Calcutta High Court (Appellete Side)
Eldyne Electro Systems Pvt. Ltd. & ... vs Union Of India & Ors on 14 December, 2021
1
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
APPELLATE SIDE
Present:-
THE HON'BLE JUSTICE SubrataTalukdar.
THE HON'BLE JUSTICE Kesang Doma Bhutia.
MAT No. 927 of 2021
With
IA No. C.A.N. 1 of 2021
Eldyne Electro Systems Pvt. Ltd. & Anr.
VS.
Union of India & Ors.
For the Appellants : Mr. Anindya Mitra, Sr. Advocate
Mr. Abhrajit Mitra, Sr. Advocate
Mr. Jisnu Chowdhury
Mr. Soumya Roy Chowdhury
Mr. Arnab Sarkat
Mr. Anurag Sardar
For the Respondents : Mr. Deepak Kumar Singh
Mr. Saptamita Pramanick
Hearing concluded on : 22.09.2021
Judgment on : 14.12.2021
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Kesang Doma Bhutia, J. - This appeal is directed against the
order of dismissal of W.P.A. No. 13026 of 2021, passed by the Hon'ble
Single Bench, for want of jurisdiction on 31.08.2021.
Facts
relevant for the purpose of disposal of the present appeal
in gist are that, Appellant No. 1 is an approved listed vendor of Indian
Railways in respect of Multi Section Digital Axle Counter and Single
Section Digital Axle Counter since long.
The Appellant, in co-operation with one ALCATAL Germany and
later with THALES Germany, used to supply the above equipment to
Indian Railways for evaluating Software Embedded Electronic
Systems and New/Imported Technology of Products for Railway
Signaling, Policy for Cross Acceptance/ Approval was introduced by
the Indian Railways in the year 2003, for the purpose of overall
safety of the system, for proper installation, testing, commissioning,
operation and maintenance. RDSO, Lucknow has been entrusted
with the responsibility for giving safety clearance certificate to the
approved listed vendors on their fulfilling the terms, requirements
and conditions laid down in the cross approval policy.
The RDSO introduced fresh procedure for cross approval of
software Embedded Electronic System and new/Improved
Technology Products for Railway Signaling with effect from
18.12.2020 and issued a letter dated 04.03.2021 to its listed vendors
including Appellant No 1 to furnish:
a) Execution of a M.O.U between the Original Equipment
Manufacturer or his authorized Indian subsidiary or his
Authorized Indian Partner.
b) Subsequent conversion of M.O.U into a proper agreement.
c) Submission of relevant pages of the agreement by 15.03.2021.
The Appellants/Writ Petitioners having allegedly failed to fulfill
the requirements sought vide letter dated 04.03.2021 read with
terms and conditions of RDSO's Fresh Cross Approval Policy dated
18.12.2020, a show cause letter dated 21.04.2021 was issued asking
the Writ Petitioner to submit documents showing the nature of
understanding as legal partnership with the M/s Thales and having
a technology transfer agreement to Indigenize and support the Thales
system as per cross approval policy within 30 days.
The Appellant No 1 and Thales sent letter dated 21.05.2021,
Agreement dated 05.08.2021 and Technical Transfer and
Collaboration Agreement dated 29.07.2021, but Respondent No. 4,
vide his letter dated 17.08.2021, temporarily delisted the
Respondent/Writ Petitioner No.1, for not being able to establish
clear-cut co-relation of materials of source to Jabil Circuit India
Limited Pune and materials used in product .
Being aggrieved by such temporary delisting the Writ Petitioners
filed W.P.A 13026 of 2021, for issuance of writ of Mandamus
commanding the Respondents to set aside the impugned order, not
to give effect to such order and not to open the tender dated
13.07.2021, so long the Writ Petitioner No.1 remains temporarily
delisted.
Hon'ble Single Bench, after hearing the Ld. Counsel for both
sides and after taking into consideration the citations referred by
both sides, has been pleased to inter alia hold that writ petitioner no.
