Neutral Citation Number : 2023/DHC/001502

* IN THE HIGH COURT OF DELHI AT NEW DELHI

+ W.P.(C) 395/2023 and CM APPL. 1585/2023 (stay)

Reserved on : 24.01.2023
Pronounced on : 28.02.2023

IN THE MATTER OF:

DURGAPUR FREIGHT TERMINAL PRIVATE LIMITED &
ANR. ..... Petitioners

Through: Mr. Sandeep Sethi and Ms.

Malvika Trivedi, Sr. Advocates
with Mr. Shatadru C, Mr.
Shailendra Slaria, Ms. Sujal Gupta
and Ms. Sonia D., Advocates.
Versus

UNION OF INDIA MINISTRY OF RAILWAYS &

ORS. ..... Respondents

Through: Mr. Asheesh Jain, CGSC with Mr.

Gaurav Kumar and Mr. Siddhant
Gupta, Advocates for respondents
No.1 to 5.
Mr. Rajiv Nayar, Sr. Advocate
with Mr. Saurabh Seth, Advocate
for respondent No.6
Mr. Amit Sibal, Sr. Advocate with
Ms. Manju Bhuteria and Mr.
Ashok Kumar, Advocates for
intervenor.
Mr. Sudhir Nandrajog, Sr.
Advocate with associate counsel
for intervenor.

CORAM:
HON'BLE MR. JUSTICE MANOJ KUMAR OHRI

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JUDGMENT
MANOJ KUMAR OHRI, J.

1. In the present petition filed under Article 226 of the Constitution

of India, the petitioners have assailed letter dated 09.12.2022 issued by
respondent No.5 to respondent No.6 and sought directions to respondent
Nos.1 to 5 not to interfere in their operation and management of a Private
Freight Terminal at Banful Sarani, Sagarbhanga, Durgapur, West
Bengal (hereinafter, ‘Durgapur PFT’).

2. Petitioner No.1 is a private limited company engaged in the

business of providing logistic services and petitioner No.2 is its director.
Respondent No.1 is the Union of India represented through the Ministry
of Railways. Respondent Nos.2 to 4 are functionaries of the Railway
Board, Delhi. Respondent No.5 is the Executive Director (RM) &
CFTM/ER, Railway Board, Kolkata. Respondent No.6 is M/s Palogix
Infrastructure Private Limited (hereinafter, ‘Palogix’), a private
company engaged in the business of rendering logistic services as well as
developing and operating Railways Private Freight Terminals.
3. The petitioners claim to have been managing and operating
Durgapur PFT pursuant to a resolution plan approved by NCLT, Kolkata
Bench, vide order dated 12.02.2018 passed in ICICI Bank v. Palogix
Infrastructure Private Limited, C.P. (IB) No. 37/KB/2017. It is their
grievance that respondent Nos.1 to 4 have taken a decision,
communicated vide the impugned letter by respondent No.5, to keep all
programmes of loading/unloading at Durgapur PFT in abeyance till
disputed matters of Palogix are resolved.

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4. Mr. Asheesh Jain, learned CGSC appearing for respondent Nos.1

to 5, took a preliminary objection to the maintainability of the present
petition on the ground that this Court does not have territorial jurisdiction
over the matter. Accordingly, parties were extensively heard on the issue
of territorial jurisdiction. Suffice it to note, three different counsels
entered appearance for Palogix, claiming to have the
authorization/nomination to represent it during the proceedings; each one
of them was heard without making an issue of their authorisation to
represent Palogix.
5. Mr. Sandeep Sethi and Ms. Malvika Trivedi, learned Senior
Counsels appearing for the petitioners, argued in favour of this Court
having territorial jurisdiction under Article 226 of the Constitution of
India and contended thus:-
(I) This Court can entertain and decide the present writ petition, as:-
(a) The impugned letter was issued at the behest of respondent
Nos.1 to 4/Railway Board, which has its situs in Delhi, and the
records of any decision taken or to be taken by the Railway Board
would be in Delhi. With regard to jurisdiction based on situs,
reference was made to the decision in Jayaswals Neco Limited v.
Union of India and Others, W.P.(C) 2103/2007.

(b) Cause of action has arisen in Delhi, insofar as (i) the

decision leading to the issuance of the impugned letter had been
taken in Delhi, (ii) the impugned letter was marked for ‘further
guidance’ to the Railway Board, Delhi, and (iii) a letter dated
26.12.2022 in furtherance of the impugned letter was issued to
respondent No.5 by Railway Board, Delhi. In connection with
jurisdiction based on cause of action, reliance was placed on the

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decision in Alchemist Ltd. and Another v. State Bank of Sikkim

and Others reported as (2007) 11 SCC 335.

(c) The License Agreement dated 19.09.2012 contains an

arbitration clause, i.e., Clause 26.4.1, as per which venue of
arbitration is at Delhi. In absence of contrary indicia, the venue of
arbitration is to be treated as the seat. Courts in Delhi, by virtue of
having jurisdiction over the seat, have jurisdiction over all disputes
arising out of the License Agreement to the exclusion of all other
Courts. In support of the contention, reliance was placed on the
decisions in BGS SGS Soma JV v. NHPS Limited reported as
(2020) 4 SCC 234, Brahmani River Pellets Limited v. Kamachi
Industries Limited reported as (2020) 5 SCC 462 and Inox
Renewables Ltd. v. Jayesh Electricals Ltd. reported as 2021 SCC
OnLine SC 448.

