Dismissed

M/S Aks Cold Storage Ltd. v. Indian Bank

Kerala HC23 Mar 2021WP(C)/3023/2021

Case brief

AI extract

What is this about?

Writ petition by a cold storage company seeking restructuring of its credit facilities, release of a secured property and quashing of an SLBC circular, all arising from loan transactions with a bank branch at Mettupalayam. The court upheld the objection to territorial jurisdiction and dismissed the petition, since no integral part of the cause of action arose in Kerala.

What the court decided

AI extract

M/S Aks Cold Storage Ltd. Vs Indian Bank — Banking and Recovery | Kerala HC (2021)

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W.P(c).No.3023/2021-C

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE SMT. JUSTICE P.V.ASHA

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TUESDAY, THE 23RD DAY OF MARCH 2021 / 2ND CHAITHRA, 1943

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WP(C).No.3023 OF 2021(C)

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PETITIONERS:

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1 M/S AKS COLD STORAGE LTD SF NO 43, 1G/2 AROOR JUNCTION, AROOR POST, ALAPUZHA DISTRICT, KERALA, PIN-688 534, REPRESENTED BY ITS MANAGING DIRECTOR.

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2 AKS SARAVANAN, IAI SARAVANAN ILLAM, MAHADEVAPURAM, METTUPALAYAM, TAMIL NADU-641 305.

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BY ADVS. SRI.MOHAN JACOB GEORGE SMT.P.V.PARVATHY (P-41) SMT.REENA THOMAS SMT.NIGI GEORGE

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RESPONDENTS:

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1 INDIAN BANK 143 OOTTY MAIN ROAD, METUPPALAYM-641 301, REPRESENTED BY ITS CHIEF MANAGER.

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2 RESERVE BANK OF INDIA, BAKERY JUNCTION ROAD, NANDAVANAM, PALAYAM, THIRUVANANTHAPURAM, KERALA-695 033, REPRESENTED BY ITS REGIONAL DIRECTOR.

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3 STATE LEVEL BANKERS' COMMITTEE, KERALA, CAANARA BANK, SLBC CELL, CIRCLE OFFICE, CANARA BANK BUILDING, P.B.NO.159, M.G. ROAD. THIRUVANANTHAPURAM-695 001, REPRESENTED BY ITS CONVENER AND GENERAL MANGER.

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4 CANARA BANK, STRESSED MANAGEMENT BRANCH (FORMERLY SYNDICATE BANK), 15/38, SIC BUILDING, 1ST FLOOR, ANNA SALAI, CHENNAI-600 002, REPRESENTED BY ITS CHIEF MANAGER.

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R1 BY SRI.S.EASWARAN, SC, INDIAN BANK R4 BY ADV. SRI.R.S.KALKURA SRI.M.GOPIKRISHNAN NAMBIAR, SC

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.03.2021, THE COURT ON 23.03.2021 DELIVERED THE FOLLOWING:

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P.V.ASHA, J .

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W.P(c) No.3023 of 2021-C

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Dated this the 23^rd day of March, 2021

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J U D G M E N T

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The Writ Petition is filed by M/s.A.K.S Cold Storage Ltd. against the Indian

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Bank Metupalayam Branch, Canara Bank, Anna Salai and other 2 respondents in

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their address at Thiruvananthapuram, seeking the following reliefs:

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i) declare that the 1^st respondent has acted in violation of Ext.P-4, P-15 to P17 RBI circulars and has without the consent of the 4^th respondent wrongly extended the consortium security created by the petitioners for the consortium credit facilities availed from the 1^st and 4^th respondents and has not granted the restructuring of the loan account in accordance with Exts.P-15 to P17 circulars and issue a writ of Mandamus or such other appropriate writ or order commanding the 1^st Respondent to grant the restructuring of the credit facility in accordance with Exts.P-15 to P17 circulars or command the second Respondent to direct the 1^st Respondent to grant suitable restructuring of the credit facility so as to enable revival of the Petitioner's business in accordance with Ext.P-15 to P-17 circulars;

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ii) Direct the 1^st Respondent to release the property of the 1^st Petitioner in Ooty which was exclusively offered as security for the Term Loan of Rs.15 crores (granted as per Ext.P-5) forthwith or direct the 2^nd Respondent to issue orders commanding the 1^st Respondent to release the property of the 1^st petitioner's property in Ooty exclusively offered as security for the term loan of Rs.15 Crore (granted as per Ext.P-5) forthwith and to exclude the penal interest charged in the account till the date of restructuring frm the date of renewal of the account by the 1^st Respondent charged since June 2018;

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iii) issue a writ of Certiorari or such other appropriate writ or order quashing Ext.P-24 SLBC) circular issued by the 3^rd respondent;

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iv) direct the second respondent to hear the Petitioners into the grievances relating to the wrongful action of extension of security by the 1^st Respondent to the consortium security without the consent of the 4^th respondent and to pass orders directing restoration of the credit relating of petitioner with CIBIL and CRILC including passing of such orders for redressal of the consequential damage and loss of business, credit worthiness and reputation suffered by the Petitioners due to declaration of the Petitioners' account being classified as NPA by the 4^th Respondent and to further direct the 2^nd respondent to complete the said procedure within a period/time limit prescribed by this Hon'ble Court;

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v) grant such other reliefs as are deemed fit and proper vi) grant the cost of this Writ Petition.”

