OIL AND NATURAL GAS COMMISSIONversusUTPAL KUMAR BASU AND ORS.

A                  OIL AND NATURAL GAS COMMISSION
                                          v.
                       UTPAL KUMAR BASU AND ORS.

                                   JUNE 23, 1994

B          [M. N. VENKATACHALIAH, CT., A.M. AHMADI AND
                            B.P. JEEVAN REDDY, JJ.]

          Constitution of Indict-Article 22fr-Territorial jurisdiction based on
    cause of action wholly or in part-Held, jurisdiction must be decided on facts
C   pleaded in the Petition, but facts must form integral part of course of action.

           Code of Civil procedure, 1908-Section 21-Held, cannot be invoked
    in favour of a party who deliberately invokes the jurisdiction of a court which
    has no jurisdiction whatsoever, for ulterior motives.

D         Practice and procedure-Exemplary costs-Awarded against party who
    did not act bona fide.

           Engineers India Limited (EIL) acting as Consultants for the Oil and
    Natural Gas Commission (ONGC) Issued an advertisement dated 27th
E   June, 1991, in all leading newspapers of the country including those in
    circulation in West Bengal calling for tenders for setting up of a Kerosene
    Recovery Processing Unit at the Hazira Complex in Gujarat. The tenders
    were to be communicated to the EIL at New Delhi. All the bids were
    scrutinised by EIL at New Delhi and the final decision was taken by the
    Steering Committee on Junuary 27, 1993 alNew Delhi, pursuant whereto
F   it was decided to award the contract to M/s. GMMCO Ltd. Thereupon,
    NICCO, an unsuccessful tenderer having its registered office at Calcutta,
    filed a Writ Petition in the Calcutta High Court. In support of its plea that
    a part of the cause of action had arisen within the jurisdiction of the
    Calcutta High Court, NICCO averred that it had come to know of the
G   tender from the publication in the Times of India, which was 'issued and
    obtained• by it within the said jurisdiction, that it had submitted its tender
    from the registered office at Calcutta, that it had submitted its revised
    price bid from its registered office and that it had made various demands
    for justice from its registered office.

H         A Single Judge of the High Court entertained the Writ Petition and
                                      252
                          O.N.G.C. v. U.K. BASU                           253

disposed it of with a direction to consider the offer of NICCO and in the        A
event of it being found valid and lowest, that the same should be accepted.

      ONGC appealed to the Supreme Court by Special Leave. The Court
confined itself to the preliminary objection of ONGC that the Calcutta
High Court had no jurisdiction in the matter.
                                                                                 B
      Allowing the Appeal, this Court

      HELD : 1. On a plain reading of Article 226(1) and (2) it becomes
clear that a High Court can exercise the power to issue directions, orders
or writs for the enforcement of any of the fundamental rights conferred by       C
Part III of the Constitution or.for auy other purpose if the cause of action
wholly or in part, had arisen within the territories in relation to which it
exercises jurisdiction, notwithstanding that the seat of the Government or
authority or the residence of the person against whom the direction, order
or writ is issued is not within its territories. [258-E-F]
                                                                                 D
       2. It is well settled that the expression 'cause of action" means that
bundle of facts which the petitioner must prove, if traversed, to entitle him
to a judgment in his favour by the Court. Therefore, in determining the
objection oflack of territorial jurisdiction the Court must take all the facts
pleaded in support of the case of action into consideration, albeit without      E
embarking upon an enquiry as to the correctness or otherwise of the said
facts. The question whether a High Court has territorial jurisdiction to
entertain a writ petition must be answered on the basis of the avennent
made in the petition, the truth or otherwise whereof being immaterial. To
put it differently, the question of territorial jurisdiction must be decided
on the facts pleaded in the petition. [258-H & 259-C-D]                          F
      3. Merely because NICCO read the advertisement at Calcutta and
submitted the offer from Calcutta and made representations from Calcut-
ta, these would not constitute facts forming an integral part of the cause
of action. So also, the mere fact it sent Fax messages from Calcutta and         G
received a reply thereto at Calcutta would not constitute an integral part
of the cause of action. Thus even if the averments in the Writ Petition are
taken as true, it cannot be said that a part of the cause of action arose
within the jurisdiction of the Calcutta High Court. [253-F-G]

