The issue that arose for consideration was whether the
Delhi High Court ought to exercise jurisdiction in respect of the impugned
order passed by CESTAT, New Delhi.
The respondent had raised preliminary objection pertaining
to lack of territorial jurisdiction of the High Court of Delhi. The appellant
operates from plot at Bareilly, U.P. The Commissioner of Central Excise,
Meerut-II issued show-cause notice; after adjudication the Commissioner
confirmed the demand and directed recovery of cenvat together with penalty. It
was that order which was appealed before CESTAT, New Delhi.
The Court observed that the significant part of the cause
of action should have arisen within the territorial sway of the Court which is
chosen by the Petitioner for ventilation of his grievances. The Court relied
on the decision in the case of Kusum Ingots and Alloys Ltd. v. Union of
India, AIR 2004 SC 2321 which clarifies the law as under :
“When an order, however, is passed by a Court or Tribunal
or an executive authority whether under provisions of a statute or
otherwise, a part of cause of action arises at that place. Even in a given
case, when the original authority is constituted at one place and the
Appellate authority is constituted at another, a writ petition would be
maintainable in the High Court within whose jurisdiction it is situate
having regard to the fact that the order of the appellate authority is also
required to be set aside and as the order of original authority merges with
that of the appellate authority.”
…….
“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 refuse to exercise its discretionary
jurisdiction by invoking the doctrine of forum convenience.”
In Stridewell Leathers (P) Ltd. v. Bhankerpur Simbhaoli
Beverages (P) Ltd., (1994) 1 SCC 34, the issue concerned was which High
Court would be the appropriate forum to adjudicate an appeal from the Company
Law Board, Principal Bench, New Delhi. The Supreme Court opined that — “the
expression “the High Court’ in S. 10-F of the Companies Act means the High
Court having jurisdiction in relation to the place at which the registered
office of the company concerned is situate as indicated by S. 2(11) read with
S. 10(1)(a) of the Act. Accordingly, the appeal against the order of the
Company Law Board would lie in the Madras High Court which has jurisdiction in
relation to the place at which the registered office of the company concerned
is situate and not the Delhi High Court merely because the order was made by
the Company Law Board at Delhi.
Similarly the Division Bench of the High Court of
Judicature at Bombay in Sun Pharmaceutical Inds. Ltd. v. Union of India,
2007 (218) ELT 495 (Bom.) held that even though the Settlement Commission was
physically located at Mumbai, since it was dealing with a case arising in
Tamil Nadu, it could be deemed to be located in that State and accordingly
amenable to the writ jurisdiction of the Madras High Court; the Bombay High
Court declined to exercise writ jurisdiction primarily because only a small
part of the cause of action had arisen within its jurisdiction.
The Court further observed that on a reading of Article
226(1) of the Constitution it will be palpably clear that without the next
following provision, that is, sub-clause (2) a High Court may not have been
empowered to issue a writ or order against a party which is not located within
the ordinary territorial limits of that High Court. The power to issue
writs against any person or Authority or government even beyond the
territorial jurisdiction of any High Court is no longer debatable. The rider
or prerequisite to the exercise of such power is that the cause of action must
meaningfully arise within the territories of that particular High Court. It
does not logically follow, however, that if a part of the cause of action
arises within the territories over which that High Court holds sway, it must
exercise that power rather than directing the petitioner to seek his remedy in
any other High Court which is better suited to exercise jurisdiction for the
reason that the predominant, substantial or significant part of the cause of
action arises in that Court. In other words any High Court is justified in
exercising powers under Article 226 either if the person, authority or govt.
is located within its territories or if the significant part of the cause of
action has arisen within its territories. The rationale of S. 20 of the Code
of Civil Procedure would, therefore, also apply to Article 226(2) of the
Constitution.
Thus the High Court should not exercise jurisdiction only
because the Tribunal whose order is in appeal before it, is located within its
territorial boundaries.
Merely because the order that is impugned has been
challenged by the CESTAT, New Delhi, the High Court at New Delhi ought not
exercise jurisdiction. The appeal was returned to be filed in the appropriate
court in accordance with law.
[Brindavan Beverages P. Ltd. v. Commissioner of C.
Ex., Meerut (2009) 237 ELT 658 (Del.)]