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The 1^st respondent raised a preliminary objection relating to the territorial jurisdiction to grant the reliefs sought by the petitioners. Therefore, both sides were heard on the preliminary objection.

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Sri. Mohan Jacob George, the learned counsel for the petitioners, argued that the 1^st petitioner company was originally incorporated in the name and style of 'SH Cold Storage Pvt. Ltd.' under the Registrar of Companies, Kerala on 19.1.2003 and its subsequent change of name as AKS Cold Storage Pvt. Ltd, was also registered with the Registrar of Companies, Kerala, as can be seen from Ext P1. The cold storage is having its address at Aroor in Alappuzha district. It is pointed out that when the zonal credit committee, had as per Ext.P2(a) letter dt.12.12.2013, sanctioned facilities to the branches of the petitioners at Ernakulam, Palakkad and Calicut also, along with its branches at Mettupalayam. It is pointed out that the land, building, plant and machinery in it situated in Aroor Village were also given as security apart from the properties at Mettupalayam towards collateral security for availing the facilities. According to the learned Counsel for the petitioners, major part of the transactions relating to this Writ Petition occurred at Aroor. Ext.P3 issued by the branch at Mettupalayam, in connection with the change of name, would show that under the head Securities Proposed' and sub heading Agri Medium Term Loans' : hypothecation of plant and machineries and extension of equitable mortgage of the properties included the land, building and machineries of the branches of the company at Ernakulam, Palakkad and Calicut

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along with that of the Mettupalayam branch. It is stated that though Ext.P11 representation was submitted from its address at Mettupalayam before the 1^st respondent at Mettupalayam, request therein was for restructuring pointing out the financial stress caused to it because its three units in Kerala were affected by the heavy flood and rain, as can be seen from Ext.P12 series of photographs and the said application was submitted for benefits under Ext.P15 circular dated 20.06.1998, Ext.P16 master circular issued by the RBI on 01.07.2013 and Ext.P17 master direction issued by the RBI on 03.07.2017, relating to relief measures to be undertaken by banks in areas affected by natural calamities. The 1^st respondent acted upon the said application and issued Ext.P18 order providing for moratorium and denying additional funding and other benefits admissible under the RBI guidelines. Dissatisfied with the same, the petitioners again approached the 1^st respondent with Ext.P19 representation requesting for benefits in tune with the guidelines of RBI. The Writ Petition is filed when further correspondence between the petitioners and the 1^st respondent bank did not yield the desired results. According to the petitioners, when restructuring was requested with reference to the loss caused to its units in Kerala on account of natural calamities, the Writ Petition lies before this Court.

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The objections raised in the counter affidavit of the 1^st respondent are the following: The 1^st respondent sanctioned certain credit facilities to M/s. SH Cold Storage Ltd., Mettupalayam on 03.08.2010. The transactions took place in

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Mettupalayam branch in Coimbatore district. Security documents were executed beyond the territorial jurisdiction of this Court. Thereafter, as per Ext.P2(a) order dated 12.12.2013 credit facilities were enhanced to the company which was having a unit at Mettupalayam and office at Mettupalayam and a consortium with syndicate bank was formed. The respondents submit that even though the 1^st petitioner was having registration within the State of Kerala and additional facilities were also sanctioned for the units at Ernakulam, Palakkad and Calicut, those factors are not relevant for determining the jurisdiction/cause of action. Again by Ext.P3 further facilities were sanctioned to the company at Mettupalayam. Additional term loan of Rs.15 crores was granted to M/s.AKS Cold Storage Private Ltd., Mettupalayam as per Ext.P5. The security was furnished for the same by deposit of title deeds in respect of properties in Nilgiris district and Thoothukudi district as per Ext.P5. The 1^st petitioner executed Ext.R1(a) agreement dated 31.03.2017 towards security for medium term loan. Along with that, Ext.R1(b) agreement of hypothecation for agriculture loan was also executed agreeing to create security over the properties in Ootty and Thoothukudy districts of Tamil Nadu. Ext.R1(c) was also executed on the very same day in respect of hypothecation of movables relating to the cold storage unit at Mettupalayam and Thoothukudy districts. Therefore, according to the 1^st respondent, the entire transaction took place outside the State of Kerala. It is further stated that the consortium meeting of the 1^st respondent and erstwhile

