Bombay High Court

Anup Shyam Karnani vs Shammi Kanhiyalal Mamtani And Ors on 12 September, 2025

2025:BHC-OS:15530

                                                                          904.CARAP.300.2025.doc


                              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                  ORDINARY ORIGINAL CIVIL JURISDICTION
                                       IN ITS COMMERCIAL DIVISION

                     COMMERCIAL ARBITRATION APPLICATION NO.300 OF 2025
                                          WITH
                      COMMERCIAL ARBITRATION PETITION NO.226 OF 2025

               Anup Shyam Karnani                                   ....Applicant/Petitioner
                          Versus
               Shammi Kanhiyalal Mamtani and Ors.                   ....Respondents



                     Mr. Rishabh Agarwal a/w. Mr. Prateek Katewa, Mr. Shailesh
                     Korpe & Ms Nikhita Mathuria i/b. Cygnus Legal, Advocates for
                     Applicant/Petitioner.

                     Mr. Yatin Malvankar              i/b. Kapil Hirani, Advocate for
                     Respondents.


                                                   CORAM: SOMASEKHAR SUNDARESAN, J.

DATE : SEPTEMBER 12, 2025

ORAL JUDGEMENT:

1. Commercial Arbitration Application No.300 Of 2025 is an

Application under Section 11 of the Arbitration and Conciliation Act,

1996 ("the Act") seeking reference of disputes and differences between

the parties, in connection with the governance of a Limited Liability

Partnership ("LLP") of which the other parties are Partners, to

arbitration.

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2. The Limited Liability Partnership Agreement is dated April 26,

2016 and was executed in Mumbai. However, shortly thereafter, the

registered office of the LLP shifted to Nagpur. All the assets of the LLP,

which form subject matter of what would need to be dealt with while

looking at the governance of the LLP or for rendering accounts of the

LLP, are located in Nagpur. Therefore, Learned Counsel for the

Respondents has instructions to raise a territorial objection, stating

that this application ought to have been filed before the Nagpur Bench

of this Court and not before the Principal Bench in Mumbai.

3. Having heard Learned Counsel for the parties at length, it is

apparent that the registered office of the LLP is in Nagpur, and disputes

over its governance would have a direct nexus with the territorial

jurisdiction of the Nagpur Bench. So also, the cause of action, which is

essentially that bundle of facts which need to be proved or disproved in

order to grant or deny relief, would entirely be located in Nagpur. Even

at the time of invocation, namely, April 12, 2024, the aforesaid fact

pattern is writ large on the face of the record i.e. that all factors relate to

the territory in Nagpur.

4. In these circumstances, it is apparent that although the seat and

venue in the arbitration agreement is silent, the bundle of facts, the

proving or disproving of which would lead to grant or denial of relief is

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entirely based in Nagpur, and therefore, it would be the Nagpur Bench

that would have territorial jurisdiction in the matter.

5. Learned Counsel for the Applicant submits that one of the

Respondents, namely, Respondent No.3 who is a Partner in the firm, is

based in Mumbai and so is the Petitioner, and therefore, the Partners

are evenly divided between Mumbai and Nagpur. He would also

submit that the LLP agreement having been executed in Mumbai

cannot be ignored. Likewise, since the invocation notice is issued from

Mumbai, he would submit that this Court would have jurisdiction. He

would seek to rely on a judgment by a Learned Single Judge of the

Delhi High Court in Prashant Kumar Parashar1 which invokes the

ruling in A.B.C.2 to urge this Court to proceed to appoint the Arbitral

Tribunal on the premise that the analysis in Prashant Kumar Parashar

would commend itself for acceptance.

6. In that case, the agreement was silent about the seat and venue

and the matter was brought before the Delhi High Court on the premise

that one of the parties lived in Delhi. The Learned Single Judge has

examined the matter and taken a view that ultimately matters of merits

would have to be dealt with by the arbitrator by taking aid of Section 16

of the Act, but has ruled that Section 11 application in the case of

1 Prashant Kumar Parashar Vs. Sumit Singla & Anr. - 2025 SCC Online Del 1745 2 A.B.C. Laminart (P) Ltd. Vs. A.P. Agencies - (1989) 2 SCC 163.

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absence of consent about the seat and venue of arbitration must be

guided by the principles obtaining from Section 16 to 20 of the Code of

Civil Procedure, 1908 ("CPC"). The Learned Single Judge ruled that

two factors are relevant, namely, where the Respondent actually or

voluntarily resides or carries on the business and where the cause of

action only or in part arises.

7. In the facts of the instant case, the cause of action only arises in

Nagpur, so also Respondent No.3 is volunteering that the most

appropriate and convenient forum being Nagpur, he has instructions to

proceed to arbitration in Nagpur. That apart, under Section 120 of the

CPC it would be the Letters Patent of the Bombay High Court that

would apply and not the provisions of CPC alluded to by the Delhi High

Court. Be that as it may, the observation of the Learned Single Judge in

Paragraph 12 is itself a pointer and is extracted below :-

"12. A catena of Supreme Court decisions have clarified that while determining territorial jurisdiction of a Court, what is decisive is the accrual of cause of action. In other words, cause of action is a bundle of facts which create rights and obligations and gives rise to the right to sue to a party. Moreover, cause of action is made up of material and integral facts. This implies that not every insignificant or inconsequential fact becomes a part of cause of action. In fact, for a fact to be considered material enough to lead to the conclusion as to accrual of cause of action, it must be proved that the said fact has a nexus with lis between the parties and that it is integral to the dispute at hand. Reference may be

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made to the decision of the Apex Court in Alchemist Ltd. v. State Bank of Sikkim, (2007) 11 SCC 335. Relevant part of it is reproduced herein:

"25. The learned counsel for the respondents referred to several decisions of this Court and submitted that whether a particular fact constitutes a cause of action or not must be decided on the basis of the facts and circumstances of each case. In our judgment, the test is whether a particular fact(s) is (are) of substance and can be said to be material, integral or essential part of the lis between the parties. If it is, it forms a part of cause of action. If it is not, it does not form a part of cause of action. It is also well settled that in determining the question, the substance of the matter and not the form thereof has to be considered."

(Emphasis supplied)

8. Even a plain reading of foregoing would show that every

insignificant or inconsequential fact cannot be part of the bundle of

facts, the proving of which would lead to an outcome in the

proceedings. Since all the properties are situated in Nagpur and the

dispute is essentially about governance of the LLP (Respondent No.4)

which has its registered office in Nagpur, it is only appropriate to hold

that the cause of action is entirely located at Nagpur.

9. In these circumstances, it would be inappropriate for this Court

to exercise jurisdiction when the designated jurisdiction would be the

Nagpur Bench of this Court.

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