Interim Order 9

Order Details: COPY OF JUDICIAL PROCEEDINGS
Pdf Text: 8 CS (COMM) 540/24
M/S GREATEX SYNTHETICS PVT. LTD. Vs. M/S DAMY
ROYAL STYLE PVT. LTD.
09.07.2025
Present: Mr. Subhash Chandra, Ld. Counsel for plaintiff
through VC.
Mr. Deepanshu Joshi, Ld. Counsel for defendant
through VC.
Today the matter is listed for the orders on the appli-
cation u/o VII Rule 10 CPC filed on behalf of defendant. It is
submitted by the Ld. Counsel for the defendants that the present
suit filed by the plaintiff, M/s. Greatex Synthetics Pvt Ltd,
against the defendants, M/s. Damy Royal Style Pvt Ltd (Defen-
dant No. 1) and Mr. Damneesh Yadav (Director of Defendant No.
2), for recovery of Rs. 19,39,526/- and other reliefs, is false, mis-
leading, and lacks a cause of action. It is further submitted that
the instant plaint is liable to be returned in accordance with Order
VII Rule 10 of the CPC, 1908, as this Court lacks the jurisdiction
to try and entertain the suit. The defendants reside and work for
gain at Faridabad, while the plaintiff conducts its business solely
from E-2, Sector, D-1, Apparel Park, Tronica City, Loni, Ghazi-
abad, Uttar Pradesh-201001. It is averred that even if the plaintiff
has a registered office in Delhi at 797, 1/2, 1st Floor, Sant Nagar,
Burari, Delhi - 110084, there have been no transactions or busi-
ness dealings between the plaintiff and the defendants at this
Delhi address.
It is also submitted that the documents annexed by
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the plaintiff, including the board resolution dated 01.04.2024, the
registration certificate dated 22.08.2019 (pages 54 and 55 of the
suit), and the alleged invoices, all consistently show the Ghazi-
abad address as the plaintiff's business location. Furthermore, it is
highlighted that page 1 of the Memorandum of Association
(MOA) filed by the plaintiff is missing, allegedly to conceal the
true facts regarding the plaintiff's primary business location. The
defendants contend that no cause of action has ever arisen at the
alleged Delhi address, and the plaintiff is merely using this ad-
dress for "forum shopping" to illegally vest jurisdiction with this
Court, without providing any evidence to support its claims re-
garding business at the Delhi address.
It is submitted that a mere unilateral mention of a ju-
risdiction condition on an invoice, without mutual consent and
agreement from both parties, does not constitute a valid agree-
ment or express/implied consent for jurisdiction. Even if pay-
ments were transferred to a bank account located within the terri-
torial jurisdiction of this Court, if no real cause of action arose
within this jurisdiction, it cannot vest this Court with territorial
jurisdiction to entertain the suit.
Reply to the present application has been filed on
behalf of plaintiff by submitting that the application filed on be-
half of defendant is liable to be dismissed as the same is without
merit. It is submitted that payment was made by the defendant to
the plaintiff in the bank account maintained by the plaintiff i.e.
HDFC bank Ltd. Branch, Chandni Chowk, Delhi and this facts
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has also been admitted by the defendants in their application and
the same find mention in the invoices issued to the defendant.
Accordingly, part cause of action has arisen in
favour of the plaintiff within the territorial jurisdiction of this
Court. Ld. Counsel for plaintiff has relied upon judgment of
Hon’ble Supreme Court in
A.B.C Laminart Pvt. And Others Vs.
A.P. Agencies (AIR 1989 Supreme Court 1239) and judgment of
Hon’ble Delhi High Court in
Satyapal Vs. Slick Auto Acces-
sories Pvt. Ltd. & Ors. In RSA No. 40/2013 and CM 3203/22013
decided on 05.03.2014.
Arguments heard. Record perused carefully.
Order VII Rule 10 of the CPC mandates the return
of a plaint if the Court finds that it does not have jurisdiction to
entertain the suit. The determination of territorial jurisdiction is
primarily governed by Section 20 of the Code of Civil Procedure,
1908. Section 20, inter alia, provides that a suit may be instituted
in a Court within the local limits of whose jurisdiction the cause
of action, wholly or in part, arises.
The core question for consideration in the present
application is whether any part of the "cause of action" as con-
templated by Section 20(c) of the CPC has arisen within the terri-
torial limits of this Court's jurisdiction. The term "cause of ac-
tion" refers to every fact which, if traversed, it would be neces-
sary for the plaintiff to prove in order to support his right to the
judgment of the Court. It is not limited to the place where the
contract was entered into or where the goods were supplied, but
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also includes the place where the breach occurred or where pay-
ment was to be received.
In the present case, the plaintiff's reliance on the ad-
mitted fact of payments being received into its HDFC bank ac-
count in Chandni Chowk, Delhi, is crucial. The Hon'ble Supreme
Court in
A.B.C. Laminart Pvt. Ltd. And Others Vs. A.P. Agencies
(supra), while primarily dealing with exclusive jurisdiction
clauses, elucidated the concept of "cause of action" and unequiv-
ocally held that the place where payment is to be made or is re-
ceived can constitute a part of the cause of action for a suit for re-
covery of money. The Court observed that "a part of the cause of
action arises at the place where the money is expressly or im-
pliedly payable." Similarly, the Hon'ble Delhi High Court in
Satyapal Vs. Slick Auto Accessories Pvt. Ltd. & Ors. (supra),
adopting the principles laid down by the Supreme Court, af-
firmed that if a significant part of the cause of action, such as the
receipt of payment, occurs within the jurisdiction of a Court, then
that Court would possess the territorial jurisdiction to entertain
the suit.
Given the defendants' own admission that payments
for the transactions forming the basis of the suit were transferred
to the plaintiff's bank account at HDFC Bank Ltd., Chandni
Chowk, Delhi, it is evident that a material part of the cause of ac-
tion, namely, the place where the payment was received, has
arisen within the territorial jurisdiction of this Court. This is a
fact that the plaintiff would need to prove if disputed, thereby
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forming an integral part of the cause of action. While the defen-
dants argue against the unilateral mention of jurisdiction on in-
voices, the plaintiff's case for jurisdiction primarily rests on the fac-
tual occurrence of money being received within this Court's limits,
which is a recognized aspect of cause of action under Section 20(c)
CPC. The arguments put forth by the defendants regarding the
plaintiff's primary business location or the absence of other transac-
tions at the alleged Delhi office, while relevant for other purposes,
do not negate the fact that a part of the cause of action, arising from
the receipt of payment, has occurred within this Court's jurisdiction.
The application under Order VII Rule 10 CPC is typically consid-
ered at the threshold, and for the purpose of this application, the
plaintiff has sufficiently demonstrated that a part of the cause of ac-
tion has arisen within the jurisdiction of this Court.
In light of the foregoing, and in conformity with the
principles laid down in Section 20 of the CPC and the pronounce-
ments of the Hon'ble Supreme Court and the Hon'ble Delhi High
Court, this Court finds no merit in the application filed by the de-
fendants under Order VII Rule 10 of the Code of Civil Procedure,
1908. The application under Order VII Rule 10 CPC filed on behalf
of the defendants is hereby dismissed.
Put up for marking of documents, completion of
pleadings, settlement of issues and for case management hearing on
23.07.2025.
(NEELAM SINGH)
District Judge
Commercial Court-06
Tis Hazari Courts, Delhi/09.07.2025AD
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