Calcutta High Court (Appellete Side)
Utkarsh India Limited &Anr vs Central Coalfields Limited &Anr on 23 December, 2021
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IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
APPELLATE SIDE
Present :-
THE HON'BLE JUSTICE Subrata Talukdar.
AND
THE HON'BLE JUSTICE Kesang Doma Bhutia.
MAT 566 of 2021
with
I.A. NO. CAN 1 of 2021
Utkarsh India Limited &Anr.
Vs
Central Coalfields Limited &Anr.
For the Appellants : Mr. JishnuChowdhury
Mr. Chayan Gupta
Mr. Souryadeep Banerjee
Mr. Dwip Raj Basu
For Central Coalfields Ltd. : Mr. Anuj Singh
Mr. Pronit Bag
Mr. Prodyot Kumar Das
Mr. Debabrata Das
Hearing concluded on : 07.10.2021
Judgment on : 23.12.2021
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Kesang Doma Bhutia J:-
This appeal is directed against the order passed by the Hon'ble
Single Bench in WPA No.10528 of 2021 on 28.05.2021 and whereby the
Hon'ble Single Bench has been pleased to dismiss the Writ Petition for
want of territorial jurisdiction and without entering into the merits of the
petition.
The factual background in which the question of territorial
jurisdiction arises in brief is that a notice inviting tender was published
by the Respondent No. 1 from Materials Management Department,
Central Coalfields Ltd., Darbanga House, Ranchi, Jharkhand 834001, for
procurement of 148 sets High Mast Lightning Tower (Fixed and Mobile)
with 8 nos./18 nos. Led Light Fittings with DG sets for different areas of
CCL.
The Appellant Company participated in the bid in respect of 4 items
out of 7 items mentioned under serial no. 1,2, 3 and 7 of schedule of
requirements and its such bid was accepted by the Respondent and was
called for e-auction on 1st October 2020. The Appellant made deposit of
requisite earnest money amounting to Rs. 23,98,780. The validity of the
offer was extended upto 31.05.2021 and, in the meantime, the appellant
was requested by the respondents to submit requisite documents as per
requirement of the NIT in respect of item no.7 twice, but having failed to
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comply, AppellantNo.1's bid in respect of item no.7 was rejected being
technically unacceptable. Consequently, the Appellant No. 1 has been
declared as a defaulter in respect of item no.7. The earnest money of Rs.
23,98,780 has been forfeited as penalty and the appellant no.1
disqualified from participating in the tender process in respect of item
no. 7 of the schedule of NIT, for a period of one year by serving the
impugned letter dated 21.05.2021.
The Appellant being aggrieved by the notice of disqualification and
penalty dated 21.05.2021, filed the Writ Petition No. 10528 of 2021 and
prayed for a Writ in the nature of Mandamus commanding the
Respondent Authorities to forthwith desist and/or forebear and/or not to
give effect to the letter dated 21.05.2021.
The Hon'ble Single Bench, after considering the submission of the
Ld. Counsel for the parties, the decision relied upon by them in support
of their submission and on considering the materials on record, inter alia
held that the integral part of cause of action i.e., floating of tender,
scrutinisation of documents and decision to disqualify the Appellants
and impose penalty was taken at Ranchi, Jharkhand and thereby held
the Calcutta High Court lacked territorial jurisdiction to entertain the
Writ Petition, though Appellants have their place of business within the
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jurisdiction of this Court and Appellants had received the notice of
disqualification at their office at Kolkata.
Ld. Counsel for the Appellants submitted that the entire tendering
process was online and the Appellant No. 1 had submitted the bid from
its office at Kolkata. The communication with regard to the tender offer
was also received by the Appellant No. 1 at its office at Kolkata. The
impugned communication of blacklisting and penalty dated 21.05.2021
was also received by the Appellant at its office at Kolkata. Therefore, the
impugned notice is a material, essential or integral part of the lis
connected with the action. Impugned action taken by the Respondents
can become effective only upon service of the same upon the Appellants
and such service having taken place in Kolkata, a part of the cause-of-
action has arisen within the jurisdiction of this Court and, in view of
Article 226 of the Constitution of India, a Writ Petition can be filed in the
High Court within the territorial jurisdiction of which the cause-of-action
in whole or in part arises. Therefore, Ld. Counsel for Appellants has
prayed for setting aside the order under challenge.
