Case Law Details

Case Name : M/s. Sterling Agro Industries Ltd. Vs. Union of India & Ors. (Delhi High Court)
Appeal Number : W.P.(C) No. 6570/2010
Date of Judgement/Order : 17/03/2011
Related Assessment Year :
Courts : All High Courts (3789) Delhi High Court (1199)

M/s. Sterling Agro Industries Ltd. Vs. Union of India & Ors. (Delhi High Court – Full Bench) The principles that have been culled out by the Full Bench especially the principles, namely, once the court comes to hold that only an insignificant or miniscule part of the cause of action has accrued within the jurisdiction of this Court or that the substantial cause of action has accrued within the jurisdiction of another High Court is inconsequential, the sole cause of action arises because of the order passed by the appellate authority which has the situs in Delhi; the denial of interference would tantamount to failure in exercising its duty / function, and the conclusion that the interpretation placed by it on the facet of dominus litis and the forum conveniens are all encompassing.

The three-judge Bench of the Delhi High Court in this case was considering the issue of whether it would have jurisdiction over a case whose cause of action arose from an order delivered by an appellate authority which is situated in the territorial jurisdiction of the Court. After considering several case laws on the subject, the Court came to the conclusion that the matter would have to be decided by a larger bench of the High Court

HIGH COURT OF DELHI AT NEW DELHI

Date of decision: 17th March, 2011

1. W.P.(C) No. 6570/2010

M/s. Sterling Agro Industries Ltd.  Versus Union of India & Ors.

2. W.P.(C) No. 8399/2009

Jan Chetna Petitioner Versus Ministry of Environment and Forests & Ors.

3. W.P.(C) No. 2447/2010

Manu Jain Petitioner Versus Smt. Neerja Shah & Ors.

4. W.P.(C) No. 2448/2010

M/s Bafna Healthcare Pvt. Ltd. & Ors. Versus Commissioner of Central Excise

5. W.P.(C) No. 6953/2010

The Commissioner of Trade Tax & Anr. Versus M/s. Ricoh India Ltd. & Ors.

JUDGEMENT

DIPAK MISRA, CJ

Regard being had to the commonality of the primary controversy relating to the jurisdiction of the High Court of Delhi being involved in these writ petitions, they were heard analogously and the said issue is adverted to and dealt with by a singular order. For the sake of clarity and convenience, we shall adumbrate the facts in W.P.(C) No.6570/2010 .

2. Expressing doubt with regard to the correctness of the decision in New India Assurance Company Limited v. Union of India and others, AIR 2010 Delhi 43 (FB), a Division Bench thought it appropriate to refer the matter for reconsidered by a Full Bench and, accordingly, a Full Bench was constituted and the matter has been placed before us for the aforesaid purpose.

3. Before we proceed to analyze and appreciate the ratio in New India Assurance Company Limited (supra), we think it apposite to have a brief resume of the necessitous facts in the present writ petition. As is evident, in invocation of the jurisdiction under Article 226 of the Constitution of India, the petitioner has called in question the legal defensibility of the order No.214 215/10-Cus dated 9.7.2010, Annexure-1, passed by the Revisionary Authority, Government of India, Ministry of Finance, Department of Revenue, whereby the revision application preferred by the petitioner has been rejected concurring with the view of the Commissioner (Appeal-I), Customs & Central Excise, Indore whereby the appellate authority has affirmed the order passed by the Assistant Commissioner of Customs ICD, W.P.(C) No.6570/2010 with connected matters Page 3 of 23 Malanpur who had expressed the view that no drawback facility is admissible to the petitioner as it had, by way of procuring duty free inputs under Rule 19(2) of the Central Excise Rules, 2002, contravened clause (ii) of the second proviso to Rule 3(1) of the Central Excise Drawback Rules, 1995 and also condition No.7(F) of the notification No.68/2007-Cus (NT) and condition No.8(F) of the notification No.103/2008-Cus (NT).

