M/S. Ambica Industries Vs. Commissioner of Central Excise  Insc 634 (18 May 2007)
S.B. Sinha & Markandey Katju
CIVIL APPEAL NO. 2749 2007 [Arising out of S.L.P. (C) No. 18405 of 2006]
CIVIL APPEAL NO. 2750/2007 @ S.L.P.(C)No. 18822 of 2006 CIVIL APPEAL NO.
2751/2007 @ S.L.P.(C)No. 18956 of 2006 S.B. SINHA, J.
1. Leave granted.
2. The issue which arises for our consideration in these appeals relates to
determination of situs of the High Court in which appeals would lie under
Section 35G(1) of the Central Excise Act.
3. Appellant herein carries on business at Lucknow. It was assessed at the
said place. The matter, however, ultimately came up before Central Excise and
Service Tax Appellate Tribunal (CESTAT), New Delhi in Appeal No.E/2792/02-NBC. The
said Tribunal exercises jurisdiction in respect of cases arising within the
territorial limits of the State of Uttar Pradesh, National Capital Territory of
Delhi and the State of Maharashtra.
4. Having regard to the situs of the Tribunal, an appeal in terms of Section
35G of the Central Excise Act, 1944 was filed before the Delhi High Court. A
Division Bench of the said Court relying on or on the basis of an India 2006
(194) ELT 264 opined that it had no territorial jurisdiction in the matter.
5. Mr. C. Hari Shankar, learned counsel appearing on behalf of the appellant
would submit that despite the fact that sub-section (9) of Section 35G of the
Act was brought to the notice of the High Court, the court refused to consider
the effect thereof in determining the question of its jurisdiction. Had the
said provision been taken into consideration for determination of the issue, it
was possible to hold that its decision in Bombay Snuff (supra) had been
rendered per incurium. Referring to the development of law governing the field,
by reason of the amendment carried out by Parliament in the said Act as also
other pari materia statutes, the learned counsel would submit that the High
Court was wrong in arriving at the said conclusion.
6. Mr. G.E. Vahanvati, learned Solicitor General of India, on the other
hand, would submit that the term 'cause of action' applicable in relation to a
suit or a writ petition before the High Court having regard to clause 2 of
Article 226 of the Constitution of India cannot be the basis for determining
the situs of the High Court to which an appeal shall lie under section 35G of
the Act. It was submitted that the situs of the Assessing Officer would be the
determinative factor for the High Court to exercise its territorial jurisdiction
in entertaining appeal thereunder and not the situs of the Tribunal alone.
7. We may, at the outset, notice some provisions of the Act which are
relevant for our purpose:- "35G. Appeal to High Court (1) An appeal shall
lie to the High Court from every order passed in appeal by the Appellate
Tribunal on or after the 1st day of July, 2003 (not being an order relating,
among other things, to the determination of any question having a relation to
the rate of duty of excise or to the value of goods for the purposes of
assessment), if the High Court is satisfied that the case involves a
substantial question of law.
(2) The Commissioner of Central Excise or the other party aggrieved by any
order passed by the Appellate Tribunal may file an appeal to the High Court and
such appeal under this sub-section shall be--- (9) Save as otherwise provided
in this Act, the provisions of the Code of Civil Procedure, 1908(5 of 1908),
relating to appeals to the High Court shall, as far as may be, apply in the
case of appeals under this section."
