Holding

The Delhi High Court has jurisdiction to entertain the appeal, and the Supreme Court restored the matter to that court.

Summary

Mis. Canon Steels Ltd appealed to the Supreme Court against the Punjab & Haryana High Court’s dismissal of its customs appeal, arguing that the High Court lacked territorial jurisdiction because the original adjudication order was passed in Mumbai and the appellate order by CESTAT was issued in Delhi. The Supreme Court examined whether the location of the appellate order creates a part of the cause of action that confers jurisdiction on the Delhi High Court under Article 226 and Section 130 of the Customs Act. Relying on Nasiruddin v. State and Kusum Ingots & Alloys Ltd. v. Union of India, the Court held that a part of the cause of action arising in Delhi gives the Delhi High Court jurisdiction, and that a High Court may decline jurisdiction only on the doctrine of forum conveniens. Consequently, the Court restored the appeal to the Delhi High Court, directing it to decide the customs case on its merits, and disposed of the Supreme Court appeal without costs.

Issues considered

Whether the Punjab & Haryana High Court had territorial jurisdiction to entertain the customs appeal where the original order was from Mumbai and the appellate order was from Delhi.
Whether the location of the appellate order creates a part of the cause of action that confers jurisdiction on the Delhi High Court under Article 226 and Section 130 of the Customs Act.
Whether the doctrine of forum conveniens can be invoked to deny jurisdiction despite a part of the cause of action arising within the High Court’s territory.

Legislation cited

Constitution of Indias. Article 226, s. Article 227
Customs Act, 1962s. 130

Subjects

jurisdictionforum convenienscustoms lawappellate jurisdictionhigh court jurisdictioncause of actionSection 130Supreme Courtcustoms appeal

Judgment

(
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MIS. CANON STEELS P. LTD. A
v.
COMMISSIONER OF CUSTOMS

NOVEMBER 12, 2007
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[DR. ARIJIT P ASA VAT AND P. SATHASIVAM, JJ.]

Customs Act, 1962; Section 130/Constitution of India, 1950;
Article 227:
c
Territorial jurisdiction ofHigh Court-Cause ofaction not arises
within-Discretionary jurisdiction-Invoking of-Held: When a part
of cause of action arises within territorial jurisdiction of one or the
other High Court, it will be for the petitioner to choose any one of
them-However, merely because part ofcause ofaction arises within D
territorial jurisdiction of High Court, that by itself may not be a
determinative factor compelling the High Court to decide the matter
on merit-High Court may refuse to exercise its discretionary
jurisdiction by invoking the doctrine of Forum Conveniens-ln the
instant case, Punjab and Haryana High Court justified in dismissing E
the appeal on ground that both the acjjudication order and the appellate
order not issued by any authority within its territorial jurisdiction-
Delhi High Court has jurisdiction to deal with the matter.
Doctrines:
F
Doctrine of 'Farum Conveniens. '-invoking of

The question which arose for determination in this appeal was
as to whether the Punjab & Haryana High Court had jurisdiction to
deal with the matter in which the original order was passed by
Adjudicating authority at Mumbai and the appellate order was G
·-\ passed at Delhi by the Customs, Excise and Service Tax Appellate
Tribunal in an appeal filed u/s.130 of the Customs Act, 1962.
Appellant-assessee contended that the judgment in Kusum
1053 H
1054 SUPREME COURT REPORTS [2007] 11 S.C.R.
1 '
A Ingots & Alloys Ltd. v. Unionof!ndiaandAnr., is in its favour and on
misreading of the decision the appeal has been dismissed by the High
Court; that prima facie, the High Court was of the view that the
appeal was not maintainable before it and, therefore, the appellant
withdrew the said appeal to file it before the appropriate High Court;
B that since the cause of action arose at Chandigarh, Punjab and f
Haryana High Court has jurisdiction; and that the situs of framing >
law or rule would give jurisdiction to the Delhi High Court.
Respondent submitted that before moving the Punjab and
C Haryana High Court, the Delhi High Court was moved, and at the
request of the appellant, the High Court permitted to withdraw the
appeal.
Disposing of the appeal, the Court