      4. While the spirit of Section 21 of the Code of Civil Procedure may       H
    254                    SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A   support the submission that the Supreme Court should, in the absence of
    proof of prejudice, refuse to interfere with the decision of the High Court
    unless it is found to be erroneous, the discretion conferred by the Section
    cannot be used in favour of a party which deliberately invokes the juris·
    diction of a Court which has no jurisdiction whatsoever, for ulterior
    motives. The object underlying the provision in Section 21 is not to
B
    encourage such litigants but to avoid harassment to litigants who had bona
    fide and in good faith commenced proceedings in a Court which is later
     found to be wanting in jurisdiction. In the instant case NICCO did not act
    bona fide in moving the Calcutta High Court. [266-A-B-C)

C           5. Notwithstanding the strong observations made by the Supreme
     Court in previous decisions, it is distressing that the Calcutta High Court
     persists in exercising jurisdiction even in cases where no part of the cause
     of action arose within its territorial jurisdiction. It is indeed a great pity
     that one of the premier High Courts of the country should appear to have
D    developed a tendency to assume jurisdiction on the sole ground that the
     petitioner before it resides in or carries on business from a registered
     office in the State of West Bengal. H an impression gains ground even in
     cases which fall outside the territorial jurisdiction of the Court it would
     be willing to exercise jurisdiction on the plea that some event, however,
     trivial and unconnected with the cause of action had occurred within the
E    jurisdiction of the said Court, litigants would seek to abuse the process by
                                                                                          )-
     carrying the cause before such members, giving rise to avoidable suspicion.
     That would lower the dignity of the institution and put the entire sptem
                                                                                      '
    ·to ridicule. [264-H; 265-A; B; 265-E; Fl

F          6. Since NICCO had not invoked the jurisdiction of the Calcutta
     High Court bona fide, this is a fit case for granting exemplary costs to
     ensure that such abuse of the court's jurisdiction does not take place in
     future. [266-FJ

           Chand Kaur v. Pratab Singh, ILR [1989) 16 Cal. 98, 102; State of
G    Rajasthan v. Swaika Properties, [1985) 3 SCC 217 andSubodh Kumar Gupta
     v. Shrikant Gupta, [1993) 4 SCC 1, relied on.

           Election Commission v. Venkata Subba Rao, [1953) SCR 1144 = AIR
     (1953) SC 210° and R. Beja/ v. Triveni Strncturals Ltd., [1987) Supp. SCC
IH 279, referred to.
                   O.N.G.C. v. U.K. BASU (AHMADI, J.) _                  255

        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1359 of A
1994.

     From the Judgment and Order dated 1(.12.1993 of the Calcutta High
Court in Matter No. 487 of 1993.

      Dipankar Gupta, Solicitor General, R. Sasi Prabhu and A. Jayaram          B
for the Appellant.

     Ashok H. Desai, G. Ramaswamy, C.S. Vaidyanathan, Pallav Shisodia,
A. Mitra, G. Joshi, A.K. Sil, G. Kandpal, J. Savla, Ms. Nina Gupta and
Vineet Kumar for the Respondents.                                               C

