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2016 Supreme(All) 1267

ALLAHABAD HIGH COURT
BEFORE : SUDHIR AGARWAL AND DR. KAUSHAL JAYENDRA THAKER, JJ.
STATE OF U.P. AND OTHERS ....Appellants
Versus
M/s. S & P INFRASTRUCTURE DEVELOPERS PVT. LTD. ....Respondent
(First Appeal From Order Defective No. 133 of 2015, decided on 20th October, 2016)

Advocates:
Counsel :
S.C. and S.K. Mehrotra for the Appellant; Alok Mishra for the Respondent.

Headnote:(A) Arbitration and Conciliation Act, 1996—Sections 34, 2(e)—Code of Civil Procedure, 1908—Sections 16, 18 and 20—Territorial jurisdiction—Arbitration Proceeding—Subject matter would situate either at Allahabad where agreement was executed between parties—Or at Lucknow where arbitration proceedings were held—Or at Delhi where award was made—Held, mere fact that during execution of agreement, bills were submitted or payments were made at Gorakhpur would not create a situation so as to claim that subject matter also was at Gorakhpur—For the purpose of territorial jurisdiction, pursuant to agreement executed between parties no “cause of action” had arisen at Gorakhpur. [Paras 13 and 14]

       (B) Cause of action—Held, denotes whole bundle of material facts based on which plaintiffs relief prayed for, is based—Neither it has any relation with the evidence set up by defendant nor depends upon character of relief prayed for—It generally consists of facts and situation which gives a party a right to file a suit and obtain a remedy from another person with the help of Court. [Para 15]

       Result; Appeal Dismissed.

       

JUDGMENT

By the Court.—The delay in filing this appeal having been condoned vide order of date passed on Delay Condonation Application, let appeal be registered with regular number and old number shall also continue to be shown in bracket for finding out details of case, whenever required by parties with reference to either of the two numbers.

2. Heard Sri S.K. Mehrotra, learned counsel for appellants and Sri Alok Mishra, counsel for respondent.

3. This appeal filed under Section 37(1)(b) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as “Act 1996”) has come up at the instance of applicant-appellant since their objection/petition under Section 34 of Act 1996 for setting aside award dated 14.9.2013 has been rejected by District Judge, Gorakhpur vide impugned order dated 23.8.2014 on the ground that it has no territorial jurisdiction. From the order passed by Court below it is evident that parties counsel admitted before Court below that cause of action actually arose at Allahabad, Kushinagar and New Delhi.

4. In order to appreciate the aforesaid findings and view taken by Court below, we may refer in brief certain admitted facts;-

5. A work contract for carrying on widening of National Highway No. 28 from Kilometre No. 152 to kilometre No. 166 was entered between M/s. S & P Infrastructures Developers Pvt. Ltd. (hereinafter referred to as “Contractor’) and National Highway Authority of India through its Chairman as well as Chief Engineer, National Highway, P.W.D. Lucknow and Superintendent Engineer, 18th Circle (National Highway), P.W.D. at Allahabad.

6. In the year 2007-08 Superintendent Engineer, 18th Circle (National Highway), P.W.D. at Allahabad invited tenders for aforesaid widening of road which formed part of district Kushinagar. The tenders submitted by Contractor were accepted on 30.7.2008 and 9.9.2008 and two separate agreements on 9.9.2008 and 30.12.2008 were executed between Contractor and Superintendent Engineer, 18th Circle (National Highway), P.W.D. Allahabad. Under agreement dated 9.9.2008, total estimated cost of work was Rs. 124494027.20, date of commencement of work was 9.9.2008 and date of completion of work was 8.3.2010. Similarly, under agreement dated 30.12.2008, estimated cost of work was Rs. 122801955.67, date of commencement of work was 30.12.2008 and date of completion of work was 29.6.2010.

7. During course of work, running account bills were submitted by Contractor in the office of Resident Engineer, Temporary Divisional Construction Unit (National Highway), P.W.D. Gorakhpur and payments after verification of work approved thereat.

8. Contractor thereafter raised certain dispute with regard to extra work and filed an application under Section 11 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as “Act 1996”) in Delhi High Court for appointment of Arbitrator.

9. During pendency of said petition, department nominated Sri N.K. Kanaudiya (Retd.) Chief Engineer U.P. P.W.D as Arbitrator and Contractor nominated Sri B.D. Joshi (Retd.) Engineer in Chief, Himanchal Pradesh P.W.D. as Arbitrator and both nominated Sri Ashok Kumar, Chief Engineer (Retd.), (Ministry of Road Transport and Highway) as Presiding Arbitrator. The said Arbitrators proceeded with arbitration on different dates at Lucknow and made award on 14.9.2013 at Delhi. The appellants being dissatisfied with award made an application under Section 34 for setting aside award in the Court of District Judge, Gorakhpur.

10. It is in these facts and circumstances, District Judge, Gorakhpur has found that arbitration agreement was executed at Allahabad, arbitration proceedings continued at Lucknow and award was made at Delhi. Therefore, for the purpose of Section 34 no cause of action has arisen at Gorakhpur so as to confer territorial jurisdiction upon District Judge, Gorakhpur to proceed upon an application under Section 34 of Act 1996.

11. The word “Court” has been defined in Section 2(e) of Act 1996 and reads as u

















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