4. It is undisputed that the petitioner industry is situate at Industrial Area, Q-5-6, Ghirongi, Dist. Bhind, Malanpur in the State of Madhya Pradesh. The initial order was passed on 30.5.2009 by the Assistant Commissioner of Customs ICD, Malanpur, Dist. Bhind (M.P.). The appellate order was passed by the Commissioner (Appeals)-I, Customs : Central Excise & Service Tax at Indore. The petitioner, as is evident, has knocked at the do ors of this Court for exercise of its inherent jurisdiction solely on the ground that the revisional authority, the Joint Secretary to the Government of India, is in Delhi and, therefore, this Court has the territorial jurisdiction to deal with the lis in question. It is urged in the petition that it is the Joint Secretary who is answerable to justify his order and, hence, this Court can dwell upon the controversy. In the grounds of the writ petition, reliance has been placed on New India Assurance Company Limited (supra).

5. We have heard the learned counsel for the parties and Mr. Atul Nanda, learned counsel as Amicus Curiae.

6. Before we scan the ratio laid down in New India Assurance Company  Limited (supra) by the Full Bench in its exactitude, it is apposite to refer the history of Article 226 of the Constitution of India. Initially, Article 226 of the Constitution of India read thus:

“226. (1) Notwithstanding anything in Article 32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. (2) The power conferred on a High Court by clause (1) shall not be in derogation of the power conferred on the Supreme Court by clause (2) of Article 32.

7. On the basis of the aforesaid constitutional provision, a strict construction was placed and the plea of cause of action or forum conveniens was not given acceptance by the Apex Court in Election Commission India v. Saka Venkata Rao, AIR 1953 SC 210. Their Lordships opined in the said case as follows:

“The rule that cause of action attracts jurisdiction in suits is based on statutory enactment and cannot apply to writs issuable under Article 226 which makes no reference to any cause of action or where it arises but insists on the presence of the person or authority “within the territories” in relation to which the High Court exercises jurisdiction.”

8. In Ltd. Col. Khajoor Singh v. Union of India, AIR 1961 SC 532, a Division Bench of Jammu and Kashmir High Court had upheld the W.P.(C) No.6570/2010 with connected matters Page 5 of 23 preliminary objections raised before it and had held that it had no jurisdiction to issue a writ against the Union of India and to arrive at the said conclusion, the High Court had placed reliance on the decisions in Saka Venkata Rao (supra) and K.S. Rashid and Son v. The Income Tax Investigation Commission etc., AIR 1954 SC 207. It was contended before the Apex Court that the aforesaid two decisions were distinguishable from the factual matrix therein inasmuch as in the earlier cases, the Election Commission and the Income Tax Investigation Commission were statutory bodies which have their location in Delhi and, therefore, the view was expressed in that manner. The majority posed two questions, namely, (i) whether the Government of  India as such can be said to have a location in a particular place, that is, New Delhi, irrespective of the fact that its authority extends over all the States and its officers function throughout India; and (ii) whether there is any scope for introducing the concept of cause of action as the basis of exercise of jurisdiction under Article 226. Their Lordships, while dealing with the first aspect, opined thus:

“It would, therefore, in our opinion be wrong to introduce in Article 226 the concept of the place where the order passed has effect in order to determine the jurisdiction of the High Court which can give relief under Article 226. The introduction of such a concept may give rise to confusion and conflict of jurisdiction.”

9. Thereafter, it has been held as follows:

“There can, therefore, be no escape from the conclusion that these words in Article 226 refer not to the place  where the Government may be functioning but only to the place where the person or authority is either resident or is located. So far therefore as a natural person is concerned, he is within those territories if he resides there permanently or temporarily. So far as an authority (other than a Government) is concerned, it is within the territories if its office is located there. So far as a Government is concerned it is within the territories only if its seat is within those territories.”

