V. amasubramanian, J.

1. The defendants in a suit for recovery of money have come up with this appeal, challenging the judgment and decree of the trial Court.

2. We have heard Mr. Anand Kumar Kapoor, learned counsel for the appellants/defendants, and Ms. Manjari S Ganu, learned counsel for the respondent/plaintiff.

3. The respondent herein filed a suit in O.S. No. 692 of 2007 on the file of the XIII Additional Chief Judge (Fast Track Court), City Civil Court, Hyderabad, against the appellants herein for recovery of a sum of Rs. 44,60,170/- together with interest at the rate of 18% p.a. from 10.11.2007 till realization, upon the principal amount of Rs. 44,08,000/-.

4. In brief, the averments contained in the plaint were that with a view to establish health clinics/diagnostic centers at Aundh and Kothrud at Pune, with the technical know-how supplied by the appellants/defendants, the respondent/ plaintiff entered into two Memoranda of Understanding on 09.12.2004 with the appellants/defendants; that in terms of Clause 4 of the Memoranda of Understanding, the respondent/plaintiff paid a sum of Rs. 20,00,000/- under each of the MOUs together with service tax to the tune of Rs. 2,04,000/- each; that under the Memoranda of Understanding, the appellants/defendants were liable to provide technical and operational specifications and also grant a licence to the respondent/plaintiff to establish the clinics under the brand name "the Apollo Clinics" using the trade marks, logos, and other designs of the appellants/defendants; that the appellants/defendants failed and neglected to carry out their obligations under the two Memoranda of Understanding; that under the receipts issued on 09.12.2004, evidencing payment of Rs. 22,04,000/- each, the amounts paid thereunder were interest free security deposits liable to be returned; that the respondent/plaintiff worked and identified sites to meet the specifications of space mentioned by the appellants/ defendants in their Site Selection Manual, but the appellants/defendants denied approval for the identified properties arbitrarily; that since the appellants/defendants evinced a desire to set up clinics in some areas of Mumbai, the respondent/plaintiff also identified properties in Mumbai, but the appellants/defendants did not approve the same; that since the process of approval itself dragged on for a period of 19 months, the market conditions changed, making the project unviable; that since the project could not take off and the appellants/defendants did not provide the technical and operational specifications to set up the clinics and did not grant a licence either to establish and run the clinics or to use the technical know-how, etc., the consideration for the contract failed, making the respondent/plaintiff entitled to seek refund of the amount paid; that the repeated requests made by the brother-in-law of the respondent/plaintiff with the representatives of the appellants/ defendants for refund of the amount, did not yield the desired results; that in a meeting held on 06.11.2007, the Chief Executive Officer of the appellants/defendants, by name, Mr. Ratan Jalan, offered to refund a sum of Rs.20,00,000/- in full and final settlement, but the offer was not accepted by the respondent/plaintiff; that the respondent/plaintiff issued a legal notice, to which the solicitors of the appellants/ defendants issued an interim reply; and that, therefore, the respondent/plaintiff was entitled to a decree as prayed for.

5. The second appellant herein filed a written statement contending inter alia that since no part of the cause of action arose in Hyderabad and also since the registered office of the appellants/defendants is not in Hyderabad, the City Civil Court, Hyderabad, had no jurisdiction to entertain the suit; that parties to the Memoranda of Understanding cannot confer jurisdiction upon a Court, which inherently lacked jurisdiction; that since the payments were made by one Mrs. Sapna Rajgarhia,