M/s. Raja Associates and Ors v. Union of India and Ors

Judgement

The petitioner No. 1 herein is a registered partnership firm who took over the running business of wholesale distribution of pharmaceuticals. The earlier owner of the said business had banking transactions with Karnataka Bank Limited and on taking over the said business, the petitioner approached the respondents-bank to take over the existing liability of the said wholesale pharmaceuticals business from Karnataka Bank Limited. Accordingly, the respondents took over the liabilities by sanctioning to petitioner No. 1 the cash credit facility of Rs. 35,00,000/- in two different accounts against hypothecation of stock in trade and on assignment of book debts on certain terms and conditions. The petitioner alleges that when this was the position, there was a fire accident in the godown belonging to the petitioner on 4-7-2003 and according to the petitioner since the insurance policy stood in the name of the bank, the bank should have sought for the insurance claim and the same should have been credited to their account. Since the respondents have failed to do so, the petitioner has taken steps in this regard and the matter is pending before the Karnataka State Consumer Dispute Redressal Commission.

2. The grievance of the petitioner at this juncture is however with regard to the notice issued by the respondents under section 13(2) of the securitisation and reconstruction of financial assets and enforcement of security interest act, 2002 (hereinafter referred to as the securitisation act). The petitioner was before this Court with the said grievance at the first instance in W. P. Nos. 33886-33887/2004. With regard to the fire accident and the manner of insurance claim, this Court has already reissued the contention put forth by the petitioner and as such the reasons assigned by the respondents in such of those paragraphs to reject the contention of the petitioner on to reject the contention of the petitioner on that aspect in their reply dated 25-5-2005 are justified. However, this Court by its order dated 24-2-2005 has not expressed its opinion with regard to the other contentions which had been raised regarding the improper manner in which the petitioners account was treated as Non-Performing Asset (hereinafter referred to as the NPA). But this Court had held that it would be open for the petitioner to raise the said issue either by way of representation or objection to the notice under Section 13(2) of the Act, as the amended provision of the Act as contained in Section 13(3A) of the Act had come into force, the same being inserted after the judgment of the Honble Supreme Court. In this regard, the decision in the case of Mardia Chemicals Ltd. etc. etc. v. Union of India and others etc. etc., reported in AIR 2004 SC 2371 was also noticed by this Court. Ultimately while disposing of the writ petition, such liberty was granted to the petitioner to file detailed representation/objection to the notice under section 13(2) of the securitisation act and the respondents were directed to consider the representation in the light of the aforesaid judgment of the Honble Supreme Court and pass appropriate orders in accordance with law. The petitioner has thereafter filed a detailed objection/representation dated 10-3-2005. The respondents have disposed of the representation by their communication dated 25-5-2005. The petitioner claiming to be aggrieved by the rejection of the objection/representation dated 10-3-2005 is once again before this Court in this petition.

3. I have heard Sri. X. M. Joseph, learned counsel for the petitioners and Sri. T. N. Raghupathy, learned counsel appearing on behalf of M/s. Rao and Rao Associates for the respondents.

4. Having heard the respective learned counsel, I have perused the writ papers, objection statement and also the decisions in the case of Mardia Chemicals, (2004 AIR-Kant HCR 1677) and in the case of M/s. Transcore v. Union of India and another, reported in 2007 AIR SCW 389 : (AIR 2007 SC 712).

5. In the background of the contentions urged by the learned counsel, the prayer made in the writ petition are to be considered. Insofar as the first prayer made by the petitioner seeking for a declaration that section 13(3a) of the securitisation act inserted with effect from 11-11-2004 is arbitrary and unconstitutional insofar as petitioners are concerned, the same need not detain this Court for long. The said provision had already come into force when the earlier petition in W. P. Nos. 33886-33887/04 was filed by the petitioner and this Court on noticing the said provision had reserved liberty in favour of the petitioner to make an appropriate objection/representation in terms of the said provision and the same has been utilised by the petitioner. Therefore, at the outset, it cannot lie in the mouth of the petitioner to question the very same provision. Even otherwise, the validity of the Securitisation Act itself has been upheld by the Honble Supreme Court in the case of Mardia Chemicals and it is pursuant to certain observations made in the said decision by the Honble Supreme Court, the said amendment by way of introduction of subsection (3a) to section 13 has been made. The said provision has been introduced for the benefit of the borrowers. Though it is contended by the learned counsel for the petitioners that the decision being rendered by the respondents themselves is contrary to law and against principles of natural justice, the fact that the Honble Supreme Court had upheld the Act when it was even more stringent without the additional opportunity would indicate that the introduction of sub-section (3A) is an opportunity to compel the bank/financial institutions to disclose reasons for treating the account of the borrower as NPA. Therefore, in any event, the said provision cannot be said to be either arbitrary or unconstitutional.

6. With regard to the second prayer made by the petitioners to declare that the respondent-Bank cannot simultaneously invoke the remedy available under the Securitisation Act and the one available under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the fact of the matter is that both the learned counsel for the petitioners as well as the learned counsel for the respondents have placed reliance on the decision of the Honble Supreme Court in the case of M/s. Transcore, wherein this aspect of the matter has been considered. The Honble Supreme Court after discussing the matter threadbare has stated as follows :

"For the above reasons, we hold that withdrawal of the O. A. pending before the DRT under the DRT Act is not a pre-condition for taking recourse to NPA Act. It is for the Bank/FI to exercise its discretion as to cases in which it may apply for leave and in cases where they may not apply for leave to withdraw. We do not wish to spell out those circumstances because the said first proviso to Section 19(1) is an enabling provision, which provision may deal with myriad circumstances which we do not wish to spell out herein."

