Indo Gulf Explosives Ltd. & Anr. vs U.P. State Indu. Devp. Corpn. ...
1999 Latest Caselaw 59 Del

ORDER

Anil Dev Singh, J.

1. The first petitioner is a Company setup for the purposes of manufacturing industrial explosives. Dr. S.K. Garg is the ChairmancumManaging Director of the first petitioner. At the request of the first petitioner, the second respondent the State of Uttar Pradesh, decided to hand over 50 acres of land to the former on lease and 656 acres on licence basis in Villages Prithvipura, Nayakhera, and Koti, Pargana and Tehsil Jhansi, Distt. Jhansi, in the State of Uttar Pradesh. While 50 acres of land was required for setting up of the factory for manufacture of explosives, the remaining land was required to fulfill the requirements of Indian Explosives Act, 1884 and the rules framed thereunder for the purposes of a safety zone of 760 metres radius around the factory. The first petitioner in the project was to be assisted by Pradeshya Industrial and Investment Corporation of Uttar Pradesh (for short 'PICUP') and the first respondent Uttar Pradesh State Industrial Development Corporation (for short 'UPSIDC'). The terms and conditions on which the second respondent accorded permission to the first petitioner to set up the industrial unit were as follows :

"(a) Industrial Unit of petitioner No.1 should be established only on 50 acres of land out of total land of 706 acres.

(b) Respondent No.1 shall fix the market value of 50 acres of land in consultation with the Collector, Jhansi.

(c) Dr. S.K. Garg was made responsible to pay the full amount of the market value so fixed.

(d) Respondent No.1 shall also realise from Dr. S.K. Garg, the economic rent for the aforesaid 50 acres of land from the date of commencement of the production in the factory.

(e) The economic rent shall be fixed by respondent No.1 after getting it approved by respondent No. 2.

(f) The rate of annual licence fee for remaining 656 acres would be rupee one per acre per year for safety zone.

(g) 50 acres of land on which Industrial Unit is established will be held on lease."

2. As is evident from above, the first respondent was authorised to fix the market value of 50 acres of land in consultation with the Collector Jhansi. The first respondent was also required to fix the economic rent of the said land with the approval of the second respondent. Pursuant to the above said terms and conditions, the first respondent on September 21, 1984 provisionally determined the market value of the above said 50 acres of land at Rs. 3,04,332/ as against Rs. 1,80,581.53 evaluated by the Collector, Jhansi, on August 23, 1984. It needs to be noted that since the first petitioner after the evaluation made by the Collector had paid a sum of Rs. 1,80,581.53 to the first respondent on August 28, 1984, the first respondent requested the first petitioner to pay the balance amount of Rs. 1,23,749.59. The first petitioner, however, requested the first respondent to withdraw the demand. On February 27, 1996, the first respondent asked the petitioners to pay a sum of Rs. 84,81,022.83 (Rs. 53,00,639.90 as economic rent due upto January 1, 1996 and Rs. 31,80,383.64 as interest due on economic rent @ 15% in respect of the above said 50 acres of land). The first petitioner on receipt of the demand protested against the same, but the first respondent by communication dated July 22, 1996 asked the petitioner to make the payment of the outstanding dues of Rs. 84,81,022.83 within 30 days failing which it threatened to reenter the said plot. The petitioners being aggrieved by the said communications dated February 27, 1996 and July 22, 1996 filed the instant writ petition.

3. It is noteworthy that the land in question is situate in the State of Uttar Pradesh. The agreement dated December 17, 1984 in regard to the allotment of land was executed by and between the first respondent and the first petitioner in the State of U.P. The order dated May 26, 1984 by virtue of which the second respondent accorded permission to the first petitioner to set up an industrial unit was also passed in the State of Uttar Pradesh. It is also not disputed that the industrial unit has been constructed by the petitioners on the land in question in the State of Uttar Pradesh. Therefore, the cause of action, if any, has mainly and substantially arisen in the State of Uttar Pradesh. The factors that the registered office of the first petitioner is in Delhi and the impugned communications were sent to the registered office merely determine the location of the first petitioner, but it does not detract from the fact that the failure to comply with the impugned communications has consequence at a place where the land is located and where the factory has been set up. This is clear from the impugned communication dated February 27, 1996 which required the first petitioner to pay Rs. 53,00,739.90 as economic rent due upto January 1, 1996 and Rs. 31,80,383.64 as interest due on economic rent in respect of 50 acres of land situate at Jhansi, failing which face the consequence of ouster therefrom. In the circumstances, this Court can not assume jurisdiction under Article 226 of the Constitution.

4. In Sector Twenty One owners Welfare Association Vs. Air Force Naval Housing Board & Ors. , a Division Bench of this Court relying upon the various judgments held that a trivial or insignificant part of the cause of action arising at a particular place would not be enough to confer writ jurisdiction on the court to entertain the lis. The Division bench noticed from the various decisions that the emphasis had shifted from the residence or location of the person or authority sought to be proceeded against to the situs of the accrual of cause of action wholly or in part. In this regard, it held as follows :

"13. The law as reflected by the above said decisions is that the emphasis has shifted from the residence or location of the person or authority sought to be proceeded against to the situs of the accrual of cause of action wholly or in part. It is also clear that a trivial or insignificant part of the cause of action arising at a particular place would be not enough to confer writ jurisdiction; it is the cause of action mainly and substantially arising at a place which would be exterminating factor of terri torial jurisdiction. So also it shall have to be kept in view who are the real persons or authorities sought to be proceeded against or against whom the writ to be issued by the Court would run. Joining to proforma or ancillary parties and certainly not the joining of unnecessary parties, would be relevant for the purpose of Article 226(1).

