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2009 Supreme(Bom) 1595
High Court of Judicature at Bombay
THE HONOURABLE MR. JUSTICE ANOOP V. MOHTA
Kotak Mahindra Bank Ltd.
Versus
Sharma Crane Service & Others
Arbitration Petition No.191 of 2009 and Arbitration Petition No.193 of 2009 and Arbitration Petition (Lodging) No.393 of 2009 and Arbitration Petition (Lodging) No.394 of 2009
Decided on : 26-11-2009
For the Petitioner:Rahul Mehta with Nikhil Mehta i/by Ms. Disha Karmbar, Advocates. For the Respondents:Ms. Kashmira Bharucha i/by M/s. Arpan M. Rajput & Co., Advocates.
Headnote:Arbitration & Conciliation Act, 1996 - Section 9 - Arbitration petition - Respondents defaulted in making timely instalments though agreed - Respondents took loans for purchase of vehicles - Respondents resisted petition on ground of jurisdiction as relevant documents signed at Nagpur - Held - Petitioner can invoke Section 9 of Act if amount so claimed less than Rs. 10 lacs - Parties have entered into 4 different agreements and signed accordingly for different vehicles - Petitions cannot be clubbed together only to remove from jurisdiction of this Court - Respondents office is at Raipur - Concerned branch of petitioner is also at Raipur - Court of City of concerned branch at Raipur have jurisdiction - All petitions filed under Section 9 of Act in this Court at Mumbai, not maintainable - All petitions dismissed with exemplary costs of Rs. 10,000/- to be paid to respondents. - Admittedly, the agreements took place at Raipur. The respondents are residing and doing their business at Raipur, the Vehicles/Equipments are also lying in the area. The prayers are for injunction and appointment of Court Receiver. The respondents have no branch office at Mumbai. The petitioners main office/registered office is in Mumbai. The termination notice though sent through Mumbai office, that itself cannot be the reason to invoke and file Section 9 petition in the Court of Mumbai. Clause 10.16 provides discretion to be exercised by the petitioner to invoke/commence the Arbitration Proceedings under the Act. It may either in Mumbai or Delhi or Chennai or Kolkata or in the place of execution of agreement. In the cases, where the amount so claimed is less than 10 lacs, the petitioner can file such proceedings in the appropriate Court. Clause 10.17 provides that the Courts above shall, subject to the provisions of law, have exclusive jurisdiction, unless the law does not permit the same. The Court of the city in which the concerned branch is situated shall subject to the provisions of law, have exclusive jurisdiction in relation to this agreement including the arbitration and all matters arising in connection therewith. In Court’s view, there is no exclusive jurisdiction of this Court at Mumbai as sought to be contended of any Court, referred above. It is the discretion of the petitioner which has to be taken note of. In view of above clauses. 10.16 and 10.17, Court’s inclined to observe that the general provisions of Code of Civil Procedure (CPC), need to be considered to give full opportunity to both the parties and basically to the respondents. Court’s of the view, in absence of clear exclusive jurisdiction clause of Courts and as peculiar clauses which provides sole discretion to be exercised by the Bank and as agreement so executed at Raipur and as the respondents office and place of business is at Raipur and as the concerned branch of the petitioner is also situated at Raipur, the Court of city of the concerned branch at Raipur shall have jurisdiction for seeking such interim relief/protection under Section 9 of the Arbitration Act and not in the Court of Mumbai as done in the present case.
Therefore, all the petitions, as filed under Section 9 of the Arbitration Act, in this Court at Mumbai, are not maintainable, except before the Court/Tribunal, as per the agreed clause itself.
All the petitions are therefore, dismissed with exemplary costs of Rs. 10,000/- (Rupees ten thousand only) to be paid to the respondents.
Heard finally, by consent of the parties.
2. The Petitioner has invoked Section 9 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act) as Respondents defaulted in making timely installments though agreed and that events of defaults are the basic cause of action for these Petitions.
3. The Petitioner is common party to all these petitions and as Respondents are also common and interlinked, though they entered into four separate agreements. Respondent-Rajkumar Sharma, is the sole proprietor of Haryan Road Carriers and Mrs. Sarita Sharma is a proprietor of Shree Transport Service for whom Rajkumar Sharma holds the power of attorney. Therefore, this common judgment/order.
4. The Petitioner is in the business of providing financial facilities such as Personal Loan, Home loan, Commercial Vehicle Loan etc.. Some time in the year 2005 and 2006, the Respondents approached the Petitioner for loan to purchase the vehicles. The Petitioner agreed to lend loan and accordingly Respondents submitted separate application for the same. The relevant documents have been signed accordingly at Nagpur.
5. The Respondents resisted the Petition, basically on the ground of jurisdiction.
6. The relevant clause of jurisdiction as relied by the parties are as under.
“10.16 Unless the same falls within the jurisdiction of the Debts Recovery Tribunal established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, any and all claims and disputes arising out of or in connection with this Agreement or its performance shall be settled by arbitration by a single Arbitrator to be appointed by the Bank. The arbitration shall be held, either in Mumbai or New Delhi or Chennai or Kolkata or in the place of execution of this Agreement, sole discretion to be exercised by the Bank at the time such arbitration is to commence, in accordance with the provisions of the Arbitration and Conciliation Act, 1996.
10.17. In the event that the claim or dispute does not fall within the jurisdiction of the Debts Recovery Tribunal established under the Recovery of Debts Due To Banks and Financial Institutions Act, 1993, for the purposes of arbitration mentioned in clause (10.16), the Courts aforesaid shall, subject to the provisions of law, have exclusive jurisdiction, if any law does not permit the same, the Courts of the city in which the concerned branch is situated, shall subject to the provisions of law have exclusive jurisdiction in relation to this Agreement, the arbitration and all matters arising in connection herewith and therewith.”
7. In Arbitration Petition No. 193 of 2009, the principal outstanding loan/claim amount is Rs.2,05,608/-
8. In Arbitration Petition No. 191 of 2009, the principal outstanding loan/claim amount is Rs.2,38,263/-
9. In Arbitration Petition (L) No. 393 of 2009, the principal outstanding loan/claim amount is Rs.4,34,362.47/-.
10. In Arbitration Petition (L) No. 394 of 2009, the principal outstanding loan/claim amount is Rs.13,07,196.67/-.
11. The basic preliminary submission in view of Section 1(4) read with Section 34 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993, (for short, the Act) provides that the peculiar jurisdiction of the Debts Recovery Tribunal (for short, the DRT) is more than 10 lacks.
12. The Petitioner is admittedly a financial institution/bank. Therefore, any claim and/or debt recovery for the amount more than Rs.10 lacs, the DRT has exclusive jurisdiction. If the amount is less than Rs.10 lacs, the said tribunal has no jurisdiction to entertain such dispute/claims. This submission/contention/issue is not in much dispute. Both the learned counsel consider this position in view of clear provision of law. Their notes of arguments also supports the same.
13. The point is, the agreed arbitration clause were permitted the petitioner to file such petition under Section 9 of the Arbitration Act in the jurisdiction of this Court at Mumbai and/or
