TaxTMI 
TaxTMI 
2000 (9) TMI 925
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....alternative, to issue a writ of mandamus directing the State of Meghalaya to transfer the investigation being conducted by the officers of the CID at Shillong to the Economic Offences Wing, General Branch of the CID, Mumbai, or any other investigating agency of the Mumbai Police, and (b)to issue a writ of prohibition or any other order or direction restraining the Special S.P. Police, CID, Shillong, and/or and investigating agency of the Meghalaya Police from taking any further step in respect of complaint lodged by the J.B. Holdings Ltd. with the police authorities at Shillong. For the sake of convenience, the appellant will be referred as the petitioner while narrating the facts of the case. 4. The relevant facts of the case as stated in the writ petition may be shortly stated thus: The petitioner is the managing director of the company, India Farmers (P.) Ltd. (IFPL), registered under the Companies Act, 1956 having its registered office at Mumbai. Out of the 2,500 shares of IFPL, the petitioner, his family members and friends together hold 2,430 shares, the balance 70 shares have remained un-allotted till date. In the year 1950, the then Government of Bombay put IFPL in....
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....oner alleged that at no point of time, J.B. Holdings Ltd. offered to make the balance payment or to take delivery of the remaining shares. As J.B. Holdings Ltd. had committed default in making the balance payment and thereby committed breach of the agreement dated 18-9-1995 the said agreement stood terminated and the earnest money stood forfeited as stipulated in the agreement. 9. It was further alleged in the writ petition that after some correspon dence between the parties, J.B. Holdings Ltd. had tried to pressurise the petitioner to reverse the transaction of sale of shares and recover the money paid in respect thereof by employing strong arm tactics, which eventually failed. Having failed to achieve the purpose by such means, J.B. Holdings Ltd. filed a false complaint against the petitioner at Shillong in the State of Meghalaya. The petitioner asserted that the complaint is false and it has been deliberately filed at Shillong with the mala fide intention of exerting pressure and causing harassment to him so as to get the transaction relating to transfer of shares reversed. According to the petitioner, since the entire transaction upon which the complaint is purportedly based....
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....gnizable offence and the dispute, if any, is of civil nature. 13. Mr. Melarkode, Subramanian Jayaram, who was arrayed as respondent No. 4 in the writ petition, filed a counter-affidavit generally denying the averments made in the writ petition. The respondent referred to the writ petition filed by the complainant, J.B. Holdings Ltd., in Gauhati High Court, challenging the action of the Government of Meghalaya refusing permission to the concerned Police officers to go to Mumbai on the ground of paucity of funds. A learned Single Judge by order dated 17-11-1997 directed the complainant to deposit the requisite amount to enable the senior Police Inspector concerned to proceed to Mumbai for investigation of the case. In appeal, a Division Bench of the High Court confirmed the said order taking the view that since the case has been registered in the State of Meghalaya it is for the Police of that State to investigate into the matter. 14. The High Court, as noted earlier dismissed the writ petition holdings that it could not entertain the writ petition since the petitioner has prayed for quashing the complaint which was lodged by the complainant at Shillong in the State of Meghalay....
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.... and Phrases' (Fourth edition), the meaning attributed to the phrase 'cause of action' in common legal parlance is existence of those facts which give a party a right to judicial interference on his behalf. 21. A Bench of three learned Judges of this Court in the case of Oil & Natural Gas Commission v. Utpal Kumar Basu [1994] 4 Comp. LJ. 203 considered at length the question of territorial jurisdiction under article 226(2). Some of the relevant observations made in the judgment are extracted hereunder : "Clause (1) of Article 226 begins with a non obstante clause - notwithstanding anything in Article 32 - and provides that every High Court shall have power 'throughout the territories in relation to which it exercises jurisdiction' to issue to any person or authority, including in appropriate cases, any Government 'within those territories' directions orders or writs, for the enforcement of any of the rights conferred by Part III or for any other purpose. Under clause (2) of Article 226, the High Court may exercise its power conferred by clause (1) if the cause of action, wholly or in part, had arisen within the territory over which it exercises jurisdiction, notwithstanding t....
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....even on the facts alleged, must depend upon whether the averments made in paragraphs 5, 7, 18, 22, 26 and 43 are sufficient in law to establish that a part of the cause of action had arisen within the jurisdiction of the Calcutta High Court." (Emphasis supplied) 22. So far as the question of territorial jurisdiction with reference to a criminal offence is concerned, the main factor to be considered is the place where the alleged offence was committed. 23. This Court in the case of K. Bhaskaran v. Sankaran Vaidhyan Balan [1999] 4 Comp. LJ. 404 considered the question of territorial jurisdiction of the Courts relating to the offence under section 138 of the Negotiable Instruments Act, 1881. In that case, on 29-1-1993, the respondent, S, presented a cheque for the amount of Rs. 1 lakh bearing the signature of the appellant, B, at the Kayamkulam (Kerala) Branch of the Syndicate Bank for encashment. The cheque was returned by the bank unpaid, because of the insufficiency of funds in the account of B. S issued a notice by registered post on 2-2-1993. The notice was returned to S on 15-2-1993 with the endorsements 'addressee absent' for three dates and 'intimation served on addresse....
