Full Judgment Text
$~11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision : 22.04.2025
+ RFA(COMM) 94/2023 & CM APPL.23201/2025
RAJENDRA GEARS AND ORS
.....APPELLANTS
Through: Mr Sanjay Vashistha, Mr Deepak
Nagar, Mr Nipun Arora, Mr
Shivendra Gupta and Mr Siddharth
Goswami, Advocates.
versus
M/S DPZ INTERNATIONAL AND ORS
.....RESPONDENTS
Through: Mr Bhavya Sethi, Mr Anupam
Sharma and Mr Akash Garg,
Advocates.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
HON'BLE MR. JUSTICE TEJAS KARIA
VIBHU BAKHRU, J. ( ORAL )
1. The appellants have filed the present appeal under Section 13(1A) of
the Commercial Courts Act, 2015 [ the CC Act ] impugning the judgment
dated 07.03.2023 [ the impugned judgment ] passed by the learned
Commercial Court in CS(COMM) No.990/2022 captioned M/s DPZ
International and Others v. M/s Rajendra Gears and Others .
2. In terms of the impugned judgment, the learned Commercial Court
decreed the suit preferred by the respondents [plaintiffs] for a sum of
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RFA(COMM) 94/2023 Page 1 of 7
₹24,19,118/- (Rupees Twenty Four Lakhs Nineteen Thousand One Hundred
and Eighteen Only) along with interest at the rate of twenty-four (24)
percent per annum from the date of filing of the suit (02.04.2022) till
realisation of the amount. The said decree was passed on admissions under
Order XII Rule 6 of the Code of Civil Procedure, 1908 [ CPC ].
3. The respondents [ plaintiffs ] had filed the aforementioned suit for
recovery of a sum of ₹24,19,118/- along with interest at the rate of twenty-
four (24) percent per annum being the amount claimed as recoverable from
the appellants [ defendants ] against goods supplied by plaintiff no.1 (DPZ
International) of which the other plaintiffs were constituent partners.
4. The plaintiffs claim that the defendants had in normal course of
business placed orders for the supply of the chain set as per the details set
out in the invoices raised by plaintiff no. 1 firm.
5. It is averred that plaintiff no.1 firm supplied the goods to the
defendants and raised invoices for the same. It is also averred that plaintiff
no.1 firm was maintaining a ledger account for the supplies made in the
regular course of its business and an amount of ₹24,19,118/- remained
payable and outstanding in respect of the goods supplied. The plaintiffs
claim that they sent reminders to the defendants for clearing the outstanding
amount, however, the defendants failed and neglected to pay the same.
6. The plaintiff firm initially filed a suit under Order XXXVII of the
CPC, but the same was withdrawn due to a technical error, with liberty to
file afresh. Thereafter, the plaintiffs initiated a pre-institution mediation, as
required under Section 12A of the CC Act. However, the defendants failed
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RFA(COMM) 94/2023 Page 2 of 7
to participate in the said proceedings.
7. It is material to note that the plaint neither contains any details
regarding the invoices raised nor any averments as to the dates and the
manner in which the goods were supplied.
8. The defendants filed a written statement contesting the suit. They
raised a preliminary objection that the learned Commercial Court did not
have jurisdiction to try the suit, as exclusive jurisdiction vested in the courts
at Ghaziabad. The defendants relied on the purchase orders issued, which,
according to them, clearly specify that all disputes would fall within the
jurisdiction of Ghaziabad courts. The defendants also made certain bald
allegations regarding fraud and concealment of facts, but no particulars of
the same were furnished, which could flesh out any of the said averments
with any substance.
9. In addition to the above, the defendants also claim that certain goods
supplied by the plaintiffs were defective. The defendants claim that the
goods supplied were lying at the factory and contended that the plaintiffs are
liable to pay damages/rent.
10. The learned Commercial Court proceeded, in our view, erroneously,
on the basis that the claims made by the plaintiffs were admitted. The
learned Commercial Court rejected the defendants’ contention that the
courts at Ghaziabad had the exclusive jurisdiction to adjudicate the disputes
in view of the purchase orders. The learned Commercial Court proceeded to
hold that the court had the jurisdiction to try the suit as part of the cause of
action had arisen within its jurisdiction. The relevant extract to the
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RFA(COMM) 94/2023 Page 3 of 7
impugned judgment setting out the learned Commercial Court’s reasoning is
set out below: -
“7. The defendants have filed a purported purchase
orders dated 06.12.2018, 31.10.2018, 31.10.2018,
31.10.2018, 16.10.2018, 10.07.2018 and 14.06.2018 in
support of contention that it had been agreed between
the parties that all disputes would be settled within
jurisdiction of "Ghaziabad" only. The said purchase
orders never translated into and took shape of a written
agreement for want of acknowledgement by the
plaintiff thereupon i.e. on the purchase order itself or
vide separate communication in this regard. It thus
cannot be concluded that by virtue of alleged
agreement(s), entered into pursuant to purchase orders
dated 06.12.2018, 31.10.2018, 31.10.2018,
31.10.2018, 16.10.2018, 10.07.2018 and 14.06.2018,
plaintiffs and defendants had agreed that all their
disputes would be subject to jurisdiction of Courts at
Ghaziabad only.
