Source: Delhi High Court 

Why in News? 

A bench of Justice Swarna Kanta Sharma held that in appropriate cases, the Court may decline to exercise its discretion by invoking the doctrine of forum conveniens.         

• The Delhi High Court held this in the case of Michael Builders and Developers v. The Indian Nursing Council and Ors. 

What was the Background of Michael Builders and Developers v. The Indian Nursing Council and Ors. Case? 

• The petitioner (Michael Builders and Developers) entered into an agreement for construction of a proposed medical college with St. Alphonso Trust. 
• Upon completing the construction, the claim of amount due for the work was raised by the petitioner. 
• The trust failed to make payment and hence the petitioner filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (A & C Act) before the District Court. 
• The petitioner thereafter filed an application under Section 11 of A & C Act before Madras High Court seeking appointment of an arbitrator. 
• An agreement of settlement was passed between the parties following this wherein the Trust agreed to pay an amount of Rs. 15,95,00,000/- along with 18% GST and pending service tax, as full and final settlement.    
• However, it was stated that the total outstanding liability is Rs. 26,00,00,000/-. 
• The settlement agreement was then submitted to the arbitrator who passed the consent order directing the Trust to pay the aforementioned amount. 
• The trust failed to comply with the payment terms and therefore, the petitioner filed an execution petition before the Principal District Judge seeking execution by attaching and selling the subject properties. 
• The District Judge passed an order for the attachment of the subject property. 
• The allegation of the petitioner is that in violation of the order of the Court the Trust applied for an Essentiality Certificate to commence a nursing and medical college on attached properties. 
• The Petitioner had filed earlier writ petitions before the Madras High Court seeking directions to the Secretary of the Government not to grant permission to the Trust. 
• The Petitioner has approached the Court seeking a writ of mandamus to prevent the respondents from granting any permission, recognition, or approval for the establishment of a nursing college to the Trust on the attached subject property, and an independent inquiry into the circumstances surrounding the grant of the Essentiality Certificate dated 14.06.2024. 

What were the Court’s Observations?  

• The Court observed that the petitioner had earlier approached Madras High Court for relief and the orders passed by them directly pertain to the property in question and the execution of the arbitral award. 
• Thus, there is no justification for invoking the jurisdiction of this High Court when the Courts in Tamil Nadu have already been seized of the matter and have issued relevant orders. 
• The Court held that in case a small part of cause of action arises within the territorial jurisdiction of a High Court, the same by itself may not be considered to be a determinative factor to compel that particular High Court to exercise its jurisdiction. 
• Thus, the Court held that the Court may decline to exercise jurisdiction by invoking the doctrine of forum conveniens. 
• In this case it was argued that since the National Medical Commission has its head office in Delhi, this Court should exercise jurisdiction. The Court made an important observation that merely because the head office of National Medical Commission or Indian Nursing Council in Delhi does not automatically confer jurisdiction upon this Court. 
• It was observed that these bodies have offices and their legal teams, which function in every State across the country, including Tamil Nadu. 
• Thus, the argument that National Medical Commission or Indian Nursing Council is based in Delhi is insufficient to justify the filing of a writ petition before this Court, especially when the cause of action has arisen, and the parties involved herein are located, in Tamil Nadu and have already approached the Courts situated in the State of Tamil Nadu and have contested and obtained orders from the said Courts. 
• The Court was thus of the opinion that the petitioner herein has engaged in forum shopping by seeking to invoke the jurisdiction of this Court after having withdrawn petitions from the appropriate forum in Tamil Nadu.  
• Such conduct, where the petitioner attempts to choose a forum favorable to them after having already approached the appropriate forum, cannot be condoned. 
• In view of the above, the present petitions along with pending application stood dismissed solely on the grounds of territorial jurisdiction, along with a total cost of Rs. 50,000/- (Rs.25,000/- in each petition), to be deposited with Delhi High Court Staff Welfare Fund within two weeks.

What is Forum Shopping? 

About:

• Forum shopping refers to the practice of deliberately choosing a specific court for a legal case in the hope of getting a favorable outcome. 
• Litigants and lawyers often consider this strategy as part of their litigation plan. 
• Forum shopping has been criticized by judges because it can lead to injustice for the opposing party and create an imbalance in the workload of different courts. 
• It can undermine the authority and legitimacy of courts and judges by creating perceptions of bias or favoritism. 
• It can increase the costs and complexity of litigation by creating conflicts of laws and multiple proceedings.

Landmark Cases:

• Kusum Ingots & Alloys Ltd v. Union of India (2004): 
  • Even if a small part of the cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. 
  • In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens.
• State of Goa v. Summit Online Trade Solutions (P) Ltd. (2023): 
  • The constitutional mandate of clause (2) is that the “cause of action”, referred to therein, must at least arise in part within the territories in relation to which the High Court exercises jurisdiction. 
  • However, in the context of a writ petition, what would constitute such “cause of action” is the material facts which are imperative for the writ petitioner to plead and prove to obtain relief as claimed. 
  • Such pleaded facts must have a nexus with the subject-matter of challenge based on which the prayer can be granted. 
  • 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.
• Chetak Construction Ltd v.  Om Prakash (2024): 
  • The Supreme Court emphasized that litigants should not have the freedom to choose the court for their convenience. The court stated that any attempt at forum shopping should be strongly discouraged.
• Vijay Kumar Ghai v. State of West Bengal (2022):
  • The Supreme Court termed forum shopping as a “disreputable practice by the courts” that “has no sanction and paramountcy in law”.