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Code of Civil Procedure, 1908: s.20(c), Or. 7, rr. 10 and 11 – Territorial jurisdiction – Agreement stipulating that terms/conditions contained therein to be interpreted in accordance with laws of Hongkong – Breach of agreement – Suit filed in Delhi – Maintainability of – Held: Applicability of law is distinct and different from cause of action – Since part of cause of action arose in Delhi, suit filed in Delhi is maintainable- Application of defendant under Or. 7 rr. 10 and 11 rightly rejected by High Court. Cost – Imposed by court – On defendant for filing application to delay progress of suit – Interference with – Held: Not called for. Words and phrases: `Cause of action’ – Meaning of. The plaintiff company-respondent No.1 was incorporated under the laws of Hongkong and engaged in the business of trading PCB product under the name and style of `Prodigy Electronics’. The defendant-appellant joined plaintiff company for marketing PCB products. In September, 2004, an employment contract was entered into between the defendant and the plaintiff company. The terms of employment contract stipulated that on resignation or termination, the employee would not engage himself in a similar or competitive business for two years nor would he contact or solicit any customer or the supplier with whom the plaintiff company conducted business during the employment and that the defendant would maintain confidentiality. Clause 18 of the agreement declared that terms and conditions of the agreement would be interpreted in accordance with the laws of Hongkong. The defendant tendered his resignation and his employment came to an end in December, 2004. The plaintiff company found that the defendant contacted potential customers of the company and informed them that he was representing plaintiff company. The defendant also participated in the Trade Fair in Delhi in 2005 and used the goodwill and the trade name of the plaintiff company. The plaintiff company filed a suit in Delhi High Court for permanent and mandatory injunction against the defendant as also for damages. It also filed an application for interim injunction restraining the defendant from using the trade name `Prodigy’. The defendant filed written statement and also an application under Or. 7 rr. 10 and 11 CPC praying for rejection/return of the plaint for presentation to proper Court on the ground that the plaint disclosed no cause of action and that clause 18 of the agreement granted exclusive jurisdiction to Courts in Hongkong and on that ground also Delhi Court had no jurisdiction in the matter. The High Court dismissed the application and also imposed cost of Rs. 4000/-, holding that the agreement did not take away jurisdiction of the court and the application was filed only to delay the progress of the suit. Defendant challenged the said order by filing the present appeal. =Dismissing the appeal, the Court HELD: 1. No case has been made out by the defendant-appellant from which it can be said that Delhi Court had no jurisdiction. [Para 13] [21-B] 2.1. `Cause of action’ and `applicability of law’ are two distinct, different and independent things and one cannot be confused with the other. The expression `cause of action’ has not been defined in the Code of Civil Procedure, 1908. It is, however, settled law that every suit pre-supposes the existence of a cause of action. If there is no cause of action, the plaint has to be rejected under o.7 r.11 CPC. Cause of action means a right to sue. It consists of material facts which are imperative for the plaintiff to allege and prove to succeed in the suit. Under s.20(c) CPC, a suit would lie in a court within the local limits of whose jurisdiction the cause of action has arisen, wholly or partly. S. 20 has been designed to secure that justice must be brought as near as possible to every man’s hearthstone and that the defendant should not be put to the trouble and expense of travelling long distances in order to defend himself. [Paras 15, 20, 21] [22-A, B, C, 23-H, 24-A] 2.2. The argument of the defendant that the agreement was executed in Hong Kong and hence suit could have been instituted only in that country is not well founded. It is no doubt true that the suit could have been instituted in Hong Kong as well. That, however, does not take away the jurisdiction of Delhi Court where a part of cause of action has arisen. The defendant committed breach of terms and conditions of agreement during the Trade Fair in February, 2005 held in Pragati Maidan, Delhi. It was, therefore, open to the plaintiff Company to institute a suit in a competent Court within the jurisdiction of Delhi. So far as applicability of law is concerned, obviously as and when the suit will come up for hearing, the Court will interpret the clause and take an appropriate decision in accordance with law. It has, however, nothing to do with the local limits of the jurisdiction of the Court. [Paras 22, 31] [24-B, C, D, E, 27-B, C] British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries & Ors. (1990) 3 SCC 481 – held inapplicable. British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries & Ors. (1990) 3 SCC 481; A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies (1989)2 SCC 163; National Thermal Power Corporation v. Singer Company & Ors. (1992) 3 SCC 551; Technip S.A. v. S.M.S. Holding (P) Ltd. & Ors. (2005) 5 SCC 465 – referred to. 3. So far as imposition of costs is concerned, normally it is in the discretion of the Court. When the Court, in the light of the facts before it, was satisfied that the defendant wanted to delay the proceedings and ordered him to pay costs of Rs.4,000/-, it would not be appropriate to interfere with that part of the order. [Para 32] [27-E, F] Manoj Swarup, Ajay Kumar and Arun Kumar Beriwal for the Appellant. Nikhil Nayyar, Ankit Singhal and TVSR Sreyaj for the Respondents.

