Delhi High Court
M/S Sterling Agro Industries Ltd. vs Union Of India & Ors. on 1 August, 2011
Author: Dipak Misra,Chief Justice
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 12th May, 2011
Date of decision: 1st August, 2011
+ 1. W.P.(C) No.6570/2010
M/s. Sterling Agro Industries Ltd. ... Petitioner
Through: Mr.M.P. Devnath with Mr. Manish
Panda, Mr. Abhishek Anand and Mr.
Tarun Jain, Advs.
Mr.Atul Nanda, Amicus Curiae.
Versus
Union of India & Ors. ... Respondents
Through: Mr.A.S. Chandhiok,
ASG with Ms. Sonia Sharma and
Ms.Sandeep Bajaj, Advs. for UOI.
Mr.A.S. Chandhiok, ASG with Mr.
Mukesh Anand with Mr. Shailesh
Tiwari, Mr. Sumit Batra & Mr.R.C.S.
Bhadoria, Mr. Jayendra Advs. for R-2
& R-3.
2. W.P.(C) No.8399/2009
Jan Chetna ... Petitioner
Through: Mr. Sanjay Parikh with Mr.Ritwick
Dutta and Mr. Rahul Choudhary,
Advs.
Versus
Ministry of Environment and Forests & Ors. ... Respondents
Through: Mr.D.K. Sharma, Adv. for R-1.
Ms.Yogmaya Agnihotri, Adv for R-2.
Mr.Ashwani Mata, Sr. Adv. with
Mr.Rishi Agrawala, Mr.Akshay Ringe
and Ms. Kanika Agnihotri, Ms. Misha
Rohtagi, Mr. Vaibhav Agnihotri,
Advs. for R-3.
Mr.A.S. Chandhiok, ASG with Mr.
Sandeep Bajaj, Mr. G.S. Parwanda,
Ms. Riya Kaul, Ms. Neha Rastogi,
Advs. for UOI.
3. W.P.(C) No.2447/2010
Manu Jain ... Petitioner
Through: Mr. R. Santhanam with Mr.A.P.
Sinha, Advs.
Versus
Smt. Neerja Shah & Ors. ... Respondents
Through: Mr.A.S. Chandhiok, ASG with Mr.
Sandeep Bajaj, Mr. G.S. Parwanda,
Ms. Riya Kaul, Ms. Neha Rastogi,
Advs. for UOI.
Mr.A.S. Chandhiok, ASG with Mr.
Mukesh Anand with Mr. Shailesh
Tiwari, Mr. Sumit Batra & Mr.R.C.S.
Bhadoria, Mr. Jayendra Advs.
Department of Central Excise.
4. W.P.(C) No.2448/2010
M/s Bafna Healthcare Pvt. Ltd. & Ors. ... Petitioners
Through: Mr. R. Santhanam with Mr.A.P.
Sinha, Advs.
Versus
Commissioner of Central Excise Delhi-IV & Ors. ... Respondents
Through: Mr.A.S. Chandhiok, ASG with Mr.
Sandeep Bajaj, Mr. G.S. Parwanda,
Ms. Riya Kaul, Ms. Neha Rastogi,
Advs. for UOI.
Mr.A.S. Chandhiok, ASG with Mr.
Mukesh Anand with Mr. Shailesh
Tiwari, Mr. Sumit Batra & Mr.R.C.S.
Bhadoria, Mr. Jayendra Advs.
Department of Central Excise.
5. W.P.(C) No.6953/2010
The Commissioner of Trade Tax & Anr. ... Petitioners
Through: Mr.A.S. Chandhiok, ASG with Mr.
Sandeep Bajaj, Mr. G.S. Parwanda,
Ms. Riya Kaul, Ms. Neha Rastogi,
Advs. for UOI.
Versus
M/s. Ricoh India Ltd. & Ors. ... Respondents
Through: None.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE VIKRAMAJIT SEN
HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE MANMOHAN
1 Whether reporters of the local papers be allowed to see the judgment? Yes
2 To be referred to the Reporter or not? Yes
3 Whether the judgment should be reported in the Digest? Yes
DIPAK MISRA, CJ
In view of the similitude of the principal controversy pertaining to the
jurisdiction of the High Court of Delhi being involved in these writ petitions,
they were heard analogously and as the said issue is the only question of
reference, it is being adverted to and dealt with by a singular order. For the
sake of convenience, we shall adumbrate the facts in W.P.(C) No.6570/2010.
2. Expressing doubt with regard to the correctness and soundness of the
decision in New India Assurance Company Limited v. Union of India and
others, AIR 2010 Delhi 43 (FB), a Division Bench thought it appropriate to
refer the matter for reconsideration by a Full Bench and, accordingly, a Full
Bench was constituted and the Full Bench thought it appropriate that the
matter should be considered by a larger Bench and, accordingly, the larger
Bench has been constituted and the matter has been placed before us for the
aforesaid purpose.
