JUDGMENT
Badar Durrez Ahmed, J.
1. The Petitioner is the respondent’s dealer for the retail sale or supply of petrol/HSD/motor oil/grease and such other petroleum products as may be specified by the respondent. The dealership of the Petitioner is situated at Hassanpur Road, Sambhal, District Moradabad (U. P.). The Petitioner was appointed as such dealer by virtue of an agreement executed by and between the Petitioner and the respondent on 15.02.1995.
2. The question for consideration is whether this Court has the territorial jurisdiction to entertain this writ petition. The nature of the present petition is indicated by the prayer. The Petitioner has sought an appropriate writ, order or direction, directing the respondent not to contemplate/take any action including suspension of supply on the basis of the inspection dated 5.7.2003 in respect of the petitioner’s said retail outlet without comparing the drawn sample with the mother/reference sample. Whether such a writ can at all be issued, is another question: At this stage, we are primarily concerned with this Court’s territorial jurisdiction to entertain this petition.
3. Although the prayer clause of the writ petition has reference only to the inspection carried out on 5.7.2003, the Petitioner is also, in point of fact, challenging the letter dated 16.8.2003 issued by the respondent. As aforesaid, the Petitioner’s retail outlet is located in Hassanpur Road, Sambhal, district Moradabad (U.P.). The inspection was carried out at the said location. The inspection report was prepared in that very location. In the inspection report certain irregularities have been noticed. The Petitioner, it must be pointed out, had earlier moved a writ petition (CW 4934/2003) before this Court soon after the said inspection and report. In that petition also the Petitioner had prayed for the issuance of a direction to the respondent not to contemplate any action, including suspension of supply on the basis of the inspection report dated 5.7.2003 in respect of the petitioner’s said retail outlet without comparing the drawn sample with the mother/reference samples. Thus, it is clear that, the prayers in the previous writ petition and the present writ petition are more or less the same. That writ petition was disposed of by an order dated 5.8.2003 in the following terms:-
“In this petition, the prayer is for direction to the respondent-Indian oil Corporation Ltd not to contemplate any action, including suspension of supply on the basis of inspection dated 05.07.2003 in respect of the Petitioner’s retail petrol pump at Hassanpur Road, Sambhal, Moradabad (U. P.) without comparing the drawn sample with the mother/reference samples. It appears that an inspection was carried out on 05.07.2003. The inspection report at the end records as under: –
“Delivery density not checked in my presence. The irregularities shall be advised in 7 days. The matter of sample container shall be informed later as it is not known to me as newly joined.”
2. Thereafter, nothing has happened. The Petitioner has rushed to this Court on the apprehension that something may happen. Without going into the question of jurisdiction itself, it is clear that the writ petition itself has no merits inasmuch as it is premature and no action against the Petitioner has at all been taken.
Accordingly, the writ petition is dismissed.”
4. After the dismissal of the said writ petition, the Petitioner received the letter dated 16.8.2003 from the respondent’s divisional office at Bareilly, U.P. This letter, which was dispatched to the Petitioner from Bareilly in U.P., was received by the Petitioner at its retail outlet at Hassanpur Road, Sambhal, district Moradabad in U.P. No part of the purported cause of action has arisen within the territorial limits of this Court. All the actions complained (i.e., the inspection of 5.7.2003 and the issuance of the letter of 16.8.2003 and receipt thereof by the petitioner) have occurred in Uttar Pradesh and not in Delhi. In the letter dated 16.8.2003 it is indicated that the inspection which was carried out on 5.7.2003 by the Anti Adulteration Cell, New Delhi showed that the high-speed diesel samples drawn from the petitioners retail outlet failed to meet the bids specifications. In this view of the matter, the respondent advised the Petitioner to submit his explanation on the above and as to why action under the Marketing Discipline Guidelines should not be taken against the Petitioner for the aforesaid irregularities. The Petitioner was given seven days time, after receipt of this letter, to make its reply. In effect, the letter dated 16.8.2003 was a show cause notice to the Petitioner. The Petitioner sent its reply (through its advocate in Delhi) on 19.8.2003. Nothing further has happened. It is pertinent to note that in the reply dated 19.8.2003 the respondent was called upon to withdraw the letter dated 16.8.2003 and not to take any action on the basis of the alleged inspection dated 5.7.2003. The respondent is yet to take action in this matter. It is obvious that, like the earlier petition, this petition, too, is premature. This writ petition ought not to have been filed at this stage.
5. However, the question of jurisdiction which was not gone into in the earlier order dated 5.8.2003 also needs to be settled. The Petitioner has relied upon clause 68 of the said agreement which reads as under:-
“68. This agreement has been made in N. Delhi and all payments there under shall be due and made in New Delhi, unless otherwise directed by the Corporation. The courts in the city of N. Delhi alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under this agreement.” (underlining added)
The learned counsel for the Petitioner submits that because of this clause, this Court would have territorial jurisdiction to entertain the present writ petition. He has placed reliance on a judgment of a Division Bench of this Court in the case of A. K. Surekha & Ors v. The Pradeshiya Investment Corporation of U. P. Ltd: where, an almost identical clause with respect to jurisdiction was the subject matter. The clause that was under consideration of the Division Bench was as under:-
“57. Jurisdiction for litigation
The borrower and PICUP agree that for all purposes of litigation relating to this agreement the jurisdiction shall be of Lucknow courts only.”
