Final Order 4

Order Details: COPY OF ORDER
Pdf Text: IN THE COURT OF SHRI DEVENDER KUMAR, DISTRICT JUDGE
(COMMERCIAL COURT-01), EAST DISTRICT
KARKARDOOMA COURTS : DELHI
CS (COMM) No. 214/2025
Ajay Gupta Vs. Gaurav Garg
01.12.2025
ORDER ON APPLICATION UNDER ORDER 7 RULE 10 CPC
Vide this order I shall dispose of an application under Order 7 Rule
10 of CPC filed by the defendant.
1. Arguments heard.
2. Ld. Counsel for defendant has argued that this court has no territorial
jurisdiction to entertain this Court, as no part of cause of action ever arose
within the territorial jurisdiction of this court. It is further argued that both
the parties are carrying on their respective business at Gurgaon, Haryana
and even material was also supplied from Gurgaon to Gurgaon, where the
plaintiff also has local office. It is further argued that Head Office of the
plaintiff is at Hauz Quazi, Sikriwalan, Delhi and no part of cause of action
ever arose at East Delhi. It is further argued that the plaintiff has invoked
territorial jurisdiction of this on the basis of place of payment, whereas the
defendant never agreed to pay amount at Delhi, especially at Preet Vihar, as
it had no concerned there, due to this Court has no territorial jurisdiction to
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entertain this case and this suit is liable to be returned to present the same
before the court of appropriate territorial jurisdiction.
3. On the other hand, Ld. Counsel for plaintiff has opposed this
application and has argued that partly cause of action arose within
territorial jurisdiction of this Court, as place of payment was agreed
between the parties at Preet Vihar, Delhi, which is also mentioned in tax
invoice, due to this Court has territorial jurisdiction to entertain this case. It
is further argued that this application is just a delay tactic and same is liable
to be dismissed.
4. Admittedly, the parameters to determine territorial jurisdiction U/o 7
Rule 10 of CPC are contents of plaint and supporting documents and
defense of the defendant has no much relevance. Normally territorial
jurisdiction is considered as mixed question of law and facts, until and
unless plaint specifically proves that court has no territorial jurisdiction to
entertain a case. In this case, the plaintiff has mentioned in Para 13 that
partly cause of action arose at East Delhi, as purchase orders were received
through telephone at Head Office of the plaintiff i.e. at Hauz Quazi,
Sikriwalan, Delhi and contract was concluded there. However, payment of
tax invoices was agreed in the bank account of the plaintiff in Kotak
Mahindra Bank, at Preet Vihar. No doubt usually partly cause of action may
arise at the place of payment but there must be some other supporting cause
of action also. A cause of action constitutes by a bundle of facts and not by
single fact. However, perusal of plaint shows that the plaintiff has been
carrying on business from Head Office at Hauz-Quazi, Sikriwalan, Delhi,
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whereas the defendant has been carrying on business at Gurgaon, Haryana.
Even material was also supplied and delivered from Gurgaon to Gurgaon,
Haryana, due to both the parties have no concerned at Preet Vihar, Delhi.
5. Admittedly, as per Para 13, partly cause of action concluded at Head
Office of the plaintiff at Hauz-Quazi, Sikriwalan, Delhi, whereas tax
invoice was issued from Gadoli Khurd, Gurgaon and both the parties
agreed for Delhi Jurisdiction, whereas Delhi Jurisdiction ought to be at the
place where the plaintiff has been carrying on business, which is definitely
not at District East, Delhi.
6. Now issue arises, if both the parties are neither carrying on their
business within the territorial jurisdiction of this court, nor having any
concerned here, they why the plaintiff has been maintaining bank account
at neutral place at Preet Vihar, Delhi. The bank account ought to be at the
place where the plaintiff has Head Office or Local Corporate Office, which
is not situated anywhere nearby to place of payment. In fact, maintaining
bank account at a neutral place may be just to overcome hurdle of not
conferring exclusive jurisdiction at neutral place, which is barred by
ABC
Laminart judgment case.