(d) The issue raised in the present writ petition is different from
the ones pending consideration before the Calcutta High Court,
inasmuch as the issues before the Calcutta High Court relate to
physical dispossession, police action, company affairs, etc.
however the sum and substance of the issue raised in the present
writ petition is that respondent Nos.1 to 5 have taken an arbitrary
decision against the petitioners on the basis of letter(s) received
from shareholders/directors of Palogix and brought their operation
of the PFT to a standstill.

(II) The impugned letter was not preceded by issuance of any show
cause notice and thus, is violative of principles of natural justice. In this
regard, reference was made to the decision of the Supreme Court in

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Union Carbide Corporation and Others v. Union of India and Others

reported as (1991) 4 SCC 584.

(III) The Railway Board, Delhi is seized of the controversy and has
advised further steps in the matter. In this regard, Mr. Sandeep Sethi,
learned Senior Counsel, drew attention to communication dated
26.12.2022 issued by the Joint Director/TT-II, Railway Board to the
Executive Director (Rail Movement), Eastern Railway House, Kolkata
(Annexure P-15) and submitted that on receipt of the said
communication, a representation was sent by the petitioners to
respondent Nos.2 to 5 on 28.12.2022, which has remained pending and
unanswered.

(IV) The principle of forum conveniens cannot be applied to oust the

territorial jurisdiction of this Court, as it is applicable only when a choice
is to be made between two forums/Courts.

6. While appearing for respondent Nos.1 to 5, Mr. Asheesh Jain,

learned CGSC, contended thus:-
(I) The cause of action cannot be said to have arisen in Delhi, as (a)
the impugned letter under the signatures of respondent No.5 was issued
in Kolkata, (b) the Durgapur PFT, with respect to operation and
management of which directions are sought by the petitioners, is situated
outside Delhi (i.e., in Durgapur), (c) the Petitioners, Respondent No.5
and Palogix are not located in Delhi, (d) the License Agreement dated
19.09.2012 between respondent Nos.5 and 6 was not executed in Delhi,
(e) the order dated 12.02.2018, on the strength of which the petitioners
claim reliefs in the present petition, was passed by the Kolkata Bench of

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NCLT, and (f) all other litigations between the parties, pending or
disposed, are before Courts/Tribunals outside Delhi.
(II) Indian Railways is divided into various ‘Railway Administrations’
and ‘Zonal Railways’ which are capable of taking decisions for
territories over which they exercise jurisdiction. Respondent No.5 is one
such Zonal Railway, which had taken the decision communicated vide
the impugned letter at Kolkata. Only a copy of the impugned letter was
communicated to Railway Board, Delhi for information and the same, by
no measure, meant that the decision was taken by respondent Nos.1 to 4.

(III) ‘Railway Administration’ in the License Agreement dated

19.09.2012 is defined as ‘President of India acting through the General
Manager for the time being of Eastern Railway…’. It is thus fallacious
for the petitioners to argue that this Court can entertain the writ petition
because the Railway Administration is headquartered in Delhi.
(IV) The communication of letter dated 26.12.2022 (Annexure P-15)
does not lead to accrual of any cause of action as the Railway Board has
only advised that prior authorization letter from the Board of Directors of
Palogix ‘may be taken’ and the authority may also obtain any legal
opinion in this regard.
(V) The arbitration clause in the License Agreement does not further
the cause of the petitioners as till date, no arbitration proceedings have
been initiated and the venue remains to be decided.

7. Mr. Rajiv Nayar, learned Senior Counsel, entered appearance for

the Resolution Applicant-Mr. Sanjay Kumar Mishra (statedly
representing respondent No.6) and submitted that in view of Clause
26.4.1 of the License Agreement, the venue of arbitration was New
Delhi. As such, this Court is a “Court of logical conclusion” and for all
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purposes (including interim relief, if any, to be filed under Section 9 of

the Arbitration Act in terms of the aforesaid Clause), the Courts in Delhi
would have territorial jurisdiction.
With regard to the impugned letter, it was submitted that the same
did not constitute final adjudication. Learned Senior Counsel pressed
that by way of the said letter, further guidance from the Railway Board
had been sought. To urge that assessment as to whether a Court has
territorial jurisdiction, has to be made in light of the contents of the
petition without going into their correctness, reliance was placed on the
decision in Oil and Natural Gas Commission v. Utpal Kumar Basu and
Others reported as (1994) 4 SCC 711.
8. Mr. Sudhir Nandrajog and Mr. Amit Sibal, learned Senior
Counsels appearing for the intervenors, countered the stance of the
petitioners on territorial jurisdiction of this Court by raising the following
contentions:-
(I) The impugned letter was issued by respondent No.5 at Kolkata and
marking a copy of the same to the Railway Board, Delhi for ‘further
guidance’ does not imply that the decision itself was taken at Delhi. The
situs of the authority that has passed the order under challenge is the
relevant factor for deciding territorial jurisdiction, which cannot be said
to lie with this Court as the impugned letter was issued at Kolkata. In this
regard, reference was made to the decisions in M/s Kwality Caterers v.
Union of India & Another reported as 2011 SCC OnLine Del 5503 and
Money Market Services (India) Private Ltd. v. Union of India reported as
MANU/DE/1633/2020.
(II) It is the communication of a decision that leads to accrual of a
cause of action and in the present case, the decision has been taken by

