CEMENT WORKERS’ MANDAL versus GLOBAL CEMENTS LTD.  (HMP CEMENTS LTD.) & ORS
[2019] 3 S.C.R. 357, Supreme Court of India, 2019
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
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CEMENT WORKERS’ MANDAL
v.
GLOBAL CEMENTS LTD. (HMP CEMENTS LTD.) & ORS.
(Civil Appeal No.5360 of 2010)
FEBRUARY 14, 2019
[ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Constitution of India: Art. 226(2) – Territorial jurisdiction of
the High Court to entertain the petition – Held: Expression “the
cause of action, wholly or in part, arises” occurring in Art. 226(2)
has to be read in the context of s. 20(c) CPC which deals with filing
of the suit within the local limits of the jurisdiction of the Civil Courts
– Issue as to whether the cause of action for filing the petition,
wholly or in part, arose in the context of territorial jurisdiction of
the High Court, is to be decided keeping in view the provisions of
Art. 226(2) r/w s. 20 CPC – On facts, the part of the cause of action
as contemplated in Art. 226(2) has arisen within the territorial
jurisdiction of the Gujarat High Court for filing the petition to claim
appropriate reliefs in relation to such dispute against the
Company – Thus, the application was maintainable in the High Court
– Order of the Single Judge is restored to the extent it decides that
the application is maintainable in the Gujarat High Court – Code
of Civil Procedure, 1908 – s. 20.
Allowing the appeal, the Court
HELD: 1.1 Article 226(2) of the Constitution empowers
the High Court to entertain the writ petition if the cause of action
to file such writ petition against the respondents of the said writ
petition has arisen wholly or in
part within the territorial
jurisdiction of ‘A’ High Court. Clause (2) further empowers a
High Court to issue any order, directions or writ as provided in
clause (1) of Article 226 in such writ petition notwithstanding
that seat of such Government or the Authority or the residence
of such person against whom the writ petition is filed does not
fall within the territories of the “A” High Court but falls in the
territories of the “B” High Court. [Paras 24, 25] [365-A-C]
[2019] 3 S.C.R. 357
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1.2 Respondent No.1-Company has its factory at Porbandar,
which is a part of State of Gujarat. The Labour Court, Junagadh,
which is also a part of State of Gujarat, entertained the dispute
between the appellant-Union and respondent No.1-Company and
passed a recovery order. One of the reliefs claimed in the petition
(SCA) pertains to non-payment of outstanding wages payable to
the workers by respondent No.1-Company. Thus, the part of the
cause of action as contemplated in Article 226 (2) has arisen within
the territorial jurisdiction of the Gujarat High Court for filing the
petition (SCA) to claim appropriate reliefs in relation to such
dispute against respondent No.1-Company. [Paras 26-27]
[365-C-E]
1.3 The expression “the cause of action, wholly or in part,
arises” occurring in Article 226(2) of the Constitution has to be
read in the context of Section 20(c) CPC which deals with filing
of the suit within the local limits of the jurisdiction of the Civil
Courts. Indeed, the question as to whether the cause of action
for filing the petition, wholly or in part, arose in the context of
territorial jurisdiction of the High Court and whether the Gujarat
High Court has territorial jurisdiction to entertain the appellant’s
petition (SCA) or not, is required to be decided keeping in view
the provisions of Article 226(2) read with the provisions of Section
20 CPC. [Paras 28-29] [365-F-H]
1.4 Special Civil Application (SCA) was
maintainable in the
High Court inasmuch as the part of the cause of action to file
such petition did accrue to the appellant within the territorial
jurisdiction of the Gujarat High Court. SCA was required to be
decided on merits by the High Court. The impugned order of the
Division Bench is set aside and the order of the Single Judge is
restored to the extent it decides that the SCA as maintainable in
the Gujarat High Court. The case is remanded to the Single Judge
(Writ Court) for deciding the petition(SCA) on merits strictly in
accordance with law. [Paras 30-33] [366-A-D]
CIVIL APPELLATE JURISDICTION:  Civil Appeal No. 5360
of 2010.
From the Judgment and Order dated 27.04.2007 of the High Court
of Gujarat at Ahmedabad in Letters Patent Appeal No. 1020 of 2006.
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Ms. Anushree Prashit Kapadia, Ms. Kavita Bhardwaj, Advs. for
the Appellant.
Gautam Awasthi, Saurabh Trivedi, Advs. for the Respondents.
