TaxTMI 
TaxTMI 
2014 (10) TMI 1074
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....14 is filed. Since the judgment in the writ appeal will have an impact on the maintainability of the writ petition, with the consent of the counsel on both sides, W.P.(C). 22184/13 was also called for to the Full Bench. 2. When the writ appeal came up for consideration before a Division Bench, on behalf of the respondents, reliance was placed on the Division Bench judgment of this Court in Selvin Abraham v. Punjab & Sind Bank (2013 (3) KLT 481). However, on going though the said judgment, the Division Bench felt that the view taken in Selvin Abraham (supra) was apparently in conflict with the principles laid down by a Full Bench of this Court in Nakul Deo Singh v. Deputy Commissioner (1999 (3) KLT 629 (FB)). Accordingly, by order dated 12.6.2014, the writ appeal was referred to be considered by a Full Bench. 3. Subsequent to the reference of the writ appeal, W.P.(C). 8678/14 came up for consideration before a learned single Judge, where also, an objection regarding the maintainability of the writ petition for want of territorial jurisdiction over the cause of action was raised, placing reliance on the judgment of the Full Bench in Nakul Deo Singh (supra) and the petitioner th....
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....er hand, on behalf of the Bank, reliance was placed on the judgments in Nakul Deo Singh (supra) and Mosaraf Hossain Khan v. Bhagheeratha Engineering Ltd. ((2006) 3 SCC 658). 7. Finally, the Division Bench held that, "we are of the view that following Kusum Ingots & Alloys Ltd. (supra), an order of dismissal when it becomes effective definitely forms an integral part of the cause of action. Service of an order of dismissal is not a mere service of a notice, it definitely gives rise to a cause of action and such service of notice forms an integral part of the cause of action". On that basis, the Division Bench set aside the judgment of the learned single Judge and directed consideration of the writ petition on merits. It is the correctness of this judgment which is referred for consideration by the Full Bench. 8. Before we analyse the various findings and conclusions of the Division Bench in Selvin Abraham (supra), it is apposite to understand the facts considered and the principles laid down in Nakul Deo Singh (supra). In that case, reference to the Full Bench was necessitated on account of an apparent conflict between the principles laid down in Union of India v. ....
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....d by an authority located outside the jurisdiction of this Court, when communicated to the party while he is within the jurisdiction of this Court, is a fact in the bundle of facts constituting the cause of action. While examining this question, the Full Bench observed that what really arose for its decision was whether the fact that on communication of the order it becomes effective as far as the person is concerned, gives him the right to approach this Court for relief. These questions were considered by the Full Bench in paragraphs 12 to 22 of the judgment and, being relevant, these paragraphs are extracted below for reference: "12. What is seen from the conflict as reflected above is that the question for consideration would be whether the fact that a decision rendered by an authority located outside the jurisdiction of this court is communicated to the party while he is within the jurisdiction of this court is a fact in the bundle of facts constituting the cause of action. The view that the receipt of the copy of the order would constitute a fact giving rise to the cause of action is founded on the theory that an order becomes effective as regards the party when it is....
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....erritorial jurisdiction of this High Court though one of them came to this State as a consequence of the orders made against him and the other after he had already suffered the consequences outside the territory. 14. The other decision that has been relied on in support of the theory of service of the order also forming part of the cause of action is the decision of the Madras High Court in Veeri Chattiar v. S.T. Officer, Bombay (AIR 1971 Mad. 155). Therein the Madras High Court held that cause of action is the bundle of facts enabling a party to maintain a legal proceeding. The impact on the addressee caused by a notice of the taxing authority and his proposal to assess relate to that bundle and is thus cause of action in part for the issue of a writ against the taxing authority. A Writ Petition will therefore lie in the High Court of the place of the addressee even if the authority is situate outside that High Court's territorial limits. Their Lordships did not refer to any precedent in support of their conclusion. Along the same lines is the view expressed in M/s. Jeferee and Karim v. A.I.T.O. (1998 (2) KLT 39) by a learned Single Judge who said that an order of ass....