8. In terms of the said provision, the questions involving "rate of
duty of excise or the value of the goods" may be subjected to an appeal
before the High Court, subject of course to its satisfaction that the matter
involves a substantial question of law. Sub-section (9) of Section 35G, prior
to 1999, provided for application of the procedure of Code of Civil Procedure,
1908 mutatis mutandis to the appeals to the High Courts, recourse to which
could be taken for challenging the final orders of the Tribunal before the High
Court. Post 1999, two provisions, namely, Section 35G and Section 35H were made
available, the relevant provisions whereof are as under :- "35G. Statement
of case to High Court.-- (1) The Commissioner of Central Excise or the other
party may, within sixty days of the date upon which he is served with notice of
an order under section 35C passed before the 1st day of July, 1999 (not being
an order relating, among other things, to the determination of any question
having a relation to the rate of duty of excise or to the value of goods for
purposes of assessment), by application in the prescribed form, accompanied,
where the application is made by the other party, by a fee of two hundred
rupees, require the Appellate Tribunal to refer to the High Court any question
of law arising out of such order and, subject to the other provisions contained
in this section, the Appellate Tribunal shall, within one hundred and twenty
days of the receipt of such application, draw up a statement of the case and
refer it to the High Court:
Provided that the Appellate Tribunal may, if it is satisfied that the
applicant was prevented by sufficient cause from presenting the application
within the period herein before specified, allow it to be presented within a
further period not exceeding thirty days"
9. The Finance Act of 2003, however, did away with the remedy of reference
to the High Court, altogether, except in the case of final orders passed by the
Tribunal on or before 1.7.2003. Final orders passed after the said date by
reason of Section 144 of the Finance Act, 2003 were made appealable to the High
Court under an entirely substituted Section 35G, whereas Section 145 of the
Finance Act, 2003, amended Section 35H of the Act to restrict its applicability
to Final Orders passed after 1.7.2003. Section 35H as amended reads as under :-
"35H. Application to High Court.-- (1) The Commissioner of Central Excise
or the other party may, within one hundred and eighty days of the date upon which
he is served with notice of an order under section 35C passed * [before the 1st
day of July, 2003] (not being an order relating, among other things, to the
determination of any question having a relation to the rate of duty of excise
or to the value of goods for purposes of assessment), by application in the
prescribed form, accompanied, where the application is made by the other party,
by a fee of two hundred rupees, apply to the High Court to direct the Appellate
Tribunal to refer to the High Court any question of law arising from such order
of the Tribunal.
(2) The Commissioner of Central Excise or the other party applying to the
High Court under sub- section (1) shall clearly state the question of law which
he seeks to be referred to the High Court and shall also specify the paragraph
in the order of the Appellate Tribunal relevant to the question sought to be
(3) On receipt of notice that an application has been made under sub-section
(1), the person against whom such application has been made, may,
notwithstanding that he may not have filed such application, file, within
forty-five days of the receipt of the notice, a memorandum of cross- objections
verified in the prescribed manner against any part of the order in relation to
which an application for reference has been made and such memorandum shall be
disposed of by the High Court as if it were an application presented within the
time specified in sub-section (1).
(4) If, on an application made under sub-section (1), the High Court directs
the Appellate Tribunal to refer the question of law raised in the application,
the Appellate Tribunal shall, within one hundred and twenty days of the receipt
of such direction, draw up a statement of the case and refer it to the High
10. Similar problems have arisen in respect of the decisions rendered by
Tribunals constituted under different Acts, for example Income Tax Act.
We are also not unmindful of a catena of decisions rendered by some High
Courts that situs of the Tribunal is the determinative factor for reference
and/or appeal before the High Court.
11. The question incidentally came up for consideration before a 5 Judge
wherein, inter alia, it was held :- "37. To sum up, our conclusions are as
First, there is no permanent seat of the High Court at Allahabad. The seats
at Allahabad and at Lucknow may be changed in accordance with the provisions of
the Order. Second, the Chief Justice of the High Court has no power to increase
or decrease the areas in Oudh from time to time. The areas in Oudh have been
determined once by the Chief Justice and, therefore, there is no scope for
changing the areas. Third, the Chief Justice has power under the second proviso
to paragraph 14 of the Order to direct in his discretion that any case or class
of cases arising in Oudh areas shall be heard at Allahabad. Any case or class
of cases are those which are instituted at Lucknow. The interpretation given by
the High Court that the word "heard" confers powers on the Chief
Justice to order that any case or class of cases arising in Oudh areas shall be
instituted or filed at Allahabad instead of Lucknow is wrong. The word
means that cases which have already been instituted or filed at Lucknow may
in the discretion of the Chief Justice under the second proviso to paragraph 14
of the Order be directed to be heard at Allahabad. Fourth, the expression
"cause of action" with regard to a civil matter means that it should
be left to the litigant to institute cases at Lucknow Bench or at Allahabad
Bench according to the cause of action arising wholly or in part within either
of the areas. If the cause of action arises wholly within Oudh areas then the
Lucknow Bench will have jurisdiction. Similarly, if the cause of action arises
wholly outside the specified areas in Oudh then Allahabad will have
jurisdiction. If the cause of action in part arises in the specified Oudh areas
and part of the cause of action arises outside the specified areas, it will be
open to the litigant to frame the case appropriately to attract the
jurisdiction either at Lucknow or at Allahabad. Fifth, a criminal case arises
where the offence has been committed or otherwise as provided in the Criminal
Proceduce Code. That will attract the jurisdiction of the Court at Allahabad or
Lucknow. In some cases depending on the facts and the provision regarding
jurisdiction, it may arise in either place."
