1. MUHAMMAD AFZAL ZULLAH, J.-These two appeals through special leave are being disposed of together as the questions involved are the same.
2. The appellant's case is that it is a public Limited Company incorporated in Pakistan with sole registered office at Karachi and that at the relevant time it had a branch office at Manchester (IJ.
3. K). As the business of the Company was to act as indenting agents o introduce local customers to foreign manufacturers, Messrs Kohinoor Textile Mills Liaqatabad, District Mianwali-a project of Kohinoor Industries Limited, asked the appellant through letter dated 25-5-1969 (in Appeal No. 51) to send quotations as to costs and freight (Karachi rates) of certain spare parts. The appellant through letter dated 2-7-1960 sent a pro forma invoice showing details of prices, C & F, Karachi and advised the Mills that the goods could be imported "on their opening a letter of credit" in favour of the appellant. The manufacturers were mentioned as Leosona Limited U. K. The letter of credit was "accordingly opened" by the Mills in favour of the appellant (Branch office U. K.) "for onward payment to manufacturers" through letters dated 8-7-1569 and 21-7-1960. The appellant admitted that the transaction did not materialise, therefore, respondent "M/s. Sayed Saigol Industries Ltd.
4. (Kohinoor Textile Mills) Liaqatabad" then filed suits for damages at Mianwali. As stated in para 10 of the petition for leave, the appellant filed written statement and besides refuting the various allegations contained in the plaint and raising other legal objections raised four preliminary legal objections which were as follows :- "(a) That since the petitioner/defendant was a Limited Company with its sole registered office at Karachi without having its any branch in West Pakistan, the suit at Mianwali could not be filed under section 20, Explanation (II) of Civil Procedure Code and only the at Courts Karachi have the exclusive jurisdiction to try the suit.
(b) That the plaint was not properly signed in terms of Order XXIX, rule 1, C. P. C., and Order VI, rule 15(1), C. P. C. As amended by Law Reforms Ordinance, 1972. The plaint as such was liable to be rejected.
(c) That the transaction was between Messrs Brady & Co. (Pakistan) Ltd., Manchester and Messrs Kohinoor Textile Mills, and not bet--ween petitioners and respondents and therefore respondents had no right to sue on the basis of the said transaction.
(d) That the suit was barred by time."
5. The issues framed on these objections were: "(i) Has this Court the jurisdiction to try the suit? O. P. D.
(ii) Is the plaint liable to be rejected as contended in objection (b) of the written statement? O. P. D.
(iii) Has the plaintiff got no locus standing to institute the suit? O. P. D.
(iv) Is the suit barred by limitation? O. P. D.
6. After examining one witness from each side, the learned trial Judge, at Mianwali, vide his orders dated 14-3-1973 decided these issues against the appellant and proceeded to try the suits on merits. The appellant challenged these orders in two revision petitions. A learned Single Judge of the Lahore High Court dismissed the same in limine on 5-3-1974 with the finding that the Mianwali Court has jurisdiction as a part of cause of action arose there. Leave to appeal was granted to examine the appellant's contentions "that since the petitioner, defendant was a limited company with the sole registered office at Karachi without having its any branch in West Pakistan, the suit at Mianwali could not be filed under section 20 Expl. (ii) of Civil Procedure Code and only the Courts at Karachi have the exclusive jurisdic--tion try the suit"; and "that inasmuch as the goods were to be supplied by the manufacturers, Messrs Leosons Ltd., United Kingdom, there was no privity of contract between the petitioners and the respondents".
7. Learned counsel for the appellant has contended that: Explanation II to section 20, C. P. C., relates to clauses (a), (b) and (c) thereof; hence the place where the cause of action or part thereof arose would not by itself determine the question of territorial jurisdiction where the defendant is a Corporation-reliance has been placed on Registered Firm, Sheikh Industries, Quetta v. West Pakistan Industrial Development Corporation, Karachi (PLD 1976 Quetta 94) and Bhola Nath Aggarwal and another v. The Empire of India of Assurance Co. Ltd. (AIR 1948 Lab. 56), while reference was also made to Messrs Rahrnania Trading Company v. Messrs Eagle Star Insurance Company Ltd. (PLD 1960 SC 202) and Messrs Gharibwal Cement Ltd., Lahore v. Messrs Universal Traders, Gakhar Mandi (PLD 1977 Lab. 481), that the cause of action or its part did not arise at Liaqatabad --Mianwali; and that "Sayed Saigol Industries Limited" the respondent/ plaintiff could not sue the appellant because nothing was said in the plaint or in the evidence as to what was its connection with "Kohinoor Textile Mills Limited"-thus it had no locus stands in the matter. Leached counsel for tie respondent submitted that the points regarding accrual of cause of action at Liaqatabad and the identity of the plaintiff were not raised before the High Court nor were they pressed at the leave stage. Otherwise, also he controverted them and gave the explanation as also necessaryparticulars about the plaintiff's locus standi. On the question of jurisdiction he contended that the Lahore cases of Bhola Nath Aggarwal and Messrs Gharibwal Cement Ltd., Lahore support the view taken in the impugned order. He also referred to a foreign case of Central Warehouring Corporation, New Delhi v. Central Bank of India Ltd., Hyderabad and another (AIR 1973 Andh. Pra 387). Reference was also made to Peoples Insurance Co. Ltd. v. Benoy Bhusan Bhawmid and others (AIR 1943 Cal. 199) and The Light of Asia Insurance Co. Ltd. v. Bai Chanchal (AIR 1932 Bom. 392).
