Bombay High Court
Shri Upendra Kantilal Thanawala vs Shree Ram Builders on 8 January, 2013
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
1/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw
hvn
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO. 545 OF 2012
IN
LEAVE PETITION NO. 211 OF 2012
IN
ARBITRATION PETITION (L) NO. 404 OF 2012
1. Shri Upendra Kantilal Thanawala )
2. Shri Pankaj Kantilal Thanawala
ig )
3. Shri Kunal Pankaj Thanawala )
4. Shri Vishal Upendra Thanawala )
All of Mumbai Indian Inhabitant, carrying on )
business at 47/49, Dr.V.B.Gandhi Marg, Fort, )
Mumbai - 23. ) ..... Petitioners
VERSUS
1. Shree Ram Builders, )
A partnership firm with its office at Jugal Baug, )
Opposite State Transport Workshop, Lal Bahadur )
Shastri Marg, Thane (W) - 400 601 )
2. Shri Ramesh Mehta, )
Partner of Shree Ram Builders, )
R/at : 13th Floor, Girnar Building, Opp. A.C. )
Market, Mumbai - 400 026 )
3. Shri Deepak Mehta, )
Partner of Shree Ram Builders, )
R/at : 13th Floor, Girnar Building, Opp.A.C. )
Market, Mumbai - 400 026 )
4. Ms. Alpa Mehta, )
Partner of Shree Ram Builders, )
::: Downloaded on - 09/06/2013 19:32:59 :::
2/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw
R/at : 13th Floor, Girnar Building, Opp.A.C. )
Market, Mumbai - 400 026 )
5. Shri Niket Pankaj Thanawala, )
Jugal Baug, Opp. State Transport Workshop, )
Lal Bahadur Shastri Marg, Thane (W) - 400 601 ) ..... Respondents
Mr.S.U.Kamdar, Senior Advocate a/w. Ms.Pooja Patil, i/b. Mr.Nahush Shah
for the Petitioners.
Mr.P.K.Dhakephalkar, Senior Advocate, i/b. Mr.Amol Mhatre for
Respondent Nos. 1 to 4.
CORAM : R.D. DHANUKA, J.
RESERVED ON
ig : DECEMBER 18, 2012
PRONOUNCED ON : JANUARY 08, 2013
ORAL JUDGMENT
1. By this Chamber Summons, Respondent Nos. 1 to 4 seek to recall the Order dated 15th March, 2012 passed in Leave Petition No. 211 of 2012 granted by this Court under Clause XII of the Letters Patent in Arbitration Petition (L) No. 404 of 2012 in favour of the petitioners.
2. Some of the relevant facts for the purpose of deciding this Chamber Summons are as under :-
(a) On 6th August, 2003, an agreement for development came to be executed between the petitioners and respondent no. 5 as the vendors and the respondent nos. 1 to 4 as the developers for the property situate at Thane (hereafter referred to as the "suit agreement").::: Downloaded on - 09/06/2013 19:32:59 :::
3/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw
(b) Respondent no.1 is a partnership firm. Respondent nos.2 to 4 are the partners of the 1st respondent. The suit agreement dated 6th August, 2003 was registered with the office of the Sub Registrar, Thane. The registered office of the 1st respondent is at Thane.
(c) On 9th April, 2008, the petitioners through their advocates issued a notice of termination of the suit agreement and power of attorney. Respondent nos. 2 to 4 challenged the said termination of the suit agreement and power of attorney. On 27 th June, 2008, respondent nos. 2 to 4 through their advocates and respondent nos. 5 to 7 invoked arbitration as per clause 61 of the suit agreement and sought to appoint the arbitrator on their behalf. The Arbitral Tribunal was thereafter constituted. On 21st April, 2011, the petitioners filed arbitration petition (367 of 2011) under Section 9 of the Arbitration and Conciliation Act, 1996 in this court against the respondents interalia praying for interim measures.
(d) In the affidavit in reply filed by respondent nos. 1 to 4 in the said proceedings, filed under section 9, respondent nos. 1 to 4 raised an objection about the maintainability of the said petition in this court by contending that the said proceedings were maintainable before the District Judge, Thane and not before this Court. By an ::: Downloaded on - 09/06/2013 19:32:59 ::: 4/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw order dated 3rd May, 2011 passed by S.J.Vazifdar, J., the petitioners were granted leave to amend the said petition. It was, however, clarified that the said order was without prejudice to rights and contentions of the respondents as regards the jurisdiction of this court. It was contended that this court has no jurisdiction. This court recorded the statement made by the respondent nos. 1 to 4 through their counsel that status quo in terms of the order passed by the Arbitral Tribunal would be maintained. The matter was adjourned.
