1. Court’s decision
The Delhi High Court has dismissed a commercial appeal filed under Section 13(1A) of the Commercial Courts Act challenging an order of the Commercial Court returning a plaint for lack of territorial jurisdiction. The Court affirmed that a plaint must disclose jurisdictional facts within its four corners, and where a plaint is “completely bereft” of such facts, the Court cannot even entertain an amendment application to cure this defect.
Applying the settled principle that an objection under Order VII Rule 10 CPC is decided on demurrer—accepting all averments in the plaint as correct—the Court found the suit fundamentally lacking pleadings showing how any part of the cause of action arose in Delhi. The mere fact that the plaintiff carried on business in Delhi did not vest Delhi courts with jurisdiction under Section 20 CPC.
The appeal was dismissed; pending applications were rendered infructuous.
2. Facts
The appellant, based in Delhi, acted as an intermediary between a Vietnamese buyer and the respondent, a manufacturer located in Gujarat, for the supply of duplex board grey back. The appellant alleged that all communication between the foreign buyer and the supplier was routed through the appellant, and the respondent agreed to pay a commission per shipment.
In 2021, shipments were made from Gujarat to Vietnam. The appellant alleged that the respondent failed to pay the agreed commission despite emails and a legal notice. Pre-institution mediation under Section 12A of the Commercial Courts Act failed due to non-appearance by the respondent.
The appellant thereafter filed CS(COMM) 519/2022 in Delhi seeking recovery of ₹44,88,961 with interest. The respondent moved an application under Order VII Rule 10 CPC seeking return of the plaint for want of territorial jurisdiction. The appellant simultaneously sought amendment of the plaint to add jurisdictional assertions. The Commercial Court rejected the amendment and returned the plaint, holding that the plaint lacked jurisdictional facts at the outset.
This appeal challenged those findings.
3. Issues
The High Court addressed the following legal issues:
- Whether, in an Order VII Rule 10 application, the Court is confined to examining only the plaint and documents or can consider replication and replies.
- Whether territorial jurisdiction can be inferred from documents or subsequent pleadings when the plaint itself contains no averment establishing jurisdiction.
- Whether an amendment to cure absence of jurisdictional facts is permissible when the plaint as filed did not disclose how the Court has territorial jurisdiction.
- Whether coordination from Delhi, issuance of emails from Delhi, or plaintiff’s residence in Delhi create a cause of action under Section 20(c) CPC.
4. Appellant’s arguments
The appellant argued that the Commercial Court erred in confining itself to the plaint. It submitted that the replication and reply to the Order VII Rule 10 application—both on record before adjudication—contained clear assertions showing that part of the cause of action arose in Delhi. The appellant cited Kuldeep Singh Pathania, arguing that courts may consider the entire pleadings to decide jurisdictional issues.
It further asserted that negotiations, acceptance of offer, issuance of purchase orders, invoices, and communications all emanated from Delhi, thereby satisfying Section 20(c). Even if the plaint did not explicitly state jurisdiction, it should be inferred from the documents and the replication.
The appellant argued that the Trial Court mechanically applied HSIL and Archie Comics without appreciating that this case was not one of a “completely unconscionable plaint,” but one where jurisdictional facts were implicit or supplemented through replication. It submitted that the principle of “debtor must seek the creditor” also conferred jurisdiction in Delhi, where the commission was payable.
Finally, it argued that territorial jurisdiction is a mixed question of fact and law and should not have been decided without trial.
5. Respondent’s arguments
The respondent submitted that under Section 20 CPC, jurisdiction flows from where the defendant resides or carries on business, or where the cause of action arises. In this case, the respondent is based entirely in Gujarat, invoices were generated in Gujarat, shipments were from Gujarat to Vietnam, and payment was received in Gujarat; no part of the cause of action arose in Delhi.
Paragraph 23 of the plaint merely stated that the plaintiff “works for profit” in Delhi—this is wholly irrelevant to territorial jurisdiction. The plaint was silent on cause-of-action facts, and therefore, as per HSIL and Archie Comics, the defect was incurable.
The respondent argued that Order VII Rule 10 must be decided on the plaint alone; replication or written statements cannot be considered. Allowing amendments to supply jurisdictional facts after the filing would allow plaintiffs to drag defendants to courts having no jurisdiction, contrary to settled law.
6. Analysis of the law
The High Court reiterated the fundamental rule: in deciding an application under Order VII Rule 10 CPC, the Court must consider only the plaint and the documents filed with the plaint—not the written statement, replication, reply, or subsequent pleadings. This flows from Exphar SA v. Eupharma Laboratories and RSPL Ltd. v. Mukesh Sharma.
