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Union of India Vs. Bakhtawar Singh Bal Krishan - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 104 of 1982
Judge
Reported in25(1984)DLT153
ActsArbitration Act, 1940 - Sections 14; Code of Civil Procedure (CPC), 1908 - Sections 20
AppellantUnion of India
RespondentBakhtawar Singh Bal Krishan
Advocates: S.L. Watel,; U.L. Watwani and; P.N. Kumar, Advs
Cases ReferredBinani Bros (P) Ltd. v. Union of India
Excerpt:
.....in delhi; although, the jurisdiction of the delhi court could be invoked on the ground that the union of indian carried on its business at delhi - thus, the question of jurisdiction would depend on the provisions of section 20 of the civil procedure code, 1908, which was not dependent on the arbitration act, 1940 - thus, award was returned for re-filing in the court that was having jurisdiction to interfere in the matterb) the case questioned whether appeal made by the appellant under sections 14, 17 and 19 of the arbitration act, 1940, would lie under the letters patent or section 10 of the delhi high court act - it was found that the order was not made under the act of 1940, although, the order was passed under section 20 of the civil procedure code, 1908 - hence, it was held that..........arose in delhi. (3) the jurisdiction of the delhi court was invoked (a) on the ground that the union of india was carrying on business at its principal seat at delhi and (b) on the ground that the full bench decision of this court in shri ram rattan bhartia v. food corporation of india and another, : air1978delhi183 , had settled the question that proceedings under the arbitration act could be taken at the place where the defendant resided or carried on business or personally worked for gain. (4) it may be pointed out that the said full bench decision related to the food corporation of india and not to the union of india. if the defendant was a statutory corporation, then jurisdiction would be conferred on the court within whose jurisdiction the principal place of business was.....
Judgment:

D.K. Kapur, J.

(1) THIS appeal is directed against the judgment delivered by Anand J. in Suit No. 511-A of 1980, on an application under Sections 14 and 17 of the Arbitration Act, 1940. The judgment is confined to issue of jurisdiction only which was the preliminary issue.

(2) THE award in question was given by Brigadier Joginder Singh on 28th October, 1981, and the contract out of which the dispute arose was one for execution of Civil Works, i.e., modernisation and augmentation of the Ordnance Factory at Moradnagar. It is undisputed that the contract was executed at Bareilly and the work was to be done in Moradnagar, both in the State of Uttar Pradesh. No part of the cause of action arose in Delhi.

(3) THE jurisdiction of the Delhi Court was invoked (a) on the ground that the Union of India was carrying on business at its principal seat at Delhi and (b) on the ground that the Full Bench decision of this Court in Shri Ram Rattan Bhartia v. Food Corporation of India and another, : AIR1978Delhi183 , had settled the question that proceedings under the Arbitration Act could be taken at the place where the defendant resided or carried on business or personally worked for gain.

(4) IT may be pointed out that the said Full Bench decision related to the Food Corporation of India and not to the Union of India. If the defendant was a statutory Corporation, then jurisdiction would be conferred on the Court within whose jurisdiction the principal place of business was located. But, the the Union of India is not a Corporation.

(5) THE learned Single Judge has held in effect that the Union of India carries on business at Delhi and has given many reasons for holding that the Union of India does carry on business at Delhi. However, this test appears to be illusory because the Union of India equally carries on business all over India and it would not be possible for us to hold that a suit against the Union of India can be instituted in any Court in India merely because the Union of India is located throughout India and, thereforee, the Union of India carries on business throughout India.

(6) WITHOUT going into any greater details, it is sufficient to say that this point has been decided by a Division Bench of this Court in Binani Bros. (P) Ltd. v. Union of India . It was there held that the expression 'voluntarily resides, carries on business and personally works for gain' are references to natural persons and not to legal entities. That was also an appeal under the Arbitration Act, but the learned Single Judge in that case had held that the Courts in Delhi did not have jurisdiction. The contract in that case was also a similar one entered into by the Director General of Supplies and Disposals on behalf of the Director of Supplies and Disposals, Bombay. The contract in that case was for the supply of pig-lead and no part of the cause of action arose at Bombay. The only question raised was whether the Delhi Court had jurisdiction because of Section 20 of the Code of Civil Procedure. The Court rejected this contention and held that the decision in Union of India and another v. Ladulal Jain, : [1964]3SCR624 , relating to a railway contract for the carriage of goods was limited to those cases in which the Government was carrying on commercial activities as opposed to sovereign activity. However, it was expressly held as follows :

'WE do not read the cited case, thereforee, to be laying down the rule that the courts at Delhi will have jurisdiction in regard to all disputes relating to all contracts executed by Union of India simply because the Union of India has its 'office' at Delhi.'

We respectfully follow this decision and held that the Delhi Courts have no jurisdiction.

(7) ONE question that arose at the hearing of this appeal may be mentioned. That question was whether an appeal lay under the Letters Patent or Section 10 of the Delhi High Court Act. It may be observed that Section 39 of the Arbitration Act, 1940, states that an order passed under the Arbitration Act is only expellable in certain specified cases. It is, thereforee, urged that no appeal lies because this is not one of the orders mentioned in Section 39.

(8) WE are of the view that the decision of the Court regarding jurisdiction is not one passed under the Arbitration Act. It is an order passed on an application of the Code of Civil Procedure. The question of jurisdiction of the Court is dependent solely on the provisions of Section 20 of the Code of Civil Procedure. An order under the Arbitration Act, i.e., for the purpose of Section 39, would be an order which could only be passed because of the Arbitration Act. The jurisdiction, however, does not depend on the Arbitration Act, but on the Code of Civil Procedure. In fact, the Arbitration Act provides that the Court having jurisdiction will be the same Court as would have Jurisdiction if a suit was filed on the same cause of action. thereforee, the jurisdiction depends entirely on the Code of Civil Procedure. To emphasise this, it can be pointed out that if the Code of Civil Procedure was amended or altered by Parliament altering the Court's jurisdiction under Section 20, or under any other provision of the Code, then the question of jurisdiction would have to be decided according to the amended provisions and would not at all depend on the Arbitration Act. We are, thereforee, of the view that a Letters Patent Appeal does lie and this is also one of the cases expressly mentioned in the judgment of the Supreme Court in Shah Babulal Khimji v. Jayaben D. Kama and another, : [1982]1SCR187 . The learned Single Judge has delivered a judgment in as much as he has finally determined the controversy regarding jurisdiction of the Court to proceed with the matter and, thereforee, it becomes expellable. The appeal would be barred by Section 39 of the Arbitration Act if it was an order passed under the Act. But it clearly is not an order under the Act as analysed earlier, so the appeal is competent either under Section 10 of the Delhi High Court Act or under Clause I Oof the Letters Patent. The observations in the above judgment of the Supreme Court at page 1795 are as follows:

'IT cannot be contended by any show of force that the Other passed by the Trial Judge being an interlocutory order, no appeal would lie to the Division Bench or that the provisions of the Arbitration Act giving a right of appeal to a litigant from the order of a Trial Judge to the Division Bench in any way fetter or over-ride the provisions of the Letters Patent.'

We read these observations as only applying to those cases in which the judgment is not an order passed under the Arbitration Act. Otherwise, the appeal would be barred by the express provisions of Section 39.

(9) CONSEQUENTLY, we allow this appeal and hold following the judgment of this Court in Binani Bros (P) Ltd. v. Union of India , that the award has to be returned for re-filing in the Court having jurisdiction. We leave the parties to bear their own costs.


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