Patel Roadways Ltd. v. Prasad Trading Co.

In this case, the Supreme Court explained how court jurisdiction works under Section 20 CPC. The carrier, Patel Roadways, tried to push all cases to Bombay courts through a contract clause. But the goods were booked and damaged elsewhere. The Court said: you cannot give a court power that it does not have. If many courts are competent, parties may pick one. But they cannot pick a court with zero connection. So, the suits in Tamil Nadu/Madras were proper, and Bombay was not.

• Can an agreement exclude a court that already has jurisdiction under Section 20 CPC?
• For a company, does jurisdiction depend on the principal office or the subordinate office tied to the cause of action?

• File the suit where the defendant lives, carries on business, works for gain, or where the cause of action arises, wholly or partly.
• For corporations: sue at the principal office or at the subordinate office if the cause of action arises at that place.
• Parties cannot create jurisdiction where none exists.
• When multiple courts are competent, parties may choose one of them by agreement.

The Supreme Court affirmed the Trial Court and the High Court. Tamil Nadu and Madras courts had jurisdiction. No part of the cause of action arose in Bombay. So, Bombay courts had no power under Section 20 CPC. A private clause could not change that. Forcing the plaintiff to sue in Bombay would be unfair.

• Jurisdiction is fixed by law, not by private will.
• Exclusive clauses work only to choose among competent courts.
• For companies, a subordinate office gives jurisdiction if the cause of action arises there.
• Section 20 CPC aims at fairness and convenience, not hardship.

This ruling guides how businesses draft jurisdiction clauses. It protects consumers and smaller firms from being dragged to faraway courts with no real link to the dispute.

• Check where the cause of action arose. That place matters.
• Corporate defendants: principal office or relevant subordinate office both count.
• Exclusive clause ≠ magic wand. It cannot create power.
• Section 20 is about fairness and practical access to justice.

Mnemonic: PLACE — Part of cause, Location of business, Agreed only among competent, Convenience, Equity.

1. Find the place where the cause arose.
2. Confirm if defendant runs business there.
3. Accept agreement only if court is already competent.

Issue: Can an exclusive clause oust lawful jurisdiction? Which office fixes corporate jurisdiction?

Rule: Section 20 CPC. Corporate suits lie at principal office or at subordinate office tied to the cause.

Application: Cause arose outside Bombay; Bombay had no link. Clause could not create power there.

Conclusion: Local courts in Tamil Nadu/Madras had jurisdiction. Appeals dismissed.

Cause of Action

Key facts that give a right to sue.

Exclusive Jurisdiction Clause

A term choosing one among competent courts.

Subordinate Office

Branch office where relevant events occurred.