Case: Union Of India  Vs. Adani Exports Ltd.

These civil appeals are preferred by the Union of India and Others challenging the judgment and order of the High Court of Gujarat at Ahmedabad made in Special Civil Application Nos. 3282/99 and 3279/99 wherein the High Court allowed the said civil applications and granted the relief as prayed for by the petitioner therein2.Though in these appeals, principal contention involved pertains to the entitlement of the respondents herein to the benefit of the Pass Book Scheme found in paragraph 54 of the Import Export Policy introduced by the appellants herein w.e.f. 1st April, 1995 in relation to certain credits to be given on export of Shrimps, the appellant firstly challenges before us the territorial jurisdiction of the High Court of Gujarat at Ahmedabad to entertain the civil applications and grant relief in favour of the respondents

Reasoning:
5.Having considered the arguments addressed on behalf of the parties and having perused the records, we are of the considered opinion that the question of jurisdiction should be first decided by us before going into the merits of the case in hand. As a matter of fact, we feel it would have been more appropriate on the facts of these cases if the High Court had proceeded under Order XIV Rule 2 of Civil Procedure Code by deciding the question of jurisdiction as a preliminary issue first instead of deciding the case on merit9.We will now consider how the High Court dealt with this issue. Having noticed the objection filed by the appellants in regard to its territorial jurisdiction, the High Court following the judgment of this Court in the case of Union of India v. Oswal Woollen (supra) held that in view of the observations of this Court in the said case, a civil application can be filed at the place where the registered office of the Company is situated and having regard to the fact that the registered office of they is situated at Ahmedabad, it accepted the argument of the learned counsel for the respondent that it is not necessary to discuss this issue any further, meaning thereby it accepted the contention of the respondents counsel that the High Court at Ahmedabad had the territorial jurisdiction to decide the application10.We are unable to accept this finding of the High Court. The view of the High Court that this Court in the case of Oswal Woollen (supra) had held that the existence of the registered office of a Company would ipso facto give a cause of action to the High Court within whose jurisdiction the registered office of such Company is situated, is not correct. As a matter of fact, in the case of Oswal Woollen (supra), the question of territorial jurisdiction in the sense with which we are concerned now, did not arise at all11.It is in that context of noticing the motive of the parties concerned in that case in choosing a forum, the above observation as to the place of the registered office of the Company was incidentally made in the judgment. Having perused the judgment in Oswals case (supra), we are of the opinion that that judgment is no authority to decide as to the requirement of law in regard to establishing the territorial jurisdiction of a court. We must say in all fairness, Mr. Desai, learned senior counsel, has not placed any reliance on this judgment nor on the basis of the finding of the High Court in this case in regard to its territorial jurisdiction. He, however, contends that from the facts narrated in the civil applications, more so in Paragraph 16 of the application, it is crystal clear that a substantial part of the cause of action has arisen within the jurisdiction of the High Court at Ahmedabad. He pointedly referred to the bundle of facts mentioned in Paragraph 16 of the application as also the additional fact pleaded in Paragraph 7 of the application in regard to the respondents having furnished a bank guarantee as also a Bond in favour of the appellants. He pointed out that the Bank guarantee and the Bond were executed by the respondents at Ahmedabad, hence, at least on this count a part of the cause of action has arisen at Ahmedabad14.Though it is also contended in para 16 of the application that the appellants have their office at Ahmedabad, that contention has not been pressed since it is clear from the records that none of these appellants have their office at Ahmedabad. De hors this fact, if we take into consideration the order facts enumerated hereinabove in support of the cause of action pleaded by the respondents, it is seen that none of these facts is in any way connected with the relief sought for by the respondents in their civil applications so as to constitute the cause of action at Ahmedabad16.It is clear from the above constitutional provision that a High Court can exercise the jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises. This provision in the Constitution has come up for consideration in a number of cases before this Court17.It is seen from the above that in order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the Court to decide a dispute which has, at least in part, arisen within its jurisdiction. 