United India Ins. Co. Ltd. v. Associated Transport Corporation Pvt. Ltd. & Anr. reported in MANU/KE/0008/1988 : AIR 1988 Kerala 36 was relied upon to contend that printed words in a consignment note subjecting to jurisdiction of particular Court when signed by only one party, in the absence of indicating any agreement between the parties to confer exclusive jurisdiction to a particular Court, printed words cannot oust jurisdiction of other Courts other than specified.
In order to understand whether a particular Court has jurisdiction or not, one has to see whether cause of action has arisen for the claim of the petitioner in this Court. The word 'cause of action' for all intent and purport must be understood as envisaged under Section 20(c) C.P.C. This is a well-settled principle. Cause of action is nothing but entire bundle of facts pleaded and the material and relevant facts alone constitute a cause of action. The facts must be relevant, integral and material so as to constitute cause of action. The cause of action need not arise always at one place. Depending upon facts and circumstances it can arise wholly or in part within the jurisdiction of one or several Courts. If cause of action has arisen at more than one place, definitely litigant will have the choice to institute proceedings at either of the places. So far as issuance of appropriate writ or direction, cause of action would refer to the ground or the basis pleaded by the petitioner. It is not necessary that respondents must be within the Court's jurisdiction where writ petition is instituted. If part of cause of action arises within the territorial limits of a Court, that Court can entertain action under Article 226(2) of the Constitution. It is also relevant to mention that the argument of lack of jurisdiction to entertain the matter is based on printed terms in the sale order or consignment note. There is nothing on record to show there was agreement between the parties to confer exclusive jurisdiction to a particular Court. In the absence of such material, printed words cannot oust jurisdiction of High Court and Supreme Court. Apparently it refers to Civil Court jurisdiction at Dhanbad and writ jurisdiction of High Court cannot be excluded. When the impugned order or action is personal, in the sense that it affects writ petitioner, then the situs of cause of action depend upon the relief claimed and would arise where the orders become effective or the action effected.
IN THE HIGH COURT OF CALCUTTA
APOT 421 of 2013, GA 2645 OF 2013 and W.P. No. 71 of 2010
Decided On: 10.04.2015
Appellants: Bharat Coking Coal Ltd.
Respondent: Auroma Coke Ltd. and Ors.
Respondent: Auroma Coke Ltd. and Ors.
Hon'ble Judges/Coram:Dr. Manjula Chellur, C.J. and Arijit Banerjee, J.
Citation;AIR 2016(NOC)302 Cal
1. The present appellant herein was the 4th respondent before learned Single Judge in W.P. No. 71 of 2010. It would be just and proper to narrate certain facts in order to understand the background in which the appeal is presented. The respondent No. 1 before us was the writ petitioner and the 2nd respondent before us is one of the Directors of the 1st respondent. These two writ petitioners approached learned Single Judge challenging the demand of Rs. 56,49,836.03 raised by the appellant herein contending that the enhanced rate of washery charges for coking coal at Rs. 1,670/- per metric tonne as against Rs. 540/- per metric tonne with retrospective effect was arbitrary, unjustifiable and not in accordance with any of the agreed terms. Similarly, increased charges towards selective road dispatches was the subject matter of challenge in the writ petition.
2. Admittedly, the writ petitioner is a public limited company having its registered office at Calcutta. After nationalization of coal mines in the year 1973, private sector was not allowed to set up coal washeries. Coal India Ltd. (for short referred to as 'CIL') is the apex company which decides all policy matters on behalf of the subsidiary coal companies. The appellant Bharat Coking Coal Ltd. (for short referred to as 'BCCL') is one of such subsidiary of CIL and is also a Government company. The appellant is the only source of raw coking coal from where the writ petitioners and similarly placed industries are getting supply of raw material.
3. After nationalization of coal mines, in order to meet the increase demand of low content ash coal by the steel plants, power houses and other industrial consumers, the Coal Mines (Nationalization) Act of 1973 came to be amended by Coal Mines (Nationalization) Amendment Act of 1993. This led to participation of private sector in coal mining as it was encouraged by the Government owing to heavy infrastructural investment required for establishing a washery. This was inevitable as coal mined in India has high content of ash. Unless such ash content was reduced in a coal washery, there was no demand for the same. The low ash content of coking coal required by the industries compelled to import same from other countries which affected the foreign exchange reserve of the country. Therefore, this amendment of 1993 was brought.