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....t's jurisdiction to entertain a petition under Art 226 of the Constitution challenging the validity of the notification for acquiring the land. The cause of action was a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. The Notification issued by the Government of the State of Rajasthan under S. 52(1) of the Rajasthan Act became effective the moment it was published in the Official Gazette as thereupon the notified land became vested in the state Government free from all encumbrances. It was not necessary for the owner to plead the service of notice on him under S. 52(2) for the grant of an appropriate writ, direction or order under Art. 226 of the Constitution for quashing the Notification issued by the State Government under S. 52(1) of the Act. 17. In Hindustan Sugars v. Union of India (AIR 1985 Cal. 17) the Calcutta High Court declined jurisdiction by holding that when respondents and the concerned authorities were outside the territorial limits of the jurisdiction of the Calcutta High Court, the fact that the petitioner was a sugar mill having its selling centre at Calcutta where from sugar was....
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.... Court had no jurisdiction to entertain the Writ Petition under Art. 226 of the Constitution. The court observed that merely because the petitioner before the High Court was a Calcutta based firm it could not institute proceedings in the Calcutta High Court in a case where a contract was executed at Aligarh, construction work was to be carried out at Aligarh and Arbitrator was appointed at Aligarh and the contract provided that in the event of dispute the Aligarh court alone would have jurisdiction. The court also expressed its anguish at courts really not having jurisdiction assuming jurisdiction. 18. Question had arisen whether the factum of issuance of a notice under S. 80 of the Code of Civil Procedure preceding the institution of the suit could be a fact which constituted the bundle of facts giving rise to a cause of action. High Courts of Bombay, Madras, Calcutta, Madhya Pradesh, Punjab and Patna took the view that a notice under S. 80 of the Code of Civil Procedure is only a requirement as a preliminary step for a legal and valid institution of the suit and that it does not really form or constitute part of the cause of action in the suit itself. After referring to ....
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.... estoppel, or by other circumstances which do not affect the cause of action. There may be several rights of action and one cause of action and rights may accrue at different times from the same cause". The above distinction was referred to by a Full Bench of the Allahabad High Court in Balbir Singh v. Atmaram (AIR 1977 All. 211). Their Lordships held that the terms `cause of action' and `right of action' are not synonymous and interchangeable. Right of action is a right to presently enforce a cause of action - a remedial right affording redress for the infringement of a legal right belonging to some definite person: a cause of action is the operative facts which give rise to such right of action. His Lordship Justice Padmanabhan in Roman Ittiathi v. Pappi Bhaskaran (1989 (2) KLT 377) adopted the same approach and noticed the distinction between cause of action and right of action. In Dayasankar v. Chief of the Air Staff, New Delhi (AIR 1988 All. 36) a Division Bench of the Allahabad High Court held that a right of action is a right to enforce a cause of action. A person residing elsewhere in the country being aggrieved by an order of Government, Central or State o....
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....acts constituting the cause of action. At best receipt of the order or communication only gives the party a right of action based on the cause of action arising out of the action complained of. When that action complained of takes place outside the territorial jurisdiction of the High Court and an appeal therefore is dismissed by an authority located outside the jurisdiction of the High Court cause of action wholly arises outside the jurisdiction of the High Court and Art. 226(2) of the Constitution cannot be invoked to sustain a Writ Petition in this High Court on the basis that a part of the cause of action has arisen within the jurisdiction of this court, merely because the appellate order communicated from the seat of the appellate authority was received while the petitioner was residing or working within the jurisdiction of this court Acceptance of the argument that the situs of the receipt of the order will determine the jurisdiction can lead to a position where a litigant would be in a position to choose his own court for the purpose of redressal of his grievance. All that he need do is to move over to a particular place for receiving the communication from the appellate aut....
