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IN
CWP-11209-2020 (O&M)
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104
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH

CWP-11209-2020 (O&M)
Date of decision : 04.08.2020

Vijay Goverdhandas Kalantri & Another .....Petitioners

Vs.

Union of India& Others .....Respondents

CORAM: HON'BLE MRS. JUSTICE ALKA SARIN

Present: Mr. Mukul Goyal, Advocate, for the petitioners.

ALKA SARIN, J. (ORAL)

Heard through video conferencing.

This is a civil writ petition under Articles 226/227 of the

Constitution of India for issuance of a writ of certiorari for setting aside the

impugned action (Annexure P-1) of respondent Nos.1, 2 and 3 disqualifying

the petitioners to act as Director from 01.11.2018 under Section 164(2)(a)

of the Companies Act, 2013.

It has been contended by learned counsel for the petitioners that

the petitioners were disqualified from acting as Directors in a company-

respondent no.4. He placed reliance on order dated 08.11.2017 (Annexure

P-7) passed in CWP. No.24977 of 2017 ‘Gurdeep Singh & Ors vs Union of

India & Anr.’ now fixed for hearing on 18.09.2020.

Mr. Bhuwan Vats, Advocate, has put in appearance for the

Union of India through video conferencing. He has pointed out to this Court

that both the petitioners are residents of Mumbai and the company-

respondent no.4, qua which the petitioners were disqualified to act as

Directors, is also registered with the Registrar of Companies, Mumbai. He

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further points out that the Registrar of Companies, Punjab and Chandigarh

(respondent no.2) has been impleaded as a party only to surreptitiously

create jurisdiction of this Court. However, the Registrar of Companies,

Punjab and Chandigarh (respondent no.2) has no connection with the

present case and this Court has no jurisdiction to entertain the present writ

petition.

Faced with this situation, learned counsel for the petitioners

contended that since the petitioners wish to invest in a company within the

jurisdiction of this Court, hence, the present writ petition has been filed.

In the present case, admittedly, both the petitioners are

residents of Mumbai and the company-respondent no.4 itself is registered

with the Registrar of Companies, Mumbai (respondent no.3) and has no

connection with the Registrar of Companies, Punjab and Chandigarh

(respondent no.2). The counsel for the petitioners has been unable to show

how the present writ petition was maintainable before this Court.

There is no ground whatsoever made out for invoking the

jurisdiction of this Court under Articles 226/227 of the Constitution of India

inasmuch as neither the petitioners are residents of Punjab, Haryana or UT

Chandigarh nor is the company-respondent no.4, qua which the petitioners

were disqualified to act as Directors, registered with the Registrar of

Companies, Punjab and Chandigarh (respondent no.2). The jurisdiction of

the High Court is limited to the territorial jurisdiction of the State(s) of

which it is the High Court. Article 226(1) and (2) of the Constitution of India

reads as under :

“226. Power of High Courts to issue certain writs. (1)

Notwithstanding anything in Article 32, every High Court shall

have powers, throughout the territories in relation to which it

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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 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 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.”

Thus, Article 226 of the Constitution of India, in clear terms,

empowers the High Court to entertain a writ petition if the cause of action

to file such a writ petition against the respondents of the said writ petition

has arisen wholly or in part within the territorial jurisdiction of the High

Court. In the case of ONGC vs. Utpal Kumar Basu, (1994) 4 SCC 711, the

Apex Court inter-alia held as under :

