Delhi High Court
Daaj Hotels And Resorts Pvt Ltd vs Mukhram Tewatia on 30 October, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 30th October, 2017
+ CM(M) 21/2017
DAAJ HOTELS AND RESORTS PVT LTD ..... Petitioner
Through: Mr. D. Abhinav Rao, Adv.
Versus
MUKHRAM TEWATIA ..... Respondent
Through: Mr. Vivekanand, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This petition under Article 227 of the Constitution of India
impugns the order (dated 22nd September, 2016 in CS No.57/2016 of
the Court of Additional District Judge-02 (South), Saket Courts, New
Delhi) of dismissal of an application of the petitioner / defendant
under Order VII Rule 10 of the Code of Civil Procedure, 1908 (CPC).
2. The petition came up first before this Court on 11 th January,
2017 and the counsel for the respondent has been appearing
throughout.
3. The counsels have been heard.
4. The respondent/plaintiff instituted the suit from which this
petition arises, for recovery of Rs.56,75,097/- from the petitioner /
defendant towards cost of work done by the respondent / plaintiff in
the hotel of the petitioner / defendant at Hyderabad and not paid for.
CM(M) 21/2017 Page 1 of 6
5. The petitioner / defendant filed the application under Order VII
Rule 10 of the CPC controverting that the Courts at Delhi had
jurisdiction and further contending that only the Courts at Hyderabad
had jurisdiction.
6. The learned Additional District Judge, in the impugned order,
has held that the Courts at Delhi as well as Hyderabad have
jurisdiction and there was no agreement between the parties restricting
the territorial jurisdiction to the Courts at Hyderabad only.
7. The counsel for the petitioner / defendant has argued (i) that the
work order was admittedly placed by the petitioner / defendant on the
respondent / plaintiff via e-mail and acceptance thereof was also
communicated by the respondent / plaintiff to the petitioner /
defendant via e-mail; (ii) that the entire work was admittedly carried
out by the respondent / plaintiff at the hotel of the petitioner /
defendant at Hyderabad; (iii) that the respondent / plaintiff, in the
plaint, has however stated that the petitioner / defendant prior to the e-
mail had approached the respondent / plaintiff at its office in Delhi and
that the acceptance of the work order was communicated by the
respondent / plaintiff to the petitioner / defendant from Delhi; (iv) that
the part payments for the work done were also made by the petitioner /
defendant by cheques drawn on its bank at Hyderabad, though the said
cheques were deposited by the respondent / plaintiff in its bank
account at Delhi; (v) that the work order placed by the petitioner /
defendant on the respondent / plaintiff had a clause as under:-
CM(M) 21/2017 Page 2 of 6
"L. All disputes arising out of this Work Order
will be settled by mutual discussion at
Hyderabad only. Any item of dispute not resolved
through mutual discussion will be referred to
M/s Shakti Parmar & Associates, the Interior
Designer and their decision will be final &
binding on the contractor.;
(vi) that the respondent / plaintiff instituted Arbitration Petition
No.154/2014 in this Court under Section 11(6) of the Arbitration and
Conciliation Act, 1996 and which was dismissed vide order dated 15 th
April, 2014, reasoning that the petitioner / defendant was situated at
Hyderabad; (vii) that as per the contract entered into between the
parties, the disputes arising out of the work order were to be settled at
Hyderabad only; (viii) that the Interior Designer with whose decision
the parties had agreed to abide is admittedly situated in Mumbai; (ix)
that the respondent / plaintiff has invoked the territorial jurisdiction of
the Courts at Delhi by stating that the contract between the parties was
executed at Delhi; and, (x) however, the admitted position is different;
admittedly the signed scanned copy of the work orders were e-mailed
to the respondent / plaintiff from Hyderabad and the respondent /
plaintiff after appending its signatures on the work orders, e-mailed
them back to the petitioner / defendant at Hyderabad and on that
account, the respondent / plaintiff could not invoke the territorial
jurisdiction of the Courts at Delhi.
