ELDYNE ELECTRO SYSTEMS PVT LTD AND ANR V. UNION OF INDIA AND ORS.

WPA/13026/2021

AI Insights

The case involves Eldyne Electro Systems Pvt. Ltd., which was temporarily delisted as an approved vendor by the RDSO, Lucknow, for failing to establish a clear correlation of materials used in their products. The petitioners challenged this decision in the Calcutta High Court, arguing that part of the cause of action arose within its jurisdiction. However, the court found that the main events, including the issuance of the impugned order and the supply of equipment, occurred in Lucknow, leading to the dismissal of the writ petition for lack of territorial jurisdiction.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 723423 (HC-WEST_BENGAL)
• Appeal Type: Others
• Pronouncement Date: 31-08-2021
• Assessment Year: misc
• Other Referred Cases: Community Action for Rural Development Vs. Secretary, Ministry of Women, Panwar Vs. Lalit Kala Accademy, SAC Allied Products Vs. Commissioner of Central Excise, Alchemist Vs. State Bank of Sikkim, Krishan Prasad Singhi & Ors. vs. Tax Recovery Officer-II (Income Tax) & Ors., Utpal Kumar Bose vs. ONGC, Swaika Properties vs. State of Orissa, Pankaj Panwar vs. Lalit Kala Akademi, Serajuddin & Co. vs. The State of Orissa & Ors., State of Punjab vs. Amar Singh Harika, Dulu Devi vs. State of Assam & Ors., National Textile Corpn. Ltd. v. Haribox Swalram, Union of India v. Adani Exports Ltd., CBI, Anti Corruption Branch v. Narayan Diwakar, ONGC v. Utpal Kumar Basu, A.B.C. Laminart (P) Ltd. v. A.P. Agencies, State of Rajasthan v. Swaika Properties, Union of India v. Oswal Wollen Mills Ltd., Lt. Col. Khajoor Singh v. Union of India, Election Commission v. Saka Venkata Rao, Cooke v. Gill
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: MR DEEPAK KUMAR SINGH; MRS SAPTAMITA PRAMANICK
• Assessee Lawyers: MR ANINDYA KUMAR MITRA SR ADVOCATE; MR ABHRAJIT MITRA SR ADVOCATE; MR JISHNU CHOWDHURY; MR SOUMYA ROY CHOWDHURY; MR ARNAB SARDAR; MR ANURAG SARDAR
• Keywords: Cause of Action; Temporary delisting; Territorial jurisdiction; Approved vendor; Multi Section Digital Axle Counter; Single Section Digital Axle Counter

Judgement Text

" 31.08.2021 Ct. No.13 Sl. No.110 pk/akd W.P.A. 13026 of 2021 [via video conference] [Eldyne Electro Systems Pvt. Ltd. & Anr. -Vs- Union of India & Ors.] Mr. Anindya Kumar Mitra .. Sr. Advocate Mr. Abhrajit Mitra .. Sr. Advocate Mr. Jishnu Chowdhury Mr. Soumya Roy Chowdhury Mr. Arnab Sardar Mr. Anurag Sardar … … for the petitioners Mr. Deepak Kumar Singh Mrs. Saptamita Pramanick … … for the respondents The writ petitioners are aggrieved by an order dated 17th August, 2021 passed by the Executive Director/Signal-I RDSO, Lucknow, temporarily delisting the writ petitioner no.1 as an approved vendor, for both Multi Section Digital Axle Counter and Single Section Digital Axle Counter. The writ petitioner no.1 was the approved vendor of the Railways for the aforesaid two components since the year 1999. Pursuant to a show-cause notice dated 21st April, 2021, the writ petitioner no.1 was asked to explain the relationship with their original equipment manufacturer one M/s. Thales Transportation Systems, GmbH of Germany. It was further stipulated that in the absence of satisfactory reply, the petitioner no.1 would be removed from the list of approved suppliers. The writ petitioners replied vide communication dated 21st May, 2021. The original equipment manufacturer, M/s. Thales confirmed and reiterated their continuing relationship of supply, design and technology transfer with the writ petitioners of the aforesaid two components. 2 The writ petitioners challenged the show-cause before this Court in W.P.A. No. 12476 of 2021. By an order dated 13th August, 2021, the Court dismissed the writ application on the ground that it was premature as no final order had been passed by the RDSO Railways, at Lucknow. On 17th August, 2021, the RDSO, Lucknow (Railways) temporarily delisted the writ petitioner no.1 with the following order:- “Competent authority has approved that M/s. Eldyne Electro Systems Pvt. Ltd., P-21, Old Ballygunge Road, Kolkata – 700 019 is temporarily delisted on account of their failure to establish clear-cut correlation of material outsource to Jabil Circuit India Private Limited Pune and material