Eldyne Electro Systems Pvt. Ltd. & ... vs Union Of India & Ors
2021 Latest Caselaw 4436 Cal

31.08.2021
 Ct. No.13
 Sl. No.110
  pk/akd
                                      W.P.A. 13026 of 2021          [via video conference]

                  [Eldyne Electro Systems Pvt. Ltd. & Anr. -Vs- Union of India & Ors.]



                            Mr. Anindya Kumar Mitra .. Sr. Advocate
                            Mr. Abhrajit Mitra .. Sr. Advocate
                            Mr. Jishnu Chowdhury
                            Mr. Soumya Roy Chowdhury
                            Mr. Arnab Sardar
                            Mr. Anurag Sardar
                                                  ... ... for the petitioners

                            Mr. Deepak Kumar Singh
                            Mrs. Saptamita Pramanick
                                               ... ... for the respondents

The writ petitioners are aggrieved by an order dated 17th

August, 2021 passed by the Executive Director/Signal-I RDSO,

Lucknow, temporarily delisting the writ petitioner no.1 as an

approved vendor, for both Multi Section Digital Axle Counter

and Single Section Digital Axle Counter.

The writ petitioner no.1 was the approved vendor of the

Railways for the aforesaid two components since the year 1999.

Pursuant to a show-cause notice dated 21st April, 2021,

the writ petitioner no.1 was asked to explain the relationship

with their original equipment manufacturer one M/s. Thales

Transportation Systems, GmbH of Germany.

It was further stipulated that in the absence of satisfactory

reply, the petitioner no.1 would be removed from the list of

approved suppliers.

The writ petitioners replied vide communication dated 21st

May, 2021. The original equipment manufacturer, M/s. Thales

confirmed and reiterated their continuing relationship of supply,

design and technology transfer with the writ petitioners of the

aforesaid two components.

The writ petitioners challenged the show-cause before

this Court in W.P.A. No. 12476 of 2021. By an order dated 13th

August, 2021, the Court dismissed the writ application on the

ground that it was premature as no final order had been passed

by the RDSO Railways, at Lucknow.

On 17th August, 2021, the RDSO, Lucknow (Railways)

temporarily delisted the writ petitioner no.1 with the following

order:-

"Competent authority has approved that M/s. Eldyne Electro Systems Pvt. Ltd., P-21, Old Ballygunge Road, Kolkata - 700 019 is temporarily delisted on account of their failure to establish clear-cut correlation of material outsource to Jabil Circuit India Private Limited Pune and material used in product MSDAC/SSDAC of M/s. Eldyne, Kolkata, from RDSO's "List of vendors for developmental orders" for both Multi Section Digital Axle Counter and Single Section Digital Axle Counter with immediate effect till such time M/s. Eldyne submit documents, if any to prove the same.

The firms can appeal to Spl. DG/VD within 60 days of communication of this order."

It prima facie appears to this Court that the ground for

temporary delistment of the petitioner no.1 was the failure to

establish correlation of material outsource to one M/s. Jabil

Circuit India Private Limited, Pune was not the subject matter of

the show-cause notice, dated 21st April, 2021.

This Court had asked the writ petitioners to explain as to

why the territorial jurisdiction of the Calcutta High Court has

been invoked when the impugned order and all communications

leading to the impugned order was issued by the RDSO at

Lucknow.

Mr. Anindya Kumar Mitra, learned Senior Advocate has

relied upon judgments of this Court, Madras High Court and the

Hon'ble Supreme Court of India. They are Community Action

for Rural Development Vs. Secretary, Ministry of Women

reported in 2015-3-LW 90 (SB) Madras, Panwar Vs. Lalit Kala

Accademy reported in AIR 2011 Cal 167, SAC Allied

Products Vs. Commissioner of Central Excise reported in

(2005) 7 SCC 159.

This Court has considered the decision of Alchemist Vs.

State Bank of Sikkim reported in AIR 2007 SC 1812.

The demurrer raised by Court needs to be addressed first

and hence, Mr. Anindya Kumar Mitra, learned senior counsel

addressed first.

Mr. Mitra first relied upon paragraph 114 of the writ

petition. About six events and/or facts have been referred to

indicate that a part of the cause of action of the petitioner no. 1

has arisen within the jurisdiction of this High Court. They are as

follows.

That the Technical inspection and investigation in

connection with the show cause was held on 19th July, 2021.

