High Court · 2007

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 14..12..2007C O R A MThe Honourable Mr. A.P. Shah, Chief JusticeandThe Honourable Mr. Justice V. RamasubramanianWrit Appeal No.1559 of 2007M/s. ORJ Electronics Oxides Ltd.,Varapur Road, Perangalur,Pudukottai District... Appellant/Petitioner versus1.Customs, Excise and Service TaxAppellate Tribunal (South Zonal-Bench),By its Registrar, Haddows Road, Chennai-6.2.The Commissioner of Customs,Customs House, New Harbour Estate,Tuticorin... Respondents- - - - -Prayer : Appeal under Clause 15 of the Letters Patentagainst the order of a learned single Judge of this Courtdated 29.11.2007 passed in W.P. S.R. No.121063 of 2007sought to prefer to this Court to call for records of 1strespondent made in ROA 67/07 dated 12.10.2007 and quash thesame and further direct the appeal filed by the petitionerin Appeal No.C/31/07 be disposed of on merits.- - - - -For Appellant: Mr. B. Kumar, Senior Counsel for Mr. S. RamachandranFor Respondent-2: Mr. P. Wilson, Assistant Solicitor General- - - - -J U D G M E N T( Delivered by the Honourable Chief Justice )Admit. Learned Assistant Solicitor General waives service forthe second respondent. By consent, the appeal is taken up forhearing. https://hcservices.ecourts.gov.in/hcservices/

2. The appellant is a company having its registered office inPudukottai District. The appellant originally filed Writ PetitionNo.14908 of 2007 at Principal Bench at Chennai to quash the orderpassed by the Customs, Excise and Service Tax Appellate Tribunal –South Zone Bench, Chennai ('Tribunal' in short) dated 5.3.2007,whereby the Tribunal directed the appellant to deposit Rs.1 Crore as apre-condition for hearing the appeal on merits. By order dated18.7.2007, this Court gave liberty to the appellant to file necessaryapplications for restoration of the appeal which was dismissed fordefault and for rectification with relevant documents and the Tribunalwas directed to consider the said applications and pass orders onmerits and in accordance with law. Accordingly, the appellant filedR.O.M. (Rectification of Mistake) Petition before the Tribunal. TheTribunal revoked its earlier direction for deposit of Rs.1 Croretowards the tax dues, but directed the appellant to deposit Rs.20Lakhs towards penalty as a pre-condition for hearing the appeal. Theappellant again approached this Court in Writ Petition SR. No.121063of 2007. The learned single Judge, however, relying upon a decisionof the Rajasthan High Court in Ram Rakh Vyas vs. The Union of India &Others, A.I.R. 1977 Rajasthan 243, held that since the appellant-company is situated in Pudukottai District, the subject matter of thewrit petition squarely comes within the jurisdiction of the MaduraiBench of the Madras High Court and the writ petition cannot beentertained at the Principal Seat. 3. We have heard Mr. B. Kumar, learned senior counsel appearingfor the appellant and Mr. P. Wilson, learned Assistant SolicitorGeneral for the second respondent. 4. The short question that falls before us is whether thePrincipal Seat at Chennai has the territorial jurisdiction toentertain this writ petition under Article 226 of the Constitution ofIndia. The Presidential Notification dated 6.7.2004, whereby apermanent Bench at Madurai was constituted, inter alia reads asfollows :"THE MADRAS HIGH COURT (ESTABLISHMENT OF APERMANENT BENCH AT MADURAI)ORDER, 2004In exercise of the powers conferred by Sub-sec.(2)of Sec.51 of the States Reorganisation Act, 1956 (37 of1956), the President, after consultation with theGovernor of Tamil Nadu and the Chief Justice of theMadras High Court, is pleased to make the followingOrder, namely :-1. Short title and commencement:(1) This Order may be called the Madras High Court https://hcservices.ecourts.gov.in/hcservices/ (Establishment of a Permanent Bench at Madurai) Order,2004.(2) It shall come into force on 24.7.2004.2. Establishment of a permanent bench of the MadrasHigh Court at Madurai:-There shall be established a permanent bench of theMadras High Court at Madurai and such Judges of theMadras High Court, being not less than five in number,as the Chief Justice of that High Court may, from timeto time nominate, shall sit at Madurai in order toexercise the jurisdiction and powers for the time beingvested in that High Court in respect of cases arising inthe districts of Kanyakumari, Tirunelveli, Tuticorin,Madurai, Dindugal, Ramanathapuram, Virudhunagar,Sivaganga, Pudukottai, Thanjavur, Nagapattinam,Tiruchirapalli, Perambalur and Karur in the State ofTamil Nadu:Provided that the Chief Justice of that High Courtmay, in his discretion, or that any case or class ofcases arising in any such district shall be heard atChennai."