Territorial jurisdiction and representative suit principles upheld for a company dispute; Coimbatore forum and impleadment sustained.

Territorial jurisdiction under Section 20(b) was upheld where the company's registered head office and part of its business activity were at Coimbatore, and some defendants also resided there; the absence of an exclusive jurisdiction clause for Erode meant part of the cause of action supported suit in Coimbatore. Representative impleadment under Order 1, Rule 8 was also sustained because no material showed that D-6 was incapable of representing the other shareholders, and the rule was treated as enabling rather than prohibitive at the threshold. No material irregularity was shown in the trial court's orders, so the revisions failed and the suit was allowed to proceed at Coimbatore.

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Issues: (i) Whether the Courts at Coimbatore had territorial jurisdiction under Section 20(b) of the Code of Civil Procedure, 1908 to entertain the suit notwithstanding that the company's factory and the impugned resolution were connected with Chennimalai. (ii) Whether D-6 could be sued in a representative capacity for the other shareholders under Order 1, Rule 8 of the Code of Civil Procedure, 1908. (iii) Whether the impugned order suffered from material irregularity warranting interference.

Issue (i): Whether the Courts at Coimbatore had territorial jurisdiction under Section 20(b) of the Code of Civil Procedure, 1908 to entertain the suit notwithstanding that the company's factory and the impugned resolution were connected with Chennimalai.

Analysis: The company had its registered head office at Coimbatore, and some of the defendants were residing there. The expression "carries on business" was treated broadly, and the Court held that part of the company's business activity and associated acts were connected with Coimbatore. In the absence of any exclusive jurisdiction clause in favour of Erode, part of the cause of action and the residence of some defendants supported jurisdiction at Coimbatore under Section 20(b).

Conclusion: The Courts at Coimbatore had jurisdiction; the objection to territorial jurisdiction was rejected.

Issue (ii): Whether D-6 could be sued in a representative capacity for the other shareholders under Order 1, Rule 8 of the Code of Civil Procedure, 1908.

Analysis: The objection that D-6 was biased and could not represent the other shareholders was held to be unsupported by material. The Court treated Order 1, Rule 8 as an enabling provision and found no basis to hold at the interlocutory stage that the representative capacity was impermissible. The Court also found no material to accept the contention that the procedural requirements for representative litigation had not been satisfied.

Conclusion: D-6 could be sued in a representative capacity for the other shareholders; the objection was rejected.

Issue (iii): Whether the impugned order suffered from material irregularity warranting interference.

Analysis: Since the trial court had correctly permitted the suit to proceed at Coimbatore and had not committed any improper exercise of discretion in allowing representative impleadment, no material irregularity was made out.

Conclusion: No interference was called for on the ground of material irregularity.

Final Conclusion: The revisions failed, and the trial court's orders were affirmed, leaving the suit to proceed before the Court at Coimbatore.

Ratio Decidendi: For territorial jurisdiction under Section 20(b), a company may be treated as carrying on business where its head office and part of its business activity are located, and a representative suit under Order 1, Rule 8 cannot be rejected at the threshold without material showing that the representative defendant is incapable of representing the concerned class.

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