Territorial jurisdiction depends on material cause of action, not petitioner’s residence or policy issuer’s location.

The petitioner, a Class “B” contractor enlisted with the Military Engineer Services (MES), challenged the constitutional validity of Policy Letter No. 66546/P-1/Renewal/2026/08/E8 dated 11 March 2025, governing renewal of enlistment for the 2026–2032 cycle, and Show Cause Notice No. 37903/B-364/109/E8 dated 26 February 2026 issued by the Chief Engineer, Western Command, MES, Chandimandir Cantt.

The petitioner had been awarded two MES contracts in 2023–24 and 2024–25, both of which were subsequently cancelled. The petitioner disputed the cancellations and invoked arbitration.

It contended that the impugned Policy introduced a new disqualification denying renewal where a contract had been cancelled for alleged contractor default, unless an arbitral award had declared the cancellation illegal.

The petitioner claimed that its renewal application remained pending, that its bids were being affected, and that it had replied to the impugned show-cause notice. It also filed a statutory appeal under the Policy and approached the Allahabad High Court under Section 11 of the Arbitration and Conciliation Act, 1996.

The respondents objected to the territorial jurisdiction of the Delhi High Court, submitting that the impugned show-cause notice and consequential non-renewal originated from Chandimandir Cantt., Panchkula, Haryana, and that similarly situated contractors had approached the High Court of Punjab and Haryana.

The petitioner relied on the location of its business and residence in Delhi, the issuance of the Policy by an authority situated in Delhi, and receipt of the show-cause notice in Delhi.

Whether the Delhi High Court had territorial jurisdiction under Article 226(2) of the Constitution merely because the petitioner was based in Delhi, the impugned Policy was issued by an authority situated in Delhi, and the show-cause notice was received in Delhi?

Whether the principal and material cause of action arose within the territorial jurisdiction of the High Court of Punjab and Haryana, where the impugned show-cause notice was issued and the consequential renewal proceedings were undertaken?

Whether the Delhi High Court should decline to exercise jurisdiction on the ground of forum conveniens, even assuming that a part of the cause of action arose in Delhi?

Under Article 226(2) of the Constitution, a High Court may exercise jurisdiction only where the facts pleaded constitute a material, essential, or integral part of the cause of action; the mere pleading of a fact or the existence of a slender part of the cause of action is insufficient.

The Court relied on Alchemist Ltd. v. State Bank of Sikkim, (2007) 11 SCC 335, and State of Goa v. Summit Online Trade Solutions (P) Ltd., (2023) 7 SCC 791, for this principle.

The Court further applied the doctrine of forum conveniens, recognised in Kusum Ingots & Alloys Ltd. v. Union of India and Ambica Industries v. Commissioner of Central Excise, under which a High Court may decline to entertain a petition where another forum is substantially more appropriate, even if a minor part of the cause of action arises within its jurisdiction.

It also relied on Aligarh Muslim University v. Vinay Engineering Enterprises (P) Ltd., (1994) 4 SCC 710, and Okhla Enclave Plot Holders Welfare Association v. State of Haryana, 2002 SCC OnLine Del 217 (DB), for the rule that the residence or location of the aggrieved party, by itself, does not confer territorial jurisdiction.

The Court held that the substance of the petitioner’s grievance was the show-cause notice issued by respondent no. 3 at Chandimandir Cantt. and the consequential refusal to renew the petitioner’s MES enlistment.

The contracts, their cancellation, and the renewal proceedings were connected with MES authorities located outside Delhi.

Although the Policy had been issued by respondent no. 2 in Delhi, it was implemented and applied against the petitioner by respondent no. 3 in Panchkula, Haryana.

The petitioner’s Delhi residence, the receipt of the notice in Delhi, and the location of the policy-making authority were therefore not material or integral facts sufficient to confer jurisdiction.

Applying the principles in Alchemist and Summit Online, the Court concluded that the principal cause of action arose outside Delhi.

It also considered the pendency of similar proceedings before the High Court of Punjab and Haryana and found that Court to be the appropriate forum, particularly since it exercised jurisdiction over the authority that issued the impugned notice.

The mere fact that the petitioner was based in Delhi, that the Policy was issued by an authority located in Delhi, or that the notice was received in Delhi did not confer territorial jurisdiction under Article 226(2).

The writ petition and pending application were accordingly dismissed for lack of territorial jurisdiction, while leaving it open to the petitioner to pursue an appropriate remedy, including before the High Court of Punjab and Haryana.