Case Note & Summary
The petitioners, M/s. Rudraksh Laminates Pvt. Ltd. and another, were defendants in a summary suit filed by the respondent, M/s. Vimal Inter Trade Private Limited and another, under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) to recover a debt arising from dishonoured cheques. The respondent had supplied raw material to the petitioners pursuant to purchase orders, and the petitioners issued nine cheques totaling Rs.29,00,685/- which were dishonoured with the remark 'Funds insufficient'. The cheques were delivered by the petitioners to the respondent at Vile Parle, Mumbai, deposited by the respondent in their account at Vile Parle, and returned unpaid through their bankers, Bank of Baroda, also at Vile Parle. The respondent instituted the summary suit in the City Civil Court at Bombay. After ex-parte evidence was recorded and the matter was posted for judgment, the petitioners filed a motion under Order VII Rule 10 read with Section 151 CPC seeking return of the plaint for presentation before the proper court, arguing that the City Civil Court lacked territorial jurisdiction because the goods were delivered at Bhiwadi, Rajasthan, and the purchase order contained a clause conferring jurisdiction on courts in Delhi. The trial court dismissed the motion. The petitioners then filed a writ petition under Article 227 of the Constitution of India challenging the order dated 7th January 2022. The High Court held that the suit was based on dishonoured cheques, which are bills of exchange, and the cause of action arose where the cheques were delivered and dishonoured, i.e., in Mumbai. Therefore, the City Civil Court at Bombay had territorial jurisdiction. The court found no error in the trial court's order and dismissed the petition.
Headnote
A) Civil Procedure - Territorial Jurisdiction - Summary Suit on Dishonoured Cheque - Order VII Rule 10, Order XXXVII, Code of Civil Procedure, 1908 - The court held that in a summary suit based on dishonoured cheques, the place of delivery and dishonour of cheques determines territorial jurisdiction, not the place of delivery of goods. Since the cheques were delivered and dishonoured in Mumbai, the City Civil Court at Bombay had jurisdiction. (Paras 5-6) B) Civil Procedure - Return of Plaint - Order VII Rule 10, Code of Civil Procedure, 1908 - The trial court's refusal to return the plaint was upheld as the suit was properly instituted within its jurisdiction. The petition under Article 227 was dismissed. (Para 6)
Issue of Consideration
Whether the City Civil Court at Bombay has territorial jurisdiction to try a summary suit based on dishonoured cheques when the goods were delivered outside its jurisdiction but the cheques were delivered and dishonoured within its jurisdiction.
Final Decision
The High Court dismissed the writ petition, upholding the trial court's order refusing to return the plaint.
Law Points
- Territorial jurisdiction in summary suits based on dishonoured cheques is determined by place of delivery and dishonour of cheques
- not place of delivery of goods
- Order VII Rule 10 CPC
- Order XXXVII CPC
