The main legal point established in the judgment is the criteria for determining cause of action and jurisdiction, based on the location of the contract, the act done by the defendant, and the balance of convenience.

M. THANIKACHALAM, J.

1. The plaintiff, aggrieved by the order passed by the learned Judge in Application No. 2182/2000, filed under Clause 12 of the Letters Patent, refusing to grant leave to file the suit, has filed this appeal.

2. The appellant as plaintiff has filed the suit against the respondents/defendants, for recovery of a sum of Rs. 3,91,92,798.20, with interest at 36% per annum on Rs. 1,78,44,489/- from the date of the plaint till the date of realisation, on the basis of three hire purchase agreements, under which the plaintiff had advanced loan to the first defendant, which is controlled by the second defendant as the Managing Director. Even as per the averments in the plaint, major cause of action, such as negotiation, disbursement of loan, etc., appear to have taken place at Hyderabad, Andhra Pradesh, where admittedly the second defendant is residing, carrying on the business in the first defendant company. The plaintiff company is having its head office, within the jurisdiction of this Court. It has its branch office at Hyderabad, which had obtained the application, for loan from the defendants, processed, forwarded the same to the plaintiff, for acceptance, on which basis, loan appears to have been granted. As seen from the affidavit filed in support of the application, the applicant/plaintiff would state that the agreement was accepted and concluded at Madras by the second defendant, thereby saying that part of cause of action had arisen at Madras, within the jurisdiction of this Court. On that basis, application has been filed to grant leave to the plaintiff/applicant, to institute the suit in this Court, against the defendants/respondents.

3. The respondents/defendants, opposed the application contending, that the entire transaction was proposed and accepted only at Hyderabad, that no person representing the first respondent, came to Madras, to conclude the transaction, that as far as the first respondent is concerned, the agreement was concluded on the second respondent signing the agreement at Hyderabad, which address alone is given in the agreement and not the Registered Office at Madras, that no part of cause of action had arisen at Madras and that the balance of convenience, which is to be seen, while granting leave under clause 12 of Letters Patent also, only in favour of the respondents.

4. The learned single Judge, considering the averments in the plaint, which are sought to be supported by affidavit, as well as the counter, came to the conclusion, that no part of cause of action had arisen, within the jurisdiction of this Court, the fact being that no act was done by the defendants within the jurisdiction of this Court, so as to say, that act has infringed the rights of the plaintiff, thereby giving part of cause of action, for the plaintiff, to lay the suit within this Court. Based on certain decisions of the Supreme Court also, accepting the contention of the respondents/defendants, the learned Single Judge, dismissed the application, as per the order dated 11.8.2000, which is under challenge in this appeal.

5. Heard the learned senior counsel for the appellant, Mr. T.V. Ramanujam and the learned counsel for the respondents, Mr. K. Harishankar.

6. The learned senior counsel, Mr. T.V. Ramanujam submitted, that as per the averments made in the plaint, part of cause of action arises within the jurisdiction of this Court, since payments were also made here, thereby giving or vesting power to the plaintiff, to choose the jurisdiction, to file the suit and in this way, the suit filed before this Court, where the part of cause of action had arisen, is well maintainable, but unfortunately, the learned Judge has not correctly considered the same, resulting dismissal of the application.

7. Per contra, the learned counsel for the respondents submitted, that no part of cause of action has arisen within the jurisdiction of this Court, that the entire transaction for the loan viz., proposal, finalisatio