TaxTMI 
TaxTMI 
2002 (5) TMI 858
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....d, inter alia, in the manufacture and sale of automobile seat belts and systems, 4. On or about 16th September 1991, a joint venture agreement in writing was made between the petitioner No. 1 and the respondent No. 3. The said agreement was for manufacture of automotive safety system and other automotive products, components and assemblies. Approval to that agreement was granted by the Government of India and pursuant thereto the petitioner No. 2 was incorporated on 16-1-1992. 5. The petitioner No. 1 came to know in January 2001 that respondent No. 3, the joint venture partner of the petitioner No. 1, applied to respondent Nos. 1 and 2, the Central Government authorities, for approval to set up a 100% subsidiary in Delhi to manufacture steering wheels and airbags and the petitioner also came to know that such approvals were accorded by the Central Government on 11-5-2000 and 8-11-2000. 6. The petitioner No. 1, therefore, sent a letter dated 24-1-2001 to the respondent Nos. 1 and 2 and prayed for cancellation of such approvals on various grounds. After that the petitioner came to know that respondent No. 4 has been incorporated in india as a 100% subsidiary of the responden....
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....nd the private respondents, urged that the respondents submitted to the jurisdiction and after submitting to the jurisdiction of this Court, the respondent cannot challenge the same. In support of this contention, the learned Counsel referred to order dated 3-9-2001, passed by this Court on this matter. On that date the learned Judge before whom the writ petition was filed refused to grant any interim order without giving the respondents any chance to file affidavits and gave directions for affidavits. However, the private respondent No. 3 did not appear on that date. On the next date i.e. 16-10-2001, respondent No. 3, appeared through Counsel and prayed for affidavit and direction was given. The learned Counsel submits that in between two days, i.e. 26-9-2001 and 8-10-2001, the Government-respondents appeared and prayed for extension of time to file affidavits. On all these dates, no question about the lack of territorial jurisdiction of this Court was raised by the learned counsel for the Central Government. The main grievance of the writ petitioner is against the Central Government. Since they submitted to the jurisdiction of this Court the present objection raised by them shoul....
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.... said petition, I say that it is now well-settled law that mere communication of a letter does not confer any jurisdiction to this Hon'ble Court which this Hon'ble Court otherwise does not have inasmuch as all the respondents are outside the jurisdiction of this Hon'ble Court and the entire cause of action has arisen also outside the jurisdiction of this Hon'ble Court, In view of the aforesaid this Hon'ble Court has no Jurisdiction to entertain and try this writ application and the same should be dismissed on this ground alone." 17. The learned counsel for the petitioner submitted that the private respondent Nos, 3 and 4 are not necessary parties to this proceeding, they are merely private parties. So nothing much turns on their objection, The petitioner is aggrieved mainly by the action of the respondent Nos. 1 and 2 and they have not taken such objection in their affidavit-in-opposition. On the other hand, they have participated in the proceedings by asking time to file affidavits and as a result of such participation they cannot raise this question of lack of territorial jurisdiction of this Court at all. In support of this contention, the learned Counsel ....
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....refore, the conduct of the parties here is vastly different from the conduct of the defendant in the case of Hiralal Patni (supra). So the ratio of the Supreme Court relating to estoppel on the part of the defendant to question on the territorial jurisdiction of this Court cannot be applied here. The decision of the Supreme Court in Hiralal Patni's case depended on the, agreement of the defendant to refer the matter to arbitration through Court. Since the matter was referred to arbitration on the consent of the defendant, thereafter, it was not open to the defendant to challenge the territorial jurisdiction of this Court. This aspect of the matter has been clarified by the Supreme Court as follows : "When he agreed to refer the matter to Arbitration through Court, he would be deemed to have waived his objection to the territorial jurisdiction of the court, raised by him in his written statement." 20. The next decision cited on this point by the learned Counsel for the petitioner is in the case of Bahrein petroleum Company Ltd.. v. P. J. Pappu, . In that judgment the learned Judges held that where a defendant allows the trial Court to proceed to deliver the judgment ....