7. While arriving at the said decision, the Honble Supreme Court has come to the conclusion that the said two acts are complementary to one another and as such the NPA Act is an additional remedy to DRT Act and they together constitute one remedy. That being so, the Doctrine of Election does not apply. This would make it clear that the Honble Supreme Court has set at rest the said controversy and as such it would not be open for the petitioner to contend that the respondent-Bank cannot invoke the provisions of the securitisation act when they have resorted to the remedy available under the DRT Act. Even otherwise in the instant case, the respondent-Bank had classified the account of the petitioner as NPA on 31-3-2004 and the notice under section 13(2) of the securitisation act was issued on 29-7-2004. Admittedly, the DRT proceedings were initiated thereafter on 7-2-2005 and therefore, in any event, the said argument would not be open for the petitioner in the facts and circumstances of this case.

8. The next prayer made by the petitioners is to declare that without classification of the account or asset of the petitioner with respondent-Bank as "sub-standard, doubtful or loss assets", the respondent-Bank cannot invoke the Securitisation Act. While considering this prayer, the contentions urged in the earlier petition and the liberty granted by this Court and the manner of consideration of the objection/representation by the respondents also requires consideration. Insofar as declaring the account belonging to the petitioner as NPA, the respondent-Bank has furnished the summary of NPA accounts for the period ending 31-3-2004 before this Court. The said summary only indicates the name of the borrower account, the date when it was first classified as NPA and also the total outstanding and the present realisable value. The name of the petitioner-firm is indicated at Sl. No. 1 and the date of classification as NPA is indicated as 31-3-2004. Against the column No. 1 total outstanding figure of 6538 is indicated while against the present realisable value of the security 7100 is indicated. The category of NPA and Part is indicated as No. 2. Therefore, insofar as treating the account belonging to the petitioner as NPA, the Bank has indicated the date as 31-3-2004 and thereafter the notice under Section 13(2) has been issued on 29-7-2004. But the strenuous contention of Sri X. M. Joseph, learned counsel for the petitioners is that the account has been treated as NPA at the whims and fancies of the respondent-Bank without following the RBI guidelines in this regard nor following the methodology indicated by the Honble Supreme Court both in the case of Mardia Chemicals Limited and M/s. Transcore. It is contended by the learned counsel that even though there may be default in payment, the account cannot be treated as NPA so as to take benefit of the Securitisation Act. The learned counsel would refer to the guidelines enclosed along with the Master Circular Prudential Norms which is produced at Annexure-L to the petition to contend that the RBI vide Clause (3) has stated the method of asset classification and as such the sub-standard assets could be classified only as per the guidelines laid down therein. The learned counsel also contends that despite this Court directing the respondent-Bank to consider the objection/representation keeping in view the RBI guidelines and the decisions rendered by the Honble Supreme Court, the respondents have failed to even indicate the manner in which the account of the petitioner has been classified as NPA.

9. On the contrary, Sri T. N. Raghupathy, learned counsel for the respondents sought to justify the action of the respondents. The learned counsel would contend that on the petitioner making a representation in terms of the liberty granted in the earlier writ petition, the respondent-Bank has considered the same in detail by its reply dated 25-5-2005. With regard to the circulars regarding treating an account as NPA, the same has been considered at paras 4 and 5 of the reply and as such the petitioners cannot make out any grievance. The learned counsel would also contend that the account of the petitioner has been treated as NPA as per the guidelines of the RBI and in this regard it is contended that the Master Circular dated 2-12-2004 relied on by the petitioner is not the relevant one since the same relates to Primary Urban Co-operative Banks. The learned counsel therefore relied on the Prudential Norms of Income Recognition, Asset Classification and Provisioning Master Circular issued by the RBI on 22-8-2003. Referring to the said circular the learned counsel would state that the asset classification is indicated in para 4 and the sub-standard assets is indicated in para 4.1.1. Since the account was thereafter classified as NPA on 31-3-2004, the notice as contemplated under Section 13(2) has been issued subsequently and therefore the action initiated by the respondents is in accordance with law.

10. Insofar as the circulars relied on, prima facie it appears to me that the circular relied on by the petitioners is in respect of Urban Co-operative Banks issued by the Reserve Bank of India. Hence, the relevant circular appears to be the circular relied on by the respondent-Bank dated 22-8-2003. Thereafter the learned counsel for the petitioner has also produced a compilation of five circulars from the year 2003 to 2007. Be that as it may. The question is whether the respondents have considered the objection/representation made by the petitioner pursuant to the liberty granted and direction issued by this Court in W. P. Nos. 33886-33887/04 in its correct perspective. As already noticed, this Court had taken note of section 13(3a) of the securitisation act regarding the procedure provided thereunder to the borrower to make out a grievance that the declaration of his account as NPA is arbitrary, illegal and contrary to the RBI Regulations and that the same could be pointed out by the borrower to the bank/ financial institutions. This Court has also made specific observation that the bank is expected to consider the said objections in accordance with law and in the light of the Supreme Court judgment referred to in the course of the said judgment viz., the judgment rendered in the case of Mardia Chemicals and give its opinion. It is thereafter this Court granted the liberty and directed the respondents to consider the same in the said manner.

11. Further, the Honble Supreme Court in the case of M/s. Transcore has made the relevant observations in paras 23 and 24 of the judgment, which reads as hereunder :

"After classification of an account as NPA, a last opportunity is given to the borrower of sixty days to repay the debt, sec. 13(3-a) inserted by amending act 30 of 2004 after the judgment of this Court in Mardia Chemicals (supra), whereby the borrower is permitted to make representation/objection to the secured creditor against classification of his account as NPA. He can also object to the amount due if so advised. Under section 13(3-a), if the Bank/FI comes to the conclusion that such objection is not acceptable, it shall communicate within one week the reasons for non-acceptance of the representation/objection. A proviso is added to section 13(3-a) which states that the reasons so communicated shall not confer any right upon the borrower to file an application to the DRT under Section 17. The scheme of sub-sections (2), (3) and (3-a) of section 13 of npa act shows that the notice under Section 13(2) is not merely a show cause notice, it is a notice of demand. That notice of demand is based on the footing that the debtor is under a liability and that his account in respect of such liability has become sub-standard, doubtful or loss. The identification of debt and the classification of the account as NPA is done in accordance with the guidelines issued by RBI. Such notice of demand, therefore, constitutes an action taken under the provisions of NPA Act and such notice of demand cannot be compared to a show cause notice. In fact, because it is a notice of demand which constitutes an action, section 13(3-a) provides for an opportunity to the borrower to make representation to the secured creditor. Section 13(2) is a condition precedent to the invocation of section 13(4) of npa act by the Bank/FI. Once the two conditions under Section 13(2) are fulfilled, the next step which the Bank or FI is entitled to take is either to take possession of the secured assets of the borrower or to take over management of the business of the borrower or to appoint any manager to manage the secured assets or require any person, who has acquired any of the secured assets from the borrower, to pay the secured creditor towards liquidation of the secured debt."

