Delhi HC: Jurisdiction under Article 226 clarified, emphasizing cause of action location. Litigants can choose forum.

New India Assurance Company Ltd. Versus UOI and Ors.

New India Assurance Company Ltd. Versus UOI and Ors. - TMI Issues Involved:
1. Jurisdiction of the Delhi High Court under Article 226 of the Constitution.
2. Applicability of the doctrine of forum conveniens.
3. Merger of the original order into the appellate order.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Delhi High Court under Article 226 of the Constitution:

The primary issue in this case was whether the Delhi High Court had jurisdiction to entertain the writ petition under Article 226 of the Constitution of India. The appeal arose from an order of a learned single judge who dismissed the writ petition on the ground that a significant part of the cause of action did not arise within the territorial jurisdiction of the Delhi High Court. The learned single judge relied on previous judgments, including Ambica Industries v. CCE [2007] 6 SCC 769, and held that this court had jurisdiction to entertain the petition, but it was not the most appropriate forum considering the cause of action.

The Division Bench referred the matter to a Larger Bench due to the importance of the jurisdiction issue and the questioning of several dicta of the Division Benches of the court. The Larger Bench examined the scope and nature of proceedings before the Appellate Authority, which led to the filing of the petition.

The court held that the jurisdiction under Article 226(1) and (2) of the Constitution is distinct and separate. Article 226(2) confers an additional power on every High Court to issue writs throughout its territory within which the cause of action wholly or in part arises. The court emphasized that the maintainability of the writ petition depends on whether the cause of action for filing the same arose, wholly or in part, within the territorial jurisdiction of the court.

2. Applicability of the Doctrine of Forum Conveniens:

The appellant's counsel argued that the order of the Appellate Authority constitutes a part of the cause of action, and thus the writ petition would be maintainable before the Delhi High Court. The counsel relied on decisions such as Sri Nasiruddin v. State Transport Appellate Tribunal [1975] 2 SCC 671 and Kusum Ingots and Alloys Ltd. v. Union of India [2004] 120 Comp Cas 672, which held that when an order is passed by a court or Tribunal, a part of the cause of action arises at that place. The court affirmed this view, stating that even where part of the cause of action arose, it would be open to the litigant, who is the dominus litis, to have his forum conveniens.

The court also addressed the principle of forum non-conveniens, which originated as a principle of international law. The court held that a domestic court in which jurisdiction is vested by law ought not to refuse to exercise jurisdiction for the reason that under the same law, some other courts also have jurisdiction. The remedy under Article 226 being discretionary, the court may refuse to exercise jurisdiction when invoked mala fide. However, there was no such suggestion in the present case, and nothing was urged that it was inconvenient for the contesting respondent to contest the writ before the Delhi High Court.

3. Merger of the Original Order into the Appellate Order:

The court examined the principle of the merger of the original order into the appellate order. The appellant's counsel argued that the order of the original authority merged into the order of the Appellate Authority, which was located in Delhi, and thus part of the cause of action arose in Delhi. The court referred to the decision in Collector of Customs v. East India Commercial Co. Ltd., AIR 1963 SC 1124, which held that when an order of an original authority is taken in appeal to the Appellate Authority, the operative order is the order of the Appellate Authority.

The court also referred to the decision in Kusum Ingots and Alloys Ltd. v. Union of India [2004] 120 Comp Cas 672, which affirmed that an order of the appellate authority constitutes a part of the cause of action, and a writ petition would be maintainable in the High Court within whose jurisdiction it is situate. The court concluded that since the Appellate Authority is situated in Delhi, the Delhi High Court has jurisdiction under Article 226 of the Constitution.

Conclusion:

The court held that where an order is passed by an appellate authority or revisional authority, a part of the cause of action arises at that place. When the original authority is situated at one place and the appellate authority is situated at another, a writ petition would be maintainable at both places. The order of the appellate authority constitutes a part of the cause of action, and the petitioner, being the dominus litis, can choose his forum. The court allowed the appeal, set aside the order of the learned single judge, and restored the writ petition for expeditious disposal.