The central legal point established is that the cause of action is crucial in determining jurisdiction, and the interpretation of governing law clauses in agreements can influence the court's decision.

M. Venugopal, J.

1. The Appellant /2nd Defendant has preferred the instant Original Side Appeal as against the Order dated 03.11.2010 in Application No.289 of 2009 passed by the Learned Single Judge in allowing the 'Leave to Sue' application.

2. The Learned Single Judge, while passing the order dated 03.11.2010 in Application No.289 of 2009 (filed by the 1st Respondent/Applicant/Plaintiff) in paragraphs 6 to 8 has, inter alia, observed as follows;

“6. . . .in the case on hand the deposit has been made at Chennai and the agreement dated has been signed by the plaintiff at Chennai. Of course, the plaintiff may sign the agreement at Chennai and likewise the first Respondent may sign the agreement in USA. But the amount has been paid by the plaintiff only at Chennai through foreign exchange. The termination of the agreement is made available at page No.53 of the typed set of papers wherein also the first respondent has not disputed the amount received from the plaintiff at Chennai. Therefore, I am of the view that the dispute squarely falls within the jurisdiction of this Court.

7. The second contention of the learned Senior Counsel appearing for the respondents / defendants is that while granting leave, the forum non convenience has to be seen and in support of his contention he relied on Clause 24 of the agreement which is made available at page No.35 of the typed set of papers.

8. Clause 24 of the agreement provides for Governing Law wherein it is stated that this agreement is to be construed in accordance with and governed by the internal laws of the State of California. However, in the said clause, the jurisdiction of this Court has not been ousted.”

and resultantly, allowed the application.

3. The Learned Counsel for the Appellant/2nd Defendant contends that the order of the Learned Single Judge, dated 03.11.2010, in allowing the 'Leave to Sue' Application No.289 of 2009 is contrary to law and an erroneous one.

4. The Learned Counsel for the Appellant urges before this Court that the Learned Single Judge while allowing Application No.289 of 2009 has failed to appreciate that the subject matter of the suit filed by the 1st Respondent / Plaintiff seeking for a permanent injunction restraining the Appellant and the 2nd Respondent from claiming through or under it from in any manner manufacturing (R)-4-cyano-3-hydeoxy-butonic acid ethyl ester known as 'Hydroxynitrile' or transferring the technical know-how with regard to the manufacture of this compound, relates to the agreement dated 05.03.2005 in which the Appellant is not a party and in fact, only the 1st and 2nd Respondents are parties.

5. It is the plea of the Appellant that the Learned Single Judge should have held that no cause of action has been shown to have arisen vis a vis the 1st Respondent/Plaintiff to maintain the suit against the Appellant when there is no privity of contract between the Appellant and the 1st Respondent/Plaintiff.

6. Expatiating her submission, the Learned Counsel for the Appellant/2nd Defendant submits that the Learned Single Judge failed to appreciate that the Appellant/2nd Defendant's place of business and its registered office is located at Mumbai and as such, the leave to sue application viz., Application No.289 of 2009 is not maintainable insofar as the Appellant is concerned.

7. According to the Appellant, in terms of ingredients of Section 20 of C.P.C, suits can be instituted where the Defendant resides or where the cause of action arises and in the instant case, the fact remains that neither the Appellant resides/functions at Chennai nor it is a party to the disputed agreement dated 05.03.2005 and therefore, the Learned Single Judge ought to have held that leave prayed for could not be granted to the 1st Respondent/Plaintiff to sue the Appellant/2nd Respondent before this Court.

8. That apart, the Learned Counsel for the Appellant brings it to the notice of this Court that four agreements dated 21.08.2008 were entered into between the