1994 (6) TMI 193 - SC - Indian Laws

Whether any part of the cause of action for filing the petition had arisen within the jurisdiction of the said High Court to entitle it to entertain hear and decide the said petition? Whether a High Court has territorial jurisdiction to entertain a writ petition? Held that - Appeal allowed. In the instant case we are convinced beyond doubt that NICCO did not act bona fide in moving the Calcutta High Court and therefore the submission based on Section 21 must fail. While the spirit of Section 21 of the Code of Civil Procedure may support such a submission we are afraid the discretion cannot be used in favour of a party which deliberately invokes the jurisdiction of a court which has no jurisdiction whatsoever for ulterior motives.

The central legal question addressed in this appeal concerns the territorial jurisdiction of the Calcutta High Court under Article 226 of the Constitution of India. Specifically, whether any part of the cause of action for filing the writ petition arose within the territorial jurisdiction of the Calcutta High Court, thereby entitling it to entertain, hear, and decide the petition.

This issue arises against the factual backdrop where a government undertaking, through its consultant, issued a nationwide tender for a contract to be executed in Gujarat. The petitioner, with its registered office in Calcutta, responded to the tender. The tender process, scrutiny, meetings, and final decision awarding the contract to another party all took place in New Delhi and Gujarat. The petitioner filed a writ petition in the Calcutta High Court challenging the rejection of its tender and sought to restrain the awarding of the contract to others. The High Court entertained the petition and directed reconsideration of the petitioner's offer. The government undertaking challenged this order before the Supreme Court on the ground that the Calcutta High Court lacked territorial jurisdiction.

Issue-Wise Detailed Analysis

1. Whether the Calcutta High Court had territorial jurisdiction under Article 226 to entertain the writ petition?

Relevant legal framework and precedents: Article 226(1) of the Constitution empowers every High Court to issue writs "throughout the territories in relation to which it exercises jurisdiction." Article 226(2) (introduced by the 15th Amendment) extends this power to cases where the cause of action, wholly or in part, arises within the territorial jurisdiction of the High Court, even if the respondent resides or the authority is located outside that territory.

In interpreting "cause of action," the Court relied on established principles that it means the bundle of facts which the petitioner must prove to entitle him to relief. The Court emphasized that jurisdiction must be determined on the facts pleaded in the petition, assuming them to be true, without delving into their correctness.

Precedents relied upon include:

State of Rajasthan v. Swaika Properties, where the Supreme Court held that mere service of notice within a jurisdiction does not confer jurisdiction unless it forms an integral part of the cause of action.
Subodh Kumar Gupta v. Shrikant Gupta, which held that mere printing of letterheads or isolated acts within a jurisdiction do not establish cause of action within that jurisdiction.
Election Commission v. Saka Venkata Subba Rao, which clarified the original limited scope of Article 226 jurisdiction and the need for the 15th Amendment to enlarge it.

Court's interpretation and reasoning: The Court examined the petitioner's averments that:

The petitioner became aware of the tender through an advertisement published in a newspaper circulated in Calcutta.
The petitioner submitted its tender and subsequent revised bids from its registered office in Calcutta.
The petitioner sent representations and communications, including fax messages, from its Calcutta office demanding justice.

The Court found that these acts, taken individually or collectively, did not constitute a part of the cause of action arising within the Calcutta jurisdiction. The decisive acts-advertisement issuance, tender scrutiny, meetings, and final decision-occurred outside Calcutta, primarily in New Delhi and Gujarat. The mere fact that the petitioner read the advertisement or sent communications from Calcutta did not amount to a cause of action arising there.

The Court rejected the petitioner's contention that the amendment to Article 226(2) was intended to broadly expand jurisdiction to wherever a part of the cause of action might be remotely connected. The Court held that the amendment requires a substantial part of the cause of action to arise within the territorial jurisdiction, not trivial or incidental acts such as reading an advertisement or sending faxes.

Key evidence and findings: The tender process was centralized in New Delhi, including scrutiny and final decision. The contract work was to be executed in Gujarat. The petitioner's presence in Calcutta was limited to receiving the advertisement, submitting bids, and sending representations. The Court found no integral act forming the cause of action within Calcutta.

Application of law to facts: Applying the legal principle that jurisdiction depends on the location where the cause of action arises, the Court concluded that the Calcutta High Court lacked jurisdiction. The cause of action arose where the tender was processed and decided, not where the petitioner was located or where it sent communications.

Treatment of competing arguments: The petitioner argued that Article 226(2) expanded jurisdiction and that the Court should not interfere on jurisdictional grounds but on merits, invoking Section 21 of the Code of Civil Procedure to avoid failure of justice. The Court rejected this, emphasizing that jurisdictional limits cannot be waived for convenience or to avoid inconvenience. It also emphasized that invoking jurisdiction without bona fide grounds amounts to abuse of process.

2. Whether the Court should exercise discretion to uphold the High Court's order despite lack of jurisdiction, relying on Section 21 of the Code of Civil Procedure?

Relevant legal framework: Section 21 of the Code of Civil Procedure allows courts to refuse to interfere with a decree or order if no failure of justice has occurred. However, this is subject to the court's discretion and the bona fide nature of the proceedings.

Court's interpretation and reasoning: The Court held that this discretion cannot be exercised in favor of a party who deliberately invokes a court's jurisdiction where none exists, especially for ulterior motives. The object of Section 21 is to protect bona fide litigants who mistakenly file in a court lacking jurisdiction, not to encourage forum shopping or abuse of process.

Since the petitioner was found not to have acted bona fide in invoking the Calcutta High Court's jurisdiction, the Court declined to uphold the High Court's order on this ground.

3. Whether the petitioner's reliance on fax communications and representations sent from Calcutta could establish jurisdiction?

The Court examined the petitioner's claim that a fax message received in Calcutta constituted part of the cause of action arising there. It found that the fax message did not convey the rejection of the tender, which was the crucial event, and that the rejection occurred later at New Delhi. Therefore, the fax communication was not an integral part of the cause of action.

4. Observations on the tendency of the Calcutta High Court to assume jurisdiction in such matters:

The Court expressed strong disapproval of the Calcutta High Court's repeated assumption of jurisdiction in cases where no part of the cause of action arose within its territorial limits. It lamented that this tendency damages the prestige of the institution and encourages abuse of the judicial process. The Court cited earlier decisions where it had rebuked such practices, emphasizing the need for judicial discipline and respect for territorial jurisdiction.

Significant Holdings

"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."

"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."

"Mere reading of an advertisement or sending communications from a place within the jurisdiction of a High Court does not constitute a part of the cause of action arising within that jurisdiction."

"The discretion under Section 21 of the Code of Civil Procedure cannot be used to uphold proceedings initiated deliberately in a court which has no jurisdiction, as that would encourage abuse of the judicial process."

"The practice of assuming jurisdiction by the Calcutta High Court in cases where no part of the cause of action arises within its territorial limits is deprecated and must cease to preserve the dignity and credibility of the institution."

Final determinations:

The Calcutta High Court lacked territorial jurisdiction to entertain the writ petition as no part of the cause of action arose within its jurisdiction.
The writ petition was liable to be dismissed on the ground of lack of jurisdiction.
The petitioner did not invoke the jurisdiction of the Calcutta High Court bona fide and hence was liable to pay exemplary costs.
The appeal was allowed, the High Court's order set aside, and the writ petition disposed of for want of jurisdiction.

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