7. Ld. Counsel for plaintiff has relied upon a judgment titled
Auto
Movers V/s. Luminous Power Technologies Private Limited, 2021 SCC
Online Del 4387, as per which, the court may have jurisdiction where
payment was agreed between the parties. However, in that case, the
defendant was making regular payments in the bank account of the plaintiff
at Delhi and even cheques were also deposited in the same bank account.
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Payment was being made by the defendant directly in the bank account of
the plaintiff, due the Hon’ble Court considered jurisdiction of the court on
the basis of place of payment.
8. However, in this case, the plaintiff has not annexed any statement of
account of Kotak Mahindra, Preet Vihar to prove that the defendant has
been making payment to the plaintiff in same bank account. Contrary to it,
ledger account of the plaintiff would show that the plaintiff has been
maintaining ledger of the defendant at Gurgaon, Haryana and the defendant
has been making payments from different accounts like Punjab and Sind
Bank, Kotak Mahindra Bank etc. Even the plaintiff has no office within the
jurisdiction of this court and office is at Sikriwalan, Delhi, which is not
falling within the jurisdiction of District East, Delhi. Plaintiff also served a
legal notice to the defendant but from District Shahdara, Delhi. As such, no
part of cause of action arose at District East, Delhi. The facts of said case
are not applicable in this case.
9. Admittedly, a cause of action is a bundle of facts and one single fact
cannot constitute a cause of action to file a case. The Hon’ble Delhi High
Court has held in case titled
Jain irrigation System v/s Pragyawan
Technologies Private Ltd, 2024 SCC Online Del 6514 that only those facts
may be considered relevant to determine a cause of action which have
direct nexus with issue involve in the case. The relevant observations of the
judgment are as under:
26. It would also be instructive to refer to a judgment of the
Coordinate Bench of this Court in
Rashtriya Mahila Kosh v. The Dale
View & Anr. wherein the learned Single Judge after considering the
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law laid down by the Supreme Court in all the landmark judgments
culled out principles which are useful in deciding the plea of territorial
jurisdiction vis-à-vis cause of action. The relevant paragraphs 21 and
22 of the judgment reads as under:
“21. It is well settled that the territorial jurisdiction of a civil court
would be ascertained having regard to the place of accrual of cause of
action. This issue has fallen for consideration in a catena of judicial
pronouncements by the Apex Court reported at AIR 1985 SC 1289 :
(1985) 3 SCC 217 State of Rajasthan v. Swaika Properties; (2002) 1
SCC 567 : AIR 2002 SC 126, Union of India v. Adani Export Ltd.;
(2004) 9 SCC 786, National Textile Corporation Ltd. v. Haribox
Swalram; (2004) 6 SCC 254, Kusum Ingots & Alloys Ltd. v. Union of
India; (1991) 4 17 erstwhile Sections 91 and 92 of the Indian Evidence
Act, 1872 18 2007 (95) DRJ 418 CS(COMM) 759/2023 Page 24 of 29
SCC 270 : AIR 1992 SC 1514, Patel Roadways Limited Bombay v.
Prasad Trading Company; JT 1994 (5) SC 1, Oil & Natural Gas
Commission v. Utpal Kumar Basu; (1996) 3 SCC 443, South East
Asia Shipping Company Ltd. v. Nav Bharat Enterprises Pvt. Ltd.
Several pronouncements of Division Bench of this court also have
adjudicated upon this issue. In the judgments reported at 85 (1997)
DLT 81 DB Sector 21 Owners Welfare Association v. Air Force Naval
Housing Board; and (2003) 69 DRJ 98, A.K. Surekha v. Pradeshiya
Investment Corporation of U.P. Ltd.; and (2004) 73 DRJ 104,
Callipers Naigai Ltd. v. Government of NCT of Delhi, this court has
considered the same issue.
