BADAR DURREZ AHMED, J.

( 1 ) ALTHOUGH this petition is styled as a petition under Section 11 (5) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act ), in fact, it is an application under Section 11 (6) thereof. This petition has come to this Court by way of transfer consequent upon the decision of the Supreme Court in the case of SBP and Company v. Patel engineering Ltd. , VIII (2005) SLT 405=iv (2005) CLT 236 (SC)= (2005) 8 SCC 618. Initially when this matter had come up before the District Court, notice of the petition had been issued to the respondents on 5. 10. 2005. In the order-sheet of 23. 11. 2005, which was the returnable date, it is recorded that the respondents had refused the process and were thus found to have been served. By said order dated 23. 11. 2005, the respondent Nos 1 and 2 were, therefore, proceeded with ex parte. This petition was continuing before the District Court upto 2. 3. 2006 when the same was transferred to this Court as indicated above.

( 2 ) DESPITE the fact that the respondents Nos. 1 and 2 have already been directed to be proceeded with ex parte, I find that there is a difficulty with regard to entertaining this petition on the ground of lack of territorial jurisdiction. To consider this aspect of the matter, it would be necessary to examine the facts of the case in brief.

( 3 ) THE petitioner s case is that the petitioner company is engaged, inter alia, in the business of providing financial/credit facilities, in the form of auto loans, personal loans, home equity loans, etc. to its borrowers. It is stated by the petitioner that the respondents approached the petitioner company seeking the grant of a loan against their immovable property. It is important to note that the respondents are both residents of B-10, Sohan Avenue, Newar Vastrapur Fountain, Vastrapur, ahmedabad, Gujarat-380015. The respondents approached the petitioner company in Gujarat itself and in pursuance of a loan application, a loan of Rs. 3,75,000/- was sanctioned. The loan agreement between the plaintiff and the respondents was entered into at Ahmedabad. The disbursements under the loan were also made to the respondents at Ahmedabad. The loan amount was supposed to be repaid by way of cheques, which, the respondents are said to have issued in favour of the petitioner. Some of those cheques on presentation at Ahmedabad, were returned dishonoured by the petitioner s bankers at Ahmedabad. Considering all these factors, it becomes clear that apart from the fact that the petitioner has its registered office in Delhi, nothing has happened with regard to the contractual relationship between the petitioner and the respondents within the territory of delhi. The entire cause of action has accrued to the petitioner in Ahmedabad, gujarat. No part of the cause of action has arisen in Delhi. The respondents also do not reside in Delhi. They are residents of Ahmedabad, Gujarat. Therefore, considering the provisions of Section 20 of the Code of Civil Procedure, 1908, this court would not have jurisdiction to entertain the present petition.

( 4 ) THE learned Counsel for the petitioner submitted that the petition under section 11 (6) for appointment of an arbitrator was filed in the Court in Delhi because the agreed place of arbitration was Delhi as indicated by Clause 18 of the schedule attached to the loan agreement between the petitioner and the respondents. In terms of Section 20 of the said Act, the parties are free to agree on the place of arbitration. Since the parties have agreed on Delhi, as the place of arbitration, this court would have jurisdiction to entertain the petition under Section 11 (6) for appointment of an arbitrator. In other words, what the learned Counsel for the petitioner is submitting is that the agreed venue of arbitration would confer the jurisdiction on the Court for the purposes of an application under Section 11 (6) of the said Act.

( 5 ) TO examine this proposition adva

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