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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD
S. ANANDA REDDY, J.
Vijai Electricals Ltd., Hyderabad - Appellant
versus
Mohan Exports (India) Pvt. Ltd., New Delhi - Respondent
AA No.99 of 2006
Decided on 27th February, 2007
Advocate appeared
C.S.N Rajli, Counsel for the Applicant; Philkhana Rama Ran, Counsel for the Respondent.
Companies Act, 1956 – Section 16 – Purchase Agreement - Realisation of Contractual Amount - Applicant is a Company registered under the Companies Act, 1956 carrying on business of manufacturing of Power and Distribution Transformers in India respondent is also a company registered under the provisions of the Companies Act, 1956 and carrying on business of trading by exporting the goods manufactured in India to outside country the process of its business, the respondent entered into a purchase agreement with the applicant for the supply of 2000 nos. distribution transformers in three lots along with other spare parts to Zarka Free Trade Zone, Zordan for a total contract price of Euros which is equivalent to It is stated that the price stipulated under the terms of the purchase agreement is subject to the variation of the exchange rate between the Euros against the Indian Rupees as on the date of the supply. It is stated that the applicant had performed its part by delivering of distribution transformers in three lots in the month and subsequent to the delivery of the transformers, the applicant became eligible for the realisation of the contractual amount respondent paid an amount paise as against the total and receivable amount of by the applicant. It is stated that the said amount payable by the respondent to the applicant is evidenced by the certificate issued by the Banker, which is filed as Annexure-A2. According to the applicant the difference or the balance amount payable as a result of the difference in exchange rate comes to with reference to which the applicant sent number of letters to the respondent, but the respondent did not even respond by giving any reply –Held, If court examine and apply the facts of the present case with the ratio laid down in the case of it is clear that the clause contained in the purchase agreement is also almost identically worded with the clause contained in the above case dealt with by the apex Court. In the present case also there were no words, like exclusive, alone, only and the like. In the absence of it, it would be difficult to accept that the jurisdiction of this Court has been excluded it was the case of the respondent that no part of the cause of action had arisen within the jurisdiction of this Court stand of the respondent is that the respondent had no place of business in Andhra Pradesh within the jurisdiction of this Court has no jurisdiction to entertain the present arbitration application. It is not necessary that the respondent must also have its office within the jurisdiction of this Court agreement is between the applicant and the respondent applicant company, being the manufacturer, manufactured the goods in question within the jurisdiction of this Court, where the applicant had its manufacturing unit and supplied the goods from it to the respondent for being exported outside the country. Therefore this Court has got jurisdiction as part of the cause of action had arisen within the jurisdiction of this Court. Therefore, the contention of the respondent that this Court had no jurisdiction is clearly devoid of merit – Application is allowed.
2. It is stated that the applicant is a Company registered under the Companies Act, 1956 carrying on business of manufacturing of Power and Distribution Transformers in India. The respondent is also a company registered under the provisions of the Companies Act, 1956 and carrying on business of trading by exporting the goods manufactured in India to outside the country. In the process of its business, the respondent entered into a purchase agreement with the applicant on 25-6-2003 for the supply of 2000 nos. distribution transformers in three lots along with other spare parts to Zarka Free Trade Zone, Zordan for a total contract price of Euros 3,283.308.00, which is equivalent to 1NR 17,06,49,933.00 (at a notional exchange rate of 1 Euro = Rs.51.975). It is stated that the price stipulated under the terms of the purchase agreement is subject to the variation of the exchange rate between the Euros against the Indian Rupees as on the date of the supply. It is stated that the applicant had performed its part by delivering 2000 nos. of distribution transformers in three lots in the month of November 2003, and subsequent to the delivery of the transformers, the applicant became eligible for the realisation of the contractual amount. However, the respondent paid an amount of Rs.18,73,46,594.72 paise as against the total and receivable amount of Rs.19,09,85,615.905 by the applicant. It is stated that the said amount payable by the respondent to the applicant is evidenced by the certificate issued by the Banker, which is filed as Annexure-A2. According to the applicant the difference or the balance amount payable as a result of the difference in exchange rate comes to Rs.36,39,0211with reference to which the applicant sent number of letters to the respondent, but the respondent did not even respond by giving any reply. Therefore, finally the applicant was constrained to issue the legal notice dated 8-5-2006 seeking consent of the respondent for appointment of an Arbitrator for resolving the dispute by naming one of the former Judges of this Court to act as an Arbitrator. Even for that also, according to the applicant, no reply was issued by the respondents. Hence, the present application.
3. The applicant also stated that as per the terms of the purchase agreement, though one of the clauses shows that the Delhi High Court has got jurisdiction, where the disputes have to be adjudicated, but in the light of the judgment of the Supreme Court in A.B. C. Laminart Pvt. Limited v. A.P. Agencies, (1989) 2 SCC 163, since there is no specific exclusion of this Court within whose jurisdiction the applicant Company has its manufacturing unit where it has manufactured the goods supplied to the respondent. Therefore, this Court has got jurisdiction as part of the cause of action had taken place within the jurisdiction of this Court. Hence, the present arbitration application seeking appointment of an Arbitrator for adjudication of the disputes.
4. A counter is filed on behalf of the respondent admitting that the parties had entered into a purchase agreement, which was stated to have been signed by the parties at New Delhi in the office of the respondent. Therefore, the present application is not maintainable before this Court, as this Court has no territorial jurisdiction to decide the issue. It is also stated that the respondent is having its office at New Delhi and has no place of business in Andhra Pradesh to come within the territorial jurisdiction of this Court. It is also stated that as per Clause 16 of the purchase agreement, dated 25-6-2003 it was stipulated that the present contract shall be subject to the jurisdiction of the Courts in Delhi New Delhi. In view of the above fact, it is stated that the Courts at Delh
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