1 has only received the impugned order at its registered office in
Kolkata, while supply of equipment were made by writ petitioners to
the RDSO Lucknow, the contract for supply was entered between the
parties at Lucknow and payment, if any, towards supply made by the
petitioner was at Lucknow. Writ Petitioners have impleaded other
respondents having their office at Kolkata and who have nothing to
do with the impugned letter of temporary delisting of the Writ
Petitioners, only for the purpose of invoking the jurisdiction of this
Court.
Hon'ble Single Bench has been further pleased to observe that
the mere fact the Writ Petitioner No. 1 has its registered corporate
office in Kolkata or, it has obtained finance from Banks in Kolkata
and by impleading other authorities of Indian Railways having office
in Kolkata, will not ipso facto confer jurisdiction to Courts in
Calcutta, when substantial, integral and principal cause of action
occurred at Lucknow, outside the jurisdiction of the High Court of
Calcutta and thereby dismissed Writ Petition No. 13026 of 2021, for
want of territorial jurisdiction and without entering into the merits of
the matter.
Therefore, the only issue that requires determination in this
appeal is whether the Hon'ble Single Bench was justified in
dismissing the Writ Petition for want of jurisdiction?
Ld. Counsel for the appellants challenging the impugned order
contended that the Ld. Judge while passing the impugned order
failed to appreciate the true intent, purport and scope of Article
226(2) of the Constitution of India.
Ld. Counsel for the appellant has also contended that learned
Judge has failed to take into notice that no contract whatsoever was
executed in between Railway and the Writ Petitioner in respect of the
disputed deal. The Writ Petitioners were to supply Multi Section
Digital Axle Counter (MSDAC) and Single Section Digital Axle
Counter (SSDAC) on the basis of RDSO's approval to 18 (Eighteen)
Zones of Railways across India including South-Eastern Railway and
not in the office of RDSO Lucknow or no payment was made from
Lucknow. The Ld. Judge has failed to appreciate the true intent and
scope of citations relied upon by the appellants and has come to the
wrong finding that substantial and integral part of the principal
cause-of-action occurred in Lucknow outside the Jurisdiction of this
Court.
The Ld. Counsel for the appellants has further contended that
the Ld. Single Judge has failed to appreciate the fact that appellants
have corporate registered office in Kolkata, they carry on business
from such corporate registered office, that all letters pertaining to
new procedure order for cross approval dated 18.12.2012 were
served on the Appellant No. 1 at its Registered Office. Therefore, a
part of the cause-of-action has arisen within the jurisdiction of this
Court and prayed for quashing the impugned order dated 30.08.2021
with a direction to the Ld. Single Judge to decide the Writ Petition in
merit.
The Ld. Counsel in support of his oral and written submissions
referred to the following citations;
1- UMC Technologies Private Limited vs. Food Corporation of India
(2021) 2 SCC 551.
2- State of Punjab vs. Amar Singh Harika.
3- Dulu Devi vs. State of Assam and others. (2016) 1 SCC 622.
4- Samar Pal Singh vs. Chitranjan Singh (2016) 1 SCC 626.
5- Krishan Prasad Singhi and others vs. Tax Recovery Officer-II
(Income Tax and others) (1996) 2 CALLT 115 (HC).
6- Serajuddin and Company vs. the State of Orissa and others AIR
CAL 414.
7- Community Action for Rural Development vs. Secretary, Ministry
of Woman and Child Development & Chairman of Rastriyakosh
2015-3-LW-19.
8- Cement Workers' Mandal vs. Global Cements Ltd. and Others AIR
2019 SC 1163.
9- Pankaj Panwar vs. Lalit Kala Akademi AIR 2015 Cal 67.
10- National Textile Corporation Limited and others vs. Haribox
Swalram and others (2004) 9 SCC 786.
11- Alchemist Limited and another vs. State Bank of Sikim and
others. AIR 2007 SC 1812.