(e) By an order dated 27th February, 2012, Arbitration Petition No. 367 of 2011 was disposed of. Before the said order was passed, the Arbitral Tribunal already delivered an award on 10th December, 2011.
Paragraphs 3 and 4 of the said Order dated 27 th February, 2012 reads as under :-
3. The Petition, is, therefore, disposed of in view of the above by keeping all points open. The liberty is granted to the parties to apply for an appropriate order, if any. There shall be no order as to costs.
4. The order already granted and the statement as recorded on 3 May 2011 shall continue till the execution of the decree.
No costs.
(g) The petitioners thereafter applied for leave under Clause XII of ::: Downloaded on - 09/06/2013 19:32:59 ::: 5/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw the Letters Patent (Leave Petition No. 211 of 2012) in this court.
(h) In the said Leave Petition filed by the petitioners, it is averred by the petitioners that if it would have been a suit, then in view of Section 2 (i) (e) of the Act, this court would have jurisdiction by virtue of the fact that three out of four respondents are residing in Mumbai, under Section 20 of the Code of Civil Procedure, 1908 as well as under Clause XII of the Letters Patent of this court on this Court granting leave under clause XII of the Letters Patent. It is also averred that the petitioners had filed proceedings under Section 9 of the Act in this Court against the respondents which have been disposed of by a final order and judgment dated 27 th February, 2012 by this court. Petitioners placed reliance upon Section 42 of the Act and submits that this court alone will have jurisdiction to entertain and try this petition. It is contended that District Court, Thane has no jurisdiction. It is the case of the petitioners that respondents were present when the said leave petition (211 of 2012) was heard by this court and after hearing both parties, leave was granted on 15 th March, 2012.
(i) The respondents have filed this Chamber Summons interalia praying for recalling of the order dated 15 th March, 2012 passed by ::: Downloaded on - 09/06/2013 19:32:59 ::: 6/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw this court granting leave under Clause XII of the Letters Patent.
3. Mr.Dhakephalkar, the learned senior counsel appearing for the respondents in support of the Chamber Summons made following submissions :-
(a)Agreement for development as well as power of attorney has been executed admittedly at Thane. Agreement has been registered with the office of the Sub Registrar, Thane. Registered office of the 1st respondent firm is also at Thane. Cause of action for arbitration proceedings is also arisen at Thane. Notice dated 9 th April, 2008 by which cause of action had arisen was served upon respondent nos. 1 to 4 at Thane. No cause of action has arisen within the territorial jurisdiction of this court. This court has, therefore, no jurisdiction to entertain, try and dispose of the present petition. Since no part of the cause of action or in any event no material part of cause of action has arisen within the territorial jurisdiction of this court, this court, could not grant leave under Clause XII of the Letters Patent in favour of the petitioners. The said order thus passed by this court is required to be recalled and the petition shall be returned to the petitioners for presentation in proper court. Respondent nos. 1 to 4 have already filed a separate petition under Section 34 of the Act in ::: Downloaded on - 09/06/2013 19:32:59 ::: 7/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw Thane Court challenging same award which has been impugned by the petitioners in this court.
(b) Counter claim was filed by the petitioners for possession in respect of the property situate at Thane. If suit was required to be filed by the either party, the same could be filed only at Thane.
(c ) It is submitted that if the proceedings would have filed for enforcement of personal obligation, then place of residence or business of the respondents for the purpose of jurisdiction would be relevant. However, in this case location of the property which is at Thane would be relevant.
(d) Section 42 of the Act would not be attracted in the facts of this case in view of the fact that proceedings filed by the petitioners under Section 9 (Arbitration Petition No. 367 of 2011) itself was without jurisdiction. Subsequent proceedings under Section 42 of the Act would be maintainable in the same court only if earlier proceedings was filed before the court having competent jurisdiction. It is submitted that in any event issue of jurisdiction was specifically raised by respondent nos. 1 to 4 in Arbitration Petition (367 of 2011) and the said issue was specifically kept open ::: Downloaded on - 09/06/2013 19:32:59 ::: 8/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw as is clear from the order passed by this court on 3 rd May, 2011 and 27th February, 2012.
(e) It is submitted that as no cause of action had arisen within the territorial jurisdiction of this court, it is submitted that application filed under section 9 by the petitioner was without jurisdiction and thus this proceedings filed under section 34 of the Arbitration and Conciliation Act cannot be filed in this court. The learned counsel placed reliance on section 42 of the Act which reads thus :
"Section 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 Court and in no other Court."
