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Legal Principle: a Suit Shall Be Instituted in the Court Within Whose Jurisdiction the Cause of Action Arises, Or the Defendant Actually and Voluntarily Resides Or Carries on Business, Or Personally - Legal Reasoning

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MCQ

Given below is the statement of Legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.
LEGAL PRINCIPLE: A suit shall be instituted in the court within whose jurisdiction the cause of action arises, or the defendant actually and voluntarily resides or carries on business, or personally works for gain.
FACTUAL SITUATION: 'Y' carries on business in Mumbai. 'Z' carries on business in Delhi. 'Z' buys goods of 'Y' in Mumbai through his agent and request Y to deliver them at Delhi. Accordingly, 'Y' delivered the goods at Delhi. But he did not get the price of the goods delivered in Delhi. Therefore, he intends to move the Civil Court for recovery of the amount from 'Z'. Which court may approach?
DECISION:

Options

  • 'Y' may institute the suit either at Delhi where Z carries on business or at Mumbai where the cause of action arose.

  • 'Y' may institute the suit at Delhi where 'z' carries on business.

  • 'Y' may institute the suit simultaneously at Delhi where 'Z' carries on business and at Mumbai where the cause of action arose.

  • 'Y' may institute the suit at Mumbai where the cause of action arose.

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Solution

'Y' may institute the suit either at Delhi where Z carries on business or at Mumbai where the cause of action arose.

Explanation:  
According to an illustration provided under Section 20  of the Code of Civil Procedure, A is a tradesman in  Calcutta.B carries on business in Delhi.B, by his agent in Calcutta, buys goods of A and requests A to deliver them to the East Indian Railway Company. A delivers the goods accordingly in Calcutta. A may sue B for the price of the goods either in Calcutta, where the cause of action has arisen or in Delhi, where B carries on business.   

Concept: Important Court Decisions (Entrance Exams)
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