On the other hand, Ld. Counsel for the Respondents submitted
that the place for submission of bid and place of service of notice of
blacklisting with penalty do not constitute a cause-of-action as the entire
tender process from the very inception till issuance of the impugned
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letter of rejection/disqualification with penalty were initiated from the
office of Materials Management Department of Central Coalfields Ltd,
situated at Ranchi, Jharkhand. The integral part of the cause-of-action
for this lis has arisen within the jurisdiction of the Court of Jharkhand
and not within the jurisdiction of this Court. Thus, he prays for dismissal
of the Appeal.
Following decisions have been cited by the parties:
1-MBL Infrastructure Limited vs Rites Limited and Others, reported in
AIR2020 Cal 155.
2- PankajPanwar vs. Lalit Kala Academi, reported in AIR 2015 Cal
67.
3-Oil and Natural Gas Commission Vs. Utpal Kumar Basu and
Others, reported in (1994) 4 SCC 711.
4-National Textile Corpn. Ltd. And Others vs. Haribox Swalram And
Others, reported in (2004) 9 SCC 786.
5-Alchemist Ltd. And Another Vs. State Bank of Sikkim and Others,
reported in (2007) SCC 335.
6-Union of India and Others Vs Adani Exports Ltd. And Another,
reported in (2002) 1 SCC 567.
7-Kusum Ingots & Alloys Ltd. Vs. Union of India and Another,
reported in (2004) 6 SCC 254.
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8-Eastern Coalfields Ltd. And Others vs Kalyan Banerjee , reported
in (2008) 3 SCC 456.
9-S.S. Jain & Co. & Anr. Vs Union of India & Ors, reported in (1994)
1CHN 445.
Perused the above decisions.
In this appeal this Court has confined itself on the Jurisdictional
issue and restrains itself from entering into the merits of the writ
petition. Therefore, this Court does not find any requirement of
discussing the decision of this Hon'ble Court passed in MBL
Infrastructure Ltd. Vs. Rites Limited and Others reported in AIR2020 Cal
155, where question of enforceability of a forfeiture clause in NIT was in
issue.
In the rest of the cases referred above matters in issue was the
territorial jurisdiction of a writ Court.
In PankajPanwar vs. Lalit Kala Academy, reported in AIR 2015 Cal
67, the Hon'ble Single Bench of this Court held that whether or not
cause of action in part has arisen within the territorial limits of a
particular High Court has to be examined having regard to the facts and
circumstance of the case as well as what is pleaded in support of the
claim, irrespective of what defence the adversary adopts. Each case must
be decided on its peculiar facts and the nature of infringement of right
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that the aggrieved voices in the writ petition. 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, that is an event which is a material, essential or
integral part of the lis connected with the action that is impugned in writ
petition, there is no plausible reason as 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 substantial facts 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 writ petition
ought to be entertained or not.
In the said case, the Writ petitioner a Professor of the Department
of Sculpture, Kala Bhawan, Viswabharati University, Santiniketan,
District Birbhum, West Bengal, who was conferred with National Award
by Lalit Kala Academy was surprised to find his name in a public notice
published in a Daily English National Newspaper having Bengal
Circulation by the Kala Academy, Delhi about withdrawal of the National
Award including plaque from him along with recovery of reward money,
without prior notice to him before such decision taken by the Academy,
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the same allegedly being taken behind the back of the petitioner such
action affected and damaged the reputation and respect which the
petitioner has earned over the years. The Hon'ble Single Judge held that
the prejudice caused having taken place in Santiniketan, where the
petitioner came to know about public notice against him on reading the
newspaper, held the integral, essential and material part of the lis
constituting the cause-of-action arose within limits of this High Court.
The Hon'ble Single Judge has been pleased to take such view after
thoroughly discussing the decisions of the Hon'ble Apex Court passed in
In Re: National Textile Corporation Ltd.(supra), Alchemist (supra), Oil and
Natural Gas Commission (supra), State of Rajasthan V. Swaika Properties,
reported in (1985)3 SCC 217, among others.