22. I have had occasion to deal with this issue on two earlier
occasions. In a decision rendered on 4-1-2007 in Arbitration
Application No. 242/2006 Rattan Singh Associates (P) Ltd. v. Gill
Power Generation Co. Pvt. Ltd. and an earlier decision rendered on
23-12-2005 in Writ Petition (C) No. 5133/2005 Jai Ganesh Petroleum
v. Union of India, upon a careful consideration of the principles laid
down in the several judicial pronouncements noticed hereinabove, so
far as the accrual for the place of cause of action which would enable
a court to have territorial jurisdiction to adjudicate upon a lis relating
thereto, the following principles had been culled out:—
i. making and signing of a contract is part of cause of action;
ii. parties cannot by consent confer jurisdiction on a court;
iii. In the case of several courts having jurisdiction, parties can legally
agree to exclude the jurisdiction of any of such courts and elect to
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restrict territorial jurisdiction to one out of such courts which
otherwise has jurisdiction;
iv. the high court must be satisfied from the entire facts pleaded in
support of the cause of action that those facts which constitute the
cause or are necessary to decide the dispute have wholly arisen within
its territorial jurisdiction, or, in any case, which have, atleast in part,
arisen within its jurisdiction;
v. each and every fact pleaded in the petition does not ipsofacto lead to
the conclusion that those facts which constitute the cause of action
vesting territorial jurisdiction upon the court to adjudicate upon the lis;
vi. only those facts pleaded which have a nexus or relevance with the
issues involved in the lis confer territorial jurisdiction on the court; vii.
in determining an objection relating to lack of territorial jurisdiction,
the court must take all the facts pleaded in support of the cause of
action as pleaded in the petition into consideration without embarking
upon an inquiry as to the correctness or otherwise to the fact that;
viii. A question of territorial jurisdiction must be apparent on the facts
pleaded in the petition, the source or otherwise of the averments made
in the writ petition being immaterial. In matters where the parties have
agreed to restrict jurisdiction to one or the other court out of several
courts which may have territorial jurisdiction, such clause would be
enforceable only if the litigation which has arisen falls within the
domain of the subject matter which is being provided in such clause.
The parties may have confined jurisdiction to litigation arising only
under the agreement. In such cases, the court has to arrive at a finding
that the litigation between the parties was within the domain of the
clause confining jurisdiction. If it does not, then the territorial
jurisdiction of the court could be barred;
ix. The court must be satisfied that all relevant facts which have
merely a substantial nexus with the lis are located within its territorial
jurisdiction;
x. Even if it were to be held that a court has jurisdiction, yet guided by
principles of forum non-conveniens, the court may divert the parties to
the court having a closer connection with the subject matter of the
litigation. Residence of parties, location of evidence, situs of the
dispute and such like considerations could guide the decision of the
court to this effect.
xi. To the above, yet another principle requires to be added. It also
requires to be borne in mind that a trivial or insignificant part of the
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cause of action arising at a particular place or where it may have
incidentally arisen, would not be sufficient to confer territorial
jurisdiction on the court, it is the court within whose jurisdiction, the
cause of action has substantially or predominantly arisen which would
have territorial jurisdiction to adjudicate upon the lis.”
(Emphasis Supplied)
In view of abovesaid judgment, Para 22 (ix to xi) made it clear that cause
of action is not a single fact and rather a bunch of facts to give rise to a
cause to action to file a case and many factors are to be considered to
determine cause of action as held above.
10. In this case, neither the plaintiff nor the defendant is carrying on
business at District East, nor material was dispatched no received here. The
Hon’ble Apex Court has held in case titled
A.B.C Laminart Pvt. Ltd. and
Another Vs. A.P. Agencies, Salem (1989) 2 SCC 163 that the parties cannot
confer jurisdiction at a neutral place, whereas compelling a person to pay
amount at a particular neutral place, without having any nexus like office or
place of receiving or sending goods, also amounts to conferring jurisdiction
to a neutral place, which is not allowed.
11. Accordingly, I am of the opinion that this court has no territorial
jurisdiction to entertain this case and jurisdiction may be at the place where
the plaintiff carrying of business and goods were dispatched and received at
Gurgaon, Haryana. Hence, application of the defendant is hereby allowed
and this plaint is returned to the plaintiff to present the same before the
court of appropriate jurisdiction.
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12. File be consigned to Record Room after returning the plaint to the
plaintiff after keeping on record a copy of the plaint and documents.
(Devender Kumar)
District Judge (Commercial Court)-01
East District, Karkardooma
Courts, Delhi/01.12.2025
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