Bombay High Court: Location of Revisionary Authority Confers Jurisdiction for Writ Petitions

Mumbai: The Bombay High Court has ruled that it possesses territorial jurisdiction to entertain writ petitions challenging orders passed by the Revisionary Authority under the Central Excise Act, 1944, when the said authority is located within its territorial limits. The court emphasized that the order of the Revisionary Authority constitutes a significant part of the cause of action, and the doctrine of merger dictates that the original order merges into the appellate/revisionary order, making the latter the operative one.

A preliminary objection regarding the maintainability of several writ petitions was raised by the respondents (Union of India), who contended that the petitions should have been filed before the High Courts within whose jurisdiction the original adjudication orders were passed. These original orders originated from various locations including Bengaluru, Goa, Chennai, and Nagpur.

The petitions were filed against orders of the Revisionary Authority constituted under Section 35EE of the Central Excise Act, 1944, rejecting claims for rebate of customs duty. Notably, there is no statutory appeal against orders passed under Section 35EE, leaving writ petitions under Article 226 of the Constitution as the only available remedy.

The court, presided over by K.R. Shriram , J., heard extensive arguments from both sides on the limited question of territorial jurisdiction.

Petitioners' Arguments:

Petitioners argued that since the impugned orders were passed by the Revisionary Authority located within the territorial jurisdiction of the Bombay High Court's Principal Seat (Mumbai), a significant part, if not the whole, of the cause of action arose there. Relying on Supreme Court precedents like Sri Nasiruddin v/s. State Transport Appellate Tribunal and Kusum Ingots & Alloys Ltd. v/s. Union of India , they contended that a litigant has the right to choose a forum where a part of the cause of action arises. They further asserted that the order of the original authority merges with the order of the Revisionary Authority, making the latter the order effectively challenged.

Respondents' Arguments:

Respondents countered that only a 'slender' part of the cause of action arose in Mumbai, with the major part arising where the original adjudication occurred and where the parties are located. They argued that the Revisionary Authority is merely a proforma party. Invoking the doctrine of forum conveniens , they submitted that the petitions should be heard by the High Courts in Bengaluru, Goa, Chennai, or Nagpur, as those would be the most convenient forums for the parties. They also cited judgments suggesting the situs of the appellate authority might not be the sole determinative factor for jurisdiction in all cases.

Court's Analysis and Findings:

The court found the preliminary objection unsustainable. It held that the location of the Revisionary Authority within its territorial jurisdiction, and the passing of the impugned order there, unequivocally constitutes a significant part of the cause of action.

The judgment heavily relied on the Supreme Court's ruling in Sri Nasiruddin , which established that if a cause of action arises wholly or in part within a specific area, the High Court covering that area has jurisdiction, and the litigant has the right to choose their forum.

The court also reaffirmed the principle from Kusum Ingots & Alloys Ltd. , stating that while a High Court may refuse jurisdiction on the ground of forum conveniens even if a small part of the cause of action arises within its territory, this does not apply when, as here, the appellate/revisionary order itself forms a significant part of the cause of action.

Crucially, the court applied the doctrine of merger, citing Collector of Customs, Calcutta v/s. East India Commercial Co. Ltd. This principle dictates that once an appeal or revision is decided, the order of the original authority merges into the order of the appellate/revisionary authority. The operative order then becomes the order of the appellate/revisionary authority, regardless of whether it reversed, modified, or merely confirmed the original order. Since the Revisionary Authority in these cases is located in Mumbai, the challenge against its order makes the Bombay High Court a court where a part of the cause of action arises.

The court clarified that the insertion of Article 226(2), which allows High Courts to exercise jurisdiction where the cause of action arises wholly or in part (even if the authority is outside their territory), supplements rather than diminishes the jurisdiction of the High Court within whose territorial limits the impugned authority is located.

Distinguishing the judgments cited by the respondents, the court noted that many dealt with different factual matrixes or legal issues, such as petitions where no cause of action was shown to arise within the jurisdiction, or matters related to appellate tribunals under different statutes where the doctrine of merger might not apply in the same way (like Settlement Commission orders). The court also dismissed the forum conveniens argument, stating that the Union of India, being a nationwide entity, could not credibly claim inconvenience.

Conclusion:

Based on the principles derived from the Supreme Court judgments on partial cause of action, the litigant's choice of forum, and the doctrine of merger, the Bombay High Court held that it has jurisdiction over the writ petitions. The preliminary objection raised by the respondents was accordingly dismissed. The petitions are now listed for hearing on merits on September 6, 2024.

This ruling provides clarity on the territorial jurisdiction of High Courts in challenges against central authorities whose final orders in the hierarchy are passed within the court's limits, reinforcing the significance of the location of the final decision-making authority as a basis for jurisdiction under Article 226.