10. Thereafter, their Lordships answered the second question in the following terms:

“16. Article 226 as it stands does not refer anywhere to the accrual of cause of action and to the jurisdiction of the High Court depending on the place where the cause of action accrues being within its territorial jurisdiction. Proceedings under Article 226 are not suits; they provide for extraordinary remedies by a special procedure and give powers of correction to the High Court over persons and authorities and these special powers have to be exercised within the limits set for them. These two limitations have already been indicated by us above and one of them is that the person or authority concerned must be within the territories over which the High Court exercises jurisdiction. Is it possible then to overlook this constitutional limitation and say that the High Court can issue a writ against a person or authority even though it may not be within its territories simply because the cause of action has arisen within those territories? It seems to us that it would be going in the face of the express provision in Art. 226 and doing away with an express limitation contained therein if the concept of cause of action were to be introduced in it. Nor do we think that it is right to say that because Art. 300 specifically provides for suits by and against the Government of India, the proceedings under Art. 226 are also covered by Art. 300. It seems to us that Art. 300 which is on the same line as S.176 of the Government of India Act, 1935, dealt with suits as such and proceedings analogous to or consequent upon suits and has no reference to the extraordinary remedies provided by Art. 226 of the Constitution. The concept of cause of action cannot in our opinion be  introduced in Art. 226, for by doing so we shall be doing away with the express provision contained therein which requires that the person or authority to whom the writ is to be issued should be resident in or located within the territories over which the High Court has jurisdiction. It is true that this may result in some inconvenience to person residing far away from New Delhi who are aggrieved by some order of the Government of India as such, and that may be a reason for making a suitable constitutional amendment in Art. 226.”

11. After the said decision came into the field, the Parliament brought the 15th Amendment and inserted Clause (1A) in the Constitution by the 15th Amendment Act, 1963. Clause (1A) read as follows:

“(1A) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.”

12. By the 42nd constitutional amendment, clause (1A) was renumbered as Clause (2) and in the present incarnation, it reads as follows:

“(2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.”

13. From the aforesaid chronological narration of the growth of Article 226  of the Constitution, the concept of cause of action arising wholly or in part came into existence for exercise of power under the said Article.

14. Presently, we shall refer to the decision of the Full Bench in New India Assurance Company Limited (supra) to perceive how it has dealt with the concept of jurisdiction regard being had to the concept of cause of action and the appreciation of the ratio by the Full Bench of various citations referred to by it. It is worth noting that the matter traveled to the Full Bench by reference made by the Division Bench while hearing a letters patent appeal from an order of the single Judge who had dismissed the writ petition summarily on the ground that significant part of the cause of action could not have been said to have arisen within the territorial jurisdiction of this Court and merely because the order under challenge had been passed by the appellate authority located within the territorial jurisdiction, the same could not be sufficient enough for conferment of jurisdiction. The learned single Judge, to arrive at the said conclusion, had placed reliance on the decisions in Ambica Industries v. Commissioner of Central Excise, 2007 (213) ELT 323(SC), Bombay Snuff (P) Ltd. v. Union of India, 2006 (194) ELT 264 (Del), Rajkumar Shivhare v. Assistant Director of Enforcement, Mumbai 154 (2008) DLT 28 and West Coast Ingots (P) Ltd. v. Commissioner of Central Excise, New Delhi, 2007 (209) ELT 343 (Del). The Full Bench referred to the arguments canvassed at the Bar, took note of the legislative history of Article 226 of the Constitution of India and referred to the decisions of the Apex Court in Collector of Customs, Calcutta v. East India  Commercial Co. Ltd., Calcutta and others, AIR 1963 SC 1124, Kishore Rungta and ors. v. Punjab National Bank and ors., 2003 (151) ELT 502 (Bom), Indian Institute of Technology v. P.C. Jain and Ors., 45 (1991) DLT42 and Kusum Ingots & Alloys Ltd. v. Union of India, (2004) 6 SCC 254 and expressed the view that it affirms the view taken in Sri Nasiruddin v. State Transport Appellate Tribunal, (1975) 2 SCC 671 and further placing reliance on the decision in Navinchandra N. Majithia (supra) eventually held thus:

“29. As held in Nasiruddin’s case, even where part of the cause of action arose, it would be open to the litigant, who is the dominus litis to have his forum conveniens. In the present case, since the Appellate Authority is situated at New Delhi, the Delhi High Court has the jurisdiction under Article 226 of the Constitution of India and, therefore, there was no occasion for the learned single Judge to apply the principle of forum conveniens to refuse to exercise the jurisdiction. The principle of forum nonconveniens originated as a principle of international law, concerned with Comity of Nations. A domestic court in which jurisdiction is vested by law otherwise ought not to refuse exercise of jurisdiction for the reason that under the same law some other courts also have jurisdiction. However, the remedy under Article 226 being discretionary, the court may refuse to exercise jurisdiction when jurisdiction has been invoked mala fide. There is no such suggestion in the present case. Nothing has been urged that it is inconvenient to the contesting respondent to contest the writ before this Court. The counsel for the contesting respondent has not disputed the jurisdiction of this Court; his main contention is of possibility of conflict. We do not find any merit in this contention of the counsel for the contesting respondent. First, that is not the case in hand. The contesting respondent is not aggrieved by the order of the appellate authority and has not assailed the same before any High Court. Thus, there is no possibility of conflicting judgments or confusion in the present case. Secondly, even if in a given case such a situation were to arise, the same is bound to be brought to the notice of the  court and the likelihood of both courts proceeding with the writ petition and conflicting judgments is remote. In such a situation, following the principle in Section 10 of the Code of Civil Procedure, the subsequently filed petition may be stayed in view of the earlier petition entailing similar questions or the court may ask the petitioner to approach the High Court where the earlier petition has been filed. In our opinion, it will be inappropriate to refuse to exercise jurisdiction merely on the basis of possibility of conflict of judgments, particularly in view of the clear language of Article 226(2).

30. Having held that this Court has jurisdiction, it cannot be said that only a insignificant or miniscule part of the cause of action has accrued within the jurisdiction of this Court or that the substantial cause of action has accrued within the jurisdiction of the High Court of Andhra Pradesh. In fact, the sole cause of action for the writ petition is the order of the appellate authority and which cause of action has accrued entirely within the jurisdiction of this Court and this Court would be failing in its duty/function if declined to entertain the writ petition on the ground of the contesting respondent being situated within the jurisdiction of the High Court of Andhra Pradesh. Though the petition has been filed under Article 226 of the Constitution, it cannot be lost sight of that jurisdiction in such cases under Article 226 is overlapping with Article 227. Article 227 is clear in this regard. The power of superintendence over Tribunals is vested in the High Court within whose jurisdiction the Tribunal is situated. In that light of the matter also, it cannot be said that only insignificant or miniscule part of the cause of action has accrued within the jurisdiction of this Court. The appellate authority in the present case having passed the order which is impugned in the petition, being situated within the jurisdiction of this Court, even if the cause of action doctrine were to be invoked, substantial part of the cause of action has accrued within the jurisdiction of this Court only. Even the language of the impugned order giving rise to the cause of action in the writ petition, discloses significant cause of action to have accrued within the jurisdiction of this Court. This Court while deciding this writ petition is not required to issue any direction, order or writ to any person outside its jurisdiction. Section 110H of the Insurance Act provides  for appeal to the Central Government, seat whereof is admittedly within the jurisdiction of this Court.

CONCLUSION

31. For the foregoing reasons, we hold that where an order is passed by an appellate authority or a revisional authority, a part of cause of (sic action) arises at that place. When the original authority is situated at one place and the appellate authority is situated at another, a writ petition would be maintainable at both the places. As the order of appellate authority constitutes a part of cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the petitioner is dominus litis to choose his forum, and that since the original order merges into the appellate order, the place where the appellate authority is located is also forum conveniens.”

[Emphasis added]

15. On a keen perusal of the decision of the Full Bench, it is clear as day that it has expressed the view which can be culled out in seriatim as follows:

(i) Once the Court comes to hold that it has jurisdiction, the plea that only an insignificant or miniscule part of the cause of action has accrued within the jurisdiction of the Court or that the substantial cause of action has accrued in another State is inconsequential.

(ii) The sole cause of action emerges when an order by the appellate authority situated within the territorial jurisdiction of Delhi is passed and when the sole cause of action accrues entirely within the jurisdiction of this Court, declining to entertain the writ petition would amount to failure of duty of the Court.