The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J. 1. This appeal is filed against
the final judgment and order dated 27.04.2007 passed by the High Court
of Gujarat at Ahmedabad in Letters Patent Appeal No.1020 of 2006 in
Civil Application No.770 of 2005 whereby the Division Bench of the
High Court allowed the said Letters Patent Appeal filed by respondent
No.1 herein holding that the High Court had no territorial jurisdiction to
entertain the Special Civil Application (in short, “SCA”) filed by the
appellant herein which was entertained and allowed by the Single Judge.
2. A few facts need mention hereinbelow for the disposal of this
appeal, which involves a short legal question.
3. Respondent No.1 herein is a Limited Company having its
registered office at Calcutta.  Respondent No.1 was engaged in the
business of manufacture and sale of cement.  They have a cement factory
at Porbandar in the State of Gujarat.
4. The appellant is a Union of workers. These workers were
working, at all relevant time, in the cement factory of respondent No.1
at Porbandar. According to the appellant-Union, as many as 500 workers,
who are the members of it, were working at the relevant time in the said
cement factory.
5. Respondent No.1, however, closed the cement factory
somewhere in the year 1998 for myriad reasons without
paying the wages
to its workers.
6. A dispute, therefore, arose between the appellant-Union and
Respondent No.1-Company (employer) regarding the non-payment of
outstanding wages payable to the workers. The appellant- Union,
therefore, approached the Labour Court at Junagadh (Gujarat) and filed
Recovery Application No.86/98 under the Industrial Disputes Act, 1947
for the recovery of the outstanding wages payable to the workers against
Respondent No.1.
CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD
(HMP CEMENTS LTD.)
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7. By order dated 12.04.1999, the Labour Court allowed the
application and directed Respondent No.1-Company to pay a sum of
Rs.81,50,744/- with a cost of Rs.50,000/- to the workers. This was
followed by issuance of recovery certificate dated 04.09.2000 for
Rs.60,35,379/- by the Collector, Junagadh as arrears of land revenue.
The said certificate, however, has remained unexecuted.
8. It appears that Respondent No.2 - Indian Bank had given
business loan to Respondent No.1- Company, which they failed to repay
to the Indian Bank.  The Indian Bank (R-2), therefore,  filed a claim
petition before the Debt Recovery Tribunal (for short “the DRT) at
Calcutta against Respondent No.1-Company for recovery of their unpaid
loan amount with interest.
9. By order dated 04.03.2003, the DRT allowed the claim petition
and ordered for sale of the properties of Respondent No.1-Company
after giving due publicity.  The DRT also appointed one Receiver to take
appropriate steps in this regard. The Receiver informed the appellant-
Union accordingly.
10. It is with these background facts, the appellant-Union filed a
petition (Special Civil Application No.12212 of 2004) in the High Court
of Gujarat at Ahmadabad out of which this appeal arises.  The SCA was
filed against the Indian Bank(respondent No.2 herein) and the
Company(respondent No.1 herein).  The appellant claimed the following
reliefs in their SCA:
“A. To issue an order, direction in
the nature of mandamus
and/or any other appropriate writ, order or direction,
directing the respondent No.1 Indian Bank, Kolkata, to
deposit the 50% amount of the sale proceeds of the
Porbandar H.M.P. Cement with the District Collector,
Porbandar, and the District Collector be directed to pay by
account payee cheque to each of the workmen
proportionately towards the part-payment of the legal dues
to the individual workman concerned; ALTERNATIVELY.
B. To issue direction to the respondent No.1 Indian Bank
to pay 50% of the amount to the petitioner union who shall
directly pay to the workmen by account payee cheque either
under the supervision of District Collector, Porbandar or
Assistant Labour Commissioner, Porbandar.
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C. To declare and hold the impugned action of the Debt
Recovery Tribunal, Kolkata, in transferring the entire sale
proceed to respondent No.1, Indian Bank, without retaining
the amount of workers’ due, as illegal and without authority
of law.
D. To suspend the operation, implementation and execution
of the order of the Debt Recovery Tribunal insofar as the
Debt Recovery Tribunal directs:
“It is being further ordered that in the case of default on
the part of the defendants in adhering to any of the terms
and condition hereinabove stated, the certificate of
recovery so issued, shall automatically be altered for the
total applicant’s claim as filed on July 2002 and the
applicant being granted the liberty to appropriate the
entire money lying with the present learned transferring
Tribunal in O.A. No.142 of 1998 after receiving the said
sum from the learned Receiver and it is also being
ordered that the learned Receiver is hereby being
ordered to stand discharged….”
