Delhi District Court
M/S. Asr Interiors & Designers Llp vs Schindler India Pvt. Ltd on 27 August, 2022
IN THE COURT OF SHRI PANKAJ GUPTA:
DISTRICT JUDGE, (S/W) (COMMERCIAL COURT)-01,
DWARKA COURTS : DELHI.
OMP (COMM) NO. 20/21
In the matter of :
1. M/s. ASR Interiors & Designers LLP
Through Its A.R.
C-2/57, Second Floor, Janakpuri,
New Delhi-110058
M: 9999260460
2. Gaurav Kumar
Partner of M/s. ASR Interiors & Designers LLP
C-2/57, Second Floor, Janakpuri,
New Delhi-110058.
M: 9999260460, Email: [email protected]
...........PETITIONERS
Versus
1. Schindler India Pvt. Ltd.
Through Its Directors
Plot No. P-1 301, 3rd Floor,
P.P. Trade Center, Wazirpur District Centre,
Netaji Subhash Place, Pitam Pura,
New Delhi-110034
Email: [email protected]
2. Mr. K. N. Popli Advocate,
Sole Arbitrator
Chamber No. 330, Lawyers Chamber,
Rohini Courts, New Delhi.
........RESPONDENTS
Date of Institution : 08.12.2021
Date when the case reserved
for Judgment : 27.08.2022
Date of Judgment : 27.08.2022
M/s ASR Interiors and Designers LLP & Anr. Vs.
Schindler India Pvt. Ltd. & Anr. Page No. 1 of 8
OMP (Comm) 20/21
JUDGMENT
1. This is the petition under section 34 of the Arbitration and Conciliation Act, 1996 (the Act) filed by the petitioner being aggrieved by the arbitration award dated 31.12.2018 (the impugned award) passed by the sole arbitrator Sh. K. N. Popli.
2. Brief facts leading to filing of the present petition are that the respondent no. 1 was a manufacturer and supplier of elevators and escalators involved in vertical transportation. The petitioners approached the respondent no. 1 for supplying and installation of 1 unit of lift at its building project G-1, Dall Mill Road, New Delhi-110059. In response thereto, the respondent no. 1 through its offer letter dated 27.07.2013, intimated the technical and commercial terms and conditions for the said installation. The said letter was duly accepted by the petitioners and resulted into a contract. Subsequently, the dispute arose between the parties. Consequently, the respondent no. 1 invoked the arbitration clause and appointed the respondent no. 2 as the arbitrator. Perusal of the record reveals that the petitioners failed to contest the case before the arbitrator / the respondent no. 2. Accordingly, the petitioners were proceeded ex-parte. The respondent no. 2 recorded the evidence and heard the arguments addressed on behalf of the respondent no. 1. Subsequently, the respondent no. 2 passed the impugned award. Being aggrieved by the same, the petitioners filed the present petition.
M/s ASR Interiors and Designers LLP & Anr. Vs. Schindler India Pvt. Ltd. & Anr. Page No. 2 of 8 OMP (Comm) 20/21
3. Notice of the petition was issued to the respondent no.
1. The respondent no. 1 has not filed the written statement (WS) as on date but contested the petition.
4. I have heard counsel for the petitioners and the respondent no. 1 and have perused the material on record.
5. Admittedly, the petitioners and the respondent no. 1 entered in the agreement dated 27.07.2013 (hereinafter referred to as the "said agreement"). The dispute arose between the parties. Consequently, the respondent no. 1 invoked the arbitration clause and appointed the respondent no. 2 as the arbitrator. As per record, in the arbitration proceedings, the petitioners failed to appear. Consequently, after hearing the respondent no. 1, the arbitrator passed the impugned award.
6. Perusal of the clause no. 18 of the said agreement reveals that the petitioners and the respondent no.1 agreed that in case of any dispute, the same shall be referred to the arbitrator and the seat of the arbitration shall be at Mumbai.
7. As per record, vide notice dated 03.04.2017, the respondent no. 1 invoked the arbitration clause and requested the petitioners to give their consent for the change of the venue of the arbitration proceedings from Mumbai to Delhi. The respondent no. 2 held that the said notice was deemed to have been served upon the petitioners and that the venue for arbitration proceedings could be at Delhi. Simultaneously, the respondent no. 2 fixed the seat of M/s ASR Interiors and Designers LLP & Anr. Vs. Schindler India Pvt. Ltd. & Anr. Page No. 3 of 8 OMP (Comm) 20/21 arbitration at Chamber no. 330, Lawyers Chamber Block, Rohini Court, Delhi. As evident from the record, the entire arbitration proceedings were conducted and the impugned award was passed at the said address.
8. As discussed above, as per the contract, the parties agreed that the venue of the arbitration proceedings shall be at Mumbai. Admittedly, the arbitrator fixed the seat of arbitration at Chamber No. 330, Lawyers Chamber Block, Rohini Court, Delhi. Both the said places do not fall within the territorial jurisdiction of this court.
9. Now the question arises as whether this court has territorial jurisdiction to entertain the present petition.
10. Counsel for the petitioners pleaded that the respondent no. 1 has filed the execution petition i.e. Ex.901/2019 for execution of the impugned award against the petitioners and the same is pending for disposal before this court. Hence, in view of section 42 of the Act, this court has the Territorial jurisdiction to entertain the present case.
11. Counsel for the respondent no. 1 opposed the said submissions and pleaded that this court does not have the territorial jurisdiction to entertain the present petition.
