Delhi District Court
Sh. Rajkumar vs Hinduja Housing Finance Limited on 22 April, 2022
IN THE COURT OF SH. HARISH DUDANI,
DISTRICT JUDGE (COMMERCIAL COURT),
DWARKA COURTS, DELHI
OMP (COMM.) NO. 30/2019
In the matter of
SH. RAJKUMAR
S/O SH. SHADI LAL
R/O H. NO. F-60, SUDARSHAN PARK
RAMESH NAGAR, DELHI-110015.
..........APPLICANT
VS.
1. HINDUJA HOUSING FINANCE LIMITED
THROUGH ITS AUTHORIZED REPRESENTATIVE
HAVING ITS
Corporate office at:- 27A, Developed
Industrial Estate, Guindy, Tamilnadu
Chennai-600032.
Branch Office at:- 604, 6th Floor,
Vishwadeep Tower, Janakpuri
District Center, Delhi-110058
Also at C-47, Ist floor,
RDC Raj Nagar, Ghaziabad, UP-201001.
2. SH. S.S. MARIAPPAN,
SENIOR CIVIL JUDGE (RETD)
SOLE ARBITRATOR, AT - E1/63,
SIDCO NAGAR, 5th MAIN ROAD,
VILLIAKKAM, CHENNAI 600049.
..........RESPONDENTS
Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 1 of 21
OMP (Comm.) No. 30-19
Date of Institution : 07.08.2019
Reserved for Orders on : 22.04.2022
Order Announced on : 22.04.2022
JUDGMENT
1. The present petition has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the impugned Order dated 22.03.2019 passed by the Sole Arbitrator/ respondent no. 2 in arbitration proceedings in case no. ARC/HHFL/272/18 titled as M/s Hinduja Housing Finance Ltd. vs. Mr. Raj Kumar (Borrower) (respondent no. 1) and Mrs. Rachna (Co-Borrower) (respondent no. 2).
2. As per the impugned award dated 22.03.2019 passed by Ld. Sole Arbitrator / respondent no. 2, the respondents jointly and severally have been directed to pay a sum of Rs. 26,43,057.00 alongwith interest @ 18% per annum on the principal amount of Rs. 26,43,057.00 from 02.06.2018 till payment of entire amount and Rs. 7,500/- as costs.
3. As per the impugned award dated 22.03.2019 the claimant (respondent no. 1 herein) had filed claim petition before Ld. Arbitrator thereby stating that the claimant is engaged in the business of providing financial facilities in the form of Housing Loan against property and the respondents approached the claimant company collectively / jointly for availing financial Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 2 of 21 OMP (Comm.) No. 30-19 facility against the property and the claimant company sanctioned and disbursed a loan for a sum of Rs. 25,50,000.00 to the respondents on executing by the respondents of the loan agreement number DL/DEL/LXND/A000000061 on 30.01.2017 and the respondents also agreed to create mortgage with respect to the immovable property bearing no. B-268, Sector VIII, Brij Vihar, Ghaziabad, UP by handing over the original title papers with respect to the said property to the claimant company. The respondents were irregular in repayment of the loan facility and the claimant company recalled the loan vide loan recalled notice dated 02.02.2018 whereby the respondents were called upon to pay the entire loan amount with interest and other charges amounting to Rs. 27,01,570.00. The respondents failed to pay the aforesaid dues and the claimant company referred the dispute for arbitration.
4. As per impugned award dated 22.03.2019, Ld. Arbitrator sent the notice to the respondents in the claim before him but the respondents failed to appear and they were deemed duly served. Thereafter, the claimant (respondent no. 1 herein) examined Sh. Mohd. Ibrahim Khan as PW1. Thereafter, on conclusion of the arbitration proceedings, Ld. Arbitrator was pleased to pass the impugned award.
Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 3 of 21 OMP (Comm.) No. 30-19
5. The petitioner has filed the abovenoted petition under Section 34 of the Arbitration and Conciliation Act, 1996 stating therein that the petitioner intended to purchase a property bearing No. B-268, Brij Vihar, Ghaziabad, UP from its owner namely Ms. Manjula Somani W/o Sh. Vinod Somani through some broker and all the formalities of property loan was done by the above said finance company from its branch office. The property was financed by the respondent no. 1 for a total sum of Rs. 25,50,000/- vide customer No. DL/DEL/LXND/A000000061 and the loan amount was directly given by respondent no. 1 to seller of the property.
