Delhi High Court
Indo Gulf Explosives Ltd. & Anr. vs U.P. State Industrial Devp. Corpn. & ... on 1 April, 1999
Equivalent citations: 79(1999)DLT193
Author: K.S. Gupta
Bench: K.S. Gupta
ORDER Devinder Gupta, J.
1. This appeal has been preferred against the order passed on 21.1.1998 by learned Single Judge dismissing the appellant's writ petition observing:-
"It appears to me that the cause of action has substantially and materially arisen in the State of Uttar Pradesh and, therefore, this Court will not entertain the writ petition. Accordingly, the writ petition is dismissed."
2. The appellant filed writ petition on 16.8.1996 praying that demand notice dated 27.2.1996 and communication dated 22.7.1996 issued by the U.P.State Industrial Development Corporation threatening reentry and forfeiting the rights of the petitioner to run industrial unit be set aside.
3. The appellant claimed that it is engaged in manufacture of industrial explosives and the company was set up in the State of Uttar Pradesh in the assisted sector with the Pradesihya Industrial and Investment Corporation of Uttar Pradesh Limited and Uttar Pradesh State Industrial Development Corporation. It approached the State of Uttar Pradesh for allotment of land. Respondent No.2 decided to transfer 50 acres of land on lease and license basis besides another 656 acres in Tehsil Jhansi (U.P.). The appellant had proposed to respondent No.2 to set up an industrial unit at Jhansi to manufacture industrial explosives. Agreement was entered into on 17.12.1984. It had complied with the terms by making deposit of the amount demanded but the respondents had not communicated or fixed yearly lease rent. It was alleged that on 22.7.1996 a registered letter was received intimating that the appellant had failed to make payment of the dues amounting to Rs.84,81,022.83. According to the appellant, it had paid in full the premium called the market value and had also been representing that but for non fixation of the Economic Rent, the respondents had no authority and power to re-enter as respondent No.2 has not given its approval to the Economic Rent, which cannot be fixed arbitrarily or on its own by respondent No.1. It is alleged that the respondents were asked to fix Economic Rent as per agreement, which they had failed, therefore, respondent No.1 had got no legal authority to re-enter in the manner as threatened in the notice. Consequently, aforementioned writ petition was filed in this Court alleging that the impugned notice dated 27.2.1996 and communication dated 22.7.1997 containing illegal and arbitrary demand of Rs.84,81,022.83 and the threatening re-entry and forfeiting the rights of the petitioner to run the industrial unit was received by the petitioner at its registered office at New Delhi and as such the cause of action had accrued to the appellant within the erritorial jurisdiction of this Court.
4. The learned Single Judge relying upon the decision of the Supreme Court in ONGC Vs. Utapal Kumar Basi and others and of this Court in Sector Twenty one owners Welfare Association Vs. Air Force Naval Housing Board & Ors. 65 (1997) D.L.T. 81 (D.B.) declined to entertain the petition holding that cause of action had substantially and materially arisen in the State of Uttar Pradesh.
5. Learned counsel for the appellant vehemently urged that notice was received in Delhi. Notice is a part of the whole of the transaction and is an integral part of the cause of action. Infringement of the petitioner's right is on service of notice. Therefore, in view the constitutional provisions contained in clause (2) of Article 226 of the Constitution of India, the appellant was within its right to have approached this Court for redressal of grievances as cause of action, if not wholly arose in part within the territorial jurisdiction of this Court.
6. Article 226 of the Constitution of India reads:-
"Power of High Courts to issue certain writs:- (1) Notwithstanding anything in Article 32, every High Court shall have power, 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, 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 off, 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."
7. By the Constitution (15th Amendment) Act, 1963, Clause 1A was inserted in Article 226 of the Constitution. This clause was later on by the Constitution (42nd Amendment) Act, 1976 re-numbered as Clause 2. Prior to insertion of clause 1A, which later on has been re-numbered as clause 2, it was held in K.S.Rashid and Son Vs. The Income Tax Investigation Commission etc. (1954) S.C.R.738 that the writs do not run beyond the territories in relation to which each High Court exercises jurisdiction. Accordingly, in Lt. Col.Khajoor Singh Vs. Union of India , it was held that a High Court cannot issue a writ or order under Article 226 unless the person, authority or Government, against whom the writ is sought was resident or located within its territorial jurisdiction. Now by insertion of clause 2, in case cause of action arises wholly or in part within the territorial jurisdiction of that High Court, it may issue a writ against a person or authority resident within the jurisdiction of another High Court. As a result of the insertion of clause 2, a petition under Article 226 of the Constitution can be presented before any High Court in case: (a) the High Court within whose territorial jurisdiction the person or authority against whom relief is sought reside or is situate; and (b) the High Court within whose territorial jurisdiction cause of action, in respect of which relief is sought under Article 226 of the Constitution has arisen wholly orin part.
