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Gulati Constructions Co. Vs. Betwa River Board - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberSuit No. 278A of 1983
Judge
Reported inAIR1984Delhi299; 1984RLR162
ActsArbitration Act, 1940 - Sections 2
AppellantGulati Constructions Co.
RespondentBetwa River Board
Advocates: D.K. Sayal and; U.L. Watwani, Advs
Cases ReferredSushil Ansal v. Union of India
Excerpt:
.....the courts of that place have no jurisdiction to interfere in the matter - - it is now well established that by agreement of parties jurisdiction cannot be conferred on courts which have no territorial jurisdiction to decide the matter. in my opinion, the objection is well founded......executed outside delhi. the arbitrator, however, had been appointed in delhi and he had given his award in delhi. there upon an application u/s 14 and 17 had been filed in this court. sultan singh j., however, held that on a correct interpretation of s. 2(c) read with s. 31(1) of the arbitration act, this court would have no jurisdiction to entertain that petition. i am in respectful agreement with the said decision. in my opinion also, it is only the court in which the cause of action wholly or in part arises, which would have the jurisdiction to adjudicate upon the matter. (16) for the aforesaid reasons the preliminary issue is decided in favor of respondents. it is directed that the arbitration proceedings and the award be returned to the arbitrator with a direction that the same.....
Judgment:

B.N. Kirpal, J.

(1) AN agreement dt. 20.7.79 was entered into between the parties for the construction of Left Main Earth Dam, Rajghat Project.

(2) THE Work was awarded by respondent 1. The said respondent is a Board which has been set up under Central Act. It is an admitted case of the parties that the office of the Board is located at Jhansi (M.P.) though a liaison office is stated to. be at New Delhi also. The Board was set up for carrying out work of constructing Rajghat Dam in district Lalitpur in the State of U.P.

(3) THE petitioner is a Company having its head office at Jhansi. The Contract was awarded to the petitioner on a tender enquiry having been floated by respondent from Jhansi. The tender was submitted by the petitioner at Jhansi and it was at that place that the tender was accepted. It is clear that the contract was concluded at Jhansi, the place where the acceptance of tender took place.

(4) IT is further admitted between the parties that the actual contract was executed in the office of Superintending Engineer, Rajghat Dam Construction Circle-II District Lalitpur (U.P.). The work was, however, carried out in the territory of Chanderi, District Guna (M.P.). Certain claims were raised by the petitioner. They were not admitted by the respondents. In terms of the agreement between the parties, the disputes had to be referred to arbitration.

(5) VIDE a letter dt. 16.12.81 issued by the Chief Engineer, Betwa River Board, Jhansi, Sh. S.P. Caprihan, Retired Engineer-in-Chief was appointed as the sole arbitrator. The sole arbitrator carried on the arbitration proceedings in Delhi and made and signed his award dt. 31.12.82 at New Delhi.

(6) ALONG with an application dt. 30.1.83 purporting to be an application u/s 14(2) of the Arbitration Act, the sole arbitrator filed the said arbitration proceedings and the award in this court. In para 5 of the application it was stated that vide letter dt. 14.1.83 the petitioner had requested the sole arbitrator that he should file the award in this court.

(7) AFTER the award was filed, by order dt. 22.2.83, the Registrar of this court directed that the award be registered and notices of the filing of the award be sent to the parties. Thereupon I.A. 1421/83 being objections u/s 30 and 33 of the Act were filed in this court by the Board. On the other hand I.A. 1420/83 is an application filed by the claimant praying that the award should be made a rule of the court and a decree in terms thereof together with interest be passed..

(8) IN the objections filed by the Betwa River Board a preliminary objection had been taken, that this court had no territorial jurisdiction to decide the disputes between the parties. Following preliminary issue was :

'HASthis court territorial jurisdiction to try this suit ?

(9) THE contention of Sh. Watwani, appearing on behalf of the Board is that no part of the cause of action arose within the territorial jurisdiction of this court and as such this court has no jurisdiction to hear this matter. On the other hand the submission of the learned counsel for petitioner is that arbitration proceedings took place in Delhi, the award was made in Delhi and the same has been filed in this court and it is only this court which has territorial jurisdiction to try the present case.

