1. Tender process for industrial plant — Bid submission and representations from registered office — Challenge to contract award — Issue of territorial jurisdiction under Article 226. (Para 1 , 2 )
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1994 Supreme(SC) 598
SUPREME COURT OF INDIA
(M.N.VENKATACHALIAH, C.J.I., AND A.M. AHMADI AND B.P. JEEVAN REDDY, JJ.)
OIL AND NATURAL GAS COMMISSION
Versus
UTPAL KUMAR BASU AND OTHERS
Civil Appeal No. 1359 of 1994 {From the Judgment and Order dated 17-12-1993 of the Calcutta High Court in Matter No. 487 of 1993}, decided on June 23, 1994
Advocates appeared :
Dipankar Gupta, Solicitor General (R. Sasiprabhu and A. Jayaram, Advocates, with him) for the Appellant;
Ashok H. Desai, G. Ramaswamy and C.S. Vaidyanathan, Senior Advocates (Pallav Shisodia, A. Mitra, G. Joshi, A.K. Sil, G. Kandpal, J. Savla, Ms Nina Gupta and Vineet Kumar, Advocates, with them) for the Respondents.
Important Points
Under Article 226, territorial jurisdiction requires a part of the cause of action to arise within the High Court's territory. Merely reading a tender advertisement, submitting a bid, or sending representations from a location does not constitute an integral part of the cause of action.
Subject
Constitutional Law - Writ Jurisdiction
Act Referred
Headnote
Code of Civil Procedure, Sec. 21-Scape of whether an order passed by a court having no jurisdiction can be refused to be interfered in absence of proof of prejudice-such discretion can not be used in favour of a party which deliberately invokes the jurisdiction of a court which has no jurisdiction-the object underlying in provisions of sec. 21 is not to encourage such litigants but to avoid harassment to litigants who had bonafide and in good faith commenced proceedings in a court which is later found to be wanting in jurisdiction. (Para 13)
Constitution of India, Articles 133 & 226 advertisement for tenders in tender form it was mentioned that the tenders were to be submitted at New Delhi which would be scrutinized at New Delhi and final decision to award contract would be taken at New Delhi-rejection to tender of the Respondents was challenged before the Calcutta High Court which restrained the appellant and directed to consider the offer of the Respondents-for invoking jurisdiction it must be show that at least a part of action arose there-cause of action did not arose within the territorial jurisdiction-merely because the advertisement was read at Calcutta in the news paper published at Calcutta and the Respondent (petition before the High Court) carried on business from a registered office at Calcutta will not constitute facts forming an integral part of cause of action in Calcutta-the exercise o jurisdiction by High Court strongly deprecated and order set aside-costs awarded for abuse of court’s jurisdiction-(1889) ILR 16 Cal 98, (1985) 3 SCC 217, 1953 SCR 1144, 1987 (Supp) SCC 279, (1993) 4 SCC 1 (Paras 4, 6, 8, 10, 12 & 15)
Legal Category Hierarchy
Advocates:
A.C.Mittal, A.K.Sil, A.N.JAYARAM, ASHOK DESAI, C.S.VAIDYANATHAN, DIPANKAR GUPTA, G.JOSHI, G.KANDPAL, G.RAMASVAMY, J.Savla, NINA GUPTA, PALLAV SHISHODIA, R.SASIPRABHU, VINIT KUMAR
A.C.Mittal, A.K.Sil, A.N.JAYARAM, ASHOK DESAI, C.S.VAIDYANATHAN, DIPANKAR GUPTA, G.JOSHI, G.KANDPAL, G.RAMASVAMY, J.Savla, NINA GUPTA, PALLAV SHISHODIA, R.SASIPRABHU, VINIT KUMAR
Table of Contents
2. Whether reading tender notices, submitting bids, or sending representations from a registered office constitutes a part of the cause of action to confer territorial jurisdiction under Article 226. (Para 4 , 7 )
3. Reading advertisements, submitting bids, or sending representations from a registered office are trivial events and do not form an integral part of the cause of action. (Para 8 , 11 , 12 , 14 )
4. Territorial jurisdiction under Article 226 requires a part of the cause of action to arise within the territory; mere residence or business office of petitioner is insufficient. (Para 5 , 6 , 8 )
5. Appeal allowed — High Court order set aside — Writ petition disposed of for want of jurisdiction — Exemplary costs imposed on petitioner. (Para 15 )