(f) Mr. Dhakephalkar, the learned senior counsel appearing for the respondents submits that if the respondents were required to file a suit in respect of the subject matter of the claim which was before the arbitral tribunal, the suit could be filed only before the appropriate court at Thane and not in this court. The learned counsel placed reliance on section 16(d) of Code of Civil Procedure 1908 and proviso thereto which reads thus :
"Section 16 - Suits to be instituted where subject-matter situate Subject to the pecuniary or other limitations prescribed by any law, suits,--::: Downloaded on - 09/06/2013 19:32:59 :::
9/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw
(a)
(b)
(c)
(d) for the determination of any other right to or interest in immovable property,
(e)
(f) shall be instituted in the Court within the local limits of whose jurisdiction the property is situate:
Provided that a suit to obtain relief respecting, or compensation for wrong to, immovable properly held by or on behalf of the defendant may, where the relief sought can be entirely obtained through his personal obedience, be instituted either in the Court within the local limits of whose jurisdiction the property is situate, or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain."
The learned counsel submits that the suit property is in possession of the respondent nos. 1 to 4 and thus proviso to section 16 would not apply.
(g) The learned counsel placed reliance upon the judgment of this court in the case of Ion Exchange of India Limited Vs. Paramount Limited, 2006(4) Bom.C.R. 545 and more particularly paragraph 9 which reads thus :
"9. It was also urged on behalf of the petitioner that considering the definition of the term "Court" appearing in Section 2(e) of the Act as no part of cause of action has arisen within the jurisdiction of this Court, this Court will not have jurisdiction to entertain the petition. Perusal of Section 2(e) of the Act quoted above shows that to find out whether this Court will have jurisdiction to entertain the petition, I ::: Downloaded on - 09/06/2013 19:32:59 ::: 10/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw will have to consider the question if instead of taking up arbitration proceedings a civil suit had been filed on the subject matter of the arbitration, whether that Civil suit could have been entertained by this Court. Before the Arbitrator, the respondent was the claimant, therefore, if the claimant instead of taking up arbitration proceedings had filed a civil suit on the subject matter of the arbitration proceedings the question to be considered is whether he could have filed the suit in this Court. Answer to that question would be in affirmative because in the suit that could have been filed by the respondent/claimant, the present petitioner would have been the defendant and the defendant/ the petitioner carries on business within the jurisdiction of this Court and therefore, in terms of Clause 12 of the Letters Patent the suit filed by the claimant on the subject matter of the arbitration in this Court against the petitioner was maintainable in this Court. It was submitted on behalf of the respondent that the question that this Court will have to consider is had the petitioner filed a civil suit whether that suit would have been maintainable before this Court or not According to the respondent because no part of cause of action arises within the jurisdiction of this Court and the respondent also does not carry on business within the jurisdiction of this Court, this Court will not have jurisdiction to entertain the suit. In my opinion, the submission is not well founded. The proper approach, would be to make an inquiry, if the party which has invoked the arbitration clause and is a claimant, had filed a Civil Suit on the subject matter of arbitration, which Court or Courts will have the jurisdiction to entertain the suit in accordance with the Law If suit filed by the claimant could have been entertained by the Court then that court will be the Court within the meaning of Section 2(e) of the Act. In the present case had the respondent decided to file civil suit instead of invoking the arbitration clause, its suit could have been entertained by this Court, if filed here, because the petitioner who would have been defendant in that suit carry on business within the jurisdiction of this Court. Therefore, in my opinion, the respondent is not right in contending that this Court will not have jurisdiction to entertain the petition because no part of cause of action has arisen within the jurisdiction of this Court and because the respondent also does not carry on business within the jurisdiction of this Court. The objections raised to the maintainability of the petition are thus rejected. I hold that this Court has jurisdiction to entertain the petition."
(h) The learned counsel places reliance upon the judgment of Jharkhand High Court in the case of M/s. Pratap Electrical & Co. Vs. M/s. Asea Bran Boveri Ltd.
AIR 2005 Jharkhand 95 and more particularly paragraphs 13 to 18 which reads ::: Downloaded on - 09/06/2013 19:32:59 ::: 11/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw thus :
"13. Coming back to the instant case, admittedly the parties entered into a contract at Bokaro and the work under the contract was executed at Bokaro. All the bills relating to work were submitted at Bokaro and all correspondences were made by the petitioner with the Area Incharge of the respondent at Bokaro. Admittedly, therefore, the Court within which jurisdiction Bokaro city situate shall have the jurisdiction. The question, therefore, that falls for consideration is whether the ouster clause contained in the agreement will oust the jurisdiction of the Court conferred by the Arbitration and Conciliation Act, 1996.
