiscontention. The expression "cause of action" has not been defined inthe Civil Procedure Code, but the meaning given to it by Lord Esher in thewell-known case in Read v. Brown `, is generally adopted by Indian Courts. Thepassage in Lord Eshers judgment where the expression "cause ofaction" has been defined runs as follows:

It has been defined in Cooke v. Gill (1873) 8 C.P. 107 to bethis : every fact which it would be necessary for the plaintiff to prove, iftraversed, in order to support his right to the judgment of the Court. It doesnot comprise every piece of evidence which is necessary to prove each fact, butevery fact which is necessary to be proved.

4. In other words it means

all the congeries of facts which it is necessary for theplaintiff to establish before he can ask the Court to grant the relief which heclaims in the suit. vide Costello J., in Samarendranath Mitra v. PyareecharanLaha : AIR1935Cal160 .

5. In the words of Lord Watson the cause of action has norelation to the defence which is set up by the defendant:

It refers entirely to the grounds set forth in the plaint asthe cause of action, or, in other words, to the media upon which the plaintiffasks the Court to arrive at a conclusion in his favour.

6. There are numerous cases decided by different High Courtsin India, where substantially the same definition has been adopted. We canrefer in this connexion to the following passage in the judgment of Sir GerogeRankin C.J., in Engineering Supplies Ltd. v. Dhandbania & Co: AIR1931Cal659 . "The only definition that will work,"thus observed the learned Chief Justice,

if it has to be applied to cases of all kinds, is the entireset of facts that gives rise to an enforceable claim, or, in the words of FryL.J. everything which if not proved gives the defendant an immediate right tojudgment, every fact which is material to be proved to entitle the plaintiffto succeed, every fact which the defendant could have a right to traverse.

7. Now, in the case of a life insurance policy, the claimantmust prove the death of the assured before he can enforce his claim against aninsurance company. The death of the assured is thus a material part of thecause of action; the plaintiff is bound to prove the fact if traversed, and ifnot proved the defendant will have an immediate right to judgment. A contractof insurance is a contingent contract, and the right to recover money payableunder it depends upon the happening of a particular event. It is the happeningof that event and not merely the failure of the insurance company to pay themoney which gives rise to the cause of action. There is no decision exactly onthis point so far as this Court is concerned, but the point did come up forconsideration before a Division Bench of this Court in Bengal Provident andInsurance Co. Ltd. v. Kamini Kumar . There the plaintiff suedthe defendant insurance company in the Court of Feni upon two policies ofinsurance issued by them to his deceased father. The company had its headoffice in Calcutta where the proposal of the assured was accepted. The assuredhowever died within the local limits of the Court at Feni in the district ofNoakhali. It was held by both the Courts below that the death of the assuredbeing a part of the cause of action, the Court at e Feni had jurisdiction totry the suit. Against this decision, there was a rule obtained from this Courtwhich was heard by a Division Bench consisting of Richardson and Beachcroft JJ.Richardson J. definitely expressed his opinion that the death of the assureddid constitute a part of the cause of action and consequently the plaintiff wascompetent to institute the suit in the Court at Feni under Section 20, Clause(c), Civil P.C. The point however was not finally decided in this case as itwas held by both the learned Judges that Section 21, Civil P.C., stood in theway of the defendants challenging the trial as being without jurisdiction. Inour opinion, the opinion of Richardson J., is perfectly sound even though theobservation cannot rank as more than obiter. This view is supported by the decisionof the English Courts in Cailland v. Champon 101 E.R. 933 and though the caseis very old it does not appear to have been dissented from in any subsequentdecision. The same view was taken by the Madras High Court in Vishvendra TirthaSwamier v. National Insurance Co. Ltd., Calcutta A.I.R. 1918 Mad. 635 [LQ/MadHC/1917/29] and byBaker J., of the Bombay High Court in Light of Asia Insurance Co. Ltd. v. BaiChanchal A.I.R. Bom. 392.