(emphasis supplied)5. Before the learned single Judge, the appellant-petitionerargued that the order impugned in the writ petition was passed by theTribunal at Chennai, and therefore, the cause of action has arisenwithin the jurisdiction of this Court, and thus the writ petitionwould lie only at the Principal Bench of the High Court at Chennai.The learned single Judge, however, relying upon the judgment of theRajasthan High Court in Ram Rakh Vyas vs. The Union of India & Others(supra) held that the words in respect of cases 'arising in' wouldmean 'pertaining to the districts of or 'arising from', and thereforethe writ petition could be entertained only at the Madurai Bench ofthe High Court and can never be entertained by the Registry at thePrincipal Bench. We are afraid that the view taken by the learnedsingle Judge is contrary to the settled legal positions. 6. In Nasiruddin v. State Transport Appellate Tribunal, AIR 1976SC 331 , the Supreme Court dealt with a similar provision contained inClause-14 of the Allahabad High Court (Amalgamation) Order 1948, inthe following words: - (at pp340-341) "The meaning of the expression "in respect of casesarising in such areas in Oudh" in the first provisoto paragraph 14 of the Order was answered by theHigh Court that with regard to applications underArticle 226 of the same will be "a case arisingwithin the areas in Oudh" only if the right of the https://hcservices.ecourts.gov.in/hcservices/ petitioner in such an application arose first at aplace within an area in Oudh. The implicationaccording to the High Court is that if the right ofthe petitioner arose first at any place outside anyarea in Oudh and if the subsequent orders in therevisional or appellate stage were passed by anauthority within an area in Oudh then in such casesthe Lucknow Bench would not have any jurisdiction.The factor which weighed heavily with the HighCourt is that in most cases where an appeal orrevision would lie to the State Government theimpugred order would be made at Lucknow and on thatview practically all writ petitions would arise atLucknow. The conclusion as well as the reasoning of theHigh Court is incorrect. It is unsound because theexpression "cause of action" in an applicationunder Article 226 would be as the expression isunderstood and if the cause of action arosebecause of the appellate order or the revisionalorder which came to be passed at Lucknow thenLucknow would have jurisdiction though theoriginal order was passed at a place outside theareas in Oudh. It may be that the original orderwas in favour of the person applying for a writ.In such case an adverse appellate order might bethe cause of action. The expression "cause of action" is well-known. If the cause of actionarises wholly or in part at a place within thespecified Oudh areas, the Lucknow Bench will havejurisdiction. If the cause of action arises whollywithin the specified Oudh areas, it isindisputable that the Lucknow Bench would haveexclusive jurisdiction in such a matter. If thecause of action arises in part within thespecified areas in Oudh it would be open to thelitigant who is the dominus litis to have hisforum conveniens. The litigant has the right to goto a Court where part of his cause of actionarises. In such cases, it is incorrect to say thatthe litigant chooses any particular Court. Thechoice is by reason of the jurisdiction of theCourt being attracted by part of cause of actionarising within the jurisdiction of the Court.Similarly, the cause of action can be said to havearisen partly within specified areas in Oudh andpartly outside the specified Oudh areas, thelitigant will have the choice to institute https://hcservices.ecourts.gov.in/hcservices/ proceedings either at Allahabad or Lucknow. TheCourt will find out in each case whether thejurisdiction of the Court is rightly attracted bythe alleged cause of action." (emphasis supplied)7. In U.P.R.C. Mill Adhikari Parishad vs. State of U.P., A.I.R.1995 S.C. 2148, writ petitions were filed before the Lucknow Bench ofthe High Court challenging a notification/order issued by the UttarPradesh Government at Lucknow, whereunder it was decided to sell sixsugar factories. One of the sugar mills was situated within the Oudharea, whereas the remaining mills were situated outside the Oudh area.The contention raised before the High Court was that the sale in termsof the notification, if finalised, would be given effect at the placeswhere the mills are situated and since five out of the six mills weresituated outside the Oudh area, the Lucknow Bench had no jurisdictionto take cognizance, entertain and decide the writ petition in respectof the five mills in terms of Clause 14 of the Allahabad High Court(Amalgamation) Order. 