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Judgment
Virender Singh, Judge
Petitioners have filed the present petition, under Article 227 of the Constitution of India, against the order dated 06.11.2025, passed by the Court of learned Additional District Judge, Kullu, District Kullu, H.P, (hereinafter referred to as ‘the trial Court’), in Civil Suit No.01 of 2024, titled as Narender Rana @ Bittu Rana versus Rajesh Verma and others.
By way of order dated 06.11.2025, the learned trial Court, has dismissed the application, filed by the petitioners, under Order 7, Rule 10 of CPC.
For the sake of convenience, the parties to the present lis, are, hereinafter referred to, in the same manner, as were, referred to, by the learned trial Court.
Factual position, as emerges from the documents annexed, with the petition, may be summed up, as under:-
Plaintiff-Narender Rana @ Bittu Rana, has filed the suit for mandatory injunction, directing the defendants to return the balance Gold weighing 1020 grams, having been deposited with the defendants, by the plaintiff, under the Kitty Scheme, started w.e.f. 19.03.2022 to 26.06.2023 and in the alternative, he has sought the relief of recovery of Rs.65,28,000/-, being the price of the said gold, along with interest @ 18 % per annum, from the date of suit till its realization.
The said suit has been filed, on the ground, that the plaintiff deals in the business of Gold Jewellery, under the name and style of sole proprietorship M/s Rana Jewellery Empire at Main Bazaar, Bhuntar, Tehsil Bhuntar, District Kullu, H.P. Defendants are running joint business under the name and style of NL Jewels manufacturers and wholesalers at Lal Bazaar Gali Bhattan, Wazir Market, Gali Bhattal, Jallandhar, City Punjab.
Parties to the lis were having the cordial relations and the defendants had approached the plaintiff at his Shop at Bhuntar and allured him to join Kitty scheme, being organized by them. As per the scheme explained by them, the plaintiff has to deposit specified quantity of Gold within specified time, then, the said Gold was supposed to be returned to the plaintiff, as per his claim and demand.
The plaintiff has consented to the above scheme and had deposited 2333.910+489.140 grams of gold, total 2823.05 grams, within a period w.e.f. 19.03.2022 to 26.06.2023 and out of the same, defendants have returned 1803.05 grams gold to the plaintiff, up to 27.07.2023 as per his requirement. The defendants were required to return 1020 grams gold to the plaintiff, as on 27.07.2023. Thereafter, the defendants had not responded to the repeated calls made by the plaintiff to demand the said gold. Thereafter, the plaintiff served the legal notice on 04.10.2023, calling upon the defendants, either to return the gold or to pay the price of the same, within a period of 15 days of the receipt of the notice.
On the basis of the above facts, plaintiff has sought the relief, as claimed, in the petition.
When, put to notice, the defendants put appearance and filed the application, under Order 7, Rule 10 of CPC for dismissal of the suit. The said relief has been sought, on the ground that the suit of the plaintiff is false, frivolous and against the public policy; as from the averments made in the plaint, no transactions allegedly have taken place, within the jurisdiction of the learned trial Court.
Relying upon the provisions of Order 7, Rule 10 of CPC, it is the further case of the defendants that no cause of action took place, within the territorial jurisdiction of District Kullu, as such, the learned trial Court has no territorial jurisdiction to entertain and try the present suit. Raising the question of territorial jurisdiction, a prayer has been made under Order 7, Rule 10 of CPC, to dismiss the suit.
This said application has been contested, by the plaintiff by filing reply, that the application is not maintainable, as the same has been filed, just to prolong the adjudication of the case. Factual position, regarding filing of the present suit has also not been disputed, but, according to the plaintiff, the contents of the application have been controverted, by pleading that the learned trial Court has the territorial jurisdiction to try and decide the suit, as the cause of action has accrued to the plaintiff to file the present suit, within the territorial jurisdiction of this Court.
The learned trial Court has dismissed the said application, vide order dated 06.11.2025.
The said order has been assailed by way of the present petition.
The defendants have moved the application, under Order 7, Rule 10 of CPC, for dismissal of the suit, whereas, provisions of Order 7, Rule 10 CPC deals with the situation, where, the Court is not having the territorial jurisdiction and Court may return the suit to the plaintiff to present the same, before the appropriate Court.
