Calcutta High Court
H R Construction Private Limited vs Steel Authority Of India on 2 July, 2024
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
OCD-20
ORDER SHEET
AP-COM/481/2024
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
(Commercial Division)
H R CONSTRUCTION PRIVATE LIMITED
VS
STEEL AUTHORITY OF INDIA
BEFORE:
The Hon'ble JUSTICE SABYASACHI BHATTACHARYYA
Date : 2nd July, 2024.
Appearance:
Mr. Sabyasachi Chowdhury, Adv.
Mr. Debraj Sahu, Adv.
Ms. Sweta Mukherjee, Adv.
..for the petitioner
Mr. Rudraman Bhattacharya, Adv.
Ms. Supriya Dubey, Adv.
Mr. Akash Munshi, Adv.
...for the respondent
The Court: The present application under Section 29-A of the
Arbitration and Conciliation Act, 1996 has been preferred for extension of
the mandate of the learned Arbitrator. It is submitted by learned counsel for
the petitioner that the hearing before the Arbitrator has been concluded and
only the award remains to be passed.
Learned counsel for the respondent submits that, in principle, he does
not have any objection to the mandate of the learned Arbitrator being
extended. However, the respondent apprehends that by operation of Section
42 of the 1996 Act, in the event the present application is entertained and
decided by this Court, the parties would be restricted to this Court in all
future court applications arising in connection with or out of the said
arbitral proceedings/award.
Learned counsel for the respondent places reliance on Clause 16 of
the agreement in question which, according to him, fixes the forum as the
District Court located in the district of the Works/Plants/Unit/Office of the
company which shall have exclusive jurisdiction upon any matter arising
out of the contract.
It is argued that since the plant of the Steel Authority of India is
situated in Keonjhar, the District Court having territorial jurisdiction over
the said area should be the appropriate Court which should entertain the
present application under Section 29-A.
In order to substantiate his contention, learned counsel cites Chief
Engineer (NH) PWD (Roads) vs. M/s. BSC & C and C JV for the proposition
that the principal court having original jurisdiction is the appropriate court
to take up applications under Section 29-A.
Learned counsel next cites the judgment of a co-ordinate Bench of
this Court in the matter of Commercial Division Bowlopedia Restaurants
India Limited vs. Devyani International Limited reported at 2021 SCC OnLine
Cal 103 for the proposition that when there is a forum selection clause
conferring exclusive jurisdiction to a court which is different to the court
having jurisdiction over the seat of arbitration, in a domestic arbitration, the
court which has jurisdiction as per the forum selection clause overrides the
other.
Learned counsel accordingly submits that the matter may be either
relegated to the appropriate District Court having territorial jurisdiction in
Keonjhar or a rider may be added by this Court that the order passed by
this Court shall not be construed to be passed in the first application
contemplated in Section 42 of the 1996 Act.
Learned counsel appearing for the petitioner places reliance on the
agreement in question itself and argues that both the agreement and the
letter of acceptance dated May 6, 2013 between the parties stipulate that
the agreement was entered into within the respondent's then office at 10,
Camac Street, Kolkata-700017 although the same has subsequently shifted.
Thus, it is argued that it is this Court which is the principal civil court
of original jurisdiction having power to adjudicate applications arising under
the 1996 Act in respect of the present cause of action.
Learned counsel places particular reliance on the latter part of the
expression "Works/Plant/Unit/Office" used in Clause 16 and argues that
both the unit and the office of the respondent are situated within the
territorial jurisdiction of this Court.
Learned counsel for the petitioner further cites BBR (India) Private
Limited vs. S.P. Singla Constructions Private Limited reported at (2023) 1 SCC
693 where it was held that the legislature has given jurisdiction to two
courts: the court which should have jurisdiction where the cause of action is
located and the court where the arbitration takes place. This is necessary as
on some occasions the agreement may provide the "seat of arbitration" that
would be neutral to both the parties. The courts where the arbitration takes
place would be required to exercise supervisory control over the arbitral
process. The "seat of arbitration" need not be the place where any cause of
action has arisen, in the sense that the "seat of arbitration" may be different
from the place where obligations are/had to be performed under the
contract.
As such, it is argued that it is this Court which has jurisdiction to
take up the matter. Learned counsel also relies on the pleadings in
paragraph 22 of the present application to substantiate his argument.
It transpires from the materials annexed to the application and the
pleadings thereof that at least a part of the cause of action for the present lis
arose at 10, Camac Street, Kolkata-700017, which is within the territorial
jurisdiction of this Court, from where the letter of acceptance was issued.
That apart, it transpires ex facie from the agreement in question that the
unit concerned is also located within the territorial jurisdiction of this Court.
A careful scrutiny of Clause 16 also indicates that the court referred
to is the "District Court" located in the district, inter alia, where the unit or
office of the company is situated and is not confined to where the works or
plant finds place.
Hence, it is undoubtedly this Court which is the principal civil court
having original jurisdiction which has the territorial authority to take up the
present application. That apart, all the sittings of the arbitral tribunal,
except for two, have been held in Kolkata and the parties have been
consistently appearing in the proceeding in Kolkata. Thus, I do not find any
particular reason as to why there should be a deviation from such stand of
the parties at this juncture.
In any event, as rightly argued by the petitioner, the co-ordinate
Bench decision in Devyani International Limited (Supra) does not apply to the
present case insofar as there is no clear-cut distinction between the court
having jurisdiction over the seat of arbitration and over the cause of action,
since at least a part of the cause of action arose, even on the face of the
pleadings, within the territorial jurisdiction of this Court whereas Clause 16
of the agreement specifies the location of the unit or office also to be the seat
of arbitration.
In such view of the matter, even going by the ratio laid down by the
Supreme Court in Chief Engineer (NH) PWD (Roads) (Supra), it is this Court
which has jurisdiction to take up the matter.
There being otherwise no dispute to the prayer for extension of
mandate, AP-COM/481/2024 is allowed, thereby extending the mandate of
the learned Arbitrator to adjudicate the dispute between the parties till
September 30, 2024.
(SABYASACHI BHATTACHARYYA, J.)
R.Bhar/bp