12. The said decision proceeded on the basis that part of the cause of
action may arise at the forum where the appellate order or the revisional order
is sourced. If, thus, a cause of action arises within one or the other High
Court, the petitioner shall be the dominus litis. Indisputably, if this set of
reasoning is to be accepted, the impugned judgment as also the decision
rendered in Bombay Snuff (supra) would not be correct. Before dilating on the
said proposition of law it may be noticed that the decision of a Tribunal would
be binding on the Assessing Authority. If the situs of the appellate Tribunal
should be considered to be the determinative factor, a decision rendered by the
Tribunal shall be binding on all the authorities exercising its jurisdiction
under the said Tribunal.
13. The Tribunal, as noticed hereinbefore, exercises jurisdiction over all
the three States. In all the three States there are High Courts. In the event,
the aggrieved person is treated to be the dominus litus, as a result whereof,
he elects to file the appeal before one or the other High Court, the decision
of the High Court shall be binding only on the authorities which are within its
jurisdiction. It will only be of persuasive value on the authorities
functioning under a different jurisdiction. If the binding authority of a High
Court does not extend beyond its territorial jurisdiction and the decision of
one High Court would not be a binding precedent for other High Courts or Courts
or Tribunals outside its territorial jurisdiction, some sort of judicial
anarchy shall come into play. An assessee, affected by an order of assessment
made at Bombay, may invoke the jurisdiction of the Allahabad High Court to take
advantage of the law laid down by it and which might suit him and thus he would
be able to successfully evade the law laid down by the High Court at Bombay.
14. Furthermore, when an appeal is provided under a statute, Parliament must
have thought of one High Court. It is a different matter that by way of
necessity, a Tribunal may have to exercise jurisdiction over several States but
it does not appeal to any reason that Parliament intended, despite providing
for an appeal before the High Court, that appeals may be filed before different
High Courts at the sweet will of the party aggrieved by the decision of the
15. In a case of this nature, therefore, the cause of action doctrine may
not be invoked.
16. Sub-section 9 of Section 35G, whereupon Mr. C. Hari Shankar, learned
counsel places strong reliance, in our opinion, does not answer the question
placed before us. Learned counsel contends that in terms of sub- section 1 of
Section 100 of the Code of Civil Procedure, the order of the First Appellate
Court being a decree, a Second Appeal shall lie before the High Court
17. There cannot be any doubt whatsoever that in terms of Article 227 of the
Constitution of India as also Clause (2) of Article 226 thereof, the High Court
would exercise its discretionary jurisdiction as also power to issue writ of
certiorari in respect of the orders passed by the Subordinate Courts within its
territorial jurisdiction or if any cause of action has arisen therewithin but
the same tests cannot be applied when the appellate court exercises a
jurisdiction over Tribunal situated in more than one State. In such a
situation, in our opinion, the High Court situated in the State where the first
court is located should be considered to be the appropriate appellate
authority. Code of Civil Procedure did not contemplate such a situation. It
provides for jurisdiction of each court. Even a District Judge must exercise
its jurisdiction only within the territorial limits of a State. It is
inconceivable under the Code of Civil Procedure that the jurisdiction of the
District Court would be exercisable beyond the territorial jurisdiction of the
District, save and except in such matters where the law specifically provides
18. The submission of Mr. C. Hari Shankar, learned counsel, as noticed
hereinbefore, is inconsistent and contradictory. The doctrine of dominus litus
or doctrine of situs of the Appellate Tribunal do not go together.
Dominus litus indicates that the suitor has more than one option, whereas
the situs of an Appellate Tribunal refers to only one High Court wherein the
appeal can be preferred. We may consider two hypothetical cases in order to
enable us to find out an answer. A Tribunal may hear out a matter either at
Allahabad or at Bombay and pass a judgment at that place. Only because the head
office is situated at Delhi, would it mean that a judgment delivered at
Allahabad or at Bombay would not attain its finality then and there.
19. We may notice some incongruities if the contention of the appellant is
taken to its logical conclusion. It is possible that in a case of emergency
while the Tribunal holding its sitting at Allahabad or Bombay may entertain a
matter where the cause of action had arisen at Delhi. But that would not mean
that when the Tribunal pronounces its judgment at Allahabad or Bombay, although
the cause of action had initially arisen at Delhi, the Delhi High Court would
have no jurisdiction in relation thereto.
