Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5360 OF 2010
Cement Workers’ Mandal ….Appellant(s)
VERSUS
Global Cements Ltd
(HMP Cements Ltd.) & Ors. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. This appeal is filed against the final judgment
and order dated 27.04.2007 passed by the High
Court of Gujarat at Ahmedabad in Letters Patent
Appeal No.1020 of 2006 in Civil Application No.770
of 2005 whereby the Division Bench of the High
Signature Not Verified
Digitally signed by
ANITA MALHOTRA
Date: 2019.02.15
17:58:08 IST
Reason:
Court allowed the said Letters Patent Appeal filed by
respondent No.1 herein holding that the High Court
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had no territorial jurisdiction to entertain the
Special Civil Application (in short, “SCA”) filed by
the appellant herein which was entertained and
allowed by the Single Judge.
2. A few facts need mention hereinbelow for the
disposal of this appeal, which involves a short legal
question.
3. Respondent No.1 herein is a Limited Company
having its registered office at Calcutta. Respondent
No.1 was engaged in the business of manufacture
and sale of cement. They have a cement factory at
Porbandar in the State of Gujarat.
4. The appellant is a Union of workers. These
workers were working, at all relevant time, in the
cement factory of respondent No.1 at Porbandar.
According to the appellantUnion, as many as 500
workers, who are the members of it, were working at
the relevant time in the said cement factory.
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5. Respondent No.1, however, closed the cement
factory somewhere in the year 1998 for myriad
reasons without paying the wages to its workers.
6. A dispute, therefore, arose between the
appellantUnion and Respondent No.1Company
(employer) regarding the nonpayment of
outstanding wages payable to the workers. The
appellant Union, therefore, approached the Labour
Court at Junagadh (Gujarat) and filed Recovery
Application No.86/98 under the Industrial Disputes
Act, 1947 for the recovery of the outstanding wages
payable to the workers against Respondent No.1.
7. By order dated 12.04.1999, the Labour Court
allowed the application and directed Respondent
No.1Company to pay a sum of Rs.81,50,744/ with
a cost of Rs.50,000/ to the workers. This was
followed by issuance of recovery certificate dated
04.09.2000 for Rs.60,35,379/ by the Collector,
Junagadh as arrears of land revenue. The said
certificate, however, has remained unexecuted.
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8. It appears that Respondent No.2 Indian Bank
had given business loan to Respondent No.1
Company, which they failed to repay to the Indian
Bank. The Indian Bank (R2), therefore, filed a
claim petition before the Debt Recovery Tribunal (for
short “the DRT) at Calcutta against Respondent
No.1Company for recovery of their unpaid loan
amount with interest.
9. By order dated 04.03.2003, the DRT allowed
the claim petition and ordered for sale of the
properties of Respondent No.1Company after giving
due publicity. The DRT also appointed one Receiver
to take appropriate steps in this regard. The
Receiver informed the appellantUnion accordingly.
10. It is with these background facts, the
appellantUnion filed a petition (Special Civil
Application No.12212 of 2004) in the High Court of
Gujarat at Ahmadabad out of which this appeal
arises. The SCA was filed against the Indian
Bank(respondent No.2 herein) and the
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Company(respondent No.1 herein). The appellant
claimed the following reliefs in their SCA:
“A. To issue an order, direction in the nature
of mandamus and/or any other appropriate
writ, order or direction, directing the
respondent No.1 Indian Bank, Kolkata, to
deposit the 50% amount of the sale proceeds
of the Porbandar H.M.P. Cement with the
District Collector, Porbandar, and the District
Collector be directed to pay by account payee
cheque to each of the workmen
proportionately towards the partpayment of
the legal dues to the individual workman
concerned; ALTERNATIVELY.
B. To issue direction to the respondent No.1
Indian Bank to pay 50% of the amount to the
petitioner union who shall directly pay to the
workmen by account payee cheque either
under the supervision of District Collector,
Porbandar or Assistant Labour Commissioner,
Porbandar.
C. To declare and hold the impugned action
of the Debt Recovery Tribunal, Kolkata, in
transferring the entire sale proceed to
respondent No.1, Indian Bank, without
retaining the amount of workers’ due, as
illegal and without authority of law.
D. To suspend the operation, implementation
and execution of the order of the Debt
Recovery Tribunal insofar as the Debt
Recovery Tribunal directs:
“It is being further ordered that in
the case of default on the part of
the defendants in adhering to any
of the terms and condition
hereinabove stated, the certificate
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of recovery so issued, shall
automatically be altered for the
total applicant’s claim as filed on
July 2002 and the applicant being
granted the liberty to appropriate
the entire money lying with the
present learned transferring
Tribunal in O.A. No.142 of 1998
after receiving the said sum from
the learned Receiver and it is also
being ordered that the learned
Receiver is hereby being ordered to
stand discharged….”
