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1973 Supreme(Del) 26

High Court Of Delhi
NATIONAL METAL CRAFT COMPANY - Appellant
Versus
RATAN STEEL LIMITED - Respondent
Suit 336(A) of 1972
Decided On : 01/24/1973

Advocates Appeared:
B.MOHAN, S.K.TIWARI

The jurisdiction of the court to deal with proceedings under the Arbitration Act is determined by the subject-matter of the reference, not by the residence of the parties or the arbitrator or the place of arbitration proceedings.

Headnote:

ARBITRATION - JURISDICTION - COURT HAVING JURISDICTION TO ENTERTAIN PROCEEDINGS UNDER ARBITRATION ACT - COURT WHICH WOULD HAVE JURISDICTION TO DECIDE QUESTIONS FORMING SUBJECT-MATTER OF REFERENCE - RESIDENCE OF PARTIES OR ARBITRATOR OR PLACE OF ARBITRATION PROCEEDINGS IRRELEVANT.

Fact of the Case:

Petitioner and respondent No. 1 entered into a lease agreement for a factory premises. Disputes arose between the parties, and respondent No. 1 sought to refer the disputes to arbitration. Petitioner nominated an arbitrator, but respondent No. 1 treated respondent No. 2 as the sole arbitrator. Petitioner filed a petition under the Arbitration Act, seeking directions to respondent No. 1 to file the agreement containing the arbitration clause, remove respondent No. 2 as the sole arbitrator, and appoint new arbitrators.

Finding of the Court:

The court held that it did not have jurisdiction to entertain the petition. The court found that the jurisdiction of the court to deal with proceedings under the Arbitration Act is determined by the subject-matter of the reference, not by the residence of the parties or the arbitrator or the place of arbitration proceedings.

Issues: Whether the court had jurisdiction to entertain the petition under the Arbitration Act.

Ratio Decidendi: The court relied on the provisions of sections 2(c) and 31 of the Arbitration Act, which provide that the court having jurisdiction to entertain proceedings under the Arbitration Act is the court which would have jurisdiction to decide questions forming the subject-matter of the reference. The court held that the residence of the parties or the arbitrator or the place of arbitration proceedings is irrelevant for determining the jurisdiction of the court.

Final Decision: The court held that it did not have jurisdiction to entertain the petition and directed that the petition be returned to the petitioner for presentation to a court of competent jurisdiction.

H. L. Anand

( 1 ) THIS is a petition under section 8,9,10, 11 and 20 of the Arbitration Act.

( 2 ) THE facts are not in dispute and may be briefly stated. On or about August 25, 1970, defendant No. 1 entered into an agreement of lease with the petitioner and its partners who are REFERRED TO as respondents 3 to 5 in respect of the factory premises known as rattan Steel Ltd. situated in village Lohta Dehat Amanat in the District of Varanasi consisting of lands and plants, machineries and other equipments in working and running condition as detailed in schedule annexed to the lease deed, which was duly registered with the Sub Registrar at Varanasi. The lease was for a period of three years with effect from July 1, 1970, with, a renewal option on the same terms and conditions. The lease deed contained an arbitration clause.

( 3 ) IT appears that some disputes arose between the parties touching the various questions with regard to the rights and obligations of the parties flowing from the lease deed which were sought to be referred by respondent No. 1 to the arbitration of Shri A. N. Parikh, Advocate, who is REFERRED TO as respondent No. 2 in the petition. The petitioner, however, claims to have nominated L. R. Gupta, Advocate, as their nominee, but it seems that not-with standing the contention of the petitioner, respondent No. 1 treats respondent No. 2 as having become the sole arbitrator and by the petition the petitioner seeks a direction to respondent No. 1 for the filing of the agreement containing the arbitration clause, for the removal of respondent No. 2 who claims to be the sole arbitrator and for the appointment of any other person or persons as arbitrator or arbitrators in accordance with the provisions of the Arbitration Act.

( 4 ) IN the affidavit filed in reply to the petition on behalf of respondent No. 1, a preliminary objection has been raised that in as much as the lease deed in question had been entered into and signed by the parties at Varanasi, the property to which the deed related was situated in the District of Varanasi, the payments envisaged by the deed were to be made at the registered office of respondent No. 1 at Calcutta, this Court would have no jurisdiction to entertain the present petition.

( 5 ) COUNSEL for the petitioner does not dispute the aforesaid facts but invokes the jurisdiction of this Court on the ground that Shri A. N. Parikh, Advocate, who claims to be the sole arbitrator is residing in Delhi where the proceedings of arbitration were being conducted and submits that this would give jurisdiction to this Court by virtue of the provisions of S. 20 of the Code of Civil Procedure.

( 6 ) IT appears to me that the contention of respondent No. 1 must prevail. Section 8,9,10, 11 and 20 of the Arbitration Act merely provi- de for the institution of certain proceedings and for making of directions by a Court having jurisdiction in the matter to which the reference relates. After citing S. 2 (c) and 31 the judgement proceeds)

( 8 ) IT is clear on a reference to the provisions to section 2 (c) and of section 31 of the Arbitration Act that the Court which would have jurisdiction to entertain the proceedings under the Arbitration Act would be the Court which would have jurisdiction to decide questions forming the subject-matter of the reference, that is the Court which could be competent to entertain the suit if the subject-matter of the reference had been the subject-matter of the suit between the parties. The residence of the parties or the arbitrator or the place where the arbitration proceedings may be or may have been conducted or the place where arbitrator may have made or signed the award would be wholly irrelevant for the determination of the jurisdiction of the Court to with the proceedings under the Arbitration- Act.

( 9 ) "jurisdiction" denotes the authority or power which the Court would have to deal with the matter brought before it and the jurisdiction of the Court may have reference e



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