14. Section 42 of the Act of 1996 defines the jurisdiction for applications under the Act. Section 42 reads as under :
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 Court and in no other Court.
15. From bare reading of the aforesaid provision, it is manifest that the non-obstante clause contained in the said provision makes it clear notwithstanding ouster of jurisdiction clause in the agreement, application under the new Act, shall be filed in a Court having jurisdiction. The non-obstante clause excludes anything anywhere contained in the whole Act, or in any other law for the time being in force, if it is contrary to or in consistent with substantive provisions contained in the section.
16. At this stage, I would like to refer Section 2(3) of the Act which defines :
S.2(1)(e).--"Court" means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary Civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the reference 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.
17. A conjoint reading of the definition of Court as given in Section 2(e) and Section 42 of the Act, leaves no mind of doubt that only one Court, namely, the Civil Court of original jurisdiction or the High Court in exercise of its ordinary original jurisdiction shall have the jurisdiction to entertain application in respect of disputes and differences forming subject matter of the arbitration.
18. As noticed above, the agreement between the parties was executed at Bokaro and all work in execution of the contract was done at Bokaro ::: Downloaded on - 09/06/2013 19:32:59 ::: 12/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw which falls within the jurisdiction of this Court. In my considered opinion, therefore, the deeming clause contained in the agreement ousting the jurisdiction of this Court and conferring the jurisdiction to the Court at Bangalore cannot override the provision of Section 42 of the Act of 1996. I, therefore, hold that application filed by the petitioner under Section 11(6) is maintainable."
(i) The learned senior counsel Mr. Dhakephalkar places reliance upon the judgment of Delhi High Court in the case of M/s. Sarovar Park Plaza Hotels and Ersorts Pvt. Ltd. Vs. M/s. World Park Hotels (India) Ltd. And anr. 2006(1) RAJ 112 (Del) and more particularly paragraph 5 which reads thus :' "5.
In the meanwhile, the petitioners in this petition had already filed a petition under Section 9 of the Act being OMP 69/2005 invoking the arbitration clause under the Head Quarter Agreement on 21st February, 2005, Notice of this petition was issued to the respondents and the said petition is stated to be pending before this court. The provisions of section 42 of the Act would obviously tilt in favour of the present petitioner as no proper petition was ever presented by the respondent herein before the Court at Madurai either under section 9 or 11 of the Act. Institution of a petition before the Court which has no jurisdiction would thus be inconsequential and cannot be equated to presentation of the petition before a Court of jurisdiction. The Distt. Judge at Madurai has inherent jurisdiction to entertain and decide this petition. Another factor which the Court needs to notice at this stage itself is that the agreement dated 9th June, 1998 was signed by the parties at New Delhi and this agreement contains the arbitration clause between the parties being article No. 29 in relation to settlement of disputes. The agreement was terminated and it was conveyed to the petitioner at Delhi. As such the presentation of the petition under section 9 and the present petition under section 11 by the petitioner cannot be said to be presented at least, prima facie before a Court within whose territorial jurisdiction no cause of action has arisen. The petition under section 11 filed by the respondent before the Court at Madurai was not entertained and decided on merits but related to lack of inherent jurisdiction in the Court. The arguments raised on behalf of the respondents while relying ::: Downloaded on - 09/06/2013 19:32:59 ::: 13/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw upn the judgment of this court in Sasken Communications Technologies Ltd. Vs. Prime Telesystems Ltd. And Ors. 99 (2002) DLT 640, 2003(1) RAJ 317 is misplaced in a s much as the principle of law stated in this judgment can hardly be disputed but in that case the application under section 9 had been filed before the Court of competent jurisdiction and was pending. It is only when the basic ingredients for filing of arbitration proceedings before a Court of competent jurisdiction is satisfied that the bar contemplated under section 42 of the Act can be enforced against the maintainability of a petition before another Court. Learned counsel appearing for the petitioner relied upon the judgments in the case of ESM Dass, Secunderabad Vs. Alfa Laval India Limited, Pune 2001(3)Arb.L.R. 218, 2001(4) R.A.J. 379 (AP) and Union of India Vs. P. Anantharam, Chief Engineer (MES) and Anr. 1991 (2) Arb.L.R. 293. It is contended that this Court alone has the jurisdiction on the basis of the documents and the factum of pendency of the petition under section 9 before this Court would tilt the balance in terms of provisions of Section 42 of the Act in favour of the petitioner."
(j) The learned senior counsel then submits that the petitioner had obtained leave under clause 12 of the Letters Patent from this court though no cause of action had arisen within the territorial jurisdiction of this court and thus the said leave is required to be revoked and the petition is liable to be returned to the petitioner for presentation to the appropriate court. It is submitted that the respondents had already filed arbitration application under section 34 challenging the validity of the same award in the court of District Judge, Thane and the same is pending.
