1999 Supreme(Cal) 626

High Court Of Calcutta
RUMA PAL, D. P. KUNDU
CITYSCAPE DEVELOPERS PVT.LTD - Appellant
Versus
ALKA BUILDERS PVT.LTD. - Respondent
A. P. O.  40  Of  1999
Decided On : 12/07/1999

The court has the jurisdiction to entertain an application under section 9 of the Arbitration and Conciliation Act, 1996 only if the court has the territorial jurisdiction to do so.

Headnote:

ARBITRATION - JURISDICTION - APPLICATION UNDER SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996 - COURT'S JURISDICTION TO ENTERTAIN THE APPLICATION - ISSUE OF JURISDICTION TO BE DECIDED AT THE OUTSET - COURT SHOULD HAVE FORMED A PRIMA FACIE VIEW ON THE ISSUE OF JURISDICTION - INTERIM ORDERS PASSED WITHOUT DECIDING THE ISSUE OF JURISDICTION - ORDERS SERIOUSLY PREJUDICED THE APPELLANT - ORDERS PASSED WITHOUT GIVING THE APPELLANT A CHANCE TO DEFEND - ORDERS SET ASIDE.

Fact of the Case:

The appellant was granted the right to develop land on Tollygunge Circular Road by establishing a multistoried commercial complex (hereafter referred to as the complex) by the Calcutta Municipal Corporation. The appellant entered into an agreement with the respondent No. 2 for the purpose of completing the project. Disputes arose between the respondent No. 2 and the appellant. The appellant and the respondent No. 2 then entered into an agreement with the respondent No. 1 to complete the project (hereafter referred to as the Joint Venture Agreement). The respondent No. 1 filed an application under section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) for the appointment of a Special Officer/receiver to make an inventory of the complex, to take symbolic possession thereof, to take symbolic possession of the undealt with area of 96,941 sq. ft. of space situated at New Alipore Market Complex, injunction restraining the respondents from dealing with or disposing of and/or encumbering in any manner the remaining 96,941 sq. ft. space situate at the said properties, injunction restraining the respondents from dealing with disposing of and/or granting of any part of the remaining 96,941 sq. ft. of area in New Alipore Market Complex without written consent of the petitioner, direction for deposit of all amounts or lease premium and other revenues of the said project in the account of Bank of Maharashtra, S. P. Mukherjee Road Branch and payment of outstanding loans and liabilities of the respondent No. 1 by operating the said Account, direction for payment of outstanding loans, if any, of the respondent No. 2 out of the revenue to be collected and upon repayment the respondent No. 2 be directed to deliver up the share certificates pertaining to 80 equity shares in the respondent No. 1 and the respondent No. 1 be directed to effect appropriate reduction of the share capital by such 80 shares, direction for deposit of amount of TDS with the Income Tax Department and payment of all statutory liabilities of the respondent No. 1 in respect of the said Joint Venture project at New Alipore Market Complex, injunction restraining the respondents from depositing any income or revenue including monthly rent as arising out of the said New Alipore Market Complex in any bank account other than current account No. 650 maintained with Bank of Maharashtra, S. P. Mukherjee Road Branch, Calcutta.

Finding of the Court:

The court held that the application under section 9 could not have been filed in this court because of the definition of the word "court" in section 2 (e) of the Act. The court further held that the issue of jurisdiction was no longer open as the propriety of the order dated 14th May, 1998 had been appealed against by the appellant and the Appellate Court had not held that the court had wrongfully assumed jurisdiction.

Issues: 1. Whether the court had the jurisdiction to entertain the application under section 9 of the Arbitration and Conciliation Act, 1996? 2. Whether the issue of jurisdiction was no longer open as the propriety of the order dated 14th May, 1998 had been appealed against by the appellant and the Appellate Court had not held that the court had wrongfully assumed jurisdiction?

Ratio Decidendi: 1. The court held that the application under section 9 could not have been filed in this court because of the definition of the word "court" in section 2 (e) of the Act. The court further held that the issue of jurisdiction was no longer open as the propriety of the order dated 14th May, 1998 had been appealed against by the appellant and the Appellate Court had not held that the court had wrongfully assumed jurisdiction. 2. The court held that the issue of jurisdiction was no longer open as the propriety of the order dated 14th May, 1998 had been appealed against by the appellant and the Appellate Court had not held that the court had wrongfully assumed jurisdiction. However, the court also held that the issue of jurisdiction should have been decided at the outset and that the interim orders passed without deciding the issue of jurisdiction were seriously prejudicial to the appellant.

Final Decision: The appeal was allowed. The order dated 18th January, 1999 was set aside and as far as the appeal from the order dated 18th May, 1998 is concerned we direct that no further order shall be obtained by the respondent No. 1 under section 9 until the issue of jurisdiction is heard and determined by the learned single Judge.