20. The situs of a Tribunal may vary from time to time. It could be Delhi or
some other place. Whether its jurisdiction would be extending to 3 States or
more or less would depend upon the Executive order which may be issued.
Determination of the jurisdiction of a High Court on the touchstone of Sections
35G and 35H of the Act, in our opinion, should be considered only on the basis
of statutory provisions and not anything else. While defining High Court in
terms of Section 36B of the Act, the Parliament never, in our opinion, contemplated
to have a situation of this nature.
21. An appeal may have to be filed by the Commissioner of Central Excise.
His office may be located in a different State. If he has to prefer an appeal
before the High Court, he would be put to a great inconvenience whereas, the
assessee would not be.
22. We may, keeping in view the aforementioned backdrop, notice a few Iyer
[AIR 1969 Mad 300], it was held :- "On that view, we think that where a
Tribunal has jurisdiction over more States than one, and it has got to make a
choice, in the absence of a statutory provision, relating to the matter it must
be guided by the principles of Section 64, that is to say, the place where the
assessee carries on his business, profession or vocation or resides. On that
test, it is the High Court of Kerala which will have jurisdiction. There is
also another approach to the question, namely, the subject-matter test As we
mentioned, the penalty proceedings were originally initiated by the Income-tax
Officer at Trichur and it was because of a directive by Section 274(2) he made
a reference to the Inspecting Assistant Commissioner. But in effect, as we
think, the penalty proceedings are but a continuation of the original
assessment orders and the subsequent proceedings started by the Income-tax
Officer at Trichur for levy of penalty. On that basis too, we are inclined to
think that this court will have no jurisdiction under Section 66(2)."
23. A Division Bench of Delhi High Court in Seth Banarsi Dass Gupta Section
66 of the Income Tax Act, 1922, held as under :- "The question then arises
as to which High Court the Delhi Bench could refer the questions of law
proposed in the applications under section 66(1) of the Act.
The only relevant provisions in the Act are those in Section 66. Section
66(1) merely states that within the time mentioned therein, the assessee or the
Commissioner may require the Appellate Tribunal to refer to "the High
Court" any question of law arising out of an order under Section 33, and
that the Appellate Tribunal shall within the time prescribed in the sub-section
draw up a statement of case and refer the question to "the High
Section 66(2) provides that if the Appellate Tribunal refuses to state a
case on an application under Section 66(1) on the ground that no question of
law arises, the assessee or the Commissioner, as the case maybe, may, within
the time mentioned in the sub-section, apply to "the High Court", and
"the High Court" if it is not satisfied with the correctness of the
decision of the Appellate Tribunal, require the Appellate Tribunal to state the
case and refer it. Section 66(8) provides that for the purposes of Section '
66, "the High Court"
means - (a) in relation to any State, the High Court of the State, and (b)
in relations to the Union Territory of Delhi, the High Court of Delhi.
The aforesaid provisions do not clearly indicate to which particular High
Court the Appellate Tribunal has to make a reference under Section 66(1) or
which High Court can call for a reference under Section 66(2), in a case where
a Bench of the Appellate Tribunal has jurisdiction over more than one
24. Referring to a judgment of Madras High Court, namely, 860, the learned
Judge opined :- "The said provisions show that in a case where a reference
is made to a High Court by a Bench of the Appellate Tribunal under section 66
of the Act the reference is just an intermediate stage, and the case (appeal
before the Bench) would be finally disposed of by the Bench after receiving the
judgment of the High Court in the reference. So, instead of adopting a
different basis for that intermediate stage, if would be quite appropriate to
adopt the same basis as the one adopted for determining the jurisdiction of the
Bench. Thus, it would be appropriate and in consonance with the aforesaid
provisions of the Act and the Standing Orders if the basis for the jurisdiction
of the Bench is adopted, instead of adopting the basis mentioned in Section 64
of the Act, as suggested in the decision of the Madras High Court in the case.
Commissioner of Income-tax, Madars v. S.