The Division Bench noted the contention of the parties with regard to jurisdiction and after considering several decisions of the Supreme Court and of other high Courts concluded in the following words:-
“28. We have examined the relevant clause of the agreement and decided cases of various courts on question of territorial jurisdiction. If the principles which have been crystallised by the various courts are made applicable to the facts of this case, the conclusion would be irresistible that this Court has no territorial jurisdiction to entertain this petition because in the instant case the Respondent had entered into an agreement with the company of the Petitioner at Lucknow and in the loan agreement, it was clearly stated that for the purposes of litigation relating to this agreement the territorial jurisdiction shall be of Lucknow courts only.”
The learned counsel for the Petitioner seeks to apply the aforesaid observations of the Division Bench to the facts of the present case to show that the courts in Delhi alone would have jurisdiction. The learned counsel for the respondent, however, submitted that the fact situation is entirely different. In the case before the Division Bench the party was being proceeded against in terms of the agreement. In the present case, no action has yet been taken in terms of the agreement. What has happened is that a surprise inspection was carried out on 5.7.2003 which has been followed by the show cause notice dated 16.8.2003 to which the Petitioner has replied by his advocate’s letter dated 19.8.2003. Nothing more has happened. There is no “claim or dispute” which has arisen under the said agreement. As such, clause 68 of the said agreement does not come into play at all.
6. I am in agreement with the submission of the learned counsel for the respondent. Clause 68 specifically speaks of a suit, application or other proceeding in respect of any “claim or dispute” arising under the agreement. There is no claim or dispute which has arisen under the agreement. In construing the expression “arising out of” in the context of an arbitration clause contained in an agreement, the Supreme Court in the case of Union Of India v. Salween Timber Construction (India) & Ors: laid down the following test:-
“In our opinion the claim made by the respondent firm was a claim arising out of the contract. The test for determining the question is whether recourse to the contract by which both the parties are bound is necessary for the purpose of determining whether the claim of the respondent firm is justified or otherwise. If it is necessary to take recourse to the terms of the contract for the purpose of deciding the matter in dispute it must be held that the matter is within the scope of the arbitration clause and the arbitrators have jurisdiction to decide this case.”
Do the issues raised in the present petition fall within the expression “claim or dispute arising under this agreement” appearing in clause 68 of the said agreement? The test for determining the question is whether recourse to the said agreement is necessary for the purpose of determining these issues? Recourse to the agreement is not necessary for considering the incident of the inspection. Recourse to the agreement is not necessary while taking up the issue of drawing of samples and the correct procedure therefore. Recourse to the agreement is also not necessary for deciding the question as to whether the show cause notice dated 16.8.2003 is valid and legal. Clause 68 of the said agreement is not at all attracted. Consequently, the judgment of the Division Bench in the case of A.T. Surekha (supra) would not be applicable to the facts of the present petition.
7. Thus, the question of territorial jurisdiction will have to be decided de hors clause 68 of the said agreement. The Supreme Court in the case of Union of India v. Adani Exports Ltd: observed as under:-
“17. It is seen from the above that in order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in part, arisen within its jurisdiction. It is clear from the above judgment that each and every fact pleaded by the respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court’s territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned.”
In the present case the facts that have a nexus or relevance with the lis are those with regard to the inspection which took place on 5.7.2003 and the show cause notice that was issued by the respondent on 16.8.2003. In this petition the Petitioner has submitted that the Respondent’s said letter dated 16.8.2003 is absolutely vague. It is also submitted that, while it has been alleged that the HSD samples drawn from the petitioner’s pump on 5.7.2003 failed to meet the bids specifications, it has not been disclosed as to when and where and in which laboratory, the samples were tested. The Petitioner has further submitted that the Respondent’s impugned letter dated 16.8.2003 does not even point out any illegality or irregularity on the part of the Petitioner. It is also alleged that the said letter dated 16.8.2003, without supplying any test report, cannot be termed as a show cause notice at all. In the absence of a test report, the Petitioner is unable to rebut any allegations made against it. Finally, the Petitioner has stated that the issuance of the purported show cause notice dated 16.8.2003 by the Respondent is merely an eye wash and the Petitioner has reasons to believe that the respondent intends to terminate the petitioner’s dealership. From these averments and submissions, it is clear that the petitioner’s grievance is essentially with respect to the inspection of 5.7.2003, the show cause notice dated 16.8.2003 and the sampling and testing procedure adopted by the respondent. These are the facts which constitute the cause of action. They have entirely arisen in U.P., beyond the territorial jurisdiction of this Court. Clearly, no part of such cause of action has arisen within the territorial jurisdiction of this Court. Hence, this Court would not have the territorial jurisdiction to entertain the present writ petition.
8. Accordingly, this writ petition is liable to be dismissed on the ground that this court lacks the territorial jurisdiction to entertain it. It is so dismissed. Since the present writ petition has also been filed prematurely despite the earlier writ petition having being dismissed as being premature, the Petitioner ought to be saddled with costs which are quantified at Rs 5,000/-.