4. Mr. Kamdar, the learned senior counsel appearing on behalf of the petitioner on the other hand submits as under:
::: Downloaded on - 09/06/2013 19:32:59 :::14/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw
(a) The learned senior counsel invited my attention to para 27 of the statement of claim filed by the respondent before the arbitral tribunal and more particularly prayers in the said statement of claim set out in para 27.
Prayers (a) to (f) of the statement of claim reads thus :
"(a) It beheld and declared that the purported termination and revocation of the Suit Agreement (said Agreement-B) and of the Suit Power of Attorney (said Power of Attorney- B) by the Respondents is wrong, unlawful, illegal, bad-in-
law and of no consequences.
(b) It be held and declared that the Respondents, by filing their Say in Spl. Civil Suit No. 445/2008 pending in Thane Civil Court and in terms of averments therein have abandoned their purported termination and revocation of the said Agreement-B and said Power of Attorney-B and have accepted and admitted the same to be binding upon them.
(c ) It be held and declared that the Suit Agreement (said Agreement-B) and of the Suit Power of Attorney (said Power of Attorney-B) are both valid, subsisting, in force and binding upon the Respondents and the Respondents are legally bound to perform their part of the terms and conditions thereof in favour of the claimant.
(d) It be held and declared that the Claimant is entitled to use and utilize the premises in the said Chika Building and the Open area of the Said Property in the manner deemed fit and proper by it.
(e) The Hon'ble Tribunal, if for any reasons finds that the above said reliefs are not possible to be granted in favour of the Claimant, the Respondents be ordered and directed to pay to the Claimants the sum of Rs.41,46,49,688/- (Rupees Forty One Crore Forty Six Lakh, Forty Nine Thousand, Six Hundred Eighty Eight only) as compensation with future interest @ 18% per annum thereon from the date hereof.
(f) The Respondents be directed to execute and register a Deed of Conveyance in respect of their 2/9th undivided share, right, title, claim and interest in the said property against receipt of the balance amount of the agreed consideration."
::: Downloaded on - 09/06/2013 19:32:59 :::15/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw
(b) The learned counsel submits that from the perusal of the prayers, it is clear that the respondents were seeking specific performance of the suit agreement and in the alternative for damages. It is submitted that there as no prayer for possession. It is submitted that there was no prayer for declaration of the title and or seeking possession of the land by the respondents in the said proceedings. It is then submitted that the proceedings were not for the land but for specific performance of the agreement for sale. Respondent Nos. 2 to 4 who are partners of the first respondent are residing at Mumbai within the territorial jurisdiction of this court. No relief has been claimed against the 5 th respondent. The respondents have not disputed the factual position in respect of the residential address of respondent nos. 2 to 4 at Mumbai. It is submitted that thus in view of section 120 of the Code of Civil Procedure which provides that section 16, 17 and 20 of the C.P.C. are not applicable to High Courts in exercise of its original side jurisdiction, the reliance placed by the respondents on section 16 is misplaced. It is submitted that clause 12 of the Letters Patent would thus apply and not section 16 of Code of Civil Procedure, 1908. As three of the respondents out of five are residing within the territorial jurisdiction of this court and in respect of the balance part of cause of action, leave is obtained by the petitioner, thus this court only has jurisdiction to entertain, try and dispose of the present petition.
::: Downloaded on - 09/06/2013 19:32:59 :::16/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw (c ) Mr. Kamdar, the learned senior counsel places reliance on clause 12 of the Letters Patent which reads thus :
"12. Original jurisdiction as to suits - And We do further ordain that the said High Court of Judicature at Bombay, in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable property such land or property shall be situated, or in all other cases, if the cause of action shall have arisen, either wholly, or in the case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits, except that the said High Court shall not have such original jurisdiction in cases failing within the jurisdiction of the Small Cause Court at Bombay, or the Bombay City Civil Court."
(d) The learned counsel places reliance upon the judgment of this court in the case of K. Venkatrao Sethupathy Vs. Khimji Assur Virji, 26 BLR 535 and more particularly at page 537 which reads thus :
"But the personal jurisdiction of the Court is exercised under clause 12 of the Letters Patent not only in cases where the defendants or some of them reside permanently within the jurisdiction but in cases where, according to the provisions of the Letters Patent, they have been lawfully caused to appear upon summons where the cause of action or part of it has arisen in Bombay."