6. It is stated that on 23.02.2017 the registry of the said property was executed in the favour of the petitioner at Registrar Office, Ghaziabad, UP but the possession of the said property has not been given to the petitioner till date. It is further stated that the petitioner was making payment of EMIs of Rs. 31,115/- per month and he paid 6-8 installments to the respondent no. 1 company. It is stated that despite many requests when the possession of the said property was not given by the seller, the petitioner visited the said property and found that the property was already under the seal by another bank / finance company but the seller of the property namely Ms. Manjula Somani S/o Vinod Somani did not disclose the same to the petitioner and the same was well known to the respondent no. 1 company too.
Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 4 of 21 OMP (Comm.) No. 30-19
7. It is further stated that the seller of the said property along with her husband, some other persons and respondent no. 1 company cheated the petitioner and the petitioner has given a written complaint to the police at PS Moti Nagar and a complaint case is pending against the respondent no. 1 and other persons.
8. It is further stated that petitioner received the notice of execution No. 637 /19 filed by the respondent no. 1 before the Court of Ld. ADJ/West, Tis Hazari Court, Delhi through which he came to know that false and baseless Award dated 22.03.2019 has been passed by the Sole Arbitrator appointed by the respondent no. 1 company thereby awarding the respondent a sum of Rs. 26,43,057/- alongwith intererst @ 18% per annum.
9. It is further stated that the petitioner is challenging the impugned award dated 22.03.2019 on the grounds that Ld. Arbitrator has been appointed by respondent no. 1 as per its own convenience and Ld. Arbitrator has passed the impugned award without giving opportunity of being heard to the petitioner and without going into merits of the claim. It is stated that arbitration proceedings should have been initiated at Delhi and the petitioner did not receive the notice of the proceedings and the arbitrator has erred in passing the Award and the rate of interest has been wrongly applied by the Ld. Arbitrator which is excessive and the proceedings have been conducted in illegal, arbitrary and unjustified manner without following the principles Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 5 of 21 OMP (Comm.) No. 30-19 of natural justice.
10. Reply to the petitioner U/s 34 of Arbitration and Conciliation Act, 1996 has been filed on behalf of the respondent No. 1 stating therein that no cause of action ever accrued for filing of the objections in favour of the petitioner and against the respondent no. 1 and the same is liable to be dismissed with costs.
11. It is stated in the reply that the petitioner cannot taken advantage of his own wrong and the petitioner has intentionally and deliberately suppressed the material facts from the Court and the petitioner has not approached the Court with clean hands and the objections are not maintainable.
12. It is further stated in the reply that the loan agreement No. DL/DEL/LXND/A000000061 dated 30.01.2017 had been executed voluntarily by both the parties and in terms of Clause 22 of the agreement both the parties agreed inter-alia to refer all the disputes and differences arising out of the said loan agreement to the Sole Arbitrator. It is stated that the petitioner failed and neglected to adhere to the fiscal discipline and defaulted in payment of monthly installments and the arbitration clause of the said agreement was invoked with the prior notice to the petitioner.
Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 6 of 21 OMP (Comm.) No. 30-19
13. It is further stated in the reply by respondent no. 1 that the petitioner requested the respondent no. 1 for finance facility and on the assurance given by the petitioner, respondent granted a loan facility to the petitioner for a sum of Rs. 25,50,000/- vide agreement No. DL/DEL/LXND/A000000061 dated 30.01.2017. It is stated that the respondent sent a loan recall notice/ legal demand notice dated 02.02.2018 to the petitioner for calling upon him to make payment of the same and despite the receipt of the legal notice the petitioner has not paid the outstanding amount to the respondent no. 1.
14. It is further stated in the reply that on failing to clear the outstanding amount, respondent no. 1 as per the terms and conditions of the loan agreement No. DL/ DEL/ LXND / A000000061 dated 30.01.2017 invoked the arbitration clause and referred dispute for adjudication and appointment of arbitrator vide letter dated 08.03.2018 sent to the Ld. Sole Arbitrator. It is further stated that the Ld. Arbitrator had given his consent for his appointment as an Arbitrator and has sent a notice dated 11.04.2018 to both the parties to appear before Ld. Arbitrator and petitioner was duly served with the said notice and the petitioner neither appeared in person or through any authorized representative before the Ld. Sole Arbitrator. It is submitted that another notice dated 07.05.2018 was sent to the petitioner and it is specifically mentioned by the Ld. Sole Arbitrator that failing to mark the appearance on the scheduled Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 7 of 21 OMP (Comm.) No. 30-19 date and time ex-parte proceedings will be conducted against the petitioner.
