RAJIV SAHAI ENDLAW, J.

1. This petition under Section 20 r/w Section 8 of the Indian Arbitration Act, 1940 was filed in relation to an agreement dated 6th September, 1988 between the Governor of Nagaland on the one hand and the petitioner on the other hand and which is not disputed between the parties. The said agreement provides for arbitration as under:- In case of any differences or dispute between the government and the organizing agent on any matter pertaining to or arising out of the agreement, the issue of dispute will be referred to arbitration in Nagaland to a sole arbitrator to be appointed by the government whose decision shall be final and binding on both the parties.

.2. It is the case in the petition that the Government of Nagaland had under the agreement aforesaid appointed the petitioner as a sole organizing agent for the Nagaland State Lotteries in the name and style of Sri Lakshmi Lottery; that the agreement was for three years; the lottery was to be freely sold all over India; that the respondent State will place orders with the printers for printing of lottery tickets and the petitioner will pay the cost of the paper and printing charges for the same; that the prize money up to Rs.5,000/- to the winner, will be distributed directly by the petitioner as the organizing agent but the prize amounts exceeding Rs.5,000/- shall be deposited by the petitioner with the respondent government in advance for being distributed amongst the winners. It is further the case of the petitioner that the petitioner in the pursuance to the aforesaid agreement invested monies in printing, posters, banners, advertisement throughout the country; that the major markets for the sale of such lotteries were the State of Tamil Nadu and the State of Kerala. Under the said agreement, the petitioner was to furnish a guarantee of Rs.15 lac to the respondent government for the due performance of the agreement and for compensating the respondent government for any loss or damage that may be caused or suffered by the government on account of any breach by the petitioner. The petitioner claims to have furnished a bank guarantee of UCO Bank, Connaught Place, New Delhi in favour of the Governor/Director of Nagaland Lotteries, Kohima. It is further the case of the petitioner that the petitioner organized from Delhi the sale of lottery tickets in different part of the country; that out of the total agreed 156 weekly draws, the lottery continued till the 65th draw but thereafter the Governments of Tamil Nadu and Kerala banned the sale of the tickets of the lottery assuming it to be a private lottery; that in spite of representations of the petitioner the respondent did not render the necessary clarification to the Governments of Tamil Nadu and Kerala claiming lottery to be the lottery of the respondent State; consequently the petitioner could not make payments for the draws already scheduled; that the petitioner moved the Madras High Court against the said illegal ban and in the said writ petition the respondent State was also made a party but the respondent State failed also to file an affidavit in those proceedings; that the respondent thereafter cancelled the contract with the petitioner. The disputes that had arisen between the parties have been listed in para 11 of the petition. The respondent State had also invoked the bank guarantee for Rs.15 lac and with respect whereto not only a dispute was raised but an application being I.A.No.11299/1990 under Order 41 r/w II Schedule of the 1940 Act was also filed.

3. The petitioner invoked the territorial jurisdiction of this court pleading that the entire business was transacted from Delhi; orders for printing of tickets were placed at Delhi; office of the respondent is also located at Delhi; that the petitioner works for gain and resides at Delhi; the expenses were to be defrayed at Delhi; that the accounts were maintained at Delhi and the bank guarantee was issued at Delhi.

4. Vide ex parte order

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