used in product MSDAC/SSDAC of M/s. Eldyne, Kolkata, from RDSO’s “List of vendors for developmental orders” for both Multi Section Digital Axle Counter and Single Section Digital Axle Counter with immediate effect till such time M/s. Eldyne submit documents, if any to prove the same. The firms can appeal to Spl. DG/VD within 60 days of communication of this order.” It prima facie appears to this Court that the ground for temporary delistment of the petitioner no.1 was the failure to establish correlation of material outsource to one M/s. Jabil Circuit India Private Limited, Pune was not the subject matter of the show-cause notice, dated 21st April, 2021. This Court had asked the writ petitioners to explain as to why the territorial jurisdiction of the Calcutta High Court has been invoked when the impugned order and all communications leading to the impugned order was issued by the RDSO at Lucknow. 3 Mr. Anindya Kumar Mitra, learned Senior Advocate has relied upon judgments of this Court, Madras High Court and the Hon’ble Supreme Court of India. They are Community Action for Rural Development Vs. Secretary, Ministry of Women reported in 2015-3-LW 90 (SB) Madras, Panwar Vs. Lalit Kala Accademy reported in AIR 2011 Cal 167, SAC Allied Products Vs. Commissioner of Central Excise reported in (2005) 7 SCC 159. This Court has considered the decision of Alchemist Vs. State Bank of Sikkim reported in AIR 2007 SC 1812. The demurrer raised by Court needs to be addressed first and hence, Mr. Anindya Kumar Mitra, learned senior counsel addressed first. Mr. Mitra first relied upon paragraph 114 of the writ petition. About six events and/or facts have been referred to indicate that a part of the cause of action of the petitioner no. 1 has arisen within the jurisdiction of this High Court. They are as follows. That the Technical inspection and investigation in connection with the show cause was held on 19th July, 2021. Such inspection has nothing to do with the issues raised in the show cause or the impugned order. That the entire work force of the petitioner no.1 comprising of 200 employees who are within the jurisdiction would be effected by the impugned order. The interest of the workers is not urged in the writ application. The writ petitioner no.1 is not espousing the cause of the workers. Indeed if the said workers are affected, they would have approached this court against the respondents. 4 The writ petitioner no.1 availed finance from the ICICI Bank, R. N. Mukherjee Road Branch and the Kotak Mahindra Bank at 14, Park Street, Kolkata. The finances of the writ petitioner no.1 are in no way connected with the impugned orders. That the agreement between the writ petitioner no.1 and his original equipment manufacturers, M/s. Thales Transportation Systems was executed at Calcutta. This Court does not see any relevance of such execution at Kolkata to the impugned orders. The same may have been relevant in a dispute between the petitioner no.1 and the original equipment manufacturer. The same has little or nothing to do with the relationship of the writ petitioner no.1 with the RDSO, Lucknow. Now, coming to the part which infact could have attracted the jurisdiction of this court i.e. receipt of the impugned orders at Calcutta, Mr. Mitra, learned senior counsel for the petitioners would rely upon the decision of the Supreme Court in the case of State of Punjab vs. Amar Singh Harika reported in AIR 1966 SC 1313. In the said case the dismissal from service of the respondent therein by the Chief Secretary, the then Pepsu Government was being tested. The order was passed on 3rd June, 1949 and not communicated until 2nd January, 1953. It was held that an order of dismissal takes effect only when it is communicated to the person affected i.e. in the instant case, the employee concerned. Mr. Mitra thereafter relied upon the decision of the Supreme Court in the case of Dulu Devi vs. State of Assam & Ors. reported in (2016) 1 SCC 622. At paragraph 16, the State of Punjab vs. Amar Singh Harika (Supra) was reiterated and 5 relied upon and for the same reason it was held that the order of dismissal of the appellant therein did not take effect until communication and hence the employee was deemed to be continuing in service until the order was communicated to her. The