Section 120 of the Code of Civil Procedure, 1908 (hereinafter referred to as “the Code”) provides that Sections 16, 17 and 20 of the Code shall not apply to the High Courts in exercise of its original civil jurisdiction. Sections 16, 17 and 20 of the Code deal with instances where the courts, in certain circumstances, can assume jurisdiction even where the cause of action may have arisen in the jurisdiction of a different state.

For instance, by virtue Section 20 of the Code, a court in Delhi shall have jurisdiction over a case even where the cause of action may have arisen in some other State, if “any of the defendants, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain in Delhi.”

However, by an application of Section 120, Sections 16, 17 and 20 of the Code are made expressly inapplicable to the High Courts with original civil jurisdiction.

It is important to note that out of all the High Courts in the country, only five High Courts exercise original civil jurisdiction, namely, the High Courts of Calcutta, Madras, Bombay, Delhi and Himachal Pradesh. Out of these, only the High Courts of Calcutta, Madras and Bombay are referred to as “Chartered High Courts” which exercise jurisdiction under their respective Letters Patent.

The applicability of Section 120 and the consequent inapplicability of Sections 16, 17 and 20 have often been a matter of consideration before the courts of the country. It has been argued that the interpretation of Section 120 read with the three Sections under its fold are seemingly in conflict with Clause XII of the Letters Patent in case of the three Chartered High Courts. Clause XII of the Letters Patent, like Section 20 of the Code, confers jurisdiction over the three Chartered High Courts to try a case where the defendant, or each of the defendants, where there are more than one, at the commencement of the suit, carry on business at a place where such Courts otherwise would have had ordinary original jurisdiction. Consequently, the question that has arisen time and again before the Courts is whether these High Courts can assume jurisdiction under Clause XII of the Letters Patent even though Section 120 of the Code expressly excludes the same.

Further, another contentious issue has been whether the remaining High Courts of Delhi and Himachal Pradesh, which are not governed by a provision akin to Clause XII of the Letters Patent, would not have jurisdiction under Sections 16, 17 and 20 of the Code because of the applicability of Section 120.

LEGISLATIVE HISTORY OF SECTION 120 OF THE CODE

The legislative history of Section 120 of the Code is significant to appreciate the purport of this provision, as it currently stands in the statute book.

Section 120 comes under the umbrella of Part IX of the Code which pertains to “Special Provisions relating to the High Courts”. The Amendment Act of 1951 substituted “Chartered High Courts” for “High Courts”, thereby making it applicable to all High Courts (and not just the three Chartered High Courts) of the Country exercising original civil jurisdiction. In fact, the implication of the said amendment has been taken into account by various Courts while construing the import of Section 120 of the Code. Interpretation of Section 120 of the Code by the various Courts in India apropos these two issues is being discussed below.

APPLICABILITY OF SECTION 120 OF THE CODE TO CHARTERED HIGH COURTS:

The applicability of Section 120 of the Code and the seeming conflict with Clause XII of the Letters Patent has been dealt with by the Hon’ble Supreme Court in the following matters:

• Food Corporation of India Vs. Evdomen Corporation [AIR 1999 SC 2352]

The Apex Court, in the aforesaid case, held that even though Section 120 of the Code ousts the application of Section 20 of the Code of Civil Procedure, since Clause XII of the Letters Patent of the Bombay High Court is applicable to the Bombay High Court, it would have jurisdiction of the Bombay High Court as the appellant was carrying on business in Bombay.

• Jindal Vijayanagar Steel Vs. Jindal Praxair Oxygen Company Limited [(2006) 11 SCC 521 decided on 29 August 2006]:

In the above-referenced case, it was contented that by virtue of Section 120 of the Code, applicability of Section 20 stands excluded, notwithstanding the Letters Patent. It was contended that any other interpretation would render Section 120 nugatory and otiose.

