Sunder Builders vs State Of Rajasthan & Anr.
1999 Latest Caselaw 147 Del

ORDER

S.K. Mahajan, J.

1. This petition under Section 20 of the Arbitration Act was filed by the petitioner for filing of Agreement No. 30 of 1987-88 relating to the work of providing Kota Stone Flooring in Rajasthan Pavilion at Pragati Maidan, New Delhi and for reference of disputes which had arisen between the parties under the said contract to an Arbitrator. The petitioner was awarded the work of providing Kota Stone flooring in Rajasthan Pavallion at Pragati Maidan, New Delhi vide the aforesaid agreement. Certain disputes having arisen between the parties, the petitioner on June 20, 1998 requested the Chief Engineer (Building) P.W.D, Jaipur to appoint an Arbitrator for adjudication of the said disputes. The following claims were sought to be referred to the Arbitrator.

The contractor claims a sum of Rs.1,50,232.49 on account of first and final bill for the work actually executed.

The contractor claim a sum of Rs. 2,300/- on account of earnest money.

The contractor claims a sum of Rs. 2,340/- on account of cost of Travelling Expenses. 15 visits at the rate of Rs. 156/- per visit.

The contractor claims a sum of Rs. 20,000/- on account of financial loss due to the late payment.

The contractor claims a sum of Rs. 5,000/- on account of Misc.expenses like postage stationary etc.

The contractor claims a sum of Rs.10,000/- on account of compensation for ndrances.

The contractor claims a sum of Rs.15,000/- on account of legal expenses.

The contractor claims a sum of Rs. 5 000/- on account of cost of arbitration.

The contractor claims interest pendent lit @ 18% p.a. from the date of notice i.e. 20.6.1988 till the date of payment.

The respondents having failed to appoint an Arbitrator this petition was filed. While invoking the jurisdiction of this Court the petitioner in paragraph 8 of the petition stated that the office of the respondent was situated at Rajasthan House, New Delhi, the contract was executed at New Delhi, the parties agreed in clause 51 that the territorial jurisdiction shall be at the place of the agreement hence this Court had the jurisdiction to entertain the petition.

2. In the written statement the respondents took a preliminary objection that this Court had no jurisdiction to try and entertain the petition inasmuch as the agreement was executed at Jaipur by the petitioner on the one hand and by the Executive Engineer, P.W.D Construction Division II, Jaipur on the other. In terms of clause 51 of the agreement the Court which can have the jurisdiction to decide the disputes between the parties is the court within whose jurisdiction the agreement had been executed and no other Court. Clause 51 of the agreement reads as under:

"Clause 51. In the event of any dispute arising between the parties hereto in respect of any of the matters comprised in this agreement, the same shall be settled by a competent court having jurisdiction over the place where agreement is executed and by no other court."

3. I have heard arguments on behalf of the learned counsel for the parties on the question as to whether this Court has territorial jurisdiction to decide the dispute.

4. Mr. Mittal has referred to the letter dated November 17,1987 written by the Executive Engineer II, P.W.D., Construction Division-II, Jaipur whereby the petitioner was informed that his tender had been accepted by the Superintending Engineer, P.W.D. Circle-V, Jaipur on behalf of the Governor of the State of Rajasthan. The petitioner was, therefore, to start work under instructions of the Assistant Engineer, P.W.D., Construction b-Division-VI, New Delhi. The letter of acceptance together with the tender submitted by the petitioner embodying all the conditions therein constituted the contract agreement between the parties. It is not denied that subsequent to the issue of this letter of acceptance of November 17,1987 a formal agreement was also executed between the parties. It is also not disputed that the formal agreement between the parties was executed at Jaipur. The contention, however, of Mr. Mittal is that contract will not be concluded unless the acceptance reaches the proposer and as the acceptance has reached the proposer at Delhi, Delhi Courts will have the jurisdiction to try the suit. For this he places reliance upon Sections 4 and 5 of the Contract Act. Under Section 4 of the Contract Act the communication of an acceptance is complete as against the proposer when it is put in course of communication to him so as to be out of the power of the acceptor and as against the acceptor when it comes to the knowledge of the proposer. The proposal of the petitioner, therefore, when accepted by the respondent was complete as against the petitioner on November 17, 1987 in Jaipur when the letter dated November 17, 1987 was put in the course of communication to the petitioner. The contention of Mr. Mittal, therefore, that acceptance as against the petitioner was complete only when the letter dated November 17, 1987 was received by the petitioner is not correct. Moreover, not only that the acceptance was complete as against the petitioner in Jaipur when the letter dated November 17, 1987 was communicated to the petitioner but even the formal agreement between the parties has admittedly been executed in Jaipur. Under Clause 51 of the Agreement only that Court will have the jurisdiction to try the suit which has the jurisdiction over the place where the agreement was executed and by no other court. As the agreement was executed at Jaipur, in my opinion, only Jaipur Courts will have the jurisdiction to try the suit. The petitioner has filed the petition under Section 20 of the Arbitration Act on the basis of clause 23 of the Agreement which was executed in Jaipur and under no other provision. The petitioner is, therefore, bound by the said agreement and as under Clause 51 only the courts at Jaipur have the jurisdiction to try the suit, in my opinion, this Court will not have the territorial jurisdiction to try the matter.

5. The judgment of this Court reported as Sushil Ansal Vs. Union of India & Others, AIR 1980 Delhi 43 relied upon by Mr. Mittal will have no applicability to the present case inasmuch as in the present case the parties had specifically by an agreement amongst themselves agreed to give exclusive jurisdiction to the Courts at Jaipur.

6. That being the position, this Court having no jurisdiction to decide the petition, the petition be returned for presentation in proper court. In the facts and circumstances of the case, however, I leave the parties to bear their own costs.