(iii) This Court has jurisdiction under Article 227 since it has the  power of superintendence over tribunals situated within its jurisdiction and judged in that light, it cannot be said that only insignificant or miniscule part of the cause of action has accrued within the jurisdiction of this Court.

(iv) Even if the doctrine of cause of action is adopted or invoked, the substantial part of the cause of action arises because the order under assail is that of the appellate authority / tribunal which is situated in Delhi.

(v) The petitioner is dominus litis to choose the forum. The place where the appellate forum is situated is also the forum conveniens.

(vi) The remedy under Article 226 being discretionary, the Court may refuse to exercise jurisdiction when jurisdiction has been invoked malafide.

16. Presently, we shall proceed to advert to the authorities that have been referred to and relied upon by the Full Bench for the simon pure reason that understanding of the principles exposited therein would enable us to appreciate the enunciation of the law by the Full Bench.

17. In East India Commercial Co. Ltd. (supra), the Apex Court had opined that on principle when once an order of an original authority is taken in appeal to the appellate authority which is located beyond the territorial jurisdiction of the High Court, it is the order of the latter authority which is the operative order after the appeal is disposed of; and as the High Court  cannot issue a writ against the appellate authority for want of territorial jurisdiction, it would not be open to it to issue a writ to the original authority which may be within its territorial jurisdiction once the appeal is disposed of, though it may be that the appellate authority has merely confirmed the order of the original authority and dismissed the appeal. The Constitution Bench  opined that it is the appellate order which is the operative order after the appeal is disposed of as the order on the principle as a decree of the lower court merges in the decree of the appellate court whether there is reversal or modification or mere confirmation.

18. It is worth noting that the aforesaid decision was rendered on 30.4.1962 prior to the 15th Amendment to the Constitution of India had come into force.

19. In the case of Sri Nasiruddin (supra), it has been held thus:

” the expression “cause of action” in an application under Article 226 would be as the expression is understood and if the cause of action arose because of the appellate order or the revisional order which came to be passed at Lucknow then Lucknow would have jurisdiction though the original order was passed at a place outside the areas in Oudh. It may be that the original order was in favor of the person applying for a writ. In such case an adverse appellate order might be the cause of action. The expression “cause of action” is well-known. If the cause of action arises wholly or in part at a place within the specified Oudh areas, the Lucknow Bench will have jurisdiction. If the cause of action arises wholly within the specified Oudh areas, it is indisputable that the Lucknow Bench would have exclusive jurisdiction in such a matter. If the cause of action arises in part within the specified areas in Oudh it would be open to the litigant who is the dominus litis to have his forum conveniens. The litigant has the right to go to a Court where part of his cause of action arises. In such cases, it is incorrect to say that the litigant chooses any particular Court. The choice is by reason of the jurisdiction of the Court being attracted by  part of cause of action arising within the jurisdiction of the Court “

20. In Kishore Rungta and ors. (supra), a writ petition was filed challenging the order passed by the Debt Recovery Appellate Tribunal, Mumbai dismissing an order of the Debt Recovery Appellate Tribunal, Jaipur. A preliminary objection was raised to the jurisdiction of the High Court of Bombay. The Division Bench referred to the decisions in East India Commercial Co. Ltd., Calcutta and others (supra), Damomal Kausomal Raisinghani v. Union of India, AIR 1967 Bom 355, Navinchandra N. Majithia v. State of Maharashtra, AIR 2000 SC 2966 and Sita Ram Singhania v. Bank of Tokyo-Mitsubishi Ltd. and ors, AIR 2000 SC 2180 and came to opine thus:

“16. Mr. Tulzapurkar lastly submitted that a part of the cause of action having arisen in Mumbai, this Court has jurisdiction to entertain the Petition in view of Article 226(2) of the Constitution. We are in agreement with Mr. Tulzapurkar. The 15th amendment to the Constitution which introduced clause 2 in Article 226 was intended to widen the ambit of the area for reaching the writs issued by the High Court. Clause 2 of Article 226 is as under :

“(2) The power conferred by clause (1) to issue directions, orders or writs to any Government authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause, of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.”

