IMPORTANT POINT
Under Clause (2) of Article 226 of the Constitution, the High Court is empowered to issue writs to any Government, authority or person exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power.

Headnote:(i) Constitution of India-Article 226(2)-Writ petition-Territorial Jurisdiction-Cause of action-Contracts for supply of cloth from mills, both situated in Bombay-Petitioners made advance payment against the same-Concerned mills supplied and delivered goods to petitioners from time to time-However, a substantial part of the contract remained unexecuted-Writ petition filed to obtain specific performance of disputed contracts-Textile mills situated in Bombay-Supply of cloth was to be made by them ex-factory at Bombay-Money was paid to the mills at Bombay-Whether Calcutta High Court had jurisdiction to entertain the writ petition on mere fact that writ petitioners carries on business at Calcutta-(No).
       Held : Under Clause (2) of Article 226 of the Constitution, the High Court is empowered to issue writs, orders or directions to any Government, authority or person exercising jurisdiction 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. Cause of action as understood in the civil proceedings means every fact which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. To put it in a different way, it is bundle of facts which taken with law applicable to them, gives the plaintiff a right to relief against the defendant. (Para 10)
       In the present case, the textile mills are situate in Bombay and the supply of cloth was to be made by them ex-factory at Bombay. According to the writ petitioners, the money was paid to the mills at Bombay. The learned Single Judge after a detailed discussion of the matter held that the Calcutta High Court had no jurisdiction to entertain the writ petition. The Division Bench has reversed this finding on the ground that concluded contract had come into existence which could be cancelled only after giving an opportunity of hearing and consequently the question of revocation of the contract at its Calcutta address would constitute a cause of action. In our opinion, the view taken by the Division Bench is wholly erroneous in law. It was nowhere pleaded in the writ petition that the appellant herein had initiated any action under Section 11 of the Act by issuing any notice to the writ petitioner for cancellation of the contract. In fact, it is stated in para 18 of the petition that the Central Government did not follow the procedure prescribed in Section 11 for cancellation of contract. (Para 12)
       The mere fact that the writ petitioner carries on business at Calcutta or that the reply to the correspondence made by it was received at Calcutta is not an integral part of the cause of action and, therefore, the Calcutta High Court had no jurisdiction to entertain the writ petition and the view to the contrary taken by the Division Bench cannot be sustained. In view of the above finding, the writ petition is liable to be dismissed. (Para 12)
       (ii) Textile Undertakings (Taking Over of Management) Act, 1983-Sections 3(1), 3(7)-Taking over of management of textile undertakings-Liability for pre-take over period-A substantial part of contract had allegedly remained unexecuted-Liability having been incurred by the textile company-It could not be enforced against the Central Government or the Custodian.
       Held : The legal position is, therefore, absolutely clear that any liability incurred by a textile company in relation to the textile undertaking before the appointed day cannot be enforced against the Central Government or the Custodian. According to the case set up by the writ petitioners, money was paid by them to the two textile mills before the appointed day but they had failed to supply the cloth. Assuming the aforesaid position to be correct, after receipt of money, the textile mills having incurred a liability, were under an obligation to supply the cloth to the writ petitioners. On the facts pleaded, the liability had been incurred by the textile company and consequently it could not be enforced against the Central Government or the Custodian. We are thus unable to accept the view taken by the Division Bench of the High Court that it was not a liability of the textile company. (Para 14)

JUDGMENT

G.P. Mathur, J.-These appeals by special leave have been preferred against the judgment and order dated 4.8.2000 of a Division Bench of Calcutta High Court, whereby the appeal preferred by respondent Nos. 1 and 2 was allowed, the order dated 11.4.1997 of the learned single Judge dismissing the writ petition was set aside and the writ petition was disposed of with certain directions.

2. The respondent Nos. 2 and 3 filed the writ petition praying that a writ of mandamus be issued commanding the appellant herein to produce the entire records relating to the withholding of delivery of goods pursuant to the contracts mentioned in Annexure-A to the writ petition and also to deliver the goods mentioned in Annexure-A upon adjustment of advance payment made by them. A further prayer was made that the appellants herein be directed to take a final decision as envisaged in the letter dated 24.10.1989 (Annexure-A to the writ petition) and an injunction be issued restraining the appellants from transferring, dealing with or disposing of goods pursuant to the contracts mentioned in Annexure-A in any manner without keeping the goods which are to be supplied to writ petitioner No.1.

3. The case set up in the writ petition is as follows. The writ petitioners had been purchasing various quantities of cloth from Finlay Mills Limited and Gold Mohur Mills Limited, both situate in Bombay. The petitioners entered into contracts specified in Annexure-A to the writ petition and made advance payment against the same. The concerned mills supplied and delivered the goods to the petitioners from time to time but a substantial part of the contract remained unexecuted. By the letter dated 26.9.1993 the mills were requested to take necessary steps for immediate delivery of the goods, in respect whereof payment had already been made. The mills vide their letter dated 29.9.1993 intimated that deliveries could not be effected as the banking transaction and accounts of the mills had been frozen, but assured that arrangements were being made to deliver the goods as early as possible. The management of the mills was taken over by the Central Government on 18.10.1993 under Textile Undertakings (Taking Over of Management) Ordinance, 1983 which was subsequently replaced by Textile Undertakings (Taking Over of Management) Act, 1993 on 25.12.1993. The Central Government constituted National Textile Corporation (South Maharashtra) Limited for the purpose of managing the textile undertakings which in turn as additional custodian took over the management of the two textile undertakings. The writ petitioners, thereafter approached the appellants for release of the goods and one bale of contractual specification was delivered but 12 bales were detained by the Excise Authorities, as a consequence whereof the same were not delivered. The National Textile Corporation (South Maharashtra) vide their letter dated 15.3.1984 requested the Officer on Special Duty of taken over mills including Gold Mohur Mills and Gold Mohur Mills to furnish particulars in prescribed proforma to enable it to take up the matter with the Central Government for taking action under section 11(1) of the Act for the purpose of cancelling or varying any contract or agreement entered prior to pre-take over period which action had to be taken on or before 14.4.1984. After giving a reasonable opportunity of hearing to the parties concerned, the textile mills called upon the writ petitioners to verify the pre-take over contracts and joint meetings took place for the said purpose and the matter was referred back to the Officer on Special Duty. The writ petitioners then vide their letter dated 13.10.1984 requested the Chairman-cum-Managing Director of National Textile Corporation (South Maharashtra) Ltd. to deliver the balance quantity of cloth in terms of the pending contracts and to adjust all sums of money which had been paid by way of advance. The appellants sent a reply on 7.11.1994 stating that (1) all

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2004 Supreme(SC) 425

IMPORTANT POINTUnder Clause (2) of Article 226 of the Constitution, the High Court is empowered to issue writs to any Government, authority or person exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power.

Cases Referred (4)

IMPORTANT POINT
Under Clause (2) of Article 226 of the Constitution, the High Court is empowered to issue writs to any Government, authority or person exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power.