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Syndicate bank was convened on 29.6.2017 at the zonal office of the 1^st respondent at Coimbatore. Ext.P8 sanction order for restructuring of credit facilities was also issued outside the State. The 1^st petitioner had as per Ext.P19 letter requested for revision of terms of the sanction order and the 1^st respondent which is having office at Mettupalayam requested for revision of the term loan. Ext.P20 sanction order was accepted by it at Mettupalayam. A demand promissory note Ext.R1(d) was thereupon executed by the 1^st petitioner at Mettupalayam on 24.3.2020 and the 1^st petitioner executed Ext.Rl(e) disposal proceeds letter on 24.3.2020 at Mettupalayam. Another loan agreement was also executed by the 1^st petitioner as per Ext.R1(f) on 24.3.2020. It is stated that Ext.R1(g) demand promissory note, Ext.R1(h) disposal of proceeds letter and Ext.R1(i) funded interest term loan agreement were also executed on 24.3.2020. Therefore, it is the contention of the 1^st respondent that the entire cause of action leading to the case arose outside the State of Kerala and moreover the property which is sought to be released is one at Ootty. Therefore, it is submitted that the mere fact that the petitioner is having units in Kerala will not be sufficient for entertaining the Writ Petition.

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Relying on the judgments in Navinchandra N. Majithia v. State of Maharashtra : (2000) 7 SCC 640, Rajendran Chingaravelu v. R.K. Mishra : (2010) 1 SCC 457, Nawal Kishore Sharma v. Union of India : (2014) 9 SCC 329 and judgment of the Allahabad High Court in P.R. Transport agency(M/s) v.

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Union of India : 2006 KHC 3015, Sri. Mohan Jacob George argued that part of cause of action arose within the limits of this Court and therefore the Writ Petition would lie before this Court.

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The learned counsel for the 1^st respondent relied on the judgments of the Apex Court in Alchemist Ltd. v. State Bank of Sikkim [(2007) 11 SCC 335], State of Rajasthan v. Swaika Properties [(1985) 3 SCC 217], Kusum Ingots & Alloys Ltd. v. Union of India & Anr. [(2004) 6 SCC 254], Full Bench judgments of this Court in Registrar, Indian Maritime University, Chennai v. Dr. K.G.Viswanathan & Anr. [2014 (4) KHC 451], Dental Council of India (DCI) v. Dr. V.Viswanath & Ors. [2018 (3) KHC 143] and the judgment of a Division Bench of this Court in Aparna Balan & Anr. v. Union of India & Ors. [2018 (4) KHC 191].

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I have considered the contentions advanced by both sides. Article 226(2) of the Constitution of India reads as follows:

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

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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 Governmen t or authority or the residence of such person is not within those territories.”

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In the judgment in Navin Chandra ( supra ), the Apex Court was considering a case where a Managing Director of a Company having its head office at Mumbai, filed a Writ Petition before the High Court of Mumbai challenging a complaint and FIR

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filed by one J. B. Holding against the petitioner in a police station at Shillong. Petitioner claimed that the entire transaction based on which complaint was filed had taken place in Bombay. The Bombay High Court dismissed the writ petition stating that it does not have jurisdiction. Referring to the judgment of Lord Watson in Chand Kour v. Partab Singh in ILR (1889) 16 Cal 98 it was held that in order to determine an objection as to lack of territorial jurisdiction the court must take all the facts pleaded in support of the cause of action into consideration without enquiring into its truth or otherwise or in other words on the basis of the pleadings. The Apex Court reversed the judgment of the High Court of Bombay and it was held that relief sought in the Writ Petition cannot be the sole criteria to determine territorial jurisdiction and that the averments made in the Writ Petition woud show that some part of cause of action arose within the territorial jurisdiction of the Bombay High Court.

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The contention of the petitioner is that the averments in the Writ Petition would show that the Writ Petition would lie before this Court. On the other hand, the contention of the respondent is that cause of action means bundle of facts and integral part of cause of action did not occur in Kerala.

