Calcutta High Court (Appellete Side)
9.2024 vs (Ad 3) Union Of India & Ors on 10 September, 2024
Author: Shampa Sarkar
Bench: Shampa Sarkar
Court No. 9 WPA 21092 of 2024
(265711)
Surya Alloy Industries Limited & Anr.
10.09.2024
Vs.
(AD 3) Union of India & Ors.
(S. Banerjee)
Mr. Debnath Ghosh
Mr. Farhan Ghaffar
Mr. Debsoumya Basak
Mr. Viswajit Neogi Dasgupta
Mr. Subhas Chandra Jana
...for the petitioners
Mr. Atarup Banerjee
Ms. Rashni Bothra
...for the Union of India
1. Let the supplementary affidavit filed by the
petitioners in court, be taken on record.
2. The writ petition has been filed challenging an
order dated June 18, 2024, by which the petitioner
no.1 was temporarily delisted from the list of
approved vendors of the Research Designs &
Standards Organisation, Government of India
('RDSO', for short). The petitioner no. 1 had been a
listed vendor since long.
3. The Indian Railways floated an e-tender dated
February 23, 2022, inter alia, for manufacture and
supply of 6.2 mm Thick Composite Grooved Rubber
Sole Plates with horns for 60 Kg PSC Sleepers to
RDSO. The petitioners duly participated in the tender
and were selected as the lowest bidder. The letter of
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acceptance was issued by the Headquarters-
Engineering, Northeast Frontier Railway, Maligaon,
Guwahati. In terms of the letter of acceptance, the
completion period was specified as four months. 50%
of the supply was to be effected within a period of
three months from the date of issuance of the letter of
acceptance. Some communications continued
between the parties with regard to the delivery,
purchase orders, supply of materials etc. By a letter
dated June 1, 2022, the petitioner no. 1 was asked to
submit a photocopy of the pooled performance
guarantee, at the earliest. Thereafter the purchase
order was issued on July 18, 2022. The goods were
allegedly inspected by the concerned authorities and
despatched sometime around September 4, 2022. The
quantity of goods tendered for inspection was 69,860.
The petitioner no. 1 company raised bills and they
were allegedly accepted. Payments were allegedly
released.
4. It is contended by the petitioners that, all on a
sudden a letter dated April 10, 2023, was issued by
the Joint Director (Track)-IX, RDSO, addressed to the
Chief Track Engineer, Northeast Frontier Railway,
Guwahati. The petitioners came to learn that the
letter was regarding failure of the petitioners to
supply the goods as per the specifications. A joint
inspection was planned to be held. Allegedly, no
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information in this regard was furnished to the
petitioners. The petitioners apprised the authorities
with regard to the despatch of the goods and the
authorities proceeded to hold an inspection. The
petitioners requested for an opportunity to participate
in the joint inspection by a representation dated April
11, 2023. The authorities proceeded to hold the joint
inspection.
5. The goods supplied were allegedly found to be of
sub-standard quality. A show-cause notice was
issued to the petitioner no. 1 on various grounds and
the petitioner no. 1 was asked to answer. The relevant
portion of the show-cause notice is quoted below:
"....4.0 In continuation to above, the 1 st set of
samples of three lots of 6.2mm CGRSP were
sent to M&C Directorate of RDSO for testing
as per IRS Specification No RDSO/M&C/RP-
198/2006. Vide ref v) above.
5.0 Vide ref vi) above M&C Directorate
has sent Sample Testing Report No. R-19/23
dt 10-05-2023 to Track Directorate. From the
reort (report) (sic) I tis (it is) (SIC) observed that
the samples are unsatisfactory (due to more
than 5% variation from specified accepted
values as per specifications) in parameters of
specific gravity and ash contents. Samples of
one of the lot found unsatisfactory in visual
test as well.
6.0 The observations recorded during the
joint inspection and subsequent test results
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establish that 6.2mm thick CGRSP at supplied
by M/s. Surya Alloy Industries Ltd. Howrah to
Track depot BNGN/Northeast Frontier Railway
were of substandard quality and did not
conform to the specifications."
6. The petitioner no. 1 answered to the notice, inter
alia, stating that in the show-cause notice, six
documents were relied upon, which were not made
available to the petitioners and without such
documents the petitioners were not in a position to
answer to the show-cause notice, satisfactorily.
