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2013 (8) TMI 89 - HC - Indian LawsJurisdiction of the Court to decide the issue - Plaintiff is a company incorporated under the Companies Act, 1956 having its registered office at New Delhi and head office at Gurgaon, Haryana - The defendant is a body corporate constituted by the West Bengal Act, LIX 1980 - Vide Memorandum of Agreement (MOA hereinafter), the defendant awarded a contract to the plaintiff to operate and maintain at Palta, West Bengal Held that - As per the judgment in the case of South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. and Ors., 1996 (3) TMI 471 - SUPREME COURT , .cause of action consists of bundle of facts which give cause to enforce the legal injury for redress in a court of law. The cause of action means, therefore, every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In view of the admitted position that contract was executed in Bombay, i.e., within the jurisdiction of the High Court of Bombay, performance of the contract was also to be done within the jurisdiction of the Bombay High Court; merely because bank guarantee was executed at Delhi and transmitted for performance to Bombay, it does not constitute a cause of action to give rise to the respondent to lay the suit on the original side of the Delhi High Court In the present case too, the MOA was executed at Kolkata and the performance of the contract was to be carried out in West Bengal. Merely because invoices were raised from New Delhi or payments were made by the plaintiff on account of service tax/education cess at New Delhi, are not sufficient to clothe this court with jurisdiction - Parties was to confine the jurisdiction to Kolkata only.
Issues Involved:
1. Territorial Jurisdiction of the Court 2. Interpretation of the Jurisdiction Clause in the Memorandum of Agreement (MOA) 3. Cause of Action and its Relevance to Territorial Jurisdiction 4. Impact of Unilateral Acts by the Plaintiff on Jurisdiction Detailed Analysis: 1. Territorial Jurisdiction of the Court The primary issue in this case is whether the Delhi High Court has the territorial jurisdiction to entertain the suit filed by the plaintiff for recovery of Rs 88,80,107. The defendant argued that the jurisdiction lies with the Kolkata courts as per the jurisdiction clause in the MOA and that no part of the cause of action arose in Delhi. 2. Interpretation of the Jurisdiction Clause in the Memorandum of Agreement (MOA) The jurisdiction clause in the MOA stated, "this agreement will be subject to jurisdiction of Calcutta Courts." The plaintiff contended that this clause did not explicitly exclude the jurisdiction of other courts since it did not use terms like "alone," "only," or "exclusively." However, the court referred to precedents such as A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem and Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd., which clarified that even in the absence of such explicit terms, the intention of the parties to vest jurisdiction in a particular court could be inferred. The court concluded that the jurisdiction clause in the MOA was clear and unambiguous in confining jurisdiction to Kolkata courts. 3. Cause of Action and its Relevance to Territorial Jurisdiction The plaintiff argued that part of the cause of action arose in Delhi because the service tax and education cess were imposed and paid in Delhi, and the invoices were raised and payable at Delhi. The court, however, emphasized that the cause of action must have a substantial nexus with the dispute. The court noted that the MOA was executed in Kolkata, the contract was to be performed in West Bengal, and the defendant was situated in Kolkata. The court referred to Union of India v. Adani Exports Limited and South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd., which established that incidental facts like the place of payment of service tax do not constitute a substantial cause of action to confer jurisdiction. The court concluded that the essential facts constituting the cause of action did not arise in Delhi. 4. Impact of Unilateral Acts by the Plaintiff on Jurisdiction The plaintiff's unilateral acts, such as raising invoices from New Delhi and depositing service tax in Delhi, were deemed insufficient to confer jurisdiction on the Delhi High Court. The court emphasized that the defendant had no control over these unilateral acts, and they did not form part of the essential facts constituting the cause of action. The court cited Rattan Singh Associates (P) Ltd. v. Gill Power Generation Company (P) Ltd., which highlighted that trivial or insignificant parts of the cause of action arising at a particular place do not confer jurisdiction. Conclusion The court concluded that it lacked territorial jurisdiction to entertain the suit. Consequently, the plaint was directed to be returned under Order 7 Rule 10(1) CPC to be presented to the appropriate court. The Registry was instructed to make the necessary endorsements in terms of Order 7 Rule 10(2) CPC.
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