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High Court Of Delhi
VIRENDRA SAIGAL - Appellant
Versus
SUMATI LAL JAMNALAL - Respondent
Decided On : 01/23/1969
ARBITRATION ACT - SECTION 31 - JURISDICTION - APPLICATION UNDER SECTION 34 - RES JUDICATA - APPLICATION UNDER SECTION 34 OF THE ARBITRATION ACT BY THE RESPONDENT IN THE SUIT FILED BY THE PETITIONER IS NOT AN APPLICATION WHICH COULD CONFER JURISDICTION ON THE DELHI COURTS UNDER SUB-SECTION (4) OF SECTION 31 OF THE ACT. THE DECISION OF THE ADDITIONAL DISTRICT JUDGE ON THE ISSUE OF JURISDICTION IN THE SUIT FOR ACCOUNTS FILED BY THE PETITIONER AGAINST THE RESPONDENT OPERATES AS RES JUDICATA.
Fact of the Case:
The petitioner filed a suit for accounts against the respondent in the Court of Commercial Judge, Delhi. The respondent filed an application under section 34 of the Arbitration Act for stay of the suit on the allegation that there was an agreement between the parties for reference of any disputes arising between them to arbitration. This application was dismissed on the ground that K. K. Behl aforesaid, who was a party to the suit as defendant No. 2 was not a party to the alleged agreement for reference of disputes to arbitration. Upon the dismissal of this application, the respondent filed his written statement and, inter alia, challenged the jurisdiction of the Delhi Courts to entertain the suit. The trial Court held in favor of the respondent on both the grounds that no part of the cause of action had arisen within the jurisdiction of the Delhi Court and that there was an agreement between the parties whereby exclusive jurisdiction had been conferred on the Courts in Bombay. The petitioner filed an appeal, which was dismissed by the Additional District Judge, Delhi, who agreed with the trial Court that no part of the cause of action had arisen in Delhi but disagreed with the conclusion of the trial Court that there was an agreement between the parties conferring exclusive jurisdiction on the Bombay Courts. The petitioner then filed an application in the Court of the Senior Subordinate Judge, Delhi, purporting to be under section 33 of the Arbitration Act. The respondent objected to the jurisdiction of the Delhi Court to entertain it and it was alleged that the decision of the learned Additional District Judge dated January 3, 1966, operated as res judicata between the parties in so far as the issue of jurisdiction was concerned.
Finding of the Court:
The court held that the filing of the application under section 34 by the respondent in the civil suit for accounts filed by the petitioner is not such an application which could confer jurisdiction on the Delhi Courts under sub-section (4) of section 31 of the Act. The court further held that the decision of the learned Additional District Judge on the issue of jurisdiction in the suit for accounts filed by the petitioner against the respondent operates as res judicata.
Issues: 1. Whether the filing of the application under section 34 of the Arbitration Act by the respondent in the suit filed by the petitioner is an application which is contemplated by sub-section (4) of section 31 of the Act? 2. Whether the decision of the learned Additional District Judge on the issue of jurisdiction in the suit for accounts filed by the petitioner against the respondent operates as res judicata?
Ratio Decidendi: 1. The court held that the filing of the application under section 34 of the Arbitration Act by the respondent in the suit filed by the petitioner is not an application which is contemplated by sub-section (4) of section 31 of the Act because the Delhi Court would not be a Court having jurisdiction under section 31 (1) of the said Act as the application for stay which has been made under section 34 of the Arbitration Act had been dismissed and the suit had been held to be filed in a Court not having jurisdiction. 2. The court held that the decision of the learned Additional District Judge on the issue of jurisdiction in the suit for accounts filed by the petitioner against the respondent operates as res judicata because section 11 of the Code of Civil Procedure prohibits the trial not only of a subsequent suit but also the trial of an issue in the subsequent suit and the issue of jurisdiction in the previous civil suit was raised on the pleadings of the parties and was decided.
Final Decision: The revision petition was dismissed with costs.
( 1 ) THERE were certain transactions as to shares between the parties to this petition. Disputes arose between the parties. Concerning those disputes, the petitioner on May 3, 1963 filed a suit for accounts in the Court of Commercial Judge, Delhi, against the respondent (as defendant No. 1) and one K. K. Behl (as defendant No. 2 ). K. K. Behl was made a party defendant on the allegation that he was an agent of the respondent and that through him, the respondent was carrying on business in Delhi. Upon service of the summons of this suit, the respondent filed an application under section 34 of the Arbitration Act for stay of the suit on allegation that there was an agreement between the parties for reference of any disputes arising between them to arbitration. This application was dismissed on the ground that K. K. Behl aforesaid, who was a party to the suit as defendant No. 2 was not a party to the allegedagreement for reference of disputes to arbitration.
( 2 ) UPON the dismissal of this application, the respondent filed his written statement and, inter alia, challenged the jurisdiction of the Delhi Courts to entertain the suit. This challenge was on two grounds- (1) that no part of the cause of action had arisen within the jurisdiction of the Delhi Court and (2) that there was an agreement between the parties whereby exclusive jurisdiction had been conferred on the Courts in Bombay. An Issue was framed on the basis of this objection and the trial Court, by its order dated April 30, 1964, held in favour of the respondent on both the grounds. The petitioner filed an appeal, being Miscellaneous Civil Appeal No. 1 of 1965, which was disposed of by the Additional District Judge, Delhi, by his order dated January 3, 1966. The Additional District Judge dismissed the appeal but only on the ground that no part of the cause of action had arisen in Delhi. He did not agree with the conclusion of the trial Court that there was an agreement between the parties conferring exclusive jurisdiction on the Bombay Courts.
( 3 ) IT was then that the petitioner on September 12, 1966, filed an application in the Court of the Senior Subordinate Judge, Delhi, purporting to be under secti 33 of the Arbitration Act. In paragraph 8 of this application, the petitioner alleged that the transaction in dispute had originated by way of offers from Delhi; that the petitioner had made payments at Delhi and that the respondent had received payments at Delhi. It was further urged by the petitioner in paragraph 9 of this application that the first application under the Arbitration Act had been made by the respondent in the Delhi Courts and, upon the basis of these allegations, it was asserted that the Delhi Courts along had jurisdiction under sub-section (4) of section 31 of the Arbitration Act. It appears that during the pendency of this application, in which no appearance was put in on behalf of the respondent, the disputes between the parties had been referred to Arbitrators in Bombay who had made their award. The petitioner, therefore, withdrew this application and filed another application under sections 14 and 33 of the Arbitration Act in the Court of the Subordinate Judge 1st Class, Delhi, on November 19, 1966 and it is this application which has given rise to this revision. In this application, it was stated by the petitioner that the award had been made on November 7, 1966 and that the award had been given notwithstanding the pendency of the earlier application dated September 12, 1966. It was prayed that the arbitrators, who are named in paragraph 9 of the application, be directed to file their award alongwith the depositions and other documents produced before the arbitrators. Cause of action for invoking the jurisdiction of the Delhi Court was alleged to be based upon the aforesaid application under section 34 of the Arbitration Act which had been made by the respondent in the aforesaid civil suit which had been filed by the petitione
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