CEMENT WORKERS’ MANDALversusGLOBAL CEMENTS LTD. (HMP CEMENTS LTD.) & ORS

                         [2019] 3 S.C.R. 357                                  357


                  CEMENT WORKERS’ MANDAL                                      A
                                    v.
   GLOBAL CEMENTS LTD. (HMP CEMENTS LTD.) & ORS.
                    (Civil Appeal No.5360 of 2010)
                         FEBRUARY 14, 2019                                    B
                [ABHAY MANOHAR SAPRE AND
                  DINESH MAHESHWARI, JJ.]
       Constitution of India: Art. 226(2) – Territorial jurisdiction of
the High Court to entertain the petition – Held: Expression “the
                                                                              C
cause of action, wholly or in part, arises” occurring in Art. 226(2)
has to be read in the context of s. 20(c) CPC which deals with filing
of the suit within the local limits of the jurisdiction of the Civil Courts
– Issue as to whether the cause of action for filing the petition,
wholly or in part, arose in the context of territorial jurisdiction of
the High Court, is to be decided keeping in view the provisions of            D
Art. 226(2) r/w s. 20 CPC – On facts, the part of the cause of action
as contemplated in Art. 226(2) has arisen within the territorial
jurisdiction of the Gujarat High Court for filing the petition to claim
appropriate reliefs in relation to such dispute against the
Company – Thus, the application was maintainable in the High Court
                                                                              E
– Order of the Single Judge is restored to the extent it decides that
the application is maintainable in the Gujarat High Court – Code
of Civil Procedure, 1908 – s. 20.
      Allowing the appeal, the Court
       HELD: 1.1 Article 226(2) of the Constitution empowers                  F
the High Court to entertain the writ petition if the cause of action
to file such writ petition against the respondents of the said writ
petition has arisen wholly or in part within the territorial
jurisdiction of ‘A’ High Court. Clause (2) further empowers a
High Court to issue any order, directions or writ as provided in
clause (1) of Article 226 in such writ petition notwithstanding               G
that seat of such Government or the Authority or the residence
of such person against whom the writ petition is filed does not
fall within the territories of the “A” High Court but falls in the
territories of the “B” High Court. [Paras 24, 25] [365-A-C]
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                                   357
358            SUPREME COURT REPORTS                      [2019] 3 S.C.R.


A           1.2 Respondent No.1-Company has its factory at Porbandar,
      which is a part of State of Gujarat. The Labour Court, Junagadh,
      which is also a part of State of Gujarat, entertained the dispute
      between the appellant-Union and respondent No.1-Company and
      passed a recovery order. One of the reliefs claimed in the petition
      (SCA) pertains to non-payment of outstanding wages payable to
B
      the workers by respondent No.1-Company. Thus, the part of the
      cause of action as contemplated in Article 226 (2) has arisen within
      the territorial jurisdiction of the Gujarat High Court for filing the
      petition (SCA) to claim appropriate reliefs in relation to such
      dispute against respondent No.1-Company. [Paras 26-27]
C     [365-C-E]
             1.3 The expression “the cause of action, wholly or in part,
      arises” occurring in Article 226(2) of the Constitution has to be
      read in the context of Section 20(c) CPC which deals with filing
      of the suit within the local limits of the jurisdiction of the Civil
D     Courts. Indeed, the question as to whether the cause of action
      for filing the petition, wholly or in part, arose in the context of
      territorial jurisdiction of the High Court and whether the Gujarat
      High Court has territorial jurisdiction to entertain the appellant’s
      petition (SCA) or not, is required to be decided keeping in view
      the provisions of Article 226(2) read with the provisions of Section
E     20 CPC. [Paras 28-29] [365-F-H]
            1.4 Special Civil Application (SCA) was maintainable in the
      High Court inasmuch as the part of the cause of action to file
      such petition did accrue to the appellant within the territorial
      jurisdiction of the Gujarat High Court. SCA was required to be
F     decided on merits by the High Court. The impugned order of the
      Division Bench is set aside and the order of the Single Judge is
      restored to the extent it decides that the SCA as maintainable in
      the Gujarat High Court. The case is remanded to the Single Judge
      (Writ Court) for deciding the petition(SCA) on merits strictly in
G     accordance with law. [Paras 30-33] [366-A-D]
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5360
      of 2010.
            From the Judgment and Order dated 27.04.2007 of the High Court
      of Gujarat at Ahmedabad in Letters Patent Appeal No. 1020 of 2006.
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 CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD                                359
             (HMP CEMENTS LTD.)

