ALCHEMIST LIMITED AND ANR. versus STATE BANK OF SIKKIM AND ORS.

Citation: [2007] 4 S.C.R. 46 · Decided: 16-03-2007 · Supreme Court of India · Bench: C.K. THAKKER · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
ALCHEMIST LIMITED AND ANR. 
v. 
STATE BANK OF SIKKIM AND ORS. 
MARCH I6, 2007 
B 
[C.K. THAKKER AND LOKESHWAR SINGH PANT A, JJ.) 
Constitution of India, 1950: 
Article 226(2)-Writ Petition-Territorial jurisdiction-Cause of 
C action-Held, cause of action is relevant and germane and writ petition can 
be instituted in High Court within the territorial jurisdiction of which cause 
of action in whole or in part arises-Whether a particular fact constitutes 
cause of action or not-Held, it must be decided on the basis of facts and 
circumstances of each case-A particular fact forms part of cause of action 
D if it is of substance and is material, integral or essential part of lis between 
parties-Even if a small fraction of cause of action arises within the jurisdiction 
of a Court, that Court would have territorial jurisdiction to entertain the 
petition-Company having registered office at Chandigarh filing writ petition 
in Punjab and Haryana High Court alleging that part of cause of action had 
arisen within the territorial jurisdiction of that Court-Jn the facts and 
E circumstances, held, writ petition rightly dismissed by High Court on the 
ground of want of territorial jurisdiction. 
Respondent No. 2-State of Sikkim was desirous of disinvesting 49% of 
its equity capital in respondent No. l '-State Bank of Sikkim to a strategic 
partner with transfer of management in the respondent No.I-Bank. For that 
F purpose, respondent No.2 issued an advertisement in "Economic Times" on 
21.1.2004 and invited offier for strategic partnership. Appellant Company 
having its Registered and Corporate office at Chandigarh submitted its formal 
proposal for the strategic business partnership vide its offer dated 3.2.2004. 
The Board of Directors of respondent No.-1 bank short-listed two entities, 
G viz. the Appellant Company and another company based in Calcutta. 
H 
Negotiations took place between Appellant Company and respondent No.1-
Bank. The Chairman and Managing Director of respondent No.1-Bank visited 
Chandigarh for further negotiations. Respondent No.1- Bank asked Appellant 
to deposit a sum of Rs. 4.50 crore to show its bonajides and utilization by 
46 
-\ 
ALCHEMIST LTD. v. ST ATE BANK OF SIKKIM 
47 
), 
the respondent No. 1-Bank for its revival. Appellant deposited the said amount A 
with the State Bank of India, Chandigarh on 16.3.2005. Respondent No.1-
Bank through its letter dated 20.2.2004 informed Appellant Company that 
its proposal was accepted in principle subject to consideration and approval 
of the Government of Sikkim. A~pellant Company on 23.2.2006 received a 
communication at Chandigarh by which respondent No.1-Bank informed B 
Appellant-Company that the Government of Sikkim had not approved the 
_)_ 
proposal submitted by Appellant Company and sought to withdraw the 
communication dated 20.2.2004. Appellant Company filed writ petition before 
the High Court of Punjab & Haryana under, Article 226 of the Constitution 
challenging the letter-cum-order dated 23.2.2006. High Court did not enter 
into merits and dismissed the writ petition opJy on the ground that it did not c 
have territorial jurisdiction to entertain the writ petition as no cause of action 
had arisen within the territorial jurisdiction of the court. Hence the present 
appeal by the Appellant Company. 
Appellant, Company contended that a part of cause of action had arisen 
within the territorial jurisdiction of the High Court of Punjab & Haryana on D 
the ground that Appellant-Company has its Registered and Corporate Office 
at Chandigarh and carries on business at Chandigarh; that acceptance of the 
offer of the Appellant-Company was communicated to it at Chandigarh; that 
part performa.1ce of the contract took place at Chandigarh inasmuch as Rs. 
-
4.50 crores had been deposited by it at Chandigarh as per the request of the 
Respondent No. 1-bank; that the Chairmen and Managing Director of E 
respondent No.1-bank visited Chandigarh to ascertain the bona fides of 
Appellant-Company and negotiations were held between the parties at 
Chandigarh; and that letter of revocation dated 2~.2.2006 was received by 
Appellant-Company at Chandigarh. 
F 
• 
Respondent contended that no part of cause of action had arisen within 
the territorial jurisdiction of the High Court of Punjab & Haryana and all 
substantial, material and integral facts constituting a cause of action were 
within the territory of the State of Sikkim on the ground that Registered

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