Hi Rock Construction Company v. Divya P. Vora

22 wp 3490 of 2026.docIN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO.3490 OF 2026 Hi Rock Construction Company ...Petitioner versusDivya P. Vora …Respondent WITHWRIT PETITION NO.3492 OF 2026Hi Rock Construction Company…Petitioner versusNirmala Dialani …Respondent WITHWRIT PETITION NO.3493 OF 2026Hi Rock Construction Company…Petitioner versusMeena Luthria …Respondent Dr. Abhinav Chandrachud with Mr. Aadil Parsurampuria, Mr. AalamParsurampuria, Ms. Kekesjro Thakar i/by Mr. Prashant Parsurampuria, forPetitioner in WP No.3490 of 2026. Mr. Aadil Parsurampuria with Mr. Aalam Parsurampuria with Ms. KejeshriThakar i/by Mr. Prashant Parsurampuria, for Petitioner in WP No.3492 and3493 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 thelearned Judge, City Civil Court at Mazgaon, Mumbai, in Notices of Motiontaken out by the Petitioner – Defendant No.1 for the return of the plaints inSSP 1/16 22 wp 3490 of 2026.docSummary Suits instituted by the Respondents – Plaintiffs on the ground thatthe City Civil Court has no jurisdiction to entertain, try and decide the suits. 3.The Respondent instituted the Summary Suits for recovery of theamounts purportedly advanced to the Defendant Nos.2 to 4, who are thepartners of Defendant No.1 firm. The substance of the claim of theRespondent – Plaintiff was that, the Respondent – Plaintiff was induced topart with substantial amounts by making dishonest and fraudulentrepresentations that the amounts would be repaid along with quarterly interest@ 12% p.a. Despite acknowledging the liability by executing balanceconfirmation, the Defendants failed and neglected to repay the amount alongwith accrued interest. Thus, the Summary Suits to recover the amounts basedon 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 arethe managing partners of the Defendant No.1 firm. The registered office ofDefendant No.1 was situated at Dahisar (East). The Defendants also hadtheir office at Dadar (West), Mumbai. The Defendants were working for gainwithin the territorial limits of the jurisdiction of the City Civil Court. 5.The Petitioner took out Notices of Motion seeking return of the plaintscontending, inter alia, that the Defendant No.1 firm was carrying on businessat its registered office at Dahisar, which was beyond the local limits of theSSP 2/16 22 wp 3490 of 2026.docjurisdiction of the City Civil Court. The Plaintiffs had resorted to clever draftingby showing the branch office as the address of Defendant No.1 firm. Sinceno 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 theproper 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, interalia, that there were specific averments in the plaints that the Defendant No.1was 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 thelocal limits of the jurisdiction of the City Civil Court. Since the Defendants hadnot raised any objection to the territorial jurisdiction of the City Civil Court inthe affidavit filed seeking leave to defend the suits, the assertion that theDefendants 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 containedin Section 20 of the Code of Civil Procedure, 1908. If the learned Judge, CityCivil Court professed to exercise the jurisdiction on the premise thatDefendant Nos.2 to 4 were residing within the local limits of the jurisdiction ofthe City Civil Court, then the suit could not have been entertained in theSSP 3/16 22 wp 3490 of 2026.docabsence 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 wassituated at Dadar (W), would not confer jurisdiction on the City Civil Court,Mumbai, unless it could be demonstrated that the cause of action also aroseat the place where the Defendant No.1 has a Branch office. Inviting theattention of the Court to the Explanation to Section 20 of the Code, 1908, Dr.Chandrachud strenuously submitted that the term ‘Corporation’ used in thesaid Explanation is of wide amplitude and covers in its fold a partnership firmalso. The learned Judge, City Civil Court, did not advert to this aspect of thematter, and, thus, committed an error in holding that the City Civil Court atMumbai had the jurisdiction to entertain, try and decide the suits. 9.To buttress the aforesaid submissions, Dr. Chandrachud placed a verystrong reliance on the judgment of the Supreme Court in the case of HakamSingh V/s. Gammon (India) Ltd.1, wherein it was enunciated that theexpression ‘Corporation’ used in the Explanation to Section 20 is notrestricted to a statutory Corporation, but also includes the legal person andincludes the Company registered under the Companies Act. 10.Dr. Chandrachud also placed reliance on the judgment of the SupremeCourt in the case of Dashrath Rupsingh Rathod V/s. State of Maharashtra1(1971) 1 SCC 286SSP 4/16 22 wp 3490 of 2026.docand Anr.2, wherein in the context of the jurisdiction of the Court to takecognizance of an offence punishable under Section 138 of the NegotiableInstruments Act, 1881, a three-Judge Bench of the Supreme Court,enunciated that the Corporations and partnership firms, and even soleproprietorship concerns could well be transacting business simultaneously inseveral cities, and if the Defendant’s location is to form the fulcrum ofjurisdiction, the Plaintiff is precluded from instituting the suit anywhere else,than the place where the Defendant has a branch Office and the cause ofaction has accrued. 