Supreme Court: If a High Court strikes down a Central Act as unconstitutional, that decision would have effect throughout India, unless stayed or overruled by the Supreme Court.

 This question is rooted in the following observation of the Supreme Court in Kusum Ingots and Alloys Ltd. v. Union of India 2004 (6) SCC 254 : An order passed on 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 of India, will have effect throughout the territory of India subject of course to the applicability of the Act.

The landmark Supreme Court judgment in Kusum Ingots & Alloys Ltd. v. Union of India (2004) clarified a crucial question of territorial jurisdiction of High Courts under Article 226 of the Constitution, particularly when challenging the validity of Central laws.

Key Facts and Issue:

• Kusum Ingots & Alloys Ltd., registered in Mumbai, borrowed from a Bhopal branch of SBI. When the company defaulted, the bank issued a notice under the SARFAESI Act, 2002.

• The company challenged the constitutional validity of the Act before the Delhi High Court.

• The main legal issue: Does the mere location of the Parliament or the seat of the legislature (i.e., where the law was made) give the Delhi High Court jurisdiction to hear the case?

Supreme Court’s Ruling:

• The Supreme Court held that the seat of Parliament or a legislature is not by itself a sufficient ground for conferring territorial jurisdiction on a High Court for entertaining a writ petition under Article 226(2).

• Jurisdiction depends on where the "cause of action" arises, wholly or in part. Merely because a law is made in Delhi does not mean every High Court in India can entertain challenges to that law; there must be a nexus between the cause of action and the territory of the High Court

Key Legal Principles Laid Down:

• The situs (location) of the authority that made the law (e.g., Parliament in Delhi) does not automatically confer jurisdiction on the Delhi High Court.

• A High Court can exercise jurisdiction only if the cause of action arises, wholly or in part, within its territory.

• The Supreme Court also observed (in what has become a controversial obiter dictum in para 22 of the judgment) that if a High Court strikes down a Central Act as unconstitutional, that decision would have effect throughout India, unless stayed or overruled by the Supreme Court.

Impact and Controversy:

• This "obiter dictum" (a remark not essential to the decision) has been widely debated. Some High Courts have followed it, holding that when a Central law is struck down by one High Court, it should not be selectively applied in other states until the Supreme Court decides otherwise.

• However, legal scholars and later judgments have questioned whether this observation is correct in law, since Article 226 only gives High Courts power within their own territories, and only the Supreme Court’s decisions are binding nationwide under Article 141.

• Despite criticism, the principle from Kusum Ingots has been practically followed by courts to avoid a situation where a Central law is valid in some states but not in others, which could lead to legal chaos and discrimination.

Summary Table: Main Points of Kusum Ingots Judgment

Principle/Issue	Supreme Court’s Decision/Observation
Does Parliament’s location confer jurisdiction?	No. Jurisdiction depends on where cause of action arises.
Can all High Courts entertain challenge to Central laws?	No. Only if the cause of action arises within their territory.
Effect of High Court striking down Central law	Obiter: Such a decision applies throughout India unless stayed/overruled by Supreme Court.
Binding nature of obiter in Kusum Ingots	Debated. Followed by many courts, but criticized by scholars.

In essence:

The Kusum Ingots judgment is highly significant in Indian legal history for two main reasons: it clarified the territorial jurisdiction of High Courts under Article 226 and sparked an ongoing debate about the nationwide effect of High Court judgments on Central laws.

Significance in Indian Legal History:

• Clarification of Territorial Jurisdiction:
  Kusum Ingots established that the mere location of Parliament or a legislative authority in Delhi does not, by itself, give the Delhi High Court jurisdiction to entertain challenges to Central laws. Instead, a High Court can only exercise jurisdiction if the cause of action arises, wholly or in part, within its territorial limits. This principle reinforced the federal structure and prevented forum shopping, ensuring that litigants file cases in the appropriate jurisdiction.

• Controversial Obiter Dictum on Nationwide Applicability:
  In paragraph 22, the Supreme Court observed that if a High Court strikes down a Central law, that decision should have effect throughout India unless stayed or overruled by the Supreme Court. This observation, though not the core holding, has been widely cited and followed by various High Courts, leading to a practical uniformity in the application of law across the country. However, this has also been criticized as creating a “High Court of India,” a concept not envisioned by the Constitution, since Article 226 limits the jurisdiction of High Courts to their own territories.

Effect on Later Judgments:

• Adoption by High Courts:
  Several High Courts, including Kerala, Calcutta, and Karnataka, have relied on Kusum Ingots to hold that when a Central law is struck down by one High Court, it should not be selectively applied in other states until the Supreme Court intervenes. For example, in Saumya Ann Thomas v. Union of India, the Kerala High Court read down a provision of the Indian Divorce Act and held that its decision would have nationwide effect unless stayed or overruled by the Supreme Court.

• Supreme Court Endorsement:
  The Supreme Court has, in subsequent orders, impliedly accepted the principle that interim or final orders of a High Court on the constitutional validity of Central legislation apply throughout the country. This has reinforced the practical effect of the Kusum Ingots dictum, even though its constitutional basis remains debated.

• Criticism and Calls for Reconsideration:
  Legal scholars and some judges argue that the obiter in Kusum Ingots is not legally sustainable, as it conflicts with the territorial limits set by Article 226 and the principle that only Supreme Court judgments are binding nationwide under Article 141. There are calls for the Supreme Court to reconsider and clarify this position, as the current practice risks undermining the federal structure and the intended role of High Courts.

Summary Table: Effects of Kusum Ingots Judgment

Effect/Development	Description
Territorial jurisdiction clarified	High Courts can only hear cases if cause of action arises within their territory.
Nationwide effect of HC judgments	High Court decisions striking down Central laws have been treated as effective across India.
Adoption by High Courts	Multiple High Courts have followed this principle for uniformity in law.
Supreme Court endorsement	Subsequent Supreme Court orders have impliedly accepted this practical approach.
Ongoing controversy	Legal scholars and some courts question the constitutional validity of this principle.

In summary, Kusum Ingots has had a profound impact on the interpretation and application of Article 226, shaping both the territorial jurisdiction of High Courts and the effect of their judgments on Central laws, while also fueling an important constitutional debate that remains unresolved.

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