3. Before we proceed to analyze and appreciate the ratio decidendi in
New India Assurance Company Limited (supra), it is seemly to exposit the
necessitous primary facts averred in the present writ petition. The petitioner,
in invocation of the jurisdiction under Article 226 of the Constitution of
India, has called in question the legal substantiality and sustainability of the
order No.214-15/10-Cus dated 9.7.2010, Annexure-1, passed by the
Revisionary Authority, Government of India, Ministry of Finance,
Department of Revenue, whereby the revision application preferred by the
petitioner has been dismissed concurring with the view expressed by the
Commissioner (Appeal-I), Customs & Central Excise, Indore whereby the
appellate authority has given the stamp of approval to the order passed by
the Assistant Commissioner of Customs ICD, Malanpur who had expressed
the view that no drawback facility is admissible to the petitioner as it had, by
way of procuring duty free inputs under Rule 19(2) of the Central Excise
Rules, 2002, contravened clause (ii) of the second proviso to Rule 3(1) of the
Central Excise Drawback Rules, 1995 and also condition No.7(F) of the
notification No.68/2007-Cus (NT) and condition No.8(F) of the notification
No.103/2008-Cus (NT).
4. It is the admitted position that the petitioner - industry is situate at
Industrial Area, Q-5-6, Ghirongi, Dist. - Bhind, Malanpur in the State of
Madhya Pradesh. The initial order was passed on 30.5.2009 by the Assistant
Commissioner of Customs ICD, Malanpur, Dist. Bhind (M.P.). The
appellate order was passed by the Commissioner (Appeals)-I, Customs and
Central Excise & Service Tax at Indore (M.P.).
5. Being dissatisfied with the order passed by the revisional authority,
the petitioner has invoked the inherent jurisdiction of this Court under
Article 226 of the Constitution of India solely on the foundation that the
revisional authority, namely, the office of the Joint Secretary to the
Government of India, is in Delhi and, therefore, this Court has the territorial
jurisdiction to deal with the lis in question. It is proponed in the petition that
it is the Joint Secretary who is answerable to justify his order and, ergo, this
Court can and should dwell upon the controversy. In the grounds
enumerated in the writ petition, reliance has been placed on the decision
rendered in New India Assurance Company Limited (supra).
6. We have heard the learned counsel for the parties and Mr.Atul Nanda,
learned senior counsel as the Amicus Curiae.
7. At this juncture, we think it apposite to refer to the history of Article
226 of the Constitution of India. Initially, Article 226 of the Constitution of
India read thus:
"226. (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 cases 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 the
enforcement of any of the rights conferred by Part III
and for any other purpose.
(2) The power conferred on a High Court by clause
(1) shall not be in derogation of the power conferred on
the Supreme Court by clause (2) of Article 32."
8. On the basis of the aforesaid constitutional provision, a strict
construction was placed and the plea of cause of action or forum conveniens
was not given acceptance by the Apex Court in Election Commission India
v. Saka Venkata Rao, AIR 1953 SC 210. Their Lordships opined in the said
case as follows:
"The rule that cause of action attracts jurisdiction in
suits is based on statutory enactment and cannot apply
to writs issuable under Article 226 which makes no
reference to any cause of action or where it arises but
insists on the presence of the person or authority
"within the territories" in relation to which the High
Court exercises jurisdiction."
9. In Ltd. Col. Khajoor Singh v. Union of India, AIR 1961 SC 532, a
Division Bench of Jammu and Kashmir High Court had upheld the
preliminary objections raised before it and had held that it had no
jurisdiction to issue a writ against the Union of India and to arrive at the said
conclusion, the High Court had placed reliance on the decisions in Saka
Venkata Rao (supra) and K.S. Rashid and Son v. The Income Tax
Investigation Commission etc., AIR 1954 SC 207. It was contended before
the Apex Court that the aforesaid two decisions were distinguishable from
the factual matrix therein inasmuch as in the earlier cases, the Election
Commission and the Income Tax Investigation Commission were statutory
bodies which have their location in Delhi and, therefore, the view was
expressed in that manner. The majority posed two questions, namely, (i)
whether the Government of India as such can be said to have a location in a
particular place, that is, New Delhi, irrespective of the fact that its authority
extends over all the States and its officers function throughout India; and (ii)
whether there is any scope for introducing the concept of cause of action as
the basis for exercise of jurisdiction under Article 226. Their Lordships,
while dealing with the first aspect, opined thus:
"It would, therefore, in our opinion be wrong to
introduce in Article 226 the concept of the place where
the order passed has effect in order to determine the
jurisdiction of the High Court which can give relief
under Article 226. The introduction of such a concept
may give rise to confusion and conflict of jurisdiction."
10. Thereafter, it has been held as follows:
"There can, therefore, be no escape from the conclusion
that these words in Article 226 refer not to the place
where the Government may be functioning but only to
the place where the person or authority is either resident
or is located. So far therefore as a natural person is
concerned, he is within those territories if he resides
there permanently or temporarily. So far as an authority
(other than a Government) is concerned, it is within the
territories if its office is located there. So far as a
Government is concerned it is within the territories only
if its seat is within those territories."