Such inspection has nothing to do with the issues raised in the

show cause or the impugned order.

That the entire work force of the petitioner no.1

comprising of 200 employees who are within the jurisdiction

would be effected by the impugned order. The interest of the

workers is not urged in the writ application. The writ petitioner

no.1 is not espousing the cause of the workers. Indeed if the

said workers are affected, they would have approached this

court against the respondents.

The writ petitioner no.1 availed finance from the ICICI

Bank, R. N. Mukherjee Road Branch and the Kotak Mahindra

Bank at 14, Park Street, Kolkata. The finances of the writ

petitioner no.1 are in no way connected with the impugned

orders.

That the agreement between the writ petitioner no.1 and

his original equipment manufacturers, M/s. Thales

Transportation Systems was executed at Calcutta. This Court

does not see any relevance of such execution at Kolkata to the

impugned orders. The same may have been relevant in a

dispute between the petitioner no.1 and the original equipment

manufacturer. The same has little or nothing to do with the

relationship of the writ petitioner no.1 with the RDSO, Lucknow.

Now, coming to the part which infact could have attracted

the jurisdiction of this court i.e. receipt of the impugned orders at

Calcutta, Mr. Mitra, learned senior counsel for the petitioners

would rely upon the decision of the Supreme Court in the case of

State of Punjab vs. Amar Singh Harika reported in AIR 1966

SC 1313. In the said case the dismissal from service of the

respondent therein by the Chief Secretary, the then Pepsu

Government was being tested. The order was passed on 3rd

June, 1949 and not communicated until 2nd January, 1953. It

was held that an order of dismissal takes effect only when it is

communicated to the person affected i.e. in the instant case, the

employee concerned.

Mr. Mitra thereafter relied upon the decision of the

Supreme Court in the case of Dulu Devi vs. State of Assam &

Ors. reported in (2016) 1 SCC 622. At paragraph 16, the State

of Punjab vs. Amar Singh Harika (Supra) was reiterated and

relied upon and for the same reason it was held that the order of

dismissal of the appellant therein did not take effect until

communication and hence the employee was deemed to be

continuing in service until the order was communicated to her.

The coming into effect of the impugned decisions or

timing thereof is not the subject matter of the instant case. The

said decisions, therefore, also cannot come to the aid of the writ

petitioner no.1.

The next decision relied upon by the counsel for the

petitioners is that of a Single Bench of this court in the case of

Krishan Prasad Singhi & Ors. vs. Tax Recovery Officer-II

(Income Tax) & Ors. reported in (1996) 2 CAL LT 115. In the

said case, the coordinate Bench of this court was concerned

with the transfer of a file of assessment from Jaipur to Kolkata.

The shares that were attached were at Calcutta. The order of

attachment was passed at Calcutta. The recovery proceedings

were initiated by the authorities in Calcutta. The pendency of

the reference at Rajasthan therefore could not give exclusive

jurisdiction to Rajasthan. An integral part of the cause of action

of the petitioner in fact arose in Calcutta. The said decision is

therefore distinguishable on facts.

The decisions of Utpal Kumar Bose vs. ONGC reported

in (1994) 4 SCC 711 and the decision of the Swaika Properties

reported in 1985 3 SCR 598 must also be viewed in the facts of

that case. In both the said decisions, a small part of the cause of

action i.e. in the ONGC case (Supra) the submission of the

tender from Kolkata and receipt of notice of rejection at Kolkata

were held to be a part of the cause of action since after the

amendment to Article 226 sub-clause (2), indeed a part of the

cause of action occurring in the territory, would definitely attract

the jurisdiction of a High Court.

What is really fundamental and requires to be understood

is the meaning and scope of the expression "part of the cause of

action" which shall be addressed shortly.

The next decision relied upon by Mr. Mitra, learned senior

counsel for the petitioners is the case of Serajuddin & Co. vs.

The State of Orissa & Ors. reported in AIR 1971 CAL 414. In

the said case, an order granting mineral concession to exploit

mines at Keonjhar, Orissa was the subject matter. The allotment

was cancelled because the petitioner failed to execute lease in

time. The mines were located in Orissa. The allotment was made

in Orissa. The lease was to have been executed at Keonjhar in

Orissa. The only part of the cause of action that a coordinate

Bench had accepted to attract jurisdiction of this court is that the

writ petitioner was located in Calcutta. This Court is with utmost

respect to the Bench, unable to accept the said decision since

the only part of the cause of action being the writ petitioner's

office at Bentick Street, Kolkata could not have attracted the

territorial jurisdiction of this court. It would have been extremely

unfair and improper to drag the Mines and Minerals Authority in

Orissa to Calcutta High Court and when the mines are located in

Orissa, merely because the petitioner was located in Calcutta.