        The Judgment of the Court was delivered by

       AHMADI, J. The short question to which we propose to limit our-
selves in this appeal directed against the decision rendered by Shyamal
Kumar Sen, J. of the Calcutta High Court on December 17, 1993 in Writ           D
Petition No. 487 of 1993, is whether any part of the cause of action for
filing the petition had arisen within the jurisdiction of the said High Court
to entitle it to entertain, hear and decide the said petition? The factual
background in which the question of territorial jurisdiction arises may be
noticed briefly.
                                                                                E
      The Oil & Natural Gas Commission (ONGC), a Government of
India Undertaking, has a Gas Processing Plant at Hazira in the State of
Gujarat. Engineers India Limited (EIL) acting as Consultants for ONGC
issued an advertisement dated June 27, 1991 in the leading newspapers of
the country including those in circulation in West Bengal calling for tenders F
for setting up of a Kerosene Recovery Processing Unit at the Hazira
Complex in Gujarat. According to the said advertisement the tenders
containing offers were to be communicated to EIL at New Delhi. NICCO,
having its registered office in Calcutta, read and became aware of the
tender notice printed in the Times of India "circulated within the jurisdic- G
tion of the Calcutta High Court. The tenders were to be scrutinised by a
Tender Committee and the final decision was to be taken by a Steering
Committee at New Delhi presided over by the Chairman of QNGC.
NICCO, along with others, submitted their offer or bid in response to the
tender notice. All the bids were scrutinised by EIL, at New Delhi.
NICCO"s bid was rejected on the gronnd that it did not fulfil the requisite H
    256                  SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A   experience criteria stipulated in the terider. The recommendations made
    by the EIL were considered by the Tender Committee. The Tender Com-
    mittee, however, expressed the view that NICCO satisfied the experience
    criteria and they too should be called for the clarificatory meeting
    proposed to be held by EIL at New Delhi. The said meeting was held by
    the EIL with various bidders including NICCO sometime in July-August,
B   1992. After the said meeting EIL once again reiterated its earlier view that
    NICCO lacked the experience criteria. The Committee re-examined the
    view of EIL and agreed with the same some time in October, 1992. In view
    of the said development NJCCO was not recommended for short-listing by
    the Tender Committee. NICCO represented and their reperesentations
c   were considered by the EIL as well as the Tender Committee but they saw
    no reason to depart from their earlier view. The final decision was taken
    by the Steering Committee on January 27, 1993 at New Delhi, pursuant
    whereto it was decided to award the contract to M/s. CIMMCO, Ltd.
    Thereupon NICCO filed the aforesaid Writ Petition in the High Court of
D   Calcutta. Jn the said Writ Petition CIMMCO was not made a party. On
    the application of CIMMCO this Court directed that it be joined in the
    appeal as a co-respondent. NICCO prayed that ONGC be restrained from
    awarding the contract to any other party and if awarded to cancel the same.
    The High Court by its impugned order dated December 17, 1993 directed
    as under:
E
            "There will be an order directing the respondents to consider the
            offer of the petitioner along with the others and in the event the
            petitioner's offer is otherwise found to be valid and lowest and in
            the event petitioner otherwise complies with the formalities,
            petitioner's offer should be accepted by the respondent authorities.
F
            The writ petition is accordingly disposed of."

    All the parties to the Writ Petition were directed to act in accordance with
    the signed copy of the aforesaid operative part of the order. A detailed
G   judgment giving reasons for the aforesaid operative part of the order was
    later rendered on 4th February, 1994.

          Aggrieved by the Judgment & Order on the High Court in the
    aforesaid Writ Petition, ONGC moved this Court under Article 136 of the
    Constitution of India. This Court by its order dated January 31, 1994
H   granted an ad-interim order for maintenance of status quo. Thereafter on
                   O.N.G.C. v. U.K. BASU [AHMADI. J.[                  257

February 25, 1994 leave to appeal was granted and the status quo order       A
was continued. As stated earlier by the said order C!MMCO was im-
pleaded as party-respondent.

       At the hearing of this appeal we indicated to counsel that we would
like to confine ourselves to the preliminary objection of ONGC that the
High Court of Calcutta had no jurisdiction to entertain, hear and dispose B
of the Writ Petition in the manner it did as the averments in the Writ
Petition, even if assumed to be correct, did not disclose that even a part
of the cause of action for institution of the said Writ Petition had arisen
within the jurisdiction of the Calcutta High Court. The Writ Petitioners
averred in paragraph 43 of the Writ Petition that a part of the cause of C
action had arisen within the jurisdiction of the said High Court as pleaded
in paragraphs 5, 7, 18, 22 and 26 of the Writ Petition. They further averred
in the said paragraph that they were likely to suffer a loss at its registered
office within the jurisdiction of the Calcutta High Court if the contract was
not awarded to them. The averments in paragraphs 5, 7, 18, 22 and 26 in
a nutshell are as under :                                                      D

        Para 5. NICCO came to know of the tender from the publication
        in the Times of India 'issued and obtained' by NICCO within the
        said jurisdiction;

        Para 7. NICCO issued/submitted its tender on August 19, 1991         E
        from its registered office within the jurisdiction of the Calcutta
        High Court which was received by EIL at New Delhi;

        Para 18. NICCO submitted its revised price bid by letter dated
        December 3, 1992 issued from its registered office within the
                                                                              F
        aforesa~d jurisdiction;


        Para 22. By Communication dated December 4, 1992 issued from
        its registered office, NICCO made demands for justice to various
        authorities; and
                                                                             G
        Para 26. By letters addressed to different agencies including the
        Steering Committee of ONGC in January/Feburary, 1993 from its
        registered office, NICCO made demands for justice.

