Supreme Court judgment on interpretation of ‘cause of action’

The bench comprising Justice Dipankar Datta and Justice S. Ravindra Bhat was hearing the State of Goa vs Summit Online Trade Solutions (P) LTD case in which the Supreme Court interpreted the term ‘cause of action’. The Supreme Court highlighted that “Those facts which are not relevant or germane for grant of the prayer would not give rise to a cause of action conferring jurisdiction on the Court.” In this case, the appellant was one of the multiple respondents in Writ petitions pending on the file of the High Court of Sikkim. In these Writ petitions, separate applications were filed by the appellant seeking its deletion from the array of respondents. 

The appellant had pleaded in the said applications that, a notification issued by it was under challenge in the writ petitions and such notification could be made a subject matter of challenge, the High Court of Bombay at Goa is the appropriate court where remedy ought to be pursued. A notification issued under a statute enacted by a State legislature cannot be subjected to judicial scrutiny within the jurisdiction of the HC of a different State. Since no part of the cause of action for invocation of the writ jurisdiction had arisen within the territorial limits of the HC, the writ petitions ought not to proceed against the Appellant. One other fact brought to the notice of Sikkim HC by the appellant was that the same notification was under challenge before the HC of Bombay at Goa and that such writ petition after admission was pending for final hearing.

While hearing the matter the Supreme Court stated that “according to the petitioning company the cause of action has arisen in Sikkim only, meaning thereby the whole of the cause of action and not part of it.” The bench also stated that all the respondents were located within the territorial jurisdiction of the HC which was factually incorrect. Moreover, the SC highlighted that only those facts which were relevant to the grant of the prayer would give rise to a cause of action. In addition, the bench opined that “no hesitation to hold that the High Court erred in dismissing the applications filed by the Appellant.” The High Court stands vacated with the result that the HC may proceed to decide the writ petitions against the other respondents according to law. Civil appeals were allowed and the impugned judgment and order was set aside.

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