TaxTMI 
TaxTMI 
TaxTMI 
2007 (9) TMI 690
X X X X Extracts X X X X
X X X X Extracts X X X X
....Interest (Enforcement) Rules, 2002 on 30.8.2004. This was followed by a notice under Section 13(4) of the S.A.R.F.A.E.S.I. Act. The proceedings were challenged by the Petitioners under Section 17(1) of the S.A.R.F.A.E.S.I. Act before the Debt Recovery Tribunal at Bangalore. But the Petitioner failed. They filed an Appeal under Section 18(1) of the S.A.R.F.A.E.S.I. Act before the Debt Recovery Appellate Tribunal at Chennai. This was also dismissed on 22.12.2006. Against this order, the present Writ Petition has been filed. 3. The learned Counsel for the Respondents submitted that the Writ was not maintainable in this Court since the entire cause of action arose in Bangalore. Both the parties are in Bangalore. The notices under the SARFAESI Act were issued in Bangalore and in these circumstances, the Writ Petition should be filed before the Karnataka High Court and not the Madras High Court. The counsel for Respondents placed their reliance on Bhanu Constructions Pvt. Ltd v. Andhra Bank 2005 (5) CTC 721: 2006 (2) BC 191 (DB). The following paragraphs in the above said decision are relevant. 20. Thus, it is clear that the location of the Appellate Tribunal may vary from time-to-tim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....going into the legality or otherwise of the order of the Tribunal at Hyderabad, which has been confirmed by the Appellate Tribunal at Chennai (ii) the seat of the Appellate Authority must be deemed to be within Hyderabad, though the building of the Office is situated at Chennai, for convenience. 4. Before the Division Bench it was contended on behalf of the Petitioners that the cause of action namely the order of the Tribunal got merged with the orders passed by the Debt Recovery Appellate Tribunal and therefore, the substantial cause of action is only at Chennai and reliance was placed on Kusum Ingots and Alloys Ltd. v. Union of India AIR 2004 SC 2321:2004(2) R.C.R. 720: 2004 (3) CTC 365: 2004 (3) BC 56 (SC): 2004 (3) SLT 565: 2004 (3) DLT 480 (SC): But the Division Bench referring to the following observations of the Supreme Court in the said decision which runs as follows: We must, however, remind ourselves that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may r....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that anyone challenging the order of the Appellate Tribunal could file it where the Appellate Tribunal is situate. 6. (i) Section 2(1)(a) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 reads thus: 2. Definitions - (1) In this Act, unless the context otherwise requires, (a) "Appellate Tribunal" means a Debts Recovery Appellate Tribunal established under Sub-section (1) of Section 8 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)." (ii) Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 reads thus: "18. Bar of jurisdiction - On and from the appointed day, no Court or other authority shall have, or been titled to exercise, any jurisdiction, power or authority (except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17." (iii) Section 3 of the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994 reads thus: 3. Sittings of Appellate Tribunal - An Appellate Tribunal shall hold its sittings either at Head-quarters or at such other ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in such areas in Oudh" occurring in First Proviso to Article 14 of the High Court (Amalgamation) Order, 1948 (hereinafter called Amalgamation Order). A notification order was issued by the Uttar Pradesh High Court at Lucknow by which it was decided to sell the sugar factories, one of the sugar mills is situate in Oudh whereas the other is situate in outside Oudh. This notification was challenged by way of a Writ Petition and it was held that by no stretch of imagination that the Judges can exercise the power of jurisdiction in respect of any area outside Oudh. The Supreme Court held With there being an order/notification by the Government there could be no cause of action at all. The Petitioner got aggrieved only from the order/notification which "arose" from Lucknow. The grievance of the Petitioner "arose" at Lucknow which is within the Oudh area and as such on the plain reading of the relevant provisions of Clause 14 of the Amalgamation Order, the Bench at Lucknow had the jurisdiction to deal with the matter. 8. In Kusum Ingots case, the words "cause of action" were dealt with in detail and the Supreme Court also considered Article 226(2) of the Constitution of India and the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....udh areas, it is indisputable that the Lucknow Bench would have exclusive jurisdiction in such a matter. If the cause of action arises in part within the specified areas in Oudh it would be open to the litigant who is the dominus litis to have his forum convenience. The litigant has the right to go to a court where part of his cause of action arises. In such cases, it is incorrect to say that the litigant chooses any particular Court. The choice is by reason of the jurisdiction of the Court being attracted by part of cause of action arising within the jurisdiction of the Court. Similarly, if the cause of action can be said to have arisen part within specified areas in Oudh and part outside the specified Oudh areas, the litigant will have the choice to institute proceedings either at Allahabad or Lucknow. The Court will find out in each case whether the jurisdiction of the Court is rightly attracted by the alleged cause of action." 