TaxTMI 
TaxTMI 
2007 (3) TMI 382
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt-State of Sikkim was desirous of disinvesting 49 per cent of its equity capital in the first respondent-State Bank of Sikkim to a strategic partner with transfer of management in the first respondent-Bank. For that purpose, the second respondent issued an advertisement in "Economic Times" on January 21, 2004 and invited offers for strategic partnership. Interested parties, firms and companies having management expertise were asked to apply with detailed bio-data profiles to the State Bank of Sikkim at its Head Office at Gangtok on or before February 7, 2004. It was stipulated in the advertisement that the offers made by the parties would be subject to scrutiny by the Board of Directors of the first respondent-Bank. It was also clarified that the right to accept or reject the offer without assigning any reason was reserved by the Board of Directors. 3. The Appellant Company submitted its formal proposal for the strategic business partnership vide its offer dated 3-2-2004. Several proposals were received from various entities, and the Board of Directors in its 143rd meeting short-listed two entities, viz. the Appellant-Company and another company based in Calcutta. Negotiations to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....had been deposited by the Appellant-Company in a fixed deposit at Chandigarh as per the request of the first respondent; (v)The Chairman and Managing Director of the first respondent visited Chadigarh to ascertain the bona fides of the Appellant-Company; (vi)Negotiations were held between the parties in the third week of March, 2005 at Chandigarh; (vii)Letter of revocation dated 23-2-2006 was received by the Appellant-Company at Chandigarh. Consequences of the revocation ensued at Chandigarh by which the Appellant-Company is aggrieved. 7. It was, therefore, submitted that at least a part of cause of action had certainly arisen within the territorial jurisdiction of the High Court of Punjab & Haryana and hence, it had jurisdiction to entertain the petition. It was, therefore, submitted that the impugned order passed by the High Court deserves to be set aside by directing the Court to decide the writ petition on merits. 8. The respondents, on the other hand, submitted that neither of the above facts nor circumstances can be said to be a part of cause of action investing jurisdiction in the High Court of Punjab & Haryana. According to the respondents, all substantial, material an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed at New Delhi, from inquiring into the alleged disqualification of the petitioner from membership of the Madras Legislative Assembly. The High Court of Madras issued a writ. The aggrieved petitioner approached this Court. 13. Allowing the appeal and reversing the decision of the High Court, this Court held that the High Court of Madras had no territorial jurisdiction to entertain the petition. 14. Speaking for the Court, Patanjali Sastri, C.J. made the following observations : ". . .The makers of the Constitution, having decided to provide for certain basic safeguards for the people in the new set-up, which they called fundamental rights, evidently thought it necessary to provide also a quick and inexpensive remedy for the enforcement of such rights and, finding that the prerogative writs which the Courts in England had developed and used whenever urgent necessity demanded immediate and decisive interposition, were peculiarly suited for the purpose, they conferred, in the States' sphere, new and wide powers on the High Courts of issuing directions, orders, or writs primarily for the enforcement of fundamental rights, the power to issue such directions, etc., 'for any other pur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rection, order or writ to the Union of India, because the seat of the Government of India was located in New Delhi. Cause of action was a concept totally irrelevant and alien for conferring jurisdiction on High Courts under article 226 of the Constitution. An attempt to import such concept was repelled by this Court. In the circumstances, article 226 was amended by the Constitution (Fifteenth Amendment) Act, 1963 and after Clause 1, new Clause (1A) was inserted which read as under : "(1A) 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." 19. It may be stated that by the Constitution (Forty-second Amendment) Act, 1976, Clause (1A) was renumbered as Clause (2). The underlying object of amendment was expressed in the following words : "Under the existing article 226 of the Constitution, the only High Court which h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Brett observed : "'Cause of action' means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court." 25. For every action, there has to be a cause of action. If there is no cause of action, the plaint or petition has to be dismissed. 26. Mr. Soli J. Sorabjee, Senior Advocate appearing for the Appellant-Company placed strong reliance on A.B.C. Laminart ( P.) Ltd. v. A.P. Agencies AIR 1989 SC 1239 and submitted that the High Court had committed an error of law and of jurisdiction in holding that no part of cause of action could be said to have arisen within the territorial jurisdiction of the High Court of Punjab & Haryana. He particularly referred to the following observations : "A cause of action means every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cial Town Planning Officer, Jaipur for acquisition of immovable property situated in Jaipur. Observing that the entire cause of action arose within the territorial jurisdiction of the High Court of Rajasthan at Jaipur Bench, the Supreme Court held that the High Court of Calcutta had no territorial jurisdiction to entertain the writ petition. 31. This Court held that mere service of notice on the petitioner at Calcutta under the Rajasthan Urban Improvement Act, 1959 could not give rise to a cause of action unless such notice was 'an integral part of the cause of action'. 32. In Oil & Natural Gas Commission v. Utpal Kumar Basu [1994] 4 SCC 711 this Court held that when the Head Office of ONGC was not located at Calcutta, nor the execution of contract work to be carried out in West Bengal, territorial jurisdiction cannot be conferred on the High Court of Calcutta on the ground that an advertisement had appeared in a daily (Times of India), published from Calcutta, or the petitioner submitted his bid from Calcutta, or subsequent representations were made from Calcutta, or fax message as to the final decision taken by ONGC was received at Calcutta inasmuch as neither of them would con....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Mumbai. It obtained a loan from the Bhopal Branch of the State Bank of India. The Bank issued a notice for repayment of loan from Bhopal under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The appellant-company filed a writ petition in the High Court of Delhi which was dismissed on the ground of lack of territorial jurisdiction. The company approached this Court and contended that as the constitutionality of a Parliamentary legislation was questioned, the High Court of Delhi had the requisite jurisdiction to entertain the writ petition. 38. Negativing the contention and upholding the order passed by the High Court, this Court ruled that passing of a legislation by itself does not confer any such right to file a writ petition in any Court unless a cause of action arises therefor. The Court stated; "A distinction between a legislation and executive action should be borne in mind while determining the said question". 39. Referring to ONGC, it was held that all necessary facts must form an 'integral part' of the cause of action. The fact which is neither material nor essential nor integral part of the cause of action would ....