Law:

Section:

Civil Procedure Code (V of 1908), S. 20, Explanation II-­Corporation deemed to carry on business (1) at its sole or principal office, irrespective of whether cause of action arose there, (2) at place where it has subordinate office provided cause of action accrues at that place-Interpretation of statues-"Explanation" ­Function of. Held, that despite the words `shall be deemed', in Explanation II to section 20, Civil Procedure Code 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 principal 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 cause of action arises there. Bhola Nath Aggarwala and another v. The Empire of India Life Assurance Co., Ltd. A I R 1948 Lah. 56 ref. 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 definitive inasmuch as it clarifies or defines the legal position in a supposed state of facts. JUDGMENT MUHAMMAD MUNIR, C J.-This is an appeal by special leave from the judgment of a Division Bench of the High Court of East Pakistan at Dacca reversing in exercise of its revisional jurisdiction a finding by the Trial Court that' it had jurisdiction and directing the plaint in the suit to be presented to a Court of competent jurisdiction. The appellant, Messrs Rahmania Trading Company, instituted against the respondent Messrs Eagle Star Insurance Company Limited, a suit in a Court at Chittagong on an insurance policy. The respondent is a foreign company but has been registered under the Pakistan Law, with its head office in Karachi. Messrs Shaw Wallace (Pakistan) Ltd. are the principal agents of the Company in Chittagong. It is common ground that no cause of action arose within the jurisdiction of the Chittagong Court. The Subordinate Judge in whose Court the suit had been instituted found on the evidence that the respondent was carrying on business in Chittagong and that therefore the…

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