Delhi High Court held that
Civil Procedure Code, 1908 — S.20(c) — Territorial jurisdiction — Recovery suit — Part of cause of action arising within jurisdiction — Effect.
Where consignments were handed over at Delhi, payments and dishonoured cheques were received and presented at Delhi, accounts were maintained at Delhi and defendant company had registered office at Delhi, part of cause of action arose within Delhi conferring territorial jurisdiction upon Delhi Courts under Section 20(c) CPC. Mere mention of administrative office at another place in invoices or airway bills, in absence of exclusive jurisdiction clause, does not oust jurisdiction of Delhi Courts.
(Paras 7 to 14)
Civil Procedure Code, 1908 — Order VII Rule 10 — Return of plaint — Territorial jurisdiction — Scope of enquiry.
While considering question of territorial jurisdiction at stage of Order VII Rule 10 CPC, Court is required to proceed on basis of averments contained in plaint and documents relied upon by plaintiff assuming same to be correct. Unrebutted pleadings and evidence cannot be discarded on presumptions.
(Para 10)
FACTS OF THE CASE
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Plaintiff instituted suit for recovery of money arising out of shipment and freight forwarding transactions alleging outstanding dues against defendant company.
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Trial Court returned plaint under Order VII Rule 10 CPC holding that Delhi Courts lacked territorial jurisdiction and that cause of action pertained to Mumbai.
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Plaintiff contended in appeal that consignments were handed over at Delhi, payments and dishonoured cheques were received and presented at Delhi and accounts relating to transactions were maintained at Delhi.
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Defendant company did not appear before Trial Court and proceedings were conducted ex parte.
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Material placed on record disclosed that defendant company had its registered office at Punjabi Bagh, New Delhi, though certain invoices reflected Mumbai office address.
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Plaintiff challenged order returning plaint contending that part of cause of action had arisen within Delhi attracting Section 20(c) CPC.
ANALYSIS OF FACTS AND LAW
The High Court examined scope of Section 20(c) CPC governing territorial jurisdiction based upon place where cause of action wholly or partly arises.
The Court held that even partial accrual of cause of action within territorial limits of a Court is sufficient to confer jurisdiction under Section 20(c) CPC.
Upon examination of pleadings and unrebutted evidence, the Court found that substantial parts of commercial transactions occurred at Delhi. Consignments were handed over at Delhi, payments were received at Delhi, post-dated cheques were presented through Delhi bank accounts and defendant’s registered office was situated at Delhi.
The Court further held that mere mention of Mumbai administrative office in invoices or airway bills could not divest Delhi Courts of jurisdiction particularly in absence of any exclusive jurisdiction agreement between parties.
The judgment reiterates settled principle governing Order VII Rule 10 CPC that at stage of deciding territorial jurisdiction, Court must proceed on assumption that averments in plaint are correct. Since defendant remained ex parte and plaintiff’s pleadings remained unrebutted, Trial Court could not discard those assertions on presumptive reasoning.
The Court also relied upon earlier precedents holding that place where payment is received or where order is placed may constitute part of cause of action for purposes of territorial jurisdiction.
Accordingly, the High Court concluded that Delhi Courts possessed territorial jurisdiction and order returning plaint was unsustainable.
RATIO DECIDENDI
For purposes of Section 20(c) CPC, where material parts of commercial transaction including handing over of consignments, receipt and presentation of cheques, maintenance of accounts and existence of registered office of defendant occur within territorial jurisdiction of a Court, part of cause of action arises therein conferring territorial jurisdiction upon such Court, and while deciding an application under Order VII Rule 10 CPC the Court must proceed on basis of plaint averments and unrebutted documents assuming them to be correct.
(Paras 7 to 14)
