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2017 DIGILAW 1068 (JK)

Himalaya Research Laboratory v. Union of India

2017-12-18

JANAK RAJ KOTWAL

body2017
JUDGMENT : 1. Petitioner claims to be an Industrial Unit engaged in manufacturing process of Ayurvedic medicines, situate at Bari Barhamna, Jammu. Petitioner says also that it is a SSI unit registered with DIC Jammu and is registered also as 'SSI/MSME (Small Scale Industry/Micro, Small and Medium Enterprises)'. 2. Respondent No. 2 vide e-tender No. U-16/13/6/Ayur.-7/2015-16-ISM dated 16.02.2016 invited online tenders along with complete set of hard copy of tender documents for DG ESIC Rate Contract No. Ay.-7 for supply of Ayurvedic Drugs (herein after to be referred as the 'impugned tender notice'). The terms and conditions for running the rate contract by virtue of its column VII at page 4 read with clause 3.i.b at page 19 provides that the pharmaceutical firms (General and MSEs) quoting for items other than those reserved for MSEs should have a minimum annual turnover of five crore rupees for Ayurvedic formulations in each of the last three preceding financial years i.e. 2012-2013, 2013-14 & 2014-15 to be eligible for participation in ESI Rate Contract (hereinafter to be referred as the 'turnover condition'). 3. In OWP No. 401/2016 petitioner challenges and seeks writ of Certiorari quashing the impugned tender notice on the ground that the turnover condition insofar as the Micro, Small and Medium Enterprises are concerned, infracts the Public Procurement Policy of 2012 issued by the Government of India, Ministry of Micro, Small and Medium Enterprises. On this petition coming up on 18.03.2016, this Court as interim measure directed respondents 2 and 3 to allow the petitioner to participate in tendering process at his own risk and responsibility without insisting upon fulfilment of the turnover condition and by virtue of a subsequent order dated 29.03.2016 this Court further directed the respondents to allow the petitioner to make good the shortcoming, if any, in the e-tendering process before finalization of the bids. Petitioner, therefore, participated in the tendering process. 4. The petitioner pursuant to the interim directions issued by this Court in OWP No. 401/2016, submitted his tender documents. The respondents, however, vide their e-mail communication dated 24.09.2016 informed the petitioner that it has not been selected in Technical evaluation Stage of its tender. 5. Petitioner, therefore, participated in the tendering process. 4. The petitioner pursuant to the interim directions issued by this Court in OWP No. 401/2016, submitted his tender documents. The respondents, however, vide their e-mail communication dated 24.09.2016 informed the petitioner that it has not been selected in Technical evaluation Stage of its tender. 5. In OWP No. 1478/2016, petitioner challenges the rejection of its bid at technical stage and seeks quashing of the communication dated 24.09.2016 contending that the petitioner was exempted from turnover clause by this Court so the respondents were under obligation to select its bid insofar as the technical stage of the tendering process is concerned and that the tender documents cannot be rejected at technical stage. In this petition, petitioner also reiterated the entire relief earlier sought in OWP No. 401/2016. 6. Respondents have raised preliminary objections in regard to jurisdiction of this Court to entertain and hear these writ petitions filed by the petitioners on three scores; i. firstly, that clause 38 of the terms and conditions for running the Rate Contract has ousted jurisdiction of all other courts in favour of the courts at Delhi/New Delhi only, ii. secondly, that no part of cause of action has arisen within the jurisdiction of this Court in the State of Jammu and Kashmir and iii. thirdly, that all the disputes and differences arising between the parties under the terms and conditions for running the Rate Contract are preferable to arbitration under the Arbitration clause provided in the said terms and conditions. 7. With the consensus of learned counsel on each side, question in regard to the jurisdiction of this Court was taken up first. Learned counsel were heard. On the question relating to the ouster of jurisdiction of all others courts in favour of courts at Delhi/New Delhi, two decisions of the Supreme Court in A.B.C. Laminart Pvt. Ltd. v A. P. Agencies Salem, (1989) 2 SCC 163 and M/s Swastik Gases (P) Ltd. v Indian Oil Corporation Ltd. (2013) 9 SCC 32 were cited by the counsel on each side. In addition Mr. U.K. Jalali, learned Senior Advocate appearing on behalf of the petitioner also cited a decision of Allahabad High Court in M/s. P. R. Transport Agency v Union of India, AIR 2006 All. 23 . 8. In addition Mr. U.K. Jalali, learned Senior Advocate appearing on behalf of the petitioner also cited a decision of Allahabad High Court in M/s. P. R. Transport Agency v Union of India, AIR 2006 All. 23 . 8. The objection in regard to non-accrual of the cause of action within the jurisdiction of this Court would be more important than the other two questions for the reason that the construction and effect of the exclusion clause, that is, clause 38, or the arbitration clause need to be taken up only if it is found that this Court has the jurisdiction to entertain and hear this petition. This is so because of the principle laid down in A.B.C. Laminart Pvt. Ltd. and anr. (supra) referred to with approval in Swastik Gases (P) Ltd. (supra). 