Jharkhand High Court
Ms Upendra Prasad And Bros Through Its ... vs Union Of India Through Deputy Chief ... on 25 February, 2016
Equivalent citations: 2016 (3) AJR 191, (2016) 3 JCR 193 (JHA) (2016) 2 JLJR 306, (2016) 2 JLJR 306
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Appeal No. 8 of 2013
M/s Upendra Prasad & Bros. having its registered office at Area No. 4, Bermo,
P.O. Jaridih Bazar, P.S. Gandhi Nagar, District Bokaro 829114 (Jharkhand)
through its Partner Sudhir Kumar, son of Shri Upendra Prasad, resident of Flat
No. B4, Maharana Apartment, P.P. Compound, P.O. Ranchi, P.S. Hindpiri,
District Ranchi 834001 (Jharkhand) ... Appellant
Versus
Union of India through Deputy Chief Engineer (Cons) East Central Railways
having its office at Satary (Near Loyola Centre), P.O. & P.S Hazaribagh825301
... Respondent
CORAM: HON'BLE MR. JUSTICE D. N. PATEL
For the Appellant : Mr. Rahul Saboo, Advocate
For the Respondent : Mr. Mahesh Tewari, Advocate
Mr. Varun Prabhakar, Advocate
th
08/Dated: 25 February, 2016
1.This appeal has been preferred against the order passed by the Civil Judge, (Senior) DivisionI, Hazaribagh in Miscellaneous Case No. 10 of 2011 dated 30th September, 2013, whereby, application preferred by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 was dismissed on the ground that the seat of arbitration was at Patna.
2. Having heard learned counsels for both the sides and looking to Section 2(e) of the Arbitration and Conciliation Act, 1996 to be read with Section 34 thereof, the judgment and order passed by the learned trial court is, hereby, quashed and set aside mainly for the following facts and reasons:
(i) It appears that the learned trial court has lost sight of the definition of the word 'Court' defined under Section 2(e) of the Arbitration and Conciliation Act, 1996. The cause of action has arisen within the Hazaribagh district in the State of Jharkhand because entire work was assigned in the Hazaribagh district.
(ii) It has been held by Hon'ble the Supreme Court in the case of Jatinder Nath v. Chopra Land Developers (P) Ltd., reported in (2007) 11 SCC 453 in paragraph 15, which reads as under:
2 "15. On the first question on the lack of territorial jurisdiction, we do not find any merit in the contentions advanced on behalf of the appellant. We have examined Ext. P1 between the appellant and the builder (the Developer) dated 1631990. The agreement describes the appellant as the owner. It describes M/s Chopra Land Development Pvt. Ltd. as the builder. Under the agreement, the appellant remains the owner. Under the agreement, the appellant applies to DDA for time to construct a housing complex on a plot of land at Saket owned by the appellant. Under the agreement, the Developer agrees to construct a housing complex on the plot bearing No. G13, Saket, New Delhi. Under the agreement, the entire construction cost is financed by the Developer. Under the agreement, the housing complex consisted of basement, ground floor, mezzanine first floor, second floor and third floor. Under the agreement, the Developer agreed to construct the housing complex without prejudice to the owner's right. Under the agreement, the owner was required to give permission to the builder to construct the housing complex.
