Mere Testing of Goods at CRCL Delhi or Presence of DRI Office Does Not Create Jurisdiction: Delhi HC [Read Order]

Meta: Mere Testing of Goods at CRCL Delhi or Presence of DRI Office Does Not Create Jurisdiction: Delhi HC

In a recent ruling, the Delhi High Court held that the mere location of the Directorate of Revenue Intelligence or the Central Revenue Control Laboratory in Delhi does not, by itself, confer territorial jurisdiction in cases relating to seizure of imported goods, when the import, seizure, storage of goods, and location of the importer are all outside Delhi.

RR Fashion, along with Yashi Fashion and SS Impex, filed writ petitions before the Delhi High Court challenging seizure memos issued by the Directorate of Revenue Intelligence in May 2025. The seizure related to consignments of PVC-coated fabrics, PVC-coated polyester fabric, and PA-coated fabric imported from a Chinese supplier. The imports were routed through a Special Economic Zone in Tamil Nadu, and the goods were warehoused in Tamil Nadu.

The petitioners challenged not only the seizure memos but also the test reports issued by the Central Revenue Control Laboratory, New Delhi. The seizure memos were issued by DRI Delhi but were served on the petitioners in Chennai, where the petitioners were also located.

At the outset, the Union of India raised a preliminary objection regarding territorial jurisdiction. The respondents argued that the entire cause of action arose in Tamil Nadu, since the goods were imported, seized, stored, and served with seizure memos there. It was argued that the Delhi High Court was not the appropriate forum to entertain the petitions.

The petitioners’ counsel argued that the Delhi High Court had jurisdiction because the DRI office that issued the seizure memos was located in Delhi and the goods were tested at CRCL, New Delhi. They argued that these facts constituted a part of the cause of action and were sufficient to invoke the jurisdiction of the Delhi High Court.

The Division Bench comprising Justice PrathibaM. Singh and Justice Renu Bhatnagar examined the issue of territorial jurisdiction in detail. The court observed that the law on the subject had been clearly settled by the Full Bench judgment of the Delhi High Court in Sterling Agro Industries Ltd. v. Union of India.

The court explained that even if a small part of the cause of action arises within the territorial limits of a High Court, the Court must still examine the doctrine of forum conveniens before exercising jurisdiction.

The court pointed out that the goods were imported in Chennai, warehoused in Tamil Nadu, and the seizure memos were served in Chennai. The samples were lifted in Tamil Nadu and sent to CRCL, New Delhi, only for testing.

The court observed that the testing laboratory is a specialised facility that could be located anywhere in the country, and the mere fact that testing took place in Delhi did not create a meaningful cause of action within Delhi.

The court held that the real and substantial cause of action arose in Tamil Nadu and that the Delhi High Court was not the appropriate forum to entertain the petitions.

The Delhi High Court accordingly declined to exercise territorial jurisdiction and dismissed the writ petitions, while granting liberty to the petitioners to approach the appropriate jurisdictional High Court or forum in accordance with law.

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