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respondent No.5 at Kolkata and communicated to Palogix at Kolkata. In

this regard, reference was made to the decision in Mr. P.K.S. Shrivastava
v. Union of India and Anr. reported as 2016 SCC OnLine Del 6149.
(III) Clause 26.4 of the License Agreement does not confer territorial
jurisdiction on this Court as – (a) the petitioners were not party to it, (b)
disputes raised herein are not contractual disputes and thus cannot be said
to have arisen out of the License Agreement, (c) no arbitration
proceedings have been initiated under the Clause, and (d) the Clause only
refers to ‘venue’ of arbitration. In fact, the question as to whether the seat
of arbitration under the License Agreement is in Delhi or not is
immaterial to the determination of territorial jurisdiction of this Court.
(IV) The letter dated 26.12.2022 does not confer territorial jurisdiction
on this Court, as – (a) it was a mere internal advisory issued to
respondent No.5 and the discretion for the decision has been left with
respondent No.5, (b) the decision-making authority is still respondent
No.5, which has its situs in Kolkata.
(V) Not even a miniscule cause of action has arisen in Delhi, as – (a)
the decision was taken and impugned letter issued at Kolkata, (b) the
petitioners claim rights under the License Agreement, MoU and
Resolution Plan, which were all executed/approved in West Bengal, and
(c) the subject matter of each of the prayers made in the petition lies
outside Delhi. While the petitioners are based in Uttar Pradesh, Palogix
has its registered office in Kolkata. Directions have been sought against
respondent No.5, which is also based in Kolkata.
(VI) Even if the petitioners are able to make out some miniscule or
peripheral connection with Delhi, to determine whether cause of action
has arisen for exercise of territorial jurisdiction, this Court shall have

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regard to facts which are material, essential or integral to the cause of

action. In this regard, reference was made to Sterling Agro Industries
Ltd. v. Union of India & Ors. reported as 2011 SCC OnLine Del 3162.
(VII) Even if this Court comes to the conclusion that it has territorial
jurisdiction in the present case, and all facts pleaded in the petition are
taken to be correct, it is not the forum conveniens. Courts where
proceedings have been conducted previously or where a large part of the
cause of action has arisen are to be preferred and in the present case,
proceedings are already pending between the parties before the NCLT
and Courts in Kolkata, wherein similar issues, grounds and prayers have
been raised/sought. Reference, in this regard, was made to WPA No.
23309/2022 pending before the Calcutta High Court, to which the
petitioners, Palogix as well as respondent No.5 are all parties.
In support of the contention, reliance was placed on the decisions
in Amit Kumar & Ors. v. Union of India & Ors. reported as 2016 SCC
OnLine Del 3312; Neetu v. Department of Financial Services and Ors.
reported as 2016 SCC OnLine Del 3549 and Rio Tinto Orissa Mining P.
Ltd. v. Mines Tribunal reported as MANU/DE/3435/2014, as well as the
following chart depicting pending litigations between the parties:-
SL. Nature of Proceeding Date of Filing Order
No.
1. Writ Petition filed before the 17.10.2022 Order dated
Hon'ble High Court at 28th October,
Calcutta being W.P.A. No. 2022 was
23309 of 2022 passed,
wherein no
Petitioners : interim order
1. Durgapur Freight Terminal has been
Pvt. Ltd. passed in
2. Ajay Malviya favour of the
petitioner.

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Respondents
1. The State of West Bengal,
through the Department of
Home Affairs
2. The General Manager,
Eastern Railway, Freight
Marketing Division
3. The Commissioner of
Police
4. The Officer-in-charge, coke
oven Police Station
5. Palogix Infrastructure
Private Limited
10.11.2022
An Intervention Application
being CAN 1 has been filed
by GCL Logistic Terminal
LLP and Godavari
Commodities Limited.
11.11.2022
An intervention Application
being CAN 2 has been filed
by Deepak Joshi
2. Commercial suit being CS No. 21.10.2022 On 22nd
267 of 2022 filed before the December,
Hon'ble High Court at 2022 the
Calcutta Plaint was
presented and
Plaintiff leave under
1. Sanjay Kumar Mishra Section 12A
of Commercial
Defendant Courts Act
1. Godavari Commodities was granted.
Limited
2. GCL Logistic Terminal
LLP
3. Palogix Infrastructure
Private Limited

An application being GA 1 of
31.10.2022
2022 has been filed by the
plaintiff, inter alia, praying for

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ad interim orders
04.01.2023
An application being GA 2 of
2023 has been filed by
defendant No.1 for revocation
of Leave under Section 12A
of Commercial Courts Act.

3. A company Petition being 29.10.2022 No interim

C.P. No. 338 of 2022 has been order has been
filed before the National passed yet,
Company Law Tribunal, however, by
Kolkata Bench under Section an order dated
241-242 of the Companies 9th November,
Act, 2013 2022, the
matter has
Petitioners: been reserved
1. GCL Logistic Terminal for passing of
LLP orders.
2. Godavari Commodities
Limited

Respondents :
1. Palogix Infrastructure
Private Limited
2. Sanjay Kumar Mishra
3. Atul Kumar Paliwal
4. Ramesh Sharan Rai
5. Vishal Rai
6. RBL Bank
7. Tata Capital Financial
Services
8. Durgapur Freight Terminal
Pvt. Ltd.
9. Palogix TMC Pvt. Ltd.
10. Palogix Infra Logistics
Pvt. Ltd.
11. Vista Steel Pvt. Ltd.
12. Shweta Rai
13. Sayonara Commercial
Private Limited
14. Twarit Transportation and

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Solutions Pvt. Ltd.

