Delhi High Court

M/S Lion Services Ltd vs M/S Dlf Projects Ltd on 10 February, 2015

Author: V. Kameswar Rao

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                      Judgment deserved on February 02, 2015
                                     Judgment delivered on February 10, 2015


+                    ARB.P. 132/2012 & IA 2794/2014

        M/S LION SERVICES LTD
                                                              ..... Petitioner
                            Through       Ms.Seema Tiwari, Advocate

                            versus

        M/S DLF PROJECTS LTD
                                                               ..... Respondent
                            Through       Mr.Rajiv Nayar, Sr. Advocate with
                                          Ms.Meghna Mishra, Ms.F.A. Khan
                                          and Ms.Niyati Kohli, Advocates

CORAM:
HON'BLE MR. JUSTICE V.KAMESWAR RAO
V.KAMESWAR RAO, J.

1. In the present petition, the petitioner has prayed for appointment of

an Arbitrator. Even though the petition has been filed for

appointment of arbitrator with regard to eight work orders, it is the

case of the petitioner during the submissions that 12 work orders

have been issued to the petitioner for providing housekeeping and

maintenance service to the respondent. There is no dispute between

the parties on this account. It is averred in the petition that this Court

has jurisdiction as parties have agreed that the Courts of Delhi would

have exclusive jurisdiction. That apart, it is also submitted by the

petitioner that all the parties have their registered office in Delhi.

2. The respondent has filed its reply and taken an objection that this

Court has no territorial jurisdiction to decide the present application.

The respondent has denied that the parties have agreed for the Courts

of Delhi to have exclusive jurisdiction to entertain the petition. The

details of the 12 work orders and the objection taken by the

respondents are as under:-

S.No. Work Order Invoice Address Site Address Completion Objection
Date Date
1. 08.01.2007 Jasola, New Delhi Jasola, New Delhi 31.03.2007 No arbitration clause
Barred by limitation
2. 08.01.2007 Gurgaon, Haryana Gurgaon, Haryana 08.01.2009 No arbitration clause
Territorial jurisdiction
3. 08.01.2007 Gurgaon, Haryana Gurgaon, Haryana 31.03.2007 No arbitration clause
Barred by limitation
Territorial jurisdiction
4. 25.07.2007 Jasola, New Delhi Jasola, New Delhi 31.03.2008 Barred by limitation
5. 25.07.2007 Noida, Uttar Pradesh Noida, Uttar Pradesh 31.03.2008 Barred by limitation
Territorial jurisdiction
6. 14.02.2008 Gurgaon, Haryana Gurgaon, Haryana 31.03.2008 Barred by limitation
Territorial jurisdiction
7. 07.04.2008 Gurgaon, Haryana Gurgaon, Haryana 31.03.2009 Territorial jurisdiction
8. 06.05.2010 Gurgaon, Haryana Gurgaon, Haryana 31.03.2011 Territorial jurisdiction
9. 11.05.2010 Gurgaon, Haryana Gurgaon, Haryana 10.05.2012 Territorial jurisdiction
10. 17.06.2010 Gurgaon, Haryana Gurgaon, Haryana 31.03.2011 Territorial jurisdiction
11. 17.06.2010 Gurgaon, Haryana Gurgaon, Haryana 17.06.2012 Territorial jurisdiction
12. 17.06.2010 Gurgaon, Haryana Gurgaon, Haryana 17.06.2012 Territorial jurisdiction

3. A rejoinder to the reply has been filed by the petitioner, wherein on

the objection of this Court having no territorial jurisdiction to entertain the

petition, a stand has been taken by the petitioner that it has received the

work orders through e-mail at its office at Delhi and has served the

respondent at various places in Delhi.

4. Learned counsel for the petitioner during submissions, would

reiterate the stand as taken in the petition as well as rejoinder.