11. Their Lordships then answered the second question in the following
terms:
"16. Article 226 as it stands does not refer anywhere
to the accrual of cause of action and to the jurisdiction
of the High Court depending on the place where the
cause of action accrues being within its territorial
jurisdiction. Proceedings under Article 226 are not suits;
they provide for extraordinary remedies by a special
procedure and give powers of correction to the High
Court over persons and authorities and these special
powers have to be exercised within the limits set for
them. These two limitations have already been indicated
by us above and one of them is that the person or
authority concerned must be within the territories over
which the High Court exercises jurisdiction. Is it
possible then to overlook this constitutional limitation
and say that the High Court can issue a writ against a
person or authority even though it may not be within its
territories simply because the cause of action has arisen
within those territories? It seems to us that it would be
going in the face of the express provision in Art. 226
and doing away with an express limitation contained
therein if the concept of cause of action were to be
introduced in it. Nor do we think that it is right to say
that because Art. 300 specifically provides for suits by
and against the Government of India, the proceedings
under Art. 226 are also covered by Art. 300. It seems to
us that Art. 300 which is on the same line as S.176 of
the Government of India Act, 1935, dealt with suits as
such and proceedings analogous to or consequent upon
suits and has no reference to the extraordinary remedies
provided by Art. 226 of the Constitution. The concept
of cause of action cannot in our opinion be introduced
in Art. 226, for by doing so we shall be doing away with
the express provision contained therein which requires
that the person or authority to whom the writ is to be
issued should be resident in or located within the
territories over which the High Court has jurisdiction. It
is true that this may result in some inconvenience to
person residing far away from New Delhi who are
aggrieved by some order of the Government of India as
such, and that may be a reason for making a suitable
constitutional amendment in Art. 226."
12. After the said decision came into the field, the Parliament brought the
15th Amendment and inserted Clause (1A) in the Constitution by the 15 th
Amendment Act, 1963. Clause (1A) read as follows:
"(1A) 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 those territories."
13. By the 42nd constitutional amendment, Clause (1A) was renumbered
as Clause (2) and in the present incarnation, it reads as follows:
"(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
those territories."
14. From the aforesaid chronological narration of the growth of Article
226 of the Constitution, the concept of cause of action arising wholly or in
part came into existence for the exercise of power under the said Article.
15. Regard being had to the aforesaid historical backdrop, we shall
presently proceed to deal with the Full Bench decision in New India
Assurance Company Limited (supra) to perceive how it has dealt with the
concept of jurisdiction in the context of the conception of cause of action
and the appreciation of the ratio of various citations by the Full Bench
referred to by it. It is worth noting that the matter travelled to the Full Bench
by reference made by the Division Bench while hearing a letters patent
appeal from an order of the single Judge who had dismissed the writ petition
summarily on the ground that significant part of the cause of action could
not have been said to have arisen within the territorial jurisdiction of this
Court and merely because the order under challenge had been passed by the
appellate authority located within the territorial jurisdiction, the same could
not be sufficient enough for conferment of jurisdiction. The learned single
Judge, to arrive at the said conclusion, had placed reliance on the decisions
in Ambica Industries v. Commissioner of Central Excise, 2007 (213) ELT
323(SC), Bombay Snuff (P) Ltd. v. Union of India, 2006 (194) ELT 264
(Del), Rajkumar Shivhare v. Assistant Director of Enforcement, Mumbai
154 (2008) DLT 28 and West Coast Ingots (P) Ltd. v. Commissioner of
Central Excise, New Delhi, 2007 (209) ELT 343 (Del). The Full Bench
referred to the arguments canvassed at the Bar, took note of the legislative
history of Article 226 of the Constitution of India and referred to the
decisions of the Apex Court in Collector of Customs, Calcutta v. East India
Commercial Co. Ltd., Calcutta and others, AIR 1963 SC 1124, Kusum
Ingots & Alloys Ltd. v. Union of India, (2004) 6 SCC 254, Sri Nasiruddin
v. State Transport Appellate Tribunal, (1975) 2 SCC 671 and
Navinchandra N. Majithia v. State of Maharashtra, AIR 2000 SC 2966,
the decision of the High Court of Bombay in Kishore Rungta and ors. v.
Punjab National Bank and ors., 2003 (151) ELT 502 (Bom) and the
decision of the High Court of Delhi in Indian Institute of Technology v.
P.C. Jain and Ors., 45 (1991) DLT42 and eventually held thus:
"29. As held in Nasiruddin's case, even where part of
the cause of action arose, it would be open to the litigant,
who is the dominus litis to have his forum conveniens. In
the present case, since the Appellate Authority is situated
at New Delhi, the Delhi High Court has the jurisdiction
under Article 226 of the Constitution of India and,
therefore, there was no occasion for the learned single
Judge to apply the principle of forum conveniens to
refuse to exercise the jurisdiction. The principle of forum
nonconveniens originated as a principle of international
law, concerned with Comity of Nations. A domestic
court in which jurisdiction is vested by law otherwise
ought not to refuse exercise of jurisdiction for the reason
that under the same law some other courts also have
jurisdiction. However, the remedy under Article 226
being discretionary, the court may refuse to exercise
jurisdiction when jurisdiction has been invoked mala
fide. There is no such suggestion in the present case.
Nothing has been urged that it is inconvenient to the
contesting respondent to contest the writ before this
Court. The counsel for the contesting respondent has not
disputed the jurisdiction of this Court; his main
contention is of possibility of conflict. We do not find
any merit in this contention of the counsel for the
contesting respondent. First, that is not the case in hand.
The contesting respondent is not aggrieved by the order
of the appellate authority and has not assailed the same
before any High Court. Thus, there is no possibility of
conflicting judgments or confusion in the present case.
