M/S Delhi Apartments Pvt. Ltd. vs M/S C.R.Sons Builders & ...
2009 Latest Caselaw 4104 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                  Date of Reserve: September 09, 2009
                                                      Date of Order: October 12, 2009

+OMP 191/2009
%                                                           12.10.2009
    M/s Delhi Apartments Pvt. Ltd.                          ...Petitioner
    Through: Mr. Sandeep Sethi, Sr. Advocate with Mr. D. Moitra, Advocates

       Versus

       M/s. C.R. Sons Builders & Developers
       Pvt. Ltd.                                       ...Respondent
       Through: Mr. George Thomas with Mr. Sanjay K.C. & Ms. Rajshree,
       Advocates


       JUSTICE SHIV NARAYAN DHINGRA

1.     Whether reporters of local papers may be allowed to see the judgment?

2.     To be referred to the reporter or not?

3.     Whether judgment should be reported in Digest?


       JUDGMENT

1. Petitioner and respondent both are having their offices in Delhi. They

entered into a Memorandum of Understanding qua construction of residential

units in Sector -5A, IIE Sidcul, Haridwar, Uttranchal. The MOU entered into

between the parties contained an arbitration clause that the disputes

between the parties shall be referred to the arbitrator. The MOU also

contained the jurisdiction clause which reads as under:

"That all disputes shall be subject to Delhi jurisdiction."

2. The disputes between the parties arose and respondent filed an

application under Section 9 of Arbitration & Conciliation Act, 1996 before the

District Judge, Haridwar. The petitioner raised objections before the District

OMP 191 of 2009 M/s Delhi Apartments Pvt. Ltd. v. M/s C.R. Sons Builders & Developers P Ltd.

Page 1 Of 5 Judge Haridwar about its jurisdiction. The learned District Judge vide its order

dated 14th May, 2009 held that it has jurisdiction to hear the petition. Against

this order of learned District Judge, Haridwar, petitioner preferred a writ

petition in the High Court of Uttranchal at Nainital being W.P.(Misc.) No.771 of

2009. However, petitioner did not prosecute this petition and the petition was

dismissed by High Court at Uttranchal on 4th August 2009. The petitioner has

filed the present application/petition under Section 9 of Arbitration &

Conciliation Act, 1996 before this Court seeking certain reliefs, inter alia,

appointment of an independent expert to record measurement and take

inventories of the goods lying at the construction site in Haridwar and also an

expert to examine the workmanship of quality of work and material.

Respondent put appearance and raised objections against the jurisdiction of

this Court in entertaining this application in view of Section 42 of the

Arbitration & Conciliation Act, 1996. The respondent was not averse to the

appointment of an expert and stated that if the petitioner was interested in

appointment of an independent expert, the parties can agree to appointment

of an independent expert by compromise outside the Court. However,

respondent did not agree to submit to the jurisdiction of the Court while the

petitioner insisted that the Court should decide the issue of jurisdiction and

grant relief. He was not agreeable to appointment of an expert under a

compromise or for filing an application under Section 9 before the Court at

Haridwar.

3. It is contended by counsel for the petitioner that merely filing an

application under Section 9 before the Court at Haridwar which according to

the petitioner was not a competent court would not bar the jurisdiction of this

Court under Section 42 of the Arbitration & Conciliation Act, 1996. He submits

OMP 191 of 2009 M/s Delhi Apartments Pvt. Ltd. v. M/s C.R. Sons Builders & Developers P Ltd.

Page 2 Of 5 that Section 42 can be invoked only if the earlier application is filed before

the Court of competent jurisdiction.

4. I consider that this plea of the petitioner is not tenable. Whether the

Court at Haridwar was a Court of competent jurisdiction or not, was the

subject matter of decision of the District Judge, Haridwar. This decision was

assailed before the High Court of Uttrakhand. The petitioner did not prosecute

the writ petition by which he assailed this decision. Thus, the decision given

by the District Judge Haridwar about the Court at Haridwar having jurisdiction

stands. Rather by filing a writ petition and then not prosecuting it, the

petitioner has conceded to the jurisdiction of Haridwar Court. I, therefore,

consider that this issue whether the Court at Haridwar had jurisdiction or not

cannot be gone into by this Court.

