FORUM SHOPPING

[Mr. M. GOVINDARAJAN]

‘Forum shopping’ is the informal name given to the practice adopted by some litigants to have their legal case heard in the court thought most likely to provide a favorable judgment.   Some judgments have, for example, become known as ‘plaintiff friendly’ and so have attracted litigation even when there is little or no connection between the legal issues and jurisdiction in which they are to be litigated.

The plaintiff might have selected one forum on the following grounds-

• The forum is not convenient to the defendant or his witnesses.   There may be problems of expenses of travel, health etc.,;
• The Court, the Judge, or the law is most likely to favor the plaintiff’s case.

The defendant may take the following activities to seek a change of venue:

• The defendant may petition the forum court that it should reject the jurisdiction and petition to transfer the case to an allegedly more convenient forum; or
• If a case has been filed in another jurisdiction, the defendant may seek injunctive relief against the plaintiff in a second state, requiring that the plaintiff discontinue the action in the first forum and instead submit the case for hearing in this allegedly more convenient forum.

In ‘Areva T & D India Limited V. Commissioner of Customs (Exports), Mumbai’ –2013 (11) TMI 263 - MADRAS HIGH COURT the petitioner exported transformers and its spares under duty free shipping bills during the period between June, 2003 and December 2003. The petitioner later made an application before the statutory authority requesting conversion of those shipping bills into DEEC shipping bills against three advance licences.   Their request was rejected by the Commissioner of Customs, Mumbai.   The petitioner challenged the said order before the Tribunal at Mumbai. The Tribunal remanded the matter to the Commissioner.   In the remand proceedings the Commissioner found that there was considerable delay in making the application for conversion and as such the department was not in a position to verify whether duty free imported goods were actually utilized in the export of products or not. Against the rejection order of the Commissioner the petitioner filed appeal before CESTAT, Mumbai bench.

During the pendency of appeal, the petitioner made a specific request to the President of the Tribunal for transfer of Chennai for which the petitioner did not pay any fees as the order to be passed by the President would be of administrative nature. The President allowed the request and the case was transferred to Madras Bench which allowed the appeal of the petitioner. Against this order the Revenue filed appeal before the High Court, Madras.

The appeal was heard on merits and ultimately the matter was remanded to the original adjudicating authority for fresh verification with liberty to the petitioner to produce contemporaneous documents for verification. It is the order which is sought to be reviewed at the instance of the petitioner principally on the ground of jurisdiction.

The petitioner submitted the following:

• The office of the adjudicating authority namely, the Commissioner of Customs (Exports Promotion) is situated at Mumbai and as such the appeal against the final order passed by CESTAT, Chennai would lie only before Mumbai High Court under Section 130 of Customs Act;
• The question of jurisdiction is a legal issue which goes to the root of the matter and as such if it is made out that the Court has no jurisdiction, the order passed by the Court assuming jurisdiction would be a nullity;
• The fact that the petitioner had not raised the point of jurisdiction at the earliest point of time would not defeat their right to challenge the said issue at a later point of time;

Therefore the petitioner seeks review the judgment and consequently to return the appeal memorandum filed by the Revenue for the purpose of representing or filing it before the High Court, Mumbai.

The Revenue put forth the following submissions before the High Court:

• Madras High Court is having jurisdiction to entertain the appeal filed against the order passed by CESTAT, Chennai;
• The Chennai Bench was given the jurisdiction to take up the matter on account of the order of transfer made by the President of the Tribunal and as such, for all practical purposes, the Madras High Court is the jurisdictional High Court competent to consider the challenge made to the order;
• The petitioner has not made out a case for review and their remedy is to file an appeal before the Supreme Court.

The High Court considered the review petition as an afterthought action.   The High Court directed to produce the application filed by the petitioner for transfer and the order passed by the President on the said application.   The same were produced before the High Court.   The High Court analyzed the documents produced before it.   In the application the petitioner has explained their difficulties to appear before the Mumbai Bench as it involves multiple trips and wastage of time and money.   The Registry of the Appellate Tribunal placed the matter before the President and accordingly the appeal was transferred. The petitioner contended that-

• The President of the Appellate Tribunal has passed an administrative order without notice to the Customs Department, transferring the appeal from CESTAT, Mumbai to the Chennai Bench;
• It has been the practice of the President of Appellate Tribunal to make such administrative transfers at the instance of any one of the parties and the present transfer order was made on the basis of an application sent by the petitioner;
• If the Revenue is aggrieved by the order of transfer, it is always open to them to approach the President to recall the order;
• The transfer order passed by the President was only an administrative order and not a judicial order and as such no notice was issued to the Customs Department;
• The Customs Department is having offices throughout India and as such no prejudice would be caused to them in case the appeal is transferred from one Bench to another Bench in a different State;
• The President is having jurisdiction to pass such administrative order under Section 129C(6) of Customs Act.                      

The High Court held as-

• Section 129C(6) is found to be a residuary power given to the Appellate Tribunal to regulate its own procedure in the matter of discharge its functions, including the places at which the Benches shall hold their sittings.   This residuary power to constitute Benches is now considered as an administrative jurisdiction to transfer cases from one Bench to another Bench, notwithstanding the fact that two Benches are located in two different states;
• Though Section 129C(6) gives power to regulate its own procedure the said provision does not expressly confer power on the Appellate Tribunal to transfer matters on administrative side. The Appellate Tribunal is deemed to be a civil court.   Therefore transfer of proceedings from one Bench to another Bench situated in a different State, can be made only by way of a judicial order.   The present case is not a transfer from one Bench to another Bench functioning in the very same State.   In case there are two or more Benches in a particular State, it is always open to the Appellate Tribunal to transfer a particular matter from one Bench to another in case it is made out that the other Bench is not functioning or for any other justifiable reason.;
• The Tribunal at Mumbai is bound by the Law declared by the Bombay High Court.   The Tribunal at Madras is expected to decide the matters on the basis of law laid down by the Madras High Court. Therefore, the Appellate Tribunal cannot transfer matters in a casual manner on administrative side without deciding the issue judicially;
• The order regarding transfer involves exercise of jurisdiction under the Customs Act.   The Appellate Tribunal is given the powers of a Court under the Code of Civil Procedure only for the purpose of deciding the matters judicially.   In case transfers are made unilaterally without the knowledge of other side, naturally the opposite party would be taken by surprise.   It would also encourage ‘Forum shopping’.
• It is not proper on the part of the Tribunal or its President to entertain correspondence with litigants directly with regard to matters pending before it.   In fact Section 129A(7) of the Customs Act provides that any application filed before the Appellate Tribunal shall be accompanied by a fee of Rs.500/-. It was only to overcome this statutory prescription, the petitioner has sent an application directly to the President, without presenting it before the Registry indicating that they are not making any payment of fee as contemplated under Section 129A(7) of the Customs Act as their request is to transfer only in the administrative capacity.

The High Court held that the President of the Appellate Tribunal has no jurisdiction to transfer the matter from the permanent Bench at Mumbai to a Bench at Chennai by way of an administrative order.