In this connection Mr. Tulzapurkar relied upon the judgment of the Supreme Court in the case of Navinchandra N. Majithia v. State of Maharashtra, The  Supreme Court held that the power conferred on the High Courts under Article 226 could as well be exercised by any High Court exercising Jurisdiction in relation to the territories within which the cause of action, wholly or in part arises and it is no matter that the seat of the Authority concerned is outside the territorial limits of the jurisdiction of that High Court. The Supreme Court further held that the amendment was aimed at widening the width of the area for reaching the writs issued by different High Courts. The Supreme Court also held that the words “cause of action wholly or in part arises” seem to have been lifted from Section 20 of the Code of Civil Procedure, which section also deals with the jurisdictional aspect of the Courts.”

21. In Alchemist Ltd. and Anr. v. State Bank of Sikkim and ors., (2007) 11 SCC 335, after referring to the decisions in A.B.C. Laminart (P) Ltd. v. A.P. Agencies, AIR 1989 SC 1239, Union of India v. Oswal Woollen Mills Ltd., (1984) 2 SCC 646, State of Rajasthan v. Swaika Properties, AIR 1985 SC 1289, Oil and Natural Gas Commission v. Utpal Kumar Basu and others, (1994) 4 SCC 711, CBI, Anti-Corruption Branch v. Narayan Diwakar, (1999) 4 SCC 656, Union of India v. Adani Exports Ltd., (2002) 1 SCC 567, Kusum Ingots & Alloys Ltd. (supra) and National Textile Corpn.   Ltd. v. Haribox Swalram, (2004) 9 SCC 786, the Bench expressed the view as follows:

“37. From the aforesaid discussion and keeping in view the ratio laid down in a catena of decisions by this Court, it is clear that for the purpose of deciding whether facts averred by the appellant- petitioner would or would not constitute a part of cause of action, one has to consider whether such fact constitutes a material, essential, or integral part of the cause of action. It is no doubt true that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless it must be a “part of cause of action”, nothing less than that.

38. In the present case, the facts which have been pleaded by the Appellant Company, in our judgment, cannot be said to be essential, integral or material facts so as to constitute a part of “cause of action” within the meaning of Article 226(2) of the Constitution. The High Court, in our opinion, therefore, was not wrong in dismissing the petition.”

22. Be it noted that we have been commended at the Bar to certain authorities which have dealt with the facet of cause of action. We think it apposite to notice a few of them. In Utpal Kumar Basu and others (supra), a three-Judge Bench of the Apex Court, while dealing with the territorial jurisdiction in the backdrop of Article 226(2), has opined thus:

“5. Clause (1) of Article 226 begins with a non- obstante clause-notwithstanding anything in Article 32 – and provides that every High Court shall have power “throughout the territories in relation to which it exercises jurisdiction”, to issue to any person or authority, including in appropriate cases, any Government, “within those territories” directions, orders or writs, for the enforcement of any of the rights conferred by Part III or for any other purpose. Under clause (2) of Article 226 the High court may exercise its power conferred by clause (1) if the cause of action, wholly or in part, had arisen within the territory over which it exercises jurisdiction, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories. On a plain reading of the aforesaid two clauses of Article 226 of the Constitution it becomes clear that a High Court can exercise the power to issue directions, orders or writs for the enforcement of any of the fundamental rights conferred by Part III of the Constitution or for any other purpose if the cause of action, wholly or in part, had arisen within the territories in relation to which it exercises jurisdiction, notwithstanding that the seat of the Government or authority or the residence of the person against whom the direction, order or writ is issued is not within the said territories. In order to confer jurisdiction on the High Court of Calcutta, NICCO must show that at least a part of the cause of action had arisen within the territorial  jurisdiction of that Court. That is at best its case in the writ petition.

6. It is well settled that the expression “cause of action” means that bundle of facts which the petitioner must prove, if traversed, to entitle him to a judgment in his favour by the Court. In Chand Kour v. Partab Singh ILR (1889) 16 Cal 98, 102 Lord Watson said:

“…the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favor.”