15. I have heard Ld. Counsel for parties and perused the record.
16. Ld. Counsel for the respondent no. 1 has contended that this Court has no territorial jurisdiction to entertain the present petition as the proceedings were conducted and Award was passed by Ld. Sole Arbitrator at Chennai, Tamil Nadu and the said place is not within the territorial jurisdiction of this Court. Ld. Counsel for respondent no. 1 has further contended that the notice of arbitration proceedings was duly served upon the petitioner and despite service the petitioner preferred to remain ex-parte in the arbitration proceedings. It is further contended by Ld. Counsel for respondent no. 1 that the petition is barred by period of limitation.
17. Ld. Counsel for the respondent no. 1 has further contended that since the question of jurisdiction goes to the root of the matter hence, the same is to be decided first and this Court can adjudicate on the objections only if it is found that this Court has territorial jurisdiction in respect of the matter in question. Ld. Counsel for respondent no. 1 has relied upon decision of Hon'ble Supreme Court of India in BGS SGS Soma JV vs. NHPC Ltd. 2019 SCC OnLine SC 1585.
Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 8 of 21 OMP (Comm.) No. 30-19
18. Ld. Counsel for the petitioner has contended that the petitioner is resident of Ramesh Nagar, Delhi 110015 which is within the territorial jurisdiction of this Court and the Office of respondent no. 1 is also in Janak Puri, New Delhi which is also within the territorial jurisdiction of this Court, hence, this Court has jurisdiction to adjudicate upon the questions involved in the petition.
19. It is contended that Loan cum Hypothecation Agreement dated 30.01.2017 was executed between the parties and by way of the said agreement it was agreed between the parties that all the disputes, differences or claims arising out of the said agreement shall be settled by way of arbitration by a Sole Arbitrator to be appointed by HHFL and the venue for conducting arbitration proceeding shall be, Chennai, India and Ld. Arbitrator passed the impugned award dated 22.03.2019 at Chennai, Tamil Nadu.
20. In para 9 of the impugned award dated 22.03.2019, Ld Arbitrator has been pleased to observe:-
9.The Loan Agreement entered between the Claimant Company and the Respondents contains an Arbitration Clause 22.2 "The Parties Agree and acknowledge that in case of any dispute or difference arising out of or in connection with this Agreement whether during its subsistence or thereafter between the parties including any dispute of difference relating to the interpretation of Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 9 of 21 OMP (Comm.) No. 30-19 the Agreement or any clause thereof shall be settled by arbitration in accordance with the provision of The Arbitration and Conciliation Act, 1996, or any statutory modifications thereof and shall be referred to a sole arbitrator, to be appointed by HHFL alone.(22.3) Such claims dispute and /or differences shall be referred to arbitration by a sole arbitrator (herein after referred to as the "Arbitrator") to be appointed by HHFL alone (22.6) The venue for conducting arbitration proceedings shall be, Chennai India. (22.7) The language of arbitration shall be English.(22.8) The award of the arbitrator shall be a speaking award and shall be final, conclusive and binding on all the parties to the arbitration whether on question of law or effect".
21. Sh. S. S. Mariappan who was appointed as Sole Arbitrator conducted the arbitration proceedings and passed the award at Chennai, Tamil Nadu which is not within the territorial jurisdiction of this Court. Section 42 of the Arbitration and Conciliation Act, 1996 provides for the jurisdiction in respect of filing of any application in respect of an arbitration agreement. Section 42 of the Arbitration and Conciliation Act, 1996 reads as:-
42.Jurisdiction.-Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 10 of 21 OMP (Comm.) No. 30-19 Court and in no other Court.
22. In Cinepolis India Private Ltd. vs Celebration City Projects Limited & Another, 2020 SCC Online Del 301., Hon'ble High Court of Delhi was pleased to hold.
