[Cites 17, Cited by 0]
Calcutta High Court
M/S Urgo Capital Limited vs Dhruv Cables And Conductors And Ors on 11 March, 2026
IN THE HIGH COURT AT CALCUTTA
2026:CHC-OS:79
COMMERCIAL DIVISION
ORIGINAL SIDE
RESERVED ON: 24.02.2026
DELIVERED ON: 11.03.2026
PRESENT:
THE HON'BLE MR. JUSTICE GAURANG KANTH
AP-COM 838 OF 2024
M/S URGO CAPITAL LIMITED
VS
DHRUV CABLES AND CONDUCTORS AND ORS.
Appearance: -
Mr. Swatarup Banerjee, Adv.
Mr. Rohit Banerjee, Adv.
Mr. K.K. Pandey, Adv.
Ms. Sonia Nandy, Adv.
Ms. Mallika Bothra, Adv.
.............. for the Petitioner
Mr. Aniruddha Bhattacharya, Adv.
Mr. Arnab Roy, Adv.
.............. for the Respondent
JUDGMENT
Gaurang Kanth, J. :-
1. The present Petition has been filed under Section 29A of the Arbitration
and Conciliation Act, 1996, seeking extension of the mandate of the
arbitral tribunal for completion of the arbitral proceedings and for
publication of the arbitral award.
2. The brief facts giving rise to the present Petition are set out hereunder:
3. The Petitioner extended a credit limit of Rs. 4,00,00,000/- to the
Respondent vide facility agreement dated 30.03.2019. During Covid period,
there was default in repayment and hence the parties renegotiated and
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entered in to a supplementary agreement dated 30.06.2021. However, the
Respondents defaulted in repayment as per the terms of the said
supplementary agreement. Disputes having arisen between the parties,
the Petitioner, by letter dated 22.03.2022, invoked the arbitration clause
as contained in the Facility Agreement dated 30.03.2019 and
supplementary agreement dated 30.06.2021 executed between the parties.
Upon failure of the Respondents to appoint an arbitrator in terms of the
said clause, the Petitioner approached this Court by filing an application
under Section 11 of the Arbitration and Conciliation Act, 1996, being A.P.
No. 341 of 2022. By order dated 29.07.2022, this Court appointed Mr.
Saptanshu Basu, Advocate as the learned Sole Arbitrator to adjudicate the
disputes between the parties.
4. The Sole arbitrator accepted the said appointment and proceeded to hold
arbitral sittings in the subject matter. Pleadings were completed on
10.04.2023. With the consent of the parties, the mandate of the learned
Arbitrator was extended for a further period of six months, till 20.09.2024.
5. During the course of the proceedings, the learned Arbitrator disposed of
applications filed under Section 16 and 17 of the Arbitration and
Conciliation Act, 1996, and also adjudicated an application under Order 1
Rule 10 of the Code of Civil Procedure seeking impleadment of additional
parties. Upon extensive hearings, the said application was disposed of. In
the meanwhile the Respondents filed a review application before this Court
for reviewing the order dated 29.07.2022, vide which the sole arbitrator
was appointed and the same is still pending. The matter thereafter
proceeded to trial. The examination of CW-1 has been concluded, however,
at that stage, the Petitioner filed an application for additional evidence.
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Argument on the said application is at progress and at this stage, the
mandate of the Tribunal expired.
6. The mandate of the learned Arbitrator expired on 20.09.2024. In the
aforesaid circumstances, the Petitioner seeks extension of the mandate for
a further period of six months to enable completion of the arbitral
proceedings and publication of the arbitral award.
7. At the outset, learned Counsel for the Respondent raised a preliminary
objection regarding the maintainability of the present Petition on the
ground of lack of territorial jurisdiction. In view thereof, this Court
proposes to decide the issue of maintainability at the threshold.
Submission on behalf of the Respondent
8. Learned Counsel appearing for the Respondent submits that this Court
does not qualify as the "Court" within the meaning of Section 2(1)(e) of the
Arbitration and Conciliation Act, 1996. It is contended that no part of the
cause of action has arisen within the territorial jurisdiction of this Court.
According to the Respondents, the Respondent are residing at New Delhi;
the agreement between the parties was executed at New Delhi; and the
registered/head office of the Petitioner is situated at Mumbai.
9. It is further submitted that, even as per the supplementary affidavit filed
by the Petitioner, certain negotiations allegedly took place at Kolkata.
However, mere negotiations at Kolkata, in the absence of any substantive
or integral part of the cause of action arising within the jurisdiction of this
Court, would not confer territorial jurisdiction upon this Court.
10. In support of the aforesaid submissions, learned Counsel for the
Respondent has placed reliance upon Harji Engineering works Pvt. Ltd.
