Analysis of Section 20(c) CPC

Territorial Jurisdiction under Section 20(c) of the Code of Civil Procedure, 1908: An Analytical Study

I. Introduction

The Code of Civil Procedure, 1908 (CPC) lays down the procedural framework governing civil litigation in India. Central to this framework are the provisions determining the territorial jurisdiction of courts, ensuring that suits are instituted in appropriate fora. Section 20 of the CPC is a cornerstone in this regard, particularly for suits not covered by Sections 15 to 19. Clause (c) of Section 20, which permits a suit to be instituted in a court within whose local limits the cause of action, wholly or in part, arises, is of profound significance. It offers flexibility to litigants while demanding a careful judicial determination of what constitutes a "cause of action" or a "part" thereof. This article seeks to provide a comprehensive analysis of Section 20(c) of the CPC, drawing upon statutory provisions and authoritative judicial pronouncements from Indian courts, primarily based on the provided reference materials.

II. The Statutory Framework: Section 20 of the Code of Civil Procedure, 1908

Section 20 of the CPC, as highlighted in several judicial decisions (M/S. Splendor Landbase Limited v. M/S. Mirage Infra Limited & Anr., Delhi High Court, 2010; RAKESH KUMAR VERMA v. HDFC BANK LTD., Supreme Court Of India, 2025), is a residual provision governing the place of suing for cases not dealt with by Sections 15 to 19 of the CPC. Section 20 states:

“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 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.” (as quoted in RAKESH KUMAR VERMA v. HDFC BANK LTD., Supreme Court Of India, 2025; Unimers India Limited v. Ifci Limited, Delhi High Court, 2012).

This article primarily focuses on Section 20(c). The Explanation, while appended to the entire section, has been judicially interpreted to primarily elucidate the meaning of "carries on business" in clauses (a) and (b) concerning corporations (Patel Roadways Limited, Bombay v. Prasad Trading Company, 1991 SCC 4 270; Mahesh Edible Oil Industries Ltd. v. Ranjit Kr. Modak And Ors., Gauhati High Court, 2011).

III. Deciphering "Cause of Action, Wholly or in Part"

The phrase "cause of action, wholly or in part, arises" is the linchpin of Section 20(c) and has been the subject of extensive judicial interpretation.

A. Defining "Cause of Action"

The CPC does not define "cause of action." However, courts have consistently interpreted it. The Supreme Court, in cases like Oil And Natural Gas Commission v. Utpal Kumar Basu And Others (1994 SCC 4 711) and Kusum Ingots & Alloys Ltd. v. Union Of India And Another (2004 SCC 6 254), drawing from the classic definition in Chand Kour v. Partab Singh (ILR (1889) 16 Cal 98 / (1887-88) 15 IA 156), has explained that "cause of action" means every fact which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. It is the "bundle of essential facts" or "material facts" that are integral to the claim (Kusum Ingots & Alloys Ltd. v. Union Of India And Another, 2004 SCC 6 254; N. Kumara Swamy v. Uco Bank, Kolkata And Others, Andhra Pradesh High Court, 2012). The averments made in the plaint determine the cause of action (Kusum Ingots & Alloys Ltd. v. Union Of India And Another, 2004 SCC 6 254).

As observed in Oil And Natural Gas Commission v. Utpal Kumar Basu And Others (1994 SCC 4 711), facts which are not integral to the cause of action, such as the petitioner's residence or the location from where representations are made, do not confer jurisdiction if the core dispute arose elsewhere. Similarly, the Supreme Court in South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. And Others (1996 SCC 3 443), also cited in Power Company Of Karnataka Limited Through Its Managing Director And Another v. Udupi Power Corporation Ltd. (Appellate Tribunal For Electricity, 2020), emphasized that for jurisdiction to be established, some part of the cause of action must have arisen within the court's territorial limits.

B. The "Wholly or in Part" Conundrum

The inclusion of "in part" significantly broadens the scope of Section 20(c). It implies that not all facts constituting the cause of action need to occur within one jurisdiction. If any material fact, which forms a part of the cause of action, arises within the local limits of a court, that court can entertain the suit (Savara Pydi Raju v. T. Venkata Rao And Others, 2006 SCC ONLINE AP 989). The Calcutta High Court in Ujjal Talukdar v. Netai Chand Koley Opposite Party. (1968 SCC ONLINE CAL 63) went as far as to state that "even an infinitesimal fraction of a cause of action will be part of the cause of action and confer jurisdiction on the Court within the territorial limits of which that little occurs."