21. Having examined the respective contentions of the parties on this issue, I am of the view that there is no merit in the contention of the respondents. A bare perusal of the arbitration clause shows that the parties have clearly designated New Delhi as the place for arbitration proceedings. While it is true that the arbitration clause does not specifically use the word "seat" but it is no longer res integra that the term "place" would be the "juridical seat" for the purpose of Section 2(2) of the Act. It has also been settled by various judgments that the word "place" would refer to "juridical seat‟ for the purpose of Section 20(1) and Section 20(2) of the Act whereas in Section 20(3) the word "place" is equivalent to "venue". This position of law is clear from reading of the judgment of the Constitution Bench in the case of BALCO (supra) and Indus Mobile Distribution Private Limited (supra).
22. The Constitution Bench of the Supreme Court examining the issue of seat and venue of an Arbitral proceeding observed as under:-
75. We are also unable to accept the submission of the learned counsel for the appellants that the Arbitration Act, 1996 does not make seat of the arbitration as the centre of gravity of the arbitration. On the contrary, it is accepted by most of the experts that in most of the national laws, arbitrations are anchored to the seat/place/situs of arbitration. Redfern in Para 3.54 concludes that "the seat of the arbitration is thus intended to be its centre of gravity." [Blackaby, Partasides, Redfern and Hunter (Eds.), Redfern and Hunter on International Arbitration (5th Edn., Oxford Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 11 of 21 OMP (Comm.) No. 30-19 University Press, Oxford/New York 2009).] This, however, does not mean that all the proceedings of the arbitration have to take place at the seat of the arbitration. The arbitrators at times hold meetings at more convenient locations. This is necessary as arbitrators often come from different countries. It may, therefore, on occasions be convenient to hold some of the meetings in a location which may be convenient to all. Such a situation was examined by the Court of Appeal in England in Naviera Amazonica Peruana S.A. v. Compania International de Seguros del Peru [(1988) 1 Lloyd's Rep 116 (CA)] wherein at p. 121 it is observed as follows:
"The preceding discussion has been on the basis that there is only one 'place' of arbitration. This will be the place chosen by or on behalf of the parties; and it will be designated in the arbitration agreement or the terms of reference or the minutes of proceedings or in some other way as the place or 'seat' of the arbitration. This does not mean, however, that the Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an Arbitral Tribunal to hold meetings--or even hearings--in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses.... It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country -- for instance, for the purpose of taking evidence.... In such circumstances each move of the Arbitral Tribunal does not of itself mean that the seat of arbitration changes. The seat of arbitration remains the place initially Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 12 of 21 OMP (Comm.) No. 30-19 agreed by or on behalf of the parties."
"96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under:
'2. Definitions.--(1) In this Part, unless the context otherwise requires -- (a)-(d) ***
(e) "Court" means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes;' We are of the opinion, the term "subject-
matter of the arbitration" cannot be confused with "subject-matter of the suit". The term "subject-matter" in Section 2(1)
(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)
(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the learned counsel for the appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 13 of 21 OMP (Comm.) No. 30-19 process. For example, if the arbitration is held in Delhi, where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the courts of Delhi being the courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi. In such circumstances, both the courts would have jurisdiction i.e. the court within whose jurisdiction the subject-matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution i.e. arbitration is located."
23. The Supreme Court in the case of Indus Mobile Distribution Private Limited (supra) after referring to Sections 2(1)(e) and 20 of the Act and various judgments including the judgment in the case of BALCO (supra) held as under:-
18. The amended Act, does not, however, contain the aforesaid amendments, presumably because the BALCO [BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810] judgment in no uncertain terms has referred to "place" as "juridical seat"
for the purpose of Section 2(2) of the Act. It further made it clear that Sections 20(1) and 20(2) where the word "place" is used, refers to "juridical seat", whereas in Section 20(3), the word "place" is equivalent to "venue". This being the settled law, it was found unnecessary to Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 14 of 21 OMP (Comm.) No. 30-19 expressly incorporate what the Constitution Bench of the Supreme Court has already done by way of construction of the Act.
19. A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction -- that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Sections 16 to 21 of CPC be attracted. In arbitration law however, as has been held above, the moment "seat" is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties."