8. I have immediately enquired from the counsel for the
respondent / plaintiff, that right or wrong, why should this Court in
this suit take a different view qua territorial jurisdiction when in the
CM(M) 21/2017 Page 3 of 6
application under Section 11(6) of the Arbitration and Conciliation
Act, 1996, it has, after considering all the same factors, been held that
the Courts at Delhi do not have jurisdiction. Attention of the counsel
for the respondent / plaintiff has also been drawn to the definition of
"Court" in Section 2(e) of the Arbitration Act as it stood prior to the
amendment w.e.f. 23rd October, 2015 and it has further been enquired
whether not the criteria as laid down therein also is of the Court in
whose jurisdiction the dispute subject matter of arbitration, if had been
subject matter of a suit, would lie.
9. The counsel for the respondent / plaintiff has referred to
Gyaneshwar Bhiku Dhargalkar Vs. Executive Engineer, PWD
Works Division II, Panaji AIR 2000 Bombay 254 and State of
Maharashtra Vs. Naseer 2002 (3) Raj 97 (SC).
10. In Gyaneshwar Bhiku Dhargalkar supra it was held that the
application under Section 20 of the Arbitration Act, 1940 having been
held to be not maintainable owing to the coming into force of the
Arbitration Act, 1996, the finding of the claims also being barred by
time therein would not constitute res judicata. In Naseer supra, it was
held that merely because the Government had at some stage agreed to
the appointment of Arbitrator would not come in the way of the
Government contending before the Court that there was no Arbitration
Agreement.
11. On the basis of the aforesaid two judgments, it is argued that in
fact the order dated 15th April, 2014 of this Court of dismissal of the
application under Section 11(6) on the ground of this Court having no
CM(M) 21/2017 Page 4 of 6
territorial jurisdiction is a nullity because there was no Arbitration
Agreement between the parties and therefore the finding as to
territorial jurisdiction therein would be of no avail.
12. The reasoning which prevailed in the aforesaid judgments is not
applicable to the present controversy. While it is the settled principle
of law that where the previous proceeding is dismissed as not
maintainable, any observations on merits of the controversy are not
res judicata (see Savitri Devi Vs. Fashion Linkers (2002) 95 DLT
893, Harbans Singh Vs. M/s Juggat Pharma 2013 SCC OnLine Del
5166 and Phonographic Performance Ltd. Vs. Union of India (2015)
220 DLT 90), in the present case, the order dated 15th April, 2014 of
this Court holding the Courts at Delhi to be not having territorial
jurisdiction is not on the point of maintainability of the petition under
Section 11(6) of the Act or on any other ground. Thus the finding
returned therein on the aspect of territorial jurisdiction would bind the
party.
13. It is not open to the respondent / plaintiff to, at this stage,
contend that there is no Arbitration Agreement. The respondent /
plaintiff instituted the petition under Section 11(6) of the Act relying
on an Arbitration Agreement and the said petition was disposed of
with liberty to the respondent / plaintiff to approach the Court having
territorial jurisdiction to appoint the Arbitrator. Allowing the
respondent / plaintiff to, at this stage, contend that the said order is a
nullity as there is no Arbitration Agreement would amount to allowing
the respondent / plaintiff as a litigant to blow hot and cold as per its
CM(M) 21/2017 Page 5 of 6
convenience and the respondent / plaintiff is estopped in law from
doing so. The principle of it being the bounden duty of the Court to
prevent abuse of its process by litigants would also apply.
14. The counsel for the respondent / plaintiff at this stage invokes
Section 42 of the Arbitration and Conciliation Act, 1996.
15. The same shows another turn-around now being made by the
counsel for the respondent / plaintiff. While it was earlier being argued
that there is no Arbitration Agreement, now reliance is placed on
Section 42 of the Arbitration Act, question of applicability of which
would arise only when there is an Arbitration Agreement between the
parties.
16. The petition thus succeeds and is allowed.
17. The impugned order dated 22nd September, 2016 is set aside.
Resultantly, the application of the petitioner / defendant under Order
VII Rule 10 of the CPC is allowed. The plaint is ordered to be
returned to the respondent / plaintiff for filing in the Court of
appropriate territorial jurisdiction. Choice has been given to the
counsel for the respondent / plaintiff to invoke Rule 10A but has not
been availed.
RAJIV SAHAI ENDLAW, J.
OCTOBER 30, 2017'
„pp‟
(corrected & released on 29th December, 2017)