"Reading the scheme of section 13(2) with section 13(4), it is clear that the notice under Section 13(2) is not a mere show cause notice and it constitutes an action taken by the Bank/FI for the purposes of the NPA Act.

Section 13(6) inter alia provides that any transfer of secured asset after taking possession or after taking ever of management of the business, under Section 13(4), by the Bank/FI shall vest in the transferee all rights in relation to the secured assets as if the transfer has been made by the owner of such secured asset."

12. The observation of the Honble Supreme Court would clearly indicate that Section 13(3A) has been inserted in view of the observations made by the Honble Supreme Court in Mardia Chemicals case and also that the notice issued under section 13(2) of the securitisation act is not a mere show cause notice but would constitute an action taken by the Bank/Financial Institutions for the purpose of NPA Act. These aspects would indicate that the consideration of an objection/representation filed after issue of S. 13(2) notice in terms sub-section (3A) requires detailed consideration by the Bank and the reasons for non-acceptability of objection is to be assigned. Therefore, in such objection/representation, when details are furnished by the borrower to indicate that the classification of the account of the borrower NPA is contrary to the legal position enunciated by the Honble Supreme Court and also not in accordance with the RBI guidelines, it is incumbent on the Bank/Financial Institutions to consider this aspect in detail and clarify to the borrower the entire details which went into consideration before classifying the account as NPA and such consideration should be indicated to be in conformity with the RBI guidelines and the decision rendered by the Honble Supreme Court. In the instant case, this had in fact been particularly directed by this Court in the earlier writ petition. Despite this, the reasons assigned by the respondent-Bank in their reply dated 25-5-2005 on this aspect of the matter in paras 4 and 5 would not only indicate lack of reasons due to non-application of mind, but also arbitrariness is writ large. I am also constrained to say that it reflects a shade of arrogance on the part of the respondents.

13. I am compelled to say so due to the fact that, though this Court in the earlier writ petition had directed the respondents to consider whether the petitioners account has been declared as NPA in terms of the circulars and the judgment of this Court, the respondents have the temerity of stating as follows in reply to the representation - "The Bank is well aware of the circulars regarding NPA and also all the judgments of the various Honble Courts, also the Honble Supreme Court. The account has been declared as NPA after considering all the aspects/Circulars/Directives of RBI issued from time to time and there cannot be any change in the same."

14. What was expected by this Court was not as to whether the officers of the respondent-Bank are aware of the circulars and the Judgments, but what had been directed is to consider as to whether the account of the petitioner falls within the said category as defined in the circulars and such consideration should have come out in the form of a speaking consideration i.e., by assigning reasons as observed by the Honble Supreme Court. Even the contents of para 5 does not disclose this aspect of the matter where it only says that the value of the security being more has no bearing towards classification without indicating what else was the method followed for classification. Though the learned counsel for the respondents attempted to point out the circular of RBI, the same does not serve any purpose at this stage since neither the reply dated 25-5-2005 nor the objection statement filed in this petition would refer to the details in this regard and what is required is not to notice the RBI guidelines alone but to indicate from the materials on record that the account in question falls within the guidelines. Only when that is done the respondents would be at liberty to proceed in accordance with law. Hence it requires re-consideration at the hands of the respondents themselves.

15. Before parting, it is also necessary to notice that even though the petitioner has produced a letter dated 2-3-2005 at Annexure-P to the petition, wherein he has alleged about certain loose statements made by the Recovery Officer of UCO Bank and the Branch Manager of the UCO Bank, the same cannot be accepted on its face value, but the reading of the reason assigned in para 4 of the communication dated 25-5-2005 in reply to the objection/representation would give an impression that all is not well with the attitude of the officers of the respondent-Bank. It is necessary to caution that the officers should realise that they are the employees of a bank which is an "other authority" as defined in article 12 of the constitution of india being a Government of India Undertaking. As such they cannot afford to behave like private money-lenders but would be accountable to judicial scrutiny and review and all actions should indicate that the same is taken after proper application of mind and should indicate lack of arbitrariness. Mere being aware of the regulations and the decision being taken in the mind is not sufficient but should be exhibited in the records and the orders/communications issued by them. It is needless to mention that the law is well settled that in the matter of Judicial review under article 226 of the constitution of india, this Court is empowered to consider the correctness or otherwise of the procedure adapted by the officers of a public authority in arriving at the decision though not so much with the decision itself. Hence, while reconsidering the matter, the respondents shall bear this in mind and shall pass appropriate orders in accordance with law.

16. For all the abovesaid reasons, the following,

ORDER

i) W. P. No. 16694/05 is allowed in part and rule made absolute to that extent.

ii) Consequently, the reason assigned in paras 4 and 5 of the communication dated 25-5-2005 which is impugned at Annexure-S to the petition is quashed to that extent and the respondents are directed to reconsider the objection/representation dated 10-3-2005 on that aspect of the matter and pass appropriate orders in accordance with the RBI guidelines and the judgments rendered by the Honble Supreme Court referred to supra.

iii) Until such re-consideration, the further proceedings pursuant to the notice dated 29-7-2004 issued under section 13(2) of the securitisation act shall remain suspended. It is, however, made clear that there shall be no impediment for the respondent-Bank to take action pursuant to the recovery certificate issued under DRT Act dated 4-4-2007 if the same has attained finality and if the respondents desire to execute the same.

iv) In the peculiar facts and circumstances of this case, the parties shall bear their own costs.

