M/S LAKSHMI ENERGY & FOODS LTD. V. UNION OF INDIA & ANR

CWP/2002/2010

AI Insights

M/s Lakshmi Energy and Foods Ltd. filed a writ petition against the Union of India and another respondent, seeking a mandamus to direct the release of \'1.91 Crores, which was allegedly admitted as payable by the second respondent. The case revolved around the jurisdiction of the High Court of Punjab & Haryana to entertain the writ petition, given that the auction and contract were executed in Delhi, and the goods were to be delivered at Kandla in Gujarat. The court examined whether any part of the cause of action arose in Haryana, considering the transportation of goods from Haryana as a potential link. However, it was concluded that the cause of action did not arise in Haryana, leading to the dismissal of the petition on jurisdictional grounds.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 735136 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 29-07-2011
• Assessment Year: misc
• Other Referred Cases: Kusum Ingots and Alloys Ltd. Vs. Union of India and another, Om Parkash Srivastava Vs. Union of India and another, Alchemist Ltd., and another Vs. State Bank of Sikkim and others, Rajendran Chingaravelu Vs. R. K. Mishra and others
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: KHARMINDER SINGH; GIRISH AGNIHOTRI; VIJAY PAL; ARVIND SETH
• Assessee Lawyers: SANJEEV BANSAL
• Keywords: Auction; Export; Jurisdiction; Mandamus; Public sector undertaking; Territorial jurisdiction; Writ petition; Damaged wheat stocks; Animal feeds