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CASE NO.:
Appeal (civil) 5751 of 2007

PETITIONER:
LAXMAN PRASAD

RESPONDENT:
PRODIGY ELECTRONICS LTD. & ANR

DATE OF JUDGMENT: 10/12/2007

BENCH:
C.K. THAKKER & ALTAMAS KABIR

JUDGMENT:
J U D G M E N T

CIVIL APPEAL NO. 5751 OF 2007
ARISING OUT OF
SPECIAL LEAVE PETITION (C) NO. 12405 OF 2006

C.K. THAKKER, J.

1. Leave granted.
2. The present appeal is directed against 
the judgment and order passed by the High Court 
of Delhi on April 26, 2006 in I.A. No. 9562 of 
2005 in Civil Suit (OS) No. 819 of 2005. By the 
said order, the High Court dismissed an 
application filed by the appellant herein under 
Order VII, Rules 10 and 11 of the Code of Civil 
Procedure, 1908 (hereafter referred to as 'the 
Code').
3. Shortly stated the facts are that 
'Prodigy Electronics Ltd.'-plaintiff 
(respondent No.1 herein) ('the Company' for 
short) was formed and incorporated under the 
laws of Hong Kong and is engaged in the 
business of trading electronic goods under the 
name and style 'Prodigy Electronics', Hong 
Kong. The main area of business of the Company 
is Printed Circuit Board (PCB). The business 
carried on by the Company involves keen 
understanding of the requirements of the 
customers in order that the products may be 
manufactured to the specific needs of the 
customers and they may be made available at 
competitive prices. The Company is, therefore, 
required to take care of the consumer-
complaints, if any. It also involves a reach 
into the market identifying the potential 
consumers of the products which involves 
substantial investment of time, effort and 
finance. According to the Company, it has 
developed solid reputation in India under the 
trade name and trade mark 'Prodigy Electronics' 
in the field of electronics generally and PCBs 
particularly.
4. According to the plaintiff-Company, on 
July 22, 2002, the defendant (appellant herein) 
joined Prodigy Electronics in India as a 
representative for marketing PCB products of 
the Company in India. An employment contract 
was entered into on October 2, 2003 between the 
defendant-employee and the plaintiff-Company. 
Under the said contract, the defendant was 
given full-time employment in the Company at 
Hong Kong in the capacity of 'International 
Business Development Manager'. He was given job 
profile of conducting all business of the 
Company in India. Subsequently, at the request 
of the defendant who put forward personal 
reasons, he was relocated to India and a new 
employment agreement dated September 13, 2004 
was signed by the parties. It was agreed that 
the job location of the appellant would be 
India. The defendant's tenure in India started 
from October 1, 2004. The Company was to bear 
all expenditure, including travel-expenses of 
the defendant. According to the Company, 
however, after relocation to India in October, 
2004, the defendant tendered his resignation by 
e-mail on the ground of personal problems. It 
was also stated that he would decide his next 
course of action later on. Though the Company 
gave assurance to the defendant to support in 
his personal problems, the defendant did not 
withdraw the resignation and thus his 
employment came to be terminated on December 
20, 2004. According to the Company, the 
defendant sent another e-mail on December 20, 
2004 giving assurance to the Company that 
though he would continue to be involved in 
marketing of PCB products, he would be 
associating himself with manufacturers other 
than the customers and suppliers of the 
Company.
5. It is the allegation of the Company 
that the defendant contacted potential 
customers of the Company and informed them that 
he was representing 'Prodigy'. He also 
submitted quotes for PCB products. It was also 
the case of the Company that the defendant 
participated in the Trade Fair in Delhi 
(Componex/Electronic India, 2005) which was 
held between February 1, 2005 to February 4, 
2005 at Pragati Maidan, New Delhi. In the said 
Trade Fair, the defendant used the goodwill and 
passed on the trade name of the plaintiff-
Company. In the course of inquiries about the 
data generated about PCB customers, the 
organizers of the Trade Fair informed the 
Company that Multi Circuit Board (CHINA) Ltd., 
Hong Kong had participated in the fair and 
information could be obtained from them. It was 
averred that the Company was shocked to receive 
the said information since Multi Circuit Board 
(CHINA) Ltd. was the manufacturer from whom the 
Company used to source its products for its 
Indian customers. The further inquiry by the 
Company revealed that the said Multi Circuit 
Board (CHINA) Ltd. had a representative in 
India and he was none else but the defendant 
who operated under the name and style of 
"Prodigy Circuit Boards". On being contacted, 
Multi Circuit Board (CHINA) Ltd. also confirmed 
that it had executed a contract with the 
defendant. It also came to the notice of the 
Company that the defendant had registered a 
deceptively similar domain name 
'www.prodigycircuits.com' as far back as on 
October 5, 2004 while he was still in the 
employment of the Company. The Company was thus 
convinced that the defendant had not resigned 
on account of personal reasons or family 
problems but he wanted to misuse confidential 
information which he had received from the 
Company and he wanted to take undue advantage 
in spite of the agreement entered into with the 
Company. The Company also discovered that the 
defendant had incorporated a Company under the 
name and style of 'Canton Treasure Corporation 
Ltd.' on July 16, 2004 when he was stationed in 
Hong Kong and was still serving with the 
Company. Thus, obvious breach of employment 
contract was committed by the appellant.
6. In view of the above facts and breach 
of contract by the defendant, the plaintiff-
Company on May 28, 2005, filed a suit being 
Civil Suit (OS) No. 819 of 2005 in the High 
Court of Delhi at New Delhi (Original 
Jurisdiction) for permanent and mandatory 
injunction against the defendant as also for 
