The Learned Division Bench of the High Court of Delhi upheld the Single Judge judgment, wherein a writ petition against Securities and Exchange Board of India (SEBI) was dismissed on the preliminary objection of maintainability of the petition on account of lack of territorial jurisdiction, by applying the principles of ‘Forum Conveniens’.
The Appellant had preferred the said petition before High Court of Delhi, seeking to set aside revocation order passed by SEBI and restraining SEBI from proceeding further with hearing the matter scheduled at Mumbai. It was urged by the Appellant that the effect of the impugned order was felt by them in New Delhi as they carried on business from their registered offices located in New Delhi; and that the impugned order was received in New Delhi and, thus, the High Court of Delhi possessed the requisite territorial jurisdiction.
The Single Judge, had concluded that none of the aforesaid facts are material, essential or integral for deciding the issue of challenge to the impugned revocation order; it was held that the fact that a small part of cause of action has arisen within the territorial jurisdiction of this Court is by itself not a determinative factor for compelling this Court to decide the matter on merits.
It was concluded that the cause of action had arisen at Mumbai since the decision of SEBI to invoke settlement order took place at Mumbai and all events prior thereto with respect to issuing Show Cause Notice (SCN) and passing of settlement order also occurred at Mumbai and, thus, High Court of judicature at Bombay had the proper jurisdiction. While applying the principles of forum conveniens, it was held that since the Appellant had participated in the SCN proceedings in Mumbai, the Settlement application was filed in Mumbai and the revocation order was passed in Mumbai, Mumbai courts would possess the jurisdiction.
While relying upon Sterling Agro Industries Ltd. v. Union of India [2011] 10 taxmann.com 120/199 Taxman 259 (Mag.), it was observed that while exercising jurisdiction under Article 226 of the Constitution of India, in addition to examining its territorial jurisdiction, the question of forum conveniens must be examined as well. Furthermore, the issue of forum conveniens is to be seen not only from the perspective of the writ petitioner but it is to be seen from the convenience of all the parties before the Court.
The relevant paragraphs of the judgment in Sterling Agro Industries Ltd.(supra) are reproduced as under:
"30. From the aforesaid pronouncements, the concept of forum conveniens gains signification. In Black's Law Dictionary, forum conveniens has been defined as follows: "The court in which an action is most appropriately brought, considering the best interests and convenience of the parties and witnesses."
31. The concept of forum conveniens fundamentally means that it is obligatory on the part of the court to see the convenience of all the parties before it. The convenience in its ambit and sweep would include the existence of more appropriate forum, expenses involved, the law relating to the lis, verification of certain facts which are necessitous for just adjudication of the controversy and such other ancillary aspects. The balance of convenience is also to be taken note of. Be it noted, the Apex Court has clearly stated in the cases of Kusum Ingots (supra), Mosaraf Hossain Khan (supra) and Ambica Industries (supra) about the applicability of the doctrine of forum conveniens while opining that arising of a part of cause of action would entitle the High Court to entertain the writ petition as maintainable.
32. The principle of forum conveniens in its ambit and sweep encapsulates the concept that a cause of action arising within the jurisdiction of the Court would not itself constitute to be the determining factor compelling the Court to entertain the matter. While exercising jurisdiction under Articles 226 and 227 of the Constitution of India, the Court cannot be totally oblivious of the concept of forum conveniens. The Full Bench in New India Assurance Co. Ltd. (supra) has not kept in view the concept of forum conveniens and has expressed the view that if the appellate authority who has passed the order is situated in Delhi, then the Delhi High Court should be treated as the forum conveniens. We are unable to subscribe to the said view." (Emphasis Supplied). “
-Ashoka Marketing Ltd. v. Securities & Exchange Board of India [2024] 158 taxmann.com 602 (Delhi)
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