11.Reliance was also placed on a decision of a learned Single Judge ofthis Court in the case of Lyka Labs Limited and Anr. V/s. State ofMaharashtra and Anr.3, wherein a distinction was sought to be drawnbetween the legal person and the juristic person to the effect that a legalperson is any subject-matter other than a human being to which the lawattributes personality. A juristic person is a body of persons, a corporation orcompany, a partnership or other legal entity recognized by law as the subjectof rights and duties, also called an artificial person. 12.Banking upon the aforesaid pronouncements, Dr. Chandrachud wouldurge 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 12932023 SCC Online Bom 560SSP 5/16 22 wp 3490 of 2026.docThus, if it is not the case of the Plaintiffs that, a part of the cause of actionarose within the local limits of the jurisdiction of the City Civil Court, where thebranch office of Defendant No.1 is situated, the City Civil Court lacked thejurisdiction to entertain, try and decide the suits. 13.In substance, the question as to whether the partnership firm falls withinthe ambit of the expression ‘Corporation’ within the meaning of theExplanation 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 defendantsreside or cause of action arises. - Subject to the limitationsaforesaid, every suit shall be instituted in a Court within thelocal limits of whose jurisdiction - (a)the defendant, or each of the defendants wherethere are more than one, at the time of the commencement ofthe suit, actually and voluntarily resides, or carries onbusiness, or personally works for gain; or (b)any of the defendants, where there are morethan one, at the time of the commencement of the suit,actually and voluntarily resides, or carries on business, orpersonally works for gain, provided that in such case eitherthe leave of the Court is given, or the defendants who do notreside, or carry on business, or personally work for gain, asaforesaid, acquiesce in such institution; or (c)the cause of action, wholly on in part, arises. Explanation – A Corporation shall be deemed to carry onbusiness at its sole or principal office in India or, in respect ofany cause of action arising at any place where it has also aSSP 6/16 22 wp 3490 of 2026.docsubordinate office, at such place.” 15.On a plain reading, it becomes evident that, the aforeextractedExplanation to section 20 addresses two distinct situations. First part of theExplanation applies to such a corporation which has its sole or principal officeat a particular place. In such cases, notwithstanding the fact that, suchdefendant – corporation might not be actually carrying on business at theplace where the sole or principal office of the defendant is situated, the courtswithin whose jurisdiction the sole or principal office of the defendant issituated, will have jurisdiction to entertain, try and decide the suit as suchcorporation ‘will be deemed to carry on business ‘ at that place. The first partof the Explanation, thus, incorporates a deeming fiction. 16.The second part of the Explanation governs the case where thedefendant does not have the sole office, but has principal office at one placeand also has a subordinate office at another place. Two parts are separatedby ‘or’, a disjunctive. If the case is covered by the second part of theExplanation, it is not the Court within whose jurisdiction the principal office ofthe defendant is situated, but the Court within whose jurisdiction it has asubordinate office, which alone shall have jurisdiction ‘in respect of any causeof action, at any place, where it has also a subordinate office’. Thus, if thedefendant – corporation has a subordinate office where the cause of actionSSP 7/16 22 wp 3490 of 2026.docarises, the suit must be instituted at that place alone irrespective of theoptions 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 theclaim of Defendant No.1 firm that the plaints do not disclose that a part of thecause of action has arisen within the local limits of the branch office ofDefendant No.1 firm at Dadar (West), Mumbai, and, therefore, the suits oughtto have been instituted in the Court within the local limits of whose jurisdictionthe registered office of the Defendant No.1 is situated. 18.To this end, Dr. Chandrachud wants the Court to construe theexpression ‘Corporation’ to include the partnership firm. Indeed, in the caseof Hakam Singh (supra), the Supreme Court repelled the submission that theexpression ‘Corporation’ in Explanation II to Section 20 of the Code, as it thenstood, includes a statutory corporation only and not the company registeredunder the Companies Act. It was postulated that the Code uses theexpression ‘Corporation’ as meaning a legal person and includes a companyregistered under the Indian Companies Act. Order XXIX of the Code dealswith suits by or against a corporation and there is nothing in the Code that aCorporation referred to under Order 20 means only a statutory corporation4(1991) 4 SCC 270SSP 8/16 22 wp 3490 of 2026.docand not a company registered under the Indian Companies Act. 19.In the case of S.S.Dhanova V/s. Municipal Corporation5, theSupreme Court further expounded the import of the expression ‘Corporation’,as under : “8. A corporation is an artificial being created by law havinga legal entity entirely separate and distinct from the individualswho compose it with the capacity of continuous existence andsuccession, notwithstanding changes in its membership. Inaddition, it possesses the capacity as such legal entity of taking,holding and conveying property, entering into contracts, suingand being sued, and exercising such other powers andprivileges as may be conferred on it by the law of its creation justas a natural person may…….” 