Order accordingly. AIR 2008 KARNATAKA 142 "Saeesh Subhash Hegde v. Darshana Saeesh Hegde"

KARNATAKA HIGH COURT

Coram : 1 ANAND BYRAREDDY, J. ( Single Bench )

Saeesh Subhash Hegde v. Darshana Saeesh Hegde.

W. P. No. 1877 of 2007, D/- 6 -3 -2008.

Portuguese Civil Code, Art.5 - Hindu Marriage Act (25 of 1955), S.7, S.13 - Law of Divorce (1910), Art.5 - DIVORCE - FAMILY COURT - Suit for divorce - Jurisdiction of Family Court - Parties were married according to the Portuguese Family Law - Had set up their matrimonial home in Goa - Parties are governed by Portuguese Family Law - Fact that parties underwent a Hindu marriage ceremony at a later point of time, immaterial - H.M. Act not having been extended to State of Goa as on date of their marriage, provisions thereunder will not apply - Husband residing at Goa - Assuming that there is possibility of reconciliation, domicile of wife would be that of husband, at Goa - Family Court at Belgaum where wife is presently residing has no jurisdiction to entertain suit. (Paras 20, 21, 23)

Cases Referred : Chronological Paras

AIR 2000 SC 1706 : 2000 AIR SCW 1816 : 2000 All LJ 1445 16

2000 (2) Goa LT 149 19, 23

AIR 1992 JK 1 10, 19

AIR 1984 SC 1224 10, 19

AIR 1980 SC 1896 16

AIR 1975 SC 1208 12

AIR 1975 SC 105 10

AIR 1971 SC 746 16

AIR 1966 Mys 100 10, 17

AIR 1963 SC 1895 16

AIR 1955 SC 334 10, 19, 22

Vijaykumar A. Patil, Santosh S. Nagarale, Madhukar M. Deshpande, for Petitioner; N. Ravindranath Kamath, for Respondent.

Judgement

Heard the Counsel for the petitioner and the Counsel for the respondent.

2. The brief facts of the case are as follows :

The petitioner is a Goan, born of Goan parents, and had married the respondent on 26-12-2002 in accordance with the Portuguese Family Law, which is applicable to this day in the State of Goa, following the procedure under the provisions of the Portuguese Civil Code (hereinafter referred to as the PC Code). In proof of the same, the petitioner has produced a Marriage Certificate issued by the Office of Civil Registration, Offices of Goa, dated 13-7-2006.

3. The petitioner and respondent had met in Belgaum when they were students of Gogte Institute of Technology in the year 1998. They were classmates. It is contended that they had fallen in love and decided to get married secretly in Goa, as the respondent did not expect her parents to consent to their marriage. And the respondent, according to the petitioner, had gone over to Goa on 11-12-2002 to give the joint declaration in the office of the Sub-Registrar, Margao and again on 26-12-2002, for the solemnisation of marriage. On both days, she had returned to Belgaum on the same day to avoid raising any suspicion in the minds of her parents.

4. The petitioner contends that the petitioner and the respondent had signed a declaration as required under Article 1075 of the PC Code declaring their intention to get married and had presented it to the Office of the Sub-Registrar, Margao on 11-12-2002. A notice indicating the intention was displayed on the Notice Board of the said office inviting objections to the proposed marriage from the public within fifteen days, as required under Art. 1076 of the PC Code. As there were no objections, the Sub-Registrar had solemnised the marriage in accordance with Art. 1081 of the PC Code on 26-12-2002. The petitioner and the respondent were thus married under the regime of a communion of assets and are governed by the relevant provisions of the PC Code.

5. Her parents, on coming to know of the marriage on 12-4-2003, had reconciled to the fact and had thereafter arranged a formal engagement ceremony on 19-9-2003 at Belgaum and a religious marriage ceremony was also held in Goa at Ramnathi Temple Hall, Fatorda, Margao on 17-11-2003. They resided at their matrimonial home at Fatorda, Margao from 17-11-2003.

6. In May 2004, the respondent had raised a complaint that she was not prepared to continue to live with the petitioner, if his mother and his bachelor brother also continued to live along with them. Since the petitioner dismissed the idea, the respondent was wholly dissatisfied. On 13-12-2005, she is said to have left for Belgaum and failed to return to their matrimonial home. The petitioners attempts to contact her were resisted. Thereafter, the respondent is said to have instituted a matrimonial case before the Family Court, Belgaum in M. C. No. 75/ 2006 under section 13(1)(ia) of the hindu marriage act, 1955 (hereinafter referred to as the "HM Act" for brevity) on the several allegations made therein. She had also filed an application under section 24 of the hm act claiming maintenance and litigation expenses. The petitioner had appeared before the Family Court and filed his written statement and raised a preliminary objection, that the petition filed under the Act was not maintainable and that the Family Court at Belgaum had no jurisdiction to entertain the case. This was treated as a preliminary issue. By an order dated 5-1-2007, the Family Court has rejected the petitioners objection. It is this, which is under challenge in the present writ petition.

7. It is contended that though a religious marriage was performed on 17-11-2003, as was customary in Goa amongst all Hindu Goans, where members of the two spousal families and their friends and relatives participate. This did not imply that their marriage was to be governed by the HM Act.

8. The Counsel for the petitioner would submit that the petitioner and the respondent are governed by the Portuguese Family Law. Therefore, the matrimonial case filed under the HM Act is not maintainable. The Family Court is not a Court contemplated under the Portuguese Family Law which envisages a Court constituted under Portuguese Law. That the Family Court has failed to appreciate that it is not a Court of domicile or a Court having jurisdiction over the place where the respondent resides within the meaning of Article 5 of the Portuguese Family Law. The Portuguese Family Law contains special provisions regarding dissolution of marriage with specific grounds under which a divorce can be granted which includes, adultery, conviction in a criminal case, ill-treatment or serious injuries, complete abandonment of conjugal domicile, incurable unsoundness of mind, de facto separation, contagious disease and so on.