      Ms. Anushree Prashit Kapadia, Ms. Kavita Bhardwaj, Advs. for           A
the Appellant.
      Gautam Awasthi, Saurabh Trivedi, Advs. for the Respondents.
      The Judgment of the Court was delivered by
                                                                             B
       ABHAY MANOHAR SAPRE, J. 1. This appeal is filed against
the final judgment and order dated 27.04.2007 passed by the High Court
of Gujarat at Ahmedabad in Letters Patent Appeal No.1020 of 2006 in
Civil Application No.770 of 2005 whereby the Division Bench of the
High Court allowed the said Letters Patent Appeal filed by respondent
No.1 herein holding that the High Court had no territorial jurisdiction to   C
entertain the Special Civil Application (in short, “SCA”) filed by the
appellant herein which was entertained and allowed by the Single Judge.
      2. A few facts need mention hereinbelow for the disposal of this
appeal, which involves a short legal question.
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       3. Respondent No.1 herein is a Limited Company having its
registered office at Calcutta. Respondent No.1 was engaged in the
business of manufacture and sale of cement. They have a cement factory
at Porbandar in the State of Gujarat.
       4. The appellant is a Union of workers. These workers were            E
working, at all relevant time, in the cement factory of respondent No.1
at Porbandar. According to the appellant-Union, as many as 500 workers,
who are the members of it, were working at the relevant time in the said
cement factory.
       5. Respondent No.1, however, closed the cement factory                F
somewhere in the year 1998 for myriad reasons without paying the wages
to its workers.
       6. A dispute, therefore, arose between the appellant-Union and
Respondent No.1-Company (employer) regarding the non-payment of
outstanding wages payable to the workers. The appellant- Union,              G
therefore, approached the Labour Court at Junagadh (Gujarat) and filed
Recovery Application No.86/98 under the Industrial Disputes Act, 1947
for the recovery of the outstanding wages payable to the workers against
Respondent No.1.
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360            SUPREME COURT REPORTS                          [2019] 3 S.C.R.


A           7. By order dated 12.04.1999, the Labour Court allowed the
      application and directed Respondent No.1-Company to pay a sum of
      Rs.81,50,744/- with a cost of Rs.50,000/- to the workers. This was
      followed by issuance of recovery certificate dated 04.09.2000 for
      Rs.60,35,379/- by the Collector, Junagadh as arrears of land revenue.
      The said certificate, however, has remained unexecuted.
B
             8. It appears that Respondent No.2 - Indian Bank had given
      business loan to Respondent No.1- Company, which they failed to repay
      to the Indian Bank. The Indian Bank (R-2), therefore, filed a claim
      petition before the Debt Recovery Tribunal (for short “the DRT) at
      Calcutta against Respondent No.1-Company for recovery of their unpaid
C     loan amount with interest.
             9. By order dated 04.03.2003, the DRT allowed the claim petition
      and ordered for sale of the properties of Respondent No.1-Company
      after giving due publicity. The DRT also appointed one Receiver to take
      appropriate steps in this regard. The Receiver informed the appellant-
D     Union accordingly.
             10. It is with these background facts, the appellant-Union filed a
      petition (Special Civil Application No.12212 of 2004) in the High Court
      of Gujarat at Ahmadabad out of which this appeal arises. The SCA was
      filed against the Indian Bank(respondent No.2 herein) and the
E     Company(respondent No.1 herein). The appellant claimed the following
      reliefs in their SCA:
            “A. To issue an order, direction in the nature of mandamus
            and/or any other appropriate writ, order or direction,
            directing the respondent No.1 Indian Bank, Kolkata, to
F           deposit the 50% amount of the sale proceeds of the
            Porbandar H.M.P. Cement with the District Collector,
            Porbandar, and the District Collector be directed to pay by
            account payee cheque to each of the workmen
            proportionately towards the part-payment of the legal dues
G           to the individual workman concerned; ALTERNATIVELY.
            B. To issue direction to the respondent No.1 Indian Bank
            to pay 50% of the amount to the petitioner union who shall
            directly pay to the workmen by account payee cheque either
            under the supervision of District Collector, Porbandar or
            Assistant Labour Commissioner, Porbandar.
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 CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD                                 361
  (HMP CEMENTS LTD.) [ABHAY MANOHAR SAPRE, J.]

