M/S. Kusum
Ingots & Alloys Ltd. Vs. Union of India and Anr [2004] Insc 334 (28 April 2004)
Cji,
S.B. Sinha & S.H. Kapadia. S.B. Sinha, J :
INTRODUCTION
Whether
the seat of the 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 is the
question involved in this appeal which arises out of a judgment and order dated
25.7.2003 passed by the High Court of Delhi in C.W.P. No. 4609 of 2003 holding
that the said Court has no jurisdiction.
BACKGROUND
FACTS
The
appellant is a company registered under the Indian Companies Act. Its
registered office is at Mumbai. It obtained a loan from the Bhopal Branch of
State Bank of India. The respondent No. 2 issued a
notice for repayment of the said loan from Bhopal purported to be in terms of the provisions of Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002.
Questioning
the vires of the said Act, the said writ petition was filed before Delhi High
Court by the appellant herein which was dismissed on the ground of lack of
territorial jurisdiction.
Submissions
The only submission made on behalf of the appellant before the High Court as
also before us is that as the constitutionality of a parliamentary act was in
question, the High Court of Delhi had the requisite jurisdiction to entertain
the writ petition.
On the
other hand, the contention of the learned counsel appearing on behalf of the
respondent is that as no cause of action arose within the territorial
jurisdiction of the High Court of Delhi, the writ petition has rightly not been
entertained.
Cause
of Action:
Cause
of action implies a right to sue. The material facts which are imperative for
the suitor to allege and prove constitutes the cause of action. Cause of action
is not defined in any statute. It has, however, been judicially interpreted
inter alia to mean that every fact which would be necessary for the plaintiff
to prove, if traversed, in order to support his right to the judgment of the
Court. Negatively put, it would mean that everything which, if not proved,
gives the defendant an immediate right to judgment, would be part of cause of
action. Its importance is beyond any doubt. For every action, there has to be a
cause of action, if not, the plaint or the writ petition, as the case may be,
shall be rejected summarily.
Clause
(2) of Article 226 of the Constitution of India reads thus:
"(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." 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 action, wholly or in
part, arises." Although in view of Section 141 of the Code of Civil
Procedure the provisions thereof would not apply to a 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
the material facts. The expression material facts is also known as integral
facts.
Keeping
in view the expressions used is Clause (2) of Article 226 of the Constitution
of India, indisputably even if a small fraction of cause of action accrues
within the jurisdiction of the Court, the Court will have jurisdiction in the
matter.
In Mussummat
Chand Kour v. Partap Singh (15 IA 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 con- clusion in his favour." This Court in
Oil & Natural Gas Commission v. Utpal Kumar Basu and Ors. (1994 (4) SCC
711) held that the question as to whether the court has a territorial
jurisdiction to entertain a writ petition, must be arrived at on the basis of
averments made in the petition, the truth or otherwise thereof being
immaterial.
This
Court in Oil and Natural Gas Commission's case (supra) held that all necessary
facts must form an integral part of the cause of action. It was observed:
"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..." In State of Rajasthan and Ors. v. M/s. Swaika Properties and Anr. [1985 (3) SCC
217], this Court opined that mere service of a notice would not give rise to
any cause of action unless service of notice was integral part of the cause of
action. The said decision has also been noticed in Oil and Natural Gas
Commission (supra). This Court held:
"The
answer to the question whether service of notice is an integral part of the
cause of action within the meaning of Art. 226(2) of the Constitution must
depend upon the nature of the impugned order giving rise to a cause of action."
Engineering Enterprises (P) Ltd. and Another [(1994) 4 SCC 710] this Court
lamented:
"2.
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.
The
contracts in question were executed at Aligarh, the construction work was to be carried out at Aligarh, even the contracts provided that
in the event of dispute the Aligarh Court
alone will have jurisdiction. The arbitrator was from Aligarh and was to function there.
Merely
because the respondent was a Calcutta-based firm, the High Court of Calcutta
seems to have exercised jurisdiction where it had none by adopting a queer line
of reasoning. We are constrained to say that this is case of abuse of
jurisdiction and we feel that the respondent deliberately moved the Calcutta
High Court ignoring the fact that no part of the cause of action had arisen
within the jurisdiction of that Court. It clearly shows that the litigation
filed in the Calcutta High Court was thoroughly unsustainable." Another
[(2002) 1 SCC 567] it was held that in order to confer jurisdiction on a High
Court to entertain a writ petition it must disclose that the integral facts
pleaded in support of the cause of action do constitute a cause so as to
empower the court to decide the dispute and the entire or a part of it arose
within its jurisdiction.