8. We do not agree with the learned counsel for the respondent that the point about accrual of cause of action at Liaqatabad was not raised in the High Court. It was not only raised and pressed but was also adequately dealt with in the impugned order. It is, however, correct that it was not pressed at the leave stage, nor leave was granted for considera--tion of the same. We do not find any compelling reason for considering it now. About the locus stands of the plaintiff also, the point raised in the petition for special leave to appeal (and on which leave was granted was that the defendant is not liable in the matter because it had no privity of contract with the plaintiff. This point has not been pressed now at the appeal stage. Instead the locus standi of the plaintiff regarding its identity has been challenged. It was not pressed in the High Court and was not urged in this Court at the leave stage nor leave was granted on the point. We do not find any justification for dealing with it now.
9. The real controversy between the parties relates to the territorial jurisdiction of the trial Court at Mianwali. A part of cause of action having accrued at Liaqatabad the learned Courts below have held, that it has jurisdiction to try the suit. Section 20 of the Civil Procedure Code reads as follows :- "20. Other suits to be instituted where defendants reside or cause of action arises.-Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such, case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
10. Explanation I-Where a person has a permanent dwelling at one place and also a temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he has such temporary residence; Explanation II.-A corporation shall b;, deemed to carry on business at its sole principal office in Pakistan or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place."
11. The role of the explanation as discussed in the Lahore case of Bhola Nath Aggarwal was approved by this Court in the case of Messrs Rehmania Trading Company. It was observed that "an Explanation is enacted by the Legislature to explain what otherwise would be doubtful or ambiguous. To the extent that it explains a stipulated situation its function is defi--nitive inasmuch as it clarifies or defines the legal position in a supposed state of facts . . . . Of the cases cited by the appellant none is in point except Bhola Nath Aggarwal and another v. The Empire of India Lift Assurance Co. Ltd. But it goes against his own contention and supports the view we are taking.
12. Khosla, J. Observed there It is therefore, clear that the corporation can be said to carry on business at the head office or at the place where it has a branch in respect of a cause of action which arises, wholly or in part, at the place where the branch office is situated. If no part of action arises at the place of the branch office, the corporation cannot be said to transact business at that place. This is the only possible interpretation of Explanation II, and not a single case cited before me has taken the contrary view.
13. Therefore, the Courts at Lahore, can only have jurisdiction if it can be shown that the cause of action, wholly or in part, arose within the jurisdiction of the Lahore Courts, other--wise the suit must be instituted at Bombay where the head office -- is situated or at some place where the cause of action, wholly or in part, arose We consider this to be a correct, statement of the function of the Explanation."
14. Learned counsel for the appellant while stating that the basic requirement regarding territorial jurisdiction is the accrual of cause of action contended, that there are exceptions to it-one being the residence of the defendant. It is further argued that Explanation to section 20 is an extension of the same exception. Thus it would cover clause (c) of the section as well and that is the reason why the accrual of the cause of action is referred in the explanation itself. The Quetta case of Registered Firm Sheikhan Industries undoubtedly, supports the learned counsel. It was held therein that clause
(c) of section 20 and Explanation 11 thereof "have to be read together and given a consistent meaning. So read the law appears to be that if the defendant is a Corporation then it can be sued at the place where its sole or principal office is situate and it can be sued elsewhere only if a part of the cause of action bad arisen at that place and the Corporation has also subordinate office at such placed". With respect it is pointed out that no reason was given for subjecting clause (c) to Explanation 11. Although learned counsel for the appellant initially thought that the Lahore case of Bhola Nath Aggarwal and another supports his contention, but on deeper analysis of the facts and observations therein, it was found that the view taken therein goes against him. The suit in the said case was filed against a company at Lahore. It had its head office at Bombay and a branch officer at Lahore. On consideration of facts, it was found that the cause of action, wholly or in part, did not arise at Lahore, therefore, the Lahore Courts had no jurisdiction in the matter. It was further held that the Courts at Lahore would have had jurisdiction if the cause of action wholly or in part had arisen there; "the suit must be instituted at Bombay where the head office is situated or at someplace where the cause of action, wholly or in part, arose" (underlining" is ours). Although this Court, it appears, by way of abundant caution remarked in the case of Messrs Rehman Trading Company that it was not called upon to decide the question whether a corporation can be sued in a place where the whole or a part of the cause of action arises if it has neither its principal office nor a subordinate office there, yet, while discussing the role of Explanation II, the Lahore view was not only approved but it was also held that "despite the words `shall be deemed Explanation II in terms defines the words `carries on business` used in clauses (a) and (b) of the section, and means that where the defendant is a corporation, it is deemed to be carrying on business at its sole or principle office irrespective of whether the cause of