9. It is contended that a suit for divorce can be instituted either in the Court of domicile or in the Court having jurisdiction over the place where the plaintiff has his or her residence. But should the plaintiff reside in a foreign country, the respective suit shall be instituted in the Court of Division of Lisbon, Portugal.

10. The Counsel has relied on the following authorities in support of the case that the Family Court at Belgaum does not have jurisdiction to entertain the abovesaid case.

- Parwatawwa v. Channawwa, AIR 1966 Mysore 100,

- K. Radha Krishnan Nayyar v. Smt. Radha, AIR 1992 Jammu and Kashmir 1

- Monica Variato v. Thomas Variato, Letters Patent Appeal No. 31/1998, High Court of Bombay at Goa

- D. P. Joshi v. State of Madhya Bharat and another, AIR 1955 SC 334

- Smt. Sathya v. Teja Singh, AIR 1975 SC 1 05

- Smt. Surinder Kaur Sandhu v. Harbax Singh Sandhu and another, AIR 1984 SC 1224.

11. The Counsel for the respondent, on the other hand, has contended as follows :

That the Family Court has addressed the several contentions raised by the petitioner and has rightly held in favour of the respondent. There is no illegality or infirmity in the order passed by the Court below. The petitioner is guilty of suppression of material facts. The petitioner had chosen to misuse the respondents innocence. Further, that the petitioners remedy would be to file a petition under section 25 of the code of civil procedure, 1908 before the Supreme Court of India and that this Court would have no jurisdiction to deal with the Writ Petition under articles 226 and 227 of the constitution of india. That the HM Act is applicable to all Hindus and that it extends to the whole of India and Hindus living in Goa are governed under the Act and, therefore, the petitioner and the respondent having admittedly married according to the Hindu rites, the Family Court at Belgaum would have jurisdiction and the present petition is only in order to avoid the petitioners liability to pay maintenance to the respondent and, therefore, the petition be dismissed.

12. The Counsel places reliance on the judgment in J. Fernandes and Company v. The Deputy Chief Controller of Imports and Exports and others, AIR 1975 SC 1208.

13. The Family Court, Belgaum has, by the impugned order, rejected the objection of the petitioner as to jurisdiction, for the following reasons :

That there is no dispute that their marriage was performed at Ramnathi Temple, Fatorda, Margao as per Hindu customs on 17-11-2003 and though the marriage was also registered under the PC Code, Article 5 of the Law of Divorce, Chapter-II, on dissolution of marriage pertaining to Portuguese Family Laws, does provide that a suit for divorce shall be instituted either in the Court of Domicile or in the Court having jurisdiction over the place where the plaintiff resides. Since the respondent, who was the petitioner in the matrimonial case, was residing at Belgaum, the said Article would provide jurisdiction to the Family Court at Belgaum.

14. Further, since the petitioner and the respondent are Hindus by religion and their marriage having been performed according to the Hindu customary rights, they are governed by Hindu Law and accordingly, the Family Court would have jurisdiction.

15. Further, the Family Court has also accepted the contention that even under section 13 of the special Marriage Act, 1954 (hereinafter referred to as the SM Act, for brevity) a wife who is the petitioner can present the petition in the Court in whose jurisdiction she resides and therefore has held that the Court would have jurisdiction. The Family Court has also accepted the contention that under section 7 of the hm act, the act is applicable to citizens of India domiciled in territories to which the HM Act extends and, therefore, the Court has formed the opinion that it would have jurisdiction to entertain the petition.

16. The questions that arise for consideration in the present petition are :

(a) Whether this Court would have jurisdiction to decide the issues arising for consideration under Articles 226 and 227 of the Constitution of India?

(b) Whether the Portuguese Family Law or the Hindu Law would be applicable to the parties herein?

(c) If Portuguese Family Law is applicable, which is the Court having jurisdiction and whether the Family Court, Belgaum would have jurisdiction?

The first question need not detain this Court for long. This Court has jurisdiction over the Family Court, Belgaum. Under article 227 of the constitution of india it is possible for this Court to examine whether the Family Court, Belgaum has acted without jurisdiction in proceeding to entertain the matrimonial case of the parties, in the face of legal contentions and admitted facts. The answer is in the affirmative (See Nibaran Chandrabag v. Mahendranath Ghughu, AIR 1963 SC 1895; Rukmanand v. State of Bihar and another, AIR 1971 SC 746; Gujarat Steel v. Mazdoor Sabha, AIR 1980 SC 1896 and Chandra Prakash Shah v. State of Uttar Pradesh, (2000) 5 SCC 152 : (AIR 2000 SC 1706) etc.).

17. In order to consider the second and third questions the following authorities are referred to :

(a) The Counsel for the petitioner has produced the text of a welcome address by Shri Manohar S. Usgaocar, Senior Advocate, and the then President, of the Goa, Daman and Diu Bar Association, at a Conference on "Family Laws in Goa" while welcoming the Chief Guest, the then Chief Justice of India Shri Y. V. Chandrachud. A useful reference may be made to the same. The relevant portion reads thus :

"In this Territory (Goa) we had a uniform Civil Code, which was a self-contained Code covering substantive law on the civil side and having 2538 Articles. It was promulgated in Portugal by an enactment, on 1st July, 1867. Article 9 of the said enactment empowered the Government to extend the Civil Code to the Overseas Colonies by introducing amendments necessitated by the special circumstances of each Colony. In exercise of such power, the Government by enactment dated 18-11-1869 extended the Civil Code to the Overseas Colonies with effect from 1st July, 1870, safeguarding the usages and customs of Goa, Daman and Diu which had been codified and to the extent they are not against the morality and public order.

Subsequently, a new enactment was promulgated on 16-2-1888 by which special and private usages and customs of Gentile Hindus of Goa were reviewed and codified in the said enactment, like polygamy in a restricted sense and controlled by the Courts, joint Hindu family, prohibition against succession of illegitimate issues except to few persons, adoption, which were saved. The Decree dated 16-2-1888 replaced the Decree of 1852.

There are also similar enactments dated 10-1-1894 and 19-4-1912 saving the usages of non-christian inhabitants of Diu, and Daman respectively.