Secondly, even if in a given case such a situation were to
arise, the same is bound to be brought to the notice of the
court and the likelihood of both courts proceeding with
the writ petition and conflicting judgments is remote. In
such a situation, following the principle in Section 10 of
the Code of Civil Procedure, the subsequently filed
petition may be stayed in view of the earlier petition
entailing similar questions or the court may ask the
petitioner to approach the High Court where the earlier
petition has been filed. In our opinion, it will be
inappropriate to refuse to exercise jurisdiction merely on
the basis of possibility of conflict of judgments,
particularly in view of the clear language of Article
226(2).
30. Having held that this Court has jurisdiction, it
cannot be said that only an insignificant or miniscule
part of the cause of action has accrued within the
jurisdiction of this Court or that the substantial cause of
action has accrued within the jurisdiction of the High
Court of Andhra Pradesh. In fact, the sole cause of action
for the writ petition is the order of the appellate authority
and which cause of action has accrued entirely within the
jurisdiction of this Court and this Court would be failing
in its duty/function if declined to entertain the writ
petition on the ground of the contesting respondent being
situated within the jurisdiction of the High Court of
Andhra Pradesh. Though the petition has been filed
under Article 226 of the Constitution, it cannot be lost
sight of that jurisdiction in such cases under Article 226
is overlapping with Article 227. Article 227 is clear in
this regard. The power of superintendence over
Tribunals is vested in the High Court within whose
jurisdiction the Tribunal is situated. In that light of the
matter also, it cannot be said that only insignificant or
miniscule part of the cause of action has accrued within
the jurisdiction of this Court. The appellate authority in
the present case having passed the order which is
impugned in the petition, being situated within the
jurisdiction of this Court, even if the cause of action
doctrine were to be invoked, substantial part of the cause
of action has accrued within the jurisdiction of this Court
only. Even the language of the impugned order giving
rise to the cause of action in the writ petition, discloses
significant cause of action to have accrued within the
jurisdiction of this Court. This Court while deciding this
writ petition is not required to issue any direction, order
or writ to any person outside its jurisdiction. Section
110H of the Insurance Act provides for appeal to the
Central Government, seat whereof is admittedly within
the jurisdiction of this Court.
CONCLUSION
31. For the foregoing reasons, we hold that where an
order is passed by an appellate authority or a revisional
authority, a part of cause of (sic action) arises at that
place. When the original authority is situated at one
place and the appellate authority is situated at another, a
writ petition would be maintainable at both the places.
As the order of appellate authority constitutes a part of
cause of action, a writ petition would be maintainable in
the High Court within whose jurisdiction it is situate
having regard to the fact that the petitioner is dominus
litis to choose his forum, and that since the original order
merges into the appellate order, the place where the
appellate authority is located is also forum conveniens."
[Emphasis added]
16. On a nuanced scrutiny of the decision of the Full Bench, it is clear as
day that it has expressed the view which can be culled out in seriatim as
follows:
(i) Once the Court comes to hold that it has jurisdiction, the plea
that only an insignificant or miniscule part of the cause of
action has accrued within the jurisdiction of the Court or that
the substantial cause of action has accrued in another State is
inconsequential.
(ii) The "sole" cause of action emerges when an order by the
appellate authority situated within the territorial jurisdiction of
Delhi is passed and when the "sole" cause of action accrues
entirely within the jurisdiction of this Court, declining to
entertain the writ petition would amount to failure of duty of the
Court.
(iii) This Court has jurisdiction under Article 227 since it has the
power of superintendence over tribunals situated within its
jurisdiction and judged in that light, it cannot be said that only
an insignificant or miniscule part of the cause of action has
accrued within the jurisdiction of this Court.
(iv) Even if the doctrine of cause of action is adopted or invoked,
the substantial part of the cause of action arises because the
order under assail is that of the appellate authority / tribunal
which is situated in Delhi.
(v) As the original order merges into the appellate order, the place
where the appellate authority is located is also the forum
conveniens.
(vi) The remedy under Article 226 being discretionary, the Court
may refuse to exercise jurisdiction only when jurisdiction has
been invoked with malafide intent.
Be it noted, the Full Bench had also observed that as the appellate
authority is situate at New Delhi, the Delhi High Court has the jurisdiction
under Article 226 of the Constitution of India and, therefore, there was no
occasion for the learned Single Judge to apply the principle of forum
conveniens to refuse exercise of jurisdiction.
17. Presently, we shall proceed to advert to the authorities that have been
referred to and relied upon by the Full Bench for the simon pure reason that
understanding of the principles exposited therein would enable us to
appreciate the enunciation of the law by the Full Bench and also refer to
certain authorities that have been cited before us.
