K. Margabanthu vs The Union of India and UCO Bank

P. Sathasivam, J.—Aggrieved by the proceedings culminating in the order dated 7-7-92 in No. 9/46/91/BO.I terminating the term of office

as Chairman and Managing Director of UCO Bank from the date of service of the said notice, the petitioner has filed the above writ petition to

quash the same and for consequential direction to restore to him the post of Chairman and Managing Director.

The case of the petitioner is briefly stated hereunder: The petitioner joined State Bank of India and ultimately he was appointed as Managing

Director of State Bank of Sowrashtra in April, 1989. Again he was appointed as Chairman Cum Managing Director of UCO Bank,third

respondent herein. He accepted the assignment and took it as a challenge and improved the financial position of the bank. Based on the publication

of wrong information in the Media known as ""Bank Scam"", the Government of India initiated enquiries at different levels through Reserve Bank of

India, the Central Bureau of Investigation and the Incometax Department. Such enquiries are directed against the holders of top post in

Nationalised Banks and other Financial Institutions. A search was carried out by the Officers of Central Bureau of Investigation at the office and

the residence at Calcutta and Madras and he was asked to go over to Bombay immediately. Questioning those proceedings, he filed a writ petition

before the Calcutta High Court and the same is pending. While so, he received an order dated 7-7-92 issued under the signature of 2nd

respondent purporting to terminate the term of office of the petitioner as Chairman and Managing Director of Uco Bank to take effect from the

date of service of the said notice. He submitted a representation dated 19-8-92 to the Additional Secretary, Government of India, for recalling the

said order of termination. The said order casts a stigma on the petitioner and it will affect the future prospects and service of the petitioner and the

said order was issued by way of punishment. The respondent has no jurisdiction or authority to impose any punishment upon the petitioner when

the allegation is yet to be established and the investigations are still pending. In such circumstances, having aggrieved by the order dated 7-7-92,

filed the above writ petition.

Respondents 1 and 2 filed a counter affidavit disputing various averments made by the petitioner. It is stated that as neither the order passed by

the Government terminating the services of the petitioner was issued nor served nor directed to the petitioner at Madras, this Court has no

jurisdiction to try, entertain and decide the subject matter of the writ petition. Regarding the merits it is stated that the tenure of appointment of the

petitioner as Chairman and Managing Director, UCO Bank was for the period from date of taking charge and ending with 30-9-93. He took

charge of the post on 11-9-91. A committee was constituted under the chairmanship of Shri R. Janakiraman to investigate into the possible

irregularities in funds management of commercial banks and financial institutions and in particular, in relation to their dealings in Government

securities, public sector bonds and similar instruments. On the basis of the report of the said committee and as per the direction of the Government

of India, CBI investigated the transaction undertaken by the UCO Bank and after thorough investigation, a First Information Report was registered

against the petitioner for offences under Indian Penal Code and the Prevention of Corruption Act. It is further stated that in the light of the report of

the said committee and the First Information Report filed by the C.B.I., the petitioner''s term was terminated prematurely in exercise of power

conferred under Clause 8 (1A) of the Nationalisede Banks (Management and Miscellaneous Provisions) Scheme, 1970. Another F.I.R. was also

registered against the petitioner on 8-7-92. It is also stated that the two provisions, namely, clause 8 (1A) and 8 (4) of the Scheme contemplates

two different sets of circumstances to terminate the services of whole-time Director. Since the petitioner was appointed as Chairman and Managing

Director of UCO Bank purely on contractual basis, his appointment was subject to the terms and conditions of the scheme and the appointment

letter issued to him. The petitioner was fully conscious of the terms and conditions and is bound by the same. Since the case of the petitioner is a

case of termination simpliciter under clause 8 (1A), the procedure giving show cause notice is not required.

The third respondent has filed a separate counter affidavit questioning the territorial jurisdiction of this Court to consider the grievance of the

petitioner. They also denied the various averments made in the affidavit.

In the light of the above pleadings, I have heard Mr. K. Doraisami, learned senior counsel for the petitioner, Mrs. Vamana Ramalingam,

Additional Central Government Standing counsel for respondents 1 and 2 and Mr. R. Ramesh for third respondent.

Mr. K. Doraisami, learned senior counsel for the petitioner, after taking me through the appointment and termination orders and the relevant

provisions of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970, contended that respondents 1 and 2 have no

jurisdiction, more particularly, in the light of Clause 8 (1A) of the Scheme which does not empower the Central Government, to terminate the terms

of office of the petitioner. He also contended that exercise of power under Clause 8 (1A) without any notice or opportunity of hearing is arbitrary

and the application of Rule ""hire and fire"" is deprecated by the Supreme Court in many decisions. On the other hand, learned counsel for the

respondents contended that inasmuch as the impugned order dated 7-7-98 was issued from Delhi addressed to the petitioner at Calcutta and

served on him at Bombay, this Court has no jurisdiction to hear this writ petition. They also contended that even on merits in terms of the letter of

appointment and the Scheme, the respondents 1 and 2 are well within their powers in terminating the services of the petitioner even before expiry

of the term.

