UNION OF INDIA AND ANOTHER versus LADU LAL JAIN

Citation: [1964] 3 S.C.R. 624 · Decided: 07-05-1963 · Supreme Court of India · Bench: K. SUBBA RAO, RAGHUBAR DAYAL, J.R. MUDHOLKAR · Disposal: Dismissed
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Judgment (excerpt)

196' 
Moy 7; 
624 
SUPREME COURT REPORTS [1964] VOL. 
UNION OF INDIA AND ANOTHER 
'/). 
LADU LAL JAIN 
(K. SmrnA RAo, RAGHUBAR DAYAL and 
J. R. MUDHOLXAR JJ.) 
Oivil Proudure-Jurisdiclion of Oourt-Railw'ay hwd-
quorters al a p/au within the jurisdiction of Court-Railway 
oimed b'V the Go•ernment "if a bu1ineB1"-0od1 of Oi•il Pro-
eedure, 1908 (V of 1908), ... 21, 115-0on1titution of India, 
Arts. 19 (6), fl!i8. 
The plaintiff' respondent instituted a suit in the court of 
the Additional SubordinateJudire, Gauhati, against the Union 
of India and the Northern Frontier Railway 
by 
the General Manager, having its headquarters at Pandu. 
Pancu is within the jurisdiction of the Subordinate Judge. The 
claim was for the recovery of a sum of Rs. 8,250/- on account of 
non-delivery of the goods which had been consig-ned to the 
plaintiff• firms. The consignment was booked from Kalyanganj 
station of defendant No. 2 for carriae:e to Kanki, a station of 
the same 
defendant. It was alleged in the plaint that the 
cause of action arose at Pan du within the jurisdiction of the 
Court, where the defendant railway had its prindpal place of 
business by virtue of its headquarters being at Pandu. The 
suit 
was resisted by the defendants on the ground that the 
court had no jurisdiction to entertain the suit. 
Relving on the decision of the A"am High Court in 
P. 0. Biswas v. Union of India, A. I. R. 1956 Assam 85, the 
court of first instance held that the principal place from which 
the railway 
in a particular area i!i: carried on 
is the principal place of business for the pnrpo•e of juri•diction 
under•. 20 of the Code of Civil Procedure, 1908, and decided 
the i8'ue in favour of the plaintiff." The revision p;.tition filed 
by the appellant• was rejected by the Hi•h Court. The present 
appeal was filed with special leave granted by this Court. 
Jt was contendod in the app•al hy the appellants that 
the running of,th• railway by the Union of India could not be 
said· to amount to carrying on of- bnsiness and that therefoi:c 
the fact that the headquarters of Northern Frontier Railway 
Administration was at Pandu within the jurisdiction of the 
3 S.C.R. 
SUPREME COURT REPORTS 
!525 
Court at Gauhati did nnt 
the Court juri<diction under 
s. 20 of the Code of Civil Procedure. 
Hold that Art•. 19 (6) and 298 of the Constitution clearly 
indicate that the State can carry on business and can even e• 
dude citizens completely or partially from carrying on that l 
businets. 
The running of railways which is a business when r.arried 
on by private companies or individuals does not cease to be a 
business when they are run by the Government. It is the 
nature of the 
activity which determines the character or an 
activity. The fact as to who runs it and with what motive 
cannot af!'ect it. 'Profit element' is not a necessary ingredient 
of carrying- on of businrss, though usually business i1 carried 
on for profit. 
The fact that the Government . runs the railways for pro-
viding cheap transport for the people and goods and for strate-
gic reasons will not convert what amounts to carrying on of 
·business into an activity of the State as a sovereign body. 
The Union of India carries on the busine.s of running 
railways and can be sued in the court of the Subordinate Judge 
of Gauhati within whose territorial jurisdiction the headquar• 
ters of one of the railways run by the Union is situated. 
Case Law reviewed. 
Stall! of Bomb!J1! v; Hospital Mazdoor Sabha [1960] 
. 2 S.C.R. 866, Tho Oorporati<m of tho Oily of Nagpur v. Its Il!m-
flloyeu, [1960] 2 S. C. R. 942 and 8a!ya Narain v. Di1tricl 
Enginur, P. W. D., A. I. R. 1962 S. C. 1161. 
CxvrL APPELLATE JURISDICTION : Civil Appeal 
No. 717 of 1961. 
Appeal by special leave from the judgmeni 
and order dated April IO, 1961 or the Assam High. 
Court in Civil Revision No. IO of 1961. 
D. R. Prem, P. D. Menon for R. N. Sachthey, 
for the appellants. 
The respondent did not appear. 
.. 1961 
" ..... of /Mia 
y, 
· .... Uleitr 
IHI 
Union of /r11/is 
... 
Lafu l•I l•in 
Ra:liubar li-va' J. 
626 SUPREME COURT REPORTS [1964] VOL. 
1963. Mav 7. 
The Judgment of the Court was 
delivered by 
' 
RAGHUBAR DAYAL J. -This appeal, by special 
leave, is directed against the order of the High Court 
of Assam rejecting the revision application, under 
s. 115 of the Code of Civil Procedure, hereinafter 
called the Code, of the appellants against the order 
of the Additional Subordinate Judge, Gauhati, in a
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