Vs BHEL reported as 2023 SCC OnLine Cal 2734, Golden Edge
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Engineering Pvt. Ltd. Vs BHEL reported as 2020 SCC OnLine Cal 996,
Ravi Ranjan Developers Pvt. Ltd. Vs Aditya Kumar Chatterjee reported
as 2022 SCC Online SC 568, Alchamist Ltd. Vs State Bank of Sikkim
reported as 2007 (11) SCC 335, order dated 21.02.2017 in AP 966/2016
titled as Sunil Hi Tech Engineers Ltd. Vs BHEL, Order dated 29.01.2026
in SLP 10944-10945/2025 titled as Jagdeep Chowgule Vs Sheela
Chowgule.
11. In view of the above, the Respondents pray for dismissal of the present
Petition on the ground that this Court lacks territorial jurisdiction to
entertain and adjudicate the same.
Submission on behalf of the Petitioner
12. Learned Counsel for the Petitioner draws the attention of this Court to
Clauses 23 of the Facility Agreement dated 02.05.2019 executed between
the parties. Under the Clause, the parties have expressly agreed that all
disputes and differences arising out of or in connection with the said
agreement shall be referred to arbitration, and that the place of arbitration
shall be at Kolkata. Further, under the said Clause, the parties have
mutually agreed that the competent courts at Kolkata shall have exclusive
jurisdiction to adjudicate disputes arising between them.
13. In view of the aforesaid clauses, it is submitted that the courts at Kolkata
have exclusive jurisdiction over the subject matter of the disputes and,
therefore, this Court qualifies as the "Court" within the meaning of Section
2(1)(e) of the Arbitration and Conciliation Act, 1996.
14. It is further submitted that, for appointment of the learned Arbitrator, the
Petitioner had approached this Court by filing A.P.(Com) 341 of 2022. By
order dated 29.07.2022, this Court appointed a learned Sole Arbitrator to
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adjudicate the disputes between the parties. The Respondent participated
in the arbitral proceedings pursuant to the said order and did not raise
any objection with regard to the territorial jurisdiction of this Court at the
relevant stage.
15. Learned Counsel for the Petitioner further submits that negotiations
between the parties took place at Kolkata, within the territorial jurisdiction
of this Court. The Respondent executed the agreement from Delhi, whereas
the authorised signatory of the Petitioner executed the same from Kolkata.
According to the Petitioner, the concluded contract thus came into
existence within the jurisdiction of this Court. Consequently, a part of the
cause of action has arisen within the territorial jurisdiction of this Court.
16. It is also submitted that the claim pending before the learned Arbitral
Tribunal is more than 3 Crore. In view of the Notification dated
10.10.2013, this Court, being the Principal Civil Court of Ordinary Original
Jurisdiction, has exclusive pecuniary jurisdiction to entertain and
adjudicate disputes where the claim exceeds Rs. 1 crore. Additionally,
under the provisions of the Commercial Courts Act, 2015, this Court is
vested with exclusive pecuniary jurisdiction to deal with the present
matter.
17. In order to substantiate the above arguments, the learned counsel for the
petitioner relies upon Bharat Aluminium Company Vs Kaiser
Aluminium technical Services reported as 2012 (9) SCC 552, Srei
Equipment Finance Ltd Vs Seirra Infraventure Pvt. Ltd. reported as
2020 SCC OnLine Cal 1790, State of West Bengal Vs Associated
Contractors reported as 2015 (1) SCC 32, BGS SGS Soma JV v. NHPC
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Ltd. reported in (2020) 4 SCC 234 and Indus Mobile Distribution Pvt.
Ltd. v. Datawind Innovations Pvt. Ltd. reported in (2017) 7 SCC 678.
18. In view of the above submissions, learned Counsel for the Petitioner
contends that this Court is the "Court" within the meaning of Section
2(1)(e) of the Arbitration and Conciliation Act, 1996, and consequently has
exclusive jurisdiction to entertain the present Petition and to extend the
mandate of the learned Arbitral Tribunal under Section 29A of the said
Act.
Legal Analysis on maintainability qua jurisdiction
19. This Court has given its anxious consideration to the rival submissions
advanced on behalf of the parties. The principal issue that arises for
determination is whether this Court possesses territorial jurisdiction to
entertain the present Petition under Section 29A of the Arbitration and
Conciliation Act, 1996.
20. The question of territorial jurisdiction in arbitral matters is no longer res
integra. In BGS SGS Soma JV (supra), the Hon'ble Supreme Court
authoritatively held that once a seat of arbitration is designated, the courts
of the seat alone would have exclusive jurisdiction over the arbitral
proceedings. The Supreme Court clarified that the "seat" constitutes the
juridical centre of arbitration and determines the court exercising
supervisory jurisdiction in respect of applications under Sections 9, 11, 34
and 37 of the Act. The Court further held that even if part of the cause of
action arises elsewhere, such fact would not dilute the exclusive
jurisdiction of the courts at the seat.
21. The aforesaid principle had earlier been enunciated in Indus Mobile
(supra), wherein the Hon'ble Supreme Court held that the designation of a
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seat of arbitration operates akin to an exclusive jurisdiction clause. It was
categorically observed that once the seat is determined, the courts at the
seat would alone have jurisdiction, even if no part of the cause of action
has arisen within such territorial limits.
