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CASE NO.: Appeal (civil)  9159 of 2003

PETITIONER: M/s. Kusum Ingots & Alloys Ltd.

RESPONDENT: Union of India and Anr.

DATE OF JUDGMENT: 28/04/2004

BENCH: CJI, S.B. Sinha & S.H. Kapadia.

JUDGMENT: J U D G M E N T

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

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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

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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."

       In Aligarh Muslim University and Another Vs. Vinay  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

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that Court. It clearly shows that the  litigation filed in the Calcutta High  Court was thoroughly unsustainable."  

       In Union of India and Others Vs. Adani Exports Ltd. and  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

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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  Vs. Union of India and Others, AIR 1979 Cal 354)

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

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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.                  Lt. Col. Khajoor Singh Vs. The Union of India and  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

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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.