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In the judgment in Rejendran Chingaravelu 's case ( supra ), relied on by Sri. Mohan Jacob, the petitioner therein filed a writ petition before the Andhra Pradesh High Court and it was dismissed on the ground that no part of the cause of action arose within the jurisdiction of that court giving liberty to petitioner to

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approach the Court at Chennai. In that case, the petitioner who was employed at Hyderabad, withdrew funds from the bank at Hyderabad for a purchase to be made in Chennai; got a certificate relating to its source of funds and got clearance for carrying cash from Airport authorities; he was intercepted and detained in Chennai, the cash with him was seized by intelligence officials; they caused publication of news reports regarding the incident depicting him as a culprit; returned the cash after 2 months without interest after an ordeal of events. The Apex Court found that the genesis of the episode started at Hyderabad. The seizure, detention, etc. at Chennai airport were initiated by the security/Intelligence officials at Hyderabad air port and that the income tax proceedings against him were also initiated at Hyderabad. Therefore, it was found that a part of cause of action arose at Hyderabad which gave the petitioner the right to sue and hence the dismissal of writ petition for want of jurisdiction was not correct. In the present case no proceedings are initiated by the Bank from the State of Kerala.

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In the judgment in Nawal Kishore Sharma 's case, the petitioner who was a seaman employed in Shipping Corporation of India was declared permanently unfit due to cardio myopathy and his registration as seaman was cancelled. He thereupon underwent treatment at his native place in Bihar. When his request for disability pension was rejected, he approached the High Court at Patna. At the time of final hearing the respondents raised objection as to territorrial jurisdiction on the ground that petitioner was discharging his duties outside Bihar; he was declared unfit by an authority of the corporation at Bombay and no cause

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of action arose within Bihar. The petitioner had claimed that he received the communications relating to denial of benefits in his permanent address at Bihar. The Apex Court found that he received the communication as to cancellation of registration as Seaman while he was undergoing treatment at his native place in Bihar. All communications relating to his claim were also made and received there. It was found that at least a fraction of the cause of action arose in Bihar when he received the letter denying disability compensation. Over and above all these, it was also found that an interim order directing payment of Rs. 2.75 lakhs to him was passed in that case after hearing the respondents and that the objection was raised after complying with the said order. Hence the Apex Court found that at the stage of interim relief the respondents did not raise any objection as to territorial jurisdiction and at that time their objection was only on the ground that compensation was already offered to him. In those peculiar circumstances of the case, the Apex Court interfered with the judgment of the High Court. In the present case even the communications are outside the State.

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All these judgments were analysed in the judgments of the Full Bench of this Court relied on by Sri.Easwaran i.e in the judgments in Indian Maritime University 's case as well as in Dental Council of India 's case and also by the Division Bench. In those judgments the judgment of the Supreme Court in State of Rajasthan v. M/s. Swaika Properties : AIR 1985 SC 1289 which was also relied on by Sri. Easwaran was discussed. In Swaika Properties ' case, a writ

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petition was filed in Calcutta High Court against land acquisition proceedings initiated by State of Rajasthan on the ground that the notice relating to acquisition was served on the petitioner while he was in State of West Bengal; whereas the land involved was in another State beyond the jurisdiction of the Calcutta High Court. It was held that mere service of such notice did not constitute an integral part of the cause of action necessary to invoke jurisdiction to entertain a petition under Art.226 of the Constitution for challenging the notification for acquisition of a land in another State. It was held that the cause of action was a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant.

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The judgment in Swaika Properties ' case was reiterated in Oil and Natural Gas Commission v. Utpal Kumar Basu & Ors. : 1994 (4) SCC 711 where after referring to Mulla on Code of Civil Procedure it was held that Calcutta High Court had no jurisdiction to entertain a writ petition merely on the ground that the petitioner was a firm having office at Calcutta, when the issue involved related to a contract executed at Aligarh and an Arbitrator was also appointed at Aligar based on the terms of contract.

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In Union of India v. Adani Exports Ltd : (2002) 1 SCC 567, the writ petition was filed in the Gujarat High Court, for the benefit of import-export scheme. The plea of the petitioners was that they carry on business of export and import from Ahmedabad. The orders for export and import are placed from and executed from Ahmedabad. The correspondence and payments for exports and imports are sent/made at Ahmedabad and therefore substantial part of the cause of

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action has arisen within the jurisdiction of the Gujarath High Court. The respondent Government of India objected to the same asserting that no part of cause of action arose in Ahmedabad. It was their contention that the passbook licence was issued at Chennai by the designated authority at Chennai and the entire transactions concerning the passbook were made from Chennai Port and jurisdiction lies with High Court at Chennai. In para.12 of the judgment the Apex Court found that admittedly none of the respondents were stationed at Ahmedabad; passbook in question, is issued by an authority who is stationed at Chennai. The designated authority, who is the competent person in respect of the matters concerning the Passbook Scheme is at Chennai. The entries in the passbook under the Scheme are to be made by the authorities at Chennai. In para.17 it was found as follows:

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“17. It is seen from the above that in order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in part, arisen within its jurisdiction. It is clear from the above judgment that each and every fact pleaded by the respondents in their application 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 the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned. If we apply this principle then we see that none of the facts pleaded in para 16 of the petition, in our opinion, falls into the category of bundle of facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad.”