25. The said decision is an authority for the proposition that the place from where an appellate order or a revisional order is passed may give rise to a part of cause of action although the original order was at a place outside the said area. When a pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e forum that is chosen is not a convenient one then the High Court may refuse to exercise its jurisdiction not because it does not have jurisdiction but because it chooses not to exercise its discretion. (Emphasis supplied) 9. In Madurai Veeran's case, the Division Bench of this Court quoted Paragraph 35 from the decision of the Supreme Court in Election Commission, India v. Saka Venkata Subba Rao AIR 1953 SC 210, and it runs as follows: The power of the High Court to issue Writs under Article 226 of the Constitution is subject to the two-fold limitation that such writs cannot run beyond the territories subject to its jurisdiction and the person or authority to whom the High Court is empowered to issue such writs must be amenable to the jurisdiction of the High Court either by residence or location within the territories subject to its jurisdiction. 10. In The Commissioner of Central Excise v. Sun Pharmaceuticals Industries Ltd., Writ Appeal No. 323 of 2006, the question of jurisdiction was decided on the basis of Kusum Ingots case and Musaraf Hossain Khan v. Bhagheeratha Engg. Ltd. and Ors. 2006(2) R.C.R.(Criminal) 137 : 2006(1) 504 : 2006 (2) CTC 57 : JT 2006 (3) SC 80.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hin those territories. 7. The question whether or not cause of action wholly or in part for filing a Writ Petition has arisen within the territorial limits of any High Court has to be decided in the light of the nature and character of the proceedings under Article 226 of the Constitution. In order to maintain a Writ Petition, a writ Petitioner has to establish that a legal right claimed by him has prima facie either been infringed or is threatened to be infringed by the Respondent within the territorial limits of the Court's jurisdiction and such infringement may take place by causing him actual injury or threat thereof. 8. Two clauses of Article 226 of the Constitution on plain reading give clear indication that the High Court can exercise power to issue direction, order or writs for the enforcement of any of the fundamental rights conferred by Part III of the Constitution or for any other purpose if the cause of action wholly or in part had arisen within the territories in relation to which it exercises jurisdiction notwithstanding that the seat of the Government or authority or the residence of the person against whom the direction, order or writ is issued is not within....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pensive 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 purpose" being also included with a view apparently to place all the High Courts in this country in somewhat the same position as the Court of King's Bench in England. But wide as were the powers thus conferred, a two-fold limitation was placed upon their exercise. In the first place, the power is to be exercised "throughout the territories in relation to which it exercises jurisdiction", that is to say, the Writs issued by the Court cannot run beyond the territories subject to its jurisdiction. Secondly, the person or authority to whom the High Court is empowered to issue such Writs must be "within those territories", which clearly implies that they must be amenable to its jurisdiction either by resi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. It may be stated that by the Constitution (Forty-second Amendment) Act, 1976, Clause (1-A) 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 has jurisdiction with respect to the Central Government is the Punjab High Court. This involves considerable hardship to litigants from distant places. It is, therefore, proposed to amend Article 226. So that when any relief is sought against any Government, authority or person for any action taken, the High Court within whose jurisdiction the cause of action arises may also have jurisdiction to issue appropriate directions, orders or writs. (Emphasis supplied) 13. The effect of the amendment was that the accrual of cause of action was made an additional ground to confer jurisdiction on a High Court under Article 226 of the Constitution. As Joint Committee observed: This Clause would enable the High Court within whose jur....