TMI Blog1988 (10) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... lied by the plaintiff to the vessel, as acknowledged by its master by Ext. A8, the translation of which in English is Ext. A9. Exts. A9 and A10 show that the plaintiff had carried out its obligations under the contract. For the purpose of this appeal, the only question that is relevant is as regards the plea of limitation. ( 3. ) The suit was filed in 1979 while the cause of action admittedly arose during the period between 3-5-1974 and 3-6-1974. Prima facie the suit was hopelessly time-barred, unless saved by S.15(5) of the Limitation Act,1963. ( 4. ) Hearing of the arrival of the vessel at the port of Cochin, the plaintiff instituted the suit on 1-8-1979 and moved an application for attachment of the vessel under O.38, R.5 of the C. P. C. The court below made an order of conditional attachment of the vessel. The first defendant entered appearance by the master of the vessel the second defendant, under protest, specifically pleading the bar of limitation, furnished security by way of bank guarantee for a sum of ₹ 1,25,000/- and secured release of the vessel. ( 5. ) Defendants 1 and 2 filed written statements denying the plaint allegations and pleading the bar of lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally a company cannot either be present in India or absent from India. But it may have a domicile or residence in India. Sometimes questions have arisen as to what is the place of residence of an incorporated company. The court then cited with approval the views expressed by Dicey in Conflict of Laws, 4th Edn., p. 152 as to the difference between a natural person and a corporation as regards domicile, residence and jurisdiction, See the decision of the Bombay High Court in Sayaji Rao Gaekwar of Baroda v. Madhaorao Raghunatharao, AIR 1929 Bom 14 and concluded : 36. Section 15(5) of the Limitation Act, 1963 can be viewed in one of the two ways, i.e., that that provision does not apply to incorporated companies at all or alternatively that the incorporated companies must be held to reside in places where they carry on their activities and thus being present in all these places. Hungerford is an Investment company. It had invested large sums of monies in Turner Morrison. Its Board of Directors used to meet in India now and then. It was (through its representatives) attending the general meeting of the shareholders of Turner Morrison. Under these circumstances, it must be held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation as the other. The emphasis here, of course, is on the business carried on by the corporation in more than one place and its management and control being thus divided. Channell, J. stated in Goerz and Co. v. Bell, (1904) 2 KB 136, 146 : it is possible -.- though I do not decide the question one way or the other - that the company may have two residences ..... That is clear in the case of a person, and I think the condition of things might be the same with regard to a company. That was a case where the company was registered in a foreign country, but having its head office and central management in London. It was accordingly held that it was resident in England. Developing this principle, Viscount Cave L.C. held in Swedish Central Ry Co. v. Thompson. (1925) AC 495, 501 : An individual may clearly have more than one residence : see Cooper v. Cadwalader, (1904) 5 Tax Cas 101; and on principle there appears to be no reason why a company should not be in the same position. The central management and control of a company may be divided, and it may'keep house and do business' in more than one place; and if so, it may have more than one residence. ( 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing process out of the jurisdiction, but - machinery for serving process within the jurisdiction. The claim of the plaintiff in that case was against a foreign shipping company operating vessels which traded with various countries, including England, and having an office of its own at a fixed place in England. Collins, L. J. posing the question whether such a foreign corporation was for the purpose of service of writ resident in England stated : Now, is this corporation carrying on business, not merely in the waters of England, but carrying on business at a fixed place, so as to entitle the plaintiff to say, 'This is a corporation resident in England, and I can, therefore, adopt the process of serving persons within the jurisdiction'? That involves a nice question of fact. (Emphasis supplied) The learned Judge then considered whether the business of the corporation was carried on in England at a fixed and definite place in such away as e it her to make it the business of the corporation, or to make it merely the business of its agent. On the facts found, he concluded that the business was that of the corporation and not merely that of the agent. Various fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was operating its business it England. Fletcher Moulton, L.J. in the same case referred in this context to the position of the agent: He carries on business at a fixed place in London as sole agent for the defendants in the United Kingdom, though it is true that he is also agent for another firm. He has power to enter into contracts of sale for the defendants; ...... Contracts made by him in this country on behalf of the defendants are signed by him or by his clerk for him, as their agent; and so far as I can see every trade operation is done by him for the defendants at this fixed address. ..... I agree that it is of primary importance that a foreign corporation Should carry on its business in this country at a fixed and definite place ( 16. ) In Dunlop Pneumatic Tyre Company Ltd. v. Actien-Gesellschaft Fur Motor Und Motorfahrzeuqbau Vorm. Cudell and Co., (1902) 1 KB 342, 349, Mathew L.J. pointed out that a corporation resided at the place where it carried on its business. In the same case Romer, L.J. said : If for a substantial period of time business is carried on by a foreign corporation at a fixed place of business in this country, through some person, who th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration is trading with this country or is trading within this country. In the former case it is not in the latter case it is. amenable to taxation in this country; and speaking for myself, I cannot see that there is any real distinction between the line of reasoning which would lead to the conclusion that the company was carrying on business in this country for the one purpose or for the other purpose. (Emphasis supplied) Lord Evershed, M.R. pointed out in Union Corporation Ltd. v. Inland Revenue Commissioners, (1952) 1 TLR 651, 663 quoted by Lord Cohen in Unit Construction Co. Ltd. v. Bullock (1960) AC 351, 373 : The company may be properly found to reside in a country where it 'really does business', that is to say where the controlling power and authority which according to the ordinary constitution of a limited liability company, is vested in its board of directors, and the exercise of that power and authority, are to some substantial degree to be found. 1. See also Cheshire and North, Private International Law, 10th edn., pp. 188 et. seq.; J.H.C. Morris, Conflict of Laws, 3rd edn., pp. 66 et. seq.; and, Dicey and Morris, Conflict of Laws, 10th edn., Vol. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation is carrying on business in the country. ( 20. ) To sum up: The decisions discussed above evidence what is now generally accepted as a rule of Private International Law See Dicey and Morris, on. cit.; and Cheshire and North eg. cit., and what may be regarded as part of Indian Law, namely, that a foreign corporation is resident in India only if it carries on business in India. A foreign corporation carrying on business in India is amenable to the jurisdiction of the local courts and is for all practical purposes present in India. This test is satisfied only if its business is carried on at a fixed and definite place which is, to a reasonable extent, a permanent place within India. The mere presence of a representative of the foreign corporation is not sufficient if his only authority is to elicit orders from customers, but not to make contracts on behalf of the corporation. The question really is, as stated by Lord Loraborn, does the corporation really keep house and does business in India? Its real business is carried on where the central management and control actually abides . De Beers Consolidated Mines Ltd. v. Howe, (1906) AC 455, 458 (see above). While a company i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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