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The Apex Court found that none of the facts pleaded in the writ petition were in

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any manner connected with the relief sought for, so as to constitute the cause of action at Ahmedabad and 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.

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Therefore, the contention of the learned Counsel for the petitioner that this Court has to look into the averments in the Writ Petition alone, in order to determine the objection as to territorial jurisdiction cannot be accepted. There should be a nexus with the averments, which would enable grant of the relief.

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In National Textile Corpn. Ltd. v. Haribox Swalram : (2004) 9 SCC

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786 the Apex Court considered a case where a firm carrying business at Calcutta filed a Writ Petition before the High Court of Calcutta alleging non-supply of textiles based on contract. The textiles mills were at Bombay; contract was executed at Bombay; payment was made at Bombay. The firm's plea was that it was carrying on business at Calcutta and that the correspondence regarding supply of textiles was to and from the firm at Calcutta and therefore part of cause of action arose within its jurisdiction. The following observations of the Apex Court in para.10 and 12.1 of the judgment are relevant:

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“10. xxxxxCause of action as understood in the civil proceedings means every fact which, if traversed, 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 the bundle of facts which taken with the law applicable to them, gives the plaintiff a right to relief

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against the defendant. Xxxxx

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xxxxx

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12.1. As discussed earlier, the mere fact that the writ petitioner carries on business at Calcutta or that the reply to the correspondence made by it was received at Calcutta is not an integral part of the cause of action and, therefore, the Calcutta High Court had no jurisdiction to entertain the writ petition and the view to the contrary taken by the Division Bench cannot be sustained. In view of the above finding, the writ petition is liable to be dismissed.”

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The aforesaid judgments in Swaika Properties ' case ( supra ) as well as in ONGC 's case ( supra ) were approved by a 3 Judge Bench of the Apex Court in Kusum Ingots & Alloys Ltd. v. Union of India : (2004) 6 SCC 254. In that case a company having its registered office at Mumbai obtained a loan from the Bhopal Branch of State Bank of India. Bank initiated proceedings under SARFAESI Act. The company filed writ petition challenging the constitutionality of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act filing writ petition in the Delhi High Court. Writ petition was dismissed for want of jurisdiction under Article 226(2) of the Constitution. The plea of the appellant that the constitutionality of parliamentary legislation would lie before the High Court was rejected by the Apex Court also. The Apex Court held that in order to decide the question regarding jurisdiction the decisions of the Apex Court rendered on interpretation of Section 20( c ) CPC shall apply to the writ proceedings also. It was held 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, which in turn is integral facts. Reiterating the dictum laid down

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in the aforesaid judgments, it was held that the facts pleaded in the writ petition must have a nexus on the basis whereof a prayer can be granted. It was also held that 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. It was also held that in view of Article 226(2) the Court will have jurisdiction in a matter even if a small fraction thereof accrues within the jurisdiction of the Court, though the doctrine of forum conveniens also have to be considered.

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In the judgment in Alchemist Ltd. v. State Bank of Sikkim : (2007) 11 SCC 335, the issue arose consequent to an advertisement of the State of Sikkim inviting offers for a strategic partnership for the purpose of disinvesting its 49% of its equity capital in the State Bank of Sikkim. It was directed that applications shall be addressed to State Bank of Sikkim at its Head Office at Gangtok and that the offers made by the parties would be subject to scrutiny by the Board of Directors of the Bank. The appellant company having its registered office at Chandigarh submitted its offer. Though the Bank informed the appellant that its offer was accepted subject to approval of Government of Sikim, the Government of Sikkim rejected its proposal. Stating that the communication of rejection from the Bank was received in Chandigarh, the appellant chellenged the said communication filing writ petition before the High Court of Punjab and Haryana. The writ petition was dismissed for want of territorial juridiction. The appellant Company approached the Apex court with the plea that at least part of the cause of action

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arose within the High Court of Punab and Haryana since it carries on business at Chandigarh, with its registered office at Chandigarh; the communication from the bank accepting its proposal as also the revocation was received at Chandigarh ; the company remitted fixed deposit at Chandigarh at the request of the bank; negotiations were held at Chandigarh, etc. The respondents' plea was that the integral part of cause of action arose within Sikkim, as the registered offices of the Bank of Sikkim as well as the Secretariat of the State of Sikkim, which invited offers are at Gangtok; the offers were scrutinised and the respective decisions of the bank as well as that of the State Government were taken at Gangtok and communications were dispatched from Gangtok. The Apex Court after analysing the judgments on the point and meaning of cause of action, held that though the expression “cause of action” has not been defined in the Constitution or in the Code of Civil Procedure, it can be described as a bundle of essential facts necessary for the plaintiff to prove before he can succeed and failure to prove such facts would give the defendant a right to judgment in his favour. Cause of action thus gives occasion for and forms the foundation of the suit. It was concluded in para 37 and 38 as follows:

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“37. From the aforesaid discussion and keeping in view the ratio laid down in a catena of decisions by this Court, it is clear that for the purpose of deciding whether facts averred by the appellant-petitioner would or would not constitute a part of cause of action, one has to consider whether such fact constitutes a material, essential, or integral part of the cause of action. It is no doubt true that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless it must be a “part of cause of

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action”, nothing less than that.