Even otherwise, the relief, under Order 7, Rule 10 of CPC, has been sought, on the ground, that no cause of action took place at Kullu, as such, the Court, in which the suit has been filed is stated to be having no territorial jurisdiction to entertain, try and decide the suit. Defendants are seeking the relief, on the basis of provisions of Section 20 of CPC. The said provisions are reproduced, as under:-
“20.Other suits to be instituted where defendants reside or cause of action arises.—Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction—
(a)the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b)any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally works for gain, as aforesaid, acquiesce in such institution; or
(c)The cause of action, wholly or in part, arises.
[Explanation].—A corporation shall be deemed to carry on business at its sole or principal office in [India] or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.”
To decide the question of jurisdiction, only the averments, made in the plaint, are to be considered and not the probable defence raised by the defendants. The plaintiff has sought the relief of mandatory injunction and in the alternative, a suit for recovery. As per the provisions of Section 20 of CPC, as reproduced above, the cause of action must have accrued to the plaintiff wholly or partly, within the territorial jurisdiction of the Court, in which suit has been filed. The term ‘cause of action’ denotes a bundle of essential facts, which are necessary for the plaintiff to prove, before he can succeed, in any suit or which, gives the plaintiff a right to sue or seek relief, against the defendants.
The term ‘cause of action’ has elaborately been discussed by the Privy Council, in the year 1922, in Muhammad Hafiz and another versus Muhammad Zakariya and others, reported in, 1922 Privy Council
The relevant extract of the judgment, is reproduced, as under:-
“Their Lordships think, therefore, that the rule covers the present dispute, and it is only necessary, in deference to the careful argument that is placed before the Board, to refer to one or two of the authorities to which the learned counsel called attention. The first was Mussummat Chand Lour v. Partab Singh, 151, All 156 and that can be dealt with very simply. In that case what happened was that a Hindu widow having sold the whole of the estate and a suit being instituted to set aside the sale, the proceedings were objected to upon the ground that before the sale was effected other proceedings were instituted to obtain an injunction to prevent the sale taking place. It was pointed out that the actual cause and circumstances which gave rise to the dispute were different in both cases, because in the old all that could be alleged was an intention, and all the relief that could be sought was an injunction. In the other, the matter alleged was an act done and the relief sought was the restoration of the property that had been sold. In the case of The Rajah of Pittapur vs. Sir Rajah Venkata Mahipastisurya 12 I, A., 116 it is said that the cause of action means the cause of action for which the suit is brought and it does not say that every suit includes every cause of action. Their Lordships see no reason to attempt to qualify or to extend those words, because they are in fact nothing but a repetition of the exact words of the Code; the cause of action is the cause of action, which gives occasion to and forms the foundation of the suit, and if that cause enables a man to ask for larger and wider relief than that to which he limits his claim, he cannot afterwards seek to recover the balance by independent proceedings. The case of Yasvant v. Vithal (1985) I.L.R., 21 Bom., 267 really illustrates this view for there the learned Judge held that both the causes of action and the remedies were distinct.”
Similar view has again reiterated by the Hon’ble Supreme Court, in a case titled as A.B.C. Laminart Pvt. Ltd. and another versus A.P. Agencies Salem, reported in (1989) 2 Supreme Court Cases 163. The relevant paragraphs-11 to 15 of the judgment, are reproduced, as under:-
“11.The jurisdiction of the Court in matter of a contra ct will depend on the situs of the contract and the cause of action arising through connecting factors.
12.A cause of action means every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a fight to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the fight sued on but includes all t he material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a fight to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff.
13.Under section 20(c) of the Code of Civil Procedure subject to the limitation stated theretofore, every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action, wholly or in pa rt arises. It may be remembered that earlier section 7 of Act of 1888 added Explanation III as under:
"Explanation III--In suits arising out of contract the cause of action arises within the meaning of this section at any of the following places, namely:
(1)the place where the contract was made;
(2)the place where the contract was to be performed or performance thereof completed;
(3)the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable."
14.The above Explanation III has not been omitted but nevertheless it may serve a guide. There must be a connecting factor.
15.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 t he place where it was made. The determination of the place where the contract was made is part of the Law of Contract. 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 t he 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.”
