Commercial Court Returned Recovery Suit for Want of Territorial Jurisdiction; Delhi High Court Holds It Cannot Decide Jurisdiction of Every Other Court While Returning Plaint
Delhi High Court Says Court Returning Plaint Under Order VII Rule 10 CPC Cannot Decide Jurisdiction of Every Other Competent Court
Facts
The appellant instituted a commercial suit seeking recovery of ₹32.80 lakh allegedly due under two purchase orders relating to structural fabrication and installation works executed for a studio project at Film City, Noida. The suit was filed before the Commercial Court at South-East District, Saket. The appellant asserted that the purchase orders were issued from Delhi, materials were supplied from Delhi, payments were received in a Delhi bank account, and the invoices contained a clause conferring jurisdiction upon Delhi courts.
The respondents objected to the maintainability of the suit, contending that the entire cause of action arose in Noida where the project was executed and that none of the relevant defendants carried on business within the territorial jurisdiction invoked by the appellant. Accepting the objection, the Trial Court held that it lacked territorial jurisdiction and directed return of the plaint under Order VII Rule 10 CPC. It further observed that no court in Delhi possessed territorial jurisdiction. The appellant challenged both the jurisdiction finding and the subsequent rejection of its application under Order VII Rule 10A CPC.
Issues
- Whether the Trial Court could hold that no court in Delhi possessed territorial jurisdiction while returning the plaint under Order VII Rule 10 CPC.
- Whether the Trial Court rightly rejected the application under Order VII Rule 10A CPC.
- Whether the question of territorial jurisdiction of another Delhi court could be conclusively decided while returning the plaint.
- Whether the appellant’s plea regarding receipt of payments in a Delhi bank account could be considered despite not being pleaded in the plaint.
Petitioner’s Arguments
The appellant argued that once the Commercial Court concluded that it lacked territorial jurisdiction, it ought to have confined itself to returning the plaint and should not have declared that all courts in Delhi lacked jurisdiction. According to the appellant, Order VII Rule 10 CPC authorises a court only to determine its own jurisdiction and not that of every other competent court before which the plaint may subsequently be presented.
It was further contended that part of the cause of action had arisen within Delhi because the purchase orders were issued from Delhi, goods were supplied from Delhi, payments were remitted into the appellant’s HDFC Bank account at Saket, and the invoices contained a Delhi jurisdiction clause. The appellant submitted that these facts entitled it to present the plaint before the South District, Saket.
Respondent’s Arguments
The respondents argued that the appellant had suppressed material facts and attempted to improve its case by relying upon facts that were never pleaded in the original plaint. According to them, the assertion regarding receipt of payments in the Saket bank account surfaced only after arguments on territorial jurisdiction had concluded and could not be relied upon to create jurisdiction retrospectively.
It was further submitted that the entire contractual work was executed in Noida, the purchase orders related to the Noida project, and the relevant offices of the respondents were situated outside the territorial jurisdiction claimed by the appellant. Consequently, no part of the cause of action arose before the Commercial Court at Delhi.
Analysis of the Law
The High Court examined the scope of Order VII Rules 10 and 10A of the Code of Civil Procedure, 1908. It observed that where a court finds that it lacks territorial jurisdiction, its statutory function is confined to returning the plaint for presentation before the proper court. Such a court is not authorised to render a binding adjudication regarding the territorial jurisdiction of every other court before which the plaint may subsequently be filed.
The Court also emphasised that territorial jurisdiction must ordinarily be determined on the basis of the pleadings contained in the plaint. Since the appellant had not pleaded receipt of payments in its HDFC Bank account while instituting the suit, the Trial Court rightly declined to consider that circumstance while deciding the application under Order VII Rule 10A CPC. Whether another court possesses jurisdiction must therefore be independently determined upon presentation of an appropriately pleaded plaint.
Precedent Analysis
- No judicial precedent was relied upon as the principal basis of the decision. The Court interpreted the scope of Order VII Rules 10 and 10A CPC directly while deciding the appeal and supervisory petition.
Court’s Reasoning
The Division Bench accepted the appellant’s limited submission that the Trial Court exceeded its jurisdiction by recording a finding that no court in Delhi possessed territorial jurisdiction. It held that once a court concludes that it lacks territorial jurisdiction, its enquiry ends with return of the plaint. It cannot conclusively determine whether another court within the same city or elsewhere would possess jurisdiction, as that question falls for independent consideration by the court before which the plaint is subsequently presented. Accordingly, the impugned finding was modified to state only that the Commercial Court at South-East District, Saket lacked territorial jurisdiction.
At the same time, the High Court strongly criticised the appellant’s conduct. It observed that the appellant had failed to disclose material facts, including the pendency of the respondents’ earlier commercial suit, and had consciously omitted any pleading regarding receipt of payments in the HDFC Bank account at Saket. Since jurisdiction must be determined on the basis of the plaint as originally filed, the appellant could not subsequently improve its case by introducing fresh factual assertions during arguments.
For that reason, while modifying the Trial Court’s jurisdiction finding, the High Court refused to interfere with the order rejecting the application under Order VII Rule 10A CPC. It clarified that if the appellant desired to rely upon receipt of payments in the Saket bank account as part of the cause of action, it would first have to appropriately amend its pleadings before presenting the plaint before a court claimed to possess territorial jurisdiction. The Court expressly left open the question whether the South District, Saket or any other Delhi court actually possessed territorial jurisdiction.
Conclusion
The Delhi High Court partly allowed the appeal by modifying the Trial Court’s observation that no Delhi court possessed territorial jurisdiction, holding that the finding could extend only to the court before which the suit had originally been instituted. However, it upheld the return of the plaint and dismissed the challenge to the rejection of the application under Order VII Rule 10A CPC, leaving the issue of territorial jurisdiction of any other competent court to be determined independently.
Case Details
- Case: Sudhir Kumar v. Monika Makkar & Ors.
- Court: Delhi High Court
- Case Numbers: CM(M) 1936/2025 and FAO (COMM) 279/2025
- Judges: Justice V. Kameswar Rao and Justice Manmeet Pritam Singh Arora
- Date: 28 July 2026
- Result: Appeal partly allowed; finding modified to restrict lack of jurisdiction to South-East District, Saket; petition dismissed; return of plaint upheld.