In contractual matters, for instance, various parts of the cause of action may arise in different locations: the place where the contract was made, the place where it was to be performed or performance was completed, the place where payment was to be made, or the place where the breach occurred (A.B.C Laminart (P) Ltd. And Another v. A.P Agencies, Salem, 1989 SCC 2 163). The Karnataka High Court in M/S. SHREE LAKSHMI GARMENTS AND TEXTILES v. M/S. SRI SAI SILKS (2023 KHC 23448) held that where goods were supplied from Bengaluru, the cause of action partly arose in Bengaluru, conferring jurisdiction on Bengaluru courts, even if delivery and payments were made elsewhere.

However, the determination of whether a "part" of the cause of action has arisen is a factual inquiry. In South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. And Others (1996 SCC 3 443), the Supreme Court found that no part of the cause of action had arisen within the jurisdiction of the High Court in question, leading to the plaint being returned for presentation to the proper court. This underscores that the facts alleged to constitute a part of the cause of action must be substantial and directly related to the dispute.

C. Nexus between Cause of Action and Forum

For a court to exercise jurisdiction under Section 20(c), there must be a clear nexus between the part of the cause of action and the territory of the court. The principles laid down in writ jurisdiction cases under Article 226(2) of the Constitution of India, which uses similar phraseology ("cause of action, wholly or in part, arises"), are often considered instructive. The Supreme Court in Kusum Ingots & Alloys Ltd. v. Union Of India And Another (2004 SCC 6 254) explicitly stated that the phraseology in Section 20(c) CPC and Article 226(2) being *in pari materia*, decisions rendered on one apply to the other. This view is echoed in Natasha Sondur And Others… v. Union Of India And Others… (Karnataka High Court, 2005) and N. Kumara Swamy v. Uco Bank, Kolkata And Others (Andhra Pradesh High Court, 2012). Thus, merely incidental or ancillary facts, such as making representations from a particular place, do not form an integral part of the cause of action so as to confer jurisdiction (Oil And Natural Gas Commission v. Utpal Kumar Basu And Others, 1994 SCC 4 711; National Textile Corpn. Ltd. v. Haribox Swalram as cited in Kusum Ingots).

IV. Section 20(c) and Contractual Stipulations: Ouster Clauses

A significant area of litigation under Section 20(c) involves its interaction with exclusive jurisdiction clauses (or ouster clauses) in contracts. The general principle, as established in Hakam Singh v. Gammon (India) Ltd. (1971 SCC 1 286), and reiterated in A.B.C Laminart (P) Ltd. And Another v. A.P Agencies, Salem (1989 SCC 2 163) and Patel Roadways Limited, Bombay v. Prasad Trading Company (1991 SCC 4 270), is that parties cannot by agreement confer jurisdiction on a court which otherwise lacks inherent jurisdiction over the subject matter. However, where two or more courts have concurrent jurisdiction (e.g., because part of the cause of action arose in each of their territories under Section 20(c)), an agreement between parties to submit disputes to one of these courts to the exclusion of others is valid and enforceable.

The Supreme Court in A.B.C Laminart (P) Ltd. clarified that for such an ouster clause to be effective, the language must be clear and unambiguous, explicitly excluding the jurisdiction of other competent courts. The use of words like "only," "alone," or "exclusive" is indicative but not always conclusive; the intention of the parties is paramount. If the chosen court under the agreement is one which possesses jurisdiction under the CPC (e.g., under Section 20(c)), the clause is generally upheld. Conversely, as emphasized in Patel Roadways Limited, an exclusive jurisdiction clause cannot override statutory provisions if the chosen court lacks jurisdiction or if other courts have jurisdiction based on where the cause of action arose, particularly concerning the Explanation to Section 20 for corporations.

V. Section 20(c) in Specific Contexts

A. Corporate Defendants

While the Explanation to Section 20 CPC primarily clarifies where a corporation "carries on business" for the purposes of clauses (a) and (b), Section 20(c) applies independently to corporations. A suit can be filed against a corporation where the cause of action, wholly or in part, arises, irrespective of the location of its principal or subordinate office, if that office is not where the cause of action (or part thereof) arose. The Gauhati High Court in Mahesh Edible Oil Industries Ltd. v. Ranjit Kr. Modak And Ors. (Gauhati High Court, 2011) clarified that if no part of the cause of action has arisen at the place of the subordinate office, the mere fact of the corporation having a subordinate office there would not give the court of that place jurisdiction under Section 20(c). The Supreme Court in Patel Roadways Limited also affirmed that suits could be filed where the cause of action arose, which could be the location of a subordinate office if the transaction giving rise to the suit occurred there.

