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2019 (2) TMI 1927 - SC - Indian LawsTerritorial Jurisdiction - power of High Court to entertain the Special Civil Application filed by the Appellant herein which was entertained and allowed by the Single Judge - whether the Division Bench was justified in holding that the SCA filed by the Appellant was not maintainable for want of territorial jurisdiction of the Gujarat High Court? - HELD THAT - The Division Bench erred in not noticing Article 226(2) of the Constitution of India while deciding the question arising in this case. The question as to whether the Gujarat High Court has territorial jurisdiction to entertain the Appellant's petition (SCA) or not, should have been decided keeping in view the provisions of Article 226(2) of the Constitution read with Section 20 of the Code of Civil Procedure, 1908. In the present case, it is found from the averments of the petition (SCA) that firstly, Respondent No. 1-Company has its factory at Porbandar, which is a part of State of Gujarat; Second, the Labour Court, Junagadh, which is also a part of State of Gujarat, entertained the dispute between the Appellant-Union and Respondent No. 1-Company and passed a recovery order; and Third, one of the reliefs claimed in the petition (SCA) pertains to non-payment of outstanding wages payable to the workers by Respondent No. 1-Company - thus, the part of the cause of action as contemplated in Article 226(2) of the Constitution has arisen within the territorial jurisdiction of the Gujarat High Court for filing the petition (SCA) to claim appropriate reliefs in relation to such dispute against Respondent No. 1-Company. The Appellant's petition (SCA) was maintainable in the Gujarat High Court inasmuch as the part of the cause of action to file such petition did accrue to the Appellant herein (Petitioner) within the territorial jurisdiction of the Gujarat High Court - the SCA was required to be decided on merits by the Gujarat High Court - Appeal allowed.
Issues Involved:
1. Territorial jurisdiction of the Gujarat High Court to entertain the Special Civil Application (SCA). 2. Non-payment of outstanding wages to workers by the Respondent Company. 3. Execution of the recovery certificate issued by the Labour Court. 4. Distribution of sale proceeds from the sale of the Respondent Company’s assets. Issue-wise Detailed Analysis: 1. Territorial Jurisdiction of the Gujarat High Court: The primary issue was whether the Gujarat High Court had the territorial jurisdiction to entertain the SCA filed by the Appellant-Union. The Division Bench of the High Court had ruled that the Gujarat High Court lacked jurisdiction because no part of the cause of action arose in Gujarat. However, the Supreme Court overturned this decision, emphasizing that Article 226(2) of the Constitution of India empowers a High Court to entertain a writ petition if the cause of action, wholly or in part, arises within its territorial jurisdiction. The Supreme Court noted that the Respondent Company had its factory in Porbandar (Gujarat), the Labour Court in Junagadh (Gujarat) had entertained the dispute, and one of the reliefs sought pertained to non-payment of wages in Gujarat. Hence, part of the cause of action did arise in Gujarat, making the SCA maintainable in the Gujarat High Court. 2. Non-Payment of Outstanding Wages: The Appellant-Union, representing workers of the Respondent Company’s cement factory in Porbandar, filed a Recovery Application in the Labour Court at Junagadh to recover outstanding wages. The Labour Court directed the Respondent Company to pay ?81,50,744/- along with costs. Despite the issuance of a recovery certificate by the Collector, Junagadh, the dues remained unpaid. 3. Execution of the Recovery Certificate: The recovery certificate issued by the Collector, Junagadh, for ?60,35,379/- as arrears of land revenue remained unexecuted. The Appellant-Union sought execution of this certificate through the SCA, requesting that part of the sale proceeds from the Respondent Company’s assets be used to pay the workers. 4. Distribution of Sale Proceeds: The Appellant-Union sought directions for the Indian Bank (Respondent No. 2) to deposit 50% of the sale proceeds from the sale of the Respondent Company’s assets with the District Collector, Porbandar, for distribution to the workers. Alternatively, they requested that the amount be paid directly to the Union for distribution under supervision. The SCA also challenged the Debt Recovery Tribunal’s (DRT) action of transferring the entire sale proceeds to the Indian Bank without retaining the workers' dues. Separate Judgments: The Supreme Court set aside the Division Bench’s order and restored the Single Judge’s order, which had held that the Gujarat High Court had territorial jurisdiction. The case was remanded to the Single Judge for a decision on merits, with a request for expedited disposal within six months. The Supreme Court clarified that its decision was limited to the issue of territorial jurisdiction and did not address the merits of the case.
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