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....e defendant in his written statement filed before the Court and the Court held that the same is permissible and the same is not a conduct which amounts to waiver. Here also the respondents asked for time to file affidavit and asked for extension of time and ultimately filed affidavit and the private defendants have specifically raised the question of lack of territorial jurisdiction of this Court. In so far as the Government respondents are concerned, they have of course, not taken the point specifically in their affidavits but they have urged this point before the Court at the very first instance when the matter was taken up for hearing after completion of affidavit. It cannot be said that either of the respondents have allowed the trial Court to proceed to deliver the judgment without raising any objection about the place of suing nor can it be said that there is long participation by them in the proceedings. It appears that this point relating to lack of territorial jurisdiction of this court has been taken by both the respondents at the threshold of hearing of the matter. Therefore, the ratio in the judgment of Bahrein Petroleum (supra) instead of supporting the case of the pet....
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....ocedure Code an application was filed seeking to introduce the objection of lack of territorial jurisdiction of the Court by way of amendment. The said application was rejected by the learned trial Judge and the order became final. There was another application also under order VII Rule 10 read with Section 154 of Civil Procedure Code. But the said application was not disposed of and was directed to be heard along with the suit. In the background of these facts, the learned Judge observed that even though such an application was filed for rejection of plaint there was long participation in, the proceeding. Such long participation will be treated as acquiescence on the part of the party raising objection to the territorial jurisdiction of the Court on a technical aspect. Having regard to the total dissimilarity of facts between the case of N. B. C. C. and the facts of this Case, the decision in that particular case can have no application here. There-fore, this Court overrules the contention of the learned Counsel for the petitioner that the respondents are precluded from raising the question of territorial jurisdiction. 23. Apart from that Section 21 of C. P. C. also militates a....
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....is not within those territories. In other words, under Article 226(2) of the Constitution, every High Court is empowered to issue writs or orders to authorities, Government or persons whose residence or seat is not included within the territories of the said High Court. But this is subject to one rider namely that this power can be exercised provided the cause of action for exercise of such power arises wholly or in part within the jurisdiction of the High Court issuing the order. 26. The learned counsel relied on the decision of the Hon'ble Supreme Court in the case of Lt. Col. Khajoor Singh v. Union of India, . That judgment was delivered after considering the provisions of Article 226 before its amendment. At that stage. Supreme Court refused to introduce the concept of cause of actipn in Article 226 of the Constitution of India. 27. In para 16 of the judgment the learned Judges held that 'Article 226 as it stands does not refer anywhere to accrual of the cause of action'. But, the minority judgment in that case delivered by Justice Subba Rao held differently and posed a question on which much reliance was placed by the learned counsel for the petitioners. Just....
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....lied on the following judgments of the Supreme Court : (i) Union of India v. Oswal Woollen Mills, . (ii) State of Rajasthan v. Swaika Properties, . (iii) Oil & Natural Gas Commission v. Utpal Kumar Basu, reported in (1994) 4 SCC 71 : (1994 AIR SCW 3287). (iv) Union of India v. Adani Exports Ltd. . (v) Navinchandra N. Majithia v. State of Maharashtra, . 32. The learned counsel for the respondents urged that they have raised the question of lack of territorial jurisdiction of the Court at the very inception of the hearing so it cannot be said that they have submitted to the jurisdiction of the Court by filing affidavits. Therefore, it cannot be said that their right to raise the question of jurisdiction has been waived. Since this question has already been decided in favour of the respondents, no further discussion is necessary. The learned counsel for the respondents urged that in the instant case, no part of the cause of action has arisen within the territorial limits of this High Court and there is no averment in the writ petition that as a result of rejection of the petitioner's representation, the business of the petitioner wil....
