Territorial jurisdiction over foreign corporations is not conferred by a local office where the cause of action arose abroad.

A jurisdictional objection is not waived merely because a defendant appears and files a written statement on the merits, provided the objection is expressly taken; the Bombay HC relied on that principle to hold that the bank had not submitted to jurisdiction. It also treated Clause 12 of the Letters Patent and section 20 of the Civil Procedure Code as rules of municipal jurisdiction, not as a basis for unlimited jurisdiction over foreign corporations. A foreign corporation's office in Bombay, or its statutory registration and business presence there, did not by itself confer territorial jurisdiction where the entire cause of action arose outside India. The suit was therefore held not maintainable in Bombay.

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Issues: (i) Whether the defendant-bank waived its objection to territorial jurisdiction by filing an appearance and written statement on merits; (ii) Whether the High Court had jurisdiction to entertain a suit against a foreign corporation merely because it maintained an office in Bombay when the entire cause of action arose outside India.

Issue (i): Whether the defendant-bank waived its objection to territorial jurisdiction by filing an appearance and written statement on merits.

Analysis: A jurisdictional objection is not waived merely because the defendant appears and also pleads to the merits, so long as the objection is specifically taken. The clause in the indemnity agreement permitting proceedings in California or Punjab did not authorise suit in Bombay. Compliance with the statutory obligation to furnish particulars under the Companies Act, and the carrying on of business at Bombay, did not amount to voluntary submission to jurisdiction. The reasoning was reinforced by the Supreme Court authority relied upon, which treated the raising of the jurisdictional objection in the written statement as sufficient to preserve it.

Conclusion: The objection to jurisdiction was not waived and was not submitted to by the defendant-bank.

Issue (ii): Whether the High Court had jurisdiction to entertain a suit against a foreign corporation merely because it maintained an office in Bombay when the entire cause of action arose outside India.

Analysis: Clause 12 of the Letters Patent and section 20 of the Code of Civil Procedure were treated as rules of municipal jurisdiction, and not as a basis for unlimited jurisdiction over foreign corporations in respect of disputes wholly arising abroad. The reasoning distinguished cases where a foreign company carried on business in India in relation to a cause of action arising here. For a foreign corporation sued on a cause of action wholly outside India, the rational rule adopted was that the mere existence of an office in India does not confer jurisdiction, unless the cause of action arose at that place. Registration of the office as the principal place of business in India under the Companies Act did not alter that position.

Conclusion: The High Court had no jurisdiction to entertain or try the suit.

Final Conclusion: The suit failed on the preliminary issue of jurisdiction because the defendant-bank's Indian office did not confer jurisdiction over a dispute wholly arising abroad, and the defendant had not waived its jurisdictional objection.

Ratio Decidendi: A foreign corporation's mere office in India does not confer territorial jurisdiction for a cause of action wholly arising outside India, and a jurisdictional objection is not waived by filing a written statement on merits if the objection is expressly taken.

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