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 Courts 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 lis 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. If we apply this principal then we see that none of the facts pleaded in Paragraph 16 of the petition, in our opinion, fall into the category of bundle of facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad18.As we have noticed earlier, the fact that the respondents are carrying on the business of export and import or that they are receiving the export and import orders at Ahmedabad or that their documents and payments for exports and imports are sent/made at Ahmedabad, has no connection whatsoever with the dispute that is involved in the applications. Similarly, the fact that the credit of duty claimed in respect of exports that were made from Chennai were handled by the respondents from Ahmedabad have also no connection whatsoever with the actions of the appellants impugned in the application. Theg and denial of credit in thek 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 actions complained against the appellants. This fact having been specifically pleaded in the application and a relief being sought for that purpose, would definitely give rise to a part of cause of action at Ahmedabad, but on behalf of the appellants, it is pointed out to us that ther involved in the applications pertains to the denial of the benefit of thes scheme which ended w.e.f.7 while the bank guarantee and the Bond in question were not part of the Pass Book Scheme which is ther of the special civil applications with which we are concerned now. Execution of the bank guarantee was not with reference to the demand of the respondents to give it due credit in the pass book but the same was executed much later than7 in regard to certain disputes pending with the customs authorities in regard to the valuations made by the said authorities as to the value of the export and import of prawn and its inputsInclusion of this totally extraneous claim in the present writ petition cannot be construed as being a factor giving rise to a cause of action. In the case of ONGC (supra), this Court negatived the contentions advanced on behalf of the respondents therein that either the acquisition of knowledge made through media at a particular place or owning and having an office or property or residing at a particular place, receiving of a fax message at a particular place, receiving telephone calls and maintaining statements of accounts of business, printing of letterheads indicating branch offices of the firm, booking of orders from a particular place are not the factors which would give rise to either wholly or in part cause of action conferring territorial jurisdiction to Courts. In the said case, this Court also held that the mere service of notice is also not a fact giving rise to a cause of action unless such notice is an integral part of the cause of actionIt is to be noted that in the said petition, among other reliefs, the writ petitioner had prayed for a writ of mandamus to the State of Meghalaya to transfer the investigation to Mumbai Police as also allegations of mala fides were made as to the filing of the complaint at Shillong. It was also averred in that case that the petitioner was primarily aggrieved by the criminal complaint filed at Meghalaya because the bulk of the investigation was carried on at Bombay. The said writ petition was dismissed by the Bombay High Court solely on the ground that since the complaint in question was filed in Shillong in the State of Meghalaya and the petitioner had sought for quashing of the said complaint, such a writ petition was not maintainable before the High Court of Bombay. According to this Court, that finding was given without taking into consideration the other alternative prayers in the writ petition to which we have made reference hereinabove, which prayers according to this Court, gave rise to a cause of action to move the High Court at Bombay for relief. Therefore, in our opinion, this judgment does not help the writ petitioner to justify its action in filing a writ petition before the Gujarat High CourtWe are not inclined to accept this argument of the learned Counsel because the appellants herein had taken objection to the entertainment of the special civil applications by the Gujarat High Court on the ground of lack of territorial jurisdiction in the first instance itself and the same was rejected, according to us, wholly on unsustainable grounds. As a matter of fact, the appellant on the entertainment of the civil application and grant of interim order, had challenged the said order on the ground of want of jurisdiction by way of a civil appeal in this Court which appeal is pending consideration by this Court, therefore, the objection having been taken at the first instance itself and the Court having not proceeded to decide this question of territorial jurisdiction as contemplated under Order XIV Rule 2 CPC, we think we cannot deny relief to the appellant solely on the ground that the High Court has chosen to proceed to decide the case on merit. This being a judgment of a Court having no territorial jurisdiction, the judgment has to be set aside. However, the special civil applications cannot be dismissed on this ground because it has been the contention of the appellants themselves in the objections filed by them before the High Court, that these applications ought to be transferred to the High Court at Chennai, in the interest of justice, we agree with this plea.