1948. Allowing the appeal, the Supreme Courtheld as follows :"14. ... The territorial jurisdiction of a Courtand the 'cause of action' are interlinked. To decidethe question of territorial jurisdiction, it isnecessary to find out the place where the 'cause ofaction' arose. We, with respect, reiterate that the lawlaid down by a Four-Judge Bench of this Court inNasiruddin's case (AIR 1976 S.C. 331) holds good eventoday despite the incorporation of an Explanation toSection 141 to the Code of Civil Procedure.There is no dispute that the Amalgamation Order isa special law which must prevail over the general law.This Court interpreted the relevant expression in Clause14 and did not take any support from any general law.The discussion by the Division Bench of the High Courtby evolving the so called theory of 'exercise ofjurisdiction revolving on the place of sitting' ascompared to the theory of 'cause of action' is whollymisconceived and has no legal basis whatsoever. Thispart of the High Court judgment is mentioned to berejected.15. Mr. Satish Chandra, learned senior advocateappearing for the appellant has contended that even onthe reasoning of the Division Bench judgment itself, theconclusions reached by the Bench are erroneous. We see https://hcservices.ecourts.gov.in/hcservices/ force in the contention. The Division Bench of the HighCourt relying upon the judgment of the Rajasthan HighCourt in Ram Rakh Vyas vs. Union of India, AIR 1977Rajasthan 243 (the judgment delivered by A.P. Sen, J. asthe learned Judge then was), came to the conclusion thatthe words 'arising in' in the context, mean 'pertainingto the districts of' or 'arising from'. It is notdisputed that in the present case, theorder/notification and the advertisement were issued bythe State Government at Lucknow. Without there being anorder/notification by the Government, there could be nocause of action at all. The petitioner got aggrievedonly from the order/notification which 'arose' fromLucknow. The grievance of the petitioner 'arose' atLucknow which is within the Oudh area and as such, onthe plain reading of the relevant provisions of Clause14 of the Amalgamation Order, the Bench at Lucknow hadthe jurisdiction to deal with the matter." (emphasissupplied)8. In Kusum Ingots and Alloys Ltd. vs. Union of India, 2004 (3)C.T.C. 365, the words "cause of action" were dealt with in detail andthe Court also considered Article 226(2) of the Constitution. Therelevant paragraph of the judgment is as follows :"Keeping in view the expressions used in Clause (2)of Article 226 of the Constitution of India,indisputably even if a small fraction of cause of actionaccrues within the jurisdiction of the Court, the Courtwill have jurisdiction in the matter.Situs of office of the respondents — whetherrelevant 23. A writ petition, however, questioning theconstitutionality of a parliamentary Act shall not bemaintainable in the High Court of Delhi only because theseat of the Union of India is in Delhi. (See Abdul KafiKhan v. Union of India (AIR 1979 Cal 354 .) 24. Learned counsel for the appellant in support ofhis argument would contend that the situs of framing lawor rule would give jurisdiction to the Delhi High Courtand in support of the said contention relied upon thedecisions of this Court in Nasiruddin v. STAT ((1975) 2SCC 671 : AIR 1976 SC 331) and U.P. Rashtriya Chini MillAdhikari Parishad v. State of U.P. ((1995) 4 SCC 738 ).So far as the decision of this Court in Nasiruddin v.STAT (cited supra) is concerned, it is not an authorityfor the proposition that the situs of legislature of aState or the authority in power to make subordinatelegislation or issue a notification would confer power https://hcservices.ecourts.gov.in/hcservices/ or jurisdiction on the High Court or a Bench of the HighCourt to entertain a petition under Article 226 of theConstitution. In fact this Court while construing theprovisions of the United Provinces High Courts(Amalgamation) Order, 1948 stated the law thus: (SCC p. 683, para 37) “ 37 . The conclusion as well as the reasoning of theHigh Court is incorrect. It is unsound because theexpression ‘cause of action’ in an application underArticle 226 would be as the expression is understoodand if the cause of action arose because of theappellate order or the revisional order which came tobe passed at Lucknow then Lucknow would havejurisdiction though the original order was passed ata place outside the areas in Oudh. It may be that theoriginal order was in favour of the person applyingfor a writ. In such case an adverse appellate ordermight be the cause of action. The expression ‘causeof action’ is well known. If the cause of actionarises wholly or in part at a place within thespecified Oudh areas, the Lucknow Bench will havejurisdiction. If the cause of action arises whollywithin the specified Oudh areas, it is indisputablethat the Lucknow Bench would have exclusivejurisdiction in such a matter. If the cause of actionarises in part within the specified areas in Oudh itwould be open to the litigant who is the dominuslitis to have his forum conveniens . The litigant hasthe right to go to a court where part of his cause ofaction arises. In such cases, it is incorrect to saythat the litigant chooses any particular court. Thechoice is by reason of the jurisdiction of the courtbeing attracted by part of cause of action arisingwithin the jurisdiction of the court. Similarly, ifthe cause of action can be said to have arisen partwithin specified areas in Oudh and part outside thespecified Oudh areas, the litigant will have thechoice to institute proceedings either at Allahabador Lucknow. The court will find out in each casewhether the jurisdiction of the court is rightlyattracted by the alleged cause of action.” 