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38. In the present case, the facts which have been pleaded by the appellant Company, in our judgment, cannot be said to be essential, integral or material facts so as to constitute a part of “cause of action” within the meaning of Article 226(2) of the Constitution. The High Court, in our opinion, therefore, was not wrong in dismissing the petition.”

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After scanning innumerable judgments of the Apex Court including the aforesaid judgments as well as other judgments of various High Courts, the Full Bench in Maritime University 's case discussed the distinction between right of action and cause of action. It was held that 'cause of action' and 'right of action' are not synonymous or interchangeable. Right of action is a right to enforce a cause of action for a remedial right affording redress for the infringement of a legal right belonging to some definite person; a cause of action is the operative facts which give rise to such right of action and cause of action should have arisen within the jurisdiction of the court either wholly or in part. The Division Bench judgment of the Allahabad High Court in Brijblal Singh Gautam v. Union of India : AIR 1998 All.132 was also discussed where it was held that award of the contract at a station outside the jurisdiction of the High Court of Allahabad could not be entertained by that court merely because the contract was to be performed at a station within the jurisdiction of the High Court of Allahabad. T he Full bench concluded that in order to entertain a writ petition, integral part of the cause of action should have arisen within the territorial juridiction of the High court. The judgment of the Apex Court in Nawal Kishore Sharma 's case was also considered in that judgment and it was found that the same was rendered in the peculiar

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circumstances of the case. In para.28 of the judgment the Full Bench concluded as follows:

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28. Thus, law is settled that in view of the provisions contained in Art.226(2) of the Constitution of India, a writ petition can be maintained in a High Court within the territorial jurisdiction of which an integral part of the cause of action has arisen. Though the expression "cause of action" is not defined either in the Constitution or in the Code of Civil Procedure, it has to be understood in the light of S.20(c) of the CPC and it means a bundle of facts which are required to be proved for a petitioner or a plaintiff to seek relief in a Court of law. It is also the settled principle of law that in a service dispute, issue of an order of termination gives rise to cause of action and service of that communication, though is necessary to give effect to the order, does not amount to a part of the cause of action much less an integral part of the cause of action. In other words, the issue of the order gives rise to the cause of action and the service of the order gives rise to a right of action.”

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In that case the issue came up for consideration, when the petitioner therein challenged the communcation issued by the University at Chennai informing that the offer of his appointment as Professor was withdrawn. Petitioner had applied for the post while working in Palakkad, pursuant to notification issued by the University at Chennai; he appeared in the interview at Chennai; offer of appointment was issued to him from Chennai which he received at Palakkad; he was asked to report at Chennai; he requested for a posting at Cochin campus; though he was informed that the request was accepted which asking him to report at Chennai, the offer was withdrawn. He sought for a direction to allow him to join, while challenging the withdrawal of offer. Yet another case considered was that of a Branch Manager of Indian Bank, who was placed under suspension while working at Kunnamkulam and was removed from service while he was at

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Palakkad. There the incidents leading to memo of charges arose while he was working in Puducherry, inquiry was conducted at Puducherry; inquiry report was forwarded from Puducherry; he submitted his explanation to it from Palakkad; Order of removal was issued from Puducherry; appeal as well as application for review were rejected by authorities at Puducherry and petitioner recieved all these while at Palakkad. The Full Bench found that there was no averment in both those writ petitions as to how the cause of action arose in the State of Kerala. However, based on the available pleadings it was found that integral part of the cause of action did not arise within the jurisdiction of this Court.

¶115

In Dental Council of India 's case ( supra ), the issue referred to the Full Bench was whether the election of the President of Dental Council held at New Delhi, on being nominated by a University at Jharkhand, can be challenged beofore any court in India just because the Dental Council is functioning throughout the territories of India. The rejection of preliminary objection raised by the Council on maintainability in the light of Article 226(2) of the Constitution of India, was challenged in the appeal. Again the Full Bench after analysing almost all the judgments on the point, reiterated the dictum laid down in Maritime University 's case and held that in order to decide the territorial jurisdiction of the court, the power of an authority over the entire people in India would not be a relevant factor and what is required is whether any part of cause of action arose within the territory of the High Court and the plea of lack of jurisdiction has to be

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determined after taking into account all the facts pleaded in support of the cause of action. Writ petition can be maintained only in a court within whose jurisdiction the person, authority or Government, the cause of action arose either wholly or in part. It was held that the residence of the petitioners therein does not confer jurisdiction on the court as it cannot be part of cause of action, though the election or nomination outside the State may affect the petitioners also. It was held that it would give them only a right of action entitling them to approach the court having jurisdiction. It was held that the said writ petition was not maintainable.

