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TMI Blog2024 (1) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... 1865, as applicable to the High Court of Delhi, assailing the common final judgment and order dated 18.12.2023 ('Impugned Judgment') passed by the learned Single Judge in W.P.(C) No. 15556 of 2023, W.P.(C) No. 15557 of 2023 and W.P.(C) No. 15558 of 2023. 2. The learned Single Judge vide Impugned Judgment has held that Appellants are not entitled to invoke the jurisdiction of this High Court under Article 226 of the Constitution of India and has accordingly, dismissed the writ petitions. The learned Single Judge held that the integral, essential and material part of the cause of action has arisen within the territorial jurisdiction of the High Court of Judicature at Bombay; and assuming that a slender part of cause of action has arisen within the jurisdiction of this court, then, applying the principles of forum conveniens, he opined it would not be appropriate to entertain the writ petitions. 3. The facts of the case to the extent relevant for consideration of the present appeals as set out in the petitions are that certain shareholders alleged violation of SEBI's Minimum Public Shareholding Norms ('MPS Norms') and disclosure requirements by and in respect of Bharat Nidhi Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation order dated 10.11.2023 ('Impugned Revocation Order') was issued by SEBI whereby the Settlement Order stood revoked and withdrawn by SEBI in terms of Regulation 28 of the Regulations of 2018 on the ground of alleged failure of the Appellants to comply with the terms of the Settlement Order. 3.4. SEBI after issuing the Impugned Revocation Order also issued a notice of hearing to the Appellants for participating in the proceedings in furtherance of the SCN dated 28.10.2020. The Appellants were called upon to attend the hearing scheduled on 05.12.2023. 4. Being aggrieved of the said Impugned Revocation Order on several grounds including violation of principles of natural justice as well as the revival of the SCN proceedings at Mumbai, the Appellants preferred the aforesaid writ petitions before the learned Single Judge seeking a direction to quash and set aside the Impugned Revocation Order dated 10.11.2023 passed by SEBI and sought a restraint against SEBI from proceedings with the hearing scheduled on 05.12.2023 at Mumbai. 4.1. However, a preliminary objection on maintainability of the writ petitions was raised on behalf of SEBI with respect to lack of territorial jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0756/2019. 5.4. He states that merely because Appellants appeared before the High Court of Judicature at Bombay to defend writ proceedings filed by its shareholders challenging the Settlement Order, does not preclude the Appellants from maintaining the writ petitions before this High Court for challenging the Impugned Revocation Order. He states that in fact, the subsequent order dated 22.12.2023 passed by the High Court of Judicature at Bombay itself recognizes the independent rights of the Appellants herein to challenge the Impugned Revocation Order by way of appropriate proceedings before an appropriate forum. 5.5. He states that a Full Bench of this Court in Sterling Agro Industries Ltd. v. Union of India and Ors. 2011 SCC Online Del 3162, has held that even if a miniscule part of cause of action arises within the jurisdiction of a High Court a writ petition before the said High Court would be maintainable. He states that in fact, in the said judgment it has been held that even if the appellate authority is situated in Delhi, this High Court may refuse to exercise its jurisdiction by invoking the principles of forum conveniens. He states therefore, the situs of SEBI being at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Impugned Revocation Order before this Court. He states that the facts constituting the cause of action within the territory of this High Court are undisputed. Analysis and findings 8. This Court has heard the learned counsel for the parties and perused the record. 9. The Appellants have filed the writ petitions impugning the Revocation Order within the territorial jurisdiction of this Court on the averments that (a) the registered offices of the Appellants are situated in New Delhi and the Appellants carry on their business in Delhi; (b) the physical hard copy of the Impugned Revocation Order was received at the addresses in New Delhi; (c) the Impugned Revocation Order was also received by an e-mail dated 10.11.2023 at the addresses in New Delhi; (d) the situs of the Appellants' shares held in BNL is the registered office address of BNL, which is the subject matter of the SCN and the proceedings initiated by SEBI pursuant to the Impugned Revocation Order; (e) the effect of the Impugned Revocation Order is felt by the Appellants at New Delhi as their registered address is at Delhi; (f) a prior writ petition filed by some public shareholders i.e., W.P.(C) 10756 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation is not annexed herewith as the Settlement Application is already filed with SEBI and SEBI is the recipient thereof. 17. The Settlement Application was thereafter considered by the internal committee of SEBI ("IC") formed under the Settlement Regulations. Meetings between the IC and the representatives of the Petitioner took place on 6th August 2021, 31st August 2021, 28th October 2021 and 2nd December 2021 to deliberate on the Settlement Application and to discuss and negotiate on the terms of the settlement. For the sake of clarity, it is submitted that the JC had separate discussions with the Petitioner and Respondent Nos. 2 to 8 in respect of their individual Settlement Applications. At and pursuant to the said meetings, the Petitioner responded to various queries raised by the JC and filed revised settlement terms with the IC based on inter se deliberations." 