D HELD: 1.1. The Court must have the requisite territorial
jurisdiction. An order passed on a writ petition questioning the
constitutionality of a Parliamentary Act, whether interim or final
keeping in view the provisions contained in clause (2).of Article 226
of the Constitution oflndia, will have effect throughout the territory
E oflndia subject of course to the applicability of the Act.
[Para 6] [1056-F, G]
1.2. The decision of this Court in the case of Nasirruddin v. STAT
is an authority for the proposition that the place from where an
appellate order or a revisional order is passed may give rise to a
F part of cause of action although the original order was at a place
outside the said area. When a part of the cause of action arises
within one or the other High Court, it will be for the petitioner to
choose his forum. [Para 8] [1058-B, C]
Nasiruddin v. STAT, [1975] 2 SCC 671, referred to.
G
1.3. Even if a small part of cause of action arises within the
territorial jurisdiction of the High Court, the same by itself may not
be considered to be a determinative factor compelling the High Court
to decide the matter on merit. In appropriate cases, the Court may
refuse to exercise its discretionary jurisdiction by invoking the
H
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MIS. CANONSTEELSP.LTD. v. COMMISSIONER OF 1055
,. CUSTOMS[PASAYAT,J.]
doctrine of forum conveniens. [Para 9] [1058-C, D] A
. '

Bhagat Singh Buggav. Dewan Jagbir Sawhney, AIR (1941) Cal
670; Madan/al Jalan v. Madanial, AIR (1949) Cal 495; Bharat Coking
Coal Ltd. v. Jharia Talkies & Cold Storage (P) Ltd., (1997) CWN 122; I

S.S. Jain & Co. v. Union ofIndia, (1994) 1 CHN 445 and New Horizons B
Ltd. v. Union ofIndia, AIR (1994) Del 126, referred to.
1.4. The appellate order in this case was issued from CESTAT
office at New Delhi. In that sense the Delhi High Court has
jurisdiction to deal with the matter. [Para 10] [1058-E, F]

Kusumingots&AlloysLtd. v. UnionofindiaandAnr., [2004] 6
c
sec 254, referred to.
1.5. The Punjab & Haryana High Court was justified in its view
as the original adjudication order and the appellate orders were not
issued by any authority within its territorial jurisdiction. But no D
person should be left without a remedy, therefore, even though the·
case was withdrawn by the asscssee, the same is restored as the
Delhi High Court has jurisdiction to deal with the matter.
[Para 11] [1058-F, G]
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5153 of
2007.
From the final Judgment and Order dated 8.5.2006 of the High Court
of Punjab and Haryana at Chandigarh in Customs Act Appeal No. 4 of
...,_ )-- 2004. ,F

S.R. Sharma and S. Balaji for the Appellant.

B. Krishna Prasad for the Respondent.

The Judgment of the Court was delivered by G
DR ARIJIT PASAYAT, J. 1. Leave granted.

2. Challenge in this appeal is to the orders passed by the Punjab &
Haryana High Court dismissing the Customs Act Appeal No. 4/2004,
filed under Section 130 of the Customs Act, 1962 (in short the 'Act') H
1056 SUPREME COURT REPORTS [2007] 11 S.C.R.