damages by ordering rendition of accounts. 
Alongwith the plaint, the Company filed an 
application under Order XXXIX, Rules 1 and 2 
read with Section 151 of the Code for interim 
injunction restraining the defendant from using 
the name 'Prodigy', 'Prodigy Circuit' or any 
other identical or deceptively similar name or 
from passing off any such identical or 
deceptively similar trade mark or trade name.
7. Notice was issued to defendant. He 
filed his written statement on November 10, 
2005. The defendant also filed an application 
under Order VII, Rules 10 and 11 of the Code 
praying for rejection/return of plaint for 
presentation to proper Court. It was contended 
by the defendant that the plaint disclosed no 
cause of action and was liable to be rejected. 
It was further stated that no requisite Court 
fee had been paid within the time granted by 
the Court and on that ground also, the plaint 
deserved to be rejected. It was also asserted 
that there was an agreement between the 
plaintiff-Company and the defendant by which 
exclusive jurisdiction was granted to Courts in 
Hong Kong and jurisdiction of all other Courts 
had been ousted and on that ground also Delhi 
Court had no jurisdiction in the matter.
8. The High Court, as observed earlier, 
considered the application of the defendant and 
by the impugned order, dismissed it holding 
that the agreement did not take away 
jurisdiction of the Court as contended by the 
defendant and the application had been filed 
only with a view to delay the progress of the 
suit which was liable to be dismissed and it 
was accordingly dismissed with costs of 
Rs.4,000/-.
9. The appellant-defendant has challenged 
the said order by filing the present appeal. On 
August 7, 2006, notice was issued by this Court 
and in the meantime further proceedings in the 
suit were stayed.
10. We have heard learned counsel for the 
parties.
11. The learned counsel for the 
appellant contended that the High Court was 
wholly wrong in holding that Courts in India 
could entertain a Civil Suit and the 
application filed by the defendant-appellant 
was liable to be rejected. According to the 
learned counsel, the agreement entered into 
between the parties made it expressly clear 
that the law applicable, in case of dispute 
between the parties would be law of Hong Kong 
Special Administrative Region and, hence, 
Indian Courts have no jurisdiction to 
entertain, deal with and decide such question. 
It was also submitted by the learned counsel 
that in the light of the agreement between the 
parties, only remedy available to the 
plaintiff-Company was to take appropriate 
proceedings in accordance with law in a 
competent Court in Hong Kong and no Indian 
Court could have jurisdiction inasmuch as 
jurisdiction of all Courts in India is barred 
by necessary implication. The counsel also 
contended that the High Court committed an 
error in holding that Delhi High Court had 
jurisdiction as the defendant was residing in 
Delhi. In the plaint itself, the plaintiff gave 
the address of the defendant of Ghaziabad which 
is not in Delhi but in Uttar Pradesh (U.P.). 
The counsel also made grievance that the High 
Court was not right in observing that the 
defendant wanted to delay the proceedings and 
was not justified in imposing costs of 
Rs.4,000/-. It was, therefore, submitted that 
the appeal deserves to be allowed by setting 
aside the order passed by the High Court.
12. The learned counsel for the 
respondent-Company, on the other hand, 
supported the order passed by the High Court. 
He submitted that the only thing which was 
relevant in the agreement was as to 
applicability of laws. As per settled legal 
position, a suit could be instituted in Delhi 
as part of cause of action had arisen within 
the territorial jurisdiction of that Court. The 
High Court was right in observing that 
applicability of law had nothing to do with 
situs of a suit and since the defendant had 
used the trade mark/trade name of the plaintiff 
in Delhi in Trade Fair, it was open to the 
plaintiff Company to institute a suit in Delhi. 
It was submitted that it is really surprising 
that though Hong Kong based Company institutes 
a suit in Delhi where the defendant had used 
the trade mark/trade name, where he resides and 
thus it is much more convenient to him to 
defend the suit, yet he objects to the 
proceedings which clearly goes to show that the 
only intention on the part of the defendant is 
to delay the proceedings. The High Court was, 
therefore, right in dismissing the application 
and in ordering payment of costs by him. It 
was, therefore, submitted that the appeal 
deserves to be dismissed.
13. Having heard the learned counsel for 
the parties, in our opinion, no case has been 
made out by the appellant from which it can be 
said that Delhi Court had no jurisdiction. Both 
the learned counsel referred to the agreement 
dated September 13, 2004 entered into between 
the parties. Clause 10 of the agreement relates 
to "Resignation and Termination of Service". In 
accordance with the said clause, the appellant 
herein left the plaintiff-Company. Clause 10 
stipulates that in the event of resignation or 
termination for any reason, the employee would 
not engage himself in a similar or competitive 
business for a period of two years, nor he 
would contact or solicit any customer or 
supplier with whom the employer conducted 
business during the employment. Clause 14 
provides for 'Conflict of Interest'. Clause 15 
deals with 'Confidentiality'. It recites that 
upon accepting employment with Prodigy, the 
defendant would maintain confidentiality which 
would mean that he would not disclose any 
'Prodigy confidential information' either 
during or after his employment to anyone 
outside the Company, nor would use it for 
personal benefit. Clause 18 is material for the 
purpose of controversy and may be reproduced:
18. The terms and conditions as 
stipulated above shall be interpreted 
in accordance to the laws of the Hong 
Kong Special Administrative Region.
 (emphasis supplied)