9. The principle laid down in the learned two-Judge Bench decision in A. B. C. Laminart has been reiterated by the Supreme Court in a subsequent learned two-Judge Bench decision in Interglobe Aviation Limited v N. Satchidanand, (2011) 7 SCC 463 and decision in both these cases has been referred to with approval in the learned three-Judge Bench decision in M/s. Swastik Gases (P) Ltd. Paragraph 22 of the reporting in the Interglobe Aviation Limited is reproduced: “22. As per the principle laid down in ABC Laminart, any, clause which ousts the jurisdiction of all courts having jurisdiction and conferring jurisdiction on a court not otherwise having jurisdiction would be invalid. It is now well settled that the parties cannot by agreement confer jurisdiction on a court which does not have jurisdiction; and that only where two or more courts have the jurisdiction to try a suit or proceeding, an agreement that the disputes shall be tried in one of such courts is not contrary to public policy. The ouster of jurisdiction of some courts is permissible so long as the court on which exclusive jurisdiction is conferred, had jurisdiction. If the clause had been made to apply only where a part of cause of action accrued in Delhi, it would have been valid. But as the clause provides that irrespective of the place of cause of action, only courts at Delhi would have jurisdiction, the said clause is invalid in law, having regard to the principle laid down in ABC Laminart. But as the clause provides that irrespective of the place of cause of action, only courts at Delhi would have jurisdiction, the said clause is invalid in law, having regard to the principle laid down in ABC Laminart. The fact that in this case, the place of embarkation happened to be Delhi, would not validate a clause, which is invalid.” 10. The legal position in regard to exclusion of jurisdiction of courts in favour of a particular court, therefore, is that the parties by agreement cannot confer jurisdiction on a court, which otherwise does not have the jurisdiction in the matter. However, when two or more courts have concurrent jurisdiction in a matter, the parties by agreement can exclude jurisdiction of all other courts in favour of one of them. To say a bit more simply, exclusion is permissible only in favour of such a court, which otherwise has the jurisdiction to hear the matter. Construction of an exclusion clause, however, will differ from case to case, having regard to the nature of the said clause but, as said above, question in regard to construction of the exclusion clause involved in this case would arise only if it is found that courts at Jammu otherwise have the jurisdiction to hear the dispute and in particular, that this Court has the jurisdiction to hear this writ petition:- Whether this Court has jurisdiction to entertain and hear this writ petition? 11. Objection raised on behalf of the respondents is that no part of cause of action has arisen within the State of Jammu and Kashmir so this Court does not have the jurisdiction to entertain and hear this petition. It is contended in the reply filed on their behalf that e-tender was invited by the Deputy Medical Commissioner (ISM) on behalf of Director General Headquarter, Employees State Insurance Corporation, New Delhi and all the proceedings with respect to calling of the tenders, deposit of tenders, pre bid meeting, and scrutiny of documents took place in New Delhi so only a competent court in Delhi/New Delhi has the territorial jurisdiction to entertain any writ petition and to adjudicate the issue raised by the petitioner. Learned counsel for the respondents, Mr. Harshwardhan Gupta, reiterated the same in his submissions and relied upon a Supreme Court judgment in Oil and Natural Gas Commission v Utpal Kumar Basu, (1994)4 SCC 711 . 12. Learned counsel for the respondents, Mr. Harshwardhan Gupta, reiterated the same in his submissions and relied upon a Supreme Court judgment in Oil and Natural Gas Commission v Utpal Kumar Basu, (1994)4 SCC 711 . 12. On the other hand, the question relating to the jurisdiction of this Court has been identically addressed by the petitioner in paragraph-16 of the petition in OWP No. 401/2016 and paragraph-13 of the petition in OWP No. 1478/16. Paragraph-13 of the petition in OWP No. 1478/16 is reproduced: “13. That the unit of the petitioner is situated at Jammu and one of the respondents, being officer of the respondents 1-3 is situated at Jammu who has been nominated as Chief Direct Demanding Officer in the e-tender notice under reference for the purposes of receiving medicines for its hospital and dispensaries situate within the territories of this Hon’ble Court. This Hon’ble Court as such has jurisdiction to entertain the petition and grant relief as sought for.” 13. As per the contention of the petitioner, this Court has jurisdiction to hear these petitions for the reason that the unit of the petitioner is located in Jammu and the seat of one of the respondents, that is, respondent No. 3 is also in Jammu. Contextually, it needs to be stated that the jurisdiction of a High Courts to entertain and hear writ petitions under Article 226 of the Constitution of India is governed by clause (1) and clause (2) of Article 226 itself and not by the Code of Civil Procedure. Clauses (1) and (2) of Article 226, are reproduced: “226. Power of High Courts to issue certain writs (1) Notwithstanding anything in Article 32, every High Court shall have power, throughout the territories in relation to which it exercise 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, prohibitions, 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.” 14. Clause (1) of Article 226 of the Constitution deals with issuance of writs orders or directions by a High Court to any person or authority, including in appropriate cases, to any Government within territory of the said High Court, whereas clause (2) deals with issuance of such writs orders or directions to any Government, authority or person, notwithstanding that the seat of such Government or authority or the residence of such person is not within its territorial jurisdiction, in case cause of action, wholly or in part, arises within the jurisdiction of the said High Court. 