Therefore, in determining the objection of lack of territorial jurisdiction the court must take all the facts pleaded in support of the cause of action into consideration albeit without embarking upon an inquiry as to the correctness or otherwise of the said facts. In other words the question whether a High Court has territorial jurisdiction to entertain a writ petition must be answered on the basis of the averments made in the petition, the truth or otherwise whereof being immaterial. To put it differently, the question of territorial jurisdiction must be decided on the facts pleaded in the petition. Therefore, the question whether in the instant case the Calcutta High Court had jurisdiction to entertain and decide the Writ Petition in question even on the facts alleged must depend upon whether the averments made in paragraphs 5, 7, 18, 22, 26 and 43 are sufficient in law to establish that a part of the cause of action had arisen within the jurisdiction of the Calcutta High Court.”

23. In Kusum Ingots & Alloys Ltd. (supra), the Apex Court posed the question whether the seat of Parliament or the legislature of a State would be a relevant factor for determining the territorial jurisdiction of a High Court to entertain a writ petition under Article 226 of the Constitution of India. Their Lordships not only referred to the clause (2) of Article 226 of the Constitution  of India but also to the facet of cause of action as have been stated in Chand Kour v. Partab Singh ILR (1887-88) 15 IA 156, Utpal Kumar Basu and others (supra), Swaika Properties (supra), Aligarh Muslim University v. Vinay Engg. Enterprises (P) Ltd., (1994) 4 SCC 710, Union of India v. Adani Exports Ltd., (2002) 1 SCC 567 and Haribox Swalram (supra) and  came to hold as follows:

“19. Passing of a legislation by itself in our opinion does not confer any such right to file a writ petition unless a cause of action arises therefor.

20. A distinction between a legislation and executive action should be borne in mind while determining the said question.

21. A parliamentary legislation when receives the assent of the President of India and is published in the Official Gazette, unless specifically excluded, will apply to the entire territory of India. If passing of a legislation gives rise to a cause of action, a writ petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the Act or some of them which were implemented shall give rise to civil or evil consequences to the petitioner. A writ court, it is well settled would not determine a constitutional question in a vacuum.

22. The court must have the requisite territorial jurisdiction. An order passed on a writ petition questioning the constitutionality of a parliamentary Act, whether interim or final keeping in view the provisions contained in clause (2) of Article 226 of the Constitution of India, will have effect throughout the territory of India subject of course to the applicability of the Act.”

24. Thereafter, in paragraphs 27 and 29, their Lordships stated thus:

“27. When an order, however, is passed by a court or tribunal or an executive authority whether under provisions of a statute or otherwise, a part of cause of action arises at that place. Even in a given case, when the  original authority is constituted at one place and the appellate authority is constituted at another, a writ petition would be maintainable at both the places. In other words as order of the appellate authority constitutes a part of cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the order of the appellate authority is also required to be set aside and as the order of the original authority merges with that of the appellate authority.

X X X X

29. In view of clause (2) of Article 226 of the Constitution of India, now if a part of cause of action arises outside the jurisdiction of the High Court, it would have jurisdiction to issue a writ. The decision in Khajoor Singh (supra) has, thus, no application.”

25. After so stating, in paragraph 30, their Lordships held thus:

“30. We must, however, remind ourselves that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. [See Bhagat Singh Bugga v. Dewan Jagbir Sawhany, AIR 1941 Cal 670, Madanlal Jalan v. Madanlal, AIR 1949 Cal 495, Bharat Coking Coal Limited v. Jharia Talkies & Cold Storage (P) Ltd., 1997 CWN 122, S.S. Jain & Co. v. Union of India, (1994) 1 CHN 445 and New Horizon Ltd. v. Union of India, AIR 1994 Del 126.”

[Emphasis supplied]

26. In Ambica Industries (supra), their Lordships have expressed thus:

“40. Although in view of Section 141 of the Code of Civil Procedure the provisions thereof would not apply to writ proceedings, the phraseology used in Section 20(c) of the Code of Civil Procedure and clause (2) of Article 226, being in pari materia, the decisions of this Court rendered on interpretation of Section 20(c) CPC shall apply to the writ proceedings also. Before proceeding to discuss the matter further it may be pointed out that the entire bundle of facts pleaded need not constitute a cause of action, as  what is necessary to be proved, before the petitioner can obtain a decree, is material facts. The expression material facts is also known as integral facts.