18. In the case of Sri Nasiruddin (supra), it has been held thus:
"...the expression "cause of action" in an application
under Article 226 would be as the expression is
understood and if the cause of action arose because of
the appellate order or the revisional order which came to
be passed at Lucknow then Lucknow would have
jurisdiction though the original order was passed at a
place outside the areas in Oudh. It may be that the
original order was in favour of the person applying for a
writ. In such case an adverse appellate order might be
the cause of action. The expression "cause of action" is
well-known. If the cause of action arises wholly or in
part at a place within the specified Oudh areas, the
Lucknow Bench will have jurisdiction. If the cause of
action arises wholly within the specified Oudh areas, it is
indisputable that the Lucknow Bench would have
exclusive jurisdiction in such a matter. If the cause of
action arises in part within the specified areas in Oudh it
would be open to the litigant who is the dominus litis to
have his forum conveniens. The litigant has the right to
go to a Court where part of his cause of action arises. In
such cases, it is incorrect to say that the litigant chooses
any particular Court. The choice is by reason of the
jurisdiction of the Court being attracted by part of cause
of action arising within the jurisdiction of the Court..."
19. In Kishore Rungta and ors. (supra), a writ petition was filed
challenging the order passed by the Debt Recovery Appellate Tribunal,
Mumbai dismissing an order of the Debt Recovery Appellate Tribunal,
Jaipur. A preliminary objection was raised regarding the jurisdiction of the
High Court of Bombay. The Division Bench of the High Court of Bombay
referred to the decisions in East India Commercial Co. Ltd., Calcutta and
others (supra), Damomal Kausomal Raisinghani v. Union of India, AIR
1967 Bom 355, Navinchandra N. Majithia (supra) and Sita Ram Singhania
v. Bank of Tokyo-Mitsubishi Ltd. and ors, AIR 2000 SC 2180 and came to
opine thus:
"16. Mr. Tulzapurkar lastly submitted that a part of the
cause of action having arisen in Mumbai, this Court has
jurisdiction to entertain the Petition in view of Article
226(2) of the Constitution. We are in agreement with
Mr. Tulzapurkar. The 15th amendment to the
Constitution which introduced clause 2 in Article 226
was intended to widen the ambit of the area for reaching
the writs issued by the High Court. Clause 2 of Article
226 is as under:
"(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 those territories."
In this connection Mr. Tulzapurkar relied upon the
judgment of the Supreme Court in the case of
Navinchandra N. Majithia v. State of Maharashtra, The
Supreme Court held that the power conferred on the
High Courts under Article 226 could as well be
exercised by any High Court exercising Jurisdiction in
relation to the territories within which the cause of
action, wholly or in part arises and it is no matter that the
seat of the Authority concerned is outside the territorial
limits of the jurisdiction of that High Court. The
Supreme Court further held that the amendment was
aimed at widening the width of the area for reaching the
writs issued by different High Courts. The Supreme
Court also held that the words "cause of action wholly or
in part arises" seem to have been lifted from Section 20
of the Code of Civil Procedure, which section also deals
with the jurisdictional aspect of the Courts."
20. In Alchemist Ltd. and Anr. v. State Bank of Sikkim and ors., (2007)
11 SCC 335, after referring to the decisions in A.B.C. Laminart (P) Ltd. v.
A.P. Agencies, AIR 1989 SC 1239, Union of India v. Oswal Woollen Mills
Ltd., (1984) 2 SCC 646, State of Rajasthan v. Swaika Properties, AIR 1985
SC 1289, Oil and Natural Gas Commission v. Utpal Kumar Basu and
others, (1994) 4 SCC 711, CBI, Anti-Corruption Branch v. Narayan
Diwakar, (1999) 4 SCC 656, Union of India v. Adani Exports Ltd., (2002)
1 SCC 567, Kusum Ingots & Alloys Ltd. (supra) and National Textile
Corpn. Ltd. v. Haribox Swalram, (2004) 9 SCC 786, the Supreme Court
expressed the view as follows:
"34. In Kusum Ingots & Alloys Ltd. v. Union of India,
(2004) 6 SCC 254 : JT (2004) Supp 1 SC 475, the
appellant was a Company registered under the
Companies Act having its head office at Mumbai. It
obtained a loan from the Bhopal Branch of the State
Bank of India. The Bank issued a notice for repayment
of loan from Bhopal under the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002. The appellant Company
filed a writ petition in the High Court of Delhi which
was dismissed on the ground of lack of territorial
jurisdiction. The Company approached this Court and
contended that as the constitutionality of a parliamentary
legislation was questioned, the High Court of Delhi had
the requisite jurisdiction to entertain the writ petition.
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, 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 v. Utpal Kumar Basu, (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 Corporation 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.
38. In the present case, the facts which have been
pleaded by the Appellant Company, in our judgment,
cannot be said to be essential, integral or material facts
so as to constitute a part of "cause of action" within the
meaning of Article 226(2) of the Constitution. The High
Court, in our opinion, therefore, was not wrong in
dismissing the petition." [Emphasis added]
21. In Utpal Kumar Basu and others (supra), a three-Judge Bench of the
Apex Court, while dealing with the territorial jurisdiction in the backdrop of
Article 226(2), has opined thus:
"5. Clause (1) of Article 226 begins with a non-
obstante clause-notwithstanding anything in Article 32 -
and provides that 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 cases, any
Government, "within those territories" directions, orders
or writs, for the enforcement of any of the rights
conferred by Part III or for any other purpose. Under
clause (2) of Article 226 the High court may exercise its
power conferred by clause (1) if the cause of action,
wholly or in part, had arisen within the territory over
which it exercises jurisdiction, notwithstanding that the
seat of such Government or authority or the residence of
such person is not within those territories. On a plain
reading of the aforesaid two clauses of Article 226 of the
Constitution it becomes clear that a High Court can
exercise the power to issue directions, orders or writs for
the enforcement of any of the fundamental rights
conferred by Part III of the Constitution or for any other
purpose if the cause of action, wholly or in part, had
arisen within the territories in relation to which it
exercises jurisdiction, notwithstanding that the seat of
the Government or authority or the residence of the
person against whom the direction, order or writ is
issued is not within the said territories. In order to confer
jurisdiction on the High Court of Calcutta, NICCO must
show that at least a part of the cause of action had arisen
within the territorial jurisdiction of that Court. That is at
best its case in the writ petition.
