The respondent filed O.S.No.1557 of 2006 against the petitioner in the Court of Additional Judge, City Small Causes Court-cum-VI Senior Civil Judge, City Civil Court, Hyderabad, for recovery of Rs.1,08,042/-. The suit claim arises out of a contract between the parties. The petitioner invited tenders for supply of Art Paper Material for the year 2004-05, and the tender submitted by the respondent was accepted on 30-04-2004. Material worth Rs.24,01,373/-was supplied by the respondent, and the entire amount, except a sum of Rs.1,08,042/-, was paid by the petitioner. The said amount was withheld, on the ground that some quantity, supplied by the respondent, did not accord with specifications.

On receipt of summons in the suit, the petitioner filed written-statement. Apart from denying its liability to pay the amount, the petitioner raised an objection, as to the territorial jurisdiction of the trial Court. It has also filed I.A.No.174 of 2008, under Rule 2 (ii)(a) of Order XIV C.P.C., with a prayer to pronounce the judgment on the preliminary issue, as to the territorial jurisdiction. The I.A. was opposed by the respondent. The trial Court dismissed the I.A., through its order