(Per : HONOURABLE MR. JUSTICE AKIL KURESHI) 1. The petitioners had filed this petition initially with a prayer for issuance of a writ holding and declaring action of respondent No.3 i.e. the Assistant Commissioner of Customs, Varanasi in not issuing Re-transfer Release Advices in respect of three DEPB licences purchased by the petitioners as illegal and bad in law. The petitioners had consequently prayed for a direction to such authority to issue such Release Advices. During the pendency of the petition, certain developments took place. The Joint Director General of Foreign Trade, New Delhi issued an order dated 30-3-2000 cancelling the three DEPB licences. By way of amendment, therefore, the petitioners added the prayer challenging such cancellation order also.
2. The brief facts leading to the present petition are as follows. The petitioner No.1 is a company registered under the Companies Act and is engaged in manufacturing detergent cakes, detergent powder etc. For the purpose of its manufacturing activity, the petitioners purchased through their agents, three DEPB licences issued by the authorities under the Director General of Foreign Trade in favour of one M/s. Yash Exports. Alongwith covering letter dated 12-3-1999 issued by the Foreign Trade Development Officer, the said Yash Exports was issued DEPB licence for a duty credit of Rs.8,04,038/-. The licence was transferable. It is this licence that the petitioners purchased on or around 20-3-1999. The authorities also endorsed such licence in favour of the petitioners as is apparent from page 17 of the compilation which is part of Annexure A to the petition. The petitioners during the same period purchased two more licences issued in favour of M/s. Yash Exports of the identical amount of Rs.8,04,038/-.
3. With the aid of these licences, when the petitioners imported certain goods needed for their manufacturing activities, and offered to pay customs duty on such imports through the DEPB credits so purchased by them, the customs authorities refused to permit such imports. After some correspondence when the authorities did not budge, the petitioners filed the present petition and prayed for a direction already noted earlier.
4. Subsequently, the Joint Director of Foreign Trade passed the order dated 30-3-2000 and cancelled all the three licences. This order also, the petitioners have challenged in this petition.
5. Learned counsel for the petitioners raised several contentions including that the petitioners being bonafide purchaser for value without notice, cannot be denied the benefit flowing from such endorsing of the DEPB licences. He submitted that when the imports were made by the petitioners, the licences were in force. The customs authorities could not have declined to accept such licences and stopped the imports of the petitioners. He also submitted that the DEPB licences are made freely transferable. Such licences were issued by the foreign trade authorities only after verification of actual exports. Such licences were made transferable. Such licences were transferred in favour of the petitioners. The counsel submitted that there is no allegation that the petitioners were either party to or even aware of the alleged fraud by M/s. Yash Exports. In short, he would contend that the authorities erred in not accepting the licences which were already endorsed in favour of the petitioners.
6. The respondents have filed detailed affidavit and appeared through their counsel. On the strength of such affidavit, Shri Satyam Chhaya opposed the petition contending that the DEPB licences were obtained through fraud. The exporters M/s. Yash Exports was found to be not in existence. The exports were never made. Invoices were overpriced. Investigation was carried out to establish that there was serious fraud committed in obtaining such licences. He, therefore, submitted that the petitioners cannot be granted any benefit on the strength of such bogus licences.
6.1 He raised objection with respect to territorial jurisdiction of this court. Relying on paragraph 3 of the affidavit-in-reply dated 13-3-2000 filed by one Shri Yogendra Garg, the counsel submitted that no part of the cause of action has arisen within the territorial jurisdiction of this court. The main relief is prayed against respondent No.3 who has his office at Varanasi. There are no averments in the petition that any action was taken within the territorial jurisdiction of this court. The counsel, therefore, submitted that the petition should be dismissed only on this preliminary ground.
7. With respect to such contention of the respondents regarding territorial jurisdiction, the counsel for the petitioners relied on the averments made in the petition which were brought on record through amendment wherein it is stated that:
“8. The Petitioner Company's registered office is situated in the state of Gujarat. Copies of the TRAs of the three DEPB licenses were received by the Petitioner company at Ahmedabad. The effect and impact of the impugned action on the part of respondent No.3 in denying to issue fresh transfer release advices is felt by the petitioner company at Ahmedabad. Thus, a substantial part of the cause of action has arisen at Ahmedabad The respondent No.6 has summoned the Petitioner company at Ahmedabad for enquiry with regard to the subject DEPB licenses. This Hon'ble Court has, therefore, jurisdiction to entertain, try and dispose of this petition.”
8. Having thus heard learned counsel for the parties, we would like to first decide the question of territorial jurisdiction. Only if we hold that this court has the territorial jurisdiction to entertain the petition, the question of examining the prayers made by the petitioners on merits would arise.
9. In this respect, we notice that the respondents had filed Civil Application No.6127/2000 in which besides stating at length in what manner the licences were obtained fraudulently, it is further stated that this court has no jurisdiction in respect of the subject matter of the petition as no cause of action has arisen in the territory of the State of Gujarat and in that view of the matter, the petition should not be entertained. In the said Civil Application, the respondents prayed that the issue of jurisdiction of the court be decided as a preliminary issue.
10 On this Civil Application, a Division Bench of this court passed an order on 28-8-2000 directing the matter to be placed before appropriate court. However, neither any observations were made with respect to the question of territorial jurisdiction, nor such question was concluded one way or the other.