These are the averments in the body of the Writ Petition on the basis
whereof NICCO contended that a part of the cause of action had arisen H
    258                   SUPREME COURT REPORTS [1994J'SUPP. 1 S.C.R.

A   within the jurisdiction of the Calcutta High Court. It may also be men-
    tioned that in course of submissions before this Court counsel for NICCO
    referred to a fax message dated January 15, 1993 sent in answer to
    NICCO's fax message dated January 11, 1993 on the basis of which he
    contended that a part of the cause of action arose within the jurisdiction
    of the Calcutta High Court where the message was received. Although in
B   the paragraphs disclosing the cause of action for the institution of the Writ
    Petition reference is not m£de to this fax message, we propose to deal with
    it to avoid technicalities. The question which, therefore, arises for con-
    sideration is whether the aforesaid averments made in the body of the Writ
    Petition taken individually or collectively, assuming them to be true, con-
c   stitute a cause of action for the maintenance of the Writ Petition in the
    High Court of Calcutta?

           Clause (1) of Article 226 begins with a non-obstallte clause - not-
    withstanding anything in Article 32 - and provides that every High Court
    shall have power 'throughout the territorial in relation to which it exercises
D   jurisdiction', to issue to any person or authority, including in appropriate
    cases, any Government, 'within those territories' directions, orders or writs,
    for the enforcement of any of the rights conferred by Part III or for any
    other purpose. Under Clause (2) of Article 226 the High court may
    exercise its power conferred by clause (1) if the cause of ~ction, wholly or
E   in part, had arisen within the territory over which it exercises jurisdiction,
    qotwithstanding that the seat of such Government or authority or the
    residence of such person is not within those territories. On a plain reading
    of the aforesaid two clauses of Article 226 of the Constitution it becomes
    clear that a High Court can exercise the power to issue directions, orders
    or writs for the enforcement of any of the fundamental rights conferred by
F   Part III of the constitution or for any other purpose if the cause of action,
    wholly or in part, had arisen within the the territories in relation to which
    it exercises jurisdiction, notwithstanding that the seat of the Government
    or authority or the residence of the person ~gainst whom the direction,
  order or writ is issued is not within the said territories. In order to confer
  jurisdiction on the High Court of Calcutta, NICCO must show that at least
G a part of the cause of action had arisen within the territorial jurisdiction
  of that Court. That is at best its case in the writ petition.

          It is well settled that the expression 'cause of action' means that
    bundle of facts which the petitioner must prove, if traversed, to entitle him
H   to a judgment in his favour by the Court. In Chand Kaur v. Pratap Singh,
                  O.N.G.C. v. U.K. BASU [AHMADI,J.)                       259

1889 (16) Calcutta 98 at 10, Lord Watson said :                                  A
        "......... the cause of action has no relation whatever to the defence
        which may be set up by the Defendant, nor does it depend upon
        the character of the relief prayed for by the Plaintiff. It refers
        entirely to the grounds set forth in the plaint as the cause of action
        or in other words to the media upon which the plaintiff asks the         B
        Court to arrive at a conclusion in his favour. 11

Therefore, in determining the objection of lack of territorial jurisdiction
the court must take all the facts pleaded in support of the cause of action
into consideration albeit without embarking upon an enquiry as to the C
correctness or otherwise of the said facts. In other words the question
whether a High Court has territorial jurisdiction to entertain a Writ Peti-
tion must be answered on the basis of the averments made in the petition,
the truth or otherwise whereof being immaterial. To put it differently, the
question of territorial jurisdiction must be decided on the the facts pleaded
in the petition. Therefore, the question whether in the instant case the D
Calcutta High Court had jurisdiction to entertain and decide the Writ
Petition in question even on the facts alleged must depend upon whether
the averments m:ade in paragraphs 5, 7, 18, 22, 26 and 43 are sufficient in
law to establish that a part of the cause of action had arisen within the
jurisdiction of the Calcutta High Court.                                      E