20.The aforesaid pronouncements, however, do not advance the cause ofthe submission on behalf of the Petitioner to the extent desired by thePetitioner. The expression ‘Corporation’ is not elastic enough to include allforms of associations of persons. Juristic and independent personality andperpetual succession are the hallmarks of ‘Corporation’, statutory orincorporated. Those inseparable attributes of a corporate entity cannot befound in all firms of assocations. The fundamental distinction between aCorporation and a registered partnership firm, cannot be lost sight of. Thepartnership firm is not a legal person, even though it has some attributes of5(1981) 3 SCC 431SSP 9/16 22 wp 3490 of 2026.docpersonality. The partnership is, in a sense, certain relations between personswho have agreed to share profits of the business. Partnership firm has noindependent juristic personality. The firm, as such, has no legal recognition. 21.A useful reference can be made to a judgment of the Supreme Court inthe case of Commissioner of Income Tax, Madras V/s. R.M.ChidambaramPillai and Ors.6, wherein the Supreme Court, inter alia, considered thequestion, ‘is the firm a person or a mere shorthand name for a collection ofpersons ? The observations of the Supreme Court in paragraphs 15 to 17 areinstructive and, hence, extracted below : “15.Is the firm a person or a mere shorthand name for acollection of persons, commercially convenient but notlegally recognised? Under Section 3 of the Partnership Act itis not a person, but a relationship among persons. Lindley,on Partnership7 has this: “The firm is not recognised by English lawyersas distinct from the members composing it. In takingpartnership accounts and in administering partnershipassets, courts have to some extent adopted the mercantileview, and actions may now, speaking generally, be broughtby or against partners in the name of their firm; but,speaking generally, the firm as such has no legalrecognition. The law, ignoring the firm, looks to the partnerscomposing it; any change amongst them destroys theidentity of the firm; what is called the property of the firm istheir property, and what are called the debts and liabilities of6(1977) 1 SCC 431712th Edition, P. 28, Sweet and MaxwellSSP 10/16 22 wp 3490 of 2026.docthe firm are their debts and their liabilities. In point of law,. apartner may be the debtor or the creditor of his copartners,but he cannot be either debtor or creditor of the firm of whichhe 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 sameand the reference in counsel's submissions to the Scottishview of a firm being a legal entity is neither here nor there.Primarily our study must zero on the Indian Partner- ship Actand not borrow courage from foreign systems. In BhagwanjiMorarji Gokuldas8 the Privy' Council ruled that the theIndian Partnership Act went beyond the English PartnershipAct, 1890, the law in India. attributing personality to apartnership being more in accordance with the law of Scoffand. Even so, Sir John Beaumont, in that case, pointed outthat the Indian Act did not make a firm a corporate body.Moreover, we are not persuaded by that ruling of the PrivyCouncil, particularly since a pronouncement of this court inDulichand9 strikes a contrary note. We quote : “In some systems of law this separate personality of afirm apart from its members has received full and formalrecognition as, for instance, in Scotland. That is, however,not the English common law conception of a firm. Englishlawyers do not recognise a firm as an entity distinct from themembers composing it. 'Our partnership law is based onEnglish law and we have also adopted notions of Englishlawyers as regards a partnership firm." The life of the Indian law of partnership depends on itsown . terms although habitually courts, as a hangover of the8AIR 1948 PC 10091956 SCR 154SSP 11/16 22 wp 3490 of 2026.docpast, have been referring to the English law on the point.The matter is concluded by the further observations of thisCourt : “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 notionsand extended a limited personality to a firm. Nevertheless,the general concept of a partnership, firmly established inboth systems of law, still is that a firm is not an entity or'person' in law but is merely an association of individualsand a firm name is only 'a collective name of thoseindividuals who constitute the firm. In other words, a firmname is merely an expression, only a compendious mode ofdesignating the persons who have 'agreed to carry onbusiness in partnership. According to the principles ofEnglish jurisprudence, which we have adopted, for thepurposes of determining legal rights 'there is no such thingas a firm known to the law' as was said by James L.J., in Exparte Corbett: In re Shand10. In these circumstances toimport the definition of the word 'person' occurring in section3(42) of the General Clauses Act, 1897, into section 4 of theIndian Partnership Act will, according to lawyers, English orIndian, be totally repugnant to the subject of partnership lawas they know and understand it to be."In Narayanappa11 the view taken by this court accords withthe position above stated. 