24. The Supreme Court in the case of Indus Mobile Distribution Private Limited (supra) analyzed Section 2(1)(e) and Section 20 of the Act as well as the Law Commission Report, 2014. It was held that the moment a seat is designated it is akin to an exclusive jurisdiction clause. It was further held that under the law of arbitration unlike the CPC which applies to suits, reference to seat is a concept by which a neutral venue can be chosen by the parties which may not in the classic sense have jurisdiction i.e. no part of the cause of action may have arisen and Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 15 of 21 OMP (Comm.) No. 30-19 neither would any of the provisions of Sections 16 to 21 of the CPC be attracted. In the said case, the Court was concerned with two different clauses, one which stipulated that arbitration shall be conducted at Mumbai and the other as per which the disputes and differences arising out of the agreement was subject to the exclusive jurisdiction of the courts at Mumbai. The respondent had filed a petition under Section 11 of the Act for appointment of an arbitrator before this Court. The petition was disposed of by the High Court holding that no part of the cause of action arose in Mumbai and the exclusive jurisdiction clause would not apply and Delhi being the first Court in which the petition was filed and where the part of cause of action had arisen would have jurisdiction. The Supreme Court held that the seat of arbitration was Mumbai and even the exclusive jurisdiction vested in the Mumbai courts. It was thus held that Mumbai courts alone would have jurisdiction to the exclusion of all other courts as the juridical seat of arbitration was at Mumbai.
25. Very recently the Supreme Court in the case of BGS SGS Soma JV vs. NHPC Ltd.
2019 SCC OnLine SC 1585 has decided the issue of jurisdiction of a Court to entertain a petition under Section 11 of the Act. The Apex Court has at length analyzed the definition of "Court" under Section 2(c) of the Act as well as Section 20 relating to the place of arbitration. Reliance has been placed on the judgment of the Apex Court in the case of BALCO (supra) as well as several other judgments such as Roger Shashoua vs. Muksh Sharma, (2009) EWHC 957 (Comm), Indus Mobile Distribution Private Limited (supra), Enercon (India) Ltd. vs. Enercon GMBH, (2014) 5 SCC 1. In Enercon (supra) the Supreme Court followed the Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 16 of 21 OMP (Comm.) No. 30-19 dictum in Roger Shashoua (supra) as follows :
"126. Examining the fact situation in the case, the Court in Shashoua case observed as follows:
"The basis for the court's grant of an anti- suit injunction of the kind sought depended upon the seat of the arbitration. An agreement as to the seat of an arbitration brought in the law of that country as the curial law and was analogous to an exclusive jurisdiction clause. Not only was there agreement to the curial law of the seat, but also to the Courts of the seat having supervisory jurisdiction over the arbitration, so that, by agreeing to the seat, the parties agreed that any challenge to an interim or final award was to be made only in the courts of the place designated as the seat of the arbitration. Although, „venue‟ was not synonymous with „seat‟, in an arbitration clause which provided for arbitration to be conducted in accordance with the Rules of the ICC in Paris (a supranational body of rules), a provision that „the venue of arbitration shall be London, United Kingdom‟ did amount to the designation of a juridical seat..."
In Paragraph 54, it is further observed as follows:
There was a little debate about the possibility of the issues relating to the alleged submission by the claimants to the jurisdiction of the High Court of Delhi being heard by that court, because it was best fitted to determine such issues under Indian Law. Whilst I found this idea attractive initially, we are persuaded that it would be wrong in principle to allow this and that it would create undue practical problems in any event. On the basis of what I have already decided, England is the seat of the arbitration and since this carries with it something akin to an Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 17 of 21 OMP (Comm.) No. 30-19 exclusive jurisdiction clause, as a matter of principle the foreign court should not decide matters which are for this Court to decide in the context of an anti- suit injunction."
26. The Supreme Court placed reliance on the observations made by the Court of Appeal, England in C v. D (2008) BusLR 843, wherein it is observed that:-
"It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award."
27. In the aforesaid case, the Court of Appeal had approved the observations made in A v. B, (2007) 1 All ER (Comm) 591, wherein it is observed that:
"... an agreement as to the seat of an arbitration is analogues to an exclusive jurisdiction clause. Any claim for a remedy.... as to the validity of an existing interim or final award is agreed to be made only in Courts of the place designated as the seat of Arbitration."
