REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5360 OF 2010

Cement Workers’ Mandal           ….Appellant(s)

VERSUS

Global Cements Ltd 

(HMP Cements Ltd.) & Ors.        …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1. This appeal is filed against the final judgment

and order dated 27.04.2007 passed by the High

Court of Gujarat at Ahmedabad in Letters Patent

Appeal No.1020 of 2006 in Civil Application No.770

of 2005 whereby the Division Bench of the High

Court allowed the said Letters Patent Appeal filed by

respondent No.1 herein holding that the High Court

1

had   no   territorial   jurisdiction   to   entertain   the

Special Civil Application (in short, “SCA”) filed by

the   appellant   herein   which   was   entertained   and

allowed by the Single Judge. 

2.A few facts need mention hereinbelow for the

disposal of this appeal, which involves a short legal

question.

3.Respondent No.1 herein is a Limited Company

having its registered office at Calcutta.  Respondent

No.1 was engaged in the business of manufacture

and sale of cement.  They have a cement factory at

Porbandar in the State of Gujarat.

4.The appellant is a Union of workers. These

workers were working, at all relevant time, in the

cement factory of respondent No.1 at Porbandar.

According to the appellant­Union, as many as 500

workers, who are the members of it, were working at

the relevant time in the said cement factory.

2

5.Respondent No.1, however, closed the cement

factory   somewhere   in   the   year   1998   for   myriad

reasons without paying the wages to its workers.  

6.A   dispute,   therefore,   arose   between   the

appellant­Union   and   Respondent   No.1­Company

(employer)   regarding   the   non­payment   of

outstanding   wages   payable   to   the   workers.   The

appellant­ Union, therefore, approached the Labour

Court   at   Junagadh   (Gujarat)   and   filed   Recovery

Application No.86/98 under the Industrial Disputes

Act, 1947 for the recovery of the outstanding wages

payable to the workers against Respondent No.1.

7.By order dated 12.04.1999, the Labour Court

allowed   the   application   and   directed   Respondent

No.1­Company to pay a sum of Rs.81,50,744/­ with

a   cost   of   Rs.50,000/­   to   the   workers.   This   was

followed by issuance of recovery certificate dated

04.09.2000   for   Rs.60,35,379/­   by   the   Collector,

Junagadh as arrears of land revenue.   The said

certificate, however, has remained unexecuted. 

3

8.It appears that Respondent No.2 ­ Indian Bank

had   given   business   loan   to   Respondent   No.1­

Company, which they failed to repay to the Indian

Bank.   The Indian Bank (R­2), therefore,   filed a

claim petition before the Debt Recovery Tribunal (for

short   “the   DRT)   at   Calcutta   against   Respondent

No.1­Company   for   recovery   of   their   unpaid   loan

amount with interest.

9.By order dated 04.03.2003, the DRT allowed

the   claim   petition   and   ordered   for   sale   of   the

properties of Respondent No.1­Company after giving

due publicity.  The DRT also appointed one Receiver

to   take   appropriate   steps   in   this   regard.   The

Receiver informed the appellant­Union accordingly.

10.It   is   with   these   background   facts,   the

appellant­Union   filed   a   petition   (Special   Civil

Application No.12212 of 2004) in the High Court of

Gujarat  at  Ahmadabad out of which this appeal

arises.     The   SCA   was   filed   against   the   Indian

Bank(respondent   No.2   herein)   and   the

4

Company(respondent No.1 herein).   The appellant

claimed the following reliefs in their SCA:

“A. To issue an order, direction in the nature

of mandamus and/or any other appropriate

writ,   order   or   direction,   directing   the

respondent   No.1   Indian   Bank,   Kolkata,   to

deposit the 50% amount of the sale proceeds

of   the   Porbandar   H.M.P.   Cement   with   the

District Collector, Porbandar, and the District

Collector be directed to pay by account payee

cheque   to   each   of   the   workmen

proportionately towards the part­payment of

the   legal   dues   to   the   individual   workman

concerned; ALTERNATIVELY.