12. In the judgment titled as "Sundaram Finance Ltd. v. Abdul Samad", reported in (2018) 3 SCC 622, the Hon'ble supreme Court held:
14. We would now like to refer to the provisions of M/s ASR Interiors and Designers LLP & Anr. Vs. Schindler India Pvt. Ltd. & Anr. Page No. 4 of 8 OMP (Comm) 20/21 the said Act, more specifically Section 36(1), which deals with the enforcement of the award:
"36. Enforcement.--(1) Where the time for making an application to set aside the arbitral award under Section 34 has expired, then, subject to the provisions of sub- section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 to 1908), in the same manner as if it were a decree of the court."
The aforesaid provision would show that an award is to be enforced in accordance with the provisions of the said Code in the same manner as if it were a decree. It is, thus, the enforcement mechanism, which is akin to the enforcement of a decree but the award itself is not a decree of the civil court as no decree whatsoever is passed by the civil court. It is the Arbitral Tribunal, which renders an award and the tribunal does not have the power of execution of a decree. For the purposes of execution of a decree the award is to be enforced in the same manner as if it was a decree under the said Code.
15. Section 2(e) of the said Act defines "court" as under:
"2. Definitions.--
***
(e) "court" means--
(i) in the case of an arbitration other than international commercial arbitration, 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;
(ii) in the case of international commercial arbitration, 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, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;"
16. The line of reasoning supporting the award to be filed in a so-called court of competent jurisdiction and then to obtain a transfer of the decree is primarily based on the jurisdiction clause found in Section 42, which reads as under:
"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 M/s ASR Interiors and Designers LLP & Anr. Vs. Schindler India Pvt. Ltd. & Anr. Page No. 5 of 8 OMP (Comm) 20/21 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 court and in no other court."
The aforesaid provision, however, applies with respect to an application being filed in court under Part I. The jurisdiction is over the arbitral proceedings. The subsequent application arising from that agreement and the arbitral proceedings are to be made in that court alone.
17. However, what has been lost sight of is Section 32 of the said Act, which reads as under:
"32. Termination of proceedings.--(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the Arbitral Tribunal under sub- section (2).
(2) The Arbitral Tribunal shall issue an order for the termination of the arbitral proceedings where--
(a) the claimant withdraws his claim, unless the respondent objects to the order and the Arbitral Tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute;
(b) the parties agree on the termination of the proceedings; or
(c) the Arbitral Tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.
(3) Subject to Section 33 and sub-section (4) of Section 34, the mandate of the Arbitral Tribunal shall terminate with the termination of the arbitral proceedings."
The aforesaid provision provides for arbitral proceedings to be terminated by the final arbitral award. Thus, when an award is already made, of which execution is sought, the arbitral proceedings already stand terminated on the making of the final award. Thus, it is not appreciated how Section 42 of the said Act, which deals with the jurisdiction issue in respect of arbitral proceedings, would have any relevance. It does appear that the provisions of the said Code and the said Act have been mixed up.
18. It is in the aforesaid context that the view adopted by the Delhi High Court in Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd. [Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd., 2009 SCC OnLine Del 511 :
(2009) 159 DLT 579] records that Section 42 of the Act would not apply to an execution application, which is not an arbitral proceeding and that Section 38 of the Code would apply to a decree passed by the court, while in the M/s ASR Interiors and Designers LLP & Anr. Vs. Schindler India Pvt. Ltd. & Anr. Page No. 6 of 8 OMP (Comm) 20/21 case of an award no court has passed the decree.
20. We are, thus, unhesitatingly of the view that the enforcement of an award through its execution can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the court, which would have jurisdiction over the arbitral proceedings.
13. In view of the above cited judgment, it can be held that the enforcement of an award through its execution can be filed anywhere in the country where such a decree can be executed and there is no requirement for obtaining a transfer of decree from the court, which would have jurisdiction over the arbitral award and section 42 of the Act will not get attracted in case of execution proceedings. Further, when the final award is made, of which execution is sought, the arbitral proceedings already stand terminated in view of section 32 and thus, section 42 of the Act, which deals with jurisdiction issue in respect of arbitral proceedings, will have no relevance. Therefore, section 42 of the Act is not relevant to decide the territorial jurisdiction of the court to entertain the petition under section 34 of the Act.
14. As discussed above, in the present case, initially, the parties fixed the venue of the arbitration at Mumbai. Subsequently, it was changed to Delhi and the seat of the arbitrator was fixed by the respondent no. 2 at Chamber no. 330, Lawyers Chamber Block, Rohini Court, Delhi where the entire proceedings were conducted and the arbitration award was passed. Therefore, once the arbitrator fixes the seat, then in the terms of section 20(2) of the Act, that shall be the jurisdictional seat and the courts having the jurisdiction over the jurisdictional seat would have the M/s ASR Interiors and Designers LLP & Anr. Vs. Schindler India Pvt. Ltd. & Anr. Page No. 7 of 8 OMP (Comm) 20/21 exclusive jurisdiction. Admittedly, the said area does not fall in the South West District Delhi. Therefore, I am of the opinion that this court does not have the territorial jurisdiction to entertain the present petition. Reliance is placed on the judgment titled as "BBR (India) Private Limited vs. S P Singla Constructions Private Limited"
reported in 2022 LiveLaw (SC) 493. The petitioner is at liberty to file fresh petition in the concerned court having territorial jurisdiction. No order as to the cost. Petition is disposed of accordingly. File be consigned to Record Room.Digitally signed by PANKAJ
ANNOUNCED IN THE OPEN COURT, PANKAJ GUPTA Date:
GUPTA 2022.09.02
On this 27th day of August, 2022 15:42:23
+0530
(PANKAJ GUPTA)
District Judge, S/W
(Commercial Court)-01:
NEW DELHI
M/s ASR Interiors and Designers LLP & Anr. Vs. Schindler India Pvt. Ltd. & Anr. Page No. 8 of 8 OMP (Comm) 20/21