The Hon'ble Supreme Court in OIL AND NATURAL GAS
COMMISSION VS UTPAL KUMAR BASU, held that merely because writ
petitioner reads the advertisement at Kolkata and submitted the offer
from Kolkata and revised the rates subsequently, when it learnt that it
was considered ineligible it send representations, including fax messages
from Kolkata would not constitute facts forming an integral part of the
cause-of-action. So also the mere fact that it sent fax messages from
Kolkata and received a reply thereto at Kolkata would not constitute an
integral part of the cause of action.
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Even if the averments in the writ petition are taken as true, it
cannot be said that a part of the cause-of-action arose within the
jurisdiction of the Calcutta High Court. When the advertisement itself
mentioned that the tenders should be submitted to EIL at New Delhi;
that those would be scrutinised at New Delhi and that a final decision
whether or not to award the contract in the tender would be taken at
New Delhi and the execution of the contract work was to be carried out
at Hazira in Gujarat. Facts
which have no proximate impact on the lis or
dispute involved in the case, do not give rise to a cause of action so as to
confer territorial jurisdiction on the court concerned.
Similar view was taken by the Hon'ble Apex Court in NATIONAL
TEXTILE CORPN. LTD AND ORS. VS HARIBOX SWALRAM AND OTHERS,
inter alia, holding that the mere fact that the writ petitioner carries on
business at Kolkata or that the reply to the correspondence made by it
was received at Kolkata is not an integral part of the cause of action,
when mill in question is located in Mumbai, payment is to be made in
Mumbai and delivery is to made from Mumbai. Such facts pleaded in the
writ petition does not ipso facto lead to the conclusion that those facts
give rise to a cause of action within the Calcutta High Court to invoke
jurisdiction to entertain the writ petition.
A similar question was examined in State of Rajasthan v. Swaika
Properties. Here certain properties belonging to a company which had its
registered office in Kolkata were sought to be acquired in Jaipur and a
notice under Section 52 of the Rajasthan Urban Improvement Act was
served upon the company at Kolkata. The question which arose for
consideration was whether the service of notice to the head of the
company at Kolkata could give rise to a cause of action within the State
of West Bengal to enable the Calcutta High Court to exercise jurisdiction
in a matter where challenge to acquisition proceedings conducted in
Jaipur was made. It was held that the entire cause-of-action culminating
in the acquisition of the land under section 152 of the Rajasthan Act
arose within the territorial jurisdiction of the Rajasthan High Court and
it was not necessary for the company to plead the service of notice upon
them at Kolkata for grant of appropriate writ, order, or direction under
Article 226 of the Constitution for quashing the notice issued by the
Rajasthan Government under Section 52 of the Act. It was thus held that
the Calcutta High Court had no jurisdiction to entertain the writ petition.
In ALCHEMIST LTD. V STATE BANK OF SIKKIM reported in (2007)
11 SCC 335 and Election Commission V. Saka Venkata Rao, reported in
AIR 1953 SC 210 was discussed and where it was observed the High
Court has wide powers while issuing orders, directions or writs for
enforcement of fundamental rights which is subject to two-fold
limitations upon their exercise. In the first place, the power is to be
exercised 'throughout the territories in relation to which it exercises
jurisdiction', that is, the writs issued by the Court cannot run beyond the
territories subject to its jurisdiction. Secondly, the person or authority to
whom the High Court is empowered to issue such writs must be 'within
those territories', which clearly implies that they must be amenable to its
jurisdiction either by residence, location within those territories.
Similar view was taken by the Apex Court in In Re :Khajoor Singh
and held that it is not permissible to read in Article 226 the residence or
location of the person affected by the order passed in order to determine
the jurisdiction of the High Court. That jurisdiction depends on the
person or authority passing the order being within those territories and
the residence or location of the person affected can have no relevance on
the question of the High Court's jurisdiction.
In Union of India v Adani Exports Limited and another, reported in
(2002)1 SCC 567, and Kusum Ingots &Alloys Ltd. V. Union of India,
reported in (2004) 6 SCC 254 held that each and every fact pleaded in the
application must lead to the conclusion that those facts give rise to a
cause-of-action within the Court's territorial jurisdiction and which have
a nexus or relevance with the lis that is involved in the case. Facts which
have no bearing with the lis or the dispute involved in the case, do not
give rise to a cause of action so as to confer territorial jurisdiction on the
court concerned.