(123) ELT 471 (Del), Lahoti, J. as the learned Chief Justice of India then
was, noticed the aforementioned decision as also other decisions operating in
the field and held :- "10. The Division Bench decision in the case of Seth
Banarsi Dass Gupta has been followed by another Division Bench in Birla Cotton
& Spg The assessee carried on business in Jaipur. It had its registered
office in Delhi. The assessment orders were passed by ITO at Jaipur and appeals
were disposed by the C at Jaipur. The matter came up before the Tribunal at
Delhi and was heard by the Central Bench of the Income-tax Appellate Tribunal
as there was no Tribunal at Jaipur. The Division Bench held that the court to
which reference should be made would be the court having jurisdiction over the
territory in which the office of the ITO was situated.
11. Recently the same principle has been followed CIT  230 ITR 912. In
this judgment, the Divi- sion Bench has assigned yet another reason why the
High Court of that State wherefrom the matter arises would only be competent to
hear the reference. A decision of one High Court is a binding authority within
its territorial jurisdiction;
but it is not a binding precedent for another High Court or Tribunal outside
its territorial jurisdiction.
The Division Bench has held as under :
"On account of the abovesaid doctrine of precedents and the rule of
binding efficacy of the law laid down by the High Court within its territorial
jurisdiction, the questions of law arising for decision in a reference should
be determined by the High Court which exercises territorial jurisdiction over
the situs of the Assessing Officer.
Else it would result in serious anomalies. An assessee affected by an
assessment order at Bombay may invoke the jurisdiction of the Delhi High Court
to take advantage of the law laid down by it and suited to him and thus get rid
of the law laid down to the contrary by the High Court of Bombay not suited to
the assessee. This cannot be allowed."
12. Having made a careful comparative reading of the provisions of the
Income-tax Act and the Customs Act, as also the relevant rules and orders of
the Tribunal we are unhesitatingly of the opinion that the principles laid down
in the abovesaid three Division Bench decisions of Delhi High Court can be
applied and do apply to the facts and circumstances of the present case.
13. The present case arises out of the State of Bombay. The petitioner may
have its factory establishment at Panipat in the State of Haryana but that is
irrelevant. The adjudicating authority is at Bombay. Obviously it is bound by
the law laid down under the provisions of the Customs Act or any other law as
interpreted by the High Court of Bombay. For the purpose of the case at hand,
the petitioner must be held bound by the law as applicable and as prevailing in
the State of Mahrashtra whereat the goods were to be imported and whereat the
proceedings under the Act were concluded. In the case at hand if the CEGAT would
have stated the case then the reference would have been made to the High Court
of Bombay and in the event of the application for statement of case having been
refused it is the High Court of Bombay which the petitioner should have
approached for issuing a requi- sition to the Tribunal to state the case."
2002 (139) E.L.T. 21, Arijit Pasayat & D.K. Jain, JJ. in a case arising
under section 35H of the Central Excise Act opined :- "2. When the matter
was placed for admission, we pointed out to learned counsel for the petitioner
that this High Court does not have jurisdiction to deal with the matter, in
view of the decision of this Court in Seth Banarsi Dass Gupta v.
Commissioner of Income Tax (Central) [1978 (113) ITR 817]. In the said case,
white dealing with the scope of entertaining reference under the Income Tax
Act, 1961 (in short, 'the I.T Act'), it was observed that this High Court, that
the State within whose territorial jurisdiction original adjudicating authority
functions would have jurisdiction to deal with the reference under the
concerned Statute. The view was again reiterated in Suresh Desai and Associates
v. Commissioner of Income Tax [71 (1968) DLT 772]. That was also a case under
Section 256 (2) of the I.T. Act. In a petition for reference arising under the
Act in Central Excise Case No. 5 of 1997 (Commissioner of Central Excise v.
Technological Institute of Textile decided on 9-11-1998, it was held that the
High Court within whose jurisdiction adjudicating authority functions would have
territorial jurisdiction to entertain the matter. We have also expressed
similar view in Central Excise Act Case No. 7 of 2000 disposed of on 30-10-2000
taking note of decision of the Apex Court in Stridewell Leather (P) Ltd. v.
Bhankerpur Simbhaoli Beverages (P) Ltd. [AIR 1944 SC 158], while dealing with
the scope of expression "the High Court" under Section 10F of the
Companies Act, 1956 (in short, the Companies Act').
3. We find no substance in the plea of learned counsel for petitioner that
site of the Commissionerate or appellate authority determines the jurisdiction
in view of what has been stated in the aforesaid decision."