4. This prompted several persons to install washeries and writ petitioner company claims to be one of them.
5. It is not in dispute that CIL and Ministry of Coal accorded a long term linkage of 2.4 lakhs metric tonne per annum of coking coal including 60,000 metric tonne of washery/direct prime coking coal to the respondents company. However, this was subject to condition that respondent company must enter into fuel supply agreement (for short FSA) with concerned coal companies. This led to filing of W.P. No. 363 of 2002 by the present writ petitioners and the same was allowed by judgment dated 9.10.2007, wherein learned Single Judge opined at that stage that it was not necessary to direct the respondents to enter into a fuel supply agreement with the private respondents herein and further held that long term linkage granted in favour of the respondent company by the Standing Linkage Committee would continue to remain operative. It was further ordered that they would continue to receive supply of coking coal as specified in the linkage/linkages. This arrangement was to continue so long as this appellant and other respondent authorities herein were not in a position to enter into FSA with the 1st respondent's company. Allocation of supply of coking coal was to be governed by the linkage and so far as the additional linkages were concerned, the respondent company was to be treated at par with others, if any, who were holding identical and similar linkages.
6. The appellants herein preferred an appeal against the said judgment dated 9.10.2007. While considering the stay application, the Division Bench disposed of the application and opined that during the pendency of the appeal, the writ petitioners will not insist on the supply of linkage coal from preferred sources but would be entitled to supply of coal in terms of linkage subject to availability and subject to the observation of the learned Single Judge to the effect that the respondent company shall be treated at par with similar linkage-holders. It is pertinent to mention that interim order was passed on agreement of parties which would continue till the appeal is finally heard and decided on merits.
7. Apparently, FSA was entered into between the parties on 31.7.2008. The dispute with regard to the demand of amount made by the appellant is with regard to the sale of coking coal made to the respondent company by the appellants as per sale orders dated 10.3.2008, 28.3.2008 and 22.4.2008.
8. It was contended on behalf of the writ petitioners that till execution of FSA the writ petitioner was entitled to receive coking coal in terms of the orders of this Court.
9. When new coal sales policy came into effect from May 2008, though the policy was introduced in 2007, the CIL insisted execution of FSA as per the format supplied by CIL, the same was entered into under protest. It is pertinent to mention, the said issue is the subject matter of challenge before the Hon'ble Supreme Court. APO No. 333 of 2003 is also adjourned till the disposal of Special Leave Petition before the Apex Court.
10. So far as the enhancement of existed washery and other charges, the demand by several wireless messages said to have been sent to the respondent company. Ultimately, there was a decision to appropriate 56 lakhs and odd from the coal value deposit of the company deposited with the appellant. Further the respondent company was directed to deposit Rs. 56 lakhs and odd towards negative balance in the coal value deposit. According to the respondent company, the revision of charges with retrospective effect is not at all justifiable even in terms of Clause 7 of the sale orders.
11. As against this, appellant and others raised challenge regarding maintainability of the writ petition on the ground of lack of territorial jurisdiction by placing reliance in Clause 12 of the sale orders contending that all suits or proceeding relating to any disputes or claims arising out of or in the course of performance of contract shall be filed only in the appropriate Courts at Dhanbad and in no other Court. According to them, the sale order was issued at Dhanbad (Jharkhand). Coal price was deposited at Dhanbad, coal was supplied by Kasunda colliery from the State of Jharkhand. Demand notice was also issued by Area Sales Manager, Kasunda. Therefore, the writ petition was not maintainable. According to them, the writ petitioner company having accepted to pay washery charges and selective loading charges, the only challenge could be with regard to revision of such charges with retrospective effect.
12. So far as subsequent decision to reduce add on price from Rs. 1,670/- to Rs. 505/- in the Board of Directors meeting held on 3.01.2009, it was only to liquidate excess stock of linkage coking coal in order to address the huge stock of coal lying at different washeries/collieries. The coking coal being a prime coal is not sold to anyone else except SAIL and to some extent to washery owners like the respondent company who has its own washery to wash such coking coal. But as per linkage, appellant had to supply coking coal in favour of the writ petitioner. Therefore, the appellant has to realize the 'opportunity costs' as against BCCL's own washery. From 01.4.2008 instead of Rs. 541/- it was enhanced to Rs. 1,670/- and the selective loading charges was also enhanced from Rs. 150 to 165 so far as ROM and Steam Coal from Rs. 100 to 110. This was because of selection of good quality coal by picking, choicing and stacking with the assistance of men engaged by the respondent company. According to them, such enhancement towards washery charges and selective loading charges was not at all outside their authority and was within the terms of sale orders therefore, there was justification in their claim.