109. It is, thus, unequivocally clear that the petitioners participated before SEBI 's Internal Committee on different dates at Mumbai and thereupon, a settlement had arrived at. It is, thus, seen that it is not merely the location of the respondent- SEBI's Head Office at Mumbai, but rather the entire ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evocation. The aspects which are not relevant to the passing of the settlement order and its cancellation cannot be considered to be integral, essential or material part of the cause of action as they do not have any substantial bearing on the issue involved in the present petitions." (Emphasis Supplied) 12. In our considered opinion, the conclusion in the Impugned Judgement that the facts asserted by the Appellants constitute a small part of cause of action, which are not integral is correct and the learned Single Judge has therefore, rightly exercised discretion to not entertain the writ petitions by invoking the doctrine of forum conveniens. The fact that a small part of cause of action has arisen within the territorial jurisdiction of this Court is by itself not a determinative factor for compelling this Court to decide the matter on merits. Our reasons for upholding the Impugned Judgement are discussed hereinafter. Registered offices of the Appellants at Delhi 13. The Supreme Court in State of Goa v. Summit Online Trade Solutions(P) Ltd. (2023) 7 SCC 791 after referring to National Textile Corporation Ltd. vs. Haribox Swalram (2004) 9 SCC 786, has categorically held that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the petitioning company has to pay tax @ 14% to the Government of Goa. The liability arises for the specific nature of business carried on by the petitioning company within the territory of Goa. The pleadings do not reflect that any adverse consequence of the impugned notification has been felt within the jurisdiction of the High Court. At this stage, we are not concerned with the differential duty as envisaged in Schedule II (@ 6%) vis-à-vis Schedule IV (@ 14%) of the impugned notification. That is a matter having a bearing on the merits of the litigation." (Emphasis Supplied) In light of the aforesaid law and in the facts of this case, the factum of the Appellants having their registered office at Delhi is not an integral fact to the cause of action for challenging the Impugned Revocation Order. Receipt of the physical copy of the impugned order at Delhi 14. The learned Single Judge has held that receipt of the Impugned Revocation Order by the Appellants at their respective Delhi address does not give rise to a cause of action within the jurisdiction of this Court in view of the judgments of the Supreme Court in Oil and Natural Gas Commission v. Utpal Kumar Basu and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause of action arising out of the action complained of. When that action complained of takes place outside the territorial jurisdiction of the High Court and an appeal therefore is dismissed by an authority located outside the jurisdiction of the High Court cause of action wholly arises outside the jurisdiction of the High Court and Art. 226(2) of the Constitution cannot be invoked to sustain a Writ Petition in this High Court on the basis that a part of the cause of action has arisen within the jurisdiction of this court, merely because the appellate order communicated from the seat of the appellate authority was received while the petitioner was residing or working within the jurisdiction of this court. Acceptance of the argument that the situs of the receipt of the order will determine the jurisdiction can lead to a position where a litigant would be in a position to choose his own court for the purpose of redressal of his grievance. All that he need do is to move over to a particular place for receiving the communication from the appellate authority and then approach the High Court of that place with a plea that that court had jurisdiction because the order of the appellate au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Goa vs. Summit Online Trade Solutions (P) Ltd. (supra) while examining the expression cause of action used in Article 226(2) of the Constitution of India held that in the context of maintaining a writ petition, cause of action are the material facts which are imperative for the writ petitioner to plead and prove, if traversed by the respondent, in order to support his right to the judgment of the Court. It held that the facts pleaded in the writ petition must have a nexus on the basis whereof a prayer can be granted. It further held that those facts which have nothing to do with the prayers made therein cannot be said to give rise to a cause of action. 16.1. Keeping in view the aforesaid statement of law, an examination of the grounds of challenge in the present writ petitions to the Impugned Revocation Order would assist the Court in appreciating the pleaded cause of action. It is the facts pleaded in the grounds, which constitute the material and integral facts, which the Appellants will have to prove, if traversed by SEBI, to seek a judgment of the Court. The challenge to the Impugned Revocation Order has been raised on the grounds of inter-alia non-adherence to the principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said SCN proceedings at Mumbai and filed settlement applications on 28.02.2021 at Mumbai. The separate meetings in the year 2021 between the representatives of the Appellants and the members of the IC of SEBI under the Regulations of 2018 were held at Mumbai. The Appellants responded to various queries raised by the IC and filed revised settlement terms with the IC based on the deliberations at Mumbai. The HPAC considered the settlement applications and the settlement terms forwarded by IC at Mumbai. The common Settlement Order in relation to the SCN was passed by SEBI at Mumbai. Now, the Impugned Revocation Order, which has the effect of recalling the settlement order has also been passed by SEBI at Mumbai. 18.1. Prior to its revocation, the challenge to the SEBI's Settlement Order by another set of shareholders of BNL was made before the High Court of Judicature at Bombay in the year 2022 by filing two (2) separate writ petitions. The said High Court was in seisin of the validity of the Settlement Order and SEBI as well as the Appellants herein were parties to the said writ petitions. 18.2. The High Court of Judicature at Bombay directed SEBI to furnish the documents pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veniens is seen not only from the perspective of the writ petitioner but it is to be seen from the convenience of all the parties before the Court. In the facts of this case, as is evident from the record that the forum conveniens for the both the parties is Mumbai. The Appellants since the year 2020 have been appearing in Mumbai before SEBI in the SCN proceedings. In W.P.(C) 15556/2023 (as well as the other writs) the writ petitioner has sought a direction for summoning the records of SEBI for examining the legality and validity of the Impugned Revocation Order. In these facts, therefore, the objection of SEBI that Mumbai is the forum conveniens for the parties has merit. The obligation of the Court to examine the convenience of all the parties has been expressly noted by the Full Bench of this Court in Sterling Agro Industries Ltd. (supra). The following paragraphs of the judgment are instructive which are reproduced as under: "30. From the aforesaid pronouncements, the concept of forum conveniens gains signification. In Black's Law Dictionary, forum conveniens has been defined as follows: "The court in which an action is most appropriately brought, considering the best i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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