The provisions of section 20 of the Code of Civil Procedure, 1908, are applicable to proceedings under the Arbitration Act, 1940, and that the Court within the local limits of whose jurisdiction the defendant or each of the defendants at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, will also have jurisdiction to entertain the proceedings under the Act in terms of clauses (a) and (b) of section 20 of the Code.

( 1 ) THE petitioner, Shri Ram Rattan Bhartia, entered into a contract with the respondent, Food Corporation of India, (herein called the Corporation ) for handling and transport of food grains at Chandausi Depot, District Moradabad, between 1st May, 1971, to 31st April, 1973, vide contract entered into between the parties in pursuance of invitation to tender No. F/l (l)/71-Chandausi. The contract contained arbitration clause No. 19, providing that. all disputes and differences arising out of or in any way touching or concerning the agreement whatsoever (except as to any matter the decision of which is expressly provided for in the contract) shall be REFERRED TO to the sole arbitration of any person appointed by the Managing Director of the Food Corporation of India.

( 2 ) DISPUTES arose between the parties in respect of the alleged claim of the petitioner on account of transportation of foodgrains for which the petitioner claimed a sum of Rs. 61,ooo. 00 , including security deposit of Rs. 25,000. 00. The case of the petitioner is that the respondent had neither paid the said sum of Rs. 61. 000. 00 nor had REFERRED TO the disputes for arbitration in terms of the arbitration clause despite the service of notice dated 1st March, 1974, to refer the disputes to arbitration. The petitioner accordingly moved the present petition under section 20 of the Arbitration Act, 1940, (herein called the Act ) in this Court for directing the Corporation to file the orginal arbitration agreement in Court and to appoint an arbitrator as per clause 19 of the, contract. The jurisdiction of this Court was invoked on the ground that the corporation has its office at Delhi and that the arbitrator was to be appointed by it.

( 3 ) THE respondents traversing the pleas raised in the petition by way of preliminary objection have contended that this Court has no jurisdiction to entertain the petition in that the contract was neither made at Delhi nor was it executable within the jurisdiction of this Court. Besides, it was alleged, the matter to which the agreement relates pertained to the handling and transport of foodgrains at Chandausi Depot, District Moradabad.

( 4 ) ON the pleadings of the parties the following preliminary issue was framed :

"has this Court no jurisdiction to entertain the suit ? Onus on defendants".

( 5 ) THE matter came up for hearing before one of us (Yogeshwar Dayal, J. ). The learned Judge noticing that there was a conflict of opinion in this Court as well as with other High Courts, on the question whether the framers of the Act incorporated all the tests given in section 20 of Code of Civil Procedure, 1908, (herein called the Code ) into the Act for the purpose of determining jurisdiction of the Court to deal with the matters arising out of the Act, or merely confined the test to one with regard to the subject matter of the reference, felt that the matter was required to be decided by a larger Bench. The matter accordingly under orders of Hon ble the Chief Justice was placed before a Division Bench of this Court.

( 6 ) THE attention of the Bench was invited to an earlier decision of a Division Bench of this Court in N. D. Sud V. Union of India, ILR 1973 II Delhi 503 (1 ). The Bench hearing this matter felt that the Bench which decided N. D. Sud s case (supra) in observing that "the residence of the defendant would be relevant factor to determine territorial jurisdiction of the Court where an application for- determination of questions regarding the validity, effect or existence of an arbitration agreement is filed provided the residence is relevant in relation to the subject matter of the reference" had carved out an exception to the rule of law laid down by the Supreme Court in Hakarn Singh v. M/s. Gammon (India) Ltd. AIR 1971 SC 740 2. The Bench hearing this matter accordingly felt it difficult to agree in entirely with the interpretation placed by the Bench in N. D. Sud s case, and directed that the matter be plac