13. Learned Single Judge on appraisal of the entire material and submissions opined that this Court has jurisdiction to entertain the matter. So far as Clause 7 of sale orders opined that there cannot be unilateral change by one party as the parties to the contract had arrived at terms and conditions based on mutual rights and obligations. It was further held, the arbitrariness leads to action when obligations are changed retrospectively. Further opined that the charges demanded are not like excise duty or customs duty which could be added on to goods. The writ petitioner company was liable to pay charges for the coking coal which is used for the manufacture of finished product. Hence, the additional charges cannot be easily loaded to the goods. Learned Judge also opined that as per the averments in page 10 of the affidavit-in-opposition, sub-para 4(m), washery charges could be claimed and recovered only if they were not recovered. Therefore, the amount in question being adjusted or paid could not be recovered from petitioner's customers, hence, there was no justification in the demand of the appellant/respondent. Accordingly, the writ petition was allowed in part.
14. Mr. Saktinath Mukherjee, learned Senior Counsel arguing for the appellant contends that judgment of Justice Maharaj Sinha was wrongly relied upon since no linkage has been granted at Kolkata hence this High Court has no jurisdiction. According to learned Senior Counsel, linkage was not the subject matter before Justice Maharaj Sinha as the controversy was with regard to fuel supply agreement. He also refers to sale document to contend that all the disputes have to be resolved at Dhanbad in the State of Jharkhand which includes the High Court concerned. He also refers to Clause 7 of the sale order in order to contend that any future escalation in price, etc. may be imposed from time to time was clearly indicated. Since all the wireless messages, subject matter of challenge in the writ petition were issued at Dhanbad, this Court has no jurisdiction. According to him, in the light of second part of Clause 7 giving authority to the appellant to impose future escalation in prices, etc., there cannot be any challenge so far as authority to demand future escalation charges and the Court has to see only whether it is exercised arbitrarily. Therefore, the dispute has to be only with regard to exercise of power and not existence of power.
15. Mr. Mukherjee also submits that the linkage whatever was in favour of the respondent company was from Delhi and not at all at Calcutta. According to him, sale price was not concluded which is clearly indicated in the affidavit by explaining opportunity costs, therefore, sale price was ad hoc rather tentative. Hence, Clause 7 of the sale orders is binding upon the parties.
16. Mr. Saktinath Mukherjee, learned Senior Counsel places reliance on following decisions to substantiate his arguments.
17. Eastern Coalfields Ltd. v. Kalyan Banerjee reported in MANU/SC/7283/2008 : (2008) 3 SCC 456 is a case where a challenge was made to termination of service of company employee. Company has its Head Office in West Bengal. Services of its employees were terminated at a place in Jharkhand State by his appointing authority whose Office was located at the same place. The controversy raised in the writ petition filed before the High Court at Calcutta was since the entire cause of action arose within the State of Jharkhand, whether the High Court at Calcutta has jurisdiction to entertain the matter for the reason of having the Head Office of the Company in the State of West Bengal. Support was placed in N.N. Singh v. Coal India Ltd. reported in C.O. No. 5869(W) of 1994. Disagreeing with the same learned Single Judge refers the matter to the Division Bench. The Division Bench opined that the Calcutta High Court had no territorial jurisdiction to entertain the writ petition. Reason for such conclusion was, it had to be essentially decided on facts. Since there was no averment in the petition that the order of termination of employee passed at Badjana Colliery, Mugma area, Dhanbad had obtained any prior approval from the Head Office at Calcutta. Facts were entirely different from the referred cases, therefore, opined that Calcutta High Court had no territorial jurisdiction. When the matter reached Apex Court, Their Lordships opined that for the purpose of Article 226 of the Constitution so far as the word 'cause of action', for all intent and purport must be assigned the same meaning as envisaged under Section 20(c) C.P.C. It means a bundle of facts which are required to be proved. The entire bundle of facts pleaded, however, need not constitute a cause of action as what is necessary to be proved is material facts whereupon a writ petition can be allowed. The argument that came to be raised was Article 226(2) provides that if cause of action had arisen in more than one Court, any of the Courts where part of cause of action has arisen will have jurisdiction to entertain the writ petition. Existence of Head Office of the appellant company in the State of West Bengal would not by itself confer any jurisdiction upon the Calcutta High Court, particularly when the Head Office had nothing to do with the order of punishment passed against the respondent.
18. MANU/SC/1764/2009 : (2010) 1 SCC 135 is a case in Sonic Surgical v. National Insurance Company Ltd. In a claim petition seeking compensation in respect of fire accident of the godown at Ambala before Consumer Commission of Union Territory, Chandigarh, a challenge was made with regard to the jurisdiction of Consumer Commission at Chandigarh. When such claim was allowed by Consumer Commission of Union Territory, Their Lordships opined that the fire broke out in the godown of the appellant at Ambala, since expression 'cause of action' means bundle of facts which give rise to right or liability and that no part of cause of action arose at Chandigarh because the expression 'branch office' would mean branch office where cause of action has arisen but not each and every branch office of opposite party wherever it is situated. Since insurance policy taken at Ambala (Haryana) but claim for compensation made at Chandigarh contending that respondent had a branch at Chandigarh was held to be incorrect. It was held that the State Consumer Redressal Commission, Haryana alone will have jurisdiction to entertain the complaint as cause of action arose at Ambala.