The Court emphasised that jurisdictional facts must be stated in the plaint as “material facts” under Order VI Rule 2 CPC. Subsequent pleadings cannot cure a defect that goes to the root of jurisdiction.
The Court analysed the full body of case law, including:
• HSIL Ltd. v. Imperial Ceramic — If the plaint does not disclose territorial jurisdiction, the court cannot even entertain an amendment.
• Archie Comic Publications v. Purple Creation — A wholly unconscionable plaint lacking any jurisdictional fact cannot be cured by amendment.
• Just Lifestyle v. Advance Magazine Publishers — Jurisdiction is tested on date of suit; amendment cannot vest jurisdiction retrospectively.
• Harshad Chiman Lal Modi — A court cannot exercise jurisdiction it inherently lacks.
• Exphar SA — Objection by demurrer must proceed assuming plaint averments to be correct.
The Court concluded that the appellant’s plaint contained zero jurisdictional facts, only a bald assertion that “plaintiff works for profit in Delhi,” which is legally irrelevant. Therefore, the Commercial Court correctly refused to consider amendment or replication.
7. Precedent analysis
The judgment extensively relied on:
Exphar SA v. Eupharma Laboratories — Demurrer principle; only plaint facts matter.
RSPL Ltd. — Jurisdiction must arise from specific material facts stated in plaint.
HSIL Ltd. — Court cannot hear amendment where plaint discloses no jurisdictional facts. Applied directly to reject appellant’s position.
Archie Comics — If plaint is entirely bereft of jurisdictional facts, it is incurable by amendment. Applied fully.
Harshad Chiman Lal Modi — Lack of jurisdiction renders proceedings coram non judice. Reinforced strict approach.
The Court distinguished Kuldeep Singh Pathania, noting it dealt with settlement of issues under Order XIV, not demurrer under Order VII.
8. Court’s reasoning
The Court held that:
• The plaint did not plead a single fact showing that any part of the cause of action arose in Delhi.
• Coordination from Delhi or issuance of emails from Delhi did not constitute cause of action without clear pleading.
• Replication cannot be considered at the Order VII Rule 10 stage.
• An amendment cannot be used to retrospectively confer jurisdiction on a court that inherently lacks it, per HSIL and Archie Comics.
• The Trial Court rightly confined itself to paragraph 23 of the plaint, which was insufficient under Section 20 CPC.
• Jurisdiction cannot be inferred; it must be pleaded. A bald statement equals no statement.
Consequently, the Commercial Court acted correctly in returning the plaint.
9. Conclusion
The High Court dismissed the appeal, confirming that Delhi courts lacked territorial jurisdiction and that the plaint was rightly returned. The Court affirmed that plaintiffs must clearly and expressly plead jurisdictional facts, and courts cannot rescue defective pleadings through inference or amendments.
Pending applications were rendered infructuous.
10. Implications
This judgment strengthens the discipline required in commercial pleadings, especially in cross-border or inter-state business disputes. It reiterates that jurisdiction cannot be manufactured through later pleadings or strategic amendments.
For businesses, the decision underscores the need for precise drafting in commercial suits and awareness of territorial jurisdiction rules under Section 20 CPC.
For courts, the ruling clarifies that HSIL and Archie Comics continue to govern situations where the plaint is silent on jurisdictional facts—making such defects incurable.
Case Law References
Exphar SA v. Eupharma Laboratories — Demurrer approach; only plaint averments are relevant. Applied.
RSPL Ltd. v. Mukesh Sharma — Jurisdiction requires specific pleaded facts. Applied.
HSIL Ltd. v. Imperial Ceramic — Court cannot amend an unconscionable plaint lacking jurisdictional facts. Applied in full.
Archie Comics v. Purple Creation — Absence of jurisdictional facts is fatal and incurable. Applied.
Harshad Chiman Lal Modi — Court inherently lacking jurisdiction cannot proceed. Applied.
Just Lifestyle v. Advance Magazine — Jurisdiction is tested on date of filing; amendment cannot vest power retrospectively. Applied.
FAQs
1. Can a court consider replication while deciding territorial jurisdiction under Order VII Rule 10 CPC?
No. The Court held that only the plaint and its annexures may be examined; replication or replies cannot cure absence of jurisdictional facts.
2. Can a plaintiff amend the plaint to add jurisdictional facts after the defendant seeks return of plaint?
Not where the plaint is completely bereft of jurisdictional facts. The Court reiterated HSIL and Archie Comics to hold such amendments impermissible.
3. Is plaintiff’s residence or place of business sufficient to confer territorial jurisdiction under Section 20 CPC?
No. Jurisdiction depends on defendant’s location or where cause of action arises—not where the plaintiff carries on business.