2007 Supreme(SC) 1572

2007(8) Supreme 442
Supreme Court of india
(From Delhi High Court)
C.K. Thakker & Altamas Kabir, JJ.
Laxman Prasad — Petitioner
versus
Progigy Electronics Ltd. & Anr. — Respondents
Appeal (civil) 5751 of 2007
[Arising out of SLP (C) No. 12405 of 2006]
Decided on : 10-12-2007

important points
‘Cause of action’ and ‘applicability of law’ are two distinct, different and independent things and one cannot be confused with the other.
Imposition of cost is in the discretion of the Court.

Headnote:(a)Code of Civil Procedure, 1908 – Order VII, rule 11(a) – ‘Cause of action’ and ‘applicability of law’ are two distinct, different and independent things and one cannot be confused with the other –’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 – 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. (Paras 15 and 16)

       (1873) 8 CP 107: 42 LJ CP 98; (1989) 2 SCC 163 – Relied upon.

       (b)Code of Civil Procedure, 1908 – Section 20 – A suit would lie in a court within the local limits of whose jurisdiction the cause of action has arisen, wholly or partly. (Para 20)

       (c)Code of Civil Procedure, 1908 – Section 20 – The suit could have been instituted in Hong Kong as well – However part of the cause of action, namely breach of employment contract, having arisen in Delhi, the Delhi High Court had jurisdiction – Clause 18 of the agreement about applicability of law of Hong Kong has nothing to do with the local limits of the jurisdiction of the Court. (Paras 22 and 31)

       (1990) 3 SCC 481; (1992) 3 SCC 551; (2005) 5 SCC 465 – Distinguished.

       (d)Code of Civil Procedure, 1908 – Section 35-B – Imposition of cost 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. (Para 32)

       Facts of the case :

       1.‘Prodigy Electronics Ltd.’-plaintiff (respondent No.1 herein) 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).

       2.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. Under an employment contract entered into on October 2, 2003, the defendant was given full-time employment in the Company at Hong Kong in the capacity of ‘International Business Development Manager’.

       3.Subsequently, at the request of the defendant, he was relocated to India and a new employment agreement dated September 13, 2004 was signed by the parties.

       4.After relocation to India in October, 2004, the defendant tendered his resignation by e-mail on the ground of personal problems and thus his employment came to be terminated on December 20, 2004.

       5.The Company has evidence of obvious breach of employment contract 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 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.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 on the ground that as per the agreement between the plaintiff-Company and the defendant 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 dismissed the application holding that the agreement did not take away jurisdiction of the Court and cost of Rs. 4,000/- was imposed.

       Findings of the Court:

       Jurisdiction of Delhi Court was not ousted by the employment agreement. Clause 18 of the agreement about applicability of law of Hong Kong has nothing to do with the local limits of the jurisdiction of the Court.

       Result : Appeal dismissed.