I have carefully considered the rival submissions.

Though elaborate arguments have been made by the learned senior counsel for the petitioner with regard to merits of the impugned order of

termination, in the light of the objection raised as to the jurisdiction of this Court, it is but proper to consider the issue regarding territorial

jurisdiction of this Court at the foremost.

There is no dispute that petitioner was appointed as Chairman cum Managing Director of UCO Bank/third respondent herein by the Ministry of

Finance, Department of Economic Affairs, Government of India, New Delhi. Based on the appointment, he functioned as Chairman and Managing

Director of the Bank at its head office at Calcutta. While he was functioning as Chairman and Managing Director of the third respondent Bank at

Calcutta, by the impugned order, his services were terminated with immediate effect before the expiry of the contractual period. I have already

stated that his appointment and termination orders were issued by the Ministry of Finance, Department of Economic Affairs, Government of India,

New Delhi. It is also seen from the materials that the impugned order dated 7-7-92 was issued from New Delhi, addressed to Calcutta and served

on him at Bombay. Though the petitioner has not stated anything about the cause of action or the territorial jurisdiction of this Court to consider the

impugned order, the respondents 1 to 3 have specifically pleaded that in the absence of cause of action wholly or partly within the jurisdiction of

this Court, it has no jurisdiction to hear this writ petition. This objection was taken by the respondents 1 and 2 in their common counter affidavit

dated 9th January, 1995 and a copy of the same had been served on the counsel for the petitioner even on 6-2-95. Likewise, the third respondent

has filed a counter affidavit dated 14-2-95 questioning the jurisdiction of this Court and a copy of the said counter had been served on the counsel

for the petitioner on 16-12-96. I have already referred to the fact that the petitioner has not explained how this Court has got territorial jurisdiction

to try this case, more particularly, when the impugned order was neither addressed to the petitioner nor served on him at Madras. As the admitted

factual position of the petitioner is that after his termination, he was residing at Madras, as stated earlier, the impugned order was neither addressed

to the petitioner nor served on him at Madras. Now I shall consider the view expressed by the Supreme Court in various decisions regarding

cause of action"" and ""jurisdiction"". In State of Rajasthan and Others Vs. Swaika Properties and Another, the Supreme Court considered the

expression ""cause of action"" and exercising territorial jurisdiction under Article 226. The following conclusion is relevant: (para 8)

The expression ''cause of action'' is tersely defined in Mulla''s Code of Civil Procedure:

The ''cause of action'' 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.

In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. The mere

service of notice u/s 52(2) of the Act on the respondents at their registered office at 18-B, Brabourne Road, Calcutta i.e. within the territorial limits

of the State of West Bengal, could not give rise to a cause of action within that territory unless the service of such notice was an integral part of the

cause of action. The entire cause of action culminating in the acquisition of the land u/s 52 (1) of the Act arose within the State of Rajasthan i.e..

within the territorial jurisdiction of the Rajasthan High Court at the Jaipur Bench. The answer to the question whether service of notice is an integral

part of the cause of action within the meaning of Article 226(2) of the Constitution must depend upon the nature of the impugned order giving rise

to a cause of action. The notification dated February 8, 1984 issued by the State Government u/s 52 (1) of the Act became effective the moment it

was published in the official Gazette as thereupon the notified land became vested in the State Government free from all encumbrances. It was not

necessary for the respondents to plead the service of notice on them by the Special Officer, Town Planning Department, Jaipur u/s 52 (2) for the

grant of an appropriate writ, direction or order under Article 226 of the Constitution for quashing the notification issued by the State Government

u/s 52 (1) of the Act. If the respondents felt aggrieved by the acquisition of their lands situate at Jaipur and wanted to challenge the validity of the

notification issued by the State Government of Rajasthan u/s 52 (1) of the Act by a petition under Article 226 of the Constitution, the remedy of

the respondents for the grant of such relief had to be sought by filing such a petition before the Rajasthan High Court, Jaipur Bench, where the

cause of action wholly or in part arose.

In H.V. Jayaram Vs. The Industrial Credit and Investment Corporation of India Ltd. and others, the Supreme Court has held that complaint

filed at Bangalore where purchaser of shares resides is not maintainable and no cause of action for failure to deliver share certificates arises at

Bangalore.