25. The said decision is an authority for theproposition that the place from where an appellate orderor a revisional order is passed may give rise to a partof cause of action although the original order was at aplace outside the said area. When a part of the cause ofaction arises within one or the other High Court, itwill be for the petitioner to choose his forum. https://hcservices.ecourts.gov.in/hcservices/ ...27. When an order, however, is passed by a Court orTribunal or an Executive Authority whether underprovisions of a statute or otherwise, a part of cause ofaction arises at that place. Even in a given case, whenthe original authority is constituted at one place andthe Appellate Authority is constituted at another, aWrit Petition would be maintainable at both the places.In other words, as order of the Appellate Authorityconstitutes a part of cause of action, a Writ Petitionwould be maintainable in the High Court within whosejurisdiction it is situate having regard to the factthat the order of the Appellate Authority is alsorequired to be set aside and as the order of theoriginal authority merges with that of the AppellateAuthority." (emphasis supplied)9. In Om Prakash Srivastava vs. Union of India, (2006) 6 S.C.C.207, the Supreme Court held :"6. Clause (2) of Article 226 of the Constitutionis of great importance. It reads as follows: “226 (2) The power conferred by clause (1) to issuedirections, orders or writs to any Government, authorityor person may also be exercised by any High Courtexercising jurisdiction in relation to the territorieswithin which the cause of action, wholly or in part,arises for the exercise of such power, notwithstandingthat the seat of such Government or authority or theresidence of such person is not within thoseterritories.” 7. The question whether or not cause of actionwholly or in part for filing a writ petition has arisenwithin the territorial limits of any High Court has tobe decided in the light of the nature and character ofthe proceedings under Article 226 of the Constitution.In order to maintain a writ petition, a writ petitionerhas to establish that a legal right claimed by him hasprima facie either been infringed or is threatened to beinfringed by the respondent within the territoriallimits of the Court’s jurisdiction and such infringementmay take place by causing him actual injury or threatthereof.8. Two clauses of Article 226 of the Constitutionon plain reading give clear indication that the HighCourt can exercise power to issue direction, order orwrits for the enforcement of any of the fundamentalrights conferred by Part III of the Constitution or for https://hcservices.ecourts.gov.in/hcservices/ any other purpose if the cause of action wholly or inpart had arisen within the territories in relation towhich it exercises jurisdiction notwithstanding that theseat of the Government or authority or the residence ofthe person against whom the direction, order or writ isissued is not within the said territories. (See ONGC v.Utpal Kumar Basu (1994) 4 SCC 711)" (emphasis supplied)10. The following extract from Alchemist Limited & Another vs.State Bank of Sikkim & Others, A.I.R. 2007 S.C. 1812 also makes itclear that the Principal Seat has jurisdiction to entertain a writpetition challenging the order of the Tribunal situated at Chennai :"9. Before entering into the controversy in thepresent appeal, let the legal position be examined :Article 226 of the Constitution as it originallyenacted had two-fold limitations on the jurisdiction ofHigh Courts with regard to their territorialjurisdiction. Firstly, the power could be exercised bythe High Court "throughout the territories in relationto which it exercises jurisdiction", i.e. the writsissued by the court cannot run beyond the territoriessubject to its jurisdiction. Secondly, the person orauthority to whom the High Court is empowered to issuesuch writs must be "within those territories", whichclearly implied that they must be amenable to itsjurisdiction either by residence or location withinthose territories.10. In Election Commission, India v. Saka VenkataRao, the petitioner applied to the High Court of Madrasunder Article 226 of the Constitution for a writ ofprohibition restraining the Election Page 1296Commission, (a statutory authority constituted by thePresident) having its office permanently located at NewDelhi, from inquiring into the alleged disqualificationof the petitioner from membership of the MadrasLegislative Assembly. The High Court of Madras issued awrit. The aggrieved petitioner approached this Court.Allowing the appeal and reversing the decision ofthe High Court, this Court held that the High Court ofMadras had no territorial jurisdiction to entertain thepetition.Speaking for the Court, Patanjali Sastri, C.J. madethe following observations:[T]he makers of the Constitution, having decided toprovide for certain basic safeguards for the people inthe new set up, which they called fundamental rights,evidently thought it necessary to provide also a quick