1996 Supreme(Del) 238
High Court Of Delhi
R.K.CONSTRUCTIONS - Appellant
Versus
NATIONAL THERMAL POWER CORPORATION LIMITED - Respondent
Decided On : 03/01/1996
The court having jurisdiction to entertain and try a petition under Section 20 of the Arbitration Act is the court within whose territorial jurisdiction the cause of action has arisen.
Headnote:
ARBITRATION - JURISDICTION - SECTION 20 OF THE ARBITRATION ACT - COURT HAVING JURISDICTION TO ENTERTAIN AND TRY A PETITION UNDER SECTION 20 OF THE ARBITRATION ACT IS THE COURT WITHIN WHOSE TERRITORIAL JURISDICTION THE CAUSE OF ACTION HAS ARISEN.
Fact of the Case:
Petitioner filed a petition under Section 20 of the Arbitration Act against National Thermal Power Commission and Canara Bank for filing of arbitration agreements pertaining to three different contracts in court and directing the Chairman of respondent No. 1 corporation to appoint an arbitrator. Respondent No. 1 raised a preliminary objection as regards territorial jurisdiction of the court to entertain and try the petition.
Finding of the Court:
The court held that the petition is not maintainable in this court since the cause of action has arisen at Bhubneshwar and the same was to be performed at Talchar Thermal Power Project, Talcher, Distt. Dhenkanal, Orissa, and the mere fact that the respondent Corporation has its head office at Delhi will not confer jurisdiction on this court to entertain the petition under Section 20 of the Arbitration Act.
Issues: Whether the court has jurisdiction to entertain and try a petition under Section 20 of the Arbitration Act.
Ratio Decidendi: The court relied on various decisions of the Supreme Court and of this court to hold that the court having jurisdiction to entertain and try a petition under Section 20 of the Arbitration Act is the court within whose territorial jurisdiction the cause of action has arisen.
Final Decision: The petition is not maintainable in this court and since petition is not maintainable, no interim relief can be granted. Interim relief which has been granted thus is liable to be vacated. Petition is liable to be returned to the plaintiff for being presented in an appropriate court having jurisdiction over the matter.
( 1 ) PETITION under Section 20 of the Arbitration Act was filed against National Thermal Power Commission and Canara Bank praying for filing of the arbitration agreements pertaining to three different contracts in court and directing Chairman of respondent No. 1 corporation to appoint an arbitrator in terms of arbitration clause 56 as reproduced in para 14 A of the petition. Along with the petition, an application for interim relief has also been preferred TO praying that respondent No. 1 be restrained from invoking various bank guarantees and restraining Canara Bank from making payment of the bank guarantees. After notice respondent No. 1 filed its reply and raised a preliminary objection as regards territorial jurisdiction of this court to entertain and try the petition. Be it stated that respondent No. 2 was ordered to be deleted from the array of parties.
( 2 ) THE petitioner firm was awarded three different contracts by M/s National Thermal Power Corporation Ltd. (for short "ntpc") and it is not disputed that its head office of respondent No. 1 Corporation is located at Delhi Petition was filed in this court alleging that since respondent No. 1 Corporation has its Head Office in Delhi, therefore, this court has jurisdiction to entertain this petition. After the parties exchanged their respective affidavits, the facts which have emerged and which are not in dispute are that for the award of the works, three contracts were executed at Bhubneshwar. Under the first contract the petitioner was required to carry out construction of 58 Type I, II and III Quarters in the Construction Township at Talchar Super Thermal Power Project in District Dhenkanal in Orissa. Second contract was for Construction Tow nship of 34 units of Type 1 and 10 units of Type III Quarters in the township of Talchar Thermal Power Project. Orissa and the third contract was for construction of 2 H Block offices for Talchar Thermal Power Project, Orissa. The objection is as regards territorial jurisdiction that the contracts were signed and executed at Bhubneshwar. The site of work was Township of Talchar Thermal Power Project at Talcher in Distt. Dhenkanal, Orissa. No part of cause of action arose at Delhi. As such courts in Delhi have no territorial jurisdiction to entertain and try this petition.
( 3 ) LEARNED counsel for the parties were heard at length.
( 4 ) THE objection raised on behalf of the respondent and arguments addressed in reply by the learned counsel for the petitioner do not require much discussion since the point raised stands decided by various decisions of this court and of the Supreme Court Section 31 of the Arbitration Act regulates the forum for entertainment of all matters connected with an arbitration agreement and award and to make applications regarding conduct of arbitration proceedings. Scope of Section 31 of the Act was explained by the Supreme Court in Kumbha Muwji v. Union of India, AIR 1953 SC 313 saying that while sub section (1) determines the jurisdiction of the Court in which an award can be filed the remaining three sub-sections are intended to make that jurisdiction effective in three ways: (1) by vesting in one court the authority to deal with all questions regarding the validity, effect or existence of an award or arbitration agreement. (2) by casting on the persons concerned the obligation to file all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings in one court and (3) by vesting exclusive jurisdiction in the court in which the first application relating to the matter is filed.
( 5 ) APPLICATIONS covered by sub-section (3) of Section 31 of the Act would also include an application under Section 20 of the Act and the same will have to be filed in the court having jurisdiction in the matter to which the reference relates and no other court. The court has been defined in Section 2 (c) of the Act to mean:
"a Civil Court having jurisdiction to decid