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2013 Supreme(Gau) 129

IN THE HIGH COURT OF GAUHATI
B.D. Agarwal, J.
Rakesh Sirohia - Appellants
Vs.
Hanuman Tea Company Ltd. - Respondent
Arb. Appeal No. 18 of 2012
Decided on : 05.03.2013

Advocates appeared:
For Appellant/Petitioner/Plaintiff: Mr. S.K. Kejriwal and Mrs. S. Kejriwal
For Respondents/Defendant: Mr. J.K. Baishya and Mr. P. Sundi

Headnote:

Arbitration and Conciliation Act, 1996 - Section 37(1)(a) - Code of Civil Procedure, 1908 - Order 43 Rule 1(a) - Indian Contract Act, 1872 - Section 28 - Grant interim protection for the suit property - One time settlement - Petitioner has purchased a tea garden, namely. Sonajuli Tea Estate, owned by respondent Company - Terms and conditions of sale and purchase of tea garden have been set-out in Agreement - Pursuant to agreement, petitioner has already made part payment of total consideration and has also made substantial investment in development and upgradation of Tea Estate - Since the respondent had outstanding dues to Bank of Baroda, one of conditions to purchase tea garden was that the respondent Company shall enter into "one time settlement" with Bank and thereafter, the final sale deed shall be executed - According petitioner, the respondent failed to perform their obligations giving rise to filing of an application under Section 9 of Act - Held, Whereby, a party is restricted absolutely from enforcing its rights under or in respect of any contract by way of a legal proceeding in ordinary court is void to that extent - In the instant case, though petitioner had legal right to enforce agreement for purchasing a tea estate in an appropriate Court at Sonitpur, Assam, he was restrained from doing so by way of incorporating Clause 8.3 in agreement - Clause 8.3 of agreement is also violative of Section 28 of Contract Act being against public policy - Impugned order is hereby set aside - Appeal allowed.

JUDGMENT

B.D. Agarwal, J.

1. This appeal under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter, referred to as 'the Arbitration Act', in short), read with Order 43 Rule 1(a) of the Code of Civil Procedure, 1908, (briefly, 'CPC') is directed against the Order dated 19.06.2012, passed by the learned District Judge, Sonitpur, Tezpur, in Misc. (Arbitration) Case No. 26 of 2012. By this impugned order, the learned District has declined to grant interim protection for the suit property under Section 9 of the Arbitration Act. Hence, this appeal is at the instance of the petitioner. Heard Sri S. Kejriwal, learned counsel for the petitioner as well as Sri P. Sundi, learned counsel for the respondent/defendant in the Court of the learned District Judge. Also gone through the impugned order and other documents annexed with the memo of appeal. No counter has been filed by the respondent.

2. The gist of the case is that the petitioner has purchased a tea garden, namely. Sonajuli Tea Estate, owned by the respondent Company. The terms and conditions of the sale and purchase of the tea garden have been set-out in the Agreement dated 13th of October 2009. Pursuant to the agreement, the petitioner has already made part payment of the total consideration and has also made substantial investment in the development and upgradation of the Tea Estate. Since the respondent had outstanding dues to the Bank of Baroda, one of the conditions to purchase the tea garden was that the respondent Company shall enter into "one time settlement" with the Bank and thereafter, the final sale deed shall be executed. According to the petitioner, the respondent failed to perform their obligations giving rise to filing of an application under Section 9 of the Arbitration Act.

3. Initially, both the parties were directed by the learned District Judge to maintain status quo of the property vide order dated 23.2.2012. However, this interim order has been vacated through the impugned order dated 19.6.2012.

4. The prayer for interim protection has been basically rejected on the ground that the Court of District Judge at Sonitpur, Tezpur in Assam has no jurisdiction to pass any order under Section 9 of the Arbitration Act in view of Clause 8.3 of the agreement. At this stage, it is necessary to mention here that the suit property, i.e., Sonajuli Tea Estate is situated in the district of Sonitpur in Assam. At the same time, the registered office of the Company of the respondent is situated at Kolkata and the agreement was also executed at Kolkata. However, the application for interim protection was filed in the Court of learned District Judge, Sonitpur, Tezpur, Assam, basically on the ground that the dispute is related to a tea estate, which is an immovable property, and since the tea garden is situated in Assam only a principal civil court having original jurisdiction in the district where the immovable property is situated has its jurisdiction to pass an order for interim protection under Section 9 of the Arbitration Act.

5. For ready reference Clause 8.3 is reproduced below:-

8.3. Courts at Kolkata alone shall have exclusive jurisdiction to the exclusion to all other Courts in all matters arising out of or relating to this agreement.

6. Sri Kejriwal, learned counsel for the petitioner submitted that since Sonajuli Tea Estate is situated in the district of Sonitpur, Assam, only a Civil Court in Assam will have territorial jurisdiction over a dispute as provided under Section 16 CPC. According to the learned counsel, since the principal civil court at Kolkata cannot entertain any application under Section 9 of the Arbitration Act or resolve the dispute of immovable property situated in Assam Clause 8.3 of the agreement is against the public policy and it cannot be invoked for determining the jurisdiction of a court.

7. The learned counsel for the petitioner further argued that had it been a case of jurisdiction of two different courts over the disputed pr















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