Sudhir Kumar v. Monika Makkar & Ors.

1. These connected proceedings arise out of order(s) passed in CS (COMM) No. 379/2025 instituted by the Appellant/Petitioner for recovery of outstanding dues under two (2) purchase orders pertaining to the execution of structural fabrication and installation works for the construction of a studio project at FC-7, Sector-16A, Film City, Noida, Uttar Pradesh.

2. Vide order dated 07.08.2025, the learned District Judge (Commercial- 06), South-East District, Saket Courts, [‘Trial Court’] held that the Courts at Delhi lacked territorial jurisdiction to entertain the suit over the transaction pleaded in the suit. Consequent thereto, by a subsequent order dated 23.08.2025, while dealing with the Appellant’s application under Order VII Rule 10A of the Code of Civil Procedure, 1908 [‘CPC’] seeking fixing of date of appearance of parties before the Court of District Judge (Commercial Court), South District, Saket Courts [‘South District, Saket’] the Trial Court rejected the said application and directed return of the plaint under Order VII Rule 10 CPC.

3. Aggrieved thereby, the Appellant instituted FAO (COMM) 279/2025 under Order XLIII Rule 1(a) CPC read with Section 13 of the Commercial Courts Act, 2015 [‘Act of 2015’] assailing the order dated 07.08.2025 [‘impugned order dated 07.08.2025’], and CM(M) 1936/2025 under Article 227 of the Constitution of India challenging the consequential order dated 23.08.2025 [impugned order dated 23.08.2025]. Noticing that both proceedings emanate from the same suit and involve interrelated questions concerning the correctness of the finding on territorial jurisdiction and the consequential return of the plaint, this Court, vide order dated 08.12.2025, directed that the appeal and the petition be listed and heard together.

4. The facts, as set out in the appeal and relevant to adjudicate the present dispute is as under: - 4.[1] The Appellant is the proprietor of M/s Vijay Iron Works, carrying on business from Sangam Vihar, New Delhi. Respondent No. 3 entrusted the work of construction of a studio project at FC-7, Sector-16A, Film City, Noida, Uttar Pradesh to Respondents No. 1 and 2. In connection with the said project, it is contended that Respondents No. 1 and 2 issued two purchase orders, both dated 12.08.2021, in favour of the Appellant for supply of structural material and execution of installation and fabrication works. The Appellant claims that Respondents No. 1 and 2 represented themselves to be acting jointly and assured payment of the amounts due under both purchase orders. 4.[2] According to the Appellant, the purchase orders were issued from Delhi, the materials were supplied from Delhi, and payments towards the executed work were remitted by Respondent No. 1 through RTGS into the Appellant’s bank account maintained at HDFC Bank, Saket Branch, New Delhi [‘HDFC Bank, Saket’]. The Appellant further asserts that the invoices raised upon the Respondents contained a clause stipulating that disputes would be subject to the jurisdiction of the Courts at Delhi. 4.[3] The Appellant alleges that after completing the contracted works, including certain additional works undertaken on the instructions of the Respondents, substantial amounts towards the principal dues remained unpaid. It is also alleged that certain tools, machinery and scrap belonging to the Appellant continued to be retained by the Respondent No. 3. Consequently, after issuance of a legal notice, the Appellant instituted CS (Comm) No. 379/2025 before the Trial Court, seeking recovery of Rs. 32,80,065/, comprising the alleged principal outstanding together with interest. 4.[4] The Respondents contested the maintainability of the suit, inter alia, on the ground that no part of the cause of action had arisen within the territorial jurisdiction of the Courts at Delhi. Respondent No. 1 further contended that it has already instituted a suit for recovery of money against the Appellant before South District, Saket and the Appellant suppressed the details of the said suit in its plaint. 4.[5] As noted above, by impugned order dated 07.08.2025, the Trial Court held that the Courts at Delhi lacked territorial jurisdiction to entertain the suit. Thereafter, by order dated 23.08.2025, the Trial Court rejected the Appellant’s application under Order VII Rule 10A CPC seeking fixing of a date of hearing before the South District, Saket and directed return of the plaint under Order VII Rule 10 CPC.

GROUNDS OF CHALLENGE RAISED BY THE APPELLANT

5. Appellant submitted that the Trial Court exceeded its jurisdiction by not only holding that it (i.e., South-East District) lacked territorial jurisdiction but also recording a finding that no Court in Delhi possessed territorial jurisdiction to entertain the suit. It is submitted that once the Trial Court concluded that it lacked jurisdiction, it could neither adjudicate upon the jurisdiction of other competent courts nor reject the Appellant's application under Order VII Rule 10A CPC. It is argued that Rule 10A does not empower the returning Court to determine whether the Court before which the plaint is proposed to be presented possesses territorial jurisdiction. 5.[1] The Appellant further submitted that multiple circumstances gave rise to a part of the cause of action within Delhi. It is submitted that the purchase orders were issued from Delhi, the contracts were entered into at Delhi, the goods were supplied from Delhi, and substantial payments amounting to approximately Rs. 66.26 lakhs were remitted by Respondent No. 1 through RTGS directly into the Appellant’s bank account at HDFC Bank, Saket. The invoices also stipulated that disputes would be subject to Delhi jurisdiction. 5.[2] The Appellant also assailed the factual findings recorded in the impugned orders as being contrary to the record. It is submitted that the Trial Court incorrectly observed that the Appellant had concealed the pendency of the earlier commercial suit, although the said fact had been disclosed in the application under Section 20(b) CPC filed before service of summons. Similarly, the Trial Court is stated to have erroneously recorded that none of the defendants resided in Delhi despite acknowledging Respondent No. 2’s Sarita Vihar address. The Appellant further submits that the application under Section 20(b) CPC was filed merely as a matter of abundant caution pursuant to the Trial Court’s observations and not as an admission that Delhi lacked jurisdiction. 5.[3] The Appellant contended that receipt of payments at Delhi constitutes part of the cause of action, and that the scheme of Order VII Rules 10 and 10A CPC does not permit the returning Court to adjudicate upon the jurisdiction of the Court before which the plaint is proposed to be presented. It is contended that due to the receipt of the payments in the HDFC Bank account, the South District, Saket has the requisite territorial jurisdiction.