5. Mr.Rajiv Nayar, learned Senior Counsel appearing for the

respondent would apart from reiterating the objection regarding territorial

jurisdiction would also state that there is no arbitration clause in some of

the work orders and the claims are barred by limitation. He relied upon the

following judgments in support of his contentions:-

(a) Krishna Mittal vs. Municipal Corporation of Delhi & Anr. (2010) 2 Arb. LR 439 (Delhi)

(b) Rattan Singh Associates Pvt. Ltd. vs. Gill Power Generation Co. Pvt. Ltd. 136 (2007) DLT 629

(c) S.K. Khanna vs. M/s Grover Oils Pvt. Ltd. ARB.P. 459/2012 decided on May 14, 2013

(d) A.P. Nirmaan vs. Sindhu Trade Links (2010) 5 RAJ. 185 (Delhi)

6. Having considered the rival submissions of the learned counsel for

the parties, it is noted that insofar as work orders at serial No.1, 2 and 3

above are concerned, the same doesn't have an arbitration clause. In view

of the fact, the work orders don't have an arbitration clause the present

application for appointment of arbitrator qua those work orders is not

maintainable. Further, the petitioner has not shown any correspondence,

letter, Telex, Telegrams or other means of communication or exchange of

statements of claim and defence in which, the existence of the agreement is

alleged by the petitioner and not denied by the respondent. In one notice

dated September 23, 2011, the petitioner had taken a stand of initiating the

arbitration proceedings through the Court of law for appointment of an

Arbitrator to recover the amount. The said notice does not make any

reference to any agreement. The present application qua the said orders

needs to be rejected.

7. I proceed to deal with the other work orders. Insofar as work order at

Serial No. 4 dated July 25, 2007 is concerned, the same is for housekeeping

services at DLF Tower, Jasola. The starting date of the work is July 01,

2007 to March 31, 2008. Clause 19 of the work order is the arbitration

clause. The first notice issued invoking the arbitration and placed on record

is dated May 25, 2011 followed by another notice dated September 23,

2011 which is after the expiry of three years, the limitation period for

invocation of arbitration clause in terms of Article 137 under Part II of the

Schedule to the Limitation Act, 1963. I agree with the submission made by

Mr.Rajiv Nayar in this regard that the petition qua these work orders is

barred by limitation. In this regard, I note for benefit the judgment as relied

upon by the respondent in Krishna Mittal's case (supra), wherein in para

Nos.7 to 10, it has been held as under:-

"7. Since in the present cases the contracts had been completed in the year 2002, petitioners should have invoked the arbitration clauses within three years from the date they became entitled to raise their claims, i.e. in the year 2002. As, in the present cases, there is no subsequent acknowledgment of debt by the respondents as contemplated by Section 18 of the Limitation Act, the period of limitation does not get extended.

8. However, I may clarify that petitioners could have availed of extended limitation if they could show that their claims were either under negotiation or under consideration during this period.

9. In fact, the Supreme Court in Shree Ram Mills Ltd. vs. Utility Premises (P) Ltd. reported in (2007) 4 SCC 599 has held that if the disputes under a contract are under negotiation or consideration, then the limitation for arbitration purpose would be deemed to have not commenced. But in the present case, petitioner has not filed any evidence to show that petitioners' claims were being considered by the respondents during the period 2002 to 2008.

10. Consequently, in my opinion, the claims of the petitioners as sought to be referred by the present petitions are not 'live claims' but 'stale claims' as they

are ex facie barred by limitation. Accordingly, present petitions are dismissed but with no orders as to costs."

8. Insofar as other work orders from Serial No. 5 to 12 are concerned,

the respondent has raised a plea of territorial jurisdiction. According to

them, all these work orders were for doing housekeeping services at

Gurgaon (Haryana) and Noida (Uttar Pradesh). I note that the petitioner has

filed this application on a plea that Parties have agreed that this Court has

exclusive jurisdiction to entertain the petition besides all the parties have

registered offices in Delhi within the jurisdiction of this Court. On an

objection taken by the respondent regarding territorial jurisdiction of this

Court to entertain the present petition, the petitioner in its rejoinder taken

an additional plea that since the petitioner has received the work orders

through e-mail at its office in Delhi and the petitioner had served the

respondent at various places in Delhi and NCR, this Court has jurisdiction.

9. It needs to be considered, whether the existence of a registered office

of the petitioner and receipt of e-mail by the petitioner at Delhi would

confer jurisdiction on this Court to entertain the present application.

10. Before I venture to decide the issue, suffice to state the petitioner has

itself shown the respondent carrying out its business from Gurgaon in the

memo of parties.