14. It is this Clause (Clause 18), which 
requires interpretation. According to the 
appellant, since the terms and conditions in 
the agreement have to be interpreted in 
accordance with the laws of Hong Kong, no Court 
in any country other than a Court in Hong Kong 
shall have jurisdiction to entertain a suit, 
petition, application or any other proceeding. 
The submission of the respondent-Company, on 
the other hand, is that what is agreed upon is 
not territorial jurisdiction of a Court but 
applicability of laws. Clause 18 deals with the 
second eventuality and declares that terms and 
conditions of the agreement would be 
interpreted in accordance with the laws of Hong 
Kong.
15. We find considerable force in the 
submission of the learned counsel for the 
respondent Company. In our view, 'cause of 
action' and 'applicability of law' are two 
distinct, different and independent things and 
one cannot be confused with the other. The 
expression 'cause of action' has not been 
defined in the Code. It is however settled law 
that every suit presupposes the existence of a 
cause of action. If there is no cause of 
action, the plaint has to be rejected [Rule 
11(a) of Order VII). Stated simply, 'cause of 
action' means a right to sue. It consists of 
material facts which are imperative for the 
plaintiff to allege and prove to succeed in the 
suit. The classic definition of the expression 
('cause of action') is found in the 
observations of Lord Brett in Cooke v. Gill, 
(1873) 8 CP 107 : 42 LJ CP 98.
16. His Lordship stated;
"Cause of action means every fact 
which it would be necessary for the 
plaintiff to prove, if traversed, in 
order to support his right to the 
judgment of the court".