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.... when an appeal is filed by him to an appellate authority who is outside the jurisdiction of this High Court and that appeal is dismissed by the appellate authority, the merger in the decision of the Appellate Authority takes place when the appeal is dismissed and not when the appellant receives the order. What a writ petitioner need plead as a part of his cause of action is the fact that his appeal was dismissed wholly or in part and not the fact that the order was communicated to him. That plea is relevant only to show when the right of action arose in his favour. The receipt of the order only gives him a right of action on the already accrued cause of action and enables him to meet a plea of laches or limitation raised in opposition. That the consequences of a proceeding in the larger sense are suffered by a person in his native place is not a ground to hold that the High Court within the jurisdiction of which the native place is situate is also competent to entertain a Writ Petition under Art 226 of the Constitution. When a person is dismissed or reduced in rank, he suffers the consequences where he was employed at the relevant time and not in his native place to which he might....
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....missed from service while he was in service outside the State, would have to suffer the consequence of the dismissal when he is in his native place is not a fact which constitutes the bundle of facts giving rise to a cause of action in his favour. Yet another principle laid down by the Full Bench is that when an appeal against an order of dismissal is filed before an appellate authority situated outside the jurisdiction of this Court and that appeal is dismissed, the order of the disciplinary authority merges in the order of the appellate authority and that cause of action to challenge the order arises on the issue of the appellate order and not where the order is received by the addressee. 15. These principles laid down in Nakul Deo Singh (supra) show that the Full Bench has approved the principles laid down by the Division bench in Thomaskutty (supra) and has disapproved the principles adopted in Kunhabdulla (supra). Applying these principles, two original petitions referred to the Full Bench for consideration were also dismissed holding that no integral part of the cause of action arose within the jurisdiction of this Court on the service of orders in Kerala, dismissing the a....
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....cause it read the advertisement at Calcutta and submitted the offer from Calcutta and made representations from Calcutta would not, in our opinion, constitute facts forming an integral part of the cause of action. So also the mere fact that it sent fax messages from Calcutta and received a reply thereto at Calcutta would not constitute an integral part of the cause of action. Besides the fax message of 15-1-1993, cannot be construed as conveying rejection of the offer as that fact occurred on 27-1-1993. We are, therefore, of the opinion that even if the averments in the writ petition are taken as true, it cannot be said that a part of the cause of action arose within the jurisdiction of the Calcutta High Court." 17. Following the principles laid down in Oil & Natural Gas Commission, the Supreme Court considered this question in its judgment in Union of India v. Adani Exports Ltd. (2002 (1) SCC 567). That was a case where the respondents filed a special civil application before the High Court of Gujarat claiming the benefit of the Passbook scheme found in the Import Export Policy introduced in 1995. The passbook in question was issued by an authority stationed in Chennai and the ....
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....t concluded contract had come into existence which could be cancelled only after giving an opportunity of hearing and consequently, the question of revocation of the contract at its Calcutta address would constitute a cause of action. In our opinion, the view taken by the Division Bench is wholly erroneous in law . . . . . . . . . . . . . . . . . . . ." "12.1. As discussed earlier, the mere fact that the writ petitioner carries on business at Calcutta or that the reply to the correspondence made by it was received at Calcutta is not an integral part of the cause of action and, therefore, the Calcutta High Court had no jurisdiction to entertain the writ petition and the view to the contrary taken by the Division Bench cannot be sustained. In view of the above finding, the writ petition is liable to be dismissed. However, in order to avoid any further harassment to the parties and to put an end to the litigation, we would examine the matter on merits as well." 19. Kusum Ingots & Alloys Ltd. (supra) is another case where the issue of territorial jurisdiction was discussed by the Apex Court while answering the question whether receipt of notice is an integral part of the ca....