7. The authorities once again reminded the
petitioners to answer to the show-cause notice, inter
alia, stating that an unsatisfactory reply to the show-
cause notice would lead to down-gradation of the
petitioner no. 1 from the 'List of the Approved
Vendors'. Thereafter, the petitioners filed a formal
reply (demand justice) which is annexed to the
supplementary affidavit and submitted that the
proceeding could not have been initiated on the basis
of an anonymous complaint. The guidelines of the
Central Vigilance Commission provided that
cognizance of such complaints could not be taken.
8. By a letter dated June 18, 2024, the petitioner
was informed of the decision to delist the petitioner
from the list of approved vendors, temporarily. The
petitioner was granted liberty to appeal before the
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appellate authority of RDSO. The petitioners contend
that neither the documents relied upon by the
authorities in the show-cause notice were supplied,
nor were the petitioners granted an opportunity of
hearing. Thus, the remedy of an appeal would not be
a bar. The ground for invoking the jurisdiction of this
court is, violation of the principles of natural justice.
9. Mr. Atarup Banerjee, learned advocate appearing
for the respondents submits that the writ petition is
not maintainable before this court, due to lack of
territorial jurisdiction. The tender was floated in
Guwahati, the goods were supplied in Guwahati and
the inspection was also made in Guwahati. Reliance
has been placed on a decision of a co-ordinate bench
of this court in WPA 12956 of 2023 (Shri Goutam
Sengutpa -Vs.- Union of India & Ors.) which was
affirmed in MAT 255 of 2024 (Goutam Sengupta -
Vs.- Union of India & Ors.).
10. Heard the parties. The cause of action in this writ
petition is neither matters arising out of the tender
conditions, nor the disputes which arose during the
execution of the work. The cause of action is the order
of temporary delisting, which was served upon the
petitioner no. 1 within the jurisdiction of this court.
11. Thus, in my view, at least a part of the cause of
action has arisen before this court.
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12. The decision in WPA 12956 of 2023 was rendered
in a matter where the entire disciplinary proceeding
which was under challenge had taken place at
Dhanbad, within the State of Jharkhand. The
coordinate Bench held that once the charged officer
had challenged the entire disciplinary proceeding and
he had attended the disciplinary proceeding at
Dhanbad, from Kolkata, even after his retirement, the
writ petition should be maintained before the
Jharkhand High Court. Deduction of pension from
the account at Kolkata was not the cause of action
according to His Lordship, which had given rise to the
writ petition. Under such circumstances, the writ
petition was dismissed on the ground of lack of
territorial jurisdiction.
13. MAT 255 of 2024 arising from the said order, was
dismissed by an Hon'ble Division Bench on the same
ground. The Division Bench found that the decision of
the Supreme Court in Shanti Devi alias Shanti
Mishra Vs. Union of India & Ors., reported in
(2020) 10 SCC 766, would not apply in the said case.
No part of the cause of action arose in the jurisdiction
of the Calcutta High Court.
14. In Shanti Devi (Supra) the Hon'ble Apex Court
held that even if a fraction of the employee's cause of
action arose within the territorial jurisdiction of Patna
High Court, the High Court would have the territorial
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jurisdiction to entertain the writ petition. In the said
case, a part cause of action was refusal to revoke the
order of refund. The relevant paragraphs are quoted
below:-
"14. The learned Single Judge did not correctly
consider the facts and pleadings in Writ Petitions Nos.
13955 of 2006 and 5999 of 2014. The earlier writ
petition filed by the petitioner in the year 2006 was
where the petitioner had prayed for refund of wrongly
withheld/illegally detained amount of Rs 1,33,559.
When the earlier writ petition was filed, there was no
issue of non-payment of pension or stoppage of
pension since the pension had been started w.e.f. May
2005. The subsequent Writ Petition No. 5999 of 2014
was filed when payment of pension after 8 years was
stopped and the petitioner was directed to return the
amount of Rs 8,09,268. The cause of action for filing
Writ Petition No. 5999 of 2014 was entirely different.
The learned Single Judge committed error in holding
that in view of the dismissal of the earlier writ petition
on the ground of lack of territorial jurisdiction, the
writ petition is also dismissed.