6. It is well settled that the expression "cause of
action" means that bundle of facts which the petitioner
must prove, if traversed, to entitle him to a judgment in
his favour by the Court. In Chand Kour v. Partab Singh
ILR (1889) 16 Cal 98, 102 Lord Watson said:
"...the cause of action has no relation whatever to
the defence which may be set up by the
defendant, nor does it depend upon the character
of the relief prayed for by the plaintiff. It refers
entirely to the grounds set forth in the plaint as
the cause of action, or, in other words, to the
media upon which the plaintiff asks the Court to
arrive at a conclusion in his favour."
Therefore, in determining the objection of lack of
territorial jurisdiction the court must take all the facts
pleaded in support of the cause of action into
consideration albeit without embarking upon an enquiry
as to the correctness or otherwise of the said facts. In
other words the question whether a High Court has
territorial jurisdiction to entertain a writ petition must be
answered on the basis of the averments made in the
petition, the truth or otherwise whereof being
immaterial. To put it differently, the question of
territorial jurisdiction must be decided on the facts
pleaded in the petition."
[Emphasis added]
22. In Kusum Ingots & Alloys Ltd. (supra), the Apex Court posed the
question whether the seat of Parliament or the legislature of a State would be
a relevant factor for determining the territorial jurisdiction of a High Court
to entertain a writ petition under Article 226 of the Constitution of India.
Their Lordships not only referred to clause (2) of Article 226 of the
Constitution of India but also to the facet of cause of action as stated in
Chand Kour v. Partab Singh ILR (1887-88) 15 IA 156, Utpal Kumar Basu
and others (supra), Swaika Properties (supra), Aligarh Muslim University
v. Vinay Engg. Enterprises (P) Ltd., (1994) 4 SCC 710, Union of India v.
Adani Exports Ltd., (2002) 1 SCC 567 and Haribox Swalram (supra) and
came to hold as follows:
"19. Passing of a legislation by itself in our opinion
does not confer any such right to file a writ petition
unless a cause of action arises therefor.
20. A distinction between a legislation and executive
action should be borne in mind while determining the
said question.
21. A parliamentary legislation when receives the
assent of the President of India and is published in the
Official Gazette, unless specifically excluded, will apply
to the entire territory of India. If passing of a legislation
gives rise to a cause of action, a writ petition questioning
the constitutionality thereof can be filed in any High
Court of the country. It is not so done because a cause of
action will arise only when the provisions of the Act or
some of them which were implemented shall give rise to
civil or evil consequences to the petitioner. A writ court,
it is well settled would not determine a constitutional
question in a vacuum.
22. The court must have the requisite territorial
jurisdiction. An order passed on a writ petition
questioning the constitutionality of a parliamentary Act,
whether interim or final, keeping in view the provisions
contained in clause (2) of Article 226 of the Constitution
of India, will have effect throughout the territory of India
subject of course to the applicability of the Act."
23. Thereafter, in paragraphs 27 and 29, their Lordships stated thus:
"27. When an order, however, is passed by a court or
tribunal or an executive authority whether under
provisions of a statute or otherwise, a part of cause of
action arises at that place. Even in a given case, when the
original authority is constituted at one place and the
appellate authority is constituted at another, a writ
petition would be maintainable at both the places. In
other words as order of the appellate authority
constitutes a part of cause of action, a writ petition
would be maintainable in the High Court within whose
jurisdiction it is situate having regard to the fact that the
order of the appellate authority is also required to be set
aside and as the order of the original authority merges
with that of the appellate authority.
X X X X
29. In view of clause (2) of Article 226 of the
Constitution of India, now if a part of cause of action
arises outside the jurisdiction of the High Court, it would
have jurisdiction to issue a writ. The decision in Khajoor
Singh (supra) has, thus, no application."
[Emphasis added]
24. After so stating, in paragraph 30, their Lordships held thus:
"30. We must, however, remind ourselves that even if
a small part of cause of action arises within the territorial
jurisdiction of the High Court, the same by itself may not
be considered to be a determinative factor compelling
the High Court to decide the matter on merit. In
appropriate cases, the Court may refuse to exercise its
discretionary jurisdiction by invoking the doctrine of
forum conveniens. [See Bhagat Singh Bugga v. Dewan
Jagbir Sawhany, AIR 1941 Cal 670, Madanlal Jalan v.
