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1999 Supreme(Cal) 45
High Court Of Calcutta
RUMA PAL, M. H. S. ANSARI
HINDUSTHAN ZINC LTD. - Appellant
Versus
GUJARAT NRE COKE LTD. - Respondent
A. P. O. T. 50 Of 1999
Decided On : 02/05/1999
R.K. KHANNA, S.B.MOOKERJEE, TIWARI
The Calcutta High Court does not have jurisdiction to entertain a suit for declaration and injunction arising out of a tender process where no part of the cause of action has arisen within its jurisdiction.
Headnote:
{'KEYWORD': 'Jurisdiction - Cause of Action - Letters Patent - Tender', 'SUBJECT': 'Revocation of leave granted under Clause 12 of the Letters Patent - Jurisdiction of Calcutta High Court to entertain a suit for declaration and injunction arising out of a tender process.', 'ACT SECTION LIST': ['Letters Patent, Clause 12']}
Fact of the Case:
Gujarat NRE Coke Ltd. (Gujarat NRE) filed a suit against Hindusthan Zinc Ltd. (HZL) in the Calcutta High Court under Clause 12 of the Letters Patent, seeking various reliefs, including a declaration that the rejection of its tender for the supply of metallurgical coke was unlawful and illegal. Gujarat NRE claimed that part of the cause of action arose within the jurisdiction of the Calcutta High Court as the advertisement for the tender was located in Calcutta, the tender notice was served on it at its registered office in Calcutta, and it issued its offer from Calcutta.
Finding of the Court:
The Calcutta High Court held that it did not have jurisdiction to entertain the suit as no part of the cause of action had arisen within its jurisdiction. The Court noted that the letter of rejection was addressed to Gujarat NRE at its Jamnagar office outside the jurisdiction of the Court and that the balance of convenience was not in favor of the action being tried in Calcutta.
Issues: 1. Whether the Calcutta High Court had jurisdiction to entertain the suit filed by Gujarat NRE under Clause 12 of the Letters Patent. 2. Whether the observation made by the learned single Judge, directing HZL to reconsider its decision rejecting Gujarat NRE's offer and allowing it to participate in the tender bidding process, was appropriate.
Ratio Decidendi: 1. The Court relied on the decision of the Supreme Court in Oil and Natural Gas Commission v. Utpal Kumar Basu, where it was held that the Calcutta High Court had no jurisdiction to entertain a writ application merely on the basis that the petitioner had read the advertisement inviting tenders at Calcutta, submitted its offer from Calcutta, made representation from Calcutta or sent FAX messages from Calcutta or received a reply thereto at Calcutta. 2. The Court held that the facts of the instant case were on all fours with the facts of the Oil and Natural Gas Commission case and that no part of the cause of action had arisen within the jurisdiction of the Calcutta High Court. 3. The Court further held that the observation made by the learned single Judge, directing HZL to reconsider its decision rejecting Gujarat NRE's offer and allowing it to participate in the tender bidding process, was inappropriate as the Court had no jurisdiction to make any observation on the merit of the suit.
Final Decision: The Calcutta High Court allowed the appeal filed by HZL and deleted the observation of the learned single Judge. It dismissed the appeal filed by Gujarat NRE and directed it to pay costs of its appeal to HZL assessed at Rs. 5,000/-.
( 1 ) THIS judgment disposes of the 2 stay applications in 2 appeals as well as the appeals themselves. There will be an order in terms of prayer (a) of the stay application.
( 2 ) THE two appeals are APOT No. 50 of 1999 (Hindusthan Zinc Ltd. v. Gujarat NRE Coke Ltd.) and APOT No. 65 of 1999 (Gujarat NRE Coke Ltd. v. Hindusthan Zinc Ltd. ). Both the appeals are treated as on the day' list.
( 3 ) BOTH the appeals have been preferred from an order allowing an application of Hindusthan Zinc Ltd. (hereafter referred to as HZL) in which HZL had prayed for revocation of leave under Cl. 12 of the Letters Patent and for rejection of the suit filed by Gujarat NRE Coke Ltd. (hereinafter referred to as "gujarat NRE" ).
( 4 ) THE facts as pleaded in the plaint are as follows :gujarat NRE has its registered office at No. 1 Clyde Row, Hastings, Calcutta-700022 within the jurisdiction of this Court. It manufacturs metallurgical coke in Jamnagar, Gujarat. HZL manufactures Zinc in Rajasthan. HZL invited a global tender on 20th July, 1998 for purchasing 75,000 M. T. of Low Ash Metallurgical Coke for delivery to its Lead Zinc Smelter in Rajasthan. An advertisement was published in the Telegraph in Calcutta which was 'located' by Gujarat NRE at its Registered Office. The Tender Notice dated 22nd/27th July, 1998 was served on Gujarat NRE at its Registered Office. Gujarat NRE submitted a report of an analysis and also delivered 100 kgs. of Metallurgical Coke to HZL. Gujarat NRE issued its offer from its place of business at Calcutta to HZL. The tender was opened in Rajasthan. The tender was scrutinized in HZL' premises in Rajasthan. Gujarat NRE' offer was rejected by letter dated 5th/7th December, 1998. Gujarat NRE came to know that its offer was rejected because the sample was not according to 0 the specifications. The rejection was unwarranted and made for no reason. The clause by which HZL had reserved its right to reject a tender in full or in part without assigning any reason was ultra vires and illegal and was liable to be cancelled or quashed as being against the principles of natural justice. HZL was acting in violation of the 'tatute' and against the principles of natural justice, and thus, should be restrained from acting contrary to the terms and conditions, contained in the tender notice dated 22nd July, 1998, and should not be allowed to give any effect to the impugned notice dated 5th/7th December, 1998 and should allow the Gujarat NRE to participate in the Part II offer i. e. price bidding. The part of the 'cause of action' which had arisen within the jurisdiction of this Court were :1) 'location' of the advertisement by Gujarat NRE in Calcutta;2) the receipt of tender notice in Calcutta; and3) the issuance of the offer by Gujarat NRE pursuant to the tender from its office in Calcutta.
( 5 ) ON the basis of these averments Gujarat NRE filed a suit against HZL with leave under Cl. 12 of the Letters Patent praying for," (A) Declaration that the rejection of the offer submitted in terms of the tender notice without assigning any reason is unlawful and illegal; (b) Direction upon the defendants to reconsider the offer submitted by the plaintiff in accordance with law; (c) Declaration that the letter dated 5th/7th December, 1998 is unlawful, illegal and should be declared null and void and cancelled; (d) Declaration that the plaintiff is entitled to participate in Part II "coke Price Offer," i. e. , price bidding as mentioned in Cl. 3. 0 (b) of Annexure "a" of the Tender Notice dated 22nd July, 1998; (e) Declaration that the Cl. 7. 2 of Annexure "a" to the said Tender Notice dated 22nd July, 1998 being No. HZL/ho/cont/4 (42) is unlawful, illegal and is liable to be cancelled; (f) Injunction; (g) Receiver; (h) Costs; (i) Other and/or further reliefs. "gujarat NRE filed an interlocutory application in its suit and obtained an ex parte order of status quo with regard to the tender until further orders.
( 6 ) HZL filed an a