6. What constitutes cause of action for determining territorial jurisdiction?
Cause of action is the bundle of facts which the petitioner must prove, if traversed, to entitle them to a judgment in their favour. It refers to the ground set forth as the media upon which the petitioner asks the court to arrive at a conclusion. (Para 6 )
7. Does submitting a bid or sending representations from a registered office confer jurisdiction under Article 226?
No. Merely reading an advertisement, submitting a bid, or sending representations and fax messages from a registered office does not constitute facts forming an integral part of the cause of action. (Para 8 )
8. How does Article 226(2) of the Constitution affect the jurisdiction of High Courts?
Article 226(2) empowers a High Court to issue directions, orders, or writs if the cause of action, wholly or in part, has arisen within its territorial jurisdiction, regardless of where the seat of the government or authority is located. (Para 5 , 10 )
9. Can a party rely on the spirit of Section 21 of the Code of Civil Procedure to maintain a petition in a court lacking jurisdiction?
No, the discretion under Section 21 CPC cannot be used in favour of a party that deliberately invokes the jurisdiction of a court lacking jurisdiction for ulterior motives or acts in bad faith. (Para 13 )
Judgment
A.M. AHMADI, J.- The short question to which we propose to limit ourselves in this appeal directed against the decision rendered by Shyamal Kumar Sen, J. of the Calcutta High Court on 17-12-1993 in Writ Petition No. 487 of 1993, is whether any part of the cause of action for filing the petition had arisen within the jurisdiction of the said High Court to entitle it to entertain, hear and decide the said petition? The factual background in which the question of territorial jurisdiction arises may be noticed briefly.
2. The Oil and Natural Gas Commission (ONGC), a Government of India Undertaking, has a Gas Processing Plant at Hazira in the State of Gujarat. Engineers India Limited (EIL) acting as consultants for ONGC issued an advertisement dated 27-6-1991 in the leading newspapers of the country including those in circulation in West Bengal calling for tenders for setting up of a Kerosene Recovery Processing Unit at the Hazira Complex in Gujarat. According to the said advertisement the tenders containing offers were to be communicated to EIL at New Delhi. NICCO, having its registered office in Calcutta, read and became aware of the tender notice printed in the Times of India circulated within the jurisdiction of the Calcutta High Court. The tenders were to be scrutinised by a Tender Committee and the final decision was to be taken by a Steering Committee at New Delhi presided over by the Chairman of ONGC. NICCO, along with others, submitted their offer or bid in response to the tender notice. All the bids were scrutinised by EIL at New Delhi. NICCOs bid was rejected on the ground that it did not fulfil the requisite experience criteria stipulated in the tender. The recommendations made by the EIL were considered by the Tender Committee. The Tender Committee, however, expressed the view that NICCO satisfied the experience criteria and they too should be called for the clarificatory meeting proposed to be held by EIL at New Delhi. The said meeting was held by the EIL with various bidders including NICCO some time in July-August 1992. After the said meeting EIL once again reiterated its earlier view that NICCO lacked the experience criteria. The Tender Committee re-examined the view of EIL and agreed with the same some time in October 1992. In view of the said development NICCO was not recommended for short listing by the Tender Committee. NICCO represented and their representations were considered by the EIL as well as the Tender Committee but they saw no reason to depart from their earlier view. The final decision was taken by the Steering Committee on 27-1-1993 at New Delhi, pursuant whereto it was decided to award the contract to M/s CIMMCO Ltd. Thereupon NICCO filed the aforesaid writ petition in the High Court of Calcutta. In the said writ petition CIMMCO was not made a party. On the application of CIMMCO this Court directed that it be joined in the appeal as a co-respondent. NICCO prayed that ONGC be restrained from awarding the contract to any other party and if awarded to cancel the same. The High Court by its impugned order dated 17-12-1993 directed as under:
"There will be an order directing the respondents to consider the offer of the petitioner along with the others and in the event the petitioners offer is otherwise found to be valid and lowest and in the event petitioner otherwise complies with the formalities, petitioners offer should be accepted by the respondent authorities.
The writ petition is accordingly disposed of."
All the parties to the writ petition were directed to act in accordance with the signed copy of the aforesaid operative part of the order. A detailed judgment giving reasons for the aforesaid operative part of the order was later rendered on 4-2-1994.
3. Aggrieved by the judgment and order of the High Court in the aforesaid writ petition, ONGC moved this Court under Article 136 of the Constitution of India. This Court by its order dated 31-1-1994 granted an ad interim order for maintenance of