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....r on merit and that in appropriate cases, the court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. 21. Ambika Industries v. Commissioner of Central Excise ((2007) 6 SCC 769) is another case of relevance. In this case, the Apex Court has followed its earlier judgment in Kusum Ingots & Alloys Ltd. (supra). In Ambika Industries (supra), the appellant was carrying on business at Lucknow and was also an assessee under the Central Excise Act at that place. A dispute under the Central Excise Act ultimately came up before the Central Excise and Service Tax Appellate Tribunal, New Delhi. Against the order of the Tribunal, appeal under the Act was filed before the Delhi High Court. A Division Bench of the Delhi High Court opined that it did not have territorial jurisdiction in the matter. In the appeal, that was filed before the Apex Court, it was held thus in paragraphs 29, 38, 40 and 41; "29. The decisions operating in the field, which have been taken note of in Kusum Ingots & Alloys Ltd. would clearly go to show how the situs doctrine had been given a go-by by making constitutional amendments. At one point of time writ petit....
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....ued by the State of Sikkim in the Economic Times newspaper, inviting offers for strategic partnership with transfer of management in the State Bank of Sikkim, having its head office at Gangtok. The appellant was one of the entities which were shortlisted. Thereafter, negotiations took place between the appellant and the bank. Subsequently, appellant had deposited Rs. 4.5 crores with the State Bank of India. Finally, they were informed that their proposal was accepted in principle subject to consideration and approval of the Government of Sikkim. Still later, they received a communication at Chandigarh, by which, the bank sought to withdraw their communication conveying acceptance of their proposal in principle. 23. In the above circumstances, the appellant filed a writ petition before the High Court of Punjab & Haryana challenging the withdrawal of the proposal. That writ petition was dismissed on the ground that the High Court of Punjab & Haryana did not have territorial jurisdiction to entertain the writ petition. In the appeal filed, the Apex Court followed its earlier judgments and upheld the order of the High Court, holding thus in paragraphs 37, 38: "37. From the ....
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....t that order and its rejection was communicated to the petitioner while he was working as Deputy Manager (General), Food Corporation of India, Regional Office, Trivandrum. The question was whether this Court had territorial jurisdiction to entertain the writ petition filed by him. The Division Bench held that the cause of action arose entirely outside the jurisdiction of this Court and not even a part of the cause of action arose within its territorial jurisdiction. 26. Yet another judgment where Nakul Deo Singh (supra) was followed is Anand Anoop v. Union of India (2004 (3) KLT 171). In that case, the appellant was a candidate who appeared for pre-medical entrance examination conducted by the third respondent institute situated in Maharashtra. Though he was declared to have passed in the examination, his claim for inclusion in the category 'Ward of defence personnel' did not yield any response from respondents 1 and 2. When he was informed that respondents were proposing to finalise a select list for admission which, according to him, was against the terms of the prospectus, the writ petition was filed. On the ground of absence of territorial jurisdiction, learned singl....
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....usion is irresistible that the cause of action arises on the issue of the appellate order and the service of the appellate authority's order does not become any part of the cause of action except that it gives right of action to the aggrieved. If service of the appellate order is not an integral part of the cause of action, the service of the order of the disciplinary authority also will not give rise to any part of the cause of action. This will be so even in a case where the situation is in the reverse and the fact that only on service on the addressee, such orders become effective does not alter the situation in any manner, except that it gives right of action to the aggrieved. 30. In this context, we should also make reference to paragraph 27 of the judgment of the Apex Court in Kusum Ingots & Alloys Ltd., where, the Apex Court has held that challenge can be maintained against an order passed by the original authority and the appellate authority where the seats of the original authority and appellate authority are situated and the Apex Court did not mention that such challenge is possible at the place where orders are served. Therefore, irrespective of whether it is the ....
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....ction and right of action. It is held that the decision in Swatika properties case (supra) and subsequent judgments established that receipt of communication by itself does not constitute as facts in the bundle of facts constituting cause of action and at best, receipt of the order of communication only gives a party a right of action based on the cause of action arising out of the action complained of. It could be seen that in the cases before the Full Bench the factual circumstances involved was dismissal of the appeal and the communication of the appellate order or rejection of the appeal and whether it constitutes a cause of action. It is in that view that the Full Bench relies upon S.S. Rathore (supra) to indicate that when there is an appeal against the original order even in a service dispute, there is a merger of the original order in the appellate order and the decision rendered by the appellate authority whether it be of dismissal, reduction, allowance or modification of the order of the original authority, a cause of action accrues to the aggrieved person to challenge the appellate order since the order of the original authority merges in the order of appellate authority....