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.... abuse. Therefore, the order I which originated from outside the local limits of the High Court must materially affect the interest of the party concerned and the Hon'ble Division Bench of the Calcutta High Court also following the Hon'ble Supreme Court's judgment in the case of Swaika Properties (supra) held in Everest Coal Co. (1986 (90) Cal WN 438) (supra) that an order having a remote or indirect consequence upon the office of party situated in Calcutta, will not furnish a cause of action. It has been further held that unless an order imposes any liability or obligation at any place within the territorial limits of a Court, merely because the party feels the consequence of the order within the jurisdiction of the High Court, the same will not furnish a cause of action. (See para 13 of the judgment in Everest Coal Co.) 36. Now scanning the averments made in the writ petition, this Court finds that the petitioners are aggrieved by the orders of approval dated 11-5-2000 and 8-11-2000 given by the Central Government to the respondent No. 3 in respect of the foreign collaboration. Those approvals were given by the authorities whose office is in Delhi and were given in....
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....not the petitioner's case, as it obviously cannot be, that the orders of approval do not become effective until the rejection order of the petitioners' request to cancel the said approval has been communicated to the petitioners. The orders of approval became effective on their own and the pendency of the petitioners' representation against the order of approval does not make them Ineffective. Now whether those orders of approval are good or bad is a different question. But, one thing is clear that this Court has no territorial jurisdiction to entertain a writ petition in respect of those orders of approval. But that purpose is sought to be achieved indirectly through this writ petition by filing a mere non-statutory representation against those orders of approval even though those orders cannot be impugned within the territorial jurisdiction of this Court. If this is allowed, then against any order passed in any part of India petition can be moved before this Court by a party if it has an office in Calcutta and that party obtains a reply in Calcutta to a non statutory representation against such orders. Therefore, something which cannot be done directly Is sought to be....
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.... under the Stamp Act in Madras (presently Chennai) issued a notice to the petitioner in Calcutta questioning the market value of the properties. That notice was served on the petitioner at Netaji Subhas Road. In the background of those facts, the Counsel for the respondent faintly urged that the Calcutta High Court has no jurisdiction to entertain the writ petition as the office of the respondent is at Tamil Nadu (see para 19 of the judgment). That faint argument was repelled, if I may say so with respect, rightly, by the learned Judge in para 20 of the judgment by observing : "It cannot be disputed that the receipt of the impugned notice is an essential part of the case of action in this case. As such this submission on behalf of the respondents on the question of lack of jurisdiction must be rejected." The factual difference between the present case and the facts in Anglo-American Tea is too obvious to deserve any further discussion. (c) The decision in Uma Shankar Chatterjee (1982 Lab IC 1361) was rendered in a service matter and in respect of an order of dismissal. It is well known that an order of dismissal from service takes effect only when it served. In....
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....was held in Bombay. Even if the order was made in Delhi, the order was served on the petitioner at Ulias Nagar which is within the jurisdiction of the Court. After the service of the order, the follow up proceedings would also be taken by officers whose offices were within the jurisdiction of the Court. (f) In D. L. Suresh Babu the petitioner staying in Bangalore challenged the order rejecting its nomination paper for election to the Central and Regional Councils of the Institute of Chartered Accountants of India which has its office in Delhi. Order of rejection passed in Delhi was served on the petitioner in Bangalore. That is why the Karnataka High Court entertained the writ petition. An order rejecting the nomination paper certainly furnishes a cause of action as it is vitally connected with a person's right to seek or contest the election. But the same is not true of the order dated 9-7-01. (g) In M/s. Balaji Vegetable Products (P) Ltd. , also the order by the Central Government refusing to endorse the change in ownership of the industrial undertaking is an order which materially affects the working of the industrial undertaking. The Court found from the facts of that....
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....stries (1989 Lab IC 224) (supra) the Gujarat High Court was considering its territorial jurisdiction to intervene in the context of communication of an order of termination and notice pay on the employee at Ahmedabad which was within its local limits. The Division Bench held that as a result of such communication, the consequences of the order fell on the employee and its furnishes a cause to the employee to more the Gujarat High Court. This logic is akin to the one followed in Uma Shankar (supra) and is well known in service jurisprudence. But the facts in the case in hand are totally different. (j) In the case of Everest Coal (1986 (90) Cal WN 438) (supra), Hon'ble Mr. Justice Chittatosh Mookherjee (as His Lordship then was) speaking for the Division Bench summarised the principles very succinctly. In the present case, territorial jurisdiction is sought to be invoked on the communication of the order dated 9-7-01 on the registered office of the petitioners in Calcutta. But the Division Bench held that service of any and every communication does not give rise to a cause of action. On a review of the case laws, this has been made clear in para 5, page 443 of the report as fo....