15. Deepak Joshi

4. A company Petition being 19.10.2022 No interim

C.P. No. 322 of 2022 has been order has been
filed before the National passed yet,
Company Law Tribunal, however, by
Kolkata Bench under Sections an order dated
241/242 of the Companies 9th November,
Act, 2013 2022, the
matter has
Petitioners: been reserved
1. Ramesh Sharan Rai for passing of
2. Sweta Rai orders.
3. Vishal Rai
4. Sayonara Commercial
Private Limited
5. Twarit Transportation and
Solutions Pvt. Ltd.

Respondents :
1. Palogix Infrastructure
Private Limited
2. Deepak Joshi
3. Kamal Singh Bhutoria
4. Shyam Premrajka
5. Sanjay Kumar Mishra
6. GCL Logistics Terminal
LLP

5. Deepak Joshi had obtained an Order dated

order dated 1.11.2022, from 04.11.2022
the Ld. Executive Magistrate has been
Durgapur in a Section 144 of passed by the
Cr.P.C. Application. Hon'ble High
Court wherein
Ajay Malaviya, had 03.11.2022 the order dated
challenged the order dated 01.11.2022
1.11.2022 by preferring an was stayed.
application under Section 482
of the Cr.P.C. before the
Hon'ble High Court at

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Calcutta being CRR No. 4011

of 2022.

A Vacating Application being 13.12.2022

CRAN 1 of 2022 has been
filed by Mr. Deepak Joshi,
being Opposite Party No.2.

9. Heard. Perused.

10. A perusal of the case records would show that initially, the license
for operation and management of Durgapur PFT was granted by
respondent No.5 to Palogix. In the year 2017, a Memorandum of
Understanding (MoU) came to be executed between petitioner No.2 and
Palogix on January 5, in terms whereof, the aforesaid license was to be
transferred to petitioner No.1 for a consideration of Rs.15,00,00,000/- to
be paid in two instalments – one of Rs.1,50,00,000/- and another of
Rs.13,50,00,000/-. The second instalment was to become due once the
license was transferred. However, before the transfer could go through,
Corporate Insolvency Resolution Process (CIRP) was initiated against
Palogix before NCLT, Kolkata Bench vide C.P.(IB) No.37/KB/2017. A
Resolution Plan dated 30.01.2018 accepted by the Committee of
Creditors was approved by the NCLT, Kolkata Bench vide order dated
12.02.2018, wherein agreement between petitioner No.1 and Palogix
with respect to transfer of license to operate Durgapur PFT was statedly
recognised.

In terms of the arrangement between petitioner No.1 and Palogix,

petitioner No.1 started operating Durgapur PFT while steps were
underway to get it substituted as Terminal Management Company in the
aforesaid license. However, as disputes arose between certain

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shareholders/directors of Palogix leading to filing of complaints with

Zonal Railways and cases at the Calcutta High Court, the impugned letter
dated 09.12.2022 was issued by respondent No.5 to Palogix
communicating thereby the decision to keep in abeyance all programmes
endorsed to/from PFPD siding for loading/unloading, until Palogix’s
disputes were resolved. Aggrieved by the same, the petitioners preferred
the instant writ petition.

11. In the writ petition, the petitioners have claimed jurisdiction of this
Court in the following terms:-

“59. The present petition is maintainable before this Hon'ble

Court inasmuch as the concerned respondents viz.
respondent nos. 1 to 4 who took the decisions impugned are
located within the territorial jurisdiction of this Hon'ble
Court. Moreover the essential part of cause of action viz.
decisions leading to the acts and/or omission including non-
consideration of the petitioner's representation dated
December 28, 2022 have taken place within the territorial
jurisdiction of this Hon'ble Court.”
12. Before proceeding further, it is deemed apposite to advert to
clauses (1) and (2) of Article 226 of the Constitution of India, which read
as under:-

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

Notwithstanding anything in Article 32, 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, 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.

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(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.”
13. A reading of Clauses (1) and (2) of Article 226 of the Constitution
of India would show that a High Court has territorial jurisdiction to issue
writs under two situations: one, where the person/authority to whom the
writ is to be issued is situated within the territory over which the High
Court exercises jurisdiction, and two, where the cause of action, wholly
or in part, arises for issuance of a writ within such territory. For the sake
of convenience, the first may be referred to as ‘jurisdiction by virtue of
situs’ and the other as ‘jurisdiction by virtue of cause of action’.

14. In the instant case, the petitioners have claimed jurisdiction of this
Court under both clauses of Article 226 of the Constitution of India. The
tests to determine whether this Court has jurisdiction under these Clauses
are well-defined. While before exercising jurisdiction by virtue of situs,
this Court is required to arrive at a positive finding that the
authority/person to whom the writ has to be issued lies within the
territory over which the Court exercises jurisdiction; in order to exercise
jurisdiction by virtue of cause of action, the Court shall be of the opinion
that cause of action, wholly or in part, has arisen within the jurisdiction
over which it exercises jurisdiction.