¶119

The aforesaid judgments were followed by the Division Bench iin Aparna Balan 's case, where the petitioners challenged their exclusion from women's team which was representing Asian Games 2018, relying on the definition of cause of action as found in the judgment of Lord Esher in Read v. Brown : 1888(22)QBD 128 which is followed in a series of judgments of the Apex Court, found that every fact which is necessary to prove in order to support the right to judgment in favour of the petitioner should be available to determine whether the cause of action arose within the territorial limits of the court. It was held that merely because application for participation for selection tournaments were routed through an authority in Kerala it would not clothe this Court with jurisdiction, when the selection tournaments were held in Bangalore and Hyderabad.

¶120

In view of the dictum laid down by the Apex Court and this Court in a

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series of cases, the contention of the petitioners that this Court need look into the averments in the Writ Petition only and since the application for restructuring was submitted pointing out the damage caused to the units of the petitioners in Kerala the Writ Petition would lie before this Court cannot be accepted. Those averments which are having nexus with the cause of action as well as relief sought have to be considered. The entire transactions relating to the loan are seen to have been made at Mettupalayam branch of the 1^st respondent. All the documents for financial facilities from the 1^st respondent are seen executed in Mettupalayam as can be seen from Exts.R1(a) to R1(i). The immovable properties involved in those transactions including that which is sought to be released is also outside the territorial jurisdiction of this Court. Merely because there are certain units in Kerala and the 1^st petitioner company had got registration from the Registrar of Companies in Kerala would not clothe this Court the jurisdiction to issue directions to the 1^st respondent at Mettupalayam relating to the transactions entered into there when even the impugned proceedings were issued from the Bank at Mettupalayam.

¶124

In the above circumstances of the case, I find force in the objection raised by the 1^st respondent that this Court does not have the territorial jurisdiction to entertain this Writ Petition. As most of the reliefs prayed for are against the 1^st respondent, I dismiss the Writ Petition as not maintainable. It is made clear that this will not prevent the petitioners from filing a separate Writ Petition against the 3^rd respondent. It is also made clear that I have not considered the question of maintainability of the Writ Petition as against the 3^rd respondent.

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The writ petition is accordingly dismissed for want of territorial jurisdiction for this Court leaving open the right of the petitioners to seek remedies available to it before

¶128

the appropriate forum.

¶129

Sd/- (P.V.ASHA, JUDGE)

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rtr/

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APPENDIX

¶134

PETITIONERS' EXHIBITS:

¶135

EXHIBIT P1	COPY OF CERTIFICATE OF INCORPORATION CONSEQUENT UPON CONVERSION TO PUBLIC LIMITED COMPANY ISSUED BY THE REGISTRAR OF COMPANIES, ERNAKULAM.
EXHIBIT P2	COPY OF THE SANCTION TICKET DATED 30.8.2010 OF THE 1ST RESPONDENT EVIDENCING THE SANCTION OF THE TERM LOAN (AMTL-I).
EXHIBIT P2 (a)	COPY OF THE SANCTION TICKET DATED 12.12.2013 OF THE 1ST RESPONDENT.
EXHIBIT P3	COPY OF THE SANCTION TICKET DATED 16.3.2015.
EXHIBIT P3 (a)	COPY OF THE ORDER DATED 6.5.2015 OF THE 1ST RESPONDENT.
EXHIBIT P4	COPY OF RBI CIRCULAR NO DBR.NO. DIR.BC.10/13.03.00/2015-16 DATED JULY 1.2015.
EXHIBIT P5	COPY OF THE SANCTION TICKET NO REF:ZO/CBE/RBD/COLCC ED/2016-17 DATED 27.3.2017.
EXHIBIT P5 (a)	COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEEDS.
EXHIBIT P6	COPY OF THE MINUTES DATED 29.6.2017.
EXHIBIT P6 (a)	COPY OF THE MINUTES DATED 19.7.2017.
EXHIBIT P6 (b)	COPY OF THE MINUTES DATED 21.12.2017.
EXHIBIT P6 (c)	COPY OF THE MINUTES OF THE CONSORTIUM MEETING HELD ON 25.6.2018.
EXHIBIT P7	COPY OF THE RELEVANT PORTION OF THE MASTER CIRCULAR OF RBI DATED JULY 1,2015.
EXHIBIT P8	COPY OF THE MINUTES OF THE CONSORTIUM MEETING DATED 2.12.2019.
EXHIBIT P9	COPY OF RBI CIRCULAR DBR NO DP.BC.II/21.04.048/2015-16 DATED JULY 1 2015.