27. The said decisions were followed by the Division Bench of the High Court
of Bombay in Bombay Snuff (supra) to hold:- "6. The only difference in the
legal position that existed at the time the above decision was rendered and the
position that prevails today is that instead of the law envisaging a reference
from the Tribunal to the High Court, the law now provides for an appeal from
every order passed by the Appellate Tribunal. That difference does not however
affect the reasoning underlying the view taken by this Court in regard to its
jurisdiction to entertain a petition under Section 35G. If a petition seeking
reference under Section 35G was not maintainable in this court, there is no
reason why an appeal under the said provision after its amendment can be said
to be so maintainable. On the reasoning adopted by this court in Technological
Institute of Textile's case (supra), an appeal under Section 35G must also be
filed only in the High Court who has jurisdiction over the authority from whose
order the proceedings have originated. The fact that the main seat of the
CESTAT is situated in Delhi or that the appeal was heard and decided at Delhi
would not mean that all appeals arising from cases so decided regardless from
Page 2522 which State the case has originated can be maintained in this
28. Before the High Court, the decision of this Court in Kusum Ingots &
member, was strongly relied upon. Therein, this Court while construing the
provisions of clause 2 of Article 226, held:- "25. The said decision is an
authority for the proposition that the place from where an appellate order or a
revisional order is passed may give rise to a part of cause of action although
the original order was at a place outside the said area. When a part of the
cause of action arises within one or the other High Court, it will be for the
petitioner to choose his forum."
29. The decisions operating in the field, which have been taken note of in
Kusum Ingots & Alloys Ltd. (supra), would clearly go to show how the situs
doctrine had been given a go-bye by making constitutional amendments. At one
point of time writ petitions against the Union of India were being filed only
before the Punjab & Haryana High Court as the said Court exercised
territorial jurisdiction over Delhi, which was the seat of the Central
Government. Experiencing difficulties, clause 1A of Article 226 was introduced.
The Constitution again underwent a change by way of insertion of clause 2 of
Article 226. Bombay Snuff (supra) has been followed by Customs & Central
Excise, Hyderabad 2007 (207) ELT 36, wherein it was held :- "10. This
judgment clearly applies to the facts of this case. We also see a subsequent
judgment of the Delhi High Court 2006 (194) ELT 264. In the said case, the High
Court was considering as to whether in terms of Section 35(G)3 of the Customs Act
the Delhi High Court could consider the appeal, filed by the assessee. The
tribunal in para 6 noticed as under;
6. The only difference in the legal position that existed at the time the
above decision was rendered and the position that prevails today is that
instead of the law envisaging a reference from the tribunal to the High Court,
the law now provides for an appeal from every order passed by the appellate
tribunal. That difference does not however affect the reasoning underlying the
view taken by this court in regard to its jurisdiction to entertain a petition
under Section 35G. If a petition seeking reference under Section 35G was not
maintainable in this court, there is no reason why an appeal under the said
provision after its amendment can be said to be maintainable. On the reasoning
adopted by this amendment can be said to be so maintainable. On the reasoning
adopted by this court in Technological Institute of Textile's case (supra), an
appeal under Section 35G must also be filed only in the High Court who has
jurisdiction over the authority from whose order the proceedings have
originated. The fact that the main seat of the CESTAT is situated in Delhi or
that the appeal was heard and decided at Delhi would not mean that all appeals
arising from cases so decided regardless from which State the case has
originated can be maintained in this court."
30. In Nasiruddin (supra) and Kusum Ingots & Alloys Ltd. (supra), the
court was not dealing with a question of this nature. Therefore, the same are
not authorities for the proposition that the High Court, which is situated at
the same place as the situs of the Tribunal, alone will have jurisdiction. If
the cause of action doctrine, as analysed hereinbefore is given effect to,
invariably more than one high Court may have jurisdiction, which is not
31. The learned Solicitor General relies upon the decision in Stridewell
(1994) 1 SCC 34 wherein construing Section 10A vis-`-vis Section 10F of Companies Act, 1956,
it was held that the High Court would mean the High Court having jurisdiction
in relation to a place at which the registered office of the Company concerned
is situated as indicated in Section 2(11) read with Section 1A thereof.
32. We are, however, of the view that in terms of the Companies Act,
"the High Court" was clearly intended to specify the particular High
Court identified by Section 10F itself, and therefore, it was held not to be a
High Court indicated by the place at which Company Law Board passes the order
Munsha Singh & Ors. AIR 1977 SC 640, wherein this Court opined that no
distinction could legitimately been drawn between the right to sue and cause of
action unless so indicated in the relevant statute. Yet again in M/s. M.