(e) The learned senior counsel also placed reliance upon the judgment of this court delivered on 16th October, 2012 (R.D. Dhanuka,J.) in the case of Navin Makhija and Ors. Vs. Tulsi Bhimjiyani and anr. delivered on 16th October, 2012 in Arbitration Petition No. 560 of 2012 and more particularly paragraph 13 which reads thus :
"13. In my view, whether suit is a suit for land or not ::: Downloaded on - 09/06/2013 19:32:59 ::: 17/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw has to be determined on the basis of the averments in the statement of claim filed before the arbitral tribunal. The Learned Senior Counsel Mr.S.U.Kamdar invited my attention to paragraphs 2.7 to 2.16 and paragraphs (3) to (10), paragraphs (34) to (45) and prayers (a), (b),
(c), (d), (e), (f), (h) and (i) of the statement of claim. From the perusal of the averments and the prayers in the statement of claim filed before the arbitral tribunal, it is clear that the petitioners seek specific performance of the agreement entered into between the parties and the suit is not for land. In view of the fact that the suit agreement is entered into at Mumbai and the dispute has arisen in respect of the such agreement for which specific performance is sought before the arbitral tribunal, in my view, this court has jurisdiction to entertain, try and dispose of the present petition. This court has already granted leave under Clause 12 of the Letters Patent to the petitioners in view of the fact that the property is situated outside Mumbai."
(f) Mr. Kamdar, learned senior counsel submits that though in the ad interim order dated 3rd May, 2011 passed by Mr. Justice S.J. Vajifdar, J. in Arbitration Petition No. 367 of 2011 which was filed by the petitioner under section 9, the issue of jurisdiction was kept open, when the said petition was finally heard and disposed off, by order dated 27 th February, 2012, after hearing both the parties, the respondent did not press the issue of jurisdiction and allowed this court to dispose of the said proceedings on merits. It is submitted that in para 3 of the said order which no doubt records that the petition is disposed of keeping all the points open, the said order is of no consequence in view of the fact that the proceedings were disposed of on merits without the respondents agitating the issue of jurisdiction. It is thus submitted that in view of arbitration Petition (367 of 2011) filed under section 9 of the Act, prior in point of time and was ::: Downloaded on - 09/06/2013 19:32:59 ::: 18/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw entertained by this court having jurisdiction, the present proceedings filed under section 34 of the Act by the petitioner which is subsequent application, can be entertained only by this court having proper jurisdiction and not by the District Court, Thane in view of section 42 of the Act.
(g) It is submitted that the arbitral tribunal has also granted claim for specific performance in favour of the respondents and is thus clear that the proceedings were not for land. It is submitted that the third part of the clause 12 of the Letters Patent would be attracted in this case and as some of the respondents residing within the territorial jurisdiction of this court, this court alone has jurisdiction after petitioner obtaining leave under clause 12 of the Letters Patent. It is submitted that this court has rightly granted leave under section 12 and no case is made out for recalling the said order and or revoking the leave granted by this court.
5. Mr. Dhakephalkar, the learned senior counsel for the respondent in rejoinder submits that the respondents had also asked for possession in prayer clause (d) of the statement of claim. The development agreement was for land and not merely for agreement for sale and thus the District Court Thane only has exclusive jurisdiction and not this court.
6. I have heard the learned counsel and I have given my anxious ::: Downloaded on - 09/06/2013 19:32:59 ::: 19/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw consideration to the rival submissions made by the learned counsel.
7. In my view, whether the suit is for land or not is to be determined on the basis of the averments in the statement of claim filed by the claimant before the arbitral tribunal. The respondent herein were claimants before the arbitral tribunal.
In para 3(g), it is averred by the respondents (original claimants) that the claimant had acquired rights and interest in the suit property as also rights of development of the suit property and came in legal and physical possession of the suit property with vacant possession of Chika village and some other structures and garages existing on the suit property and is continued to be in such possession thereof without any obstruction or hindrances. In Para 15 of the statement of claim it is averred that the claimants have always been ready and willing to pay agreed consideration and balance thereof to the respondents as per the suit agreement. In Para 18 it is submitted that suit agreement and power of attorney are valid, subsisting and in force and biding upon the respondents. Para 21 which is relevant reads thus :
"The Claimant states that, though the Suit Agreement is titled as Agreement for Development, the same in fact is the Agreement to Sell, evident from the contents thereof. The Respondents have clearly agreed to execute a Deed of Conveyance and to register the same so as to transfer their 2/9th share in the Said Property to the Claimant. In fact the respondent themselves in their Say filed in Spl.Civil Suit No. 445/2008 have accepted and admitted this position. As such the Claimant is entitled for performance of the terms and conditions of the said Agreement in its favour."