      C. To declare and hold the impugned action of the Debt                  A
      Recovery Tribunal, Kolkata, in transferring the entire sale
      proceed to respondent No.1, Indian Bank, without retaining
      the amount of workers’ due, as illegal and without authority
      of law.
      D. To suspend the operation, implementation and execution               B
      of the order of the Debt Recovery Tribunal insofar as the
      Debt Recovery Tribunal directs:
          “It is being further ordered that in the case of default on
          the part of the defendants in adhering to any of the terms
          and condition hereinabove stated, the certificate of
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          recovery so issued, shall automatically be altered for the
          total applicant’s claim as filed on July 2002 and the
          applicant being granted the liberty to appropriate the
          entire money lying with the present learned transferring
          Tribunal in O.A. No.142 of 1998 after receiving the said
          sum from the learned Receiver and it is also being                  D
          ordered that the learned Receiver is hereby being
          ordered to stand discharged….”
      E. To grant such other and further relief as the Hon’ble
      Court deems fit and proper in the interest of justice.”
      11. The respondent Nos.1 & 2, i.e., Company and the Indian Bank         E
on entering their appearance in the SCA raised a preliminary objection
before the writ court contending that the SCA filed by the appellant-
Union is not maintainable in the High Court of Gujarat at Ahmedabad
inasmuch as no part of the cause of action in relation to the subject
matter of the SCA has arisen in the State of Gujarat which entitled the
                                                                              F
appellant-Union to file the SCA in the Gujarat High Court.
        12. In other words, the objection was that having regard to the
nature of reliefs claimed by the petitioner (appellant herein) in the SCA,
no part of cause of action could be said to have arisen in the State of
Gujarat, which would empower the Gujarat High Court to entertain the
SCA for its disposal on merits. On the other hand, it was contended that      G
it is clear that the entire cause of action between the parties has accrued
in the State of Calcutta where the company’s registered office is located
and where the DRT had also entertained the claim petition filed by the
Indian Bank(respondent No.2 herein) against the Company (respondent
No.1 herein) and had passed the orders in the said claim petition.            H
362             SUPREME COURT REPORTS                           [2019] 3 S.C.R.