(10) ACCORDING to S. 2(c) of the Act a court means a civil court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit. This means thai it is only that court which will have jurisdiction to decide the matter, in which a civil suit with regard to the matter which was referred to arbitration, could have been filed. To put it differently, it is only that court which can be regarded as having jurisdiction to entertain any petition under the Arbitration Act, in which court a suit for recovery of money could have been filed by the petitioner, In S. 31(1) it is provided that an award would be filed in any court having jurisdiction in the matter to which the reference relates.

(11) READINGS. 31(1) and S. 2(c) it is clear that in order to decide which is the court which has jurisdiction in the matter to which a reference relates, what has to be ascertained is the court within which the suit could have been instituted for the claim which was raised in the reference.

(12) IN the present case, from the facts indicated hereinabove, it is clear that if a suit had to be filed by the petitioner for the recovery of money, the same could have been filed in the court of competent jurisdiction in Madhya Pradesh or in Uttar Pradesh. The tender was accepted at Jhansi. the formal contract was executed in Lalitpur (UP) and the work was carried out in district Guna (MP). To my mind, thereforee, no part of cause of action arose in Delhi. The principal office of respondent no. 1 is admittedly at Jhansi. Merely because a liaison office is in existence in Delhi and the Chairman of the Board resides in Delhi it would not be sufficient to grant territorial jurisdiction to this court to try the present proceedings. Furthermore, the factum of the arbitration proceedings having been conducted here and award being filed here is also not relevant for the purposes of deciding as to which is the court of competent jurisdiction. In order to decide as to which is the court of competent jurisdiction to entertain such petitions, reference has to be made, as already noted, to S. 2(c) of the Arbitration Act read with S. 31(1). Merely because the arbitrator chooses to hold the proceedings in a place, where admittedly no suit could be instituted, and chooses to make and publish an award at that place it would not give the courts of ;that place territorial jurisdiction to decide the matters arising under the Arbitration Act.

(13) IT is no doubt true that S. 31(2) and 31(3) state that it is the court in which the award has been filed which will have jurisdiction to decide the matter. In my opinion, however, if an award has been filed in a court which has no jurisdiction, the provisions of sub sections (2) and (3) would have no application. It is to be seen that S. 31(1) enjoins upon the arbitrator to file his award in the court having jurisdiction in the matter. If he chooses; in violation of the provisions of S. 31(1) to file the award in a court which has no territorial jurisdiction, then it cannot be argued that the said court acquires territorial jurisdiction. It is now well established that by agreement of parties jurisdiction cannot be conferred on courts which have no territorial jurisdiction to decide the matter.

(14) IN the present case the award was filed by the arbitrator in this court. The proper procedure which ought to have been followed, which has unfortunately not been followed by the Registrar, was that the award should have been returned to the arbitrator with the direction that the same should be filed in a court having jurisdiction. The Board at the first opportunity available to it, filed objections u/s 30 and 33 contending that this court has no territorial jurisdiction to try this case. In my opinion, the objection is well founded. As already observed, the conduct of arbitration proceedings in New Delhi and the making of the award in New Delhi do not give this court jurisdiction to entertain the award.

(15) REFERENCE may usefully be made to a decision of this Court in Sushil Ansal v. Union of India AIR 1980 Delhi 43. In that case also the contract had been awarded and executed outside Delhi. The arbitrator, however, had been appointed in Delhi and he had given his award in Delhi. There upon an application u/s 14 and 17 had been filed in this court. Sultan Singh J., however, held that on a correct interpretation of S. 2(c) read with S. 31(1) of the Arbitration Act, this court would have no jurisdiction to entertain that petition. I am in respectful agreement with the said decision. In my opinion also, it is only the court in which the cause of action wholly or in part arises, which would have the jurisdiction to adjudicate upon the matter.

(16) FOR the aforesaid reasons the preliminary issue is decided in favor of respondents. It is directed that the arbitration proceedings and the award be returned to the arbitrator with a direction that the same should be filed in the court of competent jurisdiction.


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