2008 (1) TMI 969 - HC - Indian Laws

Delhi High Court Ruling on Jurisdiction for Recovery Suit

The Delhi High Court lacked jurisdiction to try a suit for recovery of Rs. 1,25,55,000 filed by the appellants-plaintiffs. The court held that the cause ... - Issues Involved:1. Jurisdiction of the Delhi High Court to entertain the suit.2. Presentation and dishonour of the cheque.3. Applicability of precedents cited by the appellant.Summary:1. Jurisdiction of the Delhi High Court to entertain the suit:This appeal challenges the order dated 24.10.2007, where the learned Single Judge held that the Delhi High Court lacks jurisdiction to try the suit filed by the appellants-plaintiffs u/s Order 37 of the Code of Civil Procedure 1908 for recovery of Rs. 1,25,55,000/-. The appellants argued that the cause of action partly arose in New Delhi as the cheque was presented and dishonoured there. However, the respondent contended that all relevant actions, including the signing of the contract and issuance of the cheque, occurred in Ootacamund, thus negating the jurisdiction of the Delhi Court.2. Presentation and dishonour of the cheque:The cheque in question, dated 11.09.2002, was issued by the respondent in favor of appellant No. 1 for Rs. 93 lacs and drawn on the Oriental Bank of Commerce, Ootacamund. The cheque was dishonoured with the remark 'Payment stopped by drawer.' The appellants argued that since the cheque was presented and dishonoured in New Delhi, the cause of action partly arose there. The respondent countered that the cheque was drawn and handed over in Ootacamund, and the appellant's administrative office in New Delhi was irrelevant to the jurisdiction.3. Applicability of precedents cited by the appellant:The appellant relied on the Supreme Court's decision in I.T. Commr. v. Ogale Glass Works Ltd. and the Patna High Court's decision in Gouri Shankar v. Ram Banka to argue that the Delhi Court had jurisdiction. However, the learned Single Judge distinguished these cases, noting that in Ogale Glass Works Ltd., the payment by cheque was considered made in Delhi due to specific circumstances not present in this case. Similarly, in Gouri Shankar, the facts differed significantly from the present case. The learned Single Judge also referred to the Supreme Court's decision in Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd., which clarified that 'the bank' in Section 138 of the Negotiable Instruments Act refers to the drawee bank where the cheque is drawn, not any bank where it is presented.Conclusion:The High Court found no reason to differ from the learned Single Judge's conclusion that the Delhi Court lacks territorial jurisdiction. Consequently, the appeal was dismissed, and the plaint was to be returned to the appellant, with legal consequences to follow.