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....ommunication of appellate order would constitute an integral part of the cause of action. The Bench thereafter proceeded to hold that as per the Full Bench judgment even in a service dispute, the original order would merge in the appellate order and that on such merger, a cause of action accrues to the aggrieved person to challenge the appellate order. Thereafter, the Division Bench concluded that the Full Bench has laid down that rejection of the appeal furnishes the cause of action and that though the order becomes effective only on communication to the aggrieved party, such communication would only give the party a right of action and not cause of action. According to the Division Bench, the question considered by the Full Bench was whether a cause of action arises when the appeal is dismissed or when the order is communicated to the concerned person. 35. In paragraph 16 of its judgment, the Division Bench makes reference to the principle that consequence of the dismissal is suffered within the jurisdiction of this Court, is not a fact which constitutes the bundle of facts giving rise to a cause of action. According to the Division Bench, this finding of the Full Bench, rende....
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....uthority. We have referred to paragraph 27 of Kusum Ingots & Alloys Ltd. Where, the Supreme Court has specifically held that when an appellate authority has issued an order, challenge is possible against the appellate authority's order at the place where the order is issued and this judgment did not say that challenge is possible at the place of its service. 39. That apart, in Nakul Deo Singh, the Full Bench was considering the conflict between the principles laid down in Kunhabdulla and Thomaskutty. In Kunhabdulla, what was under challenge was an order of removal passed by an authority outside the territorial jurisdiction of this Court. The learned single Judge held that this Court had jurisdiction on the basis that though the order is effective on the authority concerned on its issue, in so far as the Government servant is concerned, it becomes effective only when he is appraised of it and that this Court can entertain a challenge against an order which was received by the petitioner through post while he was residing within the territorial jurisdiction of this Court. The Division Bench affirmed the judgment holding that the order of removal becomes effective only on accep....
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....state that ratio of any judgment must be understood in the background of the facts of that case and that a case is only an authority for what it actually decides and not what logically follows vide Ambica Quarry Works v. State of Gujrat ((1987) 1 SCC 233). In Dr. Subramanian Swamy v. State of Tamil Nadu (2014 (1) SCALE 79), the above legal position has been reiterated. Paragraph 31 of the judgment reads thus: "31. It is the settled legal proposition that the ratio of any decision must be understood in the background of the facts of that case and the case is only an authority for what it actually decides, and not what logically follows from it. "The court should not place reliance on decisions without discussing as to how the factual situation fits in with the fact-situation of the decision on which reliance is placed." 43. Amarsingh Harika was a case where the respondent was an Assistant Director of Civil Supplies in the Patiala and East Punjab States Union. He was dismissed from service by order dated 3.6.1949. This order was communicated to him on 2/3.1.1953. He filed a suit against the State of Punjab challenging the order of dismissal and the suit was instituted at ....
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....t him? Would the officer concerned be entitled to his salary for the period between the date when the order was passed and the date when it was communicated to him? These and other complications would inevitably arise if it is held that the order of dismissal takes effect as soon as it is passed, though it may be communicated to the officer concerned several days thereafter. It is true that in the present case, the respondent had been suspended during the material period; but that does not change the position that if the officer concerned is not suspended during the period of enquiry, complications of the kind already indicated would definitely arise. We are, therefore, reluctant to hold that an order of dismissal passed by an appropriate authority and kept on its file without communicating it to the officer concerned or otherwise publishing it will take effect as from the date on which the order is actually written out by the said authority; such an order can only be effective after it is communicated to the officer concerned or is otherwise published. When a public officer is removed from service, his successor would have to take charge of the said office; and except in cases whe....