19. In Alchemist Ltd. & Anr. v. State Bank of Sikkim & Ors. reported in MANU/SC/1290/2007 : (2007) 11 SCC 335, the facts that led the matter to the Supreme Court are as under:-
Government of State of Sikkim invited offers for strategic partnership with it in respondent bank functioning in the said State. The appellant company had its registered office at a place in Chandigarh, apparently, out of the State of Sikkim. The respondent bank accepted the offer of Government of State of Sikkim. Later Government of Sikkim rejected the said acceptance. The appellant company filed a writ petition in the High Court at Chandigarh. The said petition came to be dismissed on the ground of want of territorial jurisdiction. Plea raised by appellant company was that a part of cause of action arose within the territorial jurisdiction of High Court at Chandigarh because of the following reasons:-
i) The appellant was having its registered office at Chandigarh;
ii) Negotiations between both the parties occurred at Chandigarh;
iii) Part-performance of the contract also took place at Chandigarh due to deposit of certain sum by appellant in a bank at Chandigarh in pursuance of a demand made by the respondent bank in respect thereof; and
iv) Letters of acceptance of proposal and rejection thereof were received by appellant at Calcutta.
20. It was held that the facts pleaded by the appellant were not essential, integral or material facts so as to constitute a part of cause of action within the meaning of Article 226(2).
21. In the case of Om Prakash Srivastava v. Union of India reported in MANU/SC/3240/2006 : (2006) 6 SCC 207, the writ petition came to be filed by the appellant Omprakash Srivastava contending that he was being tried in several cases contrary to the extradition. Said writ petitioner came to India by way of extradition from Singapore. He was facing eight trials and he pleaded that they were in violation of provisions of Section 21 of the Extradition Act of 1962. High Court refused to consider the writ petition opining that though it may have jurisdiction to deal with the agreements of the appellant but this could be more effectively dealt with by the Allahabad High Court. Aggrieved by the same, an appeal came to be preferred before the Apex Court. Said appeal came to be disposed of opining that the question whether or not cause of action wholly or in part for filing a writ petition has arisen within the territorial limits of any High Court has to be decided in the light of the nature and character of the proceedings under Article 226 of the Constitution. In order to maintain a writ petition, a writ petitioner has to establish that a legal right claimed by him has prima facie either been infringed or is threatened to be infringed by the respondent within the territorial limits of the Court's jurisdiction and such infringement may take place by causing him actual injury or threat thereof. Ultimately, Apex Court held that the plain reading of two clauses of Article 226 of the Constitution give clear indication that the High Court can exercise power to issue direction, order or writs for the enforcement of any of the fundamental rights conferred by Part III of the Constitution or for any 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 persons against whom the direction, order or writ is issued is not within the said territories. Ultimately, the order of the Delhi High Court was set aside opining that Delhi High Court did not consider whether it had jurisdiction to deal with the writ or not and simply opined that Allahabad High Court can more effectively deal with the matter.
22. As against this, Mr. Samaraditya Pal, learned Senior Counsel arguing for respondent company contends that the money which is now adjusted towards enhanced (difference) amount of washery charges and selective coal dispatches was from the money kept in deposit towards the value of coal as advance. According to him, infraction of fact coupled with the right has to be considered in order to understand what exactly forms the bundle of facts in order to give rise to cause of action. Therefore, the genesis for claim is referable to linkage, therefore, the right again referable to the fact how cause of action arises in the present case. Judgment of Justice Sinha gives rise to such claim so far as the respondent company, therefore, the relevant and the most important material so far as facts are concerned which gives rise to right of the respondent company stems out of the judgment of Justice Sinha which was delivered at High Court at Calcutta. Therefore, substantial part of cause of action arose within the jurisdiction of this Court. In other words, he contends that right of linkage is one of the bundle of facts which was not stressed or denied, therefore, an admitted fact can be part of cause of action. He further contends the main seat of CIL is at Calcutta. He also refers to dictionary meaning of opportunity costs.
23. According to learned Senior Counsel Mr. Pal, the excess amount claimed by the appellant referable to Clause 7 and first part of Clause 7 is general guideline and the second part is with reference to future. According to him, power to exercise such claim by the appellant referable to wireless message which clearly indicate that the washing charges applicable for coking coal at the revised rate will be effective from April 1, 2008. Therefore, if the writ petitioner had paid cash already in terms of sale orders, appellant could not have unilaterally recovered the amount. It is only executive power and the same cannot be imposed. If it were to be a direct or indirect tax, it can be added on to the goods and increasing the cost with retrospective effect cannot be passed on to the goods as in the case of a direct or indirect tax. Therefore, there is not only non-application of mind but also arbitrariness in the claim of the appellant. The alleged claim is for the supply between March to May 2008. During the existence of linkage supplies, there cannot be a claim with retrospective effect and it is nothing but an unjust enrichment on the part of the appellant.