B. To issue direction to the respondent No.1

Indian Bank to pay 50% of the amount to the

petitioner union who shall directly pay to the

workmen   by   account   payee   cheque   either

under   the   supervision   of   District   Collector,

Porbandar or Assistant Labour Commissioner,

Porbandar.

C. To declare and hold the impugned action

of   the   Debt   Recovery   Tribunal,   Kolkata,   in

transferring   the   entire   sale   proceed   to

respondent   No.1,   Indian   Bank,   without

retaining   the   amount   of   workers’   due,   as

illegal and without authority of law.

D. To suspend the operation, implementation

and   execution   of   the   order   of   the   Debt

Recovery   Tribunal   insofar   as   the   Debt

Recovery Tribunal directs:

“It is being further ordered that in

the case of default on the part of

the defendants in adhering to any

of   the   terms   and   condition

hereinabove stated, the certificate

5

of   recovery   so   issued,   shall

automatically   be   altered   for   the

total applicant’s claim as filed on

July 2002 and the applicant being

granted   the   liberty  to  appropriate

the   entire   money   lying   with   the

present   learned   transferring

Tribunal   in   O.A.   No.142   of   1998

after receiving the said sum from

the learned Receiver and it is also

being   ordered   that   the   learned

Receiver is hereby being ordered to

stand discharged….”

E. To grant such other and further relief as

the Hon’ble Court deems fit and proper in the

interest of justice.”

11.The respondent Nos.1 & 2, i.e., Company and

the Indian Bank on entering their appearance in the

SCA raised a preliminary objection before the writ

court   contending   that   the   SCA   filed   by   the

appellant­Union   is   not   maintainable   in   the   High

Court of Gujarat at Ahmedabad inasmuch as no

part of the cause of action in relation to the subject

matter of the SCA has arisen in the State of Gujarat

which entitled the appellant­Union to file the SCA in

the Gujarat High Court. 

6

12.In other words, the objection was that having

regard   to   the   nature   of   reliefs   claimed   by   the

petitioner (appellant herein) in the SCA, no part of

cause of action could be said to have arisen in the

State of Gujarat, which would empower the Gujarat

High Court to entertain the SCA for its disposal on

merits.  On the other hand, it was contended that it

is clear that the entire cause of action between the

parties has accrued in the State of Calcutta where

the company's registered office is located and where

the DRT had also entertained the claim petition filed

by the Indian Bank(respondent No.2 herein) against

the   Company   (respondent   No.1   herein)   and   had

passed the orders in the said claim petition.

13.The   respondent   Nos.   1   &   2,   therefore,

contended   that   the   said   SCA   was   liable   to   be

dismissed as being not maintainable for want of

territorial jurisdiction of the Gujarat High Court.

14.The Single Judge by order dated 26.10.2005

overruled the preliminary objection and held that

7

the   Gujarat   High   Court   has   the   territorial

jurisdiction to entertain the SCA. 

15.Respondent No.1 (Company) felt aggrieved and

filed   the   LPA   before   the   Division   Bench.   By

impugned   order,   the   Division   Bench   allowed   the

LPA, set aside the order of the Single Judge and

dismissed the SCA. The Division Bench held that

the   Gujarat   High   Court   has   no   territorial

jurisdiction   to   entertain   the   SCA   in   question

because no part of the cause of action has accrued

to file such petition(SCA) in the Gujarat High Court.

16.In other words, the Division Bench was of the

view   that   having   regard   to   the   nature   of   reliefs

claimed in the SCA, the Gujarat High Court cannot

be held to have territorial jurisdiction to entertain

such petition for grant of the reliefs claimed therein.

17.It is against this order of the Division Bench,

the Union (petitioner in SCA) felt aggrieved and has

filed the present appeal in this Court after obtaining

the special leave to appeal.