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EXHIBIT P10	CIRCULAR NO KERALA SLBC/61/103/GN/2018 DATED 21.8.2018.
EXHIBIT P11	COPY OF THE REPRESENTATION DATED 20.9.2018 SUBMITTED BY THE PETITIONERS.
EXHIBIT P12	PHOTOGRAPHS OF DAMAGED INFRASTRUCTURE AND THE STOCK INSIDE THE COLD STORAGE.
EXHIBIT P13	COPY OF THE STATEMENT DATED 23.12.2019 OF THE AUDITOR ASSESSING THE VALUE OF THE DAMAGE.
EXHIBIT P14	COPY OF THE REPRESENTATION DATED 3.5.2019 TO THE 1ST RESPONDENT.
EXHIBIT P15	COPY OF RBI CIRCULAR NO RPCD NO PLFS.BC.128/05.04.02/97-98 DATED 20.6.1998.
EXHIBIT P16	COPY OF RBI CIRCULAR NO RPCD.NO. PLFS.BC 6/05.04.02/2013-14 DATED 1.7.2013.
EXHIBIT P17	COPY OF CIRCULAR NO.FIDD.CO.FSD.BC NO. 8/05/10.001/2017-18 DATED 3.7.2017.
EXHIBIT P18	COPY OF THE SANCTION TICKET NO AKS.2019- 20:23 DATED 31.12.2019 OF THE INDIAN BANK.
EXHIBIT P19	COPY OF THE REPRESENTATION DATED 11.2.2020 SUBMITTED BY THE 1ST PETITIONER.
EXHIBIT P20	COPY OF THE SANCTION TICKER NO 115.2019-20 DATED 23.3.2020 OF INDIAN BANK.
EXHIBIT P21	COPY OF THE REPRESENTATION DATED 15.4.2020 SUBMITTED BY THE PETITIONERS.
EXHIBIT P21 (a)	COPY OF THE REPRESENTATION DATED 15.6.2020 SUBMITTED BY THE PETITIONERS.
EXHIBIT P22	COPY OF THE REPLY DATED 30.6.2020 OF THE FIRST RESPONDENT.
EXHIBIT P23	COPY OF THE REPLY DATED 4.7.2020 SUBMITTED BY THE PETITONERS.
EXHIBIT P24	COPY OF SLBC CIRCULAR NO KERALA SLBC/NC/1/MA/2019 DATED 3.9.2019.
EXHIBIT P25	COPY OF THE SCHEME OF THE INDIAN BANK CALLED “IND COVID EMERGENCY CREDIT LINE”.

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EXHIBIT P26	COPY OF THE REPRESENTATION DATED 30.3.2020
	SUBMITTED BY THE PETITONERS.
EXHIBIT P27	COPY OF THE REPLY DATED 10.8.2020 OF THE
	1ST RESPONDENT.

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RESPONDENTS' EXHIBITS

¶143

EXT.R1(a)	COPY OF THE TERM LOAN AGREEMENT DATED 31.3.2017 EXECUTED BY THE 1ST PETITIONER.
EXT.R1(b)	COPY OF THE AGREEMENT OF HYPOTHECATION OF AGRICULTURE LOAN DATED 31.3.2017 EXECUTED BY THE 1ST PETITIONER.
EXT.R1(c)	COPY OF THE AGREEMENT OF HYPOTHECATION OF MOVABLES EXECUTED BY THE 1ST PETITIONER.
EXT.R1(d)	COPY OF THE DEMAND PROMISSORY NOTES DATED 24.3.2020 EXECUTED BY THE 1ST PETITIONER AT METTUPALAYAM.
EXT.R1(e)	COPY OF THE LETTER DT.24.3.2020 EXECUTED BY THE 1ST PETITIONER.
EXT.R1(f)	COPY OF THE TERM LOAN AGREEMENT DT.24.3.2020 EXECUTED BY THE 1ST PETITIONER.
EXT.R1(g)	COPY OF THE DEMAND PROMISSORY NOTE DATED 24.3.2020 EXECUTED BY THE 1ST PETITIONER.
EXT.R1(h)	COPY OF THE LETTER DATED 24.3.2020 EXECUTED BY THE 1ST PETITIONER.
EXT.R1(i)	Copy of the funded interest term loan agreement dated 24.03.2020 executed by the 1^stpetitioner.

M/S Aks Cold Storage Ltd. v. Indian Bank

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M/S Aks Cold Storage Ltd. v. Indian Bank

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