22. Applying the aforesaid settled legal position to the facts of the present case,
Clauses 23 of the Facility Agreement dated 30.03.2019 and supplementary
agreement dated 30.06.2021 assume significance. The said clause
expressly stipulates that the seat of arbitration shall be Kolkata. Further
the said clause provides that the competent courts at Kolkata shall have
exclusive jurisdiction to adjudicate disputes arising between the parties.
Thus, not only have the parties designated Kolkata as the seat of
arbitration, but they have also incorporated an exclusive jurisdiction
clause in favour of the courts at Kolkata.
23. In view of the law laid down in BGS SGS Soma JV (supra) and Indus
Mobile (supra), the designation of Kolkata as the seat of arbitration by
itself confers exclusive supervisory jurisdiction upon the courts at Kolkata.
The additional existence of an exclusive jurisdiction clause further fortifies
this conclusion.
24. The Respondents' reliance on judgments in Harji Engineering Works Pvt.
Ltd. (supra), Golden Edge Engineering Pvt. Ltd. (Supra), Ravi Ranjan
Developers Pvt. Ltd. (supra), and Alchemist Ltd. (supra) does not
advance its case. Those decisions turned on their own peculiar facts where
either no seat was designated, or the issue pertained to cause-of-action
jurisdiction in the absence of a clear and exclusive seat clause, or the
courts were examining jurisdiction under different factual matrices. None
of the said decisions dilute or depart from the ratio laid down in BGS SGS
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Soma JV (supra) and Indus Mobile (Supra) regarding the primacy of the
juridical seat. In fact, the later judgments of the Hon'ble Supreme Court
have crystallized the principle that the seat is determinative of exclusive
jurisdiction.
25. Moreover, in the present case, the Petitioner had earlier approached this
Court under Section 11 of the Act for appointment of an arbitrator. By
order dated 29.07.2022, this Court appointed the learned Sole Arbitrator.
The Respondents participated in the proceedings pursuant thereto and did
not raise any objection as to territorial jurisdiction at that stage. While
jurisdiction cannot be conferred by consent, the Respondents' conduct
reinforces the conclusion that the parties understood and acted upon the
contractual stipulation designating Kolkata as the seat of arbitration.
26. The contention regarding absence of cause of action within the territorial
limits of this Court is therefore of no consequence once the seat has been
unequivocally fixed at Kolkata. The juridical seat, and not the situs of
negotiations or execution of the agreement, is the determinative factor for
supervisory jurisdiction under Part I of the Act.
27. Insofar as pecuniary jurisdiction is concerned, the claim pending before
the learned Arbitral Tribunal is more than 3 crore, which exceeds the
statutory threshold of Rs. 1 crore. In view of the Notification dated
10.10.2013 issued by this Court, read with the provisions of the
Commercial Courts Act, 2015, this Court, being the Principal Civil Court of
Ordinary Original Jurisdiction exercising commercial jurisdiction, is vested
with the pecuniary jurisdiction to entertain and adjudicate the present
matter.
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28. Having regard to (i) the designation of Kolkata as the seat of arbitration; (ii)
the existence of an exclusive jurisdiction clause in favour of courts at
Kolkata; (iii) the authoritative pronouncements of the Hon'ble Supreme
Court in BGS SGS Soma JV (supra) and Indus Mobile (supra), and (iv) the
pecuniary value of the dispute attracting the commercial jurisdiction of
this Court, this Court has no hesitation in holding that it is the "Court"
within the meaning of Section 2(1)(e) of the Arbitration and Conciliation
Act, 1996.
29. Consequently, this Court is vested with exclusive jurisdiction to entertain
the present Petition and to consider the prayer for extension of the
mandate of the learned Arbitral Tribunal under Section 29A of the Act. The
preliminary objection raised by the Respondent as to territorial jurisdiction
is, accordingly, rejected.
Decision on Section 29A
30. This court vide order dated 29.07.2022 appointed the Sole Arbitrator to
adjudicate the dispute between the parties. The Pleadings were completed
on 10.04.2023. With the consent of the parties, the the mandate of the
Arbitral Tribunal was extended by 6 months till 20.09.2024. The matter is
presently at the stage of evidence and the cross examination of the
Claimant's witness was going on.
31. Upon consideration of the record, this Court is satisfied that there has been
no undue or unwarranted delay attributable to the learned Sole Arbitrator
in conducting the proceedings. Having regard to the advance stage of the
arbitration proceedings and in the interest of justice, the mandate of the
Sole Arbitrator is extended for a further period of 6 months from today.
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32. The learned Sole Arbitrator is requested to make all reasonable endeavours
to ensure that the arbitral proceedings are concluded and the award is
published within the extended period.
33. With the above observations, the present petition stands disposed of.
(Gaurang Kanth, J.)
SAKIL AMED (P.A)