15. The Supreme Court in Utpal Kumar Basu and Others (Supra) has
observed that the question as to whether the High Court has territorial
jurisdiction to entertain a writ petition has to be decided on the basis of

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facts pleaded in the petition, the truth or otherwise thereof being

immaterial. Relevant excerpt from the decision is extracted hereunder:-

“6. …Therefore, in determining the objection of lack of

territorial jurisdiction the court must take all the facts
pleaded in support of the cause of action into consideration
albeit without embarking upon an enquiry as to the
correctness or otherwise of the said facts. In other words the
question whether a High Court has territorial jurisdiction to
entertain a writ petition must be answered on the basis of the
averments made in the petition, the truth or otherwise
whereof being immaterial. To put it differently, the question
of territorial jurisdiction must be decided on the facts
pleaded in the petition. Therefore, the question whether in the
instant case the Calcutta High Court had jurisdiction to
entertain and decide the writ petition in question even on the
facts alleged must depend upon whether the averments made
in paragraphs 5, 7, 18, 22, 26 and 43 are sufficient in law to
establish that a part of the cause of action had arisen within
the jurisdiction of the Calcutta High Court.”
16. The scope of Article 226(2) of the Constitution of India came to be
analysed in depth in Kusum Ingots & Alloys Ltd. v. Union of India and
Another reported as (2004) 6 SCC 254, where the Supreme Court
observed thus:-

“9. Although in view of Section 141 of the Code of Civil

Procedure the provisions thereof would not apply to writ
proceedings, the phraseology used in Section 20(c) of the
Code of Civil Procedure and clause (2) of Article 226, being
in pari materia, the decisions of this Court rendered on
interpretation of Section 20(c) CPC shall apply to the writ
proceedings also. Before proceeding to discuss the matter
further it may be pointed out that the entire bundle of facts
pleaded need not constitute a cause of action as what is
necessary to be proved before the petitioner can obtain a
decree is the material facts. The expression material facts is
also known as integral facts.

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10. Keeping in view the expressions used is clause (2) of

Article 226 of the Constitution of India, indisputably even if a
small fraction of cause of action accrues within the
jurisdiction of the Court, the Court will have jurisdiction in
the matter.
xxx
16. In Union of India v. Adani Exports Ltd. it was held that in
order to confer jurisdiction on a High Court to entertain a
writ petition it must disclose that the integral facts pleaded in
support of the cause of action do constitute a cause so as to
empower the Court to decide the dispute and the entire or a
part of it arose within its jurisdiction.
xxx
18. The facts pleaded in the writ petition must have a nexus
on the basis whereof a prayer can be granted. Those facts
which have nothing to do with the prayer made therein
cannot be said to give rise to a cause of action which would
confer jurisdiction on the Court.
xxx
27. When an order, however, is passed by a court or tribunal
or an executive authority whether under provisions of a
statute or otherwise, a part of cause of action arises at that
place. Even in a given case, when the original authority is
constituted at one place and the appellate authority is
constituted at another, a writ petition would be maintainable
at both the places…
xxx
Forum conveniens
30. We must, however, remind ourselves that even if a small
part of cause of action arises within the territorial
jurisdiction of the High Court, the same by itself may not be
considered to be a determinative factor compelling the High
Court to decide the matter on merit. In appropriate cases, the
Court may refuse to exercise its discretionary jurisdiction by
invoking the doctrine of forum conveniens. [See Bhagat Singh
Bugga v. Dewan Jagbir Sawhney, Madanlal Jalan v.
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Madanlal, Bharat Coking Coal Ltd. v. Jharia Talkies & Cold

Storage (P) Ltd., S.S. Jain & Co. v. Union of India and New
Horizons Ltd. v. Union of India.]”
17. In Nawal Kishore Sharma v. Union of India and Others reported as
(2014) 9 SCC 329, it has been held that persons/authorities outside the
territorial jurisdiction of a High Court are also amenable to its writ
jurisdiction, if the cause of action wholly or partially arises within such
territorial jurisdiction. Relevant excerpt from the decision is reproduced
below:-

“9. … On a plain reading of the amended provisions in

clause (2), it is clear that now the High Court can issue a
writ when the person or the authority against whom the writ
is issued is located outside its territorial jurisdiction, if the
cause of action wholly or partially arises within the court’s
territorial jurisdiction. Cause of action for the purpose of
Article 226(2) of the Constitution, for all intent and purpose
must be assigned the same meaning as envisaged under
Section 20(c) of the Code of Civil Procedure. The expression
cause of action has not been defined either in the Code of
Civil Procedure or the Constitution. Cause of action is
bundle of facts which is necessary for the plaintiff to prove in
the suit before he can succeed.”
18. While answering a reference with respect to the correctness of the
decision in New India Assurance Co. Ltd. v. Union of India & Ors.
reported as 2009 SCC OnLine Del 1764, a Full Bench (Five Judges) of
this Court in Sterling Agro Industries Ltd. (Supra) observed thus:-

“33. In view of the aforesaid analysis, we are inclined to

modify the findings and conclusions of the Full Bench in New
India Assurance Company Limited (supra) and proceed to
state our conclusions in seriatim as follows:
(a) The finding recorded by the Full Bench that the sole
cause of action emerges at the place or location where the
tribunal/appellate authority/revisional authority is situate