coming into effect of the impugned decisions or timing thereof is not the subject matter of the instant case. The said decisions, therefore, also cannot come to the aid of the writ petitioner no.1. The next decision relied upon by the counsel for the petitioners is that of a Single Bench of this court in the case of Krishan Prasad Singhi & Ors. vs. Tax Recovery Officer-II (Income Tax) & Ors. reported in (1996) 2 CAL LT 115. In the said case, the coordinate Bench of this court was concerned with the transfer of a file of assessment from Jaipur to Kolkata. The shares that were attached were at Calcutta. The order of attachment was passed at Calcutta. The recovery proceedings were initiated by the authorities in Calcutta. The pendency of the reference at Rajasthan therefore could not give exclusive jurisdiction to Rajasthan. An integral part of the cause of action of the petitioner in fact arose in Calcutta. The said decision is therefore distinguishable on facts. The decisions of Utpal Kumar Bose vs. ONGC reported in (1994) 4 SCC 711 and the decision of the Swaika Properties reported in 1985 3 SCR 598 must also be viewed in the facts of that case. In both the said decisions, a small part of the cause of action i.e. in the ONGC case (Supra) the submission of the tender from Kolkata and receipt of notice of rejection at Kolkata were held to be a part of the cause of action since after the amendment to Article 226 sub-clause (2), indeed a part of the 6 cause of action occurring in the territory, would definitely attract the jurisdiction of a High Court. What is really fundamental and requires to be understood is the meaning and scope of the expression “part of the cause of action” which shall be addressed shortly. The next decision relied upon by Mr. Mitra, learned senior counsel for the petitioners is the case of Serajuddin & Co. vs. The State of Orissa & Ors. reported in AIR 1971 CAL 414. In the said case, an order granting mineral concession to exploit mines at Keonjhar, Orissa was the subject matter. The allotment was cancelled because the petitioner failed to execute lease in time. The mines were located in Orissa. The allotment was made in Orissa. The lease was to have been executed at Keonjhar in Orissa. The only part of the cause of action that a coordinate Bench had accepted to attract jurisdiction of this court is that the writ petitioner was located in Calcutta. This Court is with utmost respect to the Bench, unable to accept the said decision since the only part of the cause of action being the writ petitioner’s office at Bentick Street, Kolkata could not have attracted the territorial jurisdiction of this court. It would have been extremely unfair and improper to drag the Mines and Minerals Authority in Orissa to Calcutta High Court and when the mines are located in Orissa, merely because the petitioner was located in Calcutta. The other decision that was referred to is also a decision of the Single Bench of the Madras High Court reported in 2015 3 LW 90 (Community Action for Rural Development (CARD) vs. The Secretary, Ministry of Women & Child Development & Chairman of Rashtriya Kosh is also not applicable. 7 However, the decision of a Single Bench of this Court in the case of Pankaj Panwar vs. Lalit Kala Akademi reported in AIR 2015 CAL 67 needs to be considered. The subject matter of the said case was withdrawal of a national award by the Lalit Kala Academy in view of certain acts and omission alleged against the writ petitioner therein. The writ petitioner therein approached this court challenging the unilateral withdrawal of such award claiming that his image and reputation in the estimation of persons knowing him in Santiniketan in West Bengal in particular has been lowered and irreparable loss and prejudice has been caused to him. The newspaper publications having wide circulation throughout West Bengal were also part of the cause of action. When the issue of jurisdiction was raised, this coordinate Bench at paragraph 48 has stated as follows :- 48. To hold that service of an order or a notice on the addressee would never give rise to a cause of action to move the Court within whose territorial limits the order/notice is received, may not be reasonably sound. If service of an order or a notice is an event of substance i.e. an event