Goodluck Capital (P) Ltd. vs Jharkhand Ispat Pvt. Ltd.
2015 Latest Caselaw 1663 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+           CS(OS) 636/2011 & IA No.4501/2014

                                                    Decided on : 26.02.2015

IN THE MATTER OF:
GOODLUCK CAPITAL (P) LTD.                      ..... Plaintiff
                   Through : Mr. A.K. Thakur and
                   Mr.R.K.Mishra, Advocates

                         versus

JHARKHAND ISPAT PVT. LTD.                       ..... Defendant
                   Through : Mr. N.Raja Singh, Advocate

CORAM
HON'BLE MS.JUSTICE HIMA KOHLI

HIMA KOHLI, J.(Oral)

IA No.15128/2011(by the defendant u/O VII R 11 CPC)

1.    The present application has been filed by the defendant praying

inter alia that the suit as filed by the plaintiff, is liable to be rejected on

the ground that this court is not vested with the territorial jurisdiction to

try and entertain the same.       In support of the aforesaid submission,

learned counsel for the defendant company refers to and relies upon the

averments made by the plaintiff in paras 7 & 8 of the plaint.


2.    Counsel for the defendant company states that on a plain reading

of the averments made in the plaint and on perusing the documents filed

by the plaintiff, it clearly emerges that the plaintiff has failed to show



CS(OS) 636/2011                                                 Page 1 of 9
 even an iota of evidence to establish that any part of the cause of action

had arisen within the territorial jurisdiction of this court. He points out

that all the documents filed by the plaintiff along with the plaint, fortify

his stand that the entire cause of action had arisen in Ghaziabad, Uttar

Pradesh and not in Delhi. As for the address of the defendant company

given in the memo of parties, he submits that it is to the knowledge of

the plaintiff that the registered office of the defendant company is

situated at Ghaziabad and its head office is situated at Jharkhand. To

substantiate the said submission, he relies upon a copy of the Complaint

Case No.4327/2009, filed by the plaintiff before the learned Additional

Chief Judicial Magistrate at Ghaziabad, Uttar Pradesh, wherein the

address of the defendant company has been furnished in the memo of

parties as at District Ramgarh, Jharkhand.


3.    Learned counsel for the defendant also refers to the legal notice

dated 1.10.2009, issued on behalf of the plaintiff to the defendant

company where again, the address of the defendant company has been

mentioned as that of its registered office situated in Varanasi, Uttar

Pradesh. The third document relied upon by the counsel is the complaint

dated 1.4.2008, addressed by the Director of the plaintiff company to

the SSP, Ghaziabad, specifically stating inter alia that the defendant




CS(OS) 636/2011                                              Page 2 of 9
 company is situated in the jurisdiction of PS Ramgarh, Hazaribagh,

Jharkhand.


4.      Learned counsel for the defendant company sums up his argument

by stating that all the aforesaid documents conclusively prove that no

part of the cause of action has arisen in Delhi for the plaintiff to have

filed the suit in this Court and nor is the registered office/head office of

the defendant company situated in Delhi, and therefore this Court is not

vested with the territorial jurisdiction to try and entertain the present

suit.   To buttress the said argument, he relies on the decision of the

Supreme Court in the case of Kusum Ingots and Alloys Ltd. vs. Union of

India & Anr., reported as AIR 2004 SC 2321.


5.      It is settled law that the Court must be satisfied from the entire

facts pleaded in support of the cause of action that those facts do

constitute a cause that empowers it to decide a dispute which has at

least in part, arisen within its jurisdiction. The concept of „forum

conveniens‟ fundamentally means that it is obligatory for the court to

see     the   convenience   of   all   the   parties   before   it.    The   word,

"convenience" would take in its ambit and sweep, the existence of a

more appropriate forum, the expenses involved, the law relating to the

lis, verification of certain facts which are necessary for the just

adjudication of the controversy and such other ancillary aspects.


CS(OS) 636/2011                                                       Page 3 of 9
 6.    In the case of Kusum Ingots (supra) referred to by learned counsel

for the defendant, while reiterating the well established principle of

„forum conveniens‟, the Supreme Court had dismissed an appeal against

an order of the Delhi High Court, refusing to exercise its discretion to

entertain a petition on the ground of lack of territorial jurisdiction. It was

held that simply because a small part of the cause of action arises within

the territorial jurisdiction of the High Court, may itself not be considered

as a determinative factor, compelling the said Court to exercise its

jurisdiction.


7.    In an earlier decision in the case of Union of India v. Adani Exports

Ltd. reported as AIR 2002 SC 126, the Supreme Court had made the

following pertinent observations:-


      "10. ...Cause of action as understood in civil
      proceedings means every fact which, if traversed,
      would be necessary for the plaintiff to prove in order
      to support his right to a judgment of the Court. It is
      the bundle of facts which taken with the law
      applicable to them, gives the plaintiff a right to relief
      against the defendant. Each and every fact pleaded in
      the writ petition does not ipso facto lead to the conclusion
      that those facts give rise to a cause of action within the
      court's territorial jurisdiction unless those facts pleaded are
      such which have a nexus or relevance with the lis that is
      involved in the case. Facts

which have no bearing with the lis or dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned." (emphasis added)

8. After analysing a catena of decisions of the Supreme Court on

what constitutes "cause of action", this Court had held in the case of

Bata India Limited v. Vitaflex Mauch GMBH reported as (2008) ILR 2

Delhi 665, that while examining the expression, "cause of action", the

Court ought to look at the factual situation that gives rise to an

enforceable claim and it must take into consideration the entire

averments contained in the plaint and test whether, on being read

collectively, they constitute a bundle of facts that form the basis of

instituting of the suit.