8. From the perusal of the prayers, it is clear that the respondents have not claimed possession in respect of the suit property. The respondents have sought ::: Downloaded on - 09/06/2013 19:32:59 ::: 20/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw specific performance of the development agreement and in the alternative for damages. The respondents themselves claimed to be in exclusive possession of the suit property.
9. On plain reading of clause 12 of the Letters Patent, it is clear that the High Court in exercise of its ordinary original jurisdiction has powers to receive, try and determine :
(1) if in the case of suits for land or other immovable property, suit land or property would be situate within the jurisdiction of the High Court or:
(2) in all other cases if the cause of action has arisen wholly or ;
(3) If the cause of action has arisen in the part within the local limits of the ordinary original jurisdiction of the High Court than upon grant of leave under clause 12 of the Letters Patents, or ;
(4) If the defendant at the time of commencement of the suit, dwells or carry on business, work for gain within such limits, subject to exception carved out under clause 12.
10. The question that arises for consideration of this court in the present proceeding is whether clause 12 of the Letters Patent is attracted in the facts of this case and if so which part.
11. I will first consider whether the respondent who was original claimant before the arbitral tribunal could have filed the suit in this court in respect of the subject matter if there was no arbitration clause. If the respondent could not have ::: Downloaded on - 09/06/2013 19:32:59 ::: 21/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw filed a suit in this court in respect of the same subject matter, the question that arises is whether the petitioner could file the present petition under section 34 of the Act in this court, merely on the ground that three out of five respondents reside within the territorial jurisdiction of this court, on obtaining leave under clause 12 of the Letters Patent.
12. On this issue reference to the judgment of this court in the case of ION Exchange (I) Ltd. (supra) relied upon by Mr. Dhakephalkar, learned senior counsel appearing on behalf of the respondent in the present petition and applicant to the Chamber summons, would be relevant. This court has taken a view that before the arbitrator, if the claimant, instead of taking up arbitration proceeding had filed civil suit on the subject matter of the arbitration proceedings, the question to be considered is whether he could have filed a suit in this court. This court considered that in such a situation, the petitioner in the suit proceeding would have been defendant who was carrying on business within the jurisdiction of this court and therefore, in terms of clause 12 of the Letters Patent, the suit filed by the claimant on the subject matter of the arbitration, in this court against the petitioner was maintainable in this court. Admittedly in that case, the petitioner who had filed petition under section 34, was original respondent in the arbitration proceedings and was carrying on business within the territorial jurisdiction of this court. Considering these facts, this court took a view that if the respondent to the said petition who were original claimants, would have filed a suit if there was no arbitration clause in respect of the same subject matter, the respondents could have filed a suit within the jurisdiction of this court, within the meaning of ::: Downloaded on - 09/06/2013 19:32:59 ::: 22/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw section 2(1)(e) of the Act and thus the petition filed by the petitioner in that case under section 34 of the Act impugning the award would be maintainable in this court. Applying the ratio in the case of ION Exchange Limited to this case, it is clear that while deciding the issue of jurisdiction under section 34 of this court read with section 2(1)(e) of the Act, the court has to see whether in the arbitration proceeding, original claimants could have filed a suit in respect of the subject matter within the jurisdiction of this court, if there was no arbitration clause and if the answer is in affirmative, petition under section 34 would be maintainable in such court in which such suit could have been filed. If the suit itself could not have been filed in this court by the original claimant, petition under section 34 cannot be filed in this court even if some of the respondents are residing and carrying on business at Mumbai.
13. I shall first consider whether in the facts of this case, respondents could have filed a suit in respect of the subject matter of arbitration, in this court, if there was no arbitration clause and whether this court would have jurisdiction to entertain such suit.
14. I shall now decide whether the proceeding filed by the respondent before the arbitral tribunal can be considered as suit for land.
15. In my view, whether the suit is a suit for land or not has to be determined on the basis of the averments in the statement of claim filed before the arbitral tribunal. On perusal of the relevant paragraphs of the statement of claim as highlighted in the earlier paragraphs of this judgment, it is clear that the ::: Downloaded on - 09/06/2013 19:32:59 ::: 23/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw respondents claim to be in possession of the suit property. The respondent has not sought any relief for possession in respect of the suit premises. The claim was for specific performance in respect of the agreement to sell. In Paragraph 21 of the statement of claim, it was specifically pleaded that though the suit agreement was titled as "Development Agreement" the same was in fact an "Agreement for Sale".