5. After considering the agreement and looking that the subject matter

was situated at Haridwar, the District Judge had given a decision that the

Haridwar Court had jurisdiction and this decision has become final. I,

therefore, consider that Section 42 would come into operation.

6. This Court in National Highways Authority of India v. SPCL-IVRCL(JV)

2008(2) Arb.LR 404(Delhi) had considered the application of Section 42 and

observed as under:

9. The term ``court'` is defined in Section 2(1)(e) which reads as under :

``2(1) In this Part, unless the context otherwise requires, -

(e) ``Court'` means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise

OMP 191 of 2009 M/s Delhi Apartments Pvt. Ltd. v. M/s C.R. Sons Builders & Developers P Ltd.

Page 3 Of 5 of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes;'` Section 42 in which the rule of exclusive jurisdiction has been enacted to provide a 'forum conveniens' to the parties, and to avoid conflicting orders of courts at the different stages of an arbitration proceeding arising out of the same agreement between the same parties. This provision is similar to Section 31(4) of the Arbitration Act, 1940, which reads as follows: ``31(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force where in any reference any application under this Act has been made in a court competent to entertain it, that court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that court and in no other court.'`

10. The Supreme Court explained the necessity of conferring or earmarking exclusive jurisdiction upon one court in Kumbha Mawji vs. Dominion of India, AIR1953 SC 313, as follows : ``The necessity for clothing a single court with effective and exclusive jurisdiction and to bring about by the combined operation of these three provisions the avoidance of conflict and scramble is equally essential whether the question arises during the pendency of the arbitration or after the arbitration is completed or before the arbitration is commenced.'`

11. The object underlying Section 42, to exclude courts's jurisdiction and confer power only upon one court (which first dealt with the arbitration agreement, or arbitration proceeding) continues to be the same, even under the new Act. The rule of 'that court alone' applies to ``that court'` in which any application under this Part (Part I) has been made. The argument on behalf of the petitioner is insubstantial. The advertence to Sumitomo, in the opinion of the court, is inapt, because the court there was concerned with conflict of law and jurisdiction; it had to decide which was the curial law concerning arbitration, and the law governing arbitration. The issue which arises here was not within contemplation of the Supreme Court, in that decision. The petitioner is attempting to OMP 191 of 2009 M/s Delhi Apartments Pvt. Ltd. v. M/s C.R. Sons Builders & Developers P Ltd.

Page 4 Of 5 read far more than what was decided, and certainly what was not within the scope of the discussion. Besides, in this case, there is no dispute about the curial law, or the law governing arbitration; both are Indian law, and provisions of the Act."

7. In Guru Nanak Foundation vs. M/s. Rattan Singh & Sons AIR 1981 SC

(2075) the Supreme Court considered the scope and ambit of Section 31(4) of

the Indian Arbitration Act, 1940 which was similar to Section 42 of the

Arbitration & Conciliation Act, 1996 and observed as under:-

"17. On a pure grammatical construction as well as taking harmonious and overall view of the various provisions contained in the Act it is crystal clear that ordinarily that court will have jurisdiction to deal with the questions arising under the Act, except the one in Chapter IV, in which a suit with regard to the dispute involved in the arbitration would be required to be filed under the provisions of the Civil P.C. However, where an application is made in any reference to a court competent to entertain it, that court alone will have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall have to be made in that court alone and in no other court".

(emphasis added)

8. In view of the settled position of law, I consider that this petition under

Section 9 of the Act is not maintainable in the Courts at Delhi. In view of

Section 42 of the Arbitration & Conciliation Act, 1996, the Court at Haridwar

only will have jurisdiction to entertain the application/petition. I, therefore,

consider that this application/petition has to be returned to the petitioner for

filing the same in the Court of appropriate jurisdiction.

October 12, 2009                                          SHIV NARAYAN DHINGRA J.
rd
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