A             13. The respondent Nos. 1 & 2, therefore, contended that the
      said SCA was liable to be dismissed as being not maintainable for want
      of territorial jurisdiction of the Gujarat High Court.
             14. The Single Judge by order dated 26.10.2005 overruled the
      preliminary objection and held that the Gujarat High Court has the
B     territorial jurisdiction to entertain the SCA.
             15. Respondent No.1 (Company) felt aggrieved and filed the LPA
      before the Division Bench. By impugned order, the Division Bench
      allowed the LPA, set aside the order of the Single Judge and dismissed
      the SCA. The Division Bench held that the Gujarat High Court has no
C     territorial jurisdiction to entertain the SCA in question because no part of
      the cause of action has accrued to file such petition(SCA) in the Gujarat
      High Court.
             16. In other words, the Division Bench was of the view that having
      regard to the nature of reliefs claimed in the SCA, the Gujarat High
D     Court cannot be held to have territorial jurisdiction to entertain such
      petition for grant of the reliefs claimed therein.
             17. It is against this order of the Division Bench, the Union
      (petitioner in SCA) felt aggrieved and has filed the present appeal in this
      Court after obtaining the special leave to appeal.
E            18. So, the short question, which arises for consideration in this
      appeal, is whether the Division Bench was justified in holding that the
      SCA filed by the appellant was not maintainable for want of territorial
      jurisdiction of the Gujarat High Court.
            19. Heard Ms. Anushree Prashit Kapadia, learned counsel for
F     the appellant and Mr. Gautam Awasthi, learned counsel for the
      respondents.
             20. Having heard the learned counsel for the parties and on perusal
      of the record of the case, we are inclined to allow the appeal and while
      setting aside the impugned order of the Division Bench restore the order
G     of the Single Judge.
             21. In our considered opinion, the Division Bench erred in not
      noticing Article 226(2) of the Constitution of India while deciding the
      question arising in this case.

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 CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD                                   363
  (HMP CEMENTS LTD.) [ABHAY MANOHAR SAPRE, J.]

        22. In other words, the question as to whether the Gujarat High         A
Court has territorial jurisdiction to entertain the appellant’s petition(SCA)
or not, should have been decided keeping in view the provisions of Article
226(2) of the Constitution read with Section 20 of the Code of Civil
Procedure, 1908 (for short, “CPC”).
         23. Article 226 of the Constitution and Section 20 of CPC read as      B
under:
         “Article 226 of the Constitution
         226. Power of High Courts to issue certain writs
         (1) Notwithstanding anything in Article 32 every High Court            C
         shall have powers, throughout the territories in relation to
         which it exercises jurisdiction, to issue to any person or
         authority, including in appropriate cases, any Government,
         within those territories directions, orders or writs, including
         writs in the nature of habeas corpus, mandamus,
         prohibition, quo warranto and certiorari, or any of them, for          D
         the enforcement of any of the rights conferred by Part III
         and for any other purpose.
         (2) The power conferred by clause (1) to issue directions,
         orders or writs to any Government, authority or person may
         also be exercised by any High Court exercising jurisdiction            E
         in relation to the territories within which the cause of action,
         wholly or in part, arises for the exercise of such power,
         notwithstanding that the seat of such Government or
         authority or the residence of such person is not within those
         territories.                                                           F
         (3) Where any party against whom an interim order, whether
         by way of injunction or stay or in any other manner, is made
         on, or in any proceedings relating to, a petition under clause
         (1), without-
            (a) furnishing to such party copies of such petition and            G
            all documents in support of the plea for such interim
            order; and
            (b) giving such party an opportunity of being heard,

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364     SUPREME COURT REPORTS                        [2019] 3 S.C.R.


A        makes an application to the High Court for the vacation
         of such order and furnishes a copy of such application to
         the party in whose favour such order has been made or
         the counsel of such party, the High Court shall dispose
         of the application within a period of two weeks from the
         date on which it is received or from the date on which
B
         the copy of such application is so furnished, whichever
         is later, or where the High Court is closed on the last
         day of that period, before the expiry of the next day
         afterwards on which the High Court is open; and if the
         application is not so disposed of, the interim order shall,
C        on the expiry of that period, or, as the case may be, the
         expiry of the said next day, stand vacated
      (4) The power conferred on a High Court by this article
      shall not be in derogation of the power conferred on the
      Supreme Court by clause (2) of Article 32.”
D                      “Section 20 of CPC
      20. Other suits to be instituted where defendants reside or
      cause of action arises- Subject to the limitations aforesaid,
      every suit shall be instituted in Court within the local limits
      of whose jurisdiction-
E
         (a) the defendant, or each of the defendants where there
         are more than one, at the time of the commencement of
         the suit, actually and voluntarily resides, or carries on
         business, or personally works for gain; or