      The learned counsel for ONGC contended that on these averments
no part of the cause of action had arisen within the jurisdiction of the
Calcutta High Court and hence the writ petition filed by NICCO and
another was not entertainable by that High Court. He submitted that
ONGC had decided to set up a Kerosene Recovery Processing Unit at F
Hazira in Gujarat. EIL was appointed by ONGC as its consultant. In that
capacity, EIL issued the advertisement from New Delhi calling for tenders
and this advertisement was printed and published in all the leading
newspapers of the country including the Times of India in circulation in
West Bengal. The tenders or bids were to be forwarded to EIL at New G
Delhi. EIL was expected to scrutinise the tenders and make its recommen-
dations to the Tender Committee constituted by ONGC. The final decision
was, however, to be taken by the Steering Committee at. New Delhi
presided over by the Chairman, ONGC. Accordingly, the tender of NICCO
was examined by EIL at New Delhi and it recommended its rejection on
the ground that NICCO did not satisfy the experience criteria requisite for H
    260                    SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A   the grant of contract. On the first occassion, the Tender ComrniUee did
  not agree with the said recommendation and directed the EIL to call
  NICCO at the clarificatory meeting proposed to be held in New Delhi. Jn
  obedience to the said direction, EIL invited NICCO along with the other
  bidders, but once again recommended its rejection on the ground that it
  did not satisfy the experience criteria. The Tender Committee which met
B in New Delhi reviewed its earlier decision and accepted the recommenda-
  tion of EIL which was also accepted by the Steering Committee at New
  Delhi on January 27, 1993. It was at this point of time that the decision to
  award the contract to CIMMCO was taken at New Delhi. Counsel for
  ONGC, therefore, contended that all these events took place outside the
C jurisdiction of the Calcutta High Court and merely because NICCO had
  read the advertisement in the Times of India in circulation in West Bengal
  and bad forwarded its lender from its registered office in Calcutta and
  followed it up by a revised offer, it cannot be said that any part of the cause
  of action had arisen within the jurisdiction of the Calcutta High Court for
  the simple reason that if these facts were to give a cause of action, every
D tenderer would sue ONGC in the local court from where he forwarded the
  tender and that would make ONGC run about from court to court all over
  the country. Counsel further submitted that nor can the fact that NICCO
  sent representations including fax messages from its registered office to
  ONGC at Calcutta to which ONGC showed the courtesy of replying confer
  jurisdiCtion. In support of this contention, he placed strong reliance on the
E decision in State of Rajasthan v. Swaika Properties, (1985] 3 sec 217.
  Learned counsel for CIMMO buttressed these submissions by inviting our
  attention to certain other decisions of this Court, namely, Election Com-
  mission, India v. Saka Venkata Subba Rao, 1953 SCR 1144, R. Beja/ v.
  Triveni Structurals Limited, [1987] Supp. SCC 279, Subodh Kumar Gupta v.
  Shrikant Gupta & Others, (1993] 4 SCC 1 and certain decisions of different
F
  High Courts. On the other hand, counsel for NICCO, while reiterating that
  the averments made in paragraphs 5, 7, 18, 22, and 26 constituted· an
  integral part of the cause of action, submitted that by the introduction of
  clause (2). in Article 226 of the Constitution, the legislature intended to
  widen the High Court's jurisdiction and thereby extend its beneficient
G reach even to cases where a part of the cause of action arose within its
  territorial jurisdiction. In the alternative, he submitted that even if this
  court comes to the conclusion that the High Court of Calcutta lacked
  jurisdiction, this Court sitting in appeal should not interfere with the verdict
   of the High Court as ONGC had neither alleged nor showed that there
  had been a failure of justice. In this connection, he placed reliance on the
H
                   O.N.G.C. v. U.K. BASU [AHMADI,J.]                    261

spirit of section 21 of the Code Civil Procedure. He, therefore, contended A
that this Court should examine the appeal on merits and not confine itself
to the question of territorial jurisdiction. Lastly, he submitted that on
merits NICCO had made out a good case for the grant of relief sought by
it.