B. Applicability to Chartered High Courts

It is pertinent to note that Section 120 of the CPC explicitly states that Sections 16, 17, and 20 of the CPC shall not apply to a High Court in the exercise of its original civil jurisdiction. For such Chartered High Courts (e.g., Bombay, Calcutta, Madras), territorial jurisdiction is typically governed by their respective Letters Patent (e.g., Clause 12). The Supreme Court in Jindal Vijayanagar Steel (Jsw Steel Ltd.) v. Jindal Praxair Oxygen Co. Ltd. (Supreme Court Of India, 2006) rejected the argument that the principles of Section 20 could be applied to Clause 12 of the Letters Patent, given the express exclusion by Section 120 CPC. However, the principles of what constitutes a "cause of action" are often discussed in a similar vein (Zenner International Gmbh & Co Kg v. Anand Zenner Company Pvt. Ltd., Delhi High Court, 2018, noting similarity between Section 20(c) and Clause 12 of Letters Patent contextually).

C. Writs and Section 20(c) Principles

As previously mentioned, the Supreme Court in Kusum Ingots & Alloys Ltd. v. Union Of India And Another (2004 SCC 6 254) firmly established that the interpretation of "cause of action, wholly or in part" under Section 20(c) of the CPC is applicable to Article 226(2) of the Constitution of India, which governs the territorial jurisdiction of High Courts to issue writs. This principle has been consistently followed (Natasha Sondur And Others… v. Union Of India And Others…, Karnataka High Court, 2005; N. Kumara Swamy v. Uco Bank, Kolkata And Others, Andhra Pradesh High Court, 2012). Therefore, the body of case law interpreting Section 20(c) provides significant guidance for determining territorial jurisdiction in writ matters as well.

VI. Judicial Approach and Interpretation

The judicial approach to Section 20(c) reflects a balance between providing plaintiffs with a convenient forum and ensuring a rational connection between the dispute and the court. The plaintiff generally has the choice of forum when multiple courts have jurisdiction under Section 20 (Unimers India Limited v. Ifci Limited, Delhi High Court, 2012, citing New Moga Transport Co.; Dhaval Subodh Parekh v. Pawan Hans Ltd., Bombay High Court, 2008). Courts will examine the plaint allegations to ascertain if, prima facie, a part of the cause of action arose within their territorial limits (Kusum Ingots & Alloys Ltd. v. Union Of India And Another, 2004 SCC 6 254).

The term "in part" is generally construed to include any material fact that the plaintiff must prove. The decision in M/S. SHREE LAKSHMI GARMENTS AND TEXTILES v. M/S. SRI SAI SILKS (Karnataka High Court, 2023) illustrates this, where the supply of goods from Bengaluru was deemed sufficient for jurisdiction, even if other aspects of the transaction occurred elsewhere. The Andhra Pradesh High Court in Savara Pydi Raju v. T. Venkata Rao And Others (2006 SCC ONLINE AP 989) also advocated for a comprehensive approach in determining where a cause of action partly arises, especially in complex situations.

However, the connection must be genuine and not based on illusory or insignificant facts. The Supreme Court's ruling in South East Asia Shipping Co. Ltd. (1996 SCC 3 443) serves as a reminder that the facts relied upon must indeed constitute a part of the cause of action.

VII. Conclusion

Section 20(c) of the Code of Civil Procedure, 1908, is a pivotal provision that provides a flexible yet principled basis for determining territorial jurisdiction in a vast array of civil suits in India. By allowing suits to be instituted where the cause of action "wholly or in part" arises, it acknowledges the often-dispersed nature of modern transactions and interactions. The judiciary, through consistent interpretation, has defined "cause of action" as the bundle of material facts necessary for a plaintiff to succeed and has generally given a broad ambit to the term "in part," provided there is a genuine and substantial nexus between such part of the cause of action and the forum chosen.

The interplay of Section 20(c) with contractual ouster clauses and its application to corporate defendants and its analogous principles in writ jurisdiction highlight its pervasive influence. Ultimately, Section 20(c) seeks to balance the plaintiff's right to choose a convenient forum with the imperative that the chosen court has a legitimate connection to the dispute, thereby fostering fair and efficient administration of justice.