E. To grant such other and further relief as the Hon’ble
Court deems fit and proper in the interest of justice.”
11. The respondent Nos.1 & 2, i.e., Company and the Indian Bank
on entering their appearance in the SCA raised a preliminary objection
before the writ court contending that the SCA filed by the appellant-
Union is not maintainable in the High Court of Gujarat at Ahmedabad
inasmuch as no part of the cause of action in relation to the subject
matter of the SCA has arisen in the State of
Gujarat which entitled the
appellant-Union to file the SCA in the Gujarat High Court.
12. In other words, the objection was that having regard to the
nature of reliefs claimed by the petitioner (appellant herein) in the SCA,
no part of cause of action could be said to have arisen in the State of
Gujarat, which would empower the Gujarat High Court to entertain the
SCA for its disposal on merits.  On the other hand, it was contended that
it is clear that the entire cause of action between the parties has accrued
in the State of Calcutta where the company’s registered office is located
and where the DRT had also entertained the claim petition filed by the
Indian Bank(respondent No.2 herein) against  the Company (respondent
No.1 herein) and had passed the orders in the said claim petition.
CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD
(HMP CEMENTS LTD.) [ABHAY MANOHAR SAPRE, J.]
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13. The respondent Nos. 1 & 2, therefore, contended that the
said SCA was liable to be dismissed as being not maintainable for want
of territorial jurisdiction of the Gujarat High Court.
14. The Single Judge by order dated 26.10.2005 overruled the
preliminary objection and held that the Gujarat High Court has the
territorial jurisdiction to entertain the SCA.
15. Respondent No.1 (Company) felt aggrieved and filed the LPA
before the Division Bench. By impugned order, the Division Bench
allowed the LPA, set aside the order of the Single Judge and dismissed
the SCA. The Division Bench held that the Gujarat High Court has no
territorial jurisdiction to entertain the SCA in question because no part of
the cause of action has accrued to file such petition(SCA) in the Gujarat
High Court.
16. In other words, the Division Bench was of the view that having
regard to the nature of reliefs claimed in the SCA, the Gujarat High
Court cannot be held to have territorial jurisdiction to entertain such
petition for grant of the reliefs claimed therein.
17. It is against this order of the Division Bench, the Union
(petitioner in SCA) felt aggrieved and has filed the present appeal in this
Court after obtaining the special leave to appeal.
18. So, the short question, which arises for consideration in this
appeal, is whether the Division Bench was justified in holding that the
SCA filed by the appellant was not maintainable for want of
territorial
jurisdiction of the Gujarat High Court.
19. Heard Ms. Anushree Prashit Kapadia, learned counsel for
the appellant and Mr. Gautam Awasthi, learned counsel for the
respondents.
20. Having heard the learned counsel for the parties and on perusal
of the record of the case, we are inclined to allow the appeal and while
setting aside the impugned order of the Division Bench restore the order
of the Single Judge.
21. In our considered opinion, the Division Bench erred in not
noticing Article 226(2) of the Constitution of India while deciding the
question arising in this case.
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22. In other words, the question as to whether the Gujarat High
Court has territorial jurisdiction to entertain the appellant’s petition(SCA)
or not, should have been decided keeping in view the provisions of Article
226(2) of the Constitution read with Section 20 of the Code of Civil
Procedure, 1908 (for short,  “CPC”).
23. Article 226 of the Constitution and Section 20 of CPC read as
under:
“Article 226 of the Constitution
226. Power of High Courts to issue certain writs
(1) Notwithstanding anything in Article 32 every High Court
shall have powers, throughout the territories in relation to
which it exercises jurisdiction, to issue to any person or
authority, including in appropriate cases, any Government,
within those territories directions, orders or writs, including
writs in the nature of habeas corpus, mandamus,
prohibition, quo warranto and certiorari, or any of them, for
the enforcement of any of the rights conferred by Part III
and for any other purpose.
(2) 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.
(3) Where any party against whom an interim order, whether
by way of
injunction or stay or in any other manner, is made
on, or in any proceedings relating to, a petition under clause
(1), without-
(a) furnishing to such party copies of such petition and
all documents in support of the plea for such interim
order; and
(b) giving such party an opportunity of being heard,
CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD
(HMP CEMENTS LTD.) [ABHAY MANOHAR SAPRE, J.]