14. reverting back to the case at hand, it is clear that the cause of action has wholly arisen in NOIDA within the State of U.P. The principal and substantial grievance of the petitioner association is against the respondents No.2 and 3 though inciden tally, the respondent No.1 may also be required to be bound by the writ. The reverse is not correct. The writ, if any, to be issued by the Court would not serve any purpose if issued against respondent No.1 alone. In the matter of registration of the sale deedcumsublease deed merely because a document can be regis tered at Delhi by virtue of Section 30(2) of the Registration Act, territorial jurisdiction in the Courts at Delhi cannot be inferred. Moreover, the petitionerassociation is already having some litigation before the Courts of U.P. and at one point of time the Delhi High Court had declined to entertain the petition erassociation's writ for want of territorial jurisdiction in Delhi."

5. In O.N.G.C. Vs. Utpal Kumar Basi and others, , where certain works were to be executed in the State of Gujarat, the advertisement inviting tenders was published in the Times of India, which was read by the contractor at Calcutta, the contractor submitted the offer from Calcutta, made representation from Calcutta, received a reply at Calcutta and challenged the action of ONGC in rejecting its tender before the Calcutta High Court by way of a writ petition which was entertained by the High Court, the Supreme held that the Calcutta High Court had no jurisdiction to deal with the matter. While setting aside the decision of the Calcutta High Court, the Supreme Court observed as follows :

8. From the facts pleaded in the writ petition, it is clear that NICCO invoked the jurisdiction of the Calcutta High Court on the plea that a part of the cause of action had arisen within its territorial jurisdiction. According to NICCO, it became aware of the contract proposed to be given by ONGC on reading the adver tisement which appeared in the Times of India at Calcutta. In response thereto, it submitted its bid or tender from its Calcut ta office and revised the rates subsequently. When it learnt that it was considered ineligible it sent representations, including fax messages, to EIL, ONGC, etc. at New Delhi, demanding justice. As stated earlier, the Sterring Committee finally rejected the offer of NICCO and awarded the contract to CIMMCO at New Delhi on January 27, 1993. Therefore, broadly speaking, NIICO claims that a part of the cause of action arose within the jursidiction of the advertisement in Calcutta, it submitted its bid or tender from Calcutta and made representations demanding justice from Calcutta on learning about the rejection of its offer. The adver tisements itself mentioned that the tenders should be submitted at New Delhi and that a final decision whether or not to award the contact to the tenderer would be taken at New Delhi. Of course, the execution of the contract work was to be carried out at Hazira in Gujrat. Therefore, merely because it read the adver tisement at Calcutta and submitted the offer from Calcutta and made representations from Calcutta would not, in our opinion, constitute facts forming an integral part of the cause of action. So also the mere fact that it sent fax messages from Calcutta and received a reply thereto at Calcutta would not constitute an integral part of the cause of action. Besides the fax message of January 15, 1993, can not be construed as conveying rejections of the offer as that fact occurred on January 27, 1993. We are, therefore, of the opinion that 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.

12. Notwithstanding the strong observations made by this Court in the aforesaid decisions and in the earlier decisions referred to therein, we are distressed that the High Court of Calcutta per sists in exercising jurisdiction even in cases where no part of the cause of action arose within its territorial jurisdiction. It is indeed a great pity that one of the premier High Courts of the country should appear to have developed a tendency to assume jurisdiction on the sole ground that the petitioner before it resides in or carries on business from a registered office in the State of West Bengal. We feel all the more pained that notwith standing the observations of this Court made time and again, some of the learned Judges continue to betray that tendency only recently while disposing of appeals arising out of SLP Nos.10065 66 of 1993, Aligarh Muslim University & Anr. Vs. M/s. Vinny Engineering Enterprises (P) Ltd. & Anr., this Court observed :

"we are surprised, not a little, that the High Court of Calcutta should have exercised jurisdiction in a case where it had absolutely no jurisdiction."

In that case, the contract in question was executed at Aligarh, the construction work was to be carried out at Aligarh, the contracts provided that in the event of dispute the Aligarh Court alone will have jurisdiction, the arbitrator was appointed at Aligarh and was to function at Aligarh and yet merely because the respondent was a Calcutta based firm, it instituted proceedings in the Calcutta High Court and the High Court exercised jurisdic tion where it had none whatsoever. It must be remembered that the image and prestige of a Court depends on how the members of that institution conduct themselves. if an impression gains ground that even in cases which fall outside the territorial jurisdic tion of the Court, certain members of the Court would be willing to exercise jurisdiction on the plea that some event, however trivial and unconnected with the cause of action had occurred within the jurisdiction of the said Court, litigants would seek to abuse the process by carrying the cause before such members giving rise to avoidable suspicion. That would lower the dignity of the institution and put the entire system to ridicule. We are greatly pained to say so but if we do not strongly deprecate the growing tendency we will, we are afraid, be failing in our duty to the institution and the system of administration of justice. We do hope that we will not have another occasion to deal with such a situation."

6. In the circumstances, it appears to me that the cause of action has substantially and materially arisen in the State of Uttar Pradesh and therefore this Court will not entertain the writ petition. Accordingly, the writ petition is dismissed.