A court lacks jurisdiction to entertain an application under section 20 of the Arbitration Act when the subject matter of the reference and the execution of the agreement took place outside the court's jurisdiction.

( 1 ) THE Court : There are two applications, first application by the plaintiff under section 20 of the Arbitration Act and the other by the defendant for taking the petition off the file on the ground that this court has no jurisdiction to entertain the application under section 20 of the Arbitration Act. The facts inter alia leading to the said applications are that on or about July 8, 1985 pursuant to an invitation for quotation for supply and instalation of one number 1553 HR Liquid gaseous Oxygen Plant with high purity nytrogen production facility by the defendant company M/s. National Oxygen Limited, the plaintiff submitted detailed proposal for the said supply and erection of liquid gaseous Oxygen Plant under Quotation No. PD/dmm/p836/802 dated 8. 7. 85 to the defendant No. 1 giving the terms, conditions, prices, period of delivery, terms of payment technical details etc. with further terms about supply of requisite materials in certain cases by the defendant which do not fall within the scope of work of the plaintiff. The said proposal also contained inter alia an arbitration clause which is set out hereinbelow. "in the event of any dispute or difference arising or occuring between the company and its purchaser in relation to anything or any matter arising out of or under the terms and conditions of sale, the same shall be referred for arbitration to the Bengal Chamber of Commerce and Industry and such arbitration shall be governed by the provision of the Arbitration Act, 1940 and any statutory modification thereof applicable at the relevant time. "

( 2 ) BY letter dated 19th October, 1985 the defendant National Oxygen Ltd. accepted the said quotation and placed an order for the said plant and subsequently on 19th May, 1986, three separate agreements and/or contracts were entered into by the parties being contract Nos. 204,0, 2041 and 2042. It was also agreed by the plaintiff and the defendant No. 1 that out of the total contract price in respect of the said contract of Rs. 69. 25 lakhs the last balance instalment of 5% of the said amount i. e. Rs. 3,46,250/- only shall be paid by National Oxygen Limited, the defendant against bank guarantee for the equivalent amount to be executed by the banker of the plaintiff valid upto the guarantee period as stipulated in terms, of the proposal of Indian Oxygen Ltd. made by the letter dated 8th July, 1985. The plaintiff company duly furnished the said guarantee for Rs. 3,46,250/- through its banker Grindlays Bank PLC, 19, Netaji Subhas Road, Calcutta on 28th February, 1987. It is the case of the plaintiff that the said guarantee is a conditional guarantee and imposes several obligations for its enforcement. It has also been alleged on behalf of the plaintiff that the plaintiff performed its obligation under the aforesaid three agreements and inspite of various defaults, breaches and hindrance on the part of the defendant No. 1, the plaintiff in the interest of its reputation and goodwill completed all the works covered under the said three agreements including erection, installation and commissioning of the said plant. It has also been alleged that the plant was commissioned on 27th August, 1987 and the plant gave very satisfactory performance and have been in commercial production for last seven months starting from 28th August, 1987. It has been further alleged by the plaintiff in the application under section 20 that although the plant was working satisfactorily and was running for commercial production for more than seven months the defendant No. 1 for some ulterior motive refused to sign the commissioning certificate though it is signed by the plaintiff's authorised representative after commissioning plant on 27. 10. 87. Thereafter defendant No. 1 by letter dated 10th November, 1987 raised various disputes regarding (a) erectioning, (b) period of test, (c) commissioner and the delay in commissioning etc. It has been alleged that the plaintiff from time to time