12- Bharat Cooking Coal Limited vs. Auroma Coke Limited and others
and
13- Nawal Kishore Sharma vs. Union of India and others (2014) 9
SCC 329.
On the other hand, Ld. Counsel for Respondents submitted as
no part of cause of action arose within the territorial jurisdiction of
Calcutta High Court. The amended Article 226 (2) of the Constitution
which also does not confer the territorial jurisdiction within the limit
of this Court as application for registration was made by the
Petitioner at Lucknow, registration as the vendor of RDSO was also
made at Lucknow and all correspondence were made to the
petitioners by the Respondent No.3 from Lucknow.
He has also urged that to invoke the jurisdiction of this Court
the petitioners have with ill-conceived motive impleaded other
Railway authorities having their office at Koilaghat. No cause of
action whatsoever arose from the office of those Respondents situated
at Koilaghat. Therefore, he submits that the Ld. Single Judge has
rightly dismissed the Writ Petition. Learned Counsel in support of
such contention has relied upon;
1- National Textile Corporation Limited and others vs. Haribox
Swalram and others (2004) 9 SCC 786 and
2-Alchemist Limited and another vs. State Bank of Sikkim and
others. AIR 2007 SC 1812.
Having considered the submissions made by respective Learned
Counsel and, on having gone through the decisions referred by them
in support of their respective contentions, it appears whether or not
cause of action, wholly or in part, for filling a Writ Petition has arisen
within the territorial limit of a particular High Court ought to be
decided in the light the facts of this case qua the nature and
character of proceedings under Article 226 of the Constitution. That
is, whether within the limits of the High Court in which a writ
application has been filed, any of the facts which would entitle the
petitioner to obtain relief under Article 226 of the Constitution have
arisen. In other words, in order to maintain the writ application the
petitioner has to establish that within the territorial limits of the
Court's jurisdiction, prima facie a legal right claimed by him has been
either infringed or is threatened by the respondent and such
infringement may take place by causing him actual prejudice or loss
of his legal rights. Accordingly, when the impugned act of the
respondents takes effect within the territorial jurisdiction of a
particular High Court, it may entertain the writ petition of the person
aggrieved, notwithstanding that the respondents have the offices or
residences outside its territorial jurisdiction. Therefore, whether this
Court has territorial jurisdiction to entertain the Writ Petition or not
has to be decided keeping in view the provision of Article 226(2) of the
Constitution.
Profitably, for the benefit of this discussion, the provisions of
Article 226 of the Constitution required to be reiterated:
(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 case, 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 enforcement or any of the
rights conferred by Part III and for any other purpose.
(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 in those territories.
(3) Where any party against and interim order, whether by way
of injunction or stay or in any other manner is made on or in any
proceeding relating to a petition under Clause (1), without-(a)
furnishing to such party copies of such petition and all
documents in support the plea for such interim order ; and (b)
giving such party an opportunity of being heard, makes an
application to the High Court for vacation of such order and
furnishes a copy of such application to the party in whose favour
such order has been made or the counsel of such party, the High
Court shall dispose of the application within a period of two
weeks from the date on which it is received or from the date on
which the copy of such application is so furnished, whichever is
later, of where High Court is closed on the last day of that
period, before the expiry of the next day afterwards on which
the High Court is open an if application the application is not
disposed of, interim order shall on the expiry of that period, or,
as the case may be, the expiry of the said next day, stand
vacated.
(4) The Power conferred on a High Court by this Article shall not
be in derogation of the power conferred on the Supreme Court by
Clause (2) of Article 32.
In view of Article 226 (2) of the Constitution, if a part or fraction
of the cause of action arises within the territorial jurisdiction of a
High Court, the concerned High Court will have the jurisdiction over
the Writ Petition irrespective of the fact the respondents reside
outside.
The expression "Cause of Action " has not been defined either in
the Constitution or in the Civil Procedure Code, but by virtue of its
interpretation in different case laws now, it means bundle of facts
which the petitioner must prove, if traversed to entitle him to a
judgement in his favour.