In Navinchandra N. Majithia Vs. State of Maharashtra and Others, the Supreme Court has arrived at the following conclusion:- (para 32 to

36)

From the provision in Clause (2) of Article 226, it is clear that the maintainability or otherwise of the writ petition in the High Court depends

on whether the cause of action for filing the same arose, wholly or in part, within the territorial jurisdiction of that Court.

In legal parlance the expression ""cause of action"" is generally understood to mean a situation or state of facts that entitles a party to maintain an

action in a court or a Tribunal a group of operative facts giving rise to one or more bases for suing, a factual situation that entitles one person to

obtain a remedy in court from another person. (Black''s Law Dictionary)

In Stroud''s Judicial Dictionary, a ''cause of action'' is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase

comprises every fact, which, if traversed, the plaintiff must prove in order to obtain judgment.

In ''Words and Phrases'' (fourth edition) the meaning attributed to the phrase ''cause of action'' in common legal parlance is existence of those

acts which give a party a right to judicial interference on his behalf.

A Bench of three learned Judges of this Court in the case of Oil and Natural Gas Commission Vs. Utpal Kumar Basu and Others, considered

at length the question of territorial jurisdiction under Article 226(2) of the Constitution of India. Some of the relevant observations made in the

judgment are extracted hereunder.

Clause (1) of Article 226 begins with a non obstante Clause notwithstanding anything in Article 32 and provides that every High Court shall have

power ""throughout the territories in relation to which it exercises jurisdiction"", to issue to any person or authority, including in appropriate cases,

any Government, ""within those territories"" directions, orders or writs, for the enforcement of any of the rights conferred by Part III or for any other

purpose. Under Clause (2) of Article 226, the High Court may exercise its power conferred by Clause (1) if the cause of action, wholly or in part,

had arisen within the territory over which it exercises jurisdiction, notwithstanding that the seat of such Government or authority or the residence of

such person is not within those territories. On a plain reading of the aforesaid two Clauses of Article 226 of the Constitution, it becomes clear that

a High Court can exercise the power to issue directions, orders or writs for enforcement of any of the fundamental rights conferred by Part III of

the Constitution or for any other purpose if the cause of action, wholly or in part, had arisen within the territories in relation to which it exercises

jurisdiction, notwithstanding that the seat of the Government or authority or the residence of the person against whom the direction, order or writ is

issued is not within the said territories. In order to confer jurisdiction on the High Court of Calcutta, NICCO must show that at least a part of the

cause of action had arisen within the territorial jurisdiction of that Court. That is at best its case in the writ petition.

It is well settled that the expression ""cause of action"" means that bundle of facts which the petitioner must prove, if traversed, to entitle him to a

judgment in his favour by the Court, in Chand Kaur v. Partab Singh, Lord Watson said:

.....the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of

the relief prayed for by the plaintiff. It refers entirely to the ground set forth in the plaint as the cause of action, or, in other words, to the media

upon which the plaintiff asks the Court to arrive at a conclusion in his favour.

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.

In Oil and Natural Gas Commission Vs. Utpal Kumar Basu and Others, three Judge Bench of the Hon''ble Supreme Court has held that place

of residence or carrying on business is immaterial which does not give jurisdiction to the Court concerned. While considering jurisdiction of the

Calcutta High Court, Their Lordships have held that,

12........It is indeed a great pity that one of the premier High Courts of the country should appear to have developed a tendency to assume

jurisdiction on the sole ground that the petitioner before it resides in or carries on business from a registered office in the State of West Bengal.

In Writ Petition No. 1593 of 2002 dated 04-6-2002 (Neslin Joseph Prim v. Presiding Officer, Central Govt., Industrial Tribunal, Chennai and

another), I had an occasion to consider whether the Industrial Tribunal at Madras has territorial jurisdiction to adjudicate the reference made by the

Government of India in respect of termination of an employee, who was employed at Gujarat. In that case, the petitioner joined service of the

Thiruveni Engineering Industries Limited (Oil and Gas Division) as a Assistant Driller on 29-4-89. As per the appointment order, he will be placed

anywhere within the country of India where the rig work is to be carried out by the second respondent. He was promoted as a Driller on 1-3-92

by a communication addressed to his residence at Chennai. After completion of 7 years of service, the 2nd respondent issued an order of dehiring

dated 4-4-96 with effect from 18-5-96, in purported exercise of the power conferred under clause 19 of the Annexure of appointment order

dated 29-4-89. Aggrieved by the said order, after failure of conciliation proceedings, the Government of India referred the dispute to the Central

Government Industrial Tribunal cum Labour Court, Chennai and the same was taken on file as I.D.No.101/2000 for adjudication. While so, the

Management filed I.A.No. 35/2001 questioning the jurisdiction of the Industrial Tribunal at Chennai on the ground that the second respondent

head office was functioning at Delhi and they did not have any branch at Chennai. By order dated 17-7-2001, the Tribunal allowed the application

and directed the Labour Ministry to pass fresh reference by referring the same to the competent Tribunal with jurisdiction for adjudication.

