Calcutta High Court
(India) Pvt. Ltd vs Sriniketan Santiniketan on 8 December, 2023
Author: Moushumi Bhattacharya
Bench: Moushumi Bhattacharya
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
(Commercial Division)
Present :
Hon'ble Justice Moushumi Bhattacharya
AP 826 of 2023
The Kuljian Corporation
(India) Pvt. Ltd.
vs
Sriniketan Santiniketan
Development Authority (SSDA)
For the petitioner : Mr. Nalin Kohli, Sr. Adv. (VC)
Mr. Gautam Mitra, Bar-at-Law
Mr. Rishad Medora, Adv.
Mr. Meghajit Mukherjee, Adv.
Ms. Vidisha Gupta, Adv.
For the respondent : Mr. Jaydip Kar, Sr. Adv.
Mr. Siddhartha Ghosh, Adv.
Last heard on : 04.12.2023
Delivered on : 08.12.2023
2
Moushumi Bhattacharya, J.
1. The petitioner seeks interim orders of protection by way of the present
application filed under section 9 of The Arbitration and Conciliation Act,
1996.
2. The petitioner‟s grievance - and urgency - arises out of an impugned
notice issued by the respondent, Sriniketan Santiniketan Development
Authority (SSDA) on 1.11.2023 requesting the petitioner to hand over 3225
sq. mt of land to the respondent within 30 days from the date of issue of the
letter. The impugned letter arises out of an agreement dated 5.7.2004
executed between the respondent and the petitioner for setting up of a
museum with art gallery within the „Gitanjali‟ Auditorium Complex, Bolpur.
The petitioner was to finish the construction in two phases, namely, the
Museum and Art Gallery as part of the construction of the first phase and
the Hospitality Unit as the second. Each of these phases was again divided
into two parts with the specific time frames stipulated in clause 2 of the
agreement. The agreement was to be for an initial term of 30 years.
3. Learned counsel appearing for the petitioner submits that time was
not of essence in the agreement and that parties did not communicate with
each other from 2004 -2023 with regard to the alleged failure on the part of
the petitioner to complete the second phase of project i.e., the Hospitality
Unit. Counsel submits that the petitioner is in the process of the steps for
issuing a notice of invocation of the arbitration clause in the agreement and
for commencement of arbitration under Clause 17 of the Agreement.
4. Learned counsel appearing for the respondent takes a preliminary
objection to the maintainability of the application on the absence of
territorial jurisdiction. Counsel urges that the impugned letter merely
requests the petitioner to hand over the land in question and is not a notice
of termination. According to counsel, the cause of action arose in Bolpur /
Santiniketan as the immovable property is situated at Bolpur. The
respondent has its office at Bolpur and the petitioner caused breach of the
Agreement in Bolpur. Counsel also relies on the principle of forum
conveniens to say that the Commercial Court at Asansol or the District
Courts in Bolpur would have jurisdiction to entertain the present
application.
5. Counsel appearing for the petitioner seeks to deal with the objection of
jurisdiction on the ground that the Agreement was signed within the
jurisdiction of this Court, the parties accepted the agreement and the
petitioner also received the impugned notice within jurisdiction. Counsel
submits that the impugned letter threatens dispossession and the petitioner
is hence entitled to approach the Court for interim protection.
6. The arguments made on behalf of the parties rest essentially on who
has the better cause of action for approaching or, alternatively, divesting the
Court of jurisdiction. An application under section 9 of The Arbitration and
Conciliation Act, 1996 may be filed before any court wherein a part of the
cause of action has arisen particularly where the arbitration agreement does
not designate either a "seat" or a "venue". Ref. BBR (India) Private Limited vs.
S.P. Singla Constructions Private Limited; (2023) 1 SCC 693.
7. In the present case, while the respondent resists the application on
the ground of the land/immovable property being situated at Bolpur as also
the respondent having its office at Bolpur and the petitioner causing breach
of the agreement in Bolpur, the petitioner raises equally compelling facts
with regard to cause of action. Admittedly, the agreement executed between
the parties containing the arbitration clause was signed at the office of the
petitioner within the jurisdiction of this court, the petitioner accepted the
respondent‟s offer with regard to the construction of the Museum /
agreement in Kolkata and the petitioner also received the impugned notice
(under challenge in this proceeding) at its office at Kolkata within the
jurisdiction of this court.
