A Court may revoke Clause 12 leave upon finding no territorial cause of action.

The plaintiff instituted a commercial suit seeking, primarily, specific performance of an alleged understanding/agreement with defendant nos. 1 to 3 and consequential reliefs.

At the time of presentation of the plaint, the Court granted leave under Section 12A of the Commercial Courts Act, 2015, Clause 12 of the Letters Patent, 1865, and Order II Rule 2 of the Code of Civil Procedure, 1908.

When the plaintiff moved an interlocutory application for injunction, the defendants objected to the territorial jurisdiction of the Court.

On examining the plaint, particularly paragraph 36, the Court found that no part of the cause of action had arisen within its territorial limits.

The principal defendants were also outside the Court’s territorial jurisdiction.

The plaintiff relied on an alleged social-media publication as the basis for jurisdiction, but the Court held that the publication did not disclose any cause of action within its jurisdiction.

Defendant no. 3 further submitted that the suit was also a suit for land because the immovable property of the partnership firm was situated outside the jurisdiction.

Upon instructions, the plaintiff requested return of the plaint for presentation before the jurisdictional Civil Court.

Whether, notwithstanding the earlier grant of leave under Clause 12 of the Letters Patent, 1865, the Court could re-examine territorial jurisdiction while considering the plaintiff’s interlocutory application for injunction?

Whether any part of the cause of action arose within the territorial jurisdiction of the Calcutta High Court on the basis of the plaint averments or the alleged social-media publication?

Whether the leave granted under Clause 12 of the Letters Patent, Section 12A of the Commercial Courts Act, 2015, and Order II Rule 2 of the CPC should be revoked and the plaint returned for presentation before the jurisdictional Commercial Court?

The Court applied Clause 12 of the Letters Patent, 1865, under which leave to institute a suit is determined primarily by examining the averments in the plaint.

It held that, while considering an injunction application—even at the ad interim stage—the Court may conduct a deeper inquiry into jurisdiction, and that a prima facie case includes the question of whether the Court has territorial jurisdiction.

Where no cause of action has actually arisen within the Court’s territorial limits, the Court may revoke previously granted leave because an order made by a court lacking jurisdiction would be ex facie a nullity.

Applying the same reasoning, the Court revoked the leave granted under Section 12A of the Commercial Courts Act, 2015 and Order II Rule 2 of the CPC.

The plaint was directed to be returned for presentation before the competent jurisdictional Commercial Court, without adjudication on the merits.

Although leave had initially been granted on the basis of the plaint, the Court held that such grant did not prevent a subsequent and deeper examination of jurisdiction when the injunction application was considered.

The substantive relief sought was specific performance of an agreement involving defendant nos. 1 to 3, none of whom were within the Court’s territorial jurisdiction, and the plaint itself did not disclose any material cause of action arising in Calcutta.

The alleged social-media publication relied upon by the plaintiff was independently examined and found insufficient to establish territorial jurisdiction.

Since the Court concluded that no cause of action had actually arisen within its jurisdiction, continuation of the suit would have resulted in proceedings before a court lacking jurisdiction.

The Court therefore revoked the earlier jurisdictional and procedural leave and accepted the plaintiff’s request for return of the plaint.

It expressly avoided deciding the merits of the suit or the injunction application.

The plaint was returned to the plaintiff for presentation before the jurisdictional Commercial Court, with liberty to renew the injunction application there.

The Court directed that the court fees already paid could be returned and utilised in the subsequent proceeding in accordance with law.

It clarified that no finding had been made on the merits, that all issues remained open, and that the filing or admission of the suit before the Calcutta High Court would not prejudice either party.

The suit and the connected interlocutory application were accordingly disposed of.