Important Point—Convenience of parties cannot be determinative of jurisdiction of a Court.

Sanjay Kumar, J.

1. This civil revision petition under Article 227 of the Constitution arises out of the order dated 14.10.2016 passed by the learned VIII Additional District Judge, Ranga Reddy District at L.B. Nagar, in Arbitration O.P. No. 672 of 2016. The petitioner herein filed the said petition under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity, ‘the Act of 1996’) seeking an injunction restraining the respondents from alienating or encumbering the petition schedule property or parting with their possession thereof or creating therein third party rights by any means whatsoever during the pendency of the arbitration proceedings. By the order under revision, the Court below returned the petition for want of jurisdiction, permitting the petitioner to present it before the proper Court within two weeks.

2. Aggrieved thereby, the petitioner is before this Court.

3. While ordering notice before admission on 28.10.2016, this Court took note of the fact that an injunction was in operation pending disposal of the OP and accordingly directed the respondents to maintain status quo as regards the petition schedule property for four weeks. This interim order was extended until further orders on 21.11.2016, while reserving orders in the civil revision petition.

4. The case of the petitioner before the Court below was as under:

Development Agreement-cum-General Power of Attorney (GPA) dated 22.01.2016 was entered into by the petitioner and the respondents for development of the petition schedule property. However, without performing their obligations under the agreement, the respondents issued notice dated 30.07.2016 to the petitioner that they had cancelled the agreement. The petitioner spent more than Rs.3.50 crore on the project since April-May, 2015 and the delay in completion of the project was wholly attributable to the respondents. Clause XXV of the agreement provided for dispute resolution through mutual discussions, failing which, by arbitration. Pending initiation of such steps, the petitioner filed the subject petition under Section 9 of the Act of 1996 for protection of its interest.

5. Respondents 1 and 8 filed their counters before the Court below and the others adopted the same. Therein, they pointed out that the land covered by the Development Agreement-cum-GPA was located in Kolluru Village, Ramachandrapuram Mandal, Medak District, which fell within the jurisdiction of the civil Court at Sanga Reddy, while the parties were all residents of Hyderabad. They therefore asserted that the Court below had no jurisdiction to entertain the Arbitration OP.

6. The Court below took note of the fact that the petition schedule property was an extent of Ac.13.00 guntas in Survey Nos. 205, 206, 207 and 209 of Kolluru Village, Ramachandrapuram Mandal, Medak District, and the fact that the cause title showed that the petitioner and the respondents were all residents of Hyderabad. Reference was also made to the fact that the Development Agreement-cum-GPA dated 22.01.2016 was executed at Hyderabad and was gotten endorsed by the Office of the District Registrar of Medak District at Sanga Reddy vide File No. G1/1877/2016 dated 10.08.2016. The Court below observed that the parties had not entered into the agreement within Ranga Reddy District and they were neither doing business nor did any part of the transaction between the parties take place within its jurisdiction. The Court below accordingly concluded that as the petition schedule property was situated in Medak District; the parties were residents of Hyderabad; and the agreement was entered into at Hyderabad but gotten endorsed by the registration authorities of Medak District, it lacked territorial jurisdiction to entertain the Arbitration OP and returned it for proper presentation. Heard Sri B. Vijaysen Reddy, learned counsel for the petitioner; Sri Y.Ratnakar, learned counsel for Respondent 1; Sri P.S.R. Chandra Murthy, learned counsel for Respondents 2 to 7