A dated 8th May, 2006, and the order passed in review application dated
12.10.2006. The High Court held that it had no jurisdiction to deal with
the matter as the original order was passed by Adjudicating authority at
Mumbai and the appellate order was passed at Delhi by the Customs,
Excise and. Service Tax Appellate Tribunal (in short 'CESTAT').
B Reference was made to the decision of this Court in Kusum Ingots & ~
Alloys Ltd. v. Union of India and Anr., [2004] 6 SCC 254. >
3. In support of the appeal, learned counsel for the appellant
submitted that the judgment in Kusum Ingots (supra) is in favour of the
C appellant and on misr~ading of the decision the appeal has been dismissed.
Learned Additional Solicitor General, on the other hand, submitted that
before moving the Punjab and Haryana High Court, the Delhi High Court
was moved, and at the request of the appellant, the High Court permitted
to withdraw the appeal (wrongly stated as writ petition).
D 4. The factual position is not in dispute. The adjudication order under
the Act was passed by the Commissioner of Customs (EP Mumbai) and
the appeal against that order was adjudicated by CESTAT. Against the
order ofCESTAT, Customs Appeal No.6/04 was filed before the Delhi
High Court. It is submitted by learned counsel for the appellant that prima
E facie, the High Court was of the view that the appeal was not maintainable
before it and, therefore, the appellant withdrew the said appeal to file it
before the appropriate High Court. Since the cause of action arose at
Chandigarh it was submitted that the Punjab and Haryana High Court
has jurisdiction.
F
5. At this juncture, it would be appropriate to take note of what
has been stated by this Court in Kusum Ingots (supra).
6. The Court must have the requisite territorial jurisdiction. An order
passed on a writ petition questioning the constitutionality of a
G Parliamentary Act, whether interim or final keeping in view the provisions
contained in clause (2) of Article 226 of the Constitution oflndia, will
have effect throughout the te1Titory of India subject of course to the
applicability of the Act.
7. Learned counsel for the appellant in support of his argument
H
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MIS. CANON STEELS P. LTD. v. COMMISSIONER OF 1057
_..,, CUSTOMS[PASAYAT,J.]
r
would contend that the situs of framing law or rule would give jurisdiction A
to the Delhi High Court and in support of the said contention relied upon
the decisions of this Court in Nasiruddin v. STAT (1975] 2 SCC 671~
and UP. Rashtriya Chini Mill Adhikari Parishad v. State of UP.,
(1995] 4 SCC 738. So far as the decision of this Court inNasiruddin's
case (supra) is concerned, it is not an authority for the proposition that B
~
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the situs of legislature of a State or the authority in power to make
subordinate legislation or issue a notification would confer power or
jurisdiction on the High Court or a Bench of the High Court to entertaiQ
a petition under Article 226 of the Constitution. In fact, this Court while
construing the provisions of the United Provinces High Courts, c
(Amalgamation) Order, 1948 stated the law thus: (SCC p. 683, para
37)
"3 7 . The conclusion as well as the reasoning of the High Court is
incorrect. It is unsound because the expression 'cause of action'
in an application under Article 226 would be as the expression is D
understood and if the cause of action arose because of the appellate,
order or the revisional order which came to be passed at Lucknow
then Lucknow would have jurisdiction though the original order was
passed at a place outside the areas in Oudh. It may be that the
original order was in favour of the person applying for a writ. In E
such case an adverse appellate order might be the cause of action.
The expression 'cause of action' is well known. If the cause of
action arises wholly or in part at a place within the specified Oudh
areas, the Lucknow Bench will have jurisdiction. If the cause of
_,.. action arises wholly within the specified Oudh areas, it is F
';-
indisputable that the Lucknow Bench would have exclusive
jurisdiction in such a matter. If the cause of action arises in part
within the specified areas in Oudh it would be open to the litigant
who is the dominus litis to have his forum conveniens. The litigant
has the right to go to a court where part of his cause of action G
~
'-< arises. In such cases, it is incorrect to say that the litigant chooses
any pru.ticular court. The choice is by reason of the jurisdiction of
the com1 being attracted by part of cause of action arising within
·the jurisdiction of the coUii. Similarly, ifthe cause of action can be
H
1058 SUPREME COURT REPORTS [2007] 11 S.C.R.
-<{
'tC

A said to have arisen part within specified areas in Oudh and part
outside the specified Oudh areas, the litigant will have the choice
to institute proceedings either at Allahabad or Lucknow. The court
will find out in each case whether the jurisdiction of the court is
rightly attracted by the alleged cause of action."
B )a-.
8. The said decision is an authority for the proposition that the place
from where an appellate order or a revisional order is passed may give
rise to a part of cause of action although the original order was at a place
outside the said area. When a part of the cause of action arises within
one or the other High Court, it will be for the petitioner to choose his
c fomm.
9. We must, however, remind ourselves that even if a small part of
cause of action arises within the territorial jurisdiction of the High Court,
the same by itself may not be considered to be a determinative factor
D compelling the High Court to decide the matter on merit. In appropriate -.i.,
cases, the Court may refuse to exercise ifs discretionary jurisdiction by
invoking the doctrine of forum conveniens. [See Bhagat Singh Bugga v.
Dewan Jagbir Sawhney, AIR (1941) Cal 670, Madan/al Jalan v.
Madan/al, AIR (1949) Cal 495, Bharat Coking Coal Ltd. v. Jharia
E Talkies & Cold Storage (P) Ltd., (1997) CWN 122, S.S. Jain & Co.
v. Union ofIndia, (1994) 1CHN445 and New Horizons Ltd. v. Union
ofIndia, AIR (1994) Del 126.]

10. The appellate order in this case was issued from CESTAT office
at New Delhi. In that sense the Delhi High Court has jurisdiction to deal
F -<
with the matter in terms of what has been stated in paragraph 25 of Kusum
Ingot's case (supra).
11. The Punjab & Haryana High Court was justified in its view as
the original adjudication order and the appellate order were not issued
G by any authority within its territorial jurisdiction. But no person should be
left without a remedy, therefore, even though the Customs Case No.6/ .
r-
/'"'

04 was withdrawn by the assessee, we direct the restoration of the said
as undisputably, the Delhi High Court has jurisdiction to deal with the
matter.
.H
M/S. CANON STEELS P. LTD. v. COMMISSIONER OF 1059
CUSTOMS [PASAYAT, J.]
12. Customs Case No. 6104 in the Delhi High Court needless to A
say shall be dealt with on merits.
13. We make it clear that we have not expressed any opinion on
the merits of the appeal.
14. The appeal is accordingly disposed of without any order as to · B
i costs.
S.K.S. Appeal disposed of.