24. Mr. Samaraditya Pal, learned Senior Counsel arguing for the respondent has submitted the following decisions to substantiate the stand of writ petitioner/respondent company:-
25. In the case of Sri Nasiruddin v. State Transport Appellate Tribunal reported in MANU/SC/0026/1975 : (1975) 2 SCC 671, the question that arose before the Constitutional Bench of the Apex Court was extent of jurisdiction of Lucknow Bench of the Allahabad High Court vis-à-vis the High Court at Allahabad while considering the issue with regard to expression 'cause of action', Their Lordships opined that in an application under Article 226 it would be as the expression is 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 the jurisdiction though the original order was passed at a place outside the area in Oudh. If cause of action arose wholly or in part with in specified Oudh areas, then the Lucknow Bench will have the jurisdiction. If the cause of action arose in part within the specified areas in Oudh, it would be open to the litigant who is the dominus litis to have his forum convenience. Litigant has the right to go the Court where a part of cause of action arises. If the cause of action can be said to have arisen in part within specified areas in Oudh and part outside the specified Oudh areas, litigant will have the choice to institute proceedings either at Allahabad or at Lucknow. In such a situation, the Court will have to find out in each case whether the jurisdiction of the Court is rightly attracted by the alleged cause of action.
26. It was held in M/s. S.J. Coke Industries (P) Ltd. & Anr. v. Coal India Ltd. & Ors. reported in 1997 (1) CHN 67 that the legal import of the expression 'part of cause of action' is too well-established under Article 226(2) of the Constitution. Petitioner can invoke the jurisdiction of a High Court notwithstanding situs of the authority, provided a part of the cause of action arises within the jurisdiction of such Court so as to issue appropriate writ or direction. Cause of action means bundle of facts which the petitioner must prove. It has no relation whatsoever to the defence which may be set up by the defendant nor itself. It depends upon the character of the relief prayed for by the plaintiff. It refers entirely to the ground set forth in the plaint as the cause of action, or in other words the media upon which the plaintiff ask the Court to arrive at a conclusion in his favour. If lack of territorial jurisdiction is raised, the Court must take all the facts pleaded in support of cause of action albeit without embarking upon an enquiry as to the correctness or otherwise of the said facts. In other words, territorial jurisdiction of a High Court to entertain a writ petition must be based on the basis of the averments made in the writ petition, the truth or otherwise whereof being immaterial. It must refer to facts pleaded in the petition, therefore, facts alone are sufficient in law to establish that a part of cause of action had arisen within the jurisdiction of a High Court. In this case, Their Lordships opined that the entire claim of the writ petitioner was based on the letter dated 7.7.1994 to obtain 5,000 metric tonnes of coal from Hazaribagh area by reason of the changed linkage as approved by the Coal India Ltd. at Calcutta as the allotment order made by the Coal Controller, the Colliery Control Order, is by reason of non-observance of the directives of the confirmatory order of the Coal India Ltd. in terms of allotment order issued by the Coal Controller and it is on these factual elements, which comprised the foundation on which the writ petitioner claims the relief. Even if in its entirety, cause of action had not arisen at a place, the place where major part of the cause of action by reasons of the grievance as ventilated in the petition has arisen, such Court will have the jurisdiction to entertain the matter.
27. In MANU/WB/0323/1998 : 1998 (1) CLJ 425 Raichand & Co. Anr. v. Director General of Foreign Trade & Ors., it was held that if the respondents are all within the jurisdiction of the Court the writ application will lie under Article 226(1). Even if all the respondents are not within the jurisdiction of the Court, the presence of the concerned respondent against whom the primary relief is claimed within the jurisdiction of a Court would be sufficient to clothe such Court with territorial jurisdiction to entertain the writ petition. If none of the respondents are within the Court's jurisdiction, but if the cause of action wholly or in part arises within its territorial limits the writ application may be entertained under Article 226(2). In determining whether the cause of action has arisen within the jurisdiction of the Court, the nature of the impugned action or order is relevant. If the impugned order or action is personal in the sense that it affects the writ petitioner alone the situs of the cause of action will depend upon the relief claimed and would arise where the order becomes effective or the action effected. If the challenge is to the vires of the Central statute or notification or other statutory instrument which is applicable nationwide the place where the petitioner is affected by the implementation of the statute would have the jurisdiction to entertain the challenge. There is an overriding discretion of the Courts to refuse to entertain the writ application on the ground that another forum having jurisdiction was more convenient.