“5. Clause (1) of Article 226 begins with a non obstante clause –

‘notwithstanding anything in Article 32’ and provides that every

High Court shall have power ‘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, for the

enforcement of any of the rights conferred by Part III or for any

other purpose. Under clause (2) of Article 226 the High Court

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may exercise its power conferred by clause (1) if the cause of

action, wholly or in part, had arisen within the territory over

which it exercises jurisdiction, notwithstanding that the seat of

such Government or authority or the residence of such person is

not within those territories. On a plain reading of the aforesaid

two clauses of Article 226 of the Constitution it becomes clear that

a High Court can exercise the power to issue directions, orders

or writs for the enforcement of any of the fundamental rights

conferred by Part III of the Constitution or for any other purpose

if the cause of action, wholly or in part, had arisen within the

territories in relation to which it exercises jurisdiction,

notwithstanding that the seat of the Government or authority or

the residence of the person against whom the direction, order or

writ is issued is not within the said territories. In order to confer

jurisdiction on the High Court of Calcutta, NICCO must show that

at least a part of the cause of action had arisen within the

territorial jurisdiction of that Court. That is at best its case in the

writ petition.”

In the present case the counsel for the petitioners has been

unable to show as to what part of the cause of action arose within the

territorial jurisdiction of this Court. There is also no averment in the present

writ petition as to how any part of the cause of action had arisen within the

territorial jurisdiction of this Court.

In the same matter referred to above, the Supreme Court further

held that :

“It must be remembered that the image and prestige of a court

depends on how the members of that institution conduct

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themselves. If an impression gains ground that even in cases

which fall outside the territorial jurisdiction of the court, certain

members of the court would be willing to exercise jurisdiction on

the plea that some event, however trivial and unconnected with

the cause of action had occurred within the jurisdiction of the said

court, litigants would seek to abuse the process by carrying the

cause before such members giving rise to avoidable suspicion.

That would lower the dignity of the institution and put the entire

system to ridicule. We are greatly pained to say so but if we do

not strongly deprecate the growing tendency we will, we are

afraid, be failing in our duty to the institution and the system of

administration of justice. We do hope that we will not have

another occasion to deal with such a situation.

xxx

15. In the result, we allow this appeal, set aside the order of the

High Court and direct that the writ petition will stand disposed of

for want of jurisdiction. Since we are satisfied that NICCO had

not invoked the jurisdiction of the Calcutta High Court bona fide,

we think that this is a fit case for granting exemplary costs to

ensure that such abuse of the Court's jurisdiction does not take

place in future. We, therefore, direct NICCO to pay Rs 50,000 by

way of costs.”

In the matter of Aligarh Muslim University & Anr. vs. Vinay

Engineering Enterprises Private Limited & Anr., Civil Appeal No.5230-31

of 1993 decided on 27.09.1993 the Supreme Court held :

“We are surprised, not a little, that the High Court of Calcutta

should have exercised jurisdiction in a case where it had

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absolutely no jurisdiction. The contracts in question were

executed at Aligarh, the construction work was to be carried out

at Aligarh, even the contracts provided that in the event of dispute

the Aligarh Court alone will have jurisdiction. The arbitrator was

from Aligarh and was to function there. Merely because the

respondent was a Calcutta-based firm, the High Court of Calcutta

seems to have exercised jurisdiction where it had none by

adopting a queer line of reasoning. We are constrained to say that

this is case of abuse of jurisdiction and we feel that the respondent

deliberately moved the Calcutta High Court ignoring the fact that

no part of the cause of action had arisen within the jurisdiction of

that Court. It clearly shows that the litigation filed in the Calcutta

High Court was thoroughly unsustainable.”

The present writ petition seems to have been filed only to gain

benefit of the interim order (Annexure P-7) passed by this Court in CWP.

No.24977 of 2017 ‘Gurdeep Singh & Ors. Vs. Union of India & Anr.’ and

other similar cases though the initiation of the writ proceedings before this

High Court was clearly unsustainable and an abuse of jurisdiction. The filing

of the present writ petition before this High Court was not bonafide.

In view of the above, the present writ petition deserves to be

dismissed with exemplary costs. Dismissed with costs of Rs.1,00,000/- to

be deposited by the petitioners with the PM-CARES Fund.

August 04, 2020 (ALKA SARIN)

NOTE:
Whether speaking/non-speaking: Speaking
Whether reportable: YES/NO

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