Further, it is settled principle of law that each and every case
has to be adjudicated taking into consideration the facts and
circumstances as pleaded in the petition. Therefore, whether or not
cause of action in part has arisen within the territorial limit of a
particular High Court, has to be exercised having regard to the facts
and circumstances of each case pleaded as well as the nature of
infringement of the right.
In the present case no contract whatsoever was executed in
between the Appellant / Writ Petitioner No. 1 and concerned Railway
Authorities or RDSO has come on record or that Appellant No. 1 had
to supply the concerned equipment to RDSO Lucknow or payment
used to be made from Lucknow as contended by the ld. counsel for
respondents.
On the contrary from the records of this Appeal, it is seen that
the Appellant No. 1 was required to supply the concerned equipment
not at RDSO Lucknow, but to all the 18 zones of Railways situated
across the country and was required to maintain the inventory and
spare parts support system. Appellant No. 1 was required to install
that equipment at the concerned sites of Railways adopting the
guidelines laid down by Railways and was required to maintain those
equipment by providing trained and competent staff. It is also seen
that RDSO will inspect those products supplied by the Appellant No.1
at any premises where it is in use or at the place of manufacture.
The prayer no.(d) of the Appellant No.1 made in the Writ
Petition reads as " A writ of or in the nature of Mandamus do issue
commanding the respondents not to take any step or further step
against NIT No. 50215240 STORES/NORTH CENTRAL RAILWAY
dated 13th July 2021 including opening of tenders so long as the
Petitioner No.1 remains temporarily delisted."
From such facts, it can be safely assumed that Appellant No.1
used to receive purchase orders from tenders pertaining to several
Railway Zones at its registered corporate office in Kolkata, from the
department concerned of different Zonal offices of Railways who have
accepted its tender. Therefore, it cannot be said with certainty that
payment for products purchased by different zones of Indian Railways
as per the tender called by those zones is paid only by RDSO
Lucknow. Thus, it appears the area of work of, Appellant No.1 is not
only confined to RDSO Lucknow, but throughout the 18 zones of
Railways.
While, the role of RDSO Lucknow, a wing of Indian Railways,
is only to see and evaluate Software Embedded Electronic Safety
System and New/ Imported Technology Product for Railway
Signaling, supplied by approved listed vendors and whether those
products are as per its specifications and required to assess the
safety of those equipment.
From the above discussed facts it cannot be concluded with
certainty that the integral part of the cause of action of the present
petition has exclusively arisen at RDSO Lucknow, just because the
impugned order dated 17.08.2021 was issued by Respondent No.4.
From the decision of the Hon'ble Supreme Court passed in State
of Punjab vs. Amar Singh Harika and Dulu Devi vs. State of Assam and
others and followed by this Hon'ble Court at Calcutta in Krishna
Prasad Singh and others vs. Tax Recovery Officer-II (Income Tax and
others), Serajuddin & Co. vs. The State of Orissa and Ors. and Pankaj
Panwar Vs. Lalit Kala Akademi and the Hon'ble Madras High Court in
Community Action for Rural Development vs. the Secretary, Ministry of
Women and Child Development and Chairmen of Rashtriya Kosh, it is
clear that for the purpose of deciding whether facts averred by the
Writ Petitioner would or would not constitute a part of the cause of
action, it has to considered whether such facts constitute material
essential and integral part of the cause of action. In order to maintain
a Writ Application the petitioner has to establish within the territorial
limits of the Court's jurisdiction prima facie a legal right claimed by
him has been either infringed or is threated to be infringed by the
Respondents. Such infringement may take place by causing him
actual injury or threat thereof. For giving rise to a cause of action for
filing Writ Petition what is material is whether or not within the
territorial limits of the said High Court there has been any proximate
or direct effect upon the petitioner.