11. It is a conceded position that as per the work orders the work of

housekeeping was carried out at Gurgaon/Noida. Suffice to state, the

contract of housekeeping was not performed at Delhi. It is also noted that

the arbitration clause does not specify the place of arbitration. It cannot be

said that the place of arbitration would be at Delhi, if at all an arbitrator is

appointed. On that count, jurisdiction cannot be conferred on this Court to

entertain this application.

12. Keeping in view the position under Section 20 of CPC, it can still be

held that since the respondent herein is based in Gurgaon, it would be the

Court having territorial jurisdiction over Gurgaon which can entertain the

application of this nature. The cause of action as understood to mean every

fact if traversed would be necessary for the petitioner to prove in order to

support his case for seeking a relief. The claim of the petitioner as seen

from the notices is for recovery of money for the work executed at Gurgaon

and Noida. The factum of receipt of work order in Delhi or for that matter

the registered office of the petitioner being in Delhi are not relevant facts

for the petitioner to claim relief.

13. Further, the issue of jurisdiction is no more res-integra. This issue

stands settled by the judgment of this Court in Rattan Singh's case (supra),

wherein in para Nos.33 to 37 has held as under:-

"33. In the instant case, even if it was to be assumed that the agreement had been executed at Delhi, yet this Court

would not be the proper court to exercise jurisdiction in this matter inasmuch as the contract has not been performed at Delhi. The respondent is located at Punjab. The records relating to the performance of the contract and the transactions in question would be located outside the jurisdiction of this Court and the respondent admittedly has his office at Batala in Punjab which is the only office with which the plaintiff has transacted business. Therefore, even on application of the doctrine of forum non- conveniens, the petitioner would merit being sent to the courts of competent jurisdiction at Punjab.

34. The issue relating to the place where a cause of action has accrued so as to confer jurisdiction on a Vourt to adjudicate upon a petition under Section 9 of the Arbitration & Conciliation Act, 1996 has arisen for consideration before this court on earlier occasions as well. In M/s Engineering Projects (India) Ltd. Vs. M/s Greater Noida Industrial Development & Anr. reported at ILR (2004) II Delhi 88, the Court considered several judgments and arrived at a conclusion that it is the place where the cause of action has substantially arisen which would confer jurisdiction on the court to adjudicate upon the subject matter of the lis. It was held that primacy has to be given to such place where the cause of action has mainly or substantially or predominantly arisen in preference to or exclusion of a place where it has

incidentally or partially arisen. This, the court held, has a a great pragmatic purpose and ensures convenience of investigation and minimization of expenses. It was noticed that the forum of convenience from the perspective of the plaintiff has been looked askance at. A fortiori, where the defendant does not have its principal or concerned office and the cause of action has not substantially and overwhelmingly arisen at that particular place, courts situated there should decline to exercise jurisdiction in preference to the court possessing an umbical connection with the cause of action. This will root out the pernicious practice of forum shopping. Courts exercising jurisdiction in the context of the Arbitration and Conciliation Act should be mindful and vigilant in this regard also because Section 42 thereof bars all other courts from exercising jurisdiction over any further petitions/applications.

35. I find that before this Court, there is nothing in the agreement or in any correspondence which would even remotely suggest or support the submission that the agreement was made, signed or executed at Delhi. It is not even contended on behalf of the petitioner that any part of the contract was to be executed at Delhi. No correspondence has been addressed by the petitioner to the respondent to any address in Delhi. There is no material to indicate that the petitioner dealt with any officer of the respondent at Delhi or with any address of the respondent

at Delhi.

14. Translating the aforesaid conclusion, in the facts of this case, it

is clear that contracts were executed in Noida/Gurgaon. The notices

issued by the petitioner were to the offices of the respondents situated

in Gurgaon/Mumbai. In other words, no communication was

addressed to the respondent to any address in Delhi. Suffice to state,

no part of cause of action has arisen in Delhi.

15. In view of the above discussion, this petition is dismissed.

16. Liberty is given to the petitioner to approach the competent Court for

the relief sought in this petition.

17. No costs.

IA 2794/2014

Dismissed as infructuous.