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and the said High Court (i.e., Delhi High Court) cannot
decline to entertain the writ petition as that would amount to
failure of the duty of the Court cannot be accepted inasmuch
as such a finding is totally based on the situs of the
tribunal/appellate authority/revisional authority totally
ignoring the concept of forum conveniens.
(b) Even if a minuscule part of cause of action arises within
the jurisdiction of this court, a writ petition would be
maintainable before this Court, however, the cause of action
has to be understood as per the ratio laid down in the case of
Alchemist Ltd. (supra).
(c) An order of the appellate authority constitutes a part of
cause of action to make the writ petition maintainable in the
High Court within whose jurisdiction the appellate authority
is situated.
Yet, the same may not be the singular factor to compel the
High Court to decide the matter on merits. The High Court
may refuse to exercise its discretionary jurisdiction by
invoking the doctrine of forum conveniens.
(d) The conclusion that where the appellate or revisional
authority is located constitutes the place of forum conveniens
as stated in absolute terms by the Full Bench is not correct as
it will vary from case to case and depend upon the lis in
question.
(e) The finding that the court may refuse to exercise
jurisdiction under Article 226 if only the jurisdiction is
invoked in a mala fide manner is too restricted/constricted as
the exercise of power under Article 226 being discretionary
cannot be limited or restricted to the ground of mala fide
alone.
(f) While entertaining a writ petition, the doctrine of forum
conveniens and the nature of cause of action are required to
be scrutinized by the High Court depending upon the factual
matrix of each case in view of what has been stated in
Ambica Industries (supra) and Adani Exports Ltd. (supra).
(g) The conclusion of the earlier decision of the Full Bench in
New India Assurance Company Limited (supra) “that since

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the original order merges into the appellate order, the place
where the appellate authority is located is also forum
conveniens” is not correct.
(h) Any decision of this Court contrary to the conclusions
enumerated herein above stands overruled.”
19. In M/s Kwality Caterers (Supra), a Single Bench of this Court had
dismissed a petition filed under Article 226 of the Constitution of India,
refusing to exercise its power against letter issued by South Eastern
Railways, Kolkata, on the ground that it did not have territorial
jurisdiction and/or that the Court at Kolkata is the forum conveniens. In
the appeal filed by the appellant against the order of the learned Single
Judge, Division Bench of this Court concurred with the view taken by the
learned Single Judge and observed as follows:-

“10. …The thrust of the argument is that even though the

Tripartite Agreement dated 24th December, 2010 (supra)
was executed at Kolkata but the same also did not tinker with
the term of the initial agreement dated 29th July, 2005
vesting the jurisdiction exclusively in the Courts at Delhi. On
enquiry as to how the parties by consent could vest the
jurisdiction in an alien Court, it is contended that the parties
in the present case even though executed the agreement at
Kolkata, were entitled to retain the clause in the earlier
agreement of exclusive jurisdiction of the Delhi Courts for
the reason of the train subject matter of the agreement
running between Delhi and Hatia (Ranchi).
11. Having given our thought to the argument aforesaid, we
are unable to persuade ourselves to hold that the High Court
at Delhi would have jurisdiction in the present facts and/or
the High Courts at Kolkata would not be the appropriate
Court to entertain the present controversy. …
12. Though undoubtedly the initial contract dated 29th July,
2005 was executed at Delhi but the same was for the period
till 28th July, 2010 only. In July, 2010 there was a drastic
change in policy with respect to such contracts. While earlier
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(i.e. when the contract dated 29th July, 2005 was entered
into) the Railways had hived off the mobile catering services
to IRCTC and which in turn had awarded the contract to the
appellant, under the Catering Policy 2010, the Railways
decided to remove IRCTC and to take over the catering
services unto itself and for better management thereof
entrusted the same to the zonal railways. Thus the powers
which earlier were exercised by IRCTC vis-à-vis the train
subject matter of the agreement aforesaid, stood vested in the
South Eastern Railways. Even though the subject train plies
between Delhi and Hatia (Ranchi) but still the management
of the contract with respect thereto fell in the lap of South
Eastern Railways and of which as aforesaid there is no
dispute. Thus, the factum of Delhi being one of the stations
between which the train plies, is immaterial.
xxx
14. …We may notice that the initial agreement not only
provided for the jurisdiction of the Courts at Delhi but also
provided for the arbitration of the disputes and in which
arbitration the sole arbitrator was to be appointed by the
Managing Director, IRCTC. In the Tripartite Agreement it
was however expressly provided that the right of appointment
of the arbitrator stood assigned to the Chief Commercial
Manager, South Eastern Railways. It thus cannot be said that
the parties at the time of entering into the Tripartite
Agreement did not touch the Dispute Resolution Mechanism.
The said Mechanism having provided for arbitration, the
parties agreed to the arbitration of arbitrator to be appointed
by the CCM, South Eastern Railways and who can
reasonably be expected to nominate an officer of the South
Eastern Railways only as the Arbitrator. The clause in the
initial agreement as to the jurisdiction of the Courts at Delhi
and the amended agreement dated 24th December, 2010 have
to be viewed in the light of the said change/amendment.
15. …The challenge in a Writ Petition is to the arbitrary
action of the South Eastern Railways, Kolkata. The Court
competent to entertain such a challenge would be the Court
at Kolkata only within whose territorial jurisdiction the South
Eastern Railways with respect to whose action writ of
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certiorari is claimed is situated and not this Court. It is for