3 SCC 75, a right to appeal was held to be carrying with it distinct cause
of action stating :- "It is his submission that in considering the
provisions of Order 23, Rule 1, the relevant fact to be borne in mind is the
subject matter of the appeal and if the subject matter of the appeal be
different, as in the present case it is the earlier appeal No. 36 of 1981 being
confined to the subject matter of instalment and the subsequent appeal No. 44
of 1981 being against the decree on the merits of the claim,the withdrawal of
the earlier appeal cannot, in any way, be a bar to the maintainability of the
subsequent appeal. Mr. Nariman has in this connection referred to the decision
of this Court in Vallabhdas v. Dr. Madan Lal and Ors. in which this Court
"equated the meaning of the words "subject matter" in Order 23
Rule 1 with the meaning of the words "cause of action" in Order 23
Rule 2. Relying on this decision, Mr. Nariman has argued that the "subject
matter" of the appeal within the meaning of Order 23, Rule 1, must be
considered in the light of the meaning of the words "cause of action"
in Order 2, Rule 2; and it is his argument that as the "cause of
action" in respect of the claim for instalment is entirely different from
the "cause of action" in respect of decree which embraces within its
fold the 'subject matter" of the respective claims of the parties in the
suit, the withdrawal of the earlier appeal No. 36 of 1981 against the
instalments cannot in any way affect the maintain ability of the appeal No. 44
of 1981 against the decree on the merits of the claim. Mr.
Nariman has next contended that the provisions of Order 2, Rule 2 of the
Civil Procedure Code do not in any way affect the maintainability and the
merits of the present appeal No. 44 of 1981. He has submitted that the said
provisions have no application to an appeal and in any event, the cause of
action and the subject matter of the present appeal are entirely different from
the cause of action and the subject of the earlier appeal.
34. As against this, the submission of the learned Attorney General was as
"It is his argument that the right of appeal which is no doubt a
statutory right will also necessarily be governed by the provisions of Order 2,
Rule 2 and as the appeal is filed not against the entire subject matter of
appeal arising out of the cause of action in the appeal, the right to file
another appeal against the decree is clearly lost."
35. Accepting Mr. Nariman's submissions, this Hon'ble Court ruled thus:
"Even if the principles underlying Order 2, Rule 2 can be considered to
apply to an appeal, the maintainability of the instant case cannot be held to
be affected in any way as the cause of action in respect of the present appeal
is entirely different from the cause of action on the basis of which the
earlier appeal had been filed." (Emphasis supplied)
36. In that case the jurisdiction of the High Court was not to be determined
in order to give effect to the doctrine of 'cause of action' envisaged under
the Code of Civil Procedure.
37. However, we are not oblivious of another line of authority where the
situs of the Tribunal was held to be the basis for determination of the jurisdiction
of the High Court. In the said decisions, however, the contentions which have
been raised before us did not arise for consideration.
38. We have noticed hereinbefore that if the decision of the High Court in
the aforementioned question is taken to its logical conclusion, the same would
lead to a great anomaly. It would also give rise to the problem of forum
shopping. We may notice some examples to show that the determination of the
appellate forum based upon the situs of the Tribunal would lead to an anomalous
result. For example, 'an assessee affected by an assessment order in Bombay may
invoke the jurisdiction of the Delhi High Court to take advantage of the law
laid down by it which may be contrary to judgments of the High Court of Bombay.
This cannot be allowed. [See Suresh Desai and Associates V. CIT 1998 (230) ITR
912 at 915-917 and CCE V. M/s. Technological Institute of Textile in 76 (1998)
DLT 862 (DB].
39. Section 20(c) of the Code of Civil Procedure reads as under:
"20. Other suits to be instituted where defendant reside or cause of
action arises. Subject to the limitation aforesaid, every suit shall be
instituted in a court within the local limits of whose jurisdiction (c) the
cause of act5ion, wholly, or in part, arises."
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) of 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.
42. In Mussummat Chand Kour V. Partap Singh (15 1A 156), it was held:-
"....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 ground 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."
For the reasons aforementioned, we are of the opinion that the High Court
was correct in its view. These appeals, therefore, being devoid of any merit,
deserve to be dismissed. However, in the facts and circumstances of this case,
there shall be no order as to costs.