F        (b) any of the defendants, where there are more than
         one, at the time of the commencement of the suit actually
         and voluntarily resides, or carries on business, or
         personally works for gain, provided that in such case
         either the leave of the Court is given, or the defendants
         who do not reside, or carry on business, or personally
G        work for gain, as aforesaid, acquiesce in such institution;
         or
         (c) the cause of action, wholly or in part, arises.
      Explanation - A corporation shall be deemed to carry on
      business at its sole or principal office in India or, in respect
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 CEMENT WORKERS’ MANDAL v. GLOBAL CEMENTS LTD                                     365
  (HMP CEMENTS LTD.) [ABHAY MANOHAR SAPRE, J.]

       of any cause of action arising at any place where it has also              A
       a subordinate office, at such place.”
        24. Article 226(2) of the Constitution, in clear terms, empowers
the High Court (let us say “A” High Court) to entertain the writ petition
if the cause of action to file such writ petition against the respondents of
the said writ petition has arisen wholly or in part within the territorial        B
jurisdiction of “A” High Court.
       25. Clause (2) further empowers a High Court to issue any order,
directions or writ as provided in clause (1) of Article 226 of the Constitution
in such writ petition notwithstanding that seat of such Government or
the Authority or the residence of such person against whom the writ               C
petition is filed does not fall within the territories of the “A” High Court
but falls in the territories of the “B” High Court.
       26. Coming to the facts of this case, we find from the averments
of the petition(SCA) that firstly, Respondent No.1-Company has its
factory at Porbandar, which is a part of State of Gujarat; Second, the            D
Labour Court, Junagadh, which is also a part of State of Gujarat,
entertained the dispute between the appellant-Union and respondent No.1-
Company and passed a recovery order; and Third, one of the reliefs
claimed in the petition(SCA) pertains to non-payment of outstanding
wages payable to the workers by respondent No.1-Company.
                                                                                  E
       27. In the light of these three reasons, we are of the view that the
part of the cause of action as contemplated in Article 226 (2) of the
Constitution has arisen within the territorial jurisdiction of the Gujarat
High Court for filing the petition(SCA) to claim appropriate reliefs in
relation to such dispute against respondent No.1-Company.
                                                                                  F
       28. In our considered opinion, the expression “the cause of action,
wholly or in part, arises” occurring in Article 226(2) of the Constitution
has to be read in the context of Section 20(c) of CPC which deals with
filing of the suit within the local limits of the jurisdiction of the Civil
Courts.
                                                                                  G
       29. Indeed, the question as to whether the cause of action for
filing the petition, wholly or in part, arose in the context of territorial
jurisdiction of the High Court is required to be decided keeping in view
the provisions of Article 226(2) of the Constitution read with the
provisions of Section 20 of CPC.
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366                SUPREME COURT REPORTS                          [2019] 3 S.C.R.


A            30. In the light of the foregoing discussion, we are of the view
      that the appellant’s petition(SCA) was maintainable in the Gujarat High
      Court inasmuch as the part of the cause of action to file such petition did
      accrue to the appellant herein (petitioner) within the territorial jurisdiction
      of the Gujarat High Court.
B          31. In these circumstances, the SCA was required to be decided
      on merits by the Gujarat High Court.
             32. In view of the foregoing discussion, the appeal succeeds and
      is hereby allowed. The impugned order of the Division Bench is set
      aside and the order of the Single Judge is restored to the extent it decides
C     that the petition(SCA) as maintainable in the Gujarat High Court.
             33. The case is accordingly remanded to the Single Judge (Writ
      Court) for deciding the petition(SCA) on merits strictly in accordance
      with law uninfluenced by any of the observations made by the Division
      Bench and this Court because this Court has decided only the issue of
D     territorial jurisdiction of the Gujarat High Court and not beyond it.
            34. Since the petition(SCA) is old, we request the Single Judge to
      decide it preferably within six months.


      Nidhi Jain                                                       Appeal allowed.
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G




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