this reason only that much emphasis cannot be laid on the
agreement, even if any, between the parties of the jurisdiction
of the Courts at Delhi. The said agreement was in the context
of the then decision making authority being situated within
the jurisdiction of this Court. However, now when under the
changed policy and the agreement and to which the appellant
has consented, the decision making authority is situated
outside the jurisdiction of this Court, it cannot be said that
the agreement of the jurisdiction of the Courts at Delhi
subsists.
16. It cannot also be lost sight of that the appellant is
approaching the Court in the exercise of its jurisdiction
under Article 226 of the Constitution for impugning the
action of the South Eastern Railways and seeking directive
against the South Eastern Railways, Kolkata who are beyond
the jurisdiction of this Court. The Catering Policy 2010
having vested all decisions in the matter in the zonal railways
and the subject train having fallen in the South Eastern Zone,
such jurisdiction can be exercised only by the High Court
having jurisdiction over the said zone and which this Court
admittedly does not have. We may notice that the Supreme
Court recently in Interglobe Aviation Ltd. v. N. Satchidanand
(2011) 7 SCC 463 has held that a clause in an agreement
which ousts jurisdiction of all Courts having jurisdiction and
conferring jurisdiction exclusively in one Court is valid only
when the cause of action in part accrues within the
jurisdiction of the Court in which exclusive jurisdiction is
conferred and would have no application where no part of
cause of action has accrued within the jurisdiction of such
Court. It was further held that such an invalid clause
conferring exclusive jurisdiction in the Courts at Delhi would
not be validated if the entire cause of action had accrued
outside Delhi and merely because the flight with respect
whereto grievance was made had originated at Delhi.
Similarly, in the present case, the clause even if any, of
exclusive jurisdiction of Courts at Delhi would be invalid
when the cause of action for the writ petition is the action of
the South Eastern Railways at Kolkata.”

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20. A factual matrix similar to the present case presented itself in

Money Market Services (India) Private Ltd. (Supra), where this Court
observed as follows:-

“8. Thus, in order for the Court to have jurisdiction, the

impugned action forming part of the cause of action, ought to
have taken place within the territorial jurisdiction of the
Court. The various orders of the Ld. Division Bench passed
in similar circumstances are clear to the effect that this Court
would not have territorial jurisdiction if the striking off has
been directed by the authority in a different state. In those
cases, before the Ld. Division Bench, the striking off orders
were passed by the ROCs located in Kanpur and in
Maharashtra. For e.g., the order of the Division Bench in
Vishal Bhati (supra) reads:
"Considering the fact that the issue pertains to action
taken by the Registrar of Companies, Kanpur and under
identical situation with regard to action taken by
Registrar of Companies, Mumbai on account of lack of
territorial jurisdiction, we had refused to interfere into
the matter earlier. Accordingly, we dismiss this petition
also with liberty to the petitioner to file an appropriate
petition before the Court having territorial jurisdiction
over the matter".
9. In the present case the grievance of the Petitioner is not
against the SFIO investigation. In fact, the Petitioner relies
on the said investigation to argue that the name of the
company cannot be struck off. Thus, the cause of action arose
due to the act of the ROC in Chennai and not the Central
Government's act of directing the SFIO investigation. The
impact of Sub-Rule 3(1) on the striking-off of the name of the
Petitioner-Company would be a legal argument which the
Petitioner would have to raise before the appropriate forum.
The said forum would be entitled to consider the effect of
Sub-Rule 3(1) and also to examine the legality of the order
dated 25th October, 2019. The mere fact that the Central
Government may have directed the SFIO investigation, would
not vest jurisdiction in this Court, especially when the
specific order impugned in this case has been passed by the
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ROC in Chennai. Accordingly, this Court is of the view that

this Court lacks territorial jurisdiction to entertain the
present writ petition.”
21. Recently, in Sachin Hindurao Waze v. Union of India and Others
reported as 2022 SCC OnLine Del 3287, this Court underscored the
importance of applying the principle of forum conveniens and opined
thus:-

“12. On a broad holistic assessment of decisions cited by the

petitioner would show that there are practically two elements
which have to be considered by any court while accepting
jurisdiction to decide a writ petition under Article 226 of the
Indian Constitution - firstly, if any part of the cause of action
arises within its territorial jurisdiction; and secondly if the
said court is the forum conveniens. Only a mere shred or an
iota of a cause of action potentially clothing a particular
High Court with jurisdiction [per Article 226(2) of the
Constitution of India] to adjudicate a writ petition, ought not
to encourage a court to accept such jurisdiction completely
divorced and dehors an assessment of forum conveniens. This
has been categorically articulated in decisions of this Court.
A Special Bench comprising 5 judges of this Court [Chief
Justice Dipak Misra, Vikramajit Sen, J. A.K. Sikri, J. Sanjiv
Khanna, J. and Manmohan, J.] in Sterling Agro (supra) after
traversing the law relating to territorial jurisdiction in
context of Article 226 of the Constitution of India emphasized
that the High Court must not only advert to the existence of a
cause of action but also remind themselves about the doctrine
of forum conveniens also.
13. Accordingly, in para 33 of the reported judgment in
Sterling Agro Industries (supra) this Court concluded that a
cause of action cannot be totally based on the situs of the
tribunal/appellate authority/revisional authority while
completely ignoring the concept of forum conveniens, and
that the High Court may refuse to exercise its discretionary
jurisdiction by invoking the doctrine of forum conveniens.
xxx

