1984 (5) TMI 272 - HC - Indian Laws

Summary

Issues Involved:
1. Maintainability of the writ application in the jurisdiction of the Calcutta High Court.
2. Territorial jurisdiction of the Calcutta High Court.
3. Impact of non-grant of excise duty exemption on the petitioner's business and shareholder interests.

Detailed Analysis:

1. Maintainability of the Writ Application:

The primary issue was whether the writ application filed by the petitioners was maintainable within the jurisdiction of the Calcutta High Court. The petitioners argued that the writ application was maintainable as the impugned circulars affected their business operations in Calcutta, thereby giving rise to a part of the cause of action within the jurisdiction of this Court. The respondents contended that the writ application was not maintainable as neither the respondents nor the cause of action fell within the territorial limits of the Calcutta High Court.

2. Territorial Jurisdiction:

The court examined the territorial jurisdiction under Article 226 of the Constitution of India. It was argued by the respondents that the circulars and orders challenged in the writ petition were issued by authorities outside the territorial limits of the Calcutta High Court, and thus, the court lacked jurisdiction. The petitioners countered that the adverse effects of these circulars on their business operations in Calcutta constituted a part of the cause of action within the jurisdiction of this Court.

3. Impact on Business and Shareholder Interests:

The petitioners claimed that the non-grant of excise duty exemption would prevent them from selling sugar at lower prices in Calcutta, affecting their business and the value of their shares, which in turn would harm the interests of the shareholders. The court considered whether these claims constituted a part of the cause of action arising within its jurisdiction.

Judgment:

The court held that the writ application was not maintainable within its jurisdiction. It emphasized that the subject matter of the writ application was the non-application of the circulars regarding excise duty exemption on excess sugar production, which was issued by authorities outside the territorial limits of the Calcutta High Court. The court stated:

"The submission that the Company will sustain loss is in no way comprised of the part of the cause of action which needs to be proved in order to succeed in this application that the impugned order is bad, arbitrary, unreasonable and illegal being not in accordance with the norms laid down in Sub-section (3C) Section 3, Essential Commodities Act."

The court concluded that the entire cause of action did not arise within the territorial limits of the jurisdiction of this Court. As all the respondents had their offices and records outside the jurisdiction of this Court, the application did not satisfy the requirements provided under Sub-article (1) as well as Sub-article (2) of Article 226 of the Constitution of India. Consequently, the application for variation of the interim order succeeded, the interim order was vacated, and the Rule was discharged. The application for contempt was also disposed of on the same terms.

Separate Judgments:

The judgment also addressed another case, C. R. 12166(W) of 1983, which was disposed of on similar terms with the consent of the learned Advocates for both parties. Additionally, the court ordered the return of the Bank guarantee given by the petitioner Company pursuant to the earlier order of the Court.

Conclusion:

The Calcutta High Court concluded that it lacked the territorial jurisdiction to entertain the writ application, as the cause of action did not arise within its jurisdiction. The interim order was vacated, and the Rule was discharged.