2012 (6) TMI 76 - HC - Customs

High Court Jurisdiction under Article 226: Emphasis on Cause of Action and Forum Convenience

M/s. Sterling Agro Industries Ltd. Versus Union of India & Ors., Jan Chetna … Versus Ministry of Environment and Forests & Ors., Manu Jain Versus Smt. Neerja Shah & Ors., M/s Bafna Healthcare Pvt. Ltd. & Ors. Versus Commissioner of Central Excise Delhi-IV & Ors., The Commissioner of Trade Tax & Anr. Versus M/s. Ricoh India Ltd. & Ors.

The court clarified that the High Court's jurisdiction under Article 226 cannot solely rely on the location of appellate or revisional authorities. It ... Doctrine of forum conveniens - Territorial Jurisdiction of High Court - Decision in the matter of New India Assurance Company Limited v. Union of India and Others [2012 (6) TMI 96 (HC)] Held that:- 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. 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. (2007 (3) TMI 382 (SC)). 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. 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. The finding that the court may refuse to exercise jurisdiction under Article 226 if only the jurisdiction is invoked in a mala fide manner is too restricted/constricted as the exercise of power under Article 226 being discretionary cannot be limited or restricted to the ground of mala fide alone. 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 (2007 (5) TMI 21 (SC)) and Adani Exports Ltd. (2001 (10) TMI 321 (SC)). The conclusion of the earlier decision of the Full Bench in New India Assurance Company Limited [2012 (6) TMI 96 (HC)] “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. Issues Involved:1. Jurisdiction of the High Court of Delhi under Article 226 of the Constitution.2. Interpretation and application of the cause of action under Article 226(2).3. The principle of forum conveniens.4. The impact of appellate and revisional authority's location on jurisdiction.Detailed Analysis:1. Jurisdiction of the High Court of Delhi under Article 226 of the Constitution:The primary issue was whether the High Court of Delhi had jurisdiction to entertain the writ petition under Article 226 of the Constitution solely based on the location of the revisional authority in Delhi. The petitioner argued that since the revisional authority (the Joint Secretary to the Government of India) was located in Delhi, the Delhi High Court had territorial jurisdiction. The court examined the historical context and amendments to Article 226, particularly focusing on the introduction of Clause (2) which allows High Courts to exercise jurisdiction if the cause of action, wholly or in part, arises within their territory.2. Interpretation and application of the cause of action under Article 226(2):The court revisited previous judgments to clarify the interpretation of 'cause of action' under Article 226(2). It referenced several Supreme Court decisions, including Kusum Ingots & Alloys Ltd. v. Union of India and Alchemist Ltd. v. State Bank of Sikkim, which emphasized that the cause of action must be a material, essential, or integral part of the facts constituting the basis for the claim. The court concluded that merely because an appellate or revisional authority is located in Delhi, it does not automatically confer jurisdiction unless a significant part of the cause of action arises within the territorial limits of the Delhi High Court.3. The principle of forum conveniens:The court highlighted the importance of the principle of forum conveniens, which considers the convenience of all parties involved in the litigation. It stated that the High Court should not exercise jurisdiction merely because a part of the cause of action arises within its territory. The court must also consider whether it is the most appropriate forum for the case, taking into account factors such as the location of parties, witnesses, and the subject matter of the dispute. The court criticized the Full Bench decision in New India Assurance Company Limited for not adequately considering the principle of forum conveniens.4. The impact of appellate and revisional authority's location on jurisdiction:The court examined whether the location of the appellate or revisional authority should be the determining factor for jurisdiction. It concluded that while the location of such authorities might constitute a part of the cause of action, it should not be the sole factor compelling the High Court to entertain the writ petition. The court emphasized that the doctrine of forum conveniens and the nature of the cause of action must be scrutinized on a case-by-case basis.Conclusion:The court partially overruled and clarified the Full Bench decision in New India Assurance Company Limited. It held that:- The jurisdiction of the High Court cannot be based solely on the location of the appellate or revisional authority.- The cause of action must be significant and integral to confer jurisdiction.- The principle of forum conveniens must be considered to determine the most appropriate forum.- The exercise of jurisdiction under Article 226 is discretionary and should not be limited to cases of mala fide intent.The matters were directed to be listed before the appropriate Division Bench for further consideration.