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16. Learned counsel for the petitioner relied upon the

reasoning by this Court in para 30 of Sonu Sardar (supra)
that since material to be examined is the advice tendered by
the Cabinet and all documents and records were in Delhi, the
decision was taken in Delhi and therefore, this Court has
jurisdiction to entertain the writ petition. However, this Court
notes that this reasoning was premised upon the observation
in para 29 of the said decision where this Court noted that
the scope of judicial review in rejection of mercy petitions is
limited and it extends only to the material upon which the
decision is based, i.e., whether all relevant material was
considered before arriving at a conclusion. This decision will
not come to the aid of the petitioner, since in the considered
view of this Court, firstly this Court drew a distinction
between a petition challenging an issue relating to criminal
proceedings which were ongoing as opposed to a situation of
a mercy petition where criminal proceedings had attained
finality and what has to be examined in isolation was the
executive action; secondly, this Court was fully cognizant of
the law laid down in the line of decisions from Kusum Ingots
(supra), Ambica Industries v. Commissioner Of Central
Excise, (2007) 6 SCC 769, Sterling Agro (supra) where the
court is obliged to consider not only existence of part of
cause of action but also balancing it by applying the
principle of forum conveniens.
17. …Having considered the facts and circumstances of the
matter and the obvious forum conveniens for the petitioner,
being a resident of Mumbai, seeking relief relating to
proceedings underway in Mumbai, the special courts and
authorities investigating and adjudicating the matter located
in Mumbai, this Court finds no reason to clothe itself with
territorial jurisdiction to adjudicate the relief sought in this
petition.”
22. Coming to the facts of the present case, it is noted that the factum
of issuance of the impugned letter by respondent No.5 at Kolkata is not
in dispute. The petitioners have alleged that the impugned letter issued
by respondent No.5 was a mere mode of communication, whereas the
actual decision was taken by respondent Nos.1 to 4 at Delhi. However,
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there is nothing on record to give credence to the suggestion of the

petitioners. Besides, the letter dated 26.12.2022 by Railway Board, Delhi
was issued to respondent No.5 after issuance of impugned letter dated
09.12.2022 by respondent No.5. Thus, it cannot be inferred that the
impugned letter was issued pursuant to a decision taken by respondent
Nos. 1 to 4. Internal correspondence between the two departments of
Railways cannot be overstretched to claim jurisdiction of this Court.

23. Pertinently, Sections 2(32) and 3 of the Railways Act, 1989 read as
follows:-

“(32) “railway administration”, in relation to—

(a) a Government railway, means the General Manager of a
Zonal Railway; and
(b) a non-Government railway, means the person who is the
owner or lessee of the railway or the person working the
railway under an agreement;
xxx

3. Zonal Railways.—(1) The Central Government may, for

the purpose of the efficient administration of the Government
railways, by notification, constitute such railways into as
many Zonal Railways as it may deem fit and specify in such
notification the names and headquarters of such Zonal
Railways and the areas in respect of which they shall
exercise jurisdiction.
(2) The Zonal Railway existing immediately before the
commencement of this Act shall be deemed to be Zonal
Railways constituted under sub-section (1).
(3) The Central Government may, by notification, declare
any unit of the railways engaged in research, development,
designing, construction or production of rolling stock, its
parts or other equipment used on a railway, to be a Zonal
Railway.

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(4) The Central Government may, by notification, abolish any

Zonal Railway or constitute any new Zonal Railway out of
any existing Zonal Railway or Zonal Railways, change the
name or headquarters of any Zonal Railway or determine the
areas in respect of which a Zonal Railway shall exercise
jurisdiction.”
24. Railways is divided into different zones on territorial basis. Each
Railway Zone is headed by a General Manager. All zones may be
connected to the Railway Board at the top, but administratively they
operate within their own territories.

25. There is no indication that decisions taken by zonal offices are

subject to confirmation by Railways Headquarters at Delhi. As stated
above, there is no indication that the impugned letter issued by
respondent No.5 was at the behest of respondent Nos.1 to 4 or a mere
mode of conveying the decision actually taken by respondent Nos.1 to 4.
In this backdrop, by merely impleading respondent Nos.1 to 4 as parties
in the petition and suggesting that the impugned decision was taken by
them, the petitioners are misdirected in attempting to claim jurisdiction
of this Court, which otherwise is not made out. Concededly, all other
parties are not located in the jurisdiction of this Court. At the cost of
repetition, it is observed that internal correspondence exchanged between
respondent No.5 and Railway Board is inconsequential for locating
territorial jurisdiction of a Court in the matter.

26. The petitioners’ reliance on Clause 26.4.1 of the License

Agreement to attract jurisdiction of this Court is also fundamentally
flawed. Jurisdiction clauses in the contracts would decide the jurisdiction
within which contractual disputes are resolved. Party autonomy is the
reason for such choice being provided to contracting parties to chose a

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forum of their mutual choice in contractual disputes. However, when a

party chooses to invoke extraordinary writ jurisdiction of a constitutional
Court, the jurisdiction clause in the contract cannot be a guiding factor.
Regardless, even in contracts, one cannot confer jurisdiction by way of
jurisdiction clauses on a Court that does not have one. One can only
confine jurisdiction to one of the two competent Courts that have
jurisdiction. As already held, this Court lacks jurisdiction to start with,
therefore, even under Clause 26.4.1 of the license agreement, this Court
does not attract jurisdiction in the matter. The whole argument advanced
by the petitioners on “seat versus venue” is misplaced. There is no need
to refer to Clause 26.4.1 of the License Agreement dated 19.09.2012 to
look for signs to find if this Writ Court will have jurisdiction.

27. No part of cause of action, much less material cause of action, has
arisen within the territorial limits of this Court.

28. In this view of the matter, this Court is of the opinion that it does
not have territorial jurisdiction to decide the case under Article 226 of the
Constitution of India. Having arrived at such conclusion, the question as
to whether this Court is the forum conveniens or not, and other
contentions raised, need not be gone into.

29. The petition is dismissed. Pending miscellaneous application

stands disposed of.

(MANOJ KUMAR OHRI)

JUDGE
FEBRUARY 28, 2023/ga

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