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....f Criminal Procedure, this Court held that if Investigating Officer finds that the crime was not committed within his territorial jurisdiction, he can forward the FIR to the Police Station concerned, but this would not mean that in a case which requires investigation, the Police Officer can refuse to record the FIR and/or investigate it. Disapproving the order of the Delhi High Court quashing the FIR at the investigation stage on the ground of lack of territorial jurisdiction, this Court observed : "[Further] The legal position is well settled that if an offence is disclosed the Court will not normally interfere with an investigation into the case and will permit investigation into the offence alleged to be completed. If the FIR, prima facie, discloses the commission of an offence, the Court does not normally stop the investigation, for, to do so would be to trench upon the lawful power of the police to investigate into cognizable offences. It is also settled by a long course of decisions of the Supreme Court that for the purpose of exercising its power under section 482 Cr. PC to quash an FIR or a complaint, the High Court would have to proceed entirely on the basis of the alle....
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....rt for fresh disposal will cause further delay in investigation of the matter and may create other complications. Instead, it will be apt and proper to direct that further investigation relating to complaint filed by J.B. Holdings Ltd. should be made by the Mumbai Police. 30. Accordingly, we allow the appeal, set aside the judgment under challenge and dispose of the writ petition with the direction that the complaint lodged by J.B. Holdings Ltd. at Shillong which is presently being investigated by the Special Superintendent of Police, CID, Shillong, shall be transferred to the Mumbai Police for further investigation through its Economic Offences Wing, General Branch, CID, or any other branch as the competent authority of the Mumbai Police may decide in accordance with law. K.T. Thomas, J. -I respectfully agree with the judgment prepared by my learned brother Mohapatra, J. In view of the importance of the legal issue highlighted before us - regarding the extent of jurisdiction of a High Court under article 226 of the Constitution - I am tempted to add a few lines of my own for a further support to the conclusion reached by my learned brother. 2. As the facts of the case hav....
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.... place in India. Exercising this power, the Assam Police might have come to Bombay also and sought aid of Bombay Police. Thus, that by itself cannot be said that the part of cause of action has arisen in Maharashtra. If that be so then no investigation by any Police in India can be successfully carried out because any absconding accused can go to any corner of India and challenge the prosecution where he was staying. This concept is quite contrary to the scheme envisaged by the Code of Criminal Procedure with regard to the investigation of an offence." 4. When the Constitution was framed, article 226, as it originally stood, therein provided that : "Every High Court shall have power throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs..." Some of the decisions rendered by different High Courts during the earlier years of the post-Constitution period have given a wider perspective regarding the jurisdiction of the High Court and pointed out that a High Court can exercise powers under article 226 even in respect of tr....
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....enkata Subba Rao's case (supra) , and to restore the view held by the High Courts in the decisions cited above. Thus, the power conferred on the High Courts under article 226 could as well be exercised by any High Court exercising jurisdiction in relation to the territories within which 'the cause of action, wholly or in part, arises', and it is no matter that the seat of the authority concerned is outside the territorial limits of the jurisdiction of that High Court. The amendment is thus aimed at widening the width of the area for reaching the writs issued by different High Courts. 8. 'Cause of action' is a phenomenon well understood in legal parlance. Mohapatra, J. has well delineated the import of the said expression by referring to the celebrated lexicographies. The collocation of the words 'cause of action wholly or in part arises' seems to have been lifted from section 20 of the Code of Civil Procedure, 1908 which section also deals with the jurisdictional aspect of the Courts. As per that section, the suit could be instituted in a Court within the legal limits of whose jurisdiction the 'cause of action wholly or in part arises'. Judicial pronouncements have accorded almo....
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....the said court, litigants would seek to abuse the process by carrying the cause before such members giving rise to avoidable suspicion. That would lower the dignity of the institution and put the entire system to ridicule. We are greatly pained to say so, but if we do not strongly deprecate the growing tendency, we sill, we are afraid, be failing in our duty to the institution and the system of administration of justice. We do hope that we will not have another occasion to deal with such a situation." 12. The above observations are sufficient to take care of the apprehension expressed by the Division Bench of the Bombay High Court in the impugned judgment that : "If that be so, then no investigation by any police officer in India can be successfully carried out because any absconding accused can go to any corner of India and challenge the prosecution where he was staying." 13. We make it clear that the mere fact that FIR was registered in a particular State is not the sole criterion to decide that no cause of action has arisen even partly within the territorial limits of jurisdiction of another State. Nor are we to be understood that any person can create a fake cause of a....