The Civil Code referred to above is based on the Napoleanic Code. It contains, inter alia, the law of domestic relations like family laws and of succession. When the said Civil Code was enacted there was monarchy in Portugal. It was replaced by the Republic in 1910. Immediately thereafter important laws on family matters were enacted, to form part of the said Civil Code. They are :- The law of succession was partly changed by enactment dated 31-10-1910. The dissolution of marriage was permitted by divorce, including by mutual consent. Law was enacted on 25-12-1910 to give protection to some of the Law dated 25-10-1910 to regulate the marriages, illegitimate children and their mothers. These were extended to this Union Territory on 26-5-1911 and the last on 30-10-1913.

Article 63 of the marriage law dated 25-12-1910 states that this law shall come into force simultaneously with the enforcement of the law that makes the civil registration of births, marriages and deaths compulsory.

The Code of Civil Registration was enacted by the Decree dated 4-11-1912 and was enforced with effect from 1-1-1914 and the usefulness of these records and acts noted therein is multiple.

In 1930 - by enactment dated 16-12-1930 many provisions of the Civil Code were substantially amended.

In 1940 there was an agreement between the State and the Holy See dated 7-5-1940. In pursuance of the same a new enactment No. 35461 was passed, dated 22-1-1946 (w. e. f. 4-9-46), whereby the Christian marriages could be performed before the Church authorities upon the production of a no objection certificate from the Registration Officer, appointed under Code of Civil Registration, and such a marriage would have civil effects if transcribed in the Office of Civil Registration. The canonical marriages were declared indissoluble by Article 4 of the said Decree. So two Catholics married canonically could not divorce, but the same relief was available to two catholics married before the Civil Registration Officer.

This was the state of affairs at the time of Liberation of this Territory of Goa, Daman and Diu in 1961. This territory became part and parcel of Union of India by the 12th amendment to the Constitution of India and all the laws in force were maintained by the Goa, Daman and diu administration act of 1962. The Portuguese laws are hence internal laws.

Subsequently, many other Acts in force in the rest of the country were extended to this territory like the transfer of property act, the sale of goods act. the contract act, the easements act etc., and correspondingly the provisions of the Civil Code stood repealed pro tanto, but the family laws are still in force."

To the above historical background the Counsel for the petitioner adds : That, Goa was a Portuguese Colony for over 450 years, before it was liberated and became part of India again, in 1961. The Indian Parliament has maintained all the Portuguese Laws then in force in Goa, until amended or repealed by a competent legislature. There is no serious dispute as to the above legislative history.

(b) Parawatawwa v. Channawwa, AIR 1966 Mysore 100 :

In this case decided by a Division Bench of this Court, the facts are as follows :-

One Siddalingiah died in the year 1954. His wife Siddawa, who survived him, died in the year 1956. One Channawa, claiming to be the second wife of Siddalingiah, brought a suit claiming that she was married to Siddalingiah in the year 1951 in the State of Bombay and she claimed Siddalingiahs properties as his widow to the exclusion of Parwatawwa, who was the daughter of Siddawa and Siddalingiah Parwatawwa denied the claim. The Munsiff accepted the contention that there was a marriage between Channawwa and Siddalingiah. However, he opined that the marriage was invalid and dismissed the suit. In appeal, the District Judge found that the marriage was a valid marriage and decreed the suit. Parwatawwa was in appeal before this Court. Since the matter involved a question of some importance, it was referred to a Division Bench under the provisions of section 6 of the mysore high court act.

18. It was not in dispute that Siddalingiah was a permanent resident of the erstwhile State of Hyderabad and that when he married the plaintiff at Nilgond in the then State of Bombay, his first wife was living. After marriage between Channawwa and Siddalingiah was performed, there was a law, namely, the Bombay Prevention of Hindu Bigamous Marriages Act, 1946 (hereinafter referred to as the Bombay Act) forbidding bigamous marriages amongst Hindus. It was for this reason that the Munsiff had held the marriage to be void. The District Judge, in appeal, however took the view that the provisions of the bombay act did not invalidate a marriage between spouses, one of whom was not domiciled in the State of Bombay. Since Siddalingiah had no Bombay domicile, but was a person with Hyderabad domicile and since there was no Hyderabad Law prohibiting polygamy, the marriage, it was said, was not void, although Channawwa was domiciled in the State of Bombay. It was also not in dispute that there was no law operating in the State of Hyderabad prohibiting a polygamous marriage and the Personal Law of Siddalingiah indicated that he had the capacity to contract a polygamous marriage.

19. In this context, the proposition that was examined by the Division Bench of this Court was, whether after the commencement of the Constitution, there was a fusion of the then existing multitude of domiciles and so it became impossible for a citizen of India to have any other domicile than the Indian domicile. On examination of the legal position, this Court held as follows :-

"(15) The true position, therefore, is that every person belonging to a State forming part of the Union under the Constitution has a status distinct from although subsidiary to that flowing from his Indian domicile or his political status as an Indian citizen, that status having relevance only for certain purposes. For that purpose, it may be possible to say that while a person has the primary Indian domicile which contributes to the acquisition of citizenship, he may have secondary domicile which is the domicile of the State to which he belongs, although the importance of such secondary domicile has relevance only in some spheres. The recognition of such domicile may become imperative where the higher Indian domicile does not and cannot regulate a matter governed by a State law."

And concluded, upon an extensive study of the case law and other authorities, as follows :-

"(43) The discussion so far made yields the following two rules :

(a) Where the parties at the time of their marriage are domiciled in a country, the laws of which prohibit their marriage, the marriage is void, whether they are domiciled in the same country or in different countries.

(b) Where the laws of the country in which they are domiciled bestow on both the parties capacity for the marriage, the marriage is a good marriage."

