S.K. Khanna vs M/S. Grover Oils Pvt. Ltd.
2013 Latest Caselaw 2240 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                         Order delivered on: May 14, 2013
+                            ARB.P. 459/2012

       S.K. KHANNA                                        ..... Petitioner
                             Through:   Mr.Amreek Singh, Advocate

                    versus

       M/S. GROVER OILS PVT. LTD.                ..... Respondent
                     Through: Mr.R.P. Sharma, Adv. with
                               Mr.Vikram Dogra, Adv.
       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J. (Oral)

1. The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of a sole independent arbitrator.

2. Brief facts as culled out from the petition are that the petitioner is the proprietor of M/s. Special Cables Pvt. Ltd. Company. The petitioner purchased a company unit M/s. Grover Oils Pvt. Ltd. situated in SIDCO Industrial Complex Bari Brahamana in leased land of 10 Kanals at Bari Brahamana tehsil Samba (Jammu and Kashmir) from respondent through an Agreement to Sell dated 16 th November, 2007, for sale consideration of `125 lac.

3. As per the agreement, the petitioner paid `90 lac to the respondent on account of sale consideration of the said property and also obtained possession of the same on 27th December, 2007. Now the respondent is interfering in the possession of the petitioner and is adamant to alienate the

said premises to the third person for which he has no right, title and interest. It is stated in the petition that on 1st March, 2012 and 20th March, 2012, the respondent made abortive attempts to forcibly occupy the suit property of the petitioner. The said Agreement to Sell contains the arbitration clause which reads as under:

"It is also agreed that in case of any dispute arises to the meaning or understanding of any of the clauses of this agreement the decision of the mutually acceptable arbitrator Mr.Mohinder Gupta S/o late Sh.Sita Ram Gupta R/o Gandhi Nagar Jammu shall be final and binding on both the parties."

4. On 30th January, 2012 a notice issued by the petitioner was served upon the Arbitrator Mr.Mohinder Gupta requesting him to enter upon as the sole named arbitrator to resolve the dispute and adjudicate the same as per the terms of the Agreemnt to Sell. Copy of the same was served upon the respondent Mr.P.P. Grover, Managing Director of the respondent. By letter dated 6th July, 2012 the petitioner requested the respondent to appoint Arbitrator to adjudicate the disputes between the parties. Since Arbitrator Mr.Mohinder Gupta did not act as Arbitrator and the respondent also failed to appoint any Arbitrator after receipt of notice dated 6 th July, 2012, the present petition has been filed by the petitioner.

5. Notice of the petition was served upon the respondent. Reply has been filed by the respondent. Various objections have been raised by the respondent in the reply. Preliminary objection of the respondent is that this Court does not have territorial jurisdiction to try the present petition as the property in question is situated at Samba, Agreement to Sell is executed in the State of Jammu and Kashmir and the dispute has also arisen within the jurisdiction of District Samba.

6. I have heard both the parties on the preliminary objection that this Court does not have territorial jurisdiction to try the present petition

7. It is argued by the counsel for the respondent that the property in question is situated at District Samba, Jammu and Kashmir which is outside the jurisdiction of this Court. Even the Agreement to Sell was also executed in the State of Jammu and Kashmir and the dispute, which is narrated in the petition, has also arisen within the jurisdiction of District Samba. Therefore, this Court has no territorial jurisdiction to entertain the present petition.

8. It cannot be denied that the petitioner has already approached the Civil Court by filing civil suit for permanent prohibitory injunction in the Court at Samba whereby the petitioner has submitted himself to the jurisdiction of that Court. The said civil suit is still pending.

9. The argument of the respondent is that under Section 42 of the Act the petitioner is barred from filing the present petition for the reason that the petitioner already filed an application under Section 9 of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 by way of invoking the arbitration clause for an interim relief before the District Judge, Samba, and also filed an application in the suit invoking section 8 of the said Act for appointment of Arbitrator.

10. I find force in the submissions of the learned counsel for the respondent. Admittedly, the petitioner has already filed an application under Section 9 of the Jammu and Kashmir Arbitration and Conciliation Act, 1997. The property in question is also within the local limits of Court at Samba, Jammu and Kashmir. The petitioner has also filed an application in the civil suit invoking section 8 of the said Act for

appointment of Arbitrator.

