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2007 (3) TMI 382 - SC - Companies LawWhether a part of the cause of action had arisen within the territorial jurisdiction of the High Court of Punjab & Haryana so as to entertain a writ petition under article 226 of the Constitution filed by the appellant-company against the respondents? Held that - Appeal dismissed. As it is clear that for the purpose of deciding whether facts averred by the petitioner-appellant, 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. In the present case, the facts which have been pleaded by the appellant-company cannot be said to be essential, integral or material facts so as to constitute a part of cause of action within the meaning of article 226(2) of the Constitution. The High Court therefore, was not wrong in dismissing the petition. For the foregoing reasons no infirmity in the order passed by the High Court dismissing the petition on the ground of want of territorial jurisdiction.
Issues Involved:
1. Territorial jurisdiction of the High Court of Punjab & Haryana under Article 226 of the Constitution. 2. Whether a part of the cause of action arose within the territorial jurisdiction of the High Court of Punjab & Haryana. Issue-Wise Detailed Analysis: 1. Territorial Jurisdiction of the High Court of Punjab & Haryana under Article 226 of the Constitution: The primary issue before the Supreme Court was whether the High Court of Punjab & Haryana had the territorial jurisdiction to entertain a writ petition under Article 226 of the Constitution. The appellant-company contended that part of the cause of action arose within the jurisdiction of the High Court of Punjab & Haryana, while the respondents argued that all substantial facts constituting the cause of action were within the territory of the State of Sikkim. 2. Whether a Part of the Cause of Action Arose within the Territorial Jurisdiction of the High Court of Punjab & Haryana: The appellant-company argued that several events related to the cause of action occurred in Chandigarh, such as: - The company's registered and corporate office being located in Chandigarh. - Business operations carried out in Chandigarh. - Acceptance of the company's offer communicated to it in Chandigarh. - Part performance of the contract, including the deposit of Rs. 4.50 crores in Chandigarh. - Negotiations held in Chandigarh. - Receipt of the letter of revocation in Chandigarh, with consequences ensued in Chandigarh. The respondents countered by emphasizing that all integral actions and decisions took place in Sikkim, including: - The registered and corporate office of the first respondent-Bank being in Gangtok, Sikkim. - The Secretariat of the second respondent-State being in Gangtok. - Offers being called and scrutinized in Gangtok. - Decisions regarding the acceptance and rejection of the appellant's proposal taken in Gangtok. - Meetings of the Board of Directors and the issuance of the withdrawal letter occurring in Gangtok. Legal Position and Precedents: The Court examined the legal position regarding territorial jurisdiction under Article 226, referring to the Constitution's original limitations and subsequent amendments. The Court cited several precedents, including: - Election Commission v. Saka Venkata Rao: The High Court of Madras had no territorial jurisdiction to entertain the petition as the Election Commission was located in New Delhi. - Khajoor Singh v. Union of India: Reaffirmed that jurisdiction depends on the location of the person or authority passing the order. - A.B.C. Laminart (P.) Ltd. v. A.P. Agencies: Defined "cause of action" as a bundle of facts necessary for the plaintiff to prove to succeed. - Union of India v. Oswal Woollen Mills Ltd.: Highlighted that the location of the registered office and principal respondents determines jurisdiction. - State of Rajasthan v. Swaika Properties: Clarified that the entire cause of action must arise within the jurisdiction. - Oil & Natural Gas Commission v. Utpal Kumar Basu: Stressed that integral parts of the cause of action must be within the jurisdiction. - Kusum Ingots & Alloys Ltd. v. Union of India: Distinguished between legislation and executive action in determining jurisdiction. Conclusion: The Supreme Court concluded that the facts pleaded by the appellant-company did not constitute material, essential, or integral parts of the cause of action within the meaning of Article 226(2) of the Constitution. The High Court of Punjab & Haryana was justified in dismissing the petition on the ground of lack of territorial jurisdiction. The appeal was dismissed, and the parties were directed to bear their own costs.
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