15. In the case on hand the writs are sought by the petitioner to be issued to the respondent No. 1, whose seat is located outside the territorial jurisdiction of this Court at New Delhi and has issued the impugned tender notice from New-Delhi. Petitioner, though has impleaded respondent No. 3 in the writ petition, whose seat is located within the territory of this Court, but, as no relief either has been sought or could have been sought against respondent No. 3, it having been so impleaded has no importance/relevance in consideration of the question of the jurisdiction of this Court. Clause (1) of Article 226, therefore, would not apply insofar as jurisdiction of this Court to entertain and hear these petitions are concerned. 16. Since the writs have been sought against respondent No. 2, whose seat is located outside the territorial jurisdiction of this Court, petitioner is required to show that this Court has the jurisdiction to entertain and hear this petition under clause (2) of Article 226. Jurisdiction under clause (2) arises only if it is shown that cause of action has arisen, wholly or in part, within the territorial jurisdiction of this Court. 17. Jurisdiction under clause (2) arises only if it is shown that cause of action has arisen, wholly or in part, within the territorial jurisdiction of this Court. 17. In the Oil and Natural Gas Commission (supra), the tender notice on behalf of the Oil and Natural Gas Commission (ONGC) was issued by its consultants from New Delhi calling for tenders for setting up of a Kerosene Recovery Processing Unit at the Hazira Complex in Gujarat. NICCO, having its registered office at Calcutta, read the tender notice in the Times of India circulated within the jurisdiction of Calcutta High Court. On rejection of the tender submitted by the NICCO, it filed writ petition in the High Court of Calcutta. In appeal against the order dated 17.12.1993 passed by the High Court of Calcutta the point of jurisdiction came to be raised before the Supreme Court. Hon’ble Supreme Court held in this case that: “5. 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 the 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 impart, 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.” 18. Having regard to the facts of the case, the Supreme Court in Oil and Natural Gas Commission (supra) held further as under: “Merely because it read the advertisement at Calcutta and submitted the offer from Calcutta and made representation from Calcutta would not, in our opinion constitutes facts forming an integral part of cause of action. So also the mere fact that it sent fax messages from Calcutta and received a reply thereto at Calcutta would not constitute and integral part of cause of action. Besides the fax message of 15.01.1993, cannot be construed as conveying rejection of the offer as that fact occurred on 27.01.1993. We are, therefore, of the opinion that even if the averments in the writ petition are taken as true, it cannot be said that a part of the cause of action arose within the jurisdiction of the Calcutta High Court.” 19. The ratio of the judgment in Oil and Natural Gas Commission (supra) aptly and squarely applies to the case on hand. The seat of respondent No. 1 is in New Delhi and the impugned tender notice was issued from New Delhi. The tender documents, which were submitted by the petitioner pursuant to and in terms of two interim directions issued by this Court have been rejected at technical evaluation stage at New Delhi. No part of cause of action, therefore, can be said to have arisen within the territorial jurisdiction of this Court. Such is not even the plea taken by the petitioner. According to the petitioner, this Court has jurisdiction because petitioner’s unit is located within the jurisdiction of this Court and seat of one of the respondents is also within the jurisdiction of this Court. Such is not even the plea taken by the petitioner. According to the petitioner, this Court has jurisdiction because petitioner’s unit is located within the jurisdiction of this Court and seat of one of the respondents is also within the jurisdiction of this Court. The location of the seat of the petitioner is not the determinative factor in the matter of jurisdiction in filing a writ petition and, as said above, location of respondent No. 3 within territorial jurisdiction of this Court has no relevance as no relief is sought nor could have been sought against him nor he is stated to have any role in issuing the impugned tender notice or laying down the turnover condition. 20. No part of cause of action having arisen within the territorial jurisdiction of this Court, the exclusion clause comprised in clause 38 in the terms and conditions of the impugned tender notice loses relevance insofar as exclusion of the jurisdiction this Court is concerned. Likewise, the ratio of the Allahabad High Court judgment in M/s. P.R. Transport Agency (supra) is of no help to the petitioner’s case for the reason that once it is found that no part of cause of action has arisen within the jurisdiction of this Court, question relating to exclusion of jurisdiction of this Court does not arise. 21. For the reasons stated and discussed above, I would, thus, hold that this Court has no jurisdiction to entertain and hear these writ petitions as no part of cause of action has arisen within the jurisdiction of this Court and therefore, these writ petitions are dismissed. The interim directions issued in these petitions now stand vacated. Contempt (OWP) No. 171/2016 : In view of the dismissal of the writ petitions and having regard to facts and circumstances of the case, this contempt proceedings is closed. This judgment is being pronounced by me in terms of Rule 138(3) of the J&K High Court Rules, 2009.