Calcutta High Court
Techma Engineering Enterprise ... vs Union Of India on 11 February, 2022
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
COMMERCIAL DIVISION
(Via Video Conference)
BEFORE:
The Hon'ble Mr. Justice Ravi Krishan Kapur
A.P No. 334 of 2021
TECHMA ENGINEERING ENTERPRISE PRIVATE LIMITED
-vs-
UNION OF INDIA
For the petitioner :Mr. Sarvapriya Mukherjee
Mr. Rudrojit Sarkar,
Mr. Asish Choudhury,
Mr. Rabindra Kumar Mitra,
Mrs. A. Basu,
For the respondent :Mr. Sanajit Kumar Ghosh,
Mr. D. Nag,
Mr. Raja Ghosh,
Heard on : 14.12.2021, 21.12.2021, 05.01.2022
Judgment on : 11.02.2022
Ravi Krishan Kapur, J.:
1. This is an application under Section 9 of the Arbitration and
Conciliation Act, 1996 ('the Act').
2. The disputes by and between the parties arise out of a tender
published by the respondent. Pursuant to the tender, the petitioner
submitted its bid. Thereafter, the respondent issued a purchase order
on the petitioner. On 4 August, 2021, the respondent issued a
termination notice and threatened the petitioner to recover the
security deposit from the dues payable to the petitioner by the
Railways or any other Zonal Railways. In this application, the
petitioner assails the notice dated 4 August, 2021.
3. A preliminary point has been raised by the respondent that this Court
has no jurisdiction to entertain this application.
4. It is submitted on behalf of the respondent that in terms of Clause 17
of Section G of the tender document, and also the letter of acceptance
dated 25 January 2021, there is an exclusive jurisdiction clause in the
agreement. For the sake of convenience, Clause 17.1 provides as
follows:-
17.1 Court Jurisdiction:
"For any disputes related to contract or inspection/action by
RDSO in pursuance of "General Guidelines for Vendor Approval",
the court jurisdiction would be the HQrs of the Zonal Railway,
where the contract agreement has been signed."
5. It is submitted by the respondent that, since the respondent has its
headquarters at Jaipur and the agreement was also signed at Jaipur,
the appropriate Court at Jaipur has exclusive jurisdiction to entertain
this application.
6. On behalf of the petitioner it is submitted that, the forum selection
clause contained in the tender does not exclude the jurisdiction of this
Court. The word 'alone', 'exclusively' and 'only' have not been used in
Clause 17.1. In the absence of such words, this Court has jurisdiction
to entertain this application. It is further submitted on behalf of the
petitioner that an integral part of the cause of action has arisen within
the jurisdiction of this Court. The petitioner has its registered office at
Kolkata. The petitioner had submitted its bid at Kolkata. The
petitioner had received the letter awarding the tender at Kolkata. All
communications by and between the parties have also been issued or
received by the petitioner from its office at Kolkata. Accordingly, a
substantial part of the cause of action has arisen within the
jurisdiction of this Court and this Court has jurisdiction to entertain
this petition. In support of its contentions, the petitioner has inter-alia
relied on the following judgments reported in (2007) 11 SCC 335
[Alchemist Ltd. vs. State Bank of Sikkim], 2003 (2) CHN 502 [Sukanta
Mitra vs. Union of India], (2019) SCC OnLine 860 [Apratim Mukherjee
vs. State Bank of India @ Para 24-26 and (1989) 2 SCC 163 [ABC
Laminart Pvt. Ltd. vs. A.P. Agencies @ Para 3-5, 22].
7. Upon this application being moved, the petitioner had been granted
an order of injunction dated 18th August, 2021.
8. The limited question which arises for adjudication is whether this
Court has jurisdiction to entertain this application or not. A Court
exercising jurisdiction under Section 9 of the Act must ensure that it
is the 'Court' defined under the Act. It is well settled that where there
are two or more competent Courts which can entertain a proceeding,
the parties to the proceeding may agree to vest exclusive jurisdiction
in one such Court to try the disputes which might arise between
them. Such clauses are often referred to as "forum selection clauses"
and are recognized in law, whereby parties agree to a choice of forum
in one of the several Courts which has jurisdiction to entertain such
disputes. Moreover, where an agreement contains a forum selection
clause conferring jurisdiction on a particular Court to decide the
matter, the effect of such a clause is to automatically oust the
jurisdiction of any other Court which may have jurisdiction in respect
of the subject matter of the arbitration proceedings.
9. From a reading of Clause 17 of the contract, it is evident that the
disputes relating to this contract are only to be filed in the Court
where the headquarters of the Zonal Railways is situated and where
the agreement has been signed. The headquarters of the respondent is
situated at Jaipur. The letter of acceptance was issued from Jaipur.
The purchase order was also issued at Jaipur. Clause 2 of the tender
provides that the use of a digital signature of the bidder on the tender
document shall be held as a confirmation and acceptance of all the
clauses mentioned in the E-tender document. There is nothing in the
agreement which is violative of Section 28 of the Contract Act 1872.
Accordingly, in view of the clear language contained in Clause 17 of
the agreement, I am of the view that the parties had agreed to confer
exclusive jurisdiction in case of any dispute in the Court having
jurisdiction where the headquarters of the respondent Railway is
situated and where the contract had been signed. In my view, this
would only be the Court at Jaipur.
10. I find no merit in the contention of the petitioner that in the absence
of words like 'alone', 'exclusively' and 'only' in the forum selection
clause the jurisdiction of this High Court is not excluded. This
submission is erroneous and misconceived. In M/s. Swastik Gases
Pvt. Ltd. vs. Indian Oil Corporation Ltd. (2013) 9 SCC 32, the Supreme
Court has held that 'the absence of words like 'alone', 'only', or
'exclusive' is neither decisive nor does it make any material difference
in deciding the jurisdiction of a Court. In fact, the very existence of a
jurisdiction clause in an agreement makes the intention of the parties
clear and it is not necessary to read such clauses like a statute.
Accordingly, the contention of the petitioner is rejected.
11. Significantly, the decision in Swastik Gases Pvt. Ltd. (Supra) has also
been followed in various other judgments including B.E. Simoese Von
Staraburgh Niedenthal and Anr. vs. Chhattisgarh Investment Ltd.
(2015) 12 SCC 225 where it has been held that if the agreement
between two parties is clear and unambiguous enough to place
jurisdiction in one court, then by doing so it deprives all other Courts
of jurisdiction in that case. I have no dispute with the general
propositions laid down in authorities relied on by the petitioner.
However, all the decisions are distinguishable and inapposite to the
facts of this case.
12. The alternative argument made on behalf of the petitioner that the
arbitration clause is vague, ambiguous and unworkable is also self
defeating. This contention if accepted goes to the root of
maintainability of this application and is rejected.
13. Accordingly, I am of the view that this Court has no jurisdiction to
entertain this application. Since this application is dismissed on the
ground of jurisdiction, there is no question of entering into the merits
of the controversy between the parties.
14. In view of the aforesaid, AP 334 of 2021 stands dismissed. The
interim order dated 18 August, 2021 stands vacated. However, there
shall be no order as to costs.
(Ravi Krishan Kapur, J.)