Being guided by the above decisions, now, this Court would proceed further to ascertain whether, any part of cause of action had accrued to the plaintiff to file the suit, before the learned trial Court. In Para-3 of the suit filed by the plaintiff, is reproduced, as under:-
“That the plaintiff is having good and cordial relations with the defendants due to gold business. Due to these relations, the defendants approached the plaintiff at his shop/place of business at Bhuntar District Kullu, H.P. and allured the plaintiff to join
“Kitty Scheme” being organized by the defendants and also given various allurements of profits in it. In this regard, both the parties remained confabulated in their phone numbers and they hare having their whatsapp.”
On the basis of the stand, as taken in para-3, as reproduced, herein-above, the plaintiff has pleaded cause of action, in para-12, by asserting that the same has accrued to him to file the present suit, within the jurisdiction of the Court.
The learned counsel appearing for the defendants could not point out any averment, in the plaint, which shows that the cause of action has not accrued, within the territorial jurisdiction of the learned trial Court. The mere fact that the defendants are operating from Jallandhar does not oust the jurisdiction of the learned trial Court to try and decide the matter, as the contract to join the Kitty scheme was materialized at Bhuntar, in the business premises of the plaintiff.
From a bare reading of the plaint, the defendants have failed to make out a case in their favour, to demonstrate that the learned trial Court lacked jurisdiction to try and adjudicate the matter.
So far as the case law laid down by Delhi High Court, in case titled as Unimers India Limited versus The IFCL Limited and others, I.A. No.13000/2010, in CS (OS) No.1656 of 2009, is concerned, with due respect to the law laid down by the Delhi High Court, the said decision is not applicable to the facts and circumstances of the present case, as the very basis of the oral agreement/contract, which has been relied upon by the plaintiff, had taken place between the parties at Bhuntar.
Even otherwise, the defendants are before this Court, under Article 227 of the Constitution of India and the powers of this Court, under Article 227 of the Constitution of India, have duly been explained, by the Hon’ble Supreme Court in “K. Valarmathi & Ors. Versus Kumaresan, 2025 INSC 606” has elaborately discussed the scope of interference. Relevant para 9 of the judgment, is reproduced, as under:
“Essence of the power under Article 227 being supervisory, it cannot be invoked to usurp the original jurisdiction of the court which it seeks to supervise. Nor can it be invoked to supplant a statutory legal remedy under the Civil Procedure Code, 1908. For example, existence of appellate remedy under Section 96 of the Code operates as a near total bar to exercise of supervisory jurisdiction under Article 227.”
In a recent decision in “Nandi Infrastructure Corridor Enterprises Ltd. & Anr. Versus B. Gurappa Naidu & Ors., 2026 INSC 434”, the scope of interference has again been explained by the Hon’ble Supreme Court. Relevant paragraph 35 of the judgment, is reproduced, as under:-
“35.In short, the principles laid down in the above matters is as follows:
a)The power of superintendence under Article 227 is not to be exercised unless there has been an (a) unwarranted assumption of jurisdiction, not vested in Court or tribunal, or (b) gross abuse of jurisdiction or (c) an unjustifiable refusal to exercise jurisdiction vested in Courts or tribunals.
b)It is also well settled that the High Court while acting under this Article cannot exercise its power as an appellate court or substitute its own judgment in place of that of the subordinate court to correct an error, which is not apparent on the face of the record.
c)The High Court exercising supervisory jurisdiction does not act as a court of first appeal to reappreciate, reweigh the evidence or facts upon which the determination under challenge is based. Supervisory jurisdiction is not to correct every error of fact or even a legal flaw when the final finding is justified or can be supported. The High Court is not to substitute its own decision on facts and conclusion, for that of the inferior court or tribunal.”
Judging the facts and circumstances of the present case, in the light of the above decisions of the Hon’ble Supreme Court, this Court is not able to record the findings that the learned trial Court has wrongly exercised the jurisdiction vested in it, as the learned trial Court has considered the pleadings of the plaintiff and thereafter, concluded that the application, moved by the defendants deserves to be dismissed, as such, those findings do not call for any interference by this Court.
Pending application(s), if any, shall also stands disposed of.
Any of the observations made hereinabove shall not be taken as an expression of opinion on the merits of the case, as these observations are confined only to the disposal of the present petition.