8. The claim of the appellant in the writ petition is that respondent No.1 has no authority or power to re-enter as respondent No.2 has not given its approval to the Economic Rent, which cannot be fixed arbitrarily or on its own by respondent No.1. Its claim is also that the respondents were asked to fix Economic Rent as per the agreement but they failed to do so. It had paid in full the premium called "market value" but the amount, which the Collector, Jhansi later on intimated is a short fall of the market value over and above the figure intimated in Covenant 3 of the agreement, which the respondents have no right to recover and as such the respondents have no legal authority to enter in the manner threatened through notice dated 27.2.1996 and in communication dated 22.7.1996. Demand as such is illegal and arbitrary. On these averments learned Single Judge observed that as the land in question is situate in the State of Uttar Pradesh; agreement dated 17.12.1984 in regard to allotment of land was executed in the State of Uttar Pradesh; order by virtue of which permission was accorded to set up industrial unit was also passed in the State of Uttar Pradesh, therefore, cause of action, if any, had mainly and substantially arisen in the State of Uttar Pradesh.
9. In State of Rajasthan Vs. M/s.Swaika Properties and another , it was held that mere service of notice does not give rise to cause of action unless the service of notice was an integral part of the cause of action. The issue, which had arisen therein was that whether the service of notice under sub-section (2) of Section 53 of the Rajasthan Urban Improvement Act, 1959 served on the company at its registered office at Calcutta by the Special Officer, Town Planning Department, Jaipur was an integral part of cause of action and was sufficient to vest the Calcutta High Court with the jurisdiction to entertain petition under Article 226 of the Constitution challenging the validity of notification issued by the State Government of Rajasthan under Section 52(1) of the Act for acquisition of certain lands belonging to the company, as required by Urban Improvement Trust, Jaipur for public purpose. It was held that cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It was further held that mere service of notice under Section 52(2) of the Act on the respondent upon their registered office at Calcutta could not give rise to a cause of action within that territory unless the service of that notice was an integral part of the cause of action. Answer to the question that whether service of notice within the meaning of Article 226(2) of the Constitution must depend upon the nature of the impugned order giving rise to a cause of action. Consequently, in the said case, it was held that Calcutta High Court had no jurisdiction to entertain the writ petition as it was not necessary in the said case to plead service of notice and in case the company felt aggrieved by the acquisition of its land and wanted to challenge the validity of notification, it ought to have approached Rajasthan High Court.
10. In the instant case also the question arising for determination is of right of the respondents to recover arrears, which have accumulated to the tune of Rs. 84,81,022.83. The question whether or not the respondents are within their rights to enforce its demand in terms of the agreement, which was executed within the State of Uttar Pradesh or whether under the terms thereof due to non payment of dues the respondents have or have not a power of reentry are such for which neither it is nor it was necessary for the appellant to plead service of notice on them by the respondents. The mere fact that the registered office of the appellant is in Delhi where the two communications dated 27.2.1996 and 22.7.1996 were received, will not be an integral part of cause of action for such a petition. In case the appellant has felt aggrieved by the demand raised or that the same is not in consonance with the terms of the agreement or that the respondents do not have any right of re-entry, it will be for the appellant to approach that High Court within whose territorial jurisdiction the land is situated or agreement was executed and not this Court. Learned Single Judge not on the same reasonings but on different reasonings on the facts and circumstances of the case concluded that cause of action substantially and materially had arisen within the State of Uttar Pradesh.
11. We are of the view that mere service of notice on the appellant's registered office at Delhi will not be an integral part of the transaction or cause of action. In view of what was observed in M/s. Swaika Properties (supra) answer to the question that whether service of notice is an integral part of cause of action within the meaning of Article 226 of the Constitution of India must depend upon the nature of the impugned order giving rise to cause of action. Cause of action in this case is the right of the respondents to recover arrears and re-entry on the land situated within the territories of State of Uttar Pradesh.
Dismissed.