which is a material, essential or integral part of the lis connected with the action that is impugned in a writ petition, there is no plausible reason as to why the same should not be construed as constituting a material, essential or integral part of the cause of action. The plea of affectation of right or interest by reason of such order/notice being served, if based on a substantial fact forming a part of the bundle of facts constituting the cause of action, would indeed be relevant for determination of the question as to whether the writ petition ought to be entertained or not. Here, the decision to withdraw the award and the plaque from the petitioner was never communicated to him prior to the public notice being published in the print media and it is such publication, the only one in the series to make the public aware of the penalty imposed on the petitioner, that vitally affects the reputation and respect that he has earned over the years. Such affectation having taken place in Santiniketan, where the petitioner alleges he read the public notice for the first time and derived knowledge of the impugned decision of the Akademi (there being no material at least at this stage that the decision was formally served on the petitioner in any territory beyond West Bengal prior to the public notice being published), it is an integral, essential and material part of the lis constituting the cause of action to approach the Court and conferring jurisdiction on this Court to entertain the writ petition. the fact that the petitioners before the Allahabad High Court withdrew their writ petitions with liberty to approach the appropriate High Court is absolutely irrelevant and immaterial for a decision on the preliminary objection to the maintainability of this writ petition. 8 The Single Bench found that this Court had jurisdiction to entertain the writ petition, since one of the primary grievances complained by the writ petitioner therein was damage to his reputation amongst his friends and peers in Santiniketan in West Bengal. As indicated earlier the true scope and meaning of the expression ‘part of the cause of action’ must be addressed. This question came up before the Hon’ble Supreme Court in the case of Alchemist vs. State Bank of Sikkim reported in AIR 2007 SC 1812. In the said decision at paragraphs 29, 35, 36 & 37, the Supreme Court has clearly laid down that a single instance might not by itself form or constitute a part of the cause of action. The concept of a part was explained and clarified to mean a substantial and integral part. The said paragraphs are set out below: 29. In ONGC v. Utpal Kumar Basu [(1994) 4 SCC 711 : JT (1994) 6 SC 1] this Court held that when the Head Office of ONGC was not located at Calcutta, nor the execution of contract work was to be carried out in West Bengal, territorial jurisdiction cannot be conferred on the High Court of Calcutta on the ground that an advertisement had appeared in a daily (The Times of India), published from Calcutta, or the petitioner submitted his bid from Calcutta, or subsequent representations were made from Calcutta, or fax message as to the final decision taken by ONGC was received at Calcutta inasmuch as neither of them would constitute an “integral part” of the cause of action so as to confer territorial jurisdiction on the High Court of Calcutta under Article 226(2) of the Constitution. 35. Negativing the contention and upholding the order passed by the High Court, this Court ruled that passing of a legislation by itself does not confer any such right to file a writ petition in any court unless a cause of action arises therefor. The Court stated: (Kusum Ingots case [(2004) 6 SCC 254 : JT (2004) Supp 1 SC 475] , SCC p. 261, para 20) “20. A distinction between a legislation and executive action should be borne in mind while determining the said question.” Referring to ONGC [(1994) 4 SCC 711 : JT (1994) 6 SC 1] , it was held that all necessary facts must form an “integral part” of the cause of action. The fact which is neither material nor essential nor integral part of the cause of action would not constitute a part of cause of action within the meaning of Clause (2) of Article 226 of the Constitution. 