11. The Division Bench of this Court, in the case of M/s. Splendor Landbase Limited v. M/s. Mirage Infra Limited & Anr., DLT (169) 2010, Delhi 126 (DB), after discussing various decisions of the Supreme Court as well as the High Court, observed as under:

"25. Having considered the decisions referred by the parties and on a plain reading of the plaint as a whole, it is clear as we have indicated above that the present suit is one which comes within the purview of Section 16(d) of the CPC and the proviso of Section 16 of CPC is not applicable under the circumstances as the proviso of Section 16 of CPC is an exception to the main part of the Section which cannot be construed to enlarge the scope of the main provision. If the suit comes within Section 16(d) of the CPC, it has been held by the Apex Court in Harshad Chiman Lal Modi's case (supra) that Section 20 of the Code would have no application in view of the opening words of Section 20 "subject to limitations aforesaid". The Apex Court has held that the proviso to Section 16 would apply only if the relief sought could entirely be obtained by personal obedience of the defendant. The proviso we feel will only apply if the suit falls within one of the categories specified in the main part of the Section. In the present case, although specifically the relief for possession of the property has not been claimed by the Appellant in the prayer for the purpose of development, however, it is settled law that by clever drafting a party cannot be permitted to come within different meaning of relief claimed. Hence, no benefit can be derived by the Appellant either from the proviso of Section 16 or Section 20 of the Code of Civil Procedure.

12. In the case of Sasken Communication Technologies Limited v. Prime Telesystems Limited & Others, 99 (2002) DLT 640, it was observed:

"12. Section 42 of the Arbitration Act relating to the jurisdiction of the Courts puts a positive embargo against the invoking of the jurisdiction of different Courts by laying down that notwithstanding anything contained elsewhere in the said part of the Act or in any other law for the time being in force, where with respect to an Arbitration Agreement any application under the said part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of an agreement and the arbitral proceedings shall be made in that Court and in no other Court. This Section provides the forum for entertaining the applications under the Act and is intended to ensure that all the proceedings in relation to an Arbitration Agreement take place in the same Court so as to avoid conflict of decisions. It is also intended to prevent undue harassment of the parties by putting them before the same Court inspite of competence of different Courts within the jurisdiction of which different parts of cause of action might have arisen. The contention of learned counsel for the petitioner that Section 42 of the Act creates a bar only when the earlier application is before a Court of competent jurisdiction is absolutely correct but the question as to whether the Court before whom an earlier application has been filed is a Court of competent jurisdiction or not has to be adjudicated by that Court itself. Other Courts cannot come into picture and entertain subsequent applications till the earlier Court holds that it has no jurisdiction. Therefore, so long Bombay High Court does not hold that it has no territorial jurisdiction in the matter and the Agreement between the parties conferring jurisdiction upon the Courts at Mumbai is not enforceable all applications under the Act have to be made before Bombay High Court only and in no other Court even if a part of cause of action has arisen within the jurisdiction of some other Court also.

13. In the case of D.L.F. Industries v. Standard Chartered Bank and Another, reported in AIR 1999 Delhi 11, the terms of Arbitration Agreement between the parties were quite identical to the terms between the parties in the present case. In the said case the parties had

agreed that the venue of arbitration shall be at Bangalore and in the jurisdiction clause they had stipulated that the contract shall be governed by the Laws and Regulations of India and will be subject to the exclusive jurisdiction of the Courts at Bangalore. The only difference in the wordings of the Article 36.1 as well as 37.1 in the present case and the Arbitration clauses in the said case was the use of word "Bangalore" instead of "Mumbai". A learned Single Judge of this Court came to the conclusion that the contract was subject to the exclusive jurisdiction of the Courts at Bangalore. In para 7 of the Judgment it was further held that Section 9 and Section 42 of the Act being in part I an application moved under Section 9 also attracts Section 42 of the Act and precludes the parties from moving any other Court in regard to the applications under the Act."

13. In view of the aforesaid facts and circumstances of the case, this Court has no territorial jurisdiction to entertain the present petition which ought to have been filed in Jammu and Kashmir Court where an application under Section 9 of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 has already been filed and is pending adjudication. The Registry is directed to return the petition to the petitioner so as to enable the petitioner to file the same in an appropriate Court.

(MANMOHAN SINGH) JUDGE MAY 14, 2013