28. Constitutional validity of a statutory notification issued under a Central statute having application throughout the country if challenged in the writ petition, such case would therefore fall within the proposition proposed. Therefore, the Court where the petitioner has its place of business would have the jurisdiction to entertain the writ petition.
29. Ashoka Smokeless Coal India (P) Ltd. & Ors. v. Union of India & Ors. reported in MANU/SC/8741/2006 : (2007) 2 SCC 640 is relied upon to contend that the decision of linkage by CIL at Calcutta Office is the genesis which gave rise to judgment of learned Single Bench by J.M. Sinha and later in interim order by Division Bench, therefore, situs of the judgment that is judicial order which fructified the rights will be the cause of action. Therefore, Calcutta High Court has jurisdiction to entertain the writ petition as major part of the cause of action arose at Calcutta.
30. He also refers to the case of Om Prakash Srivastava v. Union of India & Anr. reported in MANU/SC/3240/2006 : (2006) 6 SCC 207 particularly paragraph Nos. 12, 13, 14 & 17(5) to contend that right of linkage being the genesis for the present controversy the place where the right of linkage got fortified by a judgment will be the place where litigation could be entertained.
31. Reliance is made to the case of Eastern Coalfields Ltd. v. Tetulia Coke Plant Pvt. Ltd. & Ors. reported in MANU/SC/0940/2011 : (2011) 14 SCC 624 particularly paragraph No. 12 with regard to plea of unjust enrichment. This is a case of refund of price recovered by the appellant in excess and not of any kind of payment of tax on duty. New plea as to unjust enrichment which was not earlier raised cannot be permitted to be raised at argument stage. Hence, the same was rejected by the Apex Court.
32. Reliance is placed in the case of M/s. P.R. Transport Agency v. Union of India reported in MANU/UP/2463/2005 : AIR 2006 Allahabad 23 particularly paragraph Nos. 19 & 20 in order to contend that ouster clauses in contract can oust territorial jurisdiction only of Civil Court and not of High Court under Article 226 when a part of cause of action has arisen within the jurisdiction of a particular High Court.
33. The case of Bharat Coking Coal Ltd. v. Champa Rani Sethi & Ors. reported in MANU/WB/0600/2007 : 2008(2) CHN 701 is relied upon to contend that if substantial part of the cause of action arose within the territorial jurisdiction of a High Court, such High Court cannot be said to be lacking territorial jurisdiction.
34. United India Ins. Co. Ltd. v. Associated Transport Corporation Pvt. Ltd. & Anr. reported in MANU/KE/0008/1988 : AIR 1988 Kerala 36 was relied upon to contend that printed words in a consignment note subjecting to jurisdiction of particular Court when signed by only one party, in the absence of indicating any agreement between the parties to confer exclusive jurisdiction to a particular Court, printed words cannot oust jurisdiction of other Courts other than specified.
35. In the case of B.N. Shankarappa v. Uthanur Srinivas & Ors. reported in MANU/SC/0160/1992 : (1992) 2 SCC 61 particularly paragraph 5 was relied upon to contend that the ultimate decision as to the place or location of Mandal headquarter of Government is to decide and conferment of discretion upon the concerned authority in that behalf must necessarily leave the choice to the discretion of the said authority and it would not be proper for the Courts to interfere with the discretion so exercised unless it is exercised in an arbitrary or whimsical manner without proper application of mind or for ulterior or mala fide purpose. This was with regard to decision of the Deputy Commissioner to exercise power under Section 4(1) of the Act, i.e., Karnataka Zilla Parishads, Taluk Panchayat Samithys, Mandal Panchayats and Nyaya Panchayats Act, 1983 read with Section 14 of the Karnataka General Clauses Act to meet the situation.
