Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(Del) 1266

IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Sahai Endlaw, J.
Aruna Oswal - Appellant
Versus
Gen Y Commodities Private Limited & Ors. - Respondent
Civil Suit (Comm) No. 1206 of 2018, 1208 of 2018; Interlocutory Application No. 14937 of 2018, 14938 of 2018, 4482 of 2019, 4956 of 2019, 5316 of 2019, 13229 of 2019, 14963 of 2018, 3333 of 2019, 4481 of 2019, 4958 of 2019, 5317 of 2019, 4957 of 2019
Decided On : 25-02-2020

Advocates Appeared:
Sandeep Sethi, Advocate, Mukti Chaudhary, Advocate, Tejaswini, Advocate, Rishab Tuli, Advocate, Sudhir Nandrajog, Advocate, Ateev Mathur, Advocate, Vaibhav Arora, Advocate, Jagriti Ahuja, Advocate, Aditya Kumar, Advocate, Mayank Mishra, Advocate, Pallavi Kumar, Advocate, Sanjiv Kakra, Advocate, Bharat Arora, Advocate, Arpit Gupta, Advocate, Lavleen Goyal, Advocate

The central legal point established in the judgment is the principle of 'debtor must seek the creditor' and the interpretation of Section 8 of the Arbitration Act in determining the territorial jurisdiction of the court.

Headnote:
CPC - Territorial Jurisdiction - Section 8 of the Arbitration Act - [CPC, Section 8 of the Arbitration Act] - The court considered the applications under Order VII Rules 10 & 11 of the CPC and under Section 8 of the Arbitration Act. The defendant argued that if the court does not have territorial jurisdiction to entertain the suit, an order under Section 8 of the Arbitration Act referring the parties to arbitration cannot be made. The court also discussed the principle of 'debtor must seek the creditor' and referred to various cases to establish the territorial jurisdiction of the court.
Fact of the Case:

The plaintiff filed suits for recovery of monies from the defendant No.1, claiming territorial jurisdiction of the court based on the location of the defendant's offices and the FDRs. The defendant argued against the territorial jurisdiction of the court.
Finding of the Court:

The court dismissed the applications under Order VII Rules 10 & 11 of the CPC and allowed the amendment sought by the plaintiff. The court also discussed the principle of 'debtor must seek the creditor' and established the territorial jurisdiction of the court based on this principle.
Issues: Territorial jurisdiction, amendment of plaint, application under Order VII Rules 10 & 11 of the CPC, Section 8 of the Arbitration Act
Ratio Decidendi: The court's decision was based on the principle of 'debtor must seek the creditor' and the interpretation of Section 8 of the Arbitration Act. The court also emphasized the need to satisfy the existence of a valid arbitration agreement before referring the parties to arbitration.
Final Decision: The court dismissed the applications under Order VII Rules 10 & 11 of the CPC and allowed the amendment sought by the plaintiff. The court directed the parties to remain personally present on the next date of hearing.

JUDGMENT

Rajiv Sahai Endlaw, J. - The applications of the defendant No.1 under Order VII Rules 10 & 11 of the Code of Civil Procedure, 1908 (CPC) and under Section 8 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), in both the suits are for consideration.

2. I have requested the senior counsel for the defendant No.1 to address first on the applications under Section 8 of the Arbitration Act, being of the view that if the parties are referred to arbitration, the need to consider the applications under Order VII Rules 10&11 of the CPC, would not arise. However, the senior counsel for the defendant No.1 contends that if this Court does not have territorial jurisdiction to entertain the suit, an order under Section 8 of the Arbitration Act referring the parties to arbitration can also be not made and the plaint has to be rejected/returned for filing in the appropriate Court and as and when filed, it will be open to the defendant No.1 to take up the plea of Section 8 of the Arbitration Act.

3. Without testing the merits of the aforesaid contention, the senior counsel for the defendant No.1 has been heard on the applications under Order VII Rules 10 & 11 of the CPC.

4. The senior counsel for the defendant No.1, arguing with reference to CS(COMM) No.1206/2018, has drawn attention to paragraph 26 of the plaint dated 12th November, 2018, where the plaintiff has pleaded as under:

"26. The FDRs created from the trading account of AO Security is lying with the Defendant No.2 Parliament Street Branch, New Delhi within the jurisdiction of this Hon''ble Court. Hence this Hon''ble Court has territorial jurisdiction to try present suit. The Defendant No.1 has its offices within the jurisdiction of this Hon''ble Court and hence this Hon''ble Court has the territorial jurisdiction to entertain and try the present suit. That the plaintiff has not filed any other petition either in this court or any other High Court or Hon''ble Supreme Court of India."

5. Finding IA No.13229/2019 in CS(COMM) No.1206/2018, of the plaintiff for amendment of the plaint to be also pending consideration and it being the settled view that an application for amendment has to be heard first, I have enquired from the counsel for the plaintiff about the amendment sought.

6. The counsel for the plaintiff states that the amendment sought is to correct the mistakes in the plaint.

7. The senior counsel for the defendant No.1, under instructions states that the defendant No.1 has no objection to the amendment sought.

8. The counsel for Axis Bank Limited, the counsel for Bank of India and the counsel for Pankaj Oswal also have no objection to the amendment sought. None appears for any of the other defendants.

9. Ia No.13229/2019 in CS(COMM) No.1206/2018 is allowed and disposed of.

10. The senior counsel for the defendant No.1, while arguing the applications under Order VII Rules 10 & 11 has taken me through the prayer paragraph of the existing plaint in CS(COMM) No.1206/2018 and has contended that all the reliefs claimed are against defendant No.1 only and not against any of the other defendants. It is argued that once the reliefs claimed are against defendant No.1, the mere fact that the Fixed Deposit Receipts (FDRs) in the name of the defendant No.1 are deposited with the defendant No.2 Bank of India, Parliament Street, New Delhi would not confer territorial jurisdiction on this Court as the defendant No.1 can have such FDRs in banks at any place.

11. It is also argued by the senior counsel for the defendant No.1 that the husband of the plaintiff had a trading account with the defendant No.1, a member of the Multi Commodity Exchange of India Limited (MCX) and all transactions between the husband of the plaintiff and the defendant No.1 were also not in Delhi but in Gurgaon and Ghaziabad. It is contended that the stamp duty payable on the said transaction in Gurgaon and Ghaziabad is less than in Delhi and the plaintiff may be examined under Order X of the CPC to co

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2020 Supreme(Del) 1266

The central legal point established in the judgment is the principle of 'debtor must seek the creditor' and the interpretation of Section 8 of the Arbitration Act in determining the territorial jurisdiction of the court.

Cases Referred (1)