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High Court Of Delhi
GULATI CONSTRUCTION COMPANY - Appellant
Versus
BETWA RIVER BD - Respondent
Decided On : 10/10/1983
ARBITRATION ACT, 1940 - SECTION 2(C), 31(1) - JURISDICTION - COURT HAVING JURISDICTION TO DECIDE THE DISPUTE - CAUSE OF ACTION - PLACE WHERE THE CONTRACT WAS CONCLUDED IS THE COURT HAVING JURISDICTION.
Fact of the Case:
A contract was entered into between the parties for the construction of Left Main Earth Dam, Rajghat Project. The work was awarded by respondent 1, Betwa River Board, which was set up under a Central Act and had its office at Jhansi, Madhya Pradesh. The petitioner, a company having its head office at Jhansi, submitted a tender at Jhansi, which was accepted there. The formal contract was executed in Lalitpur, Uttar Pradesh, and the work was carried out in Chanderi, District Guna, Madhya Pradesh. Disputes arose between the parties, and the matter was referred to arbitration. The sole arbitrator conducted the arbitration proceedings in Delhi and made and signed the award in Delhi. The arbitrator filed the award in the Delhi High Court.
Finding of the Court:
The Delhi High Court held that it did not have territorial jurisdiction to decide the disputes between the parties. The court found that no part of the cause of action arose within its territorial jurisdiction. The tender was accepted at Jhansi, the formal contract was executed in Lalitpur (UP), and the work was carried out in district Guna (MP). The court also held that the fact that the arbitration proceedings were conducted in Delhi and the award was filed there was not relevant for the purposes of deciding which court had territorial jurisdiction.
Issues: Whether the Delhi High Court had territorial jurisdiction to decide the disputes between the parties.
Ratio Decidendi: The court held that the court having jurisdiction to decide the disputes between the parties was the court in which a civil suit for the recovery of money could have been filed by the petitioner. In this case, the suit could have been filed in the court of competent jurisdiction in Madhya Pradesh or Uttar Pradesh, where the tender was accepted, the formal contract was executed, and the work was carried out, respectively. The court also held that the fact that the arbitration proceedings were conducted in Delhi and the award was filed there was not relevant for the purposes of deciding which court had territorial jurisdiction.
Final Decision: The court directed that the arbitration proceedings and the award be returned to the arbitrator with a direction that the same should be filed in the court of competent jurisdiction.
( 1 ) AN agreement dt. 20. 7. 79 was entered into between the parties for the construction of Left Main Earth Dam, Rajghat Project.
( 2 ) THE Work was awarded by respondent 1. The said respondent is a Board which has been set up under Central Act. It is an admitted case of the parties that the office of the Board is located at Jhansi (M. P.) though a liaison office is stated to. be at New Delhi also. The Board was set up for carrying out work of constructing Rajghat Dam in district Lalitpur in the State of U. P.
( 3 ) THE petitioner is a Company having its head office at Jhansi. The Contract was awarded to the petitioner on a tender enquiry having been floated by respondent from Jhansi. The tender was submitted by the petitioner at Jhansi and it was at that place that the tender was accepted. It is clear that the contract was concluded at Jhansi, the place where the acceptance of tender took place.
( 4 ) IT is further admitted between the parties that the actual contract was executed in the office of Superintending Engineer, Rajghat Dam Construction Circle-II District Lalitpur (U. P. ). The work was, however, carried out in the territory of Chanderi, District Guna (M. P. ). Certain claims were raised by the petitioner. They were not admitted by the respondents. In terms of the agreement between the parties, the disputes had to be referred to arbitration.
( 5 ) VIDE a letter dt. 16. 12. 81 issued by the Chief Engineer, Betwa River Board, Jhansi, Sh. S. P. Caprihan, Retired Engineer-in-Chief was appointed as the sole arbitrator. The sole arbitrator carried on the arbitration proceedings in Delhi and made and signed his award dt. 31. 12. 82 at New Delhi.
( 6 ) ALONG with an application dt. 30. 1. 83 purporting to be an application u/s 14 (2) of the Arbitration Act, the sole arbitrator filed the said arbitration proceedings and the award in this court. In para 5 of the application it was stated that vide letter dt. 14. 1. 83 the petitioner had requested the sole arbitrator that he should file the award in this court.
( 7 ) AFTER the award was filed, by order dt. 22. 2. 83, the Registrar of this court directed that the award be registered and notices of the filing of the award be sent to the parties. Thereupon I. A. 1421/83 being objections u/s 30 and 33 of the Act were filed in this court by the Board. On the other hand I. A. 1420/83 is an application filed by the claimant praying that the award should be made a rule of the court and a decree in terms thereof together with interest be passed. .
( 8 ) IN the objections filed by the Betwa River Board a preliminary objection had been taken, that this court had no territorial jurisdiction to decide the disputes between the parties. Following preliminary issue was :
has this court territorial jurisdiction to try this suit ?
( 9 ) THE contention of Sh. Watwani, appearing on behalf of the Board is that no part of the cause of action arose within the territorial jurisdiction of this court and as such this court has no jurisdiction to hear this matter. On the other hand the submission of the learned counsel for petitioner is that arbitration proceedings took place in Delhi, the award was made in Delhi and the same has been filed in this court and it is only this court which has territorial jurisdiction to try the present case.
( 10 ) ACCORDING to S. 2 (c) of the Act a court means a civil court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit. This means thai it is only that court which will have jurisdiction to decide the matter, in which a civil suit with regard to the matter which was referred to arbitration, could have been filed. To put it differently, it is only that court which can be regarded as having jurisdiction to entertain any petition under the Arbitration Act, in which court a suit for recovery of money could have been filed by the petitioner, In S. 31 (1) it is provided th
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