36. The claim in issue is referable to linkage or linkages. In order to understand what exactly gave rise to the claim of the appellants, one has to definitely refer to the judgment of Justice Maharaj Sinha dated 9.10.2007. It is relevant to mention that in the said litigation also though jurisdiction of this Court for initiation of proceedings was raised, subsequently neither CIL nor its subsidiary BCCL questioned the jurisdiction of this Court to decide the controversy. The controversy was with regard to validity of the long term linkage or linkages granted in favour of this very writ petitioner company by the standing linkage committee of the Ministry of Steel who did not question the same for about 8 years from the date of grant of linkage having acted upon it throughout. Therefore, learned Judge opined that sheer conduct of both authorities (CIL and BCCL) estops them from raising the question of validity of the said long term of linkage or linkages as they purported to do or to have done in their respective letters which were in question. Therefore, learned Judge opined that it was not necessary to decide the question raised on behalf of the BCCL for the purpose of disposal of said writ petition which is quoted below:-
"In view of the above, I do not think it necessary to decide the questions raised on behalf of BCCL for the purpose of disposal of the writ petition, namely (1) whether the writ petitioner is entitled to a mandatory order "directing CIL to ensure BCCL to enter into a fuel supply agreement, (2) "whether the writ petitioner should be treated as a Core Sector Industry for the purpose of allocation and delivery of coking coal on priority basis" and (3) whether a mandatory order should be made "directing CIL to ensure that BCCL do supply 17,850 M.T. per month of coking coal in terms of direction made by the Ministry of Steel vide letters dated 20 October 2000 and 28 December 2001". (Annexure-'J' and Annexure-'Z' to the writ petition appearing at pages 52 & 73 thereof, respectively)"
37. In the light of above factual situation, His Lordship opined that both CIL and its subsidiary BCCL if felt difficulty to enter into FSA immediately or in future with the writ petitioner therein, since FSA was not directed to be made at that time, the long term linkage granted in favour of the petitioner by the standing linkage committee of the Ministry of Steel etc. would continue to remain operative and the writ petitioner company would receive supply of coking coal as specified in the linkage or linkages.
38. The argument of learned Senior Counsel for appellant is, the earlier litigation referred to above was with regard to FSA and was not with regard to linkage or linkages cannot be accepted. Though execution of FSA was one of the issues cropped up for consideration, so far as supply of coal on the basis of linkage or linkages already granted in favour of the respondents company herein was the positive direction by learned Single Judge which was subsequently confirmed as per interim order in the appeal filed by the appellant herein.
39. Then coming to the argument of learned Senior Counsel for the appellant regarding lack of territorial jurisdiction of this Court as no cause of action arose within the jurisdiction of this Court coupled with Clause 12 of the sale orders is to the effect that in the light of specific indication that Courts at Dhanbad alone and no other Courts shall decide any dispute or claims arising out of or in the course of performance of the contracts, we have gone through the said clause. Apparently, the petitioner company has invoked writ jurisdiction of this Court. Dhanbad is situated in the State of Jharkhand. In order to understand whether a particular Court has jurisdiction or not, one has to see whether cause of action has arisen for the claim of the petitioner in this Court. The word 'cause of action' for all intent and purport must be understood as envisaged under Section 20(c) C.P.C. This is a well-settled principle. Cause of action is nothing but entire bundle of facts pleaded and the material and relevant facts alone constitute a cause of action. The facts must be relevant, integral and material so as to constitute cause of action. The cause of action need not arise always at one place. Depending upon facts and circumstances it can arise wholly or in part within the jurisdiction of one or several Courts. If cause of action has arisen at more than one place, definitely litigant will have the choice to institute proceedings at either of the places. So far as issuance of appropriate writ or direction, cause of action would refer to the ground or the basis pleaded by the petitioner. It is not necessary that respondents must be within the Court's jurisdiction where writ petition is instituted. If part of cause of action arises within the territorial limits of a Court, that Court can entertain action under Article 226(2) of the Constitution. It is also relevant to mention that the argument of lack of jurisdiction to entertain the matter is based on printed terms in the sale order or consignment note. There is nothing on record to show there was agreement between the parties to confer exclusive jurisdiction to a particular Court. In the absence of such material, printed words cannot oust jurisdiction of High Court and Supreme Court. Apparently it refers to Civil Court jurisdiction at Dhanbad and writ jurisdiction of High Court cannot be excluded. When the impugned order or action is personal, in the sense that it affects writ petitioner, then the situs of cause of action depend upon the relief claimed and would arise where the orders become effective or the action effected.
40. In the present case, on earlier occasion such lack of jurisdiction though raised was never seriously prosecuted. Judgment by Justice Maharaj Sinha forms basis for the supply of coal based on linkage or linkages. Integral part of cause of action accrued within the territory of this Court. Would this clothe this Court with jurisdiction to entertain the matter? So far as bundle of facts constituting cause of action in this litigation, definitely a relevant part of cause of action for the writ petitioner company to approach this Court is referable to judgment dated 9.10.2007 by this Court. Apparently, the FSA came to be entered into on 31.7.2008 subsequent to judgment dated 9.10.2007. In the light of the fact that infraction of fact coupled with the right which was genesis for the claim herein, based on the factual situation, this Court has jurisdiction to entertain the matter.
41. Then coming to the argument of unlawful claim as made by the appellants and the challenge made before learned Single Judge, Clause 7 of the sale orders or invoices are relied upon so far as this issue is concerned which reads as under:-
"The sale order will be governed by guidelines-circulars-office orders-notices-instruction, relevant law etc. issued from time to time by Coal India Ltd., Bharat Coking Coal Ltd., State Govts., Central Govt. and other statutory bodies. This is also subject to any future escalation in prices and or levies/or duties-taxes etc. which may be imposed from time to time."