41. Keeping in view the expression “cause of action” used in Clause (2) of Article 226 of the Constitution of India, indisputably even if a small fraction thereof accrues within the jurisdiction of the Court, the Court will have jurisdiction in the matter though the doctrine of forum conveniens may also have to be considered.”

[Emphasis added]

27. It is worth noting that after referring to paragraphs 12, 13 and 14 of the said decision, the Full Bench has expressed the view in the following terms:

“26. The Court made it clear that in a case of this nature, the doctrine of cause of action may not be invoked. The tests which are relevant to petitions under Articles 226 and 227 cannot be applied when the appellate court exercises its jurisdiction over a tribunal situated in more than one State. In such a situation, the High Court situated in the State where the first court is located should be considered to be the appropriate appellate authority. The Code of Civil Procedure did not contemplate such a situation. It was further observed that in Nasiruddins case (supra) and in Kusum Ingots case (supra), the Court was not dealing with a question of this nature. Therefore, the same are not authorities for the proposition that the High Court, which is situated at the same place as the situs of the tribunal, alone will have jurisdiction. If the cause of action doctrine is given effect to, invariably more than one High Court may have jurisdiction, which is not contemplated.

27. In the light of the above discussion, it is clear that the decision of the Supreme Court in Ambica Industries and also of this Court in Bombay Snuff (P) Ltd. have no bearing in deciding the territorial jurisdiction of the High Court under Article 226(1) and (2) of the Constitution of India. The distinction between statutory appeals to the High Court and petitions under Article 226 has been carved out by the Apex Court itself. The law laid down with respect to statutory appeals in Ambica Industries case is thus not applicable to writ petitions arising out of orders of Tribunals.”

28. The two aspects which immediately emerge to the surface on an apposite understanding of paragraph 30 in Kusum Ingots & Alloys Ltd. (supra) and paragraph 41 of Ambica Industries (supra) are that a small part of cause of action may confer the territorial jurisdiction on the High Court but the same is not to be considered as the determining factor to compel the High Court to decide the case and the High Court may refuse to exercise the discretionary jurisdiction by invoking the doctrine of forum conveniens. Emphasis has been laid on the concept of forum conveniens and the miniscule part of the cause of action. Similarly, in Alchemist Ltd. and Anr. (supra), while dealing with the facet of part of cause of action, it has been observed that the court is to consider whether such fact constitutes a material, essential, or integral part of the cause of action. In the said case, it has been opined that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the petition, nevertheless, it may and must be a “part of cause of action”, nothing less than that. The facts pleaded must show the essential, integral or material facts so as to constitute a part of “cause of action” within the meaning of Article 226(2) of the Constitution of India.

29. Analyzed on the aforesaid backdrop, the principles that have been  culled out by the Full Bench especially the principles, namely, once the court comes to hold that only an insignificant or miniscule part of the cause of action has accrued within the jurisdiction of this Court or that the substantial cause of action has accrued within the jurisdiction of another High Court is  inconsequential, the sole cause of action arises because of the order passed by the appellate authority which has the situs in Delhi; the denial of interference would tantamount to failure in exercising its duty / function, and the conclusion that the interpretation placed by it on the facet of dominus litis and the forum conveniens are all encompassing.

30. In our considered view, the statement of law with regard to cause of action, sole cause of action, forum conveniens and the imposition of limitation for exercise of jurisdiction under Article 226 and discretionary exercise of power have been too broadly stated in all encompassing manner and, therefore, we are of the view that the said decision requires to be reconsidered by a Larger Bench.

31. Let the matter be listed before the Honorable Chief Justice for constitution of appropriate Larger Bench.

CHIEF JUSTICE

VIKRAMAJIT SEN, J.

MANMOHAN, J.

MARCH 17, 2011

More Under Corporate Law

Posted Under

Category : Corporate Law (3528)
Type : Judiciary (10266)
Tags : high court judgments (4094)

Leave a Reply

Your email address will not be published. Required fields are marked *