15. The second reason given by the learned Single
Judge that the petitioner ought to have filed the writ
petition before the Jharkhand High Court also does
not commend us. For a retiree, who is settled in
Darbhanga and receiving pension at District
Darbhanga, it cannot be said that it was necessary for
him to file his petition in the Jharkhand High Court
where his earlier writ petition was pending. The
subject-matter of the earlier writ petition was entirely
different and the dismissal of the writ petition does
not preclude the petitioner to file subsequent writ
petition in the same High Court.
16. The Division Bench of the High Court did not
advert to the facts or pleadings of the writ petition and
only after quoting Paras 4 and 5 of the judgment
[Shanti Devi v. Union of India, 2017 SCC OnLine Pat
3639] of the learned Single Judge dismissed the writ
petition without adverting to any issue, which was
raised in the LPA by the writ petitioner. Copy of the
grounds of LPA No. 1265 of 2017 has been filed as
Annexure P-24, which indicate that the petitioner has
clearly pleaded the relevant facts and specifically
stated that cause of action arisen in the year 2013
cannot be subject-matter of writ petition filed 8 years
ago in the year 2006. The main pleadings in the writ
petition were not dealt with by the High Court and the
High Court having dismissed the writ petition on the
ground of lack of territorial jurisdiction, we need to
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advert as to whether there was any cause of action for
entertaining the writ petition by the Patna High Court.
***
***
28. From the facts of the present case, we are of
the considered opinion that part of the cause of
action has arisen within the territorial jurisdiction
of the Patna High Court. The deceased petitioner
was continuously receiving pension for the last 8
years in his savings bank account in State Bank
of India, Darbhanga. The stoppage of pension of
late B.N. Mishra affected him at his native place,
he being deprived of the benefit of pension which
he was receiving from his employer. The employer
requires a retiring employee to indicate the place
where he shall receive pension after his
retirement. Late Shri B.N. Mishra had opted for
receiving his pension in State Bank of India,
Darbhanga, State of Bihar, which was his native
place, from where he was drawing his pension
regularly for the last 8 years, stoppage of pension
gave a cause of action, which arose at the place
where the petitioner was continuously receiving
the pension. We, thus, are of the view that the
view of the learned Single Judge [Shanti
Devi v. Union of India, 2017 SCC OnLine Pat
3639] as well as the Division Bench [Shanti
Devi v. Union of India, 2018 SCC OnLine Pat 933]
holding the writ petition not maintainable on the
ground of lack of territorial jurisdiction was
completely erroneous and has caused immense
hardship to the petitioner."
15. In the case of State of Goa Vs. Summit Online
trade Solutions Private Limited & Ors., reported in
(2023) 7 SCC 791, which was disposed of by the
Hon'ble Apex Court along with other civil appeals, the
term cause of action was elaborately discussed in
paragraphs 14 to 17 of the said decision. The same
read thus:
"14. While dealing with an objection as to lack
of territorial jurisdiction to entertain a writ
petition on the ground that the cause of action
has not arisen within its jurisdiction, a High
Court essentially has to arrive at a conclusion
on the basis of the averments made in the
petition memo treating the contents as true and
correct. That is the fundamental principle.
Bearing this in mind, we have looked into the
petition memo of WP(C) No. 38 of 2017 and
searched in vain to trace how at least part of
the cause of action has been pleaded by the
petitioning company, to have arisen within the
territorial jurisdiction of the High Court.
15. This is a case where clause (2) of Article
226 has been invoked by the High Court to
clothe it with the jurisdiction to entertain and
try the writ petitions. The constitutional
mandate of clause (2) is that the "cause of
action", referred to therein, must at least arise
in part within the territories in relation to which
the High Court exercises jurisdiction when writ
powers conferred by clause (1) are proposed to
be exercised, notwithstanding that the seat of
the Government or authority or the residence of
the person is not within those territories.
16. The expression "cause of action" has not
been defined in the Constitution. However, the
classic definition of "cause of action" given by
Lord Brett in Cooke v. Gill [Cooke v. Gill, (1873)
LR 8 CP 107] that "cause of action means every
fact which it would be necessary for the plaintiff
to prove, if traversed, in order to support his
right to the judgment of the court", has been
accepted by this Court in a couple of decisions.