       From the facts pleaded in the writ petition, it is clear that NICCO
                                                                              B
invoked the jurisdiction of the Calcutta High Court on the plea that a part
of the cause of action had arisen within its territorial jurisdiction. Accord-
ing to NICCO, it became aware of the contract proposed to be given by
ONGC on reading the advertisement which appeared in the Times of India
at Calcutta. In response thereto, it submitted its bid or tender from its
Calcutta office and revised the rates subsequently. When it learnt that it
                                                                              c
was considered ineligible it sent representations, including fax messages, to
EIL. ONGC, etc. at New Delhi, demanding justice. As stated earlier, the
Steering Committee finally rejected the offer of NICCO and awarded the
contract to CIMMO at New Delhi on January 27, 1993. Therefore, broadly
speaking, NICCO claims that a part of the cause of action arose within the D
jurisdiction of the Calcutta High Court because it became aware of the
advertisement in Calcutta, it submitted its bid or tender from Calcutta and
made representations demanding justice from Calcutta on learning about
the rejection of its offer. The advertisement itself mentioned that the
tenders should be submitted to EIL at New Delhi; that those would be
scrutinised at New Delhi and that a final decision whether or not to award E
the contract to the tenderer would be taken at New Delhi. Of course, the
execution of the contract work was to be carried out at Hazira in Gujarat.
Therefore, merely because it read the advertisement at Calcutta and sub-
mitted the offer from Calcutta and made representations from Calcutta
would not, in our opinion, constitute facts forming an integral part of the p
cause of action. So also the mere fact that it sent fax massages from
Calcutta and received a reply thereto at Calcutta would not constitute an
integral part of the cause of action. Besides the fax message of January 15,
1993, can not be construed as conveying rejection of the offer as that fact
occurred on January 27, 1993. We are, therefore, of the opinion that even
if the averments in the writ petition are taken as true, it cannot be said that G
a part of the cause of action arose within the jurisdiction of the Calcutta
High court.


      In Subodh Kumar Gupta's case (supra), the facts revealed that he
had instituted a suit in the Court of Senior Judge, Chandigarh, for dissolu- H
    262                   SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A tion of the firm in which he as partner had 20% share along with his father,
    brothers and one another. The head office of the firm was situate in
    Bombay where the firm was registered with the Registrar of Firms. Its
    factory was situate at Mandsaur where the father Rajaram Gupta lived with
    his sons and attended to the partnership business. The plaintiff - petitioner
    was also residing in Mandsaur till 1974 when he shifted to Chandigarh. He,
B   however, visited Mandsaur often in connection with the business of the
    firm. The case pleaded by him was that after he shifted to Chandigarh, he
    used to call for and received the statements of accounts of the business
    carried on at Mandsaur. He had got letter heads printed indicating that
    the branch office of the firm was at Chandigarh and he claimed that he
C   also booked orders for the firm at Chandigarh. It was also pleaded that
    certain disputes had arisen regarding the management of the partnership
    firm and in regard to the correctness of the accounts which were discussed
    at the meeting in Bhilai at the end whereof an agreement Wa5 drawn up
    for the dissolution of the partnership and for distribution of assets amongst
D   the partners to which the plaintiff was a signatory. The suit filed in the
    Chandigarh Court was resisted on the preliminary contention tnat no part
    of the cause of action had arisen at Chandigarh and therefore that court
    had no jurisdiction. The Chandigarh Court upheld the contention and this
    court affirmed .the said view. While dealing with the averment that the
    plaintiff was carrying on business of the firm from Chandigarh where the
E   branch office of the firm was situate, this Court held that there is no
    averment that the branch at Chandigarh was started with the consent of
    the other partners an intimation thereof was given to the Registrar of Firms
    as required by Section 61 of the Partnership Act; the mere printing of
    stationery was neither here nor there and therefore no part of the cause of
F   action could be said to have arisen within the territorial jurisdiction of the
    Chandigarh Court.

          The submission of the learned counsel for NICCO was that clause
    (2) was introduced in Article 226 of the Constitution to enlarge the scope
    of the writ jurisdiction of the High Court. The Supreme Court in Saka
G   Venkata Subba Rao's case (supra) while interpreting Article 226 as it then
    stood observed as under :

             "The rule that cause of action attracts jurisdiction in suits is based
             on statutory enactment and cannot apply to writs issuable under
H            Article 226 which makes no reference to any cause of action or
                   O.N.G.C. v. U.K. BASU [AHMADI, J.]                      263

        where it arises but insists on the presence of the person or authority A
        "within the territories" in relation to which the High Court exercises
        jurisdiction."

