Back
High Court Of Delhi
B.R.ELECTRICALS - Appellant
Versus
CHAIRMAN - Respondent
First Appeal Order 531 of 2001
Decided On : 01/03/2003
Held:
Various contracts for supply of goods in question were entered into and the supplies were made at places other than Delhi. That way, no part of cause of action arose in Delhi. The plea of the appellant that since the various circle offices of the respondents-concerned with supplies are subject to administrative control of respondent No. 1 or that as payments of the bills raised by the appellant against supplies to different circle offices of the respondent No. 1 were stopped under instructions in that respect from respondent No. 1, part of cause of action arose in Delhi, sounds nothing but as unsuccessfully venturing to overstretch the arena of factual content constituting cause of action.
The expression cause of action signifies that bundle of facts which the petitioner must prove, if traversed, to entitle it to a judgment in its favor by the Court.
It were circle offices of the respondents in different states which received supplies in terms of their orders and were to make payments to the appellant thereforee and further it were, those respective circle offices, which denied payment of the bill amounts. It is not material that such payments were stopped under instructions from the respondent No. 1 or that the administrative control of the circle offices vests with the respondent No. 1. There is a hierarchy of administrative set-up in Government departments through which administrative control and supervision is exercised over the official activities of the subordinate local/regional offices. Moving up the ladder, ultimate administrative supervision and control culminates into the authority positioned at the pinnacle of the set-up. That way, irrespective of the place(s) where the cause of action arises, if the argument of the appellant is accepted, it would be left to the convenience of the party concerned bringing action against the Government of India, to choose the forum where it decides to seek redressal of its grievance against any governmental action as the Government of India can be said to be holding its sway all over the country through its office network. Thus, Government of India would be liable to be sued in any part of the country irrespective of its activity being in exercise of its executive I sovereign function or in connection with a commercial venture. Such a plea cannot be applied.
Clearly, thus, vesting of ultimate administrative control with DOT cannot be a basis to find that in spite of appellants failure to show that the transactions in question were of a commercial nature, the Delhi High Court will have jurisdiction to entertain and decide the petition simply because the respondents seat of power is located at New Delhi. Similarly, issue of stop payment instructions from the office of respondent No. 1 cannot be held to give rise to a part of cause of action at new Delhi. Issue of such an instruction does not constitute an integral part of cause of action as this fact need not be proved to entitle the appellant to succeed in its claim and the same is, thereforee, inconsequential and, accordingly, incapable of providing any sustenance to the appellants plea in regard to part of cause of action arising at new Delhi.
( 1 ) THE solitary issue of territorial jurisdiction circumscribes the scope of instant appeal, which aims at assailing an order dated 12. 9. 2001, passed by the learned Single Judge, rejecting a petition under Section 8 of the Arbitration act, 1940 (for short, the Act ) of the appellant, for lack of territorial jurisdiction and, thus, declining appointment of an Arbitrator to adjudicate upon the alleged disputes between the parties, arising out of various contracts.
( 2 ) THE relevant factual background giving rise to the question of territorial jurisdiction may be noticed briefly. On 21st August, 1991, the General Manager, Telecommunications (for short, gmt ), Srinagar, Kashmir, floated a tender for supply of PVC insulated twin galvanised wires. M/s. B. R. Electricals, appellant, made an offer/bid in response thereto by submitting its tender which was eventually accepted. An agreement dated 8. 10. 1991 was executed between the appellant and the GMT, which was followed by supply of goods as per specification. Later, similar or identical orders were placed with the appellant by various circle offices of the respondent No. 1 from different parts of the country for supply of the said goods and the appellant, accordingly, made supplies of the aforesaid goods. The respondents, however, failed to make the payments therefor. Consequently, an amount aggregating rs. 1,46,10,04,850. 78 is claimed outstanding against them. Letters of request demanding payment of the said amount failed to evoke any response from the respondents. On the contrary, it is pleaded, a letter dated 22. 12. 1992 from the divisional Engineer, Telecommunications at Kumbakanam dealt a rude shock to the appellant, whereby it was informed that in view of instructions from the directorate, Department of Telecommunications (for short, dot"), New Delhi, the payment of the outstanding amount of the bills raised by the appellant, could not be made.
( 3 ) A legal notice dated 1. 2. 1995 addressed to the respondents went abegging. The appellant sought to invoke writ jurisdiction of this Court by making a petition under Article 226 of the Constitution of India, but the same was dismissed by an order dated 5. 10. 1994 holding that proper remedy for redressal of appellant s grievance lay in bringing a suit. It was in this situation that a petition under Section 8 of the Act was filed.
( 4 ) AN arbitration agreement is said to be embodied in Clause 8 of the agreement dated 8. 10. 1991, which reads in the following terms:
"in case of any disputes touching the effect of this agreement, decision of the general Manager, Telecommunications, Srinagar, Kashmir, on behalf of the president of India, shall be final and legally binding on the supplier. "
( 5 ) QUESTIONING the maintainability of the petition on various counts, the respondents in their written statement, inter alia, pleaded lack of jurisdiction on the part of this Court to entertain and deal with the petition on the ground that no part of cause of action arose in Delhi. It is further pleaded that there being no written agreement, none of the alleged contracts entered into by the appellant, contains arbitration clause. The supplies under the agreement dated 8. 10. 1991 are said to have been completed and payment of the entire amount on account of such supplies already made. It is asserted that no part of the amount claimed as outstanding relates to the contract under the aforesaid agreement and, therefore, it is of no relevance to refer to the alleged arbitration clause forming part of agreement dated 8. 10. 1991.
( 6 ) IN the present context, the appellant s petition for appointment of an arbitrator having been declined solely on the ground of want of territorial jurisdiction, respondents pleas on other counts need not be adverted to.
( 7 ) THE nucleus of the appellant s response to the respondents plea against territorial jurisdiction of this Court lies in the argument that since various circle offices o
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