17. In A.B.C. Laminart Pvt. Ltd. v. A.P. 
Agencies, (1989) 2 SCC 163, this Court said;

"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 right 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 right sued on but includes all 
the 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 right 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".
 (emphasis supplied)
18. Now, Sections 16 to 20 of the Code 
deal with territorial jurisdiction of a Court 
(place of suing). Whereas Sections 16 to 18 
relate to immovable property, suits for 
compensation for wrongs to persons or movables 
have been dealt with under Section 19. Section 
20 of the Code is a residuary provision and 
covers all cases not falling under Sections 16 
to 19.
19. The relevant part of Section 20 reads 
thus;
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 or business, or 
personally work for gain, as 
aforesaid, acquiesce in such 
institution ; or
(c) the cause of action, wholly or in 
part, arises.
 (emphasis supplied)
20. Bare reading of Clause (c) leaves no 
room for doubt that a suit would lie in a court 
within the local limits of whose jurisdiction 
the cause of action has arisen, wholly or 
partly.
21. Section 20 has been designed to secure 
that justice might be brought as near as 
possible to every man's hearthstone and that 
the defendant should not be put to the trouble 
and expense of traveling long distances in 
order to defend himself.
22. According to the plaintiff-Company, a 
suit instituted on the Original Side of the 
High Court of Delhi is maintainable since a 
part of cause of action had accrued within the 
territorial jurisdiction of Delhi Court (breach 
of agreement by defendant). The argument of the 
defendant that the agreement was executed in 
Hong Kong and hence suit could have been 
instituted only in that country is, in our 
opinion, not well founded. It is no doubt true 
that the suit could have been instituted in 
Hong Kong as well. That, however, does not take 
away the jurisdiction of Delhi Court where a 
part of cause of action has arisen. In the 
plaint, it was specifically alleged by the 
plaintiff Company that the defendant committed 
breach of terms and conditions of agreement 
during the Trade Fair in February, 2005 held in 
Pragati Maidan, Delhi. It was, therefore, open 
to the plaintiff Company to institute a suit in 
a competent Court within the jurisdiction of 
Delhi and that is how the suit is filed in the 
High Court on its Original Side. In our 
considered opinion, therefore, the contention 
of the appellant-defendant that the agreement 
was executed in a foreign country or the 
defendant was a resident of Ghaziabad (Uttar 
Pradesh) cannot take away, exclude or oust the 
jurisdiction of Delhi Court in view of the 
averment made in the plaint that a part of 
cause of action had arisen within the local 
limits of Delhi.
23. It was submitted by the learned 
counsel for the appellant that once there is an 
agreement as to choice of Court or forum, the 
parties are bound by it. For the said 
proposition, our attention has been invited to 
several decisions rendered by this Court. We do 
not intend to burden our judgment on that point 
as the law is well settled and the learned 
counsel for the respondent-Company has not 
disputed the proposition. What was contended 
was that Clause 18 does not take away the 
jurisdiction of a competent Court and the 
agreement did not exclude territorial 
jurisdiction of any Court.
24. Learned counsel for the appellant 
relied on a decision of this Court in British 
India Steam Navigation Co. Ltd. v. 
Shanmughavilas Cashew Industries & Ors., (1990) 
3 SCC 481. In that case, the plaintiff 
purchased from the defendant-Company raw cashew 
nuts which were shipped in a vessel chartered 
by the Company incorporated in England. Clause 
3 of the Bill of Lading dealt with jurisdiction 
of the Court. The said clause read as under:
3. JURISDICTION: The contract 
evidenced by this bill of lading shall 
be governed by English law and 
disputes determined in England or, at 
the option of the Carrier, at the port 
of destination according to English 
law to the exclusion of the 
jurisdiction of the Courts of any 
other country. 