The other decision that was referred to is also a decision

of the Single Bench of the Madras High Court reported in 2015 3

LW 90 (Community Action for Rural Development (CARD)

vs. The Secretary, Ministry of Women & Child Development

& Chairman of Rashtriya Kosh is also not applicable.

However, the decision of a Single Bench of this Court in

the case of Pankaj Panwar vs. Lalit Kala Akademi reported in

AIR 2015 CAL 67 needs to be considered. The subject matter of

the said case was withdrawal of a national award by the Lalit

Kala Academy in view of certain acts and omission alleged

against the writ petitioner therein. The writ petitioner therein

approached this court challenging the unilateral withdrawal of

such award claiming that his image and reputation in the

estimation of persons knowing him in Santiniketan in West

Bengal in particular has been lowered and irreparable loss and

prejudice has been caused to him. The newspaper publications

having wide circulation throughout West Bengal were also part

of the cause of action. When the issue of jurisdiction was raised,

this coordinate Bench at paragraph 48 has stated as follows :-

48. To hold that service of an order or a notice on the addressee would never give rise to a cause of action to move the Court within whose territorial limits the order/notice is received, may not be reasonably sound. If service of an order or a notice is an event of substance i.e. an event which is a material, essential or integral part of the lis connected with the action that is impugned in a writ petition, there is no plausible reason as to why the same should not be construed as constituting a material, essential or integral part of the cause of action. The plea of affectation of right or interest by reason of such order/notice being served, if based on a substantial fact forming a part of the bundle of facts constituting the cause of action, would indeed be relevant for determination of the question as to whether the writ petition ought to be entertained or not. Here, the decision to withdraw the award and the plaque from the petitioner was never communicated to him prior to the public notice being published in the print media and it is such publication, the only one in the series to make the public aware of the penalty imposed on the petitioner, that vitally affects the reputation and respect that he has earned over the years. Such affectation having taken place in Santiniketan, where the petitioner alleges he read the public notice for the first time and derived knowledge of the impugned decision of the Akademi (there being no material at least at this stage that the decision was formally served on the petitioner in any territory beyond West Bengal prior to the public notice being published), it is an integral, essential and material part of the lis constituting the cause of action to approach the Court and conferring jurisdiction on this Court to entertain the writ petition. the fact that the petitioners before the Allahabad High Court withdrew their writ petitions with liberty to approach the appropriate High Court is absolutely irrelevant and immaterial for a decision on the preliminary objection to the maintainability of this writ petition.

The Single Bench found that this Court had jurisdiction to

entertain the writ petition, since one of the primary grievances

complained by the writ petitioner therein was damage to his

reputation amongst his friends and peers in Santiniketan in West

Bengal.

As indicated earlier the true scope and meaning of the

expression 'part of the cause of action' must be addressed. This

question came up before the Hon'ble Supreme Court in the case

of Alchemist vs. State Bank of Sikkim reported in AIR 2007

SC 1812. In the said decision at paragraphs 29, 35, 36 & 37, the

Supreme Court has clearly laid down that a single instance might

not by itself form or constitute a part of the cause of action. The

concept of a part was explained and clarified to mean a

substantial and integral part. The said paragraphs are set out

below:

29. In ONGC v. Utpal Kumar Basu [(1994) 4 SCC 711 : JT (1994) 6 SC 1] this Court held that when the Head Office of ONGC was not located at Calcutta, nor the execution of contract work was to be carried out in West Bengal, territorial jurisdiction cannot be conferred on the High Court of Calcutta on the ground that an advertisement had appeared in a daily (The Times of India), published from Calcutta, or the petitioner submitted his bid from Calcutta, or subsequent representations were made from Calcutta, or fax message as to the final decision taken by ONGC was received at Calcutta inasmuch as neither of them would constitute an "integral part" of the cause of action so as to confer territorial jurisdiction on the High Court of Calcutta under Article 226(2) of the Constitution.