Judgement Text

"CWP No.2002 of 2010 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH CWP No.2002 of 2010 Date of decision July 29, 2011 M/s Lakshmi Energy and Foods Ltd. ....... Petitioner Versus Union of India and another ........Respondents CORAM: HON'BLE MR. JUSTICE K. KANNAN Present:- Mr. Sanjeev Bansal, Advocate for the petitioner. Mr. Kharminder Singh , Advocate for respondent No.1. Mr. Girish Agnihotri, Senior Advocate with Mr. Vijay Pal, Advocate for respondent No.2. Mr. Arvind Seth, Advocate **** 1. Whether reporters of local papers may be allowed to see the judgment ? No 2. To be referred to the reporters or not? No 3. Whether the judgment should be reported in the digest?No K. Kannan, J (oral). 1. The petitioner's prayer for mandamus is to direct the respondents to release an amount of `1.91 Crores alleged to be admitted by the second respondent as payable to the petitioner. The petition is resisted on the ground that it is not an undisputed claim and the relief in the writ jurisdiction is not tenable. The further ground urged is that this Court has no territorial jurisdiction to entertain the case. 2. Before adverting to the merits of the claim in the writ petition I had directed both counsel to argue on the issue of jurisdiction on the basis of an objection expressed at the previous hearing by my CWP No.2002 of 2010 2 brother Judge on 5.5.2011. The facts that give rise to the action is that in an auction put up by the first respondent for sale of damaged wheat stocks at Delhi, the petitioner was the successful bidder and he had transported the goods to the second respondent for export as animal feeds to foreign countries. The parties fell into some differences and the second respondent refused to lift all the stocks and had also some differences in the matter of payments in the stocks already sold and supplied by the petitioner. After some negotiations it appears that the second respondent was prepared to pay `1.91 crores, provided the petitioner was prepared to give full discharge of all liability by the second respondent to the petitioner. The petitioner's grievance was that as a public sector undertaking with full state control the amount which was drawn up after finalization of accounts as payable ought to be paid without insisting as a pre condition that no further amounts would be paid. The petitioner would contend that he is prepared to receive the amount but he will take independent action for recovery of the balance. 3. It is an admitted fact that auction in which the petitioner become entitled to the damaged stocks was at Delhi and the contract between the petitioner and the second respondent was also signed on 10.8.2004 only at Delhi. The crucial clauses in the documents of agreement between the parties are brought through clauses 1 to 3 which are reproduced as under :- 1. “The Associates will supply around 25,000/- MT Indian Fee Wheat to PEC by road/rail to Gandhidham/Kandla Port. 2. PEC will take action to export, after arrival of at least 20,000/- MT Feed Wheat, at Gandhidham/Kandla Port. Minimum cargo size for export will be 15,000/- MT-25,000/- MT. 3. The Associate will ensure that adequate quantities are dispatched to Gandhidham/Kandla Port prior to CWP No.2002 of 2010 3 the contractual shipment date.” Clause 4 relates to rates and clause 5 relates to schedule of payments. It can be seen that no part of cause of action arise in any place in Haryana. The second respondent Company is at Delhi and the place of export is at Kandla at Gujrat. The supply is to be effected at Gandhidham and he has undertaken that adequate supplies are despatched to Gandhidham even prior to the contractual shipment date. 4. Learned counsel for the petitioner states that since the fact that goods were transported from Haryana, a part of cause of action must be taken to have arisen within the State. Learned counsel refers to a decision of the Hon'ble Supreme Court in Kusum Ingots and Alloys Ltd. Vs. Union of India and another (2004) 6 SCC 254 to say that even if a small portion of cause of action fell within the jurisdiction of the Court, the Court would have jurisdiction. He makes a pointed reference to para 9 which is reproduced as below:- “Although in view of Section 141 of the Code of Civil Procedure the provisions thereof would not apply to writ proceedings, the phraseology used in Section 20(C) of the Code of Civil Procedure and clause (2) of Article 226, being in part materia, the decisions of this Court rendered on interpretation of Section 20(c) CPC shall apply to the writ proceedings also. Before proceeding to discuss the matter further it may be pointed out that the entire bundle of facts pleaded need not constitute a cause of action as what is necessary to be proved before the petitioner can obtain a decree is the material facts. The expression material facts is also known as integral facts.” CWP No.2002 of 2010 4 5. This judgment states that the provisions of the Civil Procedure Code for ascertaining the issue of jurisdiction will be applicable even for writ proceedings. The despatch from Haryana would not mean a fraction of cause of action had arisen in the State. Such an argument is clearly wrong for the cause of action which is a bundle of causes shall be an act or an event of the respondent which gives rise to the dispute. If the goods were free on board at Haryana and the risk in the goods had stood transferred to the second respondent at Haryana, then it could be stated that a part of the cause of action arose in Haryana. I have already extracted clauses 1 to 3 which shows that the goods were to be delivered at Kandla for export. The risk in the goods passed only at Gujrat. The agreement had been executed at Delhi. I have no doubt in mind that no part of cause of action arose within the State. 6. Learned counsel for the petitioner relies also on the three other judgments of this Court to say that Article 226 of the Constitution is wider in its import and the territorial limits of jurisdiction must be construed liberally for a Court to exercise its jurisdiction to stamp out any injustice arising from the conduct of the State or its functionary. In Om Parkash Srivastava Vs. Union of India and another 2006 6 SCC 207 the Hon'ble Supreme Court was dealing with a case when two courts had jurisdiction and the Court of one jurisdiction refused to interfere on the ground that yet another court which also had jurisdiction could have a right of action. The judgment sets out the meanings of cause of action in paragraph 9,11,13 and 14. I am not reproducing them for, they state no more than the fundamental precept that cause of action means every fact that is necessary to establish a right to obtain a judgment. This is not a case where one of the places of cause of action falls within Haryana. In Alchemist Ltd., and another Vs. State Bank of Sikkim and others 2007 11 SCC 335 , the Court dealt with the meaning of expression “cause of CWP No.2002 of 2010 5 action” in para 15 and also referred to the 42nd amendment that included clause 2 which granted a wider amplitude for invoking the jurisdiction. The despatch of goods from Haryana cannot be understood as constituting a cause of action bit if it is the arrival at Kandla where he had undertaken to deliver to the respondent that could give a cause of action. The judgment in Rajendran Chingaravelu Vs. R. K. Mishra and others 2010 1 SCC 457 also considers the issue of territorial jurisdiction in the following words:- The first question that arises for consideration is whether the Andhra Pradesh High Court was justified in holding that as the seizure took place at Chennai(Tamil Nadu), the appellant could not maintain the writ petition before it. The High Court did not examine whether any part of cause of action arose in Andhra Pradesh. Clause (2) of Article 226 makes it clear that the High Court exercising jurisdiction in relation to the territories within which the cause of action arises wholly or in part, will have jurisdiction. This would mean that even if a small fraction of the cause of action (that bundle of facts which gives a petitioner, a right to sue) accrued within the territories of Andhra Pradesh, the High Court of that State will have jurisdiction. In this case, the genesis for the entire episode of search, seizure and detention was the action of the security/intelligence officials at Hyderbad Airport who having inspected the cash carried by him, altered their counterparts at Chennai Airport that the appellant was carrying a huge sum of money, and required to be intercepted and questioned. A part of the cause of action therefore clearly arose in Hyderabad. It is also to CWP No.2002 of 2010 6 be noticed that the consequential income tax proceedings against him, which he challenged in the writ petition, were also initiated at Hyderabad. Therefore, his writ petition ought not to have been rejected on the ground of want of jurisdiction.” 7. The matter related to a case of search and seizure by the officials of Hyderabad Airport that led to their counterparts at Chennai to intercept the passenger with cash and valuables at Chennai Airport in the action under the Income Tax Act. For the criminal liability that arose from such seizure, the Court found that the High Court at Andhra Pradesh had jurisdiction since the genesis for the entire episode arose at Andhra Pradesh. I will have no reason to rely on this judgment as making any parallel for consideration to the benefit of the petitioner. 8. The writ petition is dismissed as beyond the jurisdiction of this Court. The petitioner is at liberty to approach the Court of competent jurisdiction either at Delhi or at Gujrat for appropriate reliefs. The counsel for the petitioner argues that the denial of liability by a State instrumentality on the issue of territorial jurisdiction is unjustified. If the petitioner's perceived just claim seems refuted on a technical plea of jurisdiction, the same may be urged before the competent Court to press for appropriate costs and damages but this Court cannot usurp jurisdiction beyond its territorial limits after a finding that no cause of action arose in Haryana. (K. KANNAN) JUDGE July 29 , 2011 archana "