Recently,
in National Textile Corpn. Ltd. and Ors. vs. M/s Haribox Swalram and Ors. [JT
2004 (4) SC 508], a Division Bench of this Court held :
"As
discussed earlier, 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 petitioner and
the view to the contrary taken by the Division Bench cannot be sustained. In
view of the above finding, the writ petition is liable to be dismissed..."
The facts pleaded in the writ petition must have a nexus on the basis whereof a
prayer can be granted. Those facts which have nothing to do with the prayer
made therein cannot be said to give rise to a cause of action which would
confer jurisdiction on the court.
Passing
of a legislation by itself in our opinion do not confer any such right to file
a writ petition unless a cause of action arises therefor.
A
distinction between a legislation and executive action should be borne in mind
while determining the said question.
A
parliamentary legislation when receives the assent of the President of India
and published in an 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
vacuum.
The
court must have the requisite territorial jurisdiction. An order passed on 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.
Situs
of office of the Respondents - whether relevant? A writ petition, however,
questioning the constitutionality of a Parliamentary Act shall not be
maintainable in the High Court of Delhi only because the seat of the Union of
India is in Delhi. (See Abdul Kafi Khan Learned
counsel for the appellant in support of his argument would contend that situs
of framing law or rule would give jurisdiction to Delhi High Court and in
support of the said contention relied upon the decisions of this Court in Nasiruddin
vs. State Transport Appellate Tribunal (AIR 1976 SC 331) and U.P. Rashtriya Chini
Mill Adhikari Parishad, Lucknow vs. State of U.P. and others (1995) 4 SCC 738.
So far as the decision of this Court in Nasiruddin vs. State Transport
Appellate Tribunal (supra) is concerned it is not an authority for the
proposition that the situs of legislature of a State or the authority in power
to make subordinate legislation or issue a notification would confer power or
jurisdiction on the High Court or a bench of the High Court to entertain
petition under Article 226 of the Constitution. In fact this Court while
construing the provisions of United Provinces High Courts (Amalgamation) Order,
1948 stated the law thus:
"The
conclusion as well as the reasoning of the High Court is incorrect. It is
unsound because 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. Similarly, if the
cause of action can be said to have arisen partly within specified areas in
arisen in Oudh and partly outside the specified Oudh areas, the litigant will have the choice to
institute proceedings either at Allahabad or Lucknow. The Court will find out in each
case whether the jurisdiction of the Court is rightly attracted by the alleged
cause of action".
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.
The
view taken by this Court in U.P. Rashtriya Chini Mill Adhikari Parishad, Lucknow
(supra) that situs of issue of an order or notification by the Government would
come within the meaning of expression 'cases arising' in clause 14 of the
(Amalgamation) Order is not a correct view of law for the reason hereafter
stated and to that extent the said decision is overruled. In fact, a
legislation, it is trite, is not confined to a statute enacted by the
Parliament or Legislature of a State, which would include delegated legislation
and subordinate legislation or an executive order made by the Union of India,
State or any other statutory authority. In a case where the field is not
covered by any statutory rule, executive instruction issued in this behalf
shall also come with within the purview thereof. situs of office of the
Parliament, Legislature of a State or authorities empowered to make subordinate
legislation would not by itself constitute any cause of action or cases
arising. In other words, framing of a statute, statutory rule or issue of an
executive order or instruction would not confer jurisdiction upon a court only
because of the situs of the office of the maker thereof.
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.
Another
[(1961) 2 SCR 828] whereupon the learned counsel appearing on behalf of the
appellant placed strong reliance was rendered at a point of time when clause
(2) of Article 226 had not been inserted. In that case the Court held that the
jurisdiction of the High Court under Article 226 of the Constitution of India,
properly construed, depends not on the residence or location of the person
affected by the order but of the person or authority passing the order and the
place where the order has effect. In the latter sense, namely, the office of
the authority who is to implement the order would attract the territorial
jurisdiction of the Court was considered having regard to Section 20(c) of the
Code of Civil Procedure as Article 226 of the Constitution thence stood stating
:
"...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. But the argument of inconvenience, in our
opinion, cannot affect the plain language of Art. 226, nor can the concept of
the place of cause of action be introduced into it for that would do away with
the two limitations on the powers of the High Court contained in it." 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.
Forum Conveniens
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 Bhagar
Singh Bagga v. Dewan Jagbir Sawhany, AIR 1941 Cal; Mandal Jalan v. Madanlal,
(1945) 49 CWN 357; Bharat Coking Coal Limited v. M/s Jharia Talkies & Cold
Storage Pvt. Ltd. (1997) CWN 122; S.S.Jain & Co. & Anr. v. Union of
India & Ors. (1994) CHN 445; M/s. New Horizon Ltd. v. Union of India, AIR
1994 Delhi 126) Conclusion For the
aforementioned reasons, there is no merit in this appeal which is dismissed
accordingly. No costs.
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