E. To grant such other and further relief as
the Hon’ble Court deems fit and proper in the
interest of justice.”
11. The respondent Nos.1 & 2, i.e., Company and
the Indian Bank on entering their appearance in the
SCA raised a preliminary objection before the writ
court contending that the SCA filed by the
appellantUnion is not maintainable in the High
Court of Gujarat at Ahmedabad inasmuch as no
part of the cause of action in relation to the subject
matter of the SCA has arisen in the State of Gujarat
which entitled the appellantUnion to file the SCA in
the Gujarat High Court.
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12. In other words, the objection was that having
regard to the nature of reliefs claimed by the
petitioner (appellant herein) in the SCA, no part of
cause of action could be said to have arisen in the
State of Gujarat, which would empower the Gujarat
High Court to entertain the SCA for its disposal on
merits. On the other hand, it was contended that it
is clear that the entire cause of action between the
parties has accrued in the State of Calcutta where
the company's registered office is located and where
the DRT had also entertained the claim petition filed
by the Indian Bank(respondent No.2 herein) against
the Company (respondent No.1 herein) and had
passed the orders in the said claim petition.
13. The respondent Nos. 1 & 2, therefore,
contended that the said SCA was liable to be
dismissed as being not maintainable for want of
territorial jurisdiction of the Gujarat High Court.
14. The Single Judge by order dated 26.10.2005
overruled the preliminary objection and held that
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the Gujarat High Court has the territorial
jurisdiction to entertain the SCA.
15. Respondent No.1 (Company) felt aggrieved and
filed the LPA before the Division Bench. By
impugned order, the Division Bench allowed the
LPA, set aside the order of the Single Judge and
dismissed the SCA. The Division Bench held that
the Gujarat High Court has no territorial
jurisdiction to entertain the SCA in question
because no part of the cause of action has accrued
to file such petition(SCA) in the Gujarat High Court.
16. In other words, the Division Bench was of the
view that having regard to the nature of reliefs
claimed in the SCA, the Gujarat High Court cannot
be held to have territorial jurisdiction to entertain
such petition for grant of the reliefs claimed therein.
17. It is against this order of the Division Bench,
the Union (petitioner in SCA) felt aggrieved and has
filed the present appeal in this Court after obtaining
the special leave to appeal.
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18. So, the short question, which arises for
consideration in this appeal, is whether the Division
Bench was justified in holding that the SCA filed by
the appellant was not maintainable for want of
territorial jurisdiction of the Gujarat High Court.
19. Heard Ms. Anushree Prashit Kapadia, learned
counsel for the appellant and Mr. Gautam Awasthi,
learned counsel for the respondents.
20. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow the appeal and while setting
aside the impugned order of the Division Bench
restore the order of the Single Judge.
21. In our considered opinion, the Division Bench
erred in not noticing Article 226(2) of the
Constitution of India while deciding the question
arising in this case.
22. In other words, the question as to whether the
Gujarat High Court has territorial jurisdiction to
entertain the appellant's petition(SCA) or not,
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should have been decided keeping in view the
provisions of Article 226(2) of the Constitution read
with Section 20 of the Code of Civil Procedure, 1908
(for short, “CPC”).
23. Article 226 of the Constitution and Section 20
of CPC read as under:
“ Article 226 of the Constitution
226. Power of High Courts to issue certain
writs
(1) Notwithstanding anything in Article 32
every High Court shall have powers,
throughout the territories in relation to
which it exercises jurisdiction, to issue to
any person or authority, including in
appropriate cases, any Government, within
those territories directions, orders or writs,
including writs in the nature of habeas
corpus, mandamus, prohibition, quo warranto
and certiorari, or any of them, for the
enforcement of any of the rights conferred by
Part III and for any other purpose.
(2) The power conferred by clause (1) to issue
directions, orders or writs to any
Government, authority or person may also be
exercised by any High Court exercising
jurisdiction in relation to the territories
within which the cause of action, wholly or in
part, arises for the exercise of such power,
notwithstanding that the seat of such
Government or authority or the residence of
such person is not within those territories.
