2023 (9) TMI 1412 - HC - Indian Laws

Doctrine of forum non-convenience - Territorial Jurisdiction - discretionary power under Article 226 of the Constitution of India to entertain or refuse to entertain writ petition in cases where the petitioner has alternative and more appropriate and convenient High Court to approach - HELD THAT - There is no doubt that a fraction of the cause of action does arise within the territorial jurisdiction of this court as the petitioner's society is registered at Delhi and Head Offices of some of the respondents are also situated within the territorial jurisdiction of this court. However, taking into consideration the fact that the area of operation of the petitioner-Society concerning the dispute in hand, is within the territorial jurisdiction of the Patna High Court; the loan facility was also availed within the territorial jurisdiction of the Patna High Court; the security to the loan i.e., the mortgage loan of the petitioner falls under the jurisdiction of the Patna High Court; the destruction of the school building as a result of natural calamity which led the petitioner claiming his right to restructure the debt took place within the jurisdiction of the Patna High Court, therefore, this court is not inclined to entertain the instant petition. The law with regard to the discretionary power of the High Court to not entertain matter on the ground of doctrine of forum non-convenience is settled by the Hon'ble Supreme Court in the case of KUSUM INGOTS ALLOYS LTD. VERSUS UNION OF INDIA 2004 (4) TMI 342 - SUPREME COURT . It was held that the court is not obliged to entertain cases where even a small part of the cause of action arises within its territorial jurisdiction, as the same cannot be construed to be determinative factor which may compel the court to decide the case. The doctrine of forum convenience in appropriate cases, entitles the court to exercise its discretionary jurisdiction and refuse to entertain such cases. The Division Bench of this court in the case of Sachin Hindurao Waze vs UOI and Ors. has relied upon the above-mentioned judgements and has laid down two elements which have to be considered by any court while accepting jurisdiction to decide a writ petition under Article 226 of the Constitution of India. Firstly, if any part of the cause of action arises within its territorial jurisdiction; and secondly if the said court is the forum convenience. On the perusal of the above discussion, it is settled that the court has discretionary power under Article 226 of the Constitution of India to entertain or refuse to entertain writ petition in cases where the petitioner has alternative and more appropriate and convenient High Court to approach. It is also settled that if only a part of cause of action arises in the territorial jurisdiction of the court, then the court is not obliged to entertain the matter if the court is of opinion that it is not the forum conveniens. To determine material, essential or integral part of the cause of action, it is the substance of the matter that becomes relevant. In the instant case, all important events, have taken place outside territorial jurisdiction of this court. The petitioner is not incapacitated to approach the jurisdictional High Court - When admittedly a major part of cause of action arises within the territorial jurisdiction of a different High Court and only a minuscule cause of action arises within the jurisdiction of this court, the doctrine of forum non-conveniens will have full application. The said doctrine also assumes significance when the petitioner has an adequate alternative forum. This court is not inclined to entertain the instant petition. The same is accordingly dismissed.

Summary

Issues Involved:
1. Territorial Jurisdiction
2. Doctrine of Forum Non-Convenience
3. Discretionary Power under Article 226 of the Constitution of India

Summary:

Territorial Jurisdiction:
The petitioner, a charitable organization registered under the Societies Registration Act, 1860, sought restructuring of a loan borrowed in 2015 from respondent no. 3, a private bank. The loan was secured by mortgaging land in Bhagalpur, Bihar, where the school is situated. Due to a flood, the petitioner suffered financial losses and requested loan restructuring under RBI guidelines for natural calamities, which was denied by the bank. Consequently, the loan was declared a Non-Performing Asset (NPA) and a notice under Section 13(2) of the SARFAESI Act, 2002 was issued. The petitioner filed the instant petition seeking relief, including quashing an impugned order by the Assistant P.F. Commissioner.

Doctrine of Forum Non-Convenience:
The court noted that while a fraction of the cause of action arises within its territorial jurisdiction, the primary operations and disputes are within the jurisdiction of the Patna High Court. This includes the loan facility, the mortgaged property, and the natural calamity's impact. The court referenced the Supreme Court's decision in Kusum Ingots & Alloys Ltd. vs Union of India, which states that even if a small part of the cause of action arises within a court's jurisdiction, the court is not compelled to entertain the case if it is not the forum conveniens.

Discretionary Power under Article 226 of the Constitution of India:
The court emphasized its discretionary power under Article 226 to refuse to entertain petitions when a more appropriate forum is available. It cited multiple precedents, including Sterling Agro Industries Ltd. vs. Union of India, which highlighted that the situs of the appellate authority should not solely determine jurisdiction. The court also referenced recent judgments, including State of Goa vs Summit Online Trade Solutions Pvt. Ltd., which reiterate that the material facts must have a nexus with the subject matter of the case for jurisdiction to be appropriate.

Conclusion:
The court concluded that the major part of the cause of action, including the loan facility, the mortgaged property, and the resultant actions under the SARFAESI Act, occurred outside its territorial jurisdiction. Therefore, invoking the doctrine of forum non-conveniens, the court dismissed the petition, allowing the petitioner to approach the appropriate forum for redressal.