36. In National Textile Corpn. Ltd. v. Haribox Swalram [(2004) 9 SCC 786 : JT (2004) 4 SC 508] referring to earlier cases, this Court stated that: (SCC p. 797, para 12.1) 9 “12.1 … the mere fact that the writ petitioner carries on business at Calcutta or that the reply to the correspondence made by it was received at Calcutta is not an integral part of the cause of action and, therefore, the Calcutta High Court had no jurisdiction to entertain the writ petition and the view to the contrary taken by the Division Bench cannot be sustained.” 37. From the aforesaid discussion and keeping in view the ratio laid down in a catena of decisions by this Court, it is clear that for the purpose of deciding whether facts averred by the appellant- petitioner would or would not constitute a part of cause of action, one has to consider whether such fact constitutes a material, essential, or integral part of the cause of action. It is no doubt true that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless it must be a “part of cause of action”, nothing less than that.” The said decision follows the line of other decisions in the case of National Textile Corporation Ltd. v. Haribox Swalram reported in (2004) 9 SCC 786, Kusum Ingots & Alloy Ltd. v. Union Of India, reported in (2004) 6 SCC 254, Union of India v. Adani Exports Ltd. reported in (2002) 1 SCC 567, CBI, Anti Corruption Branch v. Narayan Diwakar (1999) 4 SCC 656, ONGC v. Utpal Kumar Basu, reported in (1994) 4 SCC 711, A.B.C. Laminart (P) Ltd. v. A.P. Agencies, reported in (1989) 2 SCC 163, State of Rajasthan v. Swaika Properties, reported in (1985) 3 SCC 217, Union of India v. Oswal Wollen Mills Ltd. reported in (1984) 2 SCC 646, Lt. Col. Khajoor Singh v. Union of India, reported in AIR 1961 SC 532, Election Commission v. Saka Venkata Rao, reported in AIR 1953 SC 210 and Cooke v. Gill, reported in (1873) 8 CP 107 and is good law even today. In the instant case, it is seen that the writ petitioner has only received the impugned orders at its office in Calcutta. The supply of equipment was being made to the RDSO, Lucknow. The contract that the petitioner was entered into for supply at Lucknow or in any event outside the jurisdiction of this court. The impugned orders have also been issued at Lucknow. 10 The inclusion of the other respondents having their offices at Calcutta is only for the purpose of attracting jurisdiction. Such respondents do not have, in anything to do with the impugned order which is passed by the RDSO, Lucknow. The payment, if any, towards supply made by the petitioner was at Lucknow. The mere fact that the petitioner is located at Calcutta or that he has obtained finances from banks and financial institutions herein at Calcutta cannot be part of the bundle of facts that would be necessary and essential to prove or to canvass for the purpose of challenging the impugned orders. The argument between the writ petitioner and the original equipment manufacturer namely, M/s. Thales Transportation Systems having occurred at Calcutta is also not part of the petitioner’s cause of action. It is only the text of such agreement that the RDSO, Lucknow, may be interested in. The place of execution of agreement can have little or nothing to do with the impugned order. A substantial and integral and hence the principal cause of action of the petitioners occurred at Lucknow outside the jurisdiction of this Court. In those circumstances, while the writ petitioner, may have an arguable case on merits, this Court is of the clear and unequivocal view that the writ petition cannot be entertained by this court for want of territorial jurisdiction. The writ petition must fail and is hereby dismissed. The dismissal of the instant writ petition shall not prevent the writ petitioner from challenging the impugned orders, before 11 a court having appropriate territorial jurisdiction over the cause of action and/or the respondents. Since in the interim order dated 24th August, 2021, the writ petitioner was allowed to submit tender in respect of a particular NIT issued by the respondent namely, RDSO, Lucknow, such bid of the writ petitioner, if already submitted, shall remain valid only for a period of seven days from date. There shall be no order as to costs. All parties are to act on a server copy of this order duly downloaded from the official website of this court. (Rajasekhar Mantha, J.) "