9. In a recent decision, in the case of M/s Shristi Udaipur Hotels and

Resrots (P) Ltd. vs. Housing and Urban Development Corporation Ltd.

reported as 210 (2014) DLT 198, while relying on the judgment of the

Supreme Court in the case of National Textile Corporation Ltd & Ors v.

Haribox Swalram & Ors. reported as AIR 2004 SC 1998 and on a Full

Bench decision of the Delhi High Court in the case of Sterling Agro

Industries Ltd. v. Union of India reported as AIR 2011 Delhi 174, this

Court had declined to exercise its jurisdiction on the ground that it would

be inconvenient to entertain the petition and that the High Court of

Rajasthan would be better equipped to deal with the issues raised by the

petitioner therein and in the said context, had observed as below:-

"22. The position of law that clearly emerges from the above is that the expression "cause of action" means and includes the circumstance resulting in breach of right or immediate occasion for the party to react. The said expression shall take in its fold the whole bundle of material facts which a party must prove in order to succeed. It also includes the circumstances and situations that entitle a party to maintain an action in court. For determining as to whether a particular fact constitutes a cause of action, would depend on the facts and circumstances of each case and while considering the facts averred, the court has to consider the substance of the matter and not the form. Simply because a miniscule part of the cause of action arises within the territorial jurisdiction of a particular High Court may not be sufficient to compel the said court to decide the matter on merits. In appropriate cases, discretion still rests with the court to decline to exercise the jurisdiction vested in it by invoking the doctrine of forum convenience or the doctrine of non-convenience. The said doctrine of forum non-convenience can be invoked when the court deciding to refrain from exercising its jurisdiction, is vested with the jurisdiction to decide the case." (emphasis supplied)

10. As for the instant case, the records reveal that the plaintiff had

instituted the present suit against the defendant company in March,

2011, for seeking recovery of a sum of `26,09,617/- along with interest.

At the time of instituting the suit, the address of the defendant company

was mentioned in the memo of parties as "S-35, Second Floor,

Panchshila Park, New Delhi". Subsequently, on 25.5.2011, the plaintiff

had filed an amended memo of parties, wherein the address of the

defendant company was mentioned as Ramgarh Cantt., Jharkhand, with

a note that the defendant company is also available at the earlier

address given in the memo of parties which happens to be the

residential premises of Ms. Shalini Rungta, a Director of the defendant

company.

11. As per the averments made by the plaintiff in para 7 of the plaint,

this court has the territorial jurisdiction to try and entertain the suit for

the reason that the plaintiff as also the defendant company have their

offices in Delhi and their Directors are also based in Delhi. It has been

averred in para 10 of the plaint that the cause of action for filing the

present suit arose on 1.10.2009, when the defendant company was

called upon to make the payment to the plaintiff, but it had failed to do

so.

12. The documents filed by the plaintiff make it evident that neither

the registered office nor the corporate office of the defendant is situated

in Delhi. To overcome the objection of territorial jurisdiction, the

address of the defendant was shown in the memo of parties as that of a

person described as the Director of the defendant company. Section 20

of the Code of Civil Procedure, 1908 prescribes that if the defendant is a

corporation, then it must be served at the registered office or at its

subordinate office, in respect of any cause of action arising at such

place. Neither the memo of parties, nor the documents filed by the

plaintiff substantiates the averments made in the jurisdiction para of the

plaint that the defendant company has any office at Delhi. The

residential address of a Director of the defendant company in Delhi

would not be a relevant consideration for vesting territorial jurisdiction

on this Court. The averments made in the cause of action para also do

not demonstrate as to how would this court be vested with the territorial

jurisdiction for entertaining the suit. In fact, the documents filed by the

plaintiff reinforce the arguments advanced by learned counsel for the

defendant company that the plaintiff cannot maintain an action in this

Court.

13. A reply in opposition to the present application has not been filed

by the plaintiff. However, in the course of making submissions, learned

counsel for the plaintiff concedes the objection taken by the other side

and states that the plaint may be returned to the plaintiff under Order

VII Rule 10 CPC, so that it can be presented before the appropriate

court, vested with the territorial jurisdiction to try and entertain the suit,

i.e., the Civil Court, Ghaziabad, Uttar Pradesh. He further requests that

the defendant be directed to appear before the said court, in terms of

the provisions of Order VII Rule 10A CPC.

14. In view of the aforesaid submission, directions are issued to the

Registry to return the plaint to the counsel for the plaintiff for it to be

presented before the competent court vested with the territorial

jurisdiction to try and entertain the same. As learned counsel for the

plaintiff submits that he shall present the plaint before the court of the

learned Civil Judge, Ghaziabad, the parties are directed to appear before

the said court on 25.3.2015. On the said date, the plaintiff shall present

the plaint and the defendant shall appear before the said court without

waiting to be served afresh with the summons in the suit.

CS(OS) 636/2011 & IA No.4501/2014

In view of the order passed in IA No.15128/2011 above, the suit is

disposed of, along with the pending application, while leaving the parties

to bear their own costs.

                                                     (HIMA KOHLI)
FEBRUARY 26, 2015                                       JUDGE
mk/sk/rkb