8

18.So,   the   short   question,   which   arises   for

consideration in this appeal, is whether the Division

Bench was justified in holding that the SCA filed by

the   appellant   was   not   maintainable   for   want   of

territorial jurisdiction of the Gujarat High Court.

19.Heard Ms. Anushree Prashit Kapadia, learned

counsel for the appellant and Mr. Gautam Awasthi,

learned counsel for the respondents.

20.Having   heard   the   learned   counsel   for   the

parties and on perusal of the record of the case, we

are inclined to allow the appeal and while setting

aside the  impugned  order of  the  Division Bench

restore the order of the Single Judge.      

21.In our considered opinion, the Division Bench

erred   in   not   noticing   Article   226(2)   of   the

Constitution of India while deciding the question

arising in this case. 

22.In other words, the question as to whether the

Gujarat High Court has territorial jurisdiction to

entertain   the   appellant's   petition(SCA)   or   not,

9

should   have   been   decided   keeping   in   view   the

provisions of Article 226(2) of the Constitution read

with Section 20 of the Code of Civil Procedure, 1908

(for short,  “CPC”).

23.Article 226 of the Constitution and Section 20

of CPC read as under: 

“  Article 226 of the Constitution

226. Power of High Courts to issue certain

writs

(1) Notwithstanding   anything   in   Article   32

every   High   Court   shall   have   powers,

throughout   the   territories   in   relation   to

which   it   exercises   jurisdiction,   to   issue   to

any   person   or   authority,   including   in

appropriate   cases,   any   Government,   within

those territories directions, orders or writs,

including   writs   in   the   nature   of   habeas

corpus, mandamus, prohibition, quo warranto

and   certiorari,   or   any   of   them,   for   the

enforcement of any of the rights conferred by

Part III and for any other purpose.

(2) The power conferred by clause (1) to issue

directions,   orders   or   writs   to   any

Government, authority or person may also be

exercised   by   any   High   Court   exercising

jurisdiction   in   relation   to   the   territories

within which the cause of action, wholly or in

part, arises for the exercise of such power,

notwithstanding   that   the   seat   of   such

Government or authority or the residence of

such person is not within those territories.

10

(3) Where any party against whom an interim

order, whether by way of injunction or stay

or in any other manner, is made on, or in any

proceedings   relating   to,   a   petition   under

clause (1), without­

(a) furnishing   to   such   party   copies   of

such   petition   and   all   documents   in

support   of   the   plea   for   such   interim

order; and

(b) giving such party an opportunity of

being heard, 

makes an application to the High Court

for   the   vacation   of   such   order   and

furnishes a copy of such application to

the party in  whose  favour  such  order

has been made or the counsel of such

party, the High Court shall dispose of

the application within a period of two

weeks   from   the   date   on   which   it   is

received or from the date on which the

copy   of   such   application   is   so

furnished, whichever is later, or where

the High Court is closed on the last day

of that period, before the expiry of the

next day afterwards on which the High

Court is open; and if the application is

not   so   disposed   of,   the   interim  order

shall, on the expiry of that period, or,

as the case may be, the expiry of the

said next day, stand vacated

(4) The power conferred on a High Court by

this article shall not be in derogation of the

power   conferred   on   the   Supreme   Court   by

clause (2) of Article 32.”

“  Section 20 of  CPC

20.  Other suits to be instituted where

defendants  reside or cause  of action

arises­ Subject to the limitations aforesaid,

11

every suit shall be instituted in Court within

the local limits of whose jurisdiction­

(a)   the   defendant,   or   each   of   the

defendants where there are more than

one, at the time of the commencement

of   the   suit,   actually   and   voluntarily

resides,   or   carries   on   business,   or

personally works for gain; or

(b) any of the defendants, where there

are more than one, at the time of the

commencement of the suit actually and

voluntarily   resides,   or   carries   on

business, or personally works for gain,

provided that in such case either the

leave   of   the   Court   is   given,   or   the

defendants who do not reside, or carry

on   business,   or   personally   work   for

gain,   as   aforesaid,   acquiesce   in   such

institution; or

(c)   the   cause   of   action,   wholly   or   in

part, arises.