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makes an application to the High Court for the vacation
of such order and furnishes a copy of such application to
the party in whose favour such order has been made or
the counsel of such party, the High Court shall dispose
of the application within a period of two weeks from the
date on which it is received or from the date on which
the copy of such application is so furnished, whichever
is later, or where the High Court is closed on the last
day of that period, before the expiry of the next day
afterwards on which the High Court is open; and if the
application is not so disposed of, the interim order shall,
on the expiry of that period, or, as the case may be, the
expiry of the said next day, stand vacated
(4) The power conferred on a High Court by this article
shall not be in derogation of the power conferred on the
Supreme Court by clause (2) of Article 32.”
“Section 20 of  CPC
20. Other suits to be instituted where defendants reside or
cause of action arises- Subject to the limitations aforesaid,
every suit shall be instituted in Court within the local limits
of whose jurisdiction-
(a) the defendant, or each of the defendants where there
are more than one, at the time of the commencement of
the suit, actually and voluntarily resides, or carries on
business, or personally works for gain; or
(b) any of the defendants, where there are more than
one, at the time of the commencement of the suit actually
and
voluntarily resides, or carries on business, or
personally works for gain, provided that in such case
either the leave of the Court is given, or the defendants
who do not reside, or carry on business, or personally
work for gain, as aforesaid, acquiesce in such institution;
or
(c) the cause of action, wholly or in part, arises.
Explanation - A corporation shall be deemed to carry on
business at its sole or principal office in India or, in respect
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of any cause of action arising at any place where it has also
a subordinate office, at such place.”
24. Article 226(2) of the Constitution, in clear terms, empowers
the High Court (let us say  “A” High Court) to entertain the writ petition
if the cause of action to file such writ petition against the respondents of
the said writ petition has arisen wholly or in part within the territorial
jurisdiction of  “A”  High Court.
25. Clause (2) further empowers a High Court to issue any order,
directions or writ as provided in clause (1) of Article 226 of the Constitution
in such writ petition notwithstanding that seat of such Government or
the Authority or the residence of such person against whom the writ
petition is filed does not fall within the territories of the “A” High Court
but falls in the territories of the “B” High Court.
26. Coming to the facts of this case, we find from the averments
of the petition(SCA) that firstly, Respondent No.1-Company has its
factory at Porbandar, which is a part of State of Gujarat; Second, the
Labour Court, Junagadh, which is also a part of State of Gujarat,
entertained the dispute between the appellant-Union and respondent No.1-
Company and passed a recovery order; and Third, one of the reliefs
claimed in the petition(SCA) pertains to non-payment of outstanding
wages payable to the workers by respondent No.1-Company.
27. In the light of these three reasons, we are of the view that the
part of the cause of action as
contemplated in Article 226 (2) of the
Constitution has arisen within the territorial jurisdiction of the Gujarat
High Court for filing the petition(SCA) to claim appropriate reliefs in
relation to such dispute against respondent No.1-Company.
28. In our considered opinion, the expression “the cause of action,
wholly or in part, arises”  occurring in Article 226(2) of the Constitution
has to be read in the context of Section 20(c) of CPC which deals with
filing of the suit within the local limits of the jurisdiction of the Civil
Courts.
29. Indeed, the question as to whether the cause of action for
filing the petition, wholly or in part, arose in the context of territorial
jurisdiction of the High Court is required to be decided keeping in view
the provisions of Article 226(2) of the Constitution read with the
provisions of Section 20 of CPC.
CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD
(HMP CEMENTS LTD.) [ABHAY MANOHAR SAPRE, J.]
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30. In the light of the foregoing discussion, we are of the view
that the appellant’s petition(SCA) was maintainable in the Gujarat High
Court inasmuch as the part of the cause of action to file such petition did
accrue to the appellant herein (petitioner) within the territorial jurisdiction
of the Gujarat High Court.
31. In these circumstances, the SCA was required to be decided
on merits by the Gujarat High Court.
32. In view of the foregoing discussion, the appeal succeeds and
is hereby allowed. The impugned order of the Division Bench is set
aside and the order of the Single Judge is restored to the extent it decides
that the petition(SCA) as maintainable in the Gujarat High Court.
33. The case is accordingly remanded to the Single Judge (Writ
Court) for deciding the petition(SCA) on merits strictly in accordance
with law uninfluenced by any of the observations made by the Division
Bench and this Court because this Court has decided only the issue of
territorial jurisdiction of the Gujarat High Court and not beyond it.
34. Since the petition(SCA) is old, we request the Single Judge to
decide it preferably within six months.
Nidhi Jain
                                                Appeal allowed.