https://hcservices.ecourts.gov.in/hcservices/ and inexpensive remedy for the enforcement of suchrights and, finding that the prerogative writs which theCourts in England had developed and used whenever urgentnecessity demanded immediate and decisive interposition,were peculiarly suited for the purpose, they conferred,in the States' sphere, new and wide powers on the HighCourts of issuing directions, orders, or writs primarilyfor the enforcement of fundamental rights, the power toissue such directions, etc., "for any other purpose"being also included with a view apparently to place allthe High Courts in this country in somewhat the sameposition as the Court of King's Bench in England. Butwide as were the powers thus conferred, a two-foldlimitation was placed upon their exercise. In the firstplace, the power is to be exercised "throughout theterritories in relation to which it exercisesjurisdiction", that is to say, the writs issued by thecourt cannot run beyond the territories subject to itsjurisdiction. Secondly, the person or authority to whomthe High Court is empowered to issue such writs must be"within those territories", which clearly implies thatthey must be amenable to its jurisdiction either byresidence or location within those territories.(emphasis supplied)As to the cause of action, the Court stated: "The rule that cause of action attractsjurisdiction in suits is based on statutory enactmentand cannot apply to writs issuable under Article 226which makes no reference to any cause of action or whereit arises but insists on the presence of the person orauthority 'within the territories' in relation to whichthe High Court exercises jurisdiction".11. Again, a question arose in Khajoor Singh v.Union of India, a Bench of seven Judges was called uponto consider the correctness or otherwise of Saka VenkataRao. The majority (Sinha, C.J., Kapoor, Gajendragadkar,Wanchoo, Das Gupta and Shah, JJ.) reaffirmed andapproved the view taken by this Court earlier in SakaVenkata Rao and held that the High Court of Jammu &Kashmir was right in not entertaining the writ petitionfiled by the petitioner on the ground that it had noterritorial jurisdiction. ..Speaking for the majority,Sinha, C.J., stated: It seems to us therefore that it isnot permissible to read in Article 226 the residence orlocation of the person affected by the order passed inorder to determine the jurisdiction of the High Court.That jurisdiction depends on the person or authoritypassing the order being within those territories and the https://hcservices.ecourts.gov.in/hcservices/ residence or location of the person affected can have norelevance on the question of the High Court'sjurisdiction." (emphasis supplied)11. A Full Bench of this Court in Sanjos Jewellers vs. SyndicateBank reported in 2007 (5) C.T.C. 305, has held that a writ petitionchallenging the order of the Debts Recovery Appellate Tribunal whichis situated within the territorial limits of this Court, while theoriginal Court is situated in another State, is maintainable. Similaris the view taken by a Division Bench of the Bombay High Court, towhich one of us (A.P. Shah, C.J.) was a party in Kishore Rungta vs.Pubjab National Bank, 2001 (4) Mh. L.J. 195. In that case, it washeld that the order of the Debts Recovery Tribunal in Jaipur merged inthe order of the Debts Recovery Appellate Tribunal at Mumbai. TheCourts in Jaipur would have no jurisdiction to entertain the writpetition which challenged the order of the Debts Recovery AppellateTribunal, Mumbai. Even otherwise, the writ petition was maintainablein the Bombay High Court within whose jurisdiction the appellateauthority is based. Part of the cause of action having arisen inMumbai, the Bombay High Court had the jurisdiction to entertain thewrit petition in view of Article 226(2) of the Constitution. 12. In the light of decided cases, it is clear that theterritorial jurisdiction of the Court and the 'cause of action' areinter-lined. To decide the question of territorial jurisdiction, it isnecessary to find out the place where the 'cause of action' arose. Itis not disputed that in the present case, the order impugned wasissued by the Tribunal at Chennai. The appellant is aggrieved by theorder, which has been passed in Chennai. The grievance of theappellant arose at Chennai, and as such the Principal Bench has thejurisdiction to deal with the matter. 13. In view of foregoing discussion, it is not possible tosustain the order of the learned single Judge. The appeal standsallowed. The writ petition is directed to be numbered and placedbefore the learned single Judge for admission. No costs.Consequently, M.P. No.1 of 2007 is closed.Sd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ ab/pv To1.Customs, Excise and Service TaxAppellate Tribunal (South Zonal-Bench),By its Registrar, Haddows Road, Chennai-6.2.The Commissioner of Customs,Customs House, New Harbour Estate,Tuticorin.Copy toThe Section Officer,Writ Section, High Court, Chennai.+1cc to Mr.S.Ramachandran, Advocate Sr 74567KU(CO)km/3.1. Writ Appeal No.1559 of 2007