MERE ISSUANCE OF NOTICE OR GIVING A REPLY WOULD NOT CONSTITUTE A CAUSE OF ACTION

[Mr. M. GOVINDARAJAN]

Cause of action implies a right to use. The material facts which are imperative for the suitor to allege and prove constitute the cause of action.  Cause of action is not defined in any statute. It has however, been judicially interpretated inter alia to mean that every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. Negatively put it would mean that everything which, if not proved, gives the defendant an immediate right to judgment would be part of cause of action.  The import is beyond any doubt. For every action, there has to be a cause of action, if not, the plaint or the writ petition, as the case may be, shall be rejected summarily.

In ‘Kusum Ingots and Alloys Limited V. Union of India’ – 2004 (4) TMI 342 - SUPREME COURT OF INDIA  the High Court held that the facts pleaded in the writ petition must have some nexus in relation to the prayer to be granted and not those facts which has nothing to do with the prayer made therein.  Even a small part of cause of action if arose within the territorial jurisdiction of a High Court, the Court will have jurisdiction in the matter.

In ‘Sterling Agro Industries Limited V. Union of India’ – 2012 (6) TMI 76 - DELHI HIGH COURT - LB  held as following regarding to the cause of action-

• The sole cause of action emerges at the place or location where the tribunal/appellate authority/revisional authority is situate and the said High Court cannot decline to entertain the writ petition as that would amount to failure of the duty of the Court cannot be accepted inasmuch as such a finding totally based on the situs of the tribunal/appellate authority/revisional authority totally ignoring the concept of forum conveniens;
• Even a miniscule part of cause of action arises within the jurisdiction of the Court, a writ petition would be maintainable before the High Court;
• An order of the appellate authority constitutes a part of cause of action to make the writ petition maintainable in the High Court within whose jurisdiction the appellate authority is situated. Yet the same may not be the singular factor to compel the High Court to decide the matter on merits. The High Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens.

In ‘Oil & Natural Gas Commission V. Utpal Kumar Basu & Others’ – 1994 (6) TMI 193 - SUPREME COURT, the Supreme Court held that mere sending of fax message from a particular place and the reply having received there from would not constitute a integral part of the cause of action.

In ‘National Textile Corporation Limited V. Haribox Swalram’ – 2004 (4) TMI 527 - SUPREME COURT it was held that mere fact that the writ petitioner carries on business at Calcutta or that the reply to the correspondence made by it was received at Calcutta is not an integral part of cause of action and, therefore, the Calcutta High Court had no jurisdiction to entertain the writ petition.

In ‘Magma Fincorp Limited V. Assistant Director, DGCEI’ – 2013 (8) TMI 749 - CALCUTTA HIGH COURT the petitioner is a non banking Finance Company. The petitioners have the several branches across the country for providing services coming under the category of banking and other financial services, business auxiliary services and business support services attracting the service tax.   Even a proceeding was initiated and demand was raised.  The petitioner filed appeal before Commissioner (Appeals). Subsequently the office of CAG issued a notice regarding the service tax audit for the various period ranging from 2006, 2007 till 2009, 2010. The Revenue again issued show cause notices to the petitioner on various other related issued and by an order dated 27.4.2014 the proceeding was dropped.

The Assistant Director, Director General of Central Excise Intelligence having its office at Kochi issued a summon dated 18.8.2012 and sought for the various information and documents pertaining to the financial year 2007, 2008, 2011 & 2012. Although the petitioner took the stand that they have been allotted centralized registration under the Kolkata Service Tax Commissionerate and the inquiry should be conducted by the Kolkata Zonal Unit but ultimately replied to the summons.  The documents are furnished in terms of the various notices and/or summons and the oral statements were also recorded by the officials of Kerala.  The petitioner challenged the same by means of a writ petition before Kolkata High Court.

The petitioner prayed before the High Court that direction against the respondent declaring that the inquiry initiated is illegal, bad in law and outcome of the arbitrary exercise of the power and without jurisdiction.  The Revenue contended that the Court is not having jurisdiction to entertain the petition.  The proceeding was initiated by Kochi Officers upon issuance of summons there from. Reply given to the said summons or the notices from the registered office cannot be taken as the accrual of cause of action.  Mere recording of the statement at the registered office by the Kochi Officers does not confer jurisdiction under Article 226 (2) of the Constitution of India.

The petitioner submitted the following before the High Court:

• The purported summons have been served at the registered office of the petitioner and the replies also made there from, it would therefore, be construed that a part of cause of action has arisen within the territorial jurisdiction of the Kolkata High Court;
• The statement of the officials of the petitioner has been recorded at the registered office, which is one of the constituents of the cause of action;
• If a fraction of cause of action accrues within the jurisdiction of the court, the court will have jurisdiction to entertain the writ petition;
• Any action constitutes an evil consequence at the place of business, it would give rise to a cause of action and therefore, the writ petition is maintainable.

The High Court did not find that mere issuance of notice or giving a reply would constitute a cause of action.  The other point raised by the petitioner is evil consequence at the place of the business of the petitioner at Kolkata by which the writ petition is maintainable.  The High Court held that the evil consequence as tried to be contended by the petitioner must relate to the infringement of the rights as guaranteed under Constitution of India.  No case of an infringement is made out in the writ petition. Rather it would appear from the pleadings made in the petition that the compliance to the summons and/or notices is made and the entire facts as pleaded in the writ petition would refer that the sheet anchor of the case founded on the action of Kerala Office to reopen the investigation which has already been concluded.

The High Court did not find that a slightest of the cause of action has arisen within the territorial jurisdiction of Kolkata High Court and therefore dismissed the writ petition for want to territorial jurisdiction.