(c) K. Radha Krishnan Nayyar v. Radha, AIR 1992 JandK 1 : In this case the parties were married at Madras beyond the territorial jurisdiction to which the Jammu and Kashmir Hindu Marriage Act, 1980 (hereinafter referred to as the "JKHM Act", for brevity) applied. The husband filed a petition for dissolution of marriage under section 13 of the jkhm act in the Court of the District Judge, Jammu. The petition was dismissed on the ground of want of territorial jurisdiction. The petitioner had therefore appealed to the High Court at Jammu and Kashmir. The question of law that was considered was whether the forum of jurisdiction is to be determined with reference to the parties, or the solemnisation of marriage between them, or on the basis of their residence under section 21 of the jkhm act, which corresponds to section 19 of the hm act, both of which sections employ a phrase "residing outside the territories to which this Act extends".

The Court held that in a case where marriage has been solemnised outside the State of Jammu and Kashmir, the forum for filing the petition has to be determined under section 19 of the hm act and concluded that persons who were governed by the State of Jammu and Kashmir can get relief only in the State and not in any other Court in the country under the Central Act, unless both the parties have settled and have become domicile of a place to which the State Act is not applicable but to which the Central Act alone applies. Accordingly, the Court held that since the marriage of the parties was solemnized at Madras, where the State Act was not applicable, the Trial Court had rightly dismissed the petition on the ground of jurisdiction.

(d) Monica Variato v. Thomas Variato, 2000 (2) Goa L. T. 149 :

In this case, the appellant was a German national who had married the respondent, who was a Goan, under the Special Marriage Act, 1954 at Mumbai. They presented a petition for divorce by mutual consent under Article 36 of the Law of Divorce, 1910 as applicable in the State of Goa before the Civil Judge, Senior Division, Mapusa, Goa, A provisional order of divorce, for a period of one year in terms of Article 39 of the Law of Divorce, was passed. After the lapse of one year, the appellant filed an application seeking a final decree of divorce. The respondent however, raised objections on a legal issue. It was contended that the appellant continuing to be a German National and their marriage having been solemnised under the provisions of the SM Act, their rights and obligations are governed by that Act and that the Law of Divorce, 1910, as applied in the State of Goa would not apply and that he no longer consented for divorce by mutual consent and sought to withdraw his consent.

By way of a rejoinder, it was contended that for a period of over ten years, preceding the filing of the joint application seeking divorce, the parties were domiciled in Goa and hence, it was not open to challenge the jurisdiction of the Court.

The application for divorce was dismissed by the Trial Court, while holding that the marriage was not transcribed before the Civil Registrars Office. The Court concluded that there was no marriage between the appellant and the respondent under the Law of the land (Goa). Further, the Court opined that since the parties had married under the SM Act, the proper course was to apply for divorce under that Act before the Court having jurisdiction.

This order of the Trial Court was appealed against before a Single Judge of the High Court of Bombay at Goa. It was contended that a Portuguese male and a foreigner contracting a marriage in a foreign country would still be governed by the provisions of the PC Code pertaining to marriages. On the other hand, it was contended by the respondent that SM Act had not been extended to the State of Goa as when the Act was enacted, Goa was not a part of India. The single Judge dismissed the petition while holding that the petition filed under Chapter III of the Law of Divorce, 1910, as applicable in the State of Goa was not maintainable. The reason being that the parties had married under the SM Act and that it was open for the parties to apply for a divorce under section 28 of the sm act. The same was challenged before a Division Bench of the High Court.

The Division Bench of the Bombay High Court at Goa opined that since the marriage was admittedly solemnised under the SM Act at Mumbai and thereafter the parties having been domiciled, and having had their habitual residence in Goa, if the tests of Private International Law are applied, the law to be applied would be the Law as applicable in the State of Goa and in that situation, the SM Act would not apply. The Court opined that the above view would be the view if principles of English Private International Law are made applicable and the observations of the Supreme Court of India and for the purpose of Private International Law, the marriage solemnised at Mumbai can be deemed to be a marriage in a foreign country and since the parties are domiciled in Goa, proceedings for divorce would be as per the law enforced in the State of Goa. But, insofar as the marriages performed under the Personal Laws prevailing in the constituent States of the Union, it is the Personal Law that would be applicable. Insofar as the parties before the Court were concerned, it would be the SM Act. Though it was on the ground that they are domiciled in Goa, that the appellant had approached the Court, or alternatively, that the respondent was of Goan origin, as there was no evidence on record, to come to any finding on that ground and since there was no material on record to hold that at the time of marriage, the respondent was governed by the Personal Law in force in Goa, including the law of divorce, the appeal was dismissed.

(e) D. P. Joshi v. State of Madhya Bharat and another, AIR 1955 SC 334 :

The Supreme Court, while addressing the question whether there can be a Madhya Bharat domicile apart from Indian domicile, has held that domicile has reference to the system of law by which a person is governed and when we speak of the domicile of a country, we assume that the same system of law prevails all over that country. But it might well happen that laws relating to succession and marriage might not be the same all over the country and that different areas in the State might have different laws in respect of those matters. In that case, each area having a distinct set of laws would itself be regarded as a country for the purpose of domicile.

(f) Surinder Kaur Sandhu v. Harbax Singh Sandhu, AIR 1984 SC 1224 :

The wife was the appellant before the Supreme Court. She had married the respondent in Punjab and they had moved to England where a boy was born to them in the next year. Within a short while, after the birth of the boy, the relationship between the parties was strained. The respondent-husband was trapped by the Police when he was negotiating with a hit man to have the appellant run over by a car. He was convicted and sentenced to a prison term of three years. After his release from prison, while the appellant was away at work, he had removed the boy from England and brought him to India. The appellant had obtained an order of the High Court of Justice (Family Division) in England under which the boy became a Ward of that Court. She came to India and filed a petition before the jurisdictional Judicial Magistrate seeking the custody of the child. The Magistrate dismissed the petition accepting the contention of the respondent that he was the natural guardian of the minor. The appellant thereafter, preferred a writ petition before the Punjab and Haryana High Court and the petition was dismissed.