Aggrieved by the said order, the workman preferred Writ Petition No. 1593/2002. After considering the fact that his appointment order was

served to his residence at Chennai and termination order was also communicated at his residence at Chennai and after holding that since all of

cause of action arose at Chennai, this Court has held that Central Government Industrial Tribunal cum Labour Court at Chennai has jurisdiction to

adjudicate the reference. It is clear that the place of work of the workman or the situs of the employment is the relevant factor to decide

jurisdiction. Though the place of residence or business does not confer jurisdiction, inasmuch as the appointment order was communicated to the

petitioner at his residential address at Madras and the order of dehiring was also issued to him at the same address at Madras, in the light of the

said factual position, I have set aside the order of the Industrial Tribunal and directed the Industrial Tribunal to restore I.D.101/2001 and dispose

of the same on merits. I am referring the above decision only for the purpose that mere residence of a party cannot give jurisdiction and in that

case, because of the fact that part of cause of action arose within the jurisdiction of Chennai, the Industrial Tribunal was asked to dispose of the

I.D.101/2001 referred by the Government of India.

In our case, I have already referred to the fact that neither the order passed by the Government terminating the service of the petitioner was

issued, nor served, nor directed to the petitioner at Madras (now Chennnai); accordingly this Court has no jurisdiction to try and decide the

subject-matter of the writ petition. There is no dispute that the impugned order was issued by the Union of India from New Delhi and addressed to

the petitioner as Chairman and Managing Director serving at Calcutta and ultimately the same was acknowledged by him at Bombay. In such a

circumstance, as rightly observed in the above referred decisions, merely because after termination the petitioner was residing at Madras, he

cannot invoke the jurisdiction of this Court when even part of cause of action does not arise within the territorial jurisdiction of this Court. As per

the provision in Clause 2 of Article 226 of the Constitution, it is clear that the maintainability or otherwise of the writ petition in the High Court

depends on whether the cause of action for filing the same arose wholly or in part within the territorial jurisdiction of that Court. Under Clause 2 of

Article 226, this Court can exercise its power conferred by clause 1 if the cause of action, wholly or in part, has arisen within the territory over

which it exercises jurisdiction, notwithstanding that the seat of the Government or authority or the residence of the person against whom the

direction, order is issued is not within the said territory. In order to confer jurisdiction of this Court, the petitioner must show that at least a part of

the cause of action had arisen within the territorial jurisdiction of this Court. I have already referred to the fact that petitioner has not furnished any

material for filing this writ petition before this Court except referring to the fact that his residence is at Madras. It is pertinent to note that the very

same petitioner has filed another Writ Petition at High Court, Calcutta questioning the criminal action taken against him. Whether this Court has

territorial jurisdiction to entertain a writ petition must be answered on the basis of the averments made in the petition. In other words, the question

of territorial jurisdiction must be decided on the facts pleaded in the petition. In the absence of any averment/assertion and in the light of specific

objection raised by the respondents questioning the jurisdiction of this Court and in view of the materials placed, namely, that the impugned order

of termination was issued by the Union of India at Delhi, the same was addressed to the petitioner as Chairman and Managing Director of third

respondent Bank at Calcutta and received the said order at Bombay, I hold that no part of cause of action arose within the jurisdiction of this

Court. I have already referred to the decision of the Supreme Court holding that the place of residence or carrying on business are immaterial

which does not give jurisdiction to the Court concerned.

Regarding merits of the impugned order, learned senior counsel for the petitioner though referred to the judgments of the Supreme Court,

namely, (1) CENTRAL INLAND WATER TRANSPORT CORPORATION LTD., v. BROJO NATH AIR 1986 1971; (2) M.K. Agarwal Vs.

Gurgaon Gramin Bank and Others, ; (3) Delhi Transport Corporation Vs. D.T.C. Mazdoor Congress and Others, ; and (4) Parshotam Lal

Dhingra Vs. Union of India (UOI), in support of his claim, I am of the view that in the light of my conclusion that this Court has no jurisdiction to

hear the writ petition, the merits of the claim of the petitioner cannot be considered by this Court.

In the result, the writ petition is dismissed for want of jurisdiction. No costs. Consequently, WPMP No. 10376/93 is closed.