Madanlal, AIR 1949 Cal 495, Bharat Coking Coal
Limited v. Jharia Talkies & Cold Storage (P) Ltd., 1997
CWN 122, S.S. Jain & Co. v. Union of India, (1994) 1
CHN 445 and New Horizon Ltd. v. Union of India, AIR
1994 Del 126."
[Emphasis supplied]
25. In Ambica Industries (supra), their Lordships have expressed thus:
"40. Although in view of Section 141 of the Code of
Civil Procedure the provisions thereof would not apply
to writ proceedings, the phraseology used in Section
20(c) of the Code of Civil Procedure and clause (2) of
Article 226, being in pari materia, the decisions of this
Court rendered on interpretation of Section 20(c) CPC
shall apply to the writ proceedings also. Before
proceeding to discuss the matter further it may be
pointed out that the entire bundle of facts pleaded need
not constitute a cause of action, as what is necessary to
be proved, before the petitioner can obtain a decree, is
material facts. The expression material facts is also
known as integral facts.
41. Keeping in view the expression "cause of action"
used in Clause (2) of Article 226 of the Constitution of
India, indisputably even if a small fraction thereof
accrues within the jurisdiction of the Court, the Court
will have jurisdiction in the matter though the doctrine of
forum conveniens may also have to be considered."
[Emphasis added]
26. At this juncture, we may profitably refer to the decision in Adani
Exports Ltd. (supra) wherein their Lordships, after referring to the decision
in Utpal Kumar Basu and others (supra), have held thus:
"17. It is seen from the above that in order to confer
jurisdiction on a High Court to entertain a writ petition
or a special civil application as in this case, the High
Court must be satisfied from the entire facts pleaded in
support of the cause of action that those facts do
constitute a cause so as to empower to court to decide a
dispute which has, at least in part, arisen within its
jurisdiction. It is clear from the above judgment that each
and every fact pleaded by the respondents in their
application does not ipso facto lead to the conclusion
that those facts give rise to a cause of action within the
court's territorial jurisdiction unless those facts pleaded
are such 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. If we apply this
principle then we see that none of the facts pleaded in
Paragraph 16 of the petition, in our opinion, fall into the
category of bundle of facts which would constitute a
cause of action giving rise to a dispute which could
confer territorial jurisdiction on the courts at
Ahmedabad."
27. In Rajendran Chingaravelu v. R.K. Mishra, (2010) 1 SCC 457, the
appellant, a Computer Engineer, with the intention to buy a property at
Chennai, identified a prospective seller at Chennai and proceeded from
Hyderabad with a large sum of money to Chennai and when his baggage was
checked at the Hyderabad airport by the security personnel, he was allowed
to leave Hyderabad. However, at Chennai, some officers of the Income Tax
Investigation Wing rushed in and he was pulled out of the aircraft and taken
to the office on the first floor of the airport. He was questioned there about
the money he was carrying. After certain enquiry and investigation, as
nothing was found to be amiss or irregular, the seized money was returned to
him, but without any interest. Being aggrieved by the action of the
department, he filed a writ petition in the High Court of Andhra Pradesh
seeking certain reliefs. The High Court of Andhra Pradesh declined to
interfere and directed the appellant therein to approach the appropriate court
at Chennai. The said order was the subject matter of appeal by special leave
before the Apex Court. In that context, their Lordships have held thus:
"9. The first question that arises for consideration is
whether the Andhra Pradesh High Court was justified in
holding that as the seizure took place at Chennai (Tamil
Nadu), the appellant could not maintain the writ petition
before it. The High Court did not examine whether any
part of cause of action arose in Andhra Pradesh. Clause
(2) of Article 226 makes it clear that the High Court
exercising jurisdiction in relation to the territories within
which the cause of action arises wholly or in part, will
have jurisdiction. This would mean that even if a small
fraction of the cause of action (that bundle of facts which
gives a petitioner, a right to sue) accrued within the
territories of Andhra Pradesh, the High Court of that
State will have jurisdiction.
10. In this case, the genesis for the entire episode of
search, seizure and detention was the action of the
security/intelligence officials at Hyderabad Airport (in
Andhra Pradesh) who having inspected the cash carried
by him, alerted their counterparts at Chennai Airport that
the appellant was carrying a huge sum of money, and
required to be intercepted and questioned. A part of the
cause of action therefore clearly arose in Hyderabad. It is
also to be noticed that the consequential income tax
proceedings against him, which he challenged in the writ
petition, were also initiated at Hyderabad. Therefore, his
writ petition ought not to have been rejected on the
ground of want of jurisdiction."
[Underlining is by us]
28. On a scrutiny of the aforesaid emphasized lines, it is vivid that their
Lordships have opined that a part of the cause of action arose at Hyderabad
as the officers at Hyderabad had alerted their counterparts at Chennai airport
and further consequential income tax proceedings were also initiated at
Hyderabad. In our humble view, the concept of cause of action which has
been referred to in the said decision falls within the concept of cause of
action as explained and elucidated in Alchemist Ltd. (supra).
29. In Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd. & Ors.,
(2006) 3 SCC 658, the Apex Court referred to the decision in Kusum Ingots
& Alloys Ltd. (supra) and observed as follows:
"26 ...with a view to determine the jurisdiction of one
High Court vis-à-vis the other the facts pleaded in the
writ petition must have a nexus on the basis whereof a
prayer can be made and the facts which have nothing to
do therewith cannot give rise to a cause of action to
invoke the jurisdiction of a court. In that case it was
clearly held that only because the High Court within
whose jurisdiction a legislation is passed, it would not
have the sole territorial jurisdiction but all the High
Courts where cause of action arises, will have
jurisdiction..."