28. In fact in the case of BGS SGS Soma JV (supra), the Supreme Court has laid down the tests for determination of the seat. It has been held that wherever there is an express designation of a venue and no designation of any alternative place as the seat combined with supranational body of rules governing the arbitration and no other significant contrary indicia, the inexorable conclusion is that the stated venue is actually the juridical seat of the arbitral proceeding.
29. Finally, it was held that whenever there is a designation of a place of arbitration in an arbitration clause as being the venue of the arbitration proceedings, the expression "arbitration proceedings" would make it clear whether the venue is really the seat. If the arbitration proceedings as a whole are intended to be held at a particular place, including the making of an award at that place, then the venue is the seat. This Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 18 of 21 OMP (Comm.) No. 30-19 language has to be contrasted with the language where it is only mentioned that the tribunal is to meet or have witnesses examined and in such a case the place is only a venue and not the seat.
23. In Hindustan Construction Company Limited vs NHPC Ltd. & Another, (2020) 4 SCC 310, Hon'ble Supreme Court was pleased to hold:-
3)This Court in Civil Appeal No. 9307 of 2019 entitled BGS SGS Soma JV vs. NHPC Ltd. delivered a judgment on 10.12.2019 i.e. after the impugned judgment was delivered, in which reference was made to Section 42 of the Act and a finding recorded thus: (SCC pp.
287-88, para 59) "59. Equally incorrect is the finding in Antrix Corpn. Ltd. that Section 42 of the Arbitration Act, 1996 would be rendered ineffective and useless. Section 42 is meant to avoid conflicts in jurisdiction of courts by placing the supervisory jurisdiction over all arbitral proceedings in connection with the arbitration in one court exclusively. This is why the section begins with a non-obstante clause, and then goes on to state '...where with respect to an arbitration agreement any application under this Part has been made in a court...' It is obvious that the application made under this part to a court must be a court which has jurisdiction to decide such application. The subsequent holdings of this Court,that where a seat is designated in an agreement, the courts of the seat alone have jurisdiction, would require that all applications under Part I be made only in the Court where the seat is located, and Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 19 of 21 OMP (Comm.) No. 30-19 that Court alone then has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitral agreement. So read, Section 42 is not rendered ineffective or useless. Also, where it is found on the facts of a particular case that either no "seat" is designated by agreement, or the so-called "seat" is only a convenient "venue", then there may be several courts where a part of the cause of action arises that may have jurisdiction. Again, an application under Section 9 of the Arbitration Act, 1996 may be preferred before a court in which part of the cause of action arises in a case where parties have not agreed on the "seat" of arbitration, and before such "seat" may have been determined, on the facts of a particular case, by the Arbitral Tribunal under Section 20(2) of the Arbitration Act, 1996. In both these situations, the earliest application having been made to a court in which a part of the cause of action arises would then be the exclusive court under Section 42, which would have control over the arbitral proceedings. For all these reasons, the law stated by the Bombay and Delhi High Courts in this regard is incorrect and is overruled."
4) This was made in the backdrop of explaining para 96 of the Balco, which judgment read as a whole declares that once the seat of arbitration is designated, such clause then becomes an exclusive jurisdiction clause as a result of which only the courts where the seat is located would then have jurisdiction to the exclusion of all other courts.
5)Given the finding in this case that New Delhi was the chosen seat of the parties, even if an application was first made to the Faridabad Court, that application would be Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 20 of 21 OMP (Comm.) No. 30-19 made to a court without jurisdiction. This being the case, the impugned judgment is set aside following BGS SGS Soma JV, as a result of which it is the courts at New Delhi alone which would have jurisdiction for the purposes of challenge to the Award.
24. In view of decisions in Hindustan Construction Company Limited vs NHPC Ltd. & Another (supra) and Cinepolis India Private Ltd. vs Celebration City Projects Limited & Another (supra) this Court has no jurisdiction to adjudicate upon the present dispute. The petition under Section 34 of Arbitration and Conciliation Act, 1996 stands dismissed accordingly. Parties are left to bear their own costs. File be consigned to Record Room.
Pronounced in the open Court on April 22nd, 2022 (Harish Dudani) District Judge (Commercial Court), South West District, Dwarka Courts, New Delhi/22.04.2022 Rajkumar Vs. Hinduja Housing Finance Ltd. & Anr. Page No. 21 of 21 OMP (Comm.) No. 30-19