8. The only decided case which lends some support to thecontention of Mr. Bose is that of the Rangoon High Court in Jupiter GeneralInsurance Co. Ltd. v. Abdul Aziz A.I.R. 1924 Rang. 2. There it was held that ina suit for recovery of money due under a fire insurance policy the cause ofaction does not include the loss or damage of the property insured, andconsequently the place where the loss occurred could not determine the forum ofsuch suit. It was said that the real cause of action was the failure on thepart of the insurance company to pay the money due under the contract, and theloss or damage was merely a cause of the cause and not the proximate cause. Thelearned Judges in course of their judgment observed that the expression"cause of action" as used in Section 20, Clause (c), Civil P.C.,should not be taken to have the same meaning as it was given to it in Read v.Brown (1888) 22 Q.B.D. 128 and the several other cases both English and Indianwhich followed it. It was further said that when the suit is one on a contractthe cause of action could only include the making of the contract and theperformance of the contract and the payment of money under the contract andnothing else; in other words, the expression "cause of action"occurring in Section 20(c), Civil P.C., when applied to suits based on contractwould include those facts only which were specified in Expln. 3 attached toSection 17 of the old Code, which has been omitted from the present Code of1908. With all respect to the learned Judges who decided the case it seems tous that the view taken is not sound and cannot be accepted. In the first placethe expression "cause of action" has always been interpreted in thisCourt in the light of Lord Eshers dictum in Read v. Brown (1888) 22 Q.B.D. 128and as Sir George Rankin observed in Engineering Supplies Ltd. v. Dhandbania& Co : AIR1931Cal659 , this is the only definition thatwill work if it is to be applied to cases of all kinds. It does not seem to usthat the learned Judges of the Rangoon High Court were right in saying thatthe cause of action connotes different things in different parts of the Code.We cannot also agree with the view that the cause of action in suits for moneydue on a contract of insurance is the failure on the part of the insurancecompany to pay the money. The refusal of the insurer to pay the money may be apart of the cause of action, but the death of the assured is also a materialpart which gives occasion for and forms the foundation of the suit. The othermatter upon which stress was laid by the Rangoon High Court is that as in Expln.3 to Section 17 of the Code of 1882 "cause of action" in relation tosuits on contract was exhaustively defined, the same meaning should be attachedto it in Section 20(c) of the present Code of Civil Procedure even though theexplanation occurring in the old Code has now been omitted. This, as we havealready said, is the second part of Mr. Boses contention and it is necessaryto examine this proposition carefully. Section 17, Civil P.C. of 1882 as itoriginally stood, referred to the place; where the cause of action arose. Itwas not clear whether it meant the entire cause of action or a part of it. Act7 of 1888 added an explanation, namely Expln, 3 to the section which ran asfollows:

In suits arising out of contract, the cause of action ariseswithin the meaning of this section at any of the following places, namely : (1)The place where the contract was made; (2) the place where the contract was tobe performed or performance thereof completed; (3) the place where in theperformance of the contract, any money to which the suit relates was expresslyor impliedly payable.

9. This explanation was added for the purpose of making itclear that suits arising out of contract could be instituted in the Courtwithin the local limits of which the cause of action arises either wholly or inpart. Still, there was doubt as to whether this principle was applicable to allother suits which were not based on contract, and it was held in several casesthat the introduction of the explanation did not effect any change in the lawand that the cause of action did not mean the entire cause of action, videBankey Behari v. Pokhe Ram 25 All. 48. In Section 20 of the present CivilProcedure Code, the words "wholly or in part" have been added inClause (e) to make it plain that all suits may be instituted where the cause ofaction arises either wholly or in part, and Expln. 3 of the old Code has beendropped as it is no longer necessary. We do not think that Expln. 3 to Section17, Civil P.C., 1882, cuts down or restricts in any way the scope of Section20(c) of the present Civil Procedure Code. That explanation is still good lawin the sense that suits arising out of contract could still be instituted inthe Court having local jurisdiction over any of the places specified in theexplanation; but the explanation after it is repealed cannot be regarded asexhaustively laying down all the possible for in regard to suits based oncontract. Speaking for myself I agree entirely with what was said by RichardsonJ., in Bengal Provident and Insurance Co. Ltd. v. Kamini Kumar that it is not "justifiable to interpret the language ofthe Code now in force by reading into it a repealed explanation from therepealed Code." The proper way of interpreting a statute which codifiesthe law on a particular subject was thus stated by Lord Herschell in the wellknown case in Bank of England v. Vagliano Brothers 1891 A.C. 107

I think the proper course is in the first instance toexamine the language of the statute and to ask what is its natural meaning,uninfluenced by any consideration derived from the previous state of the law,and not to start with inquiring how the law previously stood, and then,assuming that it was probably intended to" leave it unaltered, to see ifthe words of the enactment will bear an interpretation in conformity with thisview.

10. Our conclusion, therefore, is that the view taken by theCourt below is right and the Court of the 4th Subordinate Judge at Dacca hadjurisdiction to entertain the suit. We agree further with Mr. Chakravorty, thatas the cause of action in this case arose within the jurisdiction of the DaccaCourt and as the company has a branch office in that place the suit could beinstituted at Dacca under Expln. 2 to Section 20, Civil P.C. Mr. Bose for thepetitioner argues that the company cannot be said to carry on its business atDacca as the only function of the branch office established there is to collectthe premia and remit them to the head office. It has no jurisdiction to acceptproposals. But the language of the explanation is perfectly clear and once it isestablished that a corporation has got a branch office at any place it shall bedeemed in the eye of law to carry on its business at that place irrespective ofthe nature of the work that is actually carried on there. As the Privy Councilobserved in Commissioner of Income Tax, Bombey Presidency v. Bombay TrustCorporation Ltd. :

When a person is deemed to be something, the only meaningpossible is that whereas he is not in reality that something the Act ofParliament requires him to be treated as if he were.

11. The result, therefore, is that we discharge the rulewith costs; hearing fee being assessed at three gold mohurs.

Blank, J.

12. I agree.

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Peoples Insurance Co. Ltd.vs. Benoy Bhusan Bhowmik and Ors.(22.01.1943 - CALHC)