Thereafter, their Lordships reproduced paragraphs 27 and 28 of the
said decision and a passage from Adani Exports Ltd. (supra) and proceeded
to state as follows:
"28. We have referred to the scope of jurisdiction
under Articles 226 and 227 of the Constitution only to
highlight that the High Courts should not ordinarily
interfere with an order taking cognisance passed by a
competent court of law except in a proper case.
Furthermore only such High Court within whose
jurisdiction the order of the subordinate court has been
passed, would have the jurisdiction to entertain an
application under Article 227 of the Constitution unless
it is established that the earlier cause of action arose
within the jurisdiction thereof.
29. The High Courts, however, must remind
themselves about the doctrine of forum non conveniens
also. [See Mayar (H.K.) Ltd. v. Owners & Parties,
Vessel M.V. Fortune Express, (2006) 3 SCC 100: (2006)
2 Scale 30]" [Underlining is by us]
30. From the aforesaid pronouncements, the concept of forum conveniens
gains signification. In Black's Law Dictionary, forum conveniens has been
defined as follows:
"The court in which an action is most appropriately
brought, considering the best interests and convenience
of the parties and witnesses."
31. The concept of forum conveniens fundamentally means that it is
obligatory on the part of the court to see the convenience of all the parties
before it. The convenience in its ambit and sweep would include the
existence of more appropriate forum, expenses involved, the law relating to
the lis, verification of certain facts which are necessitous for just
adjudication of the controversy and such other ancillary aspects. The
balance of convenience is also to be taken note of. Be it noted, the Apex
Court has clearly stated in the cases of Kusum Ingots (supra), Mosaraf
Hossain Khan (supra) and Ambica Industries (supra) about the applicability
of the doctrine of forum conveniens while opining that arising of a part of
cause of action would entitle the High Court to entertain the writ petition as
maintainable.
32. The principle of forum conveniens in its ambit and sweep
encapsulates the concept that a cause of action arising within the jurisdiction
of the Court would not itself constitute to be the determining factor
compelling the Court to entertain the matter. While exercising jurisdiction
under Articles 226 and 227 of the Constitution of India, the Court cannot be
totally oblivious of the concept of forum conveniens. The Full Bench in
New India Assurance Co. Ltd. (supra) has not kept in view the concept of
forum conveniens and has expressed the view that if the appellate authority
who has passed the order is situated in Delhi, then the Delhi High Court
should be treated as the forum conveniens. We are unable to subscribe to
the said view.
33. In view of the aforesaid analysis, we are inclined to modify the
findings and conclusions of the Full Bench in New India Assurance
Company Limited (supra) and proceed to state our conclusions in seriatim as
follows:
(a) The finding recorded by the Full Bench that the sole cause of action
emerges at the place or location where the tribunal/appellate
authority/revisional authority is situate and the said High Court (i.e.,
Delhi High Court) cannot decline to entertain the writ petition as that
would amount to failure of the duty of the Court cannot be accepted
inasmuch as such a finding is totally based on the situs of the
tribunal/appellate authority/revisional authority totally ignoring the
concept of forum conveniens.
(b) Even if a miniscule part of cause of action arises within the
jurisdiction of this court, a writ petition would be maintainable before
this Court, however, the cause of action has to be understood as per
the ratio laid down in the case of Alchemist Ltd. (supra).
(c) An order of the appellate authority constitutes a part of cause of action
to make the writ petition maintainable in the High Court within whose
jurisdiction the appellate authority is situated. Yet, the same may not
be the singular factor to compel the High Court to decide the matter
on merits. The High Court may refuse to exercise its discretionary
jurisdiction by invoking the doctrine of forum conveniens.
(d) The conclusion that where the appellate or revisional authority is
located constitutes the place of forum conveniens as stated in absolute
terms by the Full Bench is not correct as it will vary from case to case
and depend upon the lis in question.
(e) The finding that the court may refuse to exercise jurisdiction under
Article 226 if only the jurisdiction is invoked in a malafide manner is
too restricted / constricted as the exercise of power under Article 226
being discretionary cannot be limited or restricted to the ground of
malafide alone.
(f) While entertaining a writ petition, the doctrine of forum conveniens
and the nature of cause of action are required to be scrutinized by the
High Court depending upon the factual matrix of each case in view of
what has been stated in Ambica Industries (supra) and Adani Exports
Ltd. (supra).
(g) The conclusion of the earlier decision of the Full Bench in New India
Assurance Company Limited (supra) "that since the original order
merges into the appellate order, the place where the appellate
authority is located is also forum conveniens" is not correct.
(h) Any decision of this Court contrary to the conclusions enumerated
hereinabove stands overruled.
34. Ex consequenti, we answer the reference by partially overruling and
clarifying the decision in New India Assurance Company Limited (supra) in
the above terms. Matters be listed before the appropriate Division Bench for
appropriate consideration.
CHIEF JUSTICE
VIKRAMAJIT SEN, J.
A.K. SIKRI, J.
SANJIV KHANNA, J.
MANMOHAN, J.
AUGUST 1, 2011
dk