action has arisen there, as well as at the place where it has its subordinate office, provided the 41cause of action arises there". In the Lahore case of Messrs Gharibwal Cement Ltd., it was held that "the last clause (c) (of section 20, C. P. C.) allows the suit to be instituted within the local limits of the jurisdiction of a Court where the cause of action wholly or in part arises. Explana--tion II has been added only to clarify at which place a corporation can be deemed to carry on business. It provides that it can be deemed to carry it only either at its sole or principal office in Pakistan or at the place of its subordinate office provided in the latter case the cause of action arises at the place where the subordinate office is situated. The explana--tion does not qualify clause (c). It only provides as to where the Corpora--tion can be deemed to carry on its business. Since the carrying on of business is the material fact for determining territorial jurisdiction of the Court in clauses (a) and (b) of section 20, the explanation has to be read as pertaining to these clauses only and not to clause (c) which is independent. The mere fact that according to the explanation a Companycan be said to carry on business, even at a subordinate office provided the cause of action arises there cannot mean that this is an explanation of clause (c) also. Same view was taken in the Indian Full Bench case of Central Warehousing Corporation, Calcutta, case of Peoples Insurance Co. Ltd. And the Bombay case of The Light of Asia Insurance Co. Ltd. On the interpretation of section 20, C. P. C., however, there is no discussion in the last mentioned two cases. They proceeded on the assumption that in cases of corporations clause (c) thereof would operate independently of clauses (a) and (b).
15. It would appear from the case-law cited at the Bar that the consensus of authority is that Explanation II to section 20, C. P. C. Does not control clause (c) thereof and is relateable to clauses
(a) and (b) only. Learned counsel for the appellant was unable to cite any case other than that Registered Firm Shelkhan Industries Quetta in support of his contention that clause (c) also is subject to the said explanation. We regret that the view taken in the said case, on proper analysis of section 20, C. P. C., cannot be upheld. The conjunction `or separates all the three clauses (a), (b) and (c) of section 20. Subject to limitations, pecuniary or otherwise, referred in the earlier provisions of the C. P. C., section 20 contains a general provision embracing all personal actions. The plaintiff has three options thereunder to sue: where the defendant or each of the defendants actually resides, carries on business or personally works for gain (clause `a'); or, in case there are more than one defendants, any of them besides, carries oil business or personally works for gain (clause `b'); or, at the place where the cause. of action, wholly or in part, arises (clause 'c'). If - the situation in a particular case is not covered by clauses (a) and (b), the suit can be instituted by virtue of clause (c), at the place where cause of action, wholly or in part, arises. Explanation I is not relevant for consideration in the present case.
16. Explanation II covers an uncertainty, if not ambiguity, with regard to the place where a corporation is supposed to carry on business. Its subject obviously is relateable to the phrase 'carries on business' (used in clauses (a) and (b) ). It would be violation to the language of section 20 to apply Explanation II to clause (c) where under the phrase 'carries on business' would have no meaning.
17. Therefore, it would be unjustified to subordinate clause (c) also to Explanation II. The mention of cause of action in Explanation II would not make any difference in this behalf, While explaining the phrase 'carries on business' through a deeming process, the Explanation II provided that a corporation would be considered as carrying on business at its sole or principal office and also at its subordinate office provided in the latter case, for purpose of section 20, the cause of action also arose there. This Court did not approve the view taken by the Dacca High Court in the case of Messrs Rehmania Trading Company that the Explanation II is not restrictive but has the effect of extending the liability of a corporation to be sued at a place where it has principal office or at a place where it has a subordinate office. Explanation II can be subdivided into two parts; one dealing with the principal office and other with subordinate office-a limitation has been placed regarding subordinate office only; which would mean that a party choosing to institute a suit at a place where the corporation has only a subordinate office would have initially to show that the cause of action arose there. Thus it would appear that the location of the subordinate office does not give the plaintiff a choice to institute the suit at that place. The law did not recognized that the location of a subordinate office of a corporation can be converted, through a deeming clause, into a place where the corporation 'carries on business'. It would be so only under a limita--tion namely, that where cause of action arose and the corporation has also a subordinate office at that place.
18. The combination of these two facts would become equal to the "carrying on business". The underlying idea seems to be that regarding corporation, it would not be correct to assume that it 'carries on business', as envisaged in section 20, at a subordinate office. Thus looked at from this angle as well, the entire Explanation II would appear to be relateable to the phrase 'carries on business' used in clauses (a) and (b) of section 20 and clause (c) remains independent thereof.
19. We hold accordingly. The two suits in this matter were filed at Mian--wali in which District a part of cause of action arose. Clause (c) o section 20, C. P. C. Clearly covers the situation. The objections of the appellant regarding territorial jurisdiction of the trial Court having rightly been overruled, we find no force in these appeals and the same are dismissed. The parties are left to bear their own costs.