25. Though the above clause made it clear 
that the dispute should be determined in 
England, this Court held that the objection as 
to territorial jurisdiction had been waived by 
the defendant. So far as the law is concerned, 
it was held that proper law to govern the 
contract was English law.
26. The learned counsel for the appellant 
submitted that the ratio laid down in British 
India Steam Navigation Co. applies to the case 
on hand and the High Court of Delhi committed 
an error of law in not upholding the objection 
of the defendant that Indian Court had no 
jurisdiction to deal with the matter.
27. We are unable to agree. Clause 3, as 
extracted hereinabove, clearly provided that 
the contract would be governed by English law. 
The High Court was, therefore, right in 
observing that the case is not relevant so far 
as the question raised in the present matter.
28. The counsel also referred to National 
Thermal Power Corporation v. Singer Company & 
Ors., (1992) 3 SCC 551. The parties in that 
case by an agreement had chosen the 
jurisdiction of one Court to the exclusion of 
the other. Likewise, they also agreed as to the 
applicability of law. In the light of the fact 
situation, the Court held that the parties are 
bound by such Agreement and it has to approach 
a Court in consonance with the agreement. This 
judgment also does not help the appellant in 
the instant case.
29. Our attention was also invited to 
Technip S.A. v. S.M.S. Holding (P) Ltd. & Ors., 
(2005) 5 SCC 465. Even that case also does not 
help the appellant. What was held there was as 
to the law applicable to the dispute and not 
the territorial jurisdiction of the Court. On 
the contrary, para 23 of the said decision goes 
to show that territorial jurisdiction of the 
Court and applicability of law are two 
different things and even if a matter is 
decided in the country other than the country 
where the agreement has been executed, the law 
which would apply would be the law agreed by 
the parties.
30. The Court stated;
"23. The relationship of Technip to 
Coflexip whether one of control or not 
is really a question of their status. 
The applicable law would therefore be 
the law of their domicil, namely, 
French law. Having determined their 
status according to French Law, the 
next question as to their obligation 
under the Indian Law vis a vis SEAMEC 
would have to be governed exclusively 
by Indian law (in this case the Act 
and the Regulations). SATs error lay 
in not differentiating between the two 
issues of status and the obligation by 
reason of the status and in seeking to 
cover both under a single system of 
law".
 (emphasis supplied)31. In the case on hand, we have referred 
to the relevant clauses of the agreement. 
Clause 18 provides for applicability of law and 
it specifically declares that the terms and 
conditions of the agreement shall be 
interpreted in accordance with 'the laws of 
Hong Kong Special Administrative Region'. That, 
in our judgment, does not mean that a suit can 
be instituted only in Hong Kong and not in any 
other country. Territorial jurisdiction of a 
Court, when the plaintiff intends to invoke 
jurisdiction of any Court in India, has to be 
ascertained on the basis of the principles laid 
down in the Code of Civil Procedure. Since a 
part of 'cause of action' has arisen within the 
local limits of Delhi as averred in the plaint 
by the plaintiff Company, the question has to 
be considered on the basis of such averment. 
Since it is alleged that the appellant-
defendant had committed breach of agreement by 
using trade mark/trade name in Trade Fair, 2005 
in Delhi, a part of cause of action has arisen 
in Delhi. The plaintiff-Company, in the 
circumstances, could have filed a suit in 
Delhi. So far as applicability of law is 
concerned, obviously as and when the suit will 
come up for hearing, the Court will interpret 
the clause and take an appropriate decision in 
accordance with law. It has, however, nothing 
to do with the local limits of the jurisdiction 
of the Court. The High Court, in our opinion, 
was right in rejecting the application and in 
overruling preliminary objection. Since prima 
facie the plaint disclosed a cause of action as 
also territorial jurisdiction of the Court, the 
High Court rightly rejected both the 
contentions and no error was committed by it in 
not rejecting plaint, nor returning it for 
presentation to proper Court. 'Applicability of 
Hong Kong Law', 'entering into an agreement in 
Hong Kong' or 'defendant residing in Ghaziabad 
(Uttar Pradesh)' or any of them does not take 
away the jurisdiction of Delhi Court since a 
'cause of action' at least in part, can be said 
to have arisen in Delhi. We, therefore, see no 
substance in the contention of the defendant- 
appellant.
32. So far as imposition of costs is 
concerned, normally it is in the discretion of 
the Court. When the Court, in the light of the 
facts before it, satisfied that the defendant 
wanted to delay the proceedings and ordered him 
to pay costs of Rs.4,000/-, it would not be 
appropriate to interfere with that part of the 
order. 
33. For the foregoing reasons, the appeal 
deserves to be dismissed and is accordingly 
dismissed. However, in the facts and 
circumstance of the case, there shall be no 
order as to costs.

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