11. In that view of the matter, we now proceed to decide this preliminary objection of the respondents. It is not in dispute that M/s. Yash Exports had shown its address at Varanasi when claiming DEPB licences. It had claimed to have made exports from Varanasi and accordingly received the DEPB licences issued by the Joint Director of Foreign Trade, New Delhi. The petitioners after such licences were transferred in their name, imported the goods at Mumbai. The goods were not cleared by the Customs authority at Mumbai. When the petitioners approached the respondent No.3 i.e. the Assistant Commissioner of Customs, Varanasi with a grievance regarding such non-clearance of the goods, such authority refused to grant the request of the petitioners. Thereupon, the petitioners approached this court. On the record, we have a legal notice issued by the petitioners through their advocates dated 18-11- 1999. Such notice is addressed to the Assistant Commissioner of Customs, Varanasi. In the notice, the petitioners conveyed that the release order previously issued could not be utiiised and that fresh release orders be issued. Though in the petition, the petitioners have stated that later on, they desired to import some other goods at Kandla Port utilising such credits, when the petition was filed, no such imports were made and the entire issue pertains to the action of the Customs authorities not allowing the petitioners to import the goods which had landed at Mumbai.
12. If we see the list of respondents joined by the petitioners in this petition, they are all authorities having their locations at different places outside Gujarat except respondent No.6. The other authorities are stationed at New Delhi, Mumbai, Varanasi etc. Only respondent No.6 – Senior Intelligence Officer, Directorate of Revenue Intelligence has his office in Ahmedabad. This respondent, the petitioners have joined perhaps on the ground that this authority had issued a summons to the petitioner to record the statements in connection with DRI investigation regarding the alleged bogus exports.
13. In our view, no part of the cause of action can be stated to have arisen within the local limits of this court. To reiterate, the DEPB licences were issued in favour of M/s. Yash Exports at Varanasi. The port of export was shown at Varanasi. The licences were issued by Director General of Foreign Trade, New Delhi. Such licences were transferred in favour of the petitioners also by the same authority. On the basis of purchase of such licences the petitioners imported goods which landed at Mumbai. The customs authorities at Mumbai refused to permit imports thereof on the basis of the DEPB licences so purchased by the petitioners. Clearly no part of the cause of action can be stated to have arisen within the local limits of this court. The ultimate order that the Joint Director of Foreign Trade passed was also at New Delhi. The ultimate order cancelling the licences which the petitioners have challenged in the petition subsequently, was also passed by the authority at New Delhi.
14. Merely because the officer of DRI issued a summons to the petitioners during the course of investigation, would not give any jurisdiction to us to entertain this petition. Such summons was for the purpose of recording the statements of the authorised representatives of the petitioner No.1 company, this was part of investigation undertaken by DRI with respect to fraud committed in obtaining DEPB licences. Such summons had no co-relation with the grievance of the petitioners of stopping their imports on the ground of not accepting the DEPB licences purchased by the petitioners.
15. In National Textile Corpn. Ltd. and others vs. M/s. Haribox Swalram and others reported in 2004 AIR SCW 2067, the Supreme Court held and observed that facts which have no bearing with the lis or dispute involved in the case do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned. In the said case, the petitioners had been purchasing various quantities of cloth from the mills situated in Bombay. The petitioners had entered into a contract and made advance payments for such purchases. The mills supplied and delivered the goods to the petitioners from time to time but substantial part of the contract remained unexecuted. The mills could not deliver the goods as the bank transactions and accounts of the mills had been frozen. Later on, the management of the mills was taken over by the Central Government under Textile Undertakings (Taking Over of Management) Ordinance, 1983. The Central Government constituted National Textile Corporation to manage such mills which were taken over. The petitioners, therefore, approached such Corporation for release of the remaining quantity of cloth. Since the Corporation did not deliver the goods, the petitioner approached for necessary relief before the High Court of Calcutta. The petitioners tried to establish the jurisdiction of the Calcutta High Court on the premise that it carries on business at Calcutta and the replies by mills to correspondence issued by the petitioners was received at Calcutta. The Apex Court held that such facts were not integral part of the cause of action and, therefore, the High Court at Calcutta had no territorial jurisdiction. The court observed as under:-
“10. 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. In Union of India v. Adani Exports Ltd. AIR 2002 SC 126 in the context of clause (2) of Article 226 of the Constitution, it has been explained that each and every fact pleaded in the writ petition does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the Court's territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the Court concerned. A similar question was examined in State of Rajasthan v. M/s Swaika Properties AIR 1985 SC 1289. Here certain properties belonging to a company which had its registered office in Calcutta were sought to be acquired in Jaipur and a notice under Section 52 of the Rajasthan Urban Improvement Act was served upon the company at Calcutta. The question which arose for SCA/1209/2000 10/10 JUDGMENT consideration was whether the service of notice at the head office of the company at Calcutta could give rise to a cause of action within the State of West Bengal to enable the Calcutta High Court to exercise jurisdiction in a matter where challenge to acquisition proceedings conducted in Jaipur was made. It was held that the entire cause of action culminating in the acquisition of the land under Section 152 of the Rajasthan Act arose within the territorial jurisdiction of the Rajasthan High Court and it was not necessary for the company to plead the service of notice upon them at Calcutta for grant of appropriate writ, order or direction under Article 226 of the Constitution for quashing the notice issued by the Rajasthan Government under Section 52 of the Act. It was thus held that Calcutta High Court had no jurisdiction to entertain the writ petition.”
16. In the present case, as already noted, no part of the cause of action had arisen within the jurisdiction of this court. In the result, the petition is required to be rejected only on this ground. We hereby do so without expressing any opinion on the merits. Rule discharged. Interim relief vacated.
17. In view of the order passed in the main matter, Civil Application No.6127/2000 and Civil Application No.3734/2000 both stand disposed of.
( Akil Kureshi, J. ) ( Harsha Devani, J. ) hki