GAC Logistics Pvt. Ltd. Wins Appeal as Delhi High Court Confirms Part of Cause of Action Arises in Delhi
In a significant ruling, the Delhi High Court has overturned a decision by the Trial Court, re-establishing its territorial jurisdiction over a recovery suit filed by GAC Logistics Pvt. Ltd. against ACER Logistics Pvt. Ltd. The case, presided over by Justice Manoj Kumar Ohri, was decided on May 20, 2026, and highlights the critical importance of where a cause of action arises in determining jurisdiction.
The dispute arose when GAC Logistics sought to recover outstanding dues amounting to Rs. 14,15,144/- from ACER Logistics for services rendered in shipment and forwarding. Initially, the Trial Court at Tis Hazari returned the plaint, citing a lack of jurisdiction, claiming the cause of action was linked to Mumbai. However, GAC Logistics appealed the decision, arguing that significant elements of the cause of action occurred in Delhi.
Justice Ohri, in his judgment, emphasized the provisions of Section 20 of the Civil Procedure Code, 1908, which allow a court to have jurisdiction if any part of the cause of action arises within its territorial limits. In this case, several key activities, such as the receipt of payments, issuance and dishonor of cheques, and the registered office of the defendant being in Delhi, were deemed sufficient to establish Delhi's jurisdiction.
The court also noted that the defendant, ACER Logistics, had failed to appear or challenge the claims, resulting in an ex-parte decision in favor of GAC Logistics. This underscored the validity of the plaintiff's unchallenged assertions that the consignments were handled in Delhi, and payments were made to a Delhi bank account.
Furthermore, the ruling referenced past judgments that supported the principle of jurisdiction based on the location of payment and the issuance of legal notices. The court concluded that the Trial Court had erred in its jurisdictional assessment and ordered the restoration of the suit to its original status, directing it to be listed before the Trial Court on May 28, 2026.
This decision reinforces the legal framework governing jurisdiction and serves as a precedent for similar cases where the cause of action spans multiple locations.
Bottom line:-
Territorial jurisdiction of a court under Section 20 of CPC can be established if a part of the cause of action arises within its jurisdiction, even in the absence of an exclusive jurisdiction clause between parties.
Statutory provision(s): Section 20 of the Civil Procedure Code, 1908, Order VII Rule 10 of the Civil Procedure Code, 1908
GAC Logistics Pvt. Ltd. v. ACER Logistics Pvt. Ltd, (Delhi) : Law Finder Doc id # 2902649
