SC slams forum shopping, transfers commercial lawsuit from Delhi HC to Madras HC

New Delhi, The Supreme Court has strongly deprecated the practice of "forum shopping", observing that the mere existence of territorial jurisdiction in multiple courts cannot justify choosing a particular forum or perpetuate notions of hierarchy among high courts.

Allowing a transfer petition filed by Sai Maghalakshmi Traders and others, a bench of Justices B V Nagarathna and R Mahadevan transferred a commercial suit pending before the Delhi High Court to the Madras High Court.

The bench noted that the defendants, Sai Maghalakshmi Traders, were based in Chennai, Tamil Nadu, while the plaintiff, M/s Sri Lakshmi Srinivasa Agro Foods and others, had their principal place of business in Nelmangala, Bengaluru Rural District in Karnataka.

"We fail to understand as to why the respondents/plaintiffs have filed the suit before the Delhi High Court when both the parties are residing in the neighbouring states of Karnataka and Tamil Nadu and the Madras High Court also has original jurisdiction to entertain the suit," the bench said in its October 28 order.

It observed that the need to transfer the proceedings was not driven merely by considerations of convenience.

It could be true that various high courts may have the jurisdiction to hear a particular case, especially in the case of intellectual property disputes, the court said, adding that "any perception of a particular high court being better suited to hearing a particular type of dispute is entirely misguided and erroneous."

"The mere existence of territorial jurisdiction in various courts cannot on its own become justification for forum shopping and cannot result in the perpetuation of notions of a hierarchy among the high courts of this country," it said.

The bench also highlighted the fact that ordinarily, in a case whose respective parties, genesis and factual locus are based in a particular location, the courts of the said location would be most suited to understanding the nuances of that case.

The lawsuit was instituted by M/s Sri Lakshmi Srinivasa Agro Foods and another against Sai Maghalakshmi Traders and others before the Delhi High Court.

The top court allowed the transfer petition and directed that the lawsuit be sent from the Delhi High Court to the Madras High Court, where the respondents can appear either in person or through video conferencing.

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