42. This claim according to appellant authority is nothing but opportunity costs which they are entitled to recover. Opportunity costs in general is highest price or rate of return. This concept is widely used in business planning for example while evaluating a capital investment project, a company must measure the projected return against the return it would earn on the highest yielding alternative investment involving similar risk. So far as securities investments opportunity costs means cost of foregoing a safe return on an investment in hopes of making a larger profit.
43. According to the appellant authority by virtue of second part of Clause 7 of the document, appellants are empowered to revise or escalate the prices or levies or duties which may be imposed from time to time. The first part refers to general terms which says that the sale order would be governed by guidelines, circulars, instructions issued from time to time by Coal India Ltd., Bharat Coking Coal Ltd., etc. which again subject to escalation in prices or charges or levies etc. According to appellants, alteration or modification of the charges is exclusively within the competency of the appellant which includes addition or decrease in the charges by modifying the existing charges. To substantiate their contention that there was clear understanding between the appellant and private parties, they further contend that all other companies are paying these charges. Mere acceptance by other companies cannot clothe the appellant to revise such prices unilaterally, because it depends upon the terms and conditions agreed between the parities. When challenge is made to such exercise on the part of the appellant, the same has to be decided with reference to terms and conditions agreed between the parties.
44. According to writ petitioner/respondent, the unilateral imposition or alteration which prejudices the interest of the private parties cannot be acted upon unless there was clear consensus between the parties thereby there was meeting of minds so far as the authority of the appellants to revise or modify or alter the prices, duties, etc., without further deliberations with the private parties. In support of his contention he places reliance in the judgment of State of Orissa & Ors. v. Mangalam Timber Products Ltd. reported in MANU/SC/0915/2003 : (2004) 1 SCC 139 with reference to applicability of promissory estoppel in the present case. In the referred case, Their Lordships opined that even in case of unwritten contract, promissory estoppel is applicable. Therefore, the contents of the impugned document/letters are with regard to term which did not exist and the revision of rate of washery and other charges is adverse to the interest of the writ petitioner especially when it is made effective from a back date placing the writ petitioner to disadvantageous position. Hence, appellant ought not to have revised the charges from back date and recover it from the respondent/writ petitioner.
45. To substantiate this contention of writ petitioner/respondent, learned Senior Counsel, Mr. Pal compares the controversial issue with that of revision of taxes, duties which could be tagged on to the goods so that the manufacturer would not suffer the financial burden as the same would be added to the price of the products to be paid by the customers.
46. Apparently, except in the format of sale order there was no separate agreement as such between the parties so far as this aspect of the matter. The terms or the words used at Clause 7 of the sale order is in general terms with regard to the binding guidelines, circulars, instructions, etc. issued from time to time by certain authorities. The only exception is future escalation in prices which may be imposed from time to time is also subject to general condition mentioned in the first part of the clause. This by any stretch of imagination cannot be understood that there was complete acceptance or surrender on the part of the petitioner company to abide by the unilateral revision of charges of the present nature that too with retrospective effect.
47. Learned Senior Counsel, Mr. Pal proposes alternative submission if his first argument is not accepted contending that acceptance of altered norms can only be prospective and not retrospective. He takes support for such submission placing reliance in the case of Orissa Concrete and Allied Industries Ltd. & Anr. v. Union of India & Ors. reported in 2001(1) CHN 336. According to learned Senior Counsel, Mr. Pal when the litigation was not with regard to the terms of subsisting contract which was the subject matter of dispute but new document which is sought to be unilaterally imposed on the writ petitioner is the subject matter, therefore, the terms referred to in the supply order pertains to new terms which were not initially agreed upon, hence cannot be imposed unilaterally.
48. The commercial transactions surely depend upon the mutual rights and obligations which again referable to terms and conditions mutually agreed between the parties. Appellant is the creation of State. It is expected to discharge its obligations fairly with reasonableness. Stipulation of a condition in the contract that it could act unilaterally with retrospective effect so far as the escalation of prices without consulting the party is nothing but an arbitrary clause.
49. It is pertinent and relevant to mention that subsequent to this controversy there is again decrease in the washery and other charges. As long as action of a party to the contract causes no prejudice to the interest of the other party there is no need for interference but when such action is an outcome of arbitrary exercise of power, the Courts need to step in and curb such arbitrary exercise of power.
50. In the light of the above discussion and reasoning, we are of the opinion the appeal fails on all counts. Accordingly, the appeal and connected application are dismissed.
Stay of operation of this judgment is prayed for by the Counsel appearing for the appellant and the same is rejected.