It is axiomatic that without a cause, there
cannot be any action. However, in the context of
a writ petition, what would constitute such
"cause of action" is the material facts which are
imperative for the writ petitioner to plead and
prove to obtain relief as claimed.
17. Determination of the question as to whether
the facts pleaded constitute a part of the cause
of action, sufficient to attract clause (2) of
Article 226 of the Constitution, would
necessarily involve an exercise by the High
Court to ascertain that the facts, as pleaded,
constitute a material, essential or integral part
of the cause of action. In so determining, it is
the substance of the matter that is relevant. It,
therefore, follows that the party invoking the
writ jurisdiction has to disclose that the integral
facts pleaded in support of the cause of action
do constitute a cause empowering the High
Court to decide the dispute and that, at least, a
part of the cause of action to move the High
Court arose within its jurisdiction. Such
pleaded facts must have a nexus with the
subject-matter of challenge based on which the
prayer can be granted. Those facts which are
not relevant or germane for grant of the prayer
would not give rise to a cause of action
conferring jurisdiction on the court. These are
the guiding tests."
16. Paragraph 59 of this writ petition deals with the
averments relating to the jurisdiction of this court.
The same is quoted below:-
"59. The petitioner's factory and office both are
situated within the State of West Bengal which is
within the territorial jurisdiction of this Hon'ble
Court. The petitioners No.1 had received all
correspondences including the show cause notice
at its Registered Office, which is situated at 1/1,
Camac Street, Kolkata - 700016 and which is
within the jurisdiction of this Hon'ble Court. The
office of the respondent no.3 wherefrom the
respondent RDSO controls its activates relating to
Inspections etc., is also situated within the
jurisdiction of this Hon'ble Court. All
correspondences have been issued and received in
connection with the instant matter by the
petitioners No. 1 at its said Registered Office and
the impact of the show cause dated 16th May,
2023 issued by RDSO and communication dated
21st June, 2023 and the impact of the delisting
order, wherefrom the cause of action has arisen in
the matter, have been felt by the petitioners at its
Registered Office which is situated within the
jurisdiction of this Hon'ble Court.
As such part cause of action has duly arisen
within the territorial jurisdiction of this Hon'ble
Court and thus this Hon'ble Court has
jurisdiction to try and adjudicate this instant Writ
Petition."
17. The Hon'ble Apex Court was of the view that the
Constitutional mandate is that a Writ Court, under
Article 226 of the Constitution of India is to entertain
and try writ petitions, provided at least a part of the
cause of action would arise within the territorial
jurisdiction of the High Court concerned.
18. In this case, the entire series of communications
and letters, starting from the show-cause, to the
reminders, replies etc and the final order, were all
served upon the petitioner in Kolkata. The petitioner
is an approved vendor in Kolkata, runs his business
from Kolkata and the orders and payments were
received by him in Kolkata.
19. Under such circumstances, this court holds that
the writ petition should not be rejected on the ground
of lack of jurisdiction.
20. With regard to the merits of the order passed, this
court has not expressed any opinion as this court
finds that the order simply mentions that the reply by
the petitioners was not satisfactory. Issues raised by
the petitioners were not discussed and the petitioner
was not granted an opportunity of hearing.
21. Under such circumstances, the order impugned is
set aside. The RDSO is granted liberty to proceed
afresh on the basis of the show cause notice. The
replies of the petitioners and the points raised
therein, should be considered. An opportunity of
hearing must be given to the petitioners. The matter
should be disposed of in accordance with law, by
passing a reasoned order.
22. The demand justice which has been annexed to
the supplementary affidavit, shall be treated as the
representation of the petitioners along with the other
replies which have been filed earlier. The documents
which were relied upon in the show-cause, shall be
supplied to the petitioners and if they are
voluminous, inspection thereof shall be allowed to the
petitioners, before the petitioners are heard. Upon
inspection of the documents, in case the petitioners
want to file a supplementary reply, they shall be given
such opportunity. Thereafter, the entire matter shall
be heard and decided. A reasoned order will be
passed and communicated.
23. The writ petition is disposed of.
24. All parties are to act on a server copy of this
order.
(Shampa Sarkar, J.)