In addressing whether the English Court had jurisdiction to decide the question of childs custody, the Supreme Court has opined that the modern theory of Conflict of Laws recognizes and in any event, prefers the jurisdiction of the State which has the most intimate contact with the issues arising in the case. Jurisdiction is not attracted by the operation or creation of fortuitous circumstances such as the circumstance as to where the child, whose custody is in issue, is brought or for the time being lodged. To allow the assumption of jurisdiction by another State in such circumstances will only result in encouraging forum shopping. Ordinarily, jurisdiction must follow upon functional lines. That is to say, for example, that in matters relating to matrimony and custody, the law of that place must govern which has the closest concern with the well being of the spouses and the welfare of the off springs of marriage. The spouses in this case had made England their home where this boy was born to them. The father could not therefore deprive the English Court of its jurisdiction to decide upon his custody by removing him to India, nor in the normal movement of the matrimonial home, but, by the act which was gravely detrimental to the peace of that home and the fact that the matrimonial home of the spouses was in England establishes sufficient contacts or ties with that State in order to make it reasonable and just for the Courts of that State of assume jurisdiction to enforce obligations which were incurred therein by the spouses.

20. Having regard to the above facts and circumstances and the legal position that emerges from a reference to the above authorities it is found as follows. There is no dispute that the parties were married according to the Portuguese Family Law, that is applicable within the State of Goa, and had set up their matrimonial home at Farorda, Margao. It is the Portuguese Family Law which would apply, insofar as their matrimonial relationship is concerned. The fact that the petitioner and the respondent underwent a Hindu marriage ceremony at a later point of time, would not have the effect of the parties becoming subject to the provisions of the HM Act, the HM Act not having been extended to the State of Goa as on the date of their marriage, (26-12-2002) the said Act and the provisions thereunder would not apply.

21. The reasoning of the Family Court that in terms of Article 5 of the Law of Divorce, 1910, in force in the territories of Goa, Daman, and Diu, does provide that a suit for divorce shall be instituted either in the Court of domicile or in the Court having jurisdiction over the place where the plaintiff has his or her residence, would enable the respondent to institute the petition for divorce at Belgaum is clearly a mis-interpretation of the legal position. Chapter 2, Article 5 of the Law of Divorce dealing with contested divorce, provides for grounds and procedure of a contested divorce. Article 5 in particular, reads as follows :-

"A suit for divorce shall be instituted either in the Court of domicile or in the Court having jurisdiction over the place where the plaintiff has his residence; but should the plaintiff reside in a foreign country, the respective suit shall be instituted in the Court of Division of Lisbon."

From a reading of this provision, it would follow that a suit for divorce by parties governed by the Portuguese Family Law within the State of Goa can file the same in the Court of domicile within Goa or in the Court having jurisdiction over the place where the plaintiff resides (also within the State of Goa). It cannot be construed that a plaintiff who is residing outside the State of Goa could also file a suit or petition for divorce without the State of Goa, as in the present case, in a place where he or she is residing outside Goa. The Courts, in the rest of India, would have no jurisdiction to entertain a suit (petition) under the Provisions of the Portguguese Family Law pertaining to divorce.

22. On the question whether there can be a domicile apart from Indian domicile, in respect of persons who are Indian citizens, the observations of the Apex Court in D. P. Joshis case supra is relevant. The Apex Court has held that domicile has reference to the system of law by which a person is governed. The assumption insofar as the domicile of a country is that the same system of law prevails all over that country. But it might well happen that laws relating to succession and marriage might not be the same all over the country and different areas in the state might have different laws in respect of those matters. In that case, each area having a distinct set of laws would itself be regarded as a country for the purpose of domicile.

(Emphasis supplied)

23. The reasoning of the Division Bench of the Bombay High Court at Goa in Monica Veriato, supra, is also relevant. The Court was applying the principles of English Private International Law as well as the views expressed by the Apex Court in this regard. In the said case, it is to be seen that a marriage between the parties was solemnised under the Special Marriage Act, 1954, at Mumbai and thereafter, the parties having been domiciled at Goa, a question having arisen as to the law applicable in the State of Goa, it was held that since the parties were domiciled at Goa, the Special Marriage Act, 1954 would not apply and that the marriage solemnised at Mumbai can be deemed to be a marriage in a foreign country and that the proceedings for divorce would necessarily have to be as per the law enforced in the State of Goa. By the same token of reasoning, it may be said that the respondents petition for divorce, even if it is construed as one being under the Portuguese Civil Law, would be akin to the suit being instituted in a foreign country. By virtue of the very Article indicating that if the plaintiff is residing in a foreign country, (though for all purposes the State of Karnataka is not a foreign country vis-a-vis the State of Goa) the law as applicable would indicate that the suit can only be instituted in the Court of Domicile. Since the respondent does not reside within the State of Goa, as she is presently residing at Belgaum, it would follow that alternatively, her suit will have to be instituted in the Court of Division at Lisbon. Since this would create a practical difficulty and an expensive one, it would be more appropriate if the respondent were to institute the suit in the place of domicile within the State of Goa. Though the respondent is now living at Belgaum, on the premise that if there was a possibility of reconciliation, her domicile would be that of the petitioner at Goa, it can safely be said that a suit by the respondent would lie in the State of Goa in terms of Article 5 before the Court of Domicile.

24. The further reasoning of the Family Court that the parties are Hindus by religion and since their marriage has been performed according to the Hindu customary rites and that it would be governed by the Hindu Law, is incorrect for reasons as already stated.

25. The further opinion of the Family Court that in terms of section 7 of the hm act, the act would be applicable to citizens of India domiciled in territories to which the HM Act extends and hence the Family Court would have jurisdiction, is also incorrect, since the HM Act does not extend to the State of Goa.

26. In view of this, it can be said that the Portuguese Family Law would apply to the parties and the Court having jurisdiction would be the Court of Domicile, within the State of Goa.

27. Accordingly, the writ petition is allowed. In the result, the impugned order at Annexure-G is quashed. The Family Court, Belgaum, is directed to return the Matrimonial case, in M. C. No. 75/2006, to the respondent to be presented before the Court having jurisdiction. All contentions as between the parties on merits of the matrimonial dispute, other than as are answered hereinabove, are left open.

Petition allowed.