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.... preliminary question that arose for consideration was whether the Kerala High Court had jurisdiction in the matter. Answering this contention, in the light of the provisions contained in Article 226(2) of the Constitution of India and the principles laid down in various judgments of the Apex Court, including some of the judgments referred to by us, and also the judgment in Nakul Deo Singh, the Apex Court held that the Kerala High Court did not have jurisdiction to entertain the writ petition as no part of cause of action arose within its jurisdiction. Therefore, the Apex Court in this judgment was not concerned with cause of action in the context of section 138 of the NI Act but whether the High Court had territorial jurisdiction to entertain the writ petition filed under Article 226 of the Constitution of India, challenging the criminal complaints filed at the court of Chief Judicial Magistrate, Birbhum at Suri. Thus, the Division Bench has distinguished the Apex Court judgment in Mosaraf Hossain Khan (supra) on a wrong factual basis. 48. The respondents made a final attempt to salvage Selvin Abraham by referring to the Apex Court judgment in Nawal Kishore Sharma v. Union of I....
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....tion was filed in the Patna High Court, the same was entertained and notices were issued. Pursuant to the said notice, the respondents appeared and participated in the proceedings in the High court. It further reveals that after hearing the counsel appearing for both the parties, the High Court passed an interim order on 18/09/2012 directing the authorities of Shipping corporation of India to pay at least a sum of Rs. 2.75 lakhs, which shall be subject to the result of the writ petition. Pursuant to the interim order, the respondent Shipping Corporation of India remitted Rs. 2,67,270/- (after deduction of income tax) to the bank account of the appellant. However, when the writ petition was taken up for hearing, the High Court took the view that no cause of action, not even a fraction of cause of action, has arisen within its territorial jurisdiction. 22. Considering the entire facts of the case narrated hereinbefore including the interim order passed by the High Court, in our considered opinion, the writ petition ought not to have been dismissed for want of territorial jurisdiction. As noticed above, at the time when the writ petition was heard for the purpose of grant of ....
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....oresaid reasoning, concluding that Rafiq Masih was law declared under Article 136 of the Constitution of India and that there was no conflict to be resolved, the reference was answered. 52. Since Nawal Kishore Sharma (supra) was decided "in the peculiar facts and circumstances" of the case, in view of the principles laid down in Rafiq Masih (supra), we should accept the contention that relief was granted in Nawal Kishore Sharma, in exercise of the powers of the Apex Court under Article 142 of the Constitution of India. 53. Thus, the conclusion is irresistible, that the principles laid down in Selvin Abraham are contrary, not only to the Full Bench judgment in Nakul Deo Singh but also to the Apex Court judgments we have referred to. As a result, Selvin Abraham does not laid down good law and therefore, is overruled. The question referred to the Full Bench is answered as aforesaid. 54. Coming to the cases that are referred to the Full Bench, in W.A. 743/14, by Ext. P2 notification issued by the appellant from Chennai where its head office is situated, applications were invited to various posts, including the post of Professor (Management). In response to the notification, th....
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....r dated 20.7.2012, which was served on the petitioner while he was at Palakkad. The petitioner submitted his objection against the findings of the enquiry officer. This was considered by the disciplinary authority, who, thereafter, issued Ext. P5 order dated 26.9.2012, removing the petitioner from service. This order was issued from Puducherry and was served on the petitioner while he was at Palakkad. He filed an appeal to the General manager, Indian Bank, Chennai which was rejected and this order was also communicated to the petitioner at Palakkad. He filed a review application to the first respondent, the Chairman and Managing Director of the Bank at Chennai. That was also rejected by Ext. P9 order which also was served on the petitioner at Palakkad. It was in these circumstances, the writ petition was filed with the following main prayers: 1) To issue Writ in the (nature of) certiorari to quash Ext. P3, Ext. P4, Ext. P5, Ext. P6 & Ext. P9 as legally unsustainable and violative of Article 14 and 16 of the Constitution of India. 2) To issue Writ in the nature of mandamus commanding the 4th respondent to reinstate the petitioner in service with retrospective effec....