Delhi High Court
Five Square Agro Gold Pvt. Ltd. vs Mayank Mohan Agarwal on 14 January, 2019
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 385/2017
% 14th January, 2019
FIVE SQUARE AGRO GOLD PVT. LTD. ..... Appellant
Through: Mr. N.M. Popli, Advocate for
Mr. K.N. Popli, Advocate
(Mobile No. 9868487642).
versus
MAYANK MOHAN AGARWAL ..... Respondent
Through: Mr. Rishi Sehgal and Mr.
Rathore, Advocates (Mobile
No. 9891758831).
CORAM:
HON'BLE MR. JUSTICE VALMIKI J. MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. Appellant/Plaintiff impugns the Judgment of the trial
court dated 24.09.2016 by which the trial court has dismissed the suit
for recovery of Rs. 6,27,137.51 filed by the appellant/plaintiff against
the respondent/defendant by observing that the courts at Mumbai had
territorial jurisdiction and the suit could not have been filed as the
parties were governed by the arbitration clause as per the rules of the
concerned stock exchanges being NCDEX and MCX. The
appellant/plaintiff was the broker and the respondent/defendant was
the client, and there were Member-Client Agreements between the
parties with respect to broking transaction in commodities.
2. Indubitably, the Member-Client Agreement between the
parties (Net Trading Agreement), contains a Clause 10, as per which it
is provided that parties are aware that parties will be governed by the
mechanism of arbitration provided by the rules and regulations of the
commodities exchange. The commodities exchanges are the NCDEX
and MCX. This Clause 10 reads as under:-
"10. The Member and the Client are aware of the provisions of the Bye-
Laws, Rules and regulations of the Exchange relating to resolution of
disputes/differences through the mechanism of arbitration provided by
the Exchange and agree to abide by the said provisions."
3. In the suit, the respondent/defendant at the earliest stage
had filed an application under Section 8 of the Arbitration and
Conciliation Act, 1996, but this application was held over for being
decided at the stage of final arguments in the suit.
4. I may note that the respondent/defendant is situated at
Ghaziabad, and not only for the sake of convenience, the
respondent/defendant would not have any benefit for going to the
courts at Mumbai, the objection taken for lack of jurisdiction of the
courts at Delhi is to only harass the appellant/plaintiff by raising
unnecessary objection inasmuch as the fact of the matter is that as per
the record, the transactions of net trading took place at the counters
and stations of the appellant/plaintiff at Delhi as the appellant/plaintiff
is admittedly situated at Delhi. Just because there is a deeming clause
being Clause No. 3 of the Member-Client Agreement (MCX) entered
into on the same date on 04.05.2009 that transactions are deemed to be
entered at Mumbai, the same would not mean that courts at Mumbai
will have jurisdiction because there is no deemed provision possible in
law for those courts to have jurisdiction where actually the
transactions are not conducted. Parties by consent cannot confer
jurisdiction on a court which has none, and in the present case since
the broking transactions took place between the parties at the stations
of the appellant/plaintiff at Delhi, in my opinion, the Clause 3 of the
Member-Client Agreement, MCX dated 04.05.2009 is otiose and
futile. Therefore, the courts at Delhi will have territorial jurisdiction
as the transactions were entered into between the parties through the
monitors and stations of the appellant/plaintiff with respect to booking
transactions in commodities.
5(i). So far as the arbitration clause is concerned, being Clause
10, the same is an undisputed clause, and therefore the ld. counsel for
the appellant/plaintiff states that appellant/plaintiff has no objection to
get the issues decided by the mechanism of arbitration as per Clause
10, however, it is pleaded that in view of the bonafide disputes created
by none else than the respondent/defendant, including of territorial
jurisdiction at Mumbai, hence, the time spent for prosecution of the
suit and also this appeal should be liable to be excluded under Section
14 of the Limitation Act, 1963, with respect to arbitration proceedings
which the appellant/plaintiff intends to initiate.
(ii). I agree with these arguments urged on behalf of
appellant/plaintiff that for the time spent by the appellant/plaintiff to
pursue the suit as also this appeal, for these periods exclusion will be
available to the appellant/plaintiff under Section 14 of the Limitation
Act, and the concerned arbitration tribunal will liberally consider the
application filed by the appellant/plaintiff under Section 14 of the
Limitation Act when disputes are raised for being decided in the
arbitration proceedings.
6. In fact, in my opinion, the factum of filing of the
application under Section 8 of the Arbitration and Conciliation Act by
the respondent/defendant will amount to invoking of the arbitration
clause, and thus, and in fact the limitation will stop running as from the
date of filing of the application under Section 8 of the Arbitration and
Conciliation Act by the respondent/defendant. Once the limitation stops
running, it would stop running possibly even so far as the
appellant/plaintiff is concerned, however, this aspect of limitation will be
finally decided in the arbitration proceedings.
8. In view of the aforesaid discussion, this appeal is disposed
of by directing the appellant/plaintiff to seek resolution of the disputes by
the mechanism of arbitration of the NCDEX and MCX exchange and as
per the relevant by Bye-Laws, Rules and Regulations of the exchanges.
All pending application are hereby also disposed of.
JANUARY 14, 2019/AK VALMIKI J. MEHTA, J