It is true that the expression "cause-of-action" has neither been
defined in the Constitution nor in the Code of Civil Procedure, 1908. It
may, however, be described as a bundle of essential facts necessary for
the plaintiff to prove before he can succeed. Failure to prove such facts
would give the defendant a right to judgment in his favour. Cause of
action thus gives occasion for and forms the foundation of the suit.
In the present Appeal from the averments made in the writ petition
and from the materials on record, it appear the NIT was issued by the
Materials Management Department of Central Coalfields Limited, Ranchi,
Jharkhand, for procurement of 148 sets of Fixed and Mobile High Mast
Lighting towers with Led Lights and DG sets on 08.09.20. The
prospective bidders were required to submit their bids to the above
mentioned office by 30.09.20. The tender was to be opened in the above
office on 01.10.20 and technically qualified bidders were called to
participate in reverse auction on 01.10.20 from the above office. The date
for extension of offer too was issued to the Appellants from the above
office by email and reply thereto was sent by the Appellants to the above
office. The appellants were requested to submit or upload the documents
as per NIT in respect of tender schedule item no 7 twice by the
respondents from their above office and lastly the impugned letter of
rejection of the bid of the Appellant in respect of item no.7 was issued by
the Respondent on the failure of the Appellants to upload the documents
called for finalisation of technically qualified offer of the Appellants
within stipulated time from their office at Ranchi, Jharkhand.
It is the case of the Appellants that tendering process was online
and they submitted their bid online from its office in Kolkata, deposited
earnest money from Kolkata and received all communication relating to
the impugned tender from the very inception of tender process till receipt
of the impugned letter of disqualification with penalty dated 21.05.2021
at its office. They have also alleged that service of the impugned letter
has caused injury to their business and right to livelihood and thereby
infringed their right to trade and business guaranteed under Article 19
(1) (g) and right to livelihood guaranteed under Article 21 of the
Constitution. Their such rights being infringed within the territorial
limits of this High Court, this Court has jurisdiction to hear the matter.
Further, Clause 32 of the General Conditions of Contract as
contained in the NIT, clearly provides that in case of dispute arising out
of the contract entered into with suppliers will be subject to the
jurisdiction of the competent court of law. The courts in whose territorial
jurisdiction from where contract is being issued is located, i.e. Ranchi,
Jharkhand shall be competent to deal with any matter arising out of this
purchase order/contract.
The Hon'ble Apex Court in Shriram City Union Finance Corporation
Ltd. V. Ram Mishra, reported in AIR 2002 SC 2402 has held that, in case
parties under their own agreement expressly agree that their dispute
shall be tried in one jurisdiction, then the party can only file a suit in
that court alone to which they have agreed. Once parties bind themselves
as such it is not open to them to choose a different jurisdiction in
violation the terms of agreement.
In the present case by virtue of clause 32 of the General Conditions
of Contract contained in the NIT, any dispute that arises out of any order
or purchase made as per NIT between the purchaser and technically
qualified vendor, is subject to the jurisdiction of the Courts of Ranchi,
Jharkhand and not the High Court of Calcutta, under whose jurisdiction
Appellants reside and carry on business.
That apart, in view of the decisions of the Hon'ble Supreme Court
discussed through the above referred cases and the entire process of the
impugned tender having emanated from Materials and Management
Department of Central Coalfields, Head Office at Ranchi, Jharkhand
including the impugned notice of disqualification and penalty, constitute
facts forming the integral part of cause-of-action for the lis have arisen
within the territorial jurisdiction of Ranchi and, not within the
Jurisdiction of the Calcutta High Court,
For the foregoing reasons, MAT 566 of 2021 with CAN 1 of 2021
stands dismissed as not maintainable.
It is made clear that the merits of the dispute have not been
touched and it would be open to the parties to agitate merit before the
Competent Court/Forum.
The order of the Hon'ble Single Bench impugned in this appeal
dated 28.05.2021 stands affirmed.
Interim order, if any, stands vacated.
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.)