35. Negativing the contention and upholding the order passed by the High Court, this Court ruled that passing of a legislation by itself does not confer any such right to file a writ petition in any court unless a cause of action arises therefor. The Court stated: (Kusum Ingots case [(2004) 6 SCC 254 : JT (2004) Supp 1 SC 475] , SCC p. 261, para 20) "20. A distinction between a legislation and executive action should be borne in mind while determining the said question." Referring to ONGC [(1994) 4 SCC 711 : JT (1994) 6 SC 1] , it was held that all necessary facts must form an "integral part" of the cause of action. The fact which is neither material nor essential nor integral part of the cause of action would not constitute a part of cause of action within the meaning of Clause (2) of Article 226 of the Constitution.

36. In National Textile Corpn. Ltd. v. Haribox Swalram [(2004) 9 SCC 786 : JT (2004) 4 SC 508] referring to earlier cases, this Court stated that: (SCC p. 797, para 12.1)

"12.1 ... the mere fact that the writ petitioner carries on business at Calcutta or that the reply to the correspondence made by it was received at Calcutta is not an integral part of the cause of action and, therefore, the Calcutta High Court had no jurisdiction to entertain the writ petition and the view to the contrary taken by the Division Bench cannot be sustained."

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."

The said decision follows the line of other decisions in the

case of National Textile Corporation Ltd. v. Haribox Swalram

reported in (2004) 9 SCC 786, Kusum Ingots & Alloy Ltd. v.

Union Of India, reported in (2004) 6 SCC 254, Union of India v.

Adani Exports Ltd. reported in (2002) 1 SCC 567, CBI, Anti

Corruption Branch v. Narayan Diwakar (1999) 4 SCC 656,

ONGC v. Utpal Kumar Basu, reported in (1994) 4 SCC 711,

A.B.C. Laminart (P) Ltd. v. A.P. Agencies, reported in (1989) 2

SCC 163, State of Rajasthan v. Swaika Properties, reported in

(1985) 3 SCC 217, Union of India v. Oswal Wollen Mills Ltd.

reported in (1984) 2 SCC 646, Lt. Col. Khajoor Singh v. Union of

India, reported in AIR 1961 SC 532, Election Commission v.

Saka Venkata Rao, reported in AIR 1953 SC 210 and Cooke v.

Gill, reported in (1873) 8 CP 107 and is good law even today.

In the instant case, it is seen that the writ petitioner has

only received the impugned orders at its office in Calcutta. The

supply of equipment was being made to the RDSO, Lucknow.

The contract that the petitioner was entered into for supply at

Lucknow or in any event outside the jurisdiction of this court.

The impugned orders have also been issued at Lucknow.

The inclusion of the other respondents having their offices

at Calcutta is only for the purpose of attracting jurisdiction. Such

respondents do not have, in anything to do with the impugned

order which is passed by the RDSO, Lucknow.

The payment, if any, towards supply made by the

petitioner was at Lucknow.

The mere fact that the petitioner is located at Calcutta or

that he has obtained finances from banks and financial

institutions herein at Calcutta cannot be part of the bundle of

facts that would be necessary and essential to prove or to

canvass for the purpose of challenging the impugned orders.

The argument between the writ petitioner and the original

equipment manufacturer namely, M/s. Thales Transportation

Systems having occurred at Calcutta is also not part of the

petitioner's cause of action. It is only the text of such agreement

that the RDSO, Lucknow, may be interested in. The place of

execution of agreement can have little or nothing to do with the

impugned order.

A substantial and integral and hence the principal cause

of action of the petitioners occurred at Lucknow outside the

jurisdiction of this Court.

In those circumstances, while the writ petitioner, may

have an arguable case on merits, this Court is of the clear and

unequivocal view that the writ petition cannot be entertained by

this court for want of territorial jurisdiction.

The writ petition must fail and is hereby dismissed.

The dismissal of the instant writ petition shall not prevent

the writ petitioner from challenging the impugned orders, before

a court having appropriate territorial jurisdiction over the cause of

action and/or the respondents.

Since in the interim order dated 24th August, 2021, the

writ petitioner was allowed to submit tender in respect of a

particular NIT issued by the respondent namely, RDSO,

Lucknow, such bid of the writ petitioner, if already submitted,

shall remain valid only for a period of seven days from date.

There shall be no order as to costs.

All parties are to act on a server copy of this order duly

downloaded from the official website of this court.

(Rajasekhar Mantha, J.)