However, the Hon’ble Supreme Court held that the Courts can assume jurisdiction under Clause XII of the Letters Patent and there was no question of a conflict between Clause XII and the Code of Civil Procedure, since:

• • • The Letters Patent and the Code of Civil Procedure operate in separate fields, i.e., the Letters Patent specifically confers jurisdiction on the Chartered High Courts and Code of Civil Procedure confers jurisdiction on all other courts; and

• • • There is clearly a difference between the scope of the Letters Patent and the Code of Civil Procedure – the difference being evident upon a plain reading of Section 120 of Code of Civil Procedure.

Therefore, the Hon’ble Supreme Court has conclusively held that the three Chartered High Courts would have jurisdiction to try certain cases under Clause XII of the Letters Patent if the conditions therein are satisfied. As a result, in the case of these three Chartered High Courts, a litigant will have the option of invoking the jurisdiction under Clause XII of the Letters Patent, even though the same has been expressly excluded by Section 120 of the Code.

APPLICABILITY OF SECTION 120 OF THE CODE TO OTHER HIGH COURTS EXERCISING ORIGINAL CIVIL JURISDICTION:

It is interesting to note that while dealing with the question of applicability of Section 120 of the Code, the Delhi High Court has taken contradictory stands on the issue in the following judgements:

• Mikuni Corporation Vs. UCAL Fuel System Limited [ILR (2008) II Delhi 367 decided on 30 January 2008]

down by the Hon’ble Supreme Court in the Jindal Vijaynagar case (supra) and opined that since the Delhi High Court is not a Chartered High Court, there is no Letters Patent Act conferring specific jurisdiction on it. Further, while the Delhi High Court exercises original jurisdiction, such jurisdiction is determined as per the provisions of the Code and its own rules framed for the purpose. Further, since the Delhi High Court Rules did not confer any jurisdiction on the Delhi High Court in a manner similar to that of Clause XII of the Letters Patent does in case of Bombay High Court, and in the absence of either party having its office or place of business in Delhi and no cause of action having arisen in Delhi, the Delhi High Court would have no jurisdiction in the matter.

• Ashok Rekhi V. Chanda Bhasin & Ors. [CS OS 2192/2006 decided on 06 April 2015]:

However, a contrary view was taken by the Delhi High Court in the above judgement. In this case also, the Hon’ble Delhi High Court discussed the decisions of the Apex Court in Food Corporation of India V. Evdomen Corporation (supra) and Jindal Vijaynagar case (supra). It was held that the question of whether Section 120 of the Code would be applicable to a High Court like Delhi High Court, to which Clause XII of the Letters Patent does not apply, has to be construed differently and has been conclusively decided by the Court in the case of State Bank of India v. Himalayan Exporters [1979 Delhi 201 (8)].

In State Bank of India (supra) it was held that when Section 120 of the Code was amended in 1951 by substituting “Chartered High Courts” in Part IX for “High Courts”, thereby making it applicable to all High Courts in the Country, the applicability of Section 120 was intended to be restricted only to the three Chartered High Courts of Calcutta, Madras and Bombay as none of the other High Courts in the country were exercising original civil jurisdiction at the time. Further, it was held that it must have been considered appropriate that if in the future a High Court assumes original civil jurisdiction, it would look for guidance in such matters, to an enactment, which confers such jurisdiction on it. Therefore, Section 120 was not intended to include within its ambit a High Court like Delhi, which does not contain in its rules a provision such as that of Clause XII of the Letters Patent of Calcutta, Madras and Bombay High Courts.

The Hon’ble Delhi High Court, therefore, squarely applied the ratio of the Delhi High Court in the case of State Bank of India v. Himalayan Exporters (supra) while holding that if a view contrary to the same would be taken, it would lead to ‘strange consequences’ inasmuch as the District Courts in Delhi would be able to invoke jurisdiction under Sections 16, 17 and 20 of the Code and deal with properties outside Delhi, but the Delhi High Court would be unable to do so.

It is interesting to note that although in the Ashok Rekhi (supra) Case, the Hon’ble Delhi High Court did not even discuss its decision in Mikuni Corporation Vs. UCAL Fuel System Limited (supra), there are only a few cases where the issue discussed in this Article has been considered. Therefore, more clarity on the same is the need of the hour.