Thus, this Court ruled that in the absence of a specific provision in Article
226 on the lines .of the Code of Civil Procedure, the High Court cannot           B
exercise jurisdiction on the plea that the whole or part of the cause of
action had arisen within its jurisdiction. This view was followed in sub-
sequent cases. The consequence was that only the High Court of Punjab
could exercise jurisdiction under Article 226 of the Constitution against the
Union of India and other bodies located in Delhi. To remedy this situation,
clause (lA) was inserted by the 15th Amendment Act, 1963 to confer on             C
the High Court's jurisdiction to entertain a petition under Article 226
against the Union of India or any other body or authority located in Delhi
if the cause of action has arisen, wholly or in part, within its jurisdiction.
Clause (lA) was later renumbered as clause (2) of Article 226. Therefore,
the learned Counsel for NICCO is right that this amendment was intro-             D
duced to supersede the view taken by this Court in the aforesaid case. But
as stated earlier, on a plain reading of clause (2) of Article 226, it is clear
that the power conferred by clause ( 1) can be exercised by the Higb Court
provided the cause of action, wholly or in part had arisen within its
territorial limits.
                                                                                  E
      Strong reliance was placed on the decision of this Court in the State
of Rajasthan case (supra) by the learned counsel for ONGC. The facts of
that case reveal that the respondent-company having its registered office
at Calcutta owned a large chunk of land on the outskirts of Jaipur. The
Special Officer, Town Planning Department, Jaipur, at the instance of the F
Improvement Trust, Jaipur issued a notice intimating that the State
Government proposed to acquire a large part of the said parcel of land for
a public purpose, namely, implementation of a development scheme. The
said notice was duly served on the respondents at their Calcutta office. The
respondents thereafter participated in the inquiry and contended that they G
proposed to use the land for constructing a three star hotel. The Special
Officer, however, felt that the alleged need of the respondents was just a
pretence and the land was not needed bona fide by them, b1:1t the real
object was to get the land released from acquisition. Consequently, the
requisite final notification for the acquisition of the land was issued:
Thereafter an attempt was made to seek exemption in regard to the H
    264                  SUPREME COURT REPORTS (1994] SUPP.1 S.C.R.

A notified land under Section 20 of the Urban Lands {Ceiling and Regula-
  tion) Act, 1976, but in vain. Having failed to get the land released from
  acquisition, the respondents filed a writ petition under Article 226 of the
  Constitution in the High Court of Calcutta challenging the acquisition
  wherein rule nisi issued and an ad-interim ex-parte prohibitory order was
  granted restraining talting of possession of the acquired land, etc. The
B question which. arose for consideration in the backdrop of the said facts
  was whether the High Court of Calcutta had jurisdiction to entertain the
  petition and grant ex-parte ad-interim relief. This Court observed that
  upon the said facts, the cause of action neither wholly nor in part arose
  within the territorial limits of the Calcutta High Court and therefore the
C learned Judge had no 'jurisdiction to issue Rule nisi or to grant the ad-in-
  terim ex-parte prohibitory order. After extracting the definition of the
  expression 'cause of action' from Mulla's Code of Civil Procedure, this
  Court observed as under :

            "The mere service of notice under Section 52(2) of the Act on the
D
            respondents at their registered office at 18-B, Broabourne Road,
            Calcutta i.e., within the territorial limits of the State of West
            Bengal, could not give rise to cause of action within that territory
            unless the service of such notice was an integral part of the cause
            of action. The entire cause of action culminating in the acquisition
E           of the land under Section 52{1) of the Act arose within the State
            of Rajasthan i.e. within the territorial jurisdiction of the Rajasthan
            High Court at the Jaipur Bench."