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...... ............."We hold that the writ petition filed by the appellant did not disclosed that the cause of action nor any part thereof had arisen for tiling the same." On the expression cause of action the learned counsel for the petitioner cited a few decisions. The learned counsel first relied on the decision of the Division Bench of the Calcutta High Court in Bimal Singh Kothari (supra). In para 31 of the judgment the learned Judges accepted the formulation made by Chief Justice Rankin in Engineering Supplies Ltd. v. Dhandhania and Co., . Those observations of Chief Justice Rankin is set out below : The only definition that will work, if it has to be applied to cases of all kinds, is the entire set of facts that gives rise to an enforceable claim, or in the words of Fry L.J., 'everything which if not proved gives the defendant an immediate right to judgment'; every fact which is material to be proved to entitle the plaintiff to succeed, every fact, which the defendant could have a right to traverse." One thing is clear from the observation of Chief Justice Rankin that the fact in question must be a material fact. The learned counsel also relied on the deci....
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.... WN 438) (supra). 40. Now the Court proposes to discuss the principles rendered in five Supreme Court judgments on which counsel of both the parties relied. The first in this series is the one rendered in the case of Oswal Woollen Mill . (1) Oswal Woollen Mill had its registered office at Ludhiana and a branch office at Calcutta, The writ petition was filed before Calcutta High Court seeking reliefs against authorities mostly in Delhi and Amritsar. In the background of these facts the Court observed in para 2 that "one would have expected the writ petition to be filed either in the High Court of Punjab and Haryana or in Delhi High Court" but Instead of that the writ petition was filed in Calcutta High Court because of a consignment having arrived in Calcutta Port. The question of territorial jurisdiction in that case was not considered with reference to Article 226(2) of the Constitution or with reference to accrual of a part of cause of action. The Apex Court in that case expressed its concern about the High Court's lack of circumspection in granting ex parte interim order and the various manoeuvres usually employed by the petitioner to prolong the life of an interim ....
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.... action within that territory unless the service of such notice was an integral part of the cause of action. The entire cause of action culminating in the acquisition of the land under Section 52(1) of the Act arose within the State of Rajasthan i.e. within the territorial jurisdiction of the Rajasthan High Court at the Jaipur Bench. The answer to the question whether service of notice is an integral part of the cause of action within the meaning of Article 226(2) of the Constitution must depend upon the nature of the impugned order giving rise to a cause of action." Following the same ratio, this Court holds that mere service in Calcutta of the communication dated 9-7-2001, not under any statutory provision, does not give rise to any integral part of cause of action of the petitioners inasmuch as all proceedings about the orders of approval took outside the limits of this Hon'ble Court. (iii) In the ONGC case (supra) also NICCO, the petitioner before Calcutta High Court had its registered office in Calcutta and in the writ petition it was averred that if contract is not awarded in their favour the writ petitioner would suffer loss at its registered office at Calcutta wit....
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....approval is rejected is of no consequence. The Supreme Court, further dealing the concept of Article 226(2) and relying on the decision of ONGC (1994 AIR SCW 3287), explained the concept of cause of action in para 17 at page 130 of the report and the relevant extracts wherefrom are excerpted below : "It is clear from the above judgment that each and every fact pleaded by the respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the Court's territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is Involved in the case. Facts which have no bearing with the Us or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the Court concerned." (Underlined by Court) The learned Judges also held in para 18 as follows : "The non-granting and denial of credit in the passbook having an ultimate effect, if any, on the business of the respondents at Ahmedabad would not also, in our opinion, give rise to any such cause of action to a Court at Ahmedabad to adjudicate on the action....