8. Further in the case of A.B. C. Laminart Pvt. Ltd. &
Anr vs. A.P. Agencies, Salem, 1989 AIR 1239, it has
been held that:"
“In the matter of a contract there may arise causes of
action of various kinds. In a suit for damages for
breach of contract the cause of action consists of the
making of the contract, and of its breach, so that the
suit may be filed either at the place where the
contract was made or at the place where it should
have been performed and the breach occurred. The
making of the contract is part of the cause of action.
A suit on a contract, therefore, can be filed at the
place where it was made. The determination of the
place where the contract was made is part of the
Law of Contract.
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RFA(COMM) 94/2023 Page 4 of 7
But making of an offer on a particular place does
not form cause of action in a suit for damages for
breach of contract. Ordinarily, acceptance of an
offer and its intimation result in a contract and hence
a suit can be filed in a court within whose
jurisdiction the acceptance was communicated. The
performance of a contract is part of cause of action
and a suit in respect of the breach can always be
filed at the place where the contract should have
performed or its performance completed. If the
contract is to be performed at the place where it is
made, the suit on the contract is to be filed there and
nowhere else. In suits for agency actions the cause
of action arises at the place where the contract of
agency was made or the place where actions are to
be rendered and payment is to be made by the agent.
Part of cause of action arises where money is
expressly or impliedly payable under a contract. In
cases of repudiation of a contract, the place where
repudiation is received is the place where the suit
would lie. If a contract is plead ed as part of the
cause of action giving jurisdiction to the Court
where the suit is filed and that contract is found to
be invalid, such part of cause of the action
disappears The above are some of the connecting
factors. So long as the parties to a contract do not
oust the jurisdiction of all the Courts which would
otherwise have jurisdiction to decide the cause of
action under the law it cannot be said that the parties
have by their contract ousted the jurisdiction of the
Courts."
9. In the instant case, since the orders for goods were
placed at Delhi, the goods were supplied from the
registered office of plaintiff from Delhi and the
payment for the same was also received at Delhi, the
Court at Delhi specifically this Court has jurisdiction
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RFA(COMM) 94/2023 Page 5 of 7
to try and adjudicate upon the matter.”
11. It is apparent from the above that the learned Commercial Court
found that the purchase orders had been not translated or taken the shape of
the written agreement for want of the acknowledgment. It is also noted that
the learned Commercial Court rejected the defence that the goods were
supplied in Ghaziabad.
12. It is not necessary to examine the merits of the decision rendered by
the learned Commercial Court on the issue whether it had the jurisdiction to
try and adjudicate the suit. However, it is apparent that the said decision is
not based on admissions. As noted above, the learned Commercial Court
had proceeded to reject the defence and decree the suit. Clearly, the
impugned judgement is not premised on admissions but is founded on
rejection of the defence raised by the defendants. For this reason alone, the
impugned judgment is unsustainable.
13. The fact that the defendants had admitted the receipt of the invoices is
clearly not dispositive of the entire disputes. However, we note that the
impugned judgment is passed principally on the basis that the defendants
had admitted the invoices during the course of the admission / denial of the
documents conducted on 20.01.2023.
14. In view of the above, the impugned judgment is set aside. We remand
the matter to the learned Commercial Court to resume proceedings at the
stage as obtaining when the impugned judgment was rendered.
15. Nothing stated in this order shall be construed as an expression on the
merits of the disputes between the parties. We clarify that all the rights and
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RFA(COMM) 94/2023 Page 6 of 7
contentions of the parties are reserved in this regard.
16. The parties shall appear before the learned Commercial Court/
Successor Court on 15.05.2025 for directions.
17. The appeal is allowed in the aforesaid terms. The pending application
is also disposed of.
VIBHU BAKHRU, J
TEJAS KARIA, J
APRIL 22, 2025
M
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Signing Date:30.04.2025
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RFA(COMM) 94/2023 Page 7 of 7