            Pointing out that after the issuance of the notification by the State
F   Government under Section 52(1) of the Act, the .notified land became
    vested in the State Government free from all encumbrances and hence it
    was not necessary for the respondents to plead the service of notice under
    Section 52(2) for the grant of an appropriate direction or order under
    Article 226 for quashing the notification acquiring the land. This Court,
    therefore, held that no part of the cause of action arose within the juris-
G   diction of the Calcutta High Court. This Court deeply regretted and
    deprecated the practice prevalent in the High Court of exercising jurisdic-
    tion and passing interlocutory orders in matters where it lacked territorial
    jurisdiction. Notwithstanding the strong observations made by this Court
    in the aforesaid decision and in the earlier decisions referred to therein,
H   we are distressed that the High Court of Calcutta persists in exercising
                   O.N.G.C. v. U.K. BASU [AHMADI, J.)                    265

jurisdiction even in cases where no part of the cause of action arose within A
its territorial jurisdiction. It is indeed a great pity that one of the premier
High Courts of the country should appear to have developed a tendency
to assume jurisdiction on the sole ground that the petitioner before it
resides in or carries on business from a registered office in the State of
West Bengal. We feel all the more pained that notwithstanding the obser-
                                                                                B
vations of this Court made time and again, some of the learned Jndges
continue to betray that tendency. Only recently while disposing of appeals
arising out of SLP Nos. 10065-66 of 1993, Aligarh Muslim University & Anr.
v. Mis. Vinny Engineering Enterprises (P) Ltd. & Anr., this Court observed:

        "We are suprised, not a little, that the High Court of Calcutta          C
        should have exercised jurisdiction in a case where it had absolutely
        no jurisdiction.11




In that case, the contract in question was executed at Aligarh, the coru;truc-
tion work was to be carried out at Aligarh, the contracts provided that in       D
the event of dispute the Aligarh Court alone will have jurisdiction, the
Arbitrator was appointed at Aligarh and was to function at Aligarh and
yet merely because the respondent was a Calcutta based firm, it instituted
proceedings in the Calcutta High Court and the High Court exercised
jurisdiction where it had none whatsoever. It must be remembered that the
image and prestige of a Court depends on how the members of that                 E
institution conduct themselves. If an impression gains gronnd that even in
cases which fall outside the territorial jurisdiction of the Court, certain
members of the Court would be willing to exercise jurisdiction on the plea
that some event, however trivial and unconnected with the cause of action
had occurred within the jurisdiction of the said Court, litigants would seek     F
to abuse the process by carrying the cause before such members giving rise
to avoidable suspicion. That would lower the dignity of the institution and
pnt the entire system to ridicule. We are greatly pained to say so but if we
do not strongly deprecate the growing tendency we will, we are afraid, be
failing in our duty to the institution and the system of administration of
justice. We do hope that we will not have another occasion to deal with          G
such a situation.

      The submission of the learned counsel for NI CCO based on Section
21 of the Code of Civil Procedure that even if this Court comes to the
conclusion that the High Court of Calcutta had no jurisdiction, this Court H
    266                   SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A should, in the absence of proof of prejudice, refuse to interfere with the
    decision of the High Court unless it is otherwise found to be erroneous.
    While the spirit of Section 21 of the Code of Civil Procedure mry support
    such a submission, we are afraid, the discretion cannot be used in favour
    of a party which deliberately invokes the jurisdiction of a Court which has
    no jurisdiction whatsoever for ulterior motives. That would.only encourage
B   such type of litigation. The object underlying the provision in Section 21
    is not to encourage such litigants but to avoid harassment to litigants who
    had bona fide and in good faith commenced proceedings in a court which
    is later found to be wanting in jurisdiction. In the instant case, we are
    convinced, beyond doubt, that NI CCO did not act bona fide in moving the
c   Calcutta High Court and, therefore, the submission based on section 21
    must fail

           Before we part we must clarify that we have confined ourselves to
    deciding whether on the averments made in the petition any part of the
    cause of action is shown to have arisen within the jurisdiction of the
D   Calcutta High Court. Even if we had come to the conclusion that the
    averments disclosed· that a part of the cause of action had arisen within the
    jurisdiction of the said court and therefore the petition could be enter-
    tained by that Court, it would still have been open for the opposite party
    to dispute the said averments and if the opposite party were to succeed
E   in showing that the averments were not true and correct, the petition,
    though entertained, would fail for want of jurisdiction.

           In the result, we allow this appeal, set aside the order of the High
    Court and direct that the writ petition will stand disposed of for want of
    jurisdiction. Since we are satisfied that NICCO had not invoked the juris-
F   diction of the Calcutta High Court bona fide, we think that this is a fit case
    for granting exemplary costs to ensure that such abuse of the court's
    jurisdiction does not take place in future. We, therefore, direct NICCO to
    pay Rs. 50,000 by way of costs.

    R.R.                                                         Appeal allowed.