17.The necessary inference from the premise that apartner- ship is only a collective of separate-persons and nota legal person in itself lends to the further conclusion that10(1880) 14 Ch D 122 11AIR 1966 sc 1300SSP 12/16 22 wp 3490 of 2026.docthe salary stipulated to be paid to a partner from the firm isin reality a mode of division of the firm's profits, no personbeing his own Servant in law since a contract of servicepostulates two different persons.” 22.Reliance sought to be placed by Dr. Chandrachud on the judgment ofthe Supreme Court in the case of Dashrath Rupsingh Rathod V/s. State ofMaharashtra (supra) and a judgment of this Court in the case of Lyka LabsLimited and Anr. (supra), to bolster up a submission that the partnershipfirm has some sort of legal personality, is not of much assistance. Thepartnership firm is a compendious mode of designating persons who haveagreed to carry on business in partnership. That, however, does notnecessarily imply that, in law, the firm is an entity incorporated by persons. Itis essentially an association of individuals. Firm name is a collective name ofthose individuals who constituted the firm. To put in other words, thepartnership registered under the Partnership Act, 1932, is neither a personnor a legal entity. 23.A useful reference in this context can be made to a recentpronouncement of the Supreme Court in the case of Dhanasingh PrabhuV/s. Chandrasekar and Anr.12 wherein, in the context of the provisionscontained in Section 141 of the Negotiable Instruments Act, 1881, theSupreme Court enunciated in no uncertain terms that the partners and the12(2025) 10 SCC 96SSP 13/16 22 wp 3490 of 2026.docpartnership firm are one and the same. Unlike a company, a partnership firmhas no independent corporate existence and has no distinct legal personaindependent of its partners. The relevant observations in paragraph Nos.41to 43 read as under : “41.A partnership firm, unlike a company registeredunder the Companies Act, does not possess a separatelegal personality and the firm’s name is only acompendious reference for describing its partners. Thisfundamental distinction between a firm and a companyrests on the premise that the company is separate fromits shareholders. In that context, the words of LordMacnaghten in Salomon vs. Salomon & Co. Ltd.13(“Salomon”) are instructive : “..… The company is at law a different personaltogether from the subscribers...… and though it may bethat after incorporation the business is precisely thesame as it was before and the same persons aremanagers and the same hands receive the proceeds, thecompany is not in law, the agent of the subscribers ortrustee for them. Nor are the subscribers as membersliable, in any shape or form, except to the extent and inthe manner provided by the Act.”42.This distinction does not, however, continue to holdtrue for a partnership firm. In the seminal case of BachaF. Guzdar V/s. CIT14, this Court had an opportunity to131897 AC 22(HL)14(1954) 2 SCC 563SSP 14/16 22 wp 3490 of 2026.docbriefly address this distinction between a partnership firmand a company, wherein it was observed thus: “13.It was argued that the position ofshareholders in a company is analogous to that ofpartners inter se. This analogy is wholly inaccurate.Partnership is merely an association of persons forcarrying on the business of partnership and in law thefirm name is a compendious method of describing thepartners. Such is, however, not the case of a companywhich stands as a separate juristic entity distinct from theshareholders.” 43.The partnership name being only a compendiousmethod of describing the partners, it stands to reasonthat a reference to the partners in their capacity aspartners of the firm will be sufficient to impute liability onthe partners themselves, whereas directors of a companyare made liable vicariously through the company, uponwhom falls the primary liability. Thus, the partners andthe partnership firm are one and the same. Unlike acompany, a partnership firm has no independentcorporate existence and has no distinct legal personaindependent of its partners. Similarly, the partners of afirm are co-owners of the property of the firm unlikeshareholders in a company who are not co-owners of theproperty of the company.……..”24. The aforesaid being the position in law, the submission on behalf of theSSP 15/16 22 wp 3490 of 2026.docPetitioner that the expression ‘Corporation’ in the Explanation to Section 20 isexpansive 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 heldthat Defendant No.1 firm is a mere collection of individuals i.e. DefendantNos.2 to 4, and since Defendant Nos.2 to 4 are residing and working for gainwithin the local limits of the jurisdiction of the City Civil Court, the submissionon behalf of the Petitioner that the suits are not maintainable without the leaveof the Court under clause (b) of Section 20 of the Code, does not meritacceptance. 25.The Court also finds that, in the plaint, there are adequate averments toshow that Defendant Nos.2 to 4 had induced the Plaintiff to part with theamounts and that Defendant Nos.2 to 4 were working for gain within the locallimits of the jurisdiction of the City Civil Court. It is specifically asserted thatthe balance confirmations were executed by Defendant No.2, for and onbehalf of Defendant Nos.1 to 4. Thus, it cannot be urged that there are noaverments in the plaint to demonstrate that, a part of the cause of action hasarisen 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. )SSP 16/16