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(3) Where any party against whom an interim
order, whether by way of injunction or stay
or in any other manner, is made on, or in any
proceedings relating to, a petition under
clause (1), without
(a) furnishing to such party copies of
such petition and all documents in
support of the plea for such interim
order; and
(b) giving such party an opportunity of
being heard,
makes an application to the High Court
for the vacation of such order and
furnishes a copy of such application to
the party in whose favour such order
has been made or the counsel of such
party, the High Court shall dispose of
the application within a period of two
weeks from the date on which it is
received or from the date on which the
copy of such application is so
furnished, whichever is later, or where
the High Court is closed on the last day
of that period, before the expiry of the
next day afterwards on which the High
Court is open; and if the application is
not so disposed of, the interim order
shall, on the expiry of that period, or,
as the case may be, the expiry of the
said next day, stand vacated
(4) The power conferred on a High Court by
this article shall not be in derogation of the
power conferred on the Supreme Court by
clause (2) of Article 32.”
“ Section 20 of CPC
20.
Other suits to be instituted where
defendants reside or cause of action
arises Subject to the limitations aforesaid,
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every suit shall be instituted in Court within
the local limits of whose jurisdiction
(a) the defendant, or each of the
defendants where there are more than
one, at the time of the commencement
of the suit, actually and voluntarily
resides, or carries on business, or
personally works for gain; or
(b) any of the defendants, where there
are more than one, at the time of the
commencement of the suit actually and
voluntarily resides, or carries on
business, or personally works for gain,
provided that in such case either the
leave of the Court is given, or the
defendants who do not reside, or carry
on business, or personally work for
gain, as aforesaid, acquiesce in such
institution; or
(c) the cause of action, wholly or in
part, arises.
Explanation A corporation shall be deemed
to carry on business at its sole or principal
office in India or, in respect of any cause of
action arising at any place where it has also a
subordinate office, at such place.”
24. Article 226(2) of the Constitution, in clear
terms, empowers the High Court (let us say “A”
High Court) to entertain the writ petition if the
cause of action to file such writ petition against the
respondents of the said writ petition has arisen
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wholly or in part within the territorial jurisdiction of
“A” High Court.
25. Clause (2) further empowers a High Court to
issue any order, directions or writ as provided in
clause (1) of Article 226 of the Constitution in such
writ petition notwithstanding that seat of such
Government or the Authority or the residence of
such person against whom the writ petition is filed
does not fall within the territories of the “A” High
Court but falls in the territories of the “B” High
Court.
26. Coming to the facts of this case, we find from
the averments of the petition(SCA) that firstly,
Respondent No.1Company has its factory at
Porbandar, which is a part of State of Gujarat;
Second, the Labour Court, Junagadh, which is also
a part of State of Gujarat, entertained the dispute
between the appellantUnion and respondent No.1
Company and passed a recovery order; and Third,
one of the reliefs claimed in the petition(SCA)
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pertains to nonpayment of outstanding wages
payable to the workers by respondent No.1
Company.
27. In the light of these three reasons, we are of
the view that the part of the cause of action as
contemplated in Article 226 (2) of the Constitution
has arisen within the territorial jurisdiction of the
Gujarat High Court for filing the petition(SCA) to
claim appropriate reliefs in relation to such dispute
against respondent No.1Company.
28. In our considered opinion, the expression “
the
cause of action, wholly or in part, arises ” occurring
in Article 226(2) of the Constitution has to be read
in the context of Section 20(c) of CPC which deals
with filing of the suit within the local limits of the
jurisdiction of the Civil Courts.
29. Indeed, the question as to whether the cause
of action for filing the petition, wholly or in part,
arose in the context of territorial jurisdiction of the
High Court is required to be decided keeping in view
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the provisions of Article 226(2) of the Constitution
read with the provisions of Section 20 of CPC.
30. In the light of the foregoing discussion, we are
of the view that the appellant's petition(SCA) was
maintainable in the Gujarat High Court inasmuch
as the part of the cause of action to file such
petition did accrue to the appellant herein
(petitioner) within the territorial jurisdiction of the
Gujarat High Court.
31. In these circumstances, the SCA was required
to be decided on merits by the Gujarat High Court.
32. In view of the foregoing discussion, the appeal
succeeds and is hereby allowed. The impugned
order of the Division Bench is set aside and the
order of the Single Judge is restored to the extent it
decides that the petition(SCA) as maintainable in
the Gujarat High Court.
33. The case is accordingly remanded to the Single
Judge (Writ Court) for deciding the petition(SCA) on
merits strictly in accordance with law uninfluenced
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by any of the observations made by the Division
Bench and this Court because this Court has
decided only the issue of territorial jurisdiction of
the Gujarat High Court and not beyond it.
34. Since the petition(SCA) is old, we request the
Single Judge to decide it preferably within six
months.
…………………………………J.
[ABHAY MANOHAR SAPRE]
....…..................................J.
[DINESH MAHESHWARI]
New Delhi;
February 14, 2019.
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