In the present case the Respondent No. 4 has issued the order
of temporary delisting of the Appellant No. 1, one of its approved
vendors on 17.08.2021 and which has compelled the Appellant no.1
to file the writ petition. The Appellant No.1 was served with such
order affecting its legal right and having its effect on its business run
from Kolkata at its registered corporate office at Kolkata.
In view of ratio of above decisions, order of temporary delisting
of the Appellant No.1 has become effective only when it was
communicated and served on the Appellant No.1. A part of cause of
action has therefore arisen when the impugned order is implemented.
Therefore, cause of action for assailing such impugned order would
arise at the place of communication that is within the limits of this
Court.
Ld. Counsel for the Respondents has referred to In Re: National
Textile Corporation Ltd. and urged that merely because the petitioners
carry on business in Kolkata, all correspondence were made from
Kolkata and tender was filed from Kolkata, do not give rise to integral
part of cause of action as such facts have no nexus with the dispute
involved in the case.
It is true that in National Textiles (supra), the writ petitioners
have their place of business at Kolkata and from where they used to
place orders to the textile mills situated in Bombay (Management of
which was undertaken by Central Govt. before those mills could fully
discharge their liabilities to the Petitioners, in respect of the orders
which they had accepted from petitioners prior to take over), supply
was made from Bombay and payment was also made in Bombay. The
petitioners had filed the said case against National Textiles
Corporation, the Custodian of those Mills with which the petitioners
had actual business dealings. More so, the petitioners had failed to
produce the vouchers to substantiate their claim over undelivered
consignment.
But, in the present case the petitioner has alleged that the
impugned order of temporary delisting affecting its legal right and
having adverse effect on its business was served to it at its registered
office in Kolkata and as such a part of cause of action has arisen
within the limits of this court, where the order of delisting has taken
effects.
The Ld. Counsel for the respondents has also referred to In Re:
Alchemist and urged that the facts of the present case and that of the
In Re: Alchemist are almost pari materia and therefore, that the very
fact the petitioners have their registered corporate office in Kolkata or
it carries on business in Kolkata or it is financed by banks in Kolkata
or it has received the impugned order in Kolkata do not ipso facto
lead to the conclusion that those facts give rise to a cause-of-action
within the limits of this Court and those facts have no bearing with
the dispute involved in this case as each and every matter relating to
the products of the petitioner no.1 was controlled by RDSO Lucknow.
In Re: Alchemist the Govt. of Sikkim was desirous of dis-
investing 49% of its Equity Capital in State Bank Of Sikkim to a
strategic partner with transfer of management and made
advertisement in newspaper inviting offer, but the facts of the present
case as discussed above is totally different from the Alchemist and we
cannot put both the cases on the same footing. Therefore, this Court
is unable to accept the submission made by the Ld. Counsel for the
Respondents.
Since the impugned order of temporary delisting affecting the
Appellant no.1 would be effective only upon communication to the
Appellant No1 and cause of action for assailing such would arise at
the place where it was communicated for such reason, this Court
holds that the integral part of cause-of-action for this lis having
arisen within the territorial limits of this Court, the Appeal succeeds
and is hereby allowed.
The impugned order of the Hon'ble Single Bench dated 30.08.21
stands accordingly set aside.
W.P.A. No.13026 of 2021 is accordingly remanded to the
Hon'ble Single Bench for a decision now on merits. This Court
clarifies that it has only decided the issue of territorial jurisdiction
and not beyond.
The protection already granted by this Court at the interim
stage and thereafter extended in favour of the appellants shall
continue till appropriate orders are passed by Hon'ble Single Bench.
MAT No.927 of 2021 with CAN NO.1 of 2021 stand
accordingly disposed of.
There will be no order as to costs.
All parties shall act in terms of the copy of the order downloaded from
the official website of this Court.
Urgent Xerox certified photocopies of this judgment, if applied for, be
given to the parties upon compliance of the requisite formalities.
I agree.
(Subrata Talukdar, J.) (Kesang Doma Bhutia, J.)