Under the agreement, the entire cost of construction was to be borne by the Developer. Under the agreement, the building plan, the completion certificate, etc. were to be signed by the appellant owner. Under the agreement, vide Clause 15, the Developer agreed to pay to the appellant owner a sum of Rs 5 lakhs in consideration of his seeking permission to construct the housing complex. This was in addition to the construction cost to be incurred by the Developer. Clause 16 of the agreement stated that in consideration of the Developer's services to construct the housing complex, the appellant agrees to allow the ownership of the basement, ground floor and mezzanine along with proportionate interest in the land to be transferred in the name of the Developer. At this stage, it may be noted that under the ex parte award dated 2931994 the arbitrator has passed his award in terms of Clause 16 and, therefore, it was contended before us on behalf of the appellant that the dispute related to possession of the property; that the dispute was comparable to a suit for land and that the submission was made specifically in view of the award being passed in terms of Clause 16 of the agreement (Ext. P1). It was urged that since the arbitrator has passed the award directing the appellant to transfer the ownership of basement, ground floor, mezzanine along with the proportionate interest in the land in favour of the Developer, the 3 present dispute related to recovery of possession and since the lands were located in Saket the trial court had no jurisdiction to make the award rule of the court under Section 14 of the Act. As stated above, we do not find merit in the contention advanced on behalf of the appellant. We have examined Ext. P1 in entirety. Apart from the above clauses of Ext. P1, we have already quoted Clauses 11, 20 and 21 by which the parties agreed that in case of dispute between the parties the same shall be referred for arbitration to the sole arbitrator at Faridabad and his decision shall be binding on both the parties. Under Clause 21, the parties agreed that the Faridabad Court alone shall have the jurisdiction in case of any dispute between the parties. On our examining the terms and conditions of Ext. P1 along with the surrounding circumstances thereto, we are of the view that Ext. P1 was a pure development agreement. The agreement is merely an agreement whereby a party agrees to develop certain property for a certain consideration. Under the agreement, the appellant herein continues to remain the owner. He has to apply for permission to construct the building to DDA. The Developer agrees to construct on the land. The Developer agrees to finance the entire construction cost and in lieu of the Developer's services in the matter of construction of housing complex, the owner (the appellant herein) agrees to permit transfer of the ownership of a part of the complex to the Developer. It is for this reason, as indicated by the events enumerated above, that MCD had issued notice to the appellant on 2191992 to show cause why the building plan submitted should not be revoked. It is for the above reasons, that MCD ultimately revoked the sanction for the construction of the housing complex on 1851993 and it is the appellant herein as owner who had sought to challenge the revocation vide Writ Petition No. 5038 of 1993. On the facts of this case, therefore, it cannot be said that the trial court at Faridabad had no jurisdiction to make the award the rule of the court under Section 14 of the Act. Section 31(1) of the Act provides that an award may be filed in any court having jurisdiction in the matter to which the reference relates. Under that section, the award can be filed in the court within whose jurisdiction the property in dispute lies. Parties cannot give jurisdiction to a court under Section 14 by consent if that court does not have jurisdiction. If an award refers to an immovable property, the court having jurisdiction in respect of the same will entertain an 4 application under Section 14. In order to decide as to which court has jurisdiction to entertain a petition under Section 14, reference has to be made to Section 2(c) read with Section 31(1) of the Act. Merely because the arbitrator chooses to hold the proceedings in a place where no suit could be instituted, and chooses to make an award at that place, it would not give the court of that place territorial jurisdiction to decide the matter under the Act. Section 30 refers to ground for setting aside an award. Section 30 is to be read with Section 33. The idea behind the entire scheme of the Arbitration Act appears to be that an application by a party challenging the validity of correctness of the award on whatever ground has to be made under Section 33. Section 33 is the only section under which a party is given the right to apply to the court to challenge either the agreement or the award. Under the Act, therefore, after the award has been filed a party is permitted to make an application under Section 33 to bring all kinds of defects to the notice of the court and the court will give relief either under Section 15 or Section 16 or even under Section 30 of the Act. In an arbitration without the intervention of the court, an award can be filed in any court having jurisdiction in the matter to which the reference relates. The award can be filed only in the court which would have jurisdiction in respect of the subjectmatter of the dispute. In order to decide the jurisdiction of the court, it is necessary to decide whether the court would have jurisdiction to try a regular suit between the parties in which the relief is claimed. Section 33 does not prescribe the court before which an application under this section may be filed, but Section 31 makes such provision. Section 31(2) provides that all questions regarding the validity, effect or existence of an award or an arbitration agreement shall be decided by the court in which the award has been filed or may be filed. Section 2(c) lays down the forum. The application has to be moved in the court within whose jurisdiction the opposite party resides or carries on business or within whose jurisdiction any part of the cause of action arises. Residence or carrying on business of a party, apart from the place of accrual of a cause of action is relevant for determining the territorial jurisdiction of the court in arbitration cases, if the question so arises in connection with the subjectmatter of the dispute."
(emphasis supplied) 5
3. In view of the aforesaid facts, reasons and judicial pronouncement, I hereby quash and set aside the order passed by the Civil Judge, (Senior) DivisionI, Hazaribagh in Miscellaneous Case No. 10 of 2011 dated 30th September, 2013. I also direct the Civil Judge, (Senior) DivisionI, Hazaribagh to decide Miscellaneous Case No. 10 of 2011 on its own merit and in accordance with law.
4. Accordingly, this appeal is allowed and disposed of.
(D.N. Patel, J.) Ajay/