Explanation ­ A corporation shall be deemed

to carry on business at its sole or principal

office in India or, in respect of any cause of

action arising at any place where it has also a

subordinate office, at such place.”

24.Article   226(2)   of   the   Constitution,   in   clear

terms, empowers the High Court (let us say   “A”

High   Court)   to   entertain   the   writ   petition   if   the

cause of action to file such writ petition against the

respondents   of   the   said   writ   petition   has   arisen

12

wholly or in part within the territorial jurisdiction of

“A”  High Court. 

25.Clause (2) further empowers a High Court to

issue any order, directions or writ as provided in

clause (1) of Article 226 of the Constitution in such

writ   petition   notwithstanding   that   seat   of   such

Government or the Authority or the residence of

such person against whom the writ petition is filed

does not fall within the territories of the “A” High

Court but falls in the territories of the “B” High

Court.

26.Coming to the facts of this case, we find from

the   averments   of   the   petition(SCA)   that   firstly,

Respondent   No.1­Company   has   its   factory   at

Porbandar,   which   is   a   part   of   State   of   Gujarat;

Second, the Labour Court, Junagadh, which is also

a part of State of Gujarat, entertained the dispute

between the appellant­Union and respondent No.1­

Company and passed a recovery order; and Third,

one   of   the   reliefs   claimed   in   the   petition(SCA)

13

pertains   to   non­payment   of   outstanding   wages

payable   to   the   workers   by   respondent   No.1­

Company. 

27.In the light of these three reasons, we are of

the view that the part of the cause of action as

contemplated in Article 226 (2) of the Constitution

has arisen within the territorial jurisdiction of the

Gujarat High Court for filing the petition(SCA) to

claim appropriate reliefs in relation to such dispute

against respondent No.1­Company. 

28.In our considered opinion, the expression “the

cause of action, wholly or in part, arises”  occurring

in Article 226(2) of the Constitution has to be read

in the context of Section 20(c) of CPC which deals

with filing of the suit within the local limits of the

jurisdiction of the Civil Courts. 

29.Indeed, the question as to whether the cause

of action for filing the petition, wholly or in part,

arose in the context of territorial jurisdiction of the

High Court is required to be decided keeping in view

14

the provisions of Article 226(2) of the Constitution

read with the provisions of Section 20 of CPC. 

30.In the light of the foregoing discussion, we are

of the view that the appellant's petition(SCA) was

maintainable in the Gujarat High Court inasmuch

as   the   part   of   the   cause   of   action   to   file   such

petition   did   accrue   to   the   appellant   herein

(petitioner) within the territorial jurisdiction of the

Gujarat High Court. 

31.In these circumstances, the SCA was required

to be decided on merits by the Gujarat High Court.

32.In view of the foregoing discussion, the appeal

succeeds   and   is   hereby   allowed.   The   impugned

order of the Division Bench is set aside and the

order of the Single Judge is restored to the extent it

decides that the petition(SCA) as maintainable in

the Gujarat High Court.

33.The case is accordingly remanded to the Single

Judge (Writ Court) for deciding the petition(SCA) on

merits strictly in accordance with law uninfluenced

15

by any of the observations made by the Division

Bench   and   this   Court   because   this   Court   has

decided only the issue of territorial jurisdiction of

the Gujarat High Court and not beyond it.

34.Since the petition(SCA) is old, we request the

Single   Judge   to   decide   it   preferably   within   six

months. 

    …………………………………J.

      [ABHAY MANOHAR SAPRE ]

....…..................................J.

             [DINESH MAHESHWARI]

New Delhi;

February 14, 2019.       

16