M/S. Rocklite Resins & Chemicals ... vs M/S. Arinits Sales (P) Ltd.
2009 Latest Caselaw 2109 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI


+         FAO (OS) No. 305/2008 & CM No.9509/2008 (stay)


%                                            Date of Decision : 18.05.2009


M/s. Rocklite Resins & Chemicals (P) Ltd., & Ors.
      ...     ...     ...    ...    ...     ...     ...     ... Appellant
                       Through: Mr. K.K. Aggarwal,
                                  Advocate


                                -VERSUS-


M/s. Arinits Sales (P) Ltd.
      ...      ...    ...      ...    ...          ...    ...     ...     Respondent
                         Through:        Counsel for the respondent.


CORAM :

HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA


1.        Whether the Reporters of local papers
          may be allowed to see the judgment?

2.        To be referred to Reporter or not?

3.        Whether the judgment should be
          reported in the Digest?


SANJAY KISHAN KAUL, J. (Oral)

1. The respondent instituted a suit under the provisions of

Order 37 of the Code of Civil Procedure, 1908

(hereinafter referred to as 'the said Code') for recovery

of Rs.20,37,684/- along with interest @18% per annum

till 30.4.2006 totaling to Rs.33,32,335/- along with

future interest against the appellant. The respondent

claims that the suit amount is the value of the goods

supplied being Phenol. The supplies are stated to have

been made under six invoices for which the orders were

placed at New Delhi and the supplies were to be made

by the respondent from New Delhi. The cheques are

alleged to be given at New Delhi and the cheques were

presented for encashment at New Delhi where they

bounced. The cheques were drawn on the State Bank of

Bikaner and Jaipur, Bahadurgarh.

2. The appellant filed an application under Order 7 Rule 10

(i) of the said Code seeking return of the plaint on the

ground that this Court does not have territorial

jurisdiction to entertain the suit as no part of cause of

action had arisen at Delhi. It is the case of the appellant

that everything happened at Bahadurgarh and not at

Delhi.

3. It may be noticed that the invoices contained printed

conditions at the back which are as under:-

"2. All disputes are subject to Delhi Jurisdiction only.

xxx xxx xxx xxx xxx xxx

4. All cheque/drafts are to be drawn in the name of the company - ARINITS SALES CORPORATION marked "A/C PAYEE" payable at Delhi only unless otherwise specified to be made through our branch office."

4. The respondent thus claimed exclusive jurisdiction of

Delhi Courts.

5. The learned Single Judge has found in favour of the

respondent on the ground that at the stage of

consideration of such an application only the averments

in the plaint have to be seen and once the allegation is

of orders being placed at Delhi, the plaint cannot be

thrown out at threshold.

6. The substratum of the case of the appellant is that the

respondent filed a similar suit against the sister concern

of the appellant in which similar application was filed by

such sister concern and the plaint was directed to be

return to be presented to a competent court. The order

dated 20.12.2007 of the learned Single Judge was

challenged in appeal before the Division Bench and in

terms of order dated 18.1.2008, the appeal has been

dismissed. Learned counsel further emphasis that no

part of cause of action has arisen in Delhi and thus even

if the printed condition at the back of the invoices are

considered, the Court having no jurisdiction cannot be

conferred with jurisdiction through that modus operandi.

7. It is trite to say that exclusive jurisdiction can be

conferred on any Court so long as that Court is one of

the Courts where some cause of action arises. The legal

position has been setforth succinctly in A.B.C.

Laminart Pvt. Ltd. Vs. A.P. Agencies, Salem, AIR

1989 SC 1239. Thus even if the invoice contained the

aforesaid clause for exclusive jurisdiction of Delhi

Courts, a suit can be maintained in Delhi only if some

part of cause of action has arisen in Delhi.

8. The aforesaid is the rationale for the judgment delivered

by the learned Single Judge and the Division Bench in

the suit filed against the sister concern of the appellant.

9. If we peruse the impugned order, we find that what has

weighed with the learned Single Judge is the scope of

Order 7 Rule 10 of the said Code. It is once again trite

to say that on examining an application under Order 7

Rule 10 or 11 of the said Code, the plaint alone along

with the documents filed with the plaint can be

considered. The defence of the defendant is not to be

examined at that stage. It is always possible during the

course of trial to establish that what is alleged in the

plaint is factually incorrect and in that eventuality the

plaint can be returned at that stage.

10. A reference in this regard can also be made to the

observations of the Supreme Court in Sajjan Sikaria &

Ors. Vs. Shakuntala Devi Mishra & Ors., (2005) 13

SCC 687 where it was observed in para 3 as under:-

"3. We find that the directions for considering the question relating to Order 7 Rule 11 CPC as preliminary issue is not correct as that would necessitate filing of a written statement. It is a settled position in law that while dealing with an application under Order 7 Rule 11 CPC, consideration of written statement is not a condition precedent and only averments in the plaint have to be considered."

11. In the present case, the clear averment made by the

respondent is that the place where the order for supply

of goods were placed is at New Delhi. The learned

Single Judge has examined the aspect of presentation of

cheques for encashment at New Delhi to come to the

conclusion that it would not itself conferred jurisdiction

in the Courts at Delhi. It is this latter part which has

weighed in the judgments relating to the sister concern

of the appellant. However, the material aspect to be

examined in the present case is the scope of scrutiny by

the Court under Order 7 Rule 10 of the said Code.

Learned counsel for the appellant has not been able to

show to us any document where there is an admission

that the orders for the goods were not placed at New

Delhi. As to whether this averment is correct or not

would have to be tested only during the course of trial.

It cannot be at the stage of consideration of this

application under Order 7 Rule 10 of the said Code be

said that this allegation should be presumed to be

incorrect and the application decided on that premise.

If the allegation is correct that the orders were placed

for supply at New Delhi, then some part of cause of

action would arise at New Delhi and thus the clause

contained in the invoice of exclusive jurisdiction at Delhi

would come into force.

12. We are thus of the considered view that the reasoning

of the learned Single Judge that allegation made by the

respondent for supplies being made at Delhi would have

to be presumed to be correct for consideration of the

application under Order 7 Rule 10 of the said Code is

unexceptionable and thus we find no infirmity in the

impugned order.

13. The appeal being without any merit is dismissed leaving

the parties to bear their own costs.

14. Interim order stands vacated.

SANJAY KISHAN KAUL, J.

MAY 18, 2009 SUDERSHAN KUMAR MISRA, J.

gm