8. In A.B.C. Laminart Pvt. Ltd. vs. A.P. Agencies, Salem; (1989) 2 SCC
163, the Supreme Court held that the situs of making of the contract would
form part of the cause of action and that, acceptance of an offer would also
confer jurisdiction on the Court to entertain the suit. The Supreme Court in
A.B.C Laminart also held that a suit would lie in the Court within whose
jurisdiction repudiation of the contract is received.
9. The classical definition of the expression "cause of action" can be
found in Cooke V. Gill; (1873) LR 8 CP 107 as:
"cause of action means every fact which it would be necessary for
the plaintiff to prove, if traversed, in order to support his right to
the judgment of the court"
The logic being that the plaintiff can only approach a court with a cause
pursuant to the defendant‟s action in repudiating a right of the plaintiff. The
cause of action hence provides the foundation of the plaintiff‟s claim to relief.
10. Both the parties have thus presented compelling arguments on
jurisdiction. The issue, however, is not about which side has the better
cause to approach the Court but whether the cause of action which has
arisen within the jurisdiction of this court can be discounted either for being
insignificant or for the reason that no cause of action has arisen at all.
11. Considering the material placed by the parties, this court is of the
view that the disqualification as to jurisdiction would not fall under any of
the aforesaid heads.
12. The competence of a court to entertain an application under section 9
of the 1996 Act can only be questioned where the opponent is able to show
that the cause of action pleaded is either insufficient or slender in the sense
of the facts on which the jurisdiction rests not being an integral part of the
cause of action. This was the situation before the Supreme Court in State of
Goa vs. Summit Online Trade Solutions Private Limited; (2023)7 SCC 791
where the Court was of the view that the mere fact of the petitioner company
having its office in Gangtok, Sikkim would not, by itself, form an integral
part of the cause of action authorising the petitioning company to move the
Sikkim High Court when the tax was levied by the Government of Goa in
respect of the business of the petitioning company within the territory of
Goa. Similarly, in Ravi Ranjan Developers Pvt. Ltd. vs. Aditya Kumar
Chatterjee; 2022 SCC OnLine SC 568 the Supreme Court found that the
parties did not agree to submit to the jurisdiction of the Calcutta High Court
at any point of time in respect of the disputes. The arbitration clause in Ravi
Ranjan, in any event, designated a seat/venue.
13. Therefore, in the facts of the present case, namely, the execution of
the agreement, acceptance of the terms of the agreement and receipt of the
impugned letter, all of which took place within jurisdiction of this court,
must be held to be integral to the cause of action. These are robust facts
and are indefeasible to the petitioner‟s entitlement to interim protection. In
the absence of a designation as to seat or venue in the arbitration
agreement, the petitioner would be entitled to move any court vested with
jurisdiction and the Calcutta High Court is one of such courts. The
respondent has not shown any agreement between the parties divesting the
Calcutta High Court of jurisdiction.
14. The argument that Calcutta High Court is not the "forum conveniens"
is also not acceptable in view of the above reasons.
15. The other objection raised on behalf of the respondent that the
impugned letter merely requests handing over of the land without any threat
of termination is not a credible defence to the action. The impugned letter
dispossesses the petitioner of the land which forms the crux of the
arbitration agreement. It is also undisputed that there was no
correspondence between the parties in the intervening period of 19 years,
that is, from 2004-2023. The action of the respondent in seeking to re-
possess the land is therefore abrupt, to say the least. The principles of
estoppel and acquiescence may also be applicable to the facts of the case.
16. The reach of a Court exercising powers under section 9 of The
Arbitration and Conciliation Act, 1996 has been reinforced in several
decisions : Essar House Private Limited vs. Arcellor Mittal Nippon Steel India
Limited; 2022 SCC OnLine SC 1219 being one of them. There is little doubt
that the Court can intervene to preserve the subject matter in the
arbitration, pre-initiation. The petitioner‟s stated position of initiating steps
for arbitration in terms of the arbitration agreement further persuades the
court to grant the relief prayed for.
17. There shall accordingly be an order of stay of the impugned letter
dated 1st November, 2023. The interim order shall be in place till 15th
January, 2024 or until constitution of the arbitral tribunal, whichever is
earlier.
18. Since parties have been heard at length on all points, nothing further
remains of the application. AP 826 of 2023 is accordingly disposed of in
terms of the above.
Urgent Photostat certified copies of this order, if applied for, be
supplied to the parties upon fulfillment of requisite formalities.
(Moushumi Bhattacharya, J.)
