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IN THE HIGH COURT OF JUDICATURE AT PATNA
K. Vinod Chandran, J
Naushad Khan Son of Nazbul Hoda Khan – Petitioner
Versus
The Branch Manager Tata Motor Finance Solutions Limited - Respondent
Request Case No.79 of 2022
Decided On : 26-04-2023
Advocate Appeared:
For the Petitioner:Mr. Mrigank Mauli, Senior Advocate, Mr. Kumar Ravish, Advocate
For the Respondent:Mr. P. N. Shahi, Senior Advocate, Mr. Dayanand Singh, Advocate
IMPORTANT POINT
The main legal point established in the judgment is the significance of consent of the parties in deciding the seat of arbitration and the exclusivity of jurisdiction conferred on the Courts at Mumbai as per the arbitration clause and the agreement.
Headnote:
Arbitration Agreement - Jurisdiction - Arbitration and Conciliation Act, 1996 - Section 42, Section 8, Section 11 - State of West Bengal vs. Associated Contractors, (2015) 1 SCC 32, Ravi Ranjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee, 2022 SCC Online SC 568, Indus Mobile Distribution Pvt. Ltd v. Datawind Innovations Private Limited; 2017(7)SCC 678, Experion Developers Pvt. Ltd. v. Sushma Ashok Shiroor, AIR 2022 SC 1824 - The court discussed the application of Section 42 of the Arbitration and Conciliation Act, 1996 and the interpretation of 'Court' as defined in Section 2(1)(e). It also considered the distinction between 'seat' and 'venue' of arbitration, and the significance of consent of the parties in deciding the seat of arbitration. The judgment highlighted the exclusivity of jurisdiction conferred on the Courts at Mumbai as per the arbitration clause and the agreement, and the estoppel of the petitioner from invoking jurisdiction at any other place.
Fact of the Case:
The petitioner entered into a loan-cum-hypothecation-cum-guarantee agreement with the respondent for the purchase of heavy vehicles with finance availed from the respondent. Disputes arose regarding the working of the agreement, leading to the need for arbitration.
Finding of the Court:
The court found that the petitioner is estopped from invoking jurisdiction at any place other than Mumbai, as there is exclusive jurisdiction conferred on the Courts at Mumbai as per the arbitration clause and the agreement.
Issues: The issues revolved around the application of Section 42 of the Arbitration and Conciliation Act, 1996, the distinction between 'seat' and 'venue' of arbitration, and the exclusivity of jurisdiction conferred on the Courts at Mumbai as per the arbitration clause and the agreement.
Ratio Decidendi: The court's decision was based on the interpretation of Section 42, the distinction between 'seat' and 'venue' of arbitration, and the significance of consent of the parties in deciding the seat of arbitration.
Final Decision: The Request Case was rejected, without prejudice to the right of the petitioner to approach the jurisdictional Court as evident from the consensus arrived at between the parties to the agreement, from the agreement itself.
JUDGMENT :
The above Request Case arises from a loan-cum-hypothecation-cum-guarantee agreement produced along with the memorandum as Annexure-P1. The petitioner entered into the aforesaid agreement with the respondent, in which Clause 21 is the arbitration clause, for purchase of heavy vehicles with finance availed from the respondent through its Gaya Branch in the year 2017. The petitioner alleges that disputes have arisen insofar as the working of the agreement, which requires to be referred for arbitration.
2. Shri Mrigank Mauli, learned Senior Advocate, instructed by Shri Kumar Ravish appeared for the petitioner and Shri P.N.Shahi, learned Senior Advocate, instructed by Shri Dayanand Singh appeared for the respondent.
3. On behalf of the petitioner, it was submitted that the objections raised regarding the requirement of approaching the High Court at Bombay for reason of the respondent having approached that Court, in its original jurisdiction, does not disable the petitioner from approaching this Court, since the agreement was executed in Gaya within the jurisdiction of this Court and the vehicles were also delivered within the State of Bihar. The decision rendered in State of West Bengal vs. Associated Contractors, (2015) 1 SCC 32 is relied on to contend that Section 42 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) would not be applicable insofar as applications made before judicial authorities under Section 8, applications filed before the Chief Justice or his delegate under Section 11, applications filed before Principal Civil Court or to High Court having no jurisdiction and applications filed in the Court that has no subject matter of jurisdiction. Insofar as the objection regarding the exclusivity of the venue of arbitration, the Clause, as referred to from the agreement, being Clause 22 does not confer any exclusive jurisdiction. Reliance is also placed on the decision in Ravi Ranjan Developers Pvt. Ltd. v. Aditya Kumar Chatterjee, 2022 SCC Online SC 568.
4. For the respondents reliance is placed on Indus Mobile Distribution Pvt. Ltd v. Datawind Innovations Private Limited; 2017(7)SCC 678, to argue that seat of arbitration could be anywhere as desired by the parties to the agreement. It is asserted by the learned counsel that there is an application under Section 9 filed before the High Court of Mumbai and in that circumstance also under Section 42, the petitioner has to approach the High Court of Mumbai under Section 11 and not this Court. This is without prejudice to the contention that the arbitration agreement specifically contains a clause with exclusive jurisdiction conferred on the Courts in Mumbai. Further, it is pointed out that the petitioner has already approached the Consumer Forum for redressal of the very same grievances attempted to be raised before the arbitrator and in such circumstance by the doctrine of election, the petitioner is estopped from requesting for appointment of an arbitrator by this Court.
5. The learned Senior Counsel for the petitioner, to resist the contention regarding doctrine of election, places reliance on Experion Developers Pvt. Ltd. v. Sushma Ashok Shiroor, AIR 2022 SC 1824.
6. In Experion Developers Pvt. Ltd. (supra), the question considered was whether, the consumer having elected to proceed under the Consumer Protection Act, the provisions of the RERA Act could be availed of. The decision in Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783 was also considered in that case. We need only refer to paragraph 24 of the said decision:-
“24. Before we consider whether the provisions of the RERA Act have made any change in the legal position stated in the preceding paragraph, we may note that an allottee placed in circumstances similar to that of the complainants, could have initiated the following proceedings before the RERA Act came into force:
(A) If he satisfied the requirements of being a “consumer” under the CP Act, he could have init
