Courts would have the territorial jurisdiction u/s 20 of the Code of Civil Procedure even if a part of cause of action arises within the territory: High Court of Delhi

 IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment delivered on: 12th January 2022 FAO 48 2020 M S DORO DESIGNS PVT LTD Appellant M S RADIUM CREATION LTD Respondent Advocates who appeared in this case: For the Petitioner For the Respondent : Mr. Avtar Singh Advocate Mr. Rahul Kumar Advocate CORAM: HON’BLE MR. JUSTICE SANJEEV SACHDEVA SANJEEV SACHDEVA J. The hearing was conducted through video conferencing. Appellant impugns order dated 30.10.2019 whereby the plaint has been returned under Order 7 Rule 10 CPC on an application filed by the respondent under Order 7 Rule 11 CPC. The plaint has been returned on the ground of alleged lack of territorial jurisdiction by the trial court. It has been held that the averments in the plaint that discussion and negotiation had taken place FAO 48 2020 in the Delhi office were bald and vague averments without the same being substantiated by any material. In these circumstances the plaint has been returned. Learned counsel appearing for the appellant submits that the trial court has erred in not appreciating that apart from the discussion that had taken place in the office at Delhi the arrangement between the parties was that work was undertaken by the appellant at Delhi which clearly showed that part of the cause of action arose in Delhi and the Courts at Delhi would have jurisdiction. He submits that the business transactions between the parties were that the respondent used to send raw material or semi finished articles to Delhi on which the appellant was supposed to do certain additions and fabrication work after which the finished articles were sent back to the respondent in Mumbai. He submits that since admittedly the articles were received in Delhi for processing and further fabrication and then sent back to Mumbai and the ground for non payment by the respondent of the invoices of the appellant is that the job work undertaken by the appellant in Delhi was not up to the mark and the goods were rejected by the buyer. FAO 48 2020 He submits that part cause of action accordingly arose in Delhi and as such the Courts at Delhi would have the territorial jurisdiction in terms of Section 20 of the Code of Civil Procedure. Learned counsel appearing for the respondent admits that the nature of business was such that the articles were sent to Delhi for fabrication and finishing and then shipped to Mumbai. He however submits that on merits the appellant has no case and respondent had suffered substantial loss because of the deficient job work of the appellant. The dispute in the present case with regard to the merits of the claim of the appellant and the defence of the respondent. However it is not in dispute that articles were sent by respondent to Delhi for fabrication and finishing and they were processed in Delhi and then sent back to Mumbai to the respondent. The dispute is with regard to the quality of the work done by the appellant on the articles at Delhi. 10. Clearly part of the cause of action for filing the subject suit has accrued in Delhi and in view thereof the impugned order dated 30.10.2019 holding that no part of cause of action has arisen in Delhi is erroneous and is not sustainable. In view of the above the impugned order dated 30.10.2019 is set aside. The matter is remitted to the concerned trial court for adjudication in accordance with law. FAO 48 2020 12. Parties shall appear before the concerned Court on 21.02.2022. Trial court shall thereafter dispose of the Suit in accordance with law. 13. The appeal is allowed in the above terms. 14. Copy of the order be uploaded on the High Court website and be also forwarded to learned counsels through email by the Court JANUARY 12 2022 SANJEEV SACHDEVA J FAO 48 2020 

Summary: Section 20 of the Code of Civil Procedure lays down that every suit shall be instituted in Court within the local limits of jurisdiction and accordingly the Courts would have a territorial jurisdiction u/s 20 of the Code of Civil Procedure even if a part of cause of action arises within the territory. These were stated by High Court of Delhi, consisting Justice Sanjeev Sachdeva in the case of M/S Doro Designs Pvt. Ltd. vs. M/S Radium Creation Ltd. [FAO 48/2020] on 12.01.2022. The facts of the case are that the appellant impugned the order dated 30.10.2019 that was returned under Order 7 Rule 10 CPC on an application filed by the respondent under Order 7 Rule 11 CPC. The plaint was returned on the ground of alleged lack of territorial jurisdiction by the trial court. It was held that the averments in the plaint that the discussion and negotiation took place in the Delhi office were bald and vague averments without being substantiated by any material. The learned Counsel for the appellant submitted that the trial court has erred in not appreciating that apart from the discussion that had taken place in the office at Delhi the arrangement between the parties was that work was undertaken by the appellant at Delhi which clearly showed that part of the cause of action arose in Delhi and the Courts at Delhi would have jurisdiction. He submitted that the business transactions between the parties were that the respondent used to send raw material or semi-finished articles to Delhi on which the appellant used to do certain additions and fabrication work after which he used to send back the finished articles to the respondent in Mumbai. Therefore, since the articles were received in Delhi for processing and fabrication and then sent back to Mumbai and the ground for non-payment by the invoices to the appellant by respondent was for job work undertaken by the appellant in Delhi, thus, a part cause of action accordingly arose in Delhi and Courts at Delhi would have the territorial jurisdiction in terms of Section 20 of the Code of Civil Procedure. The learned Counsel for the respondent submitted that the nature of business was such that the articles were sent to Delhi for fabrication and finishing and then shipped to Mumbai. However, on merits, the appellant has no case and respondent had suffered substantial loss because of the deficient job work of the appellant. The dispute in the present case with regard to the merits of the claim of the appellant. It was submitted that the dispute is with regard to the quality of the work done by the appellant on the articles at Delhi.