SUBMISSIONS BY RESPONDENTS

6. The Respondents contended that the Appellant has suppressed material facts and is attempting to improve upon the original plaint through the appeal. The Respondents pointed out that while Respondent No. 2 was shown as having a Noida address in the suit before the Trial Court, the Appellant has altered the address to Delhi in the appeal proceedings, thereby attempting to create an artificial basis for jurisdiction. 6.[1] The Respondents further submitted that the Trial Court had expressly kept the issue of territorial jurisdiction open from the inception of the suit, as reflected in the order dated 07.05.2025 and after considering the pleadings and objections raised by the defendants, the Trial Court correctly examined the question of territorial jurisdiction and, upon finding that no jurisdiction lay in Delhi, returned the plaint under Order VII Rule 10 CPC. 6.[2] According to the Respondents, the entire cause of action arose in Noida, Uttar Pradesh. The Appellant himself pleaded that he was engaged for work at the site of Respondent No. 3 in Noida, that the work was executed there, and that the purchase order required billing at the Noida address of Respondent No. 2; therefore, any alleged default and the corresponding cause of action could only arise in Noida. It was further argued that Respondent No. 1 is based in Gurugram, Respondent No. 2 has its relevant subordinate office in Noida, and Respondent No. 3 is situated in Noida; consequently, even under Section 20(a) and (b) CPC, jurisdiction would lie only in Noida. 6.[3] It is further submitted that while considering an application under Order VII Rule 10 CPC, the Court is confined to the averments contained in the plaint; the Appellant, after conclusion of arguments on territorial jurisdiction, sought to rely on bank statements annexed to written submissions in an attempt to establish Delhi jurisdiction of South District Saket. It is submitted that the Trial Court rightly refused to consider such material, as it constituted an impermissible attempt to improve the plaint and create jurisdiction after arguments had concluded. 6.[4] The Respondents contended that the Trial Court correctly appreciated the pleadings and documents and recorded findings that the work was performed in Noida, none of the defendants resided in Delhi, the purchase order was issued from the Noida office, and no part of the cause of action arose in Delhi.

FINDINGS AND ANALYSIS

7. This Court has heard the learned counsel for the parties and perused the record.

8. The Trial Court vide the impugned order dated 07.08.2025 held that it (i.e., South-East District) lacked territorial jurisdiction to entertain the suit and further proceeded to record a finding that no Courts in Delhi possessed territorial jurisdiction to adjudicate the dispute. This finding was returned by the Court in exercise of its jurisdiction under Order VII Rule 10 CPC. The Trial Court passed a detailed order on 07.08.2025 wherein at paragraphs 1, 2, 29 and 30 it returned the following findings: -

to the Appellant to file an appropriate application under Order VII Rule 10A CPC. The relevant portion of the order reads as under: - “Vide separate order, it has been held that this Court lacks territorial jurisdiction to entertain the present suit. In view of holding that this court lacks territorial jurisdiction to entertain the present suit, prayer of plaintiff for granting leave to sue Defendant no. 1 and 3 in this court is not maintainable. Therefore, application of the Plaintiff under Section 20 (b) is dismissed. Further, in view of holding that this court lacks territorial jurisdiction to entertain the present suit, the plaint is liable to be returned under Order VII Rule 10 CPC. The Plaintiff may, if it so desires, move an appropriate application under Order VII Rule 10 A CPC within a week from today with copy to opposite counsel. List for further proceedings on 23.08.2025.” [Emphasis Supplied]

8.1. The Appellant in terms of the aforesaid liberty filed an application under Order VII Rule 10A CPC stating that the plaintiff proposes to present the plaint, after its return, before the South District, Saket and accordingly sought a direction for fixing a date of appearance. This application was however dismissed by the Trial Court vide order dated 23.08.2025 and this order has been impugned in CM(M) No. 1936/2025. The Trial Court, on 23.08.2025, issued a simplicitor direction for return of the plaint, along with the original documents and court fees under Order VII Rule 10 CPC. Though, it is not expressly recorded in the order dated 23.08.2025, it appears on perusal of the contents of said order that the Trial Court was of the opinion that since, as per the averments in the plaint and the documents filed in support thereof, no part of the cause of action had arisen in Delhi, therefore the prayer seeking fixing a date of appearance before the South District, Saket was not maintainable. Learned counsel for the Respondents also confirm this conclusion drawn by this Court.

9. Before us, learned counsel for the Appellant has submitted that the Appellant is not disputing the finding of the Trial Court, in order dated 07.08.2025, that the Court of the learned District Judge (Commercial-06), South-East District, Saket Courts, lacked territorial jurisdiction to entertain the suit. The limited grievance urged is that the Trial Court exceeded the scope of its jurisdiction under Order VII Rule 10 CPC by recording a conclusive finding that no Court in Delhi possessed territorial jurisdiction. It is contended that once the Trial Court concluded that it (i.e., South-East District) lacked territorial jurisdiction, it ought to have confined itself to returning the plaint, leaving the question whether any other Court in Delhi possessed territorial jurisdiction to be examined, if necessary, by the Court before which the plaint was subsequently presented. The Appellant contends that in view of the fact that payments were received by it from Respondent No. 1 at HDFC Bank, Saket, part of cause of action has arisen within the territorial limits of South District, Saket.