16. From the perusal of the prayers in the statement of claim, it is clear that the respondent had prayed for specific performance of the agreement to sell. The learned arbitrator has granted such reliefs in favour of the respondents. It is not in dispute that the agreement was entered into at Thane. It is also not in dispute that the agreement had been registered with the office of the Sub Registrar, Thane. It is also not in dispute that the registered office of the first respondent is situated at Thane. In the case of Navin Makhija and Ors. Vs. Tulsi Bhimjiyani and anr. this court (R.D. Dhanuka,J.) by order and judgment dated 16 th October, 2012 in Arbitration Petition No. 560 of 2012 after considering the Supreme Court judgment in the case of Adcon Electronics Pvt. Ltd. Vs. Daulat and Anr. reported in 2001(4) Mh.L.J. 469 has held that the suit was for specific performance of the agreement and was not suit for land. It has been held that since the said agreement was entered into in Mumbai and the dispute had arisen in respect of the said agreement in which specific performance was sought before the arbitral tribunal, Bombay High Court had jurisdiction to try, entertain and dispose of the petition filed under section 34 of the Act. On applying the ratio of the said judgment to the facts of this case, it is clear that as in this case the suit ::: Downloaded on - 09/06/2013 19:32:59 ::: 24/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw agreement was entered into at Thane, the suit property is situated at Thane, the claim was for specific performance of the agreement to sell, the proceedings being not in the nature of suit for land, could not have been filed within the jurisdiction of this court. In view of the first part of clause 12 of the Letters Patent, thus in my view, this court would not have jurisdiction to entertain a suit for specific performance. Therefore, in my view, this court has no jurisdiction to entertain the present petition filed under section 34 in this court.
17. The next question that arises for consideration of this court is whether any part of cause of action had arisen either wholly or in part in respect of the subject matter of the dispute within the jurisdiction of this Court. In my view, it is admitted fact that the agreement was entered into at Thane, the suit property is situated at Thane, the suit agreement was registered at Thane. The entire cause of action had thus arisen at Thane. In my view, no cause of action has arisen within the jurisdiction of this court. If no cause of action has arisen within the jurisdiction of this court and if the respondent would have applied for leave under clause 12 of the Letters Patent for filing the suit in this court, no such leave could have been granted by this court in favour of the respondents to confer jurisdiction on this court. In my view, even second part of clause 12 of the Letters Patent in such situation thus would not be attracted.
18. The next question that arises for consideration of this court is whether the petitioner could have filed the present petition in this court on the basis that three out of five respondents to this petition reside within the jurisdiction of this court. In my view, since the respondent could not have filed a suit in respect of ::: Downloaded on - 09/06/2013 19:32:59 ::: 25/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw the subject matter of arbitration, in this case, in this court, as no cause of action had arisen within the territorial jurisdiction of this court, on conjoint reading of section 34 of the Act and Section 2(1)(e), the petition under section 34 could not be filed in this court as the same is without jurisdiction.
19. In my view, the petitioner can apply for leave under clause 12 of the Letters Patents only if the material part of cause of action has arisen within the jurisdiction of this court and not otherwise. As no cause of action has arisen within the jurisdiction of this court at all, or in any case, material cause of action, in my view this court could not have granted leave under clause 12 of the Letters Patent to confer jurisdiction on this court. In my view, leave under clause 12 could not be granted on the ground that some of the respondents to petition under section 34 are residing within jurisdiction of this court.
20. From the perusal of the application for leave under clause 12 filed by the petitioner in this court, it is clear that leave is sought on two grounds (a) if it would have filed a suit, this court would have jurisdiction by virtue of the fact that three out of four respondents are residing in Mumbai, under section 20 of the Code of Civil Procedure, 1908 as well as clause 12 of the Letters Patent after this court granting leave; (b) under section 42 of the Act, in view of the petitioner earlier having filed petition under section 9 of the Act in this Court in respect of the same subject matter.
21. I would now consider whether the arbitration Petition No. 960 of 2002 ::: Downloaded on - 09/06/2013 19:32:59 ::: 26/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw could be filed in this court being subsequent petition in view of section 42 of the Act, the Petitioner having earlier filed petition under section 9 (367 of 2011) in this court against respondent in respect of the same agreement. On perusal of section 42 of the Act, it is clear that the subsequent application arising out of the same agreement can be filed in the same court in which the prior application had been made in the court having jurisdiction over the arbitral proceedings, only if the earlier application was filed before the court having jurisdiction to entertain such application, otherwise the subsequent application would not be maintainable in the same court. The bar which is contemplated under section 42 of the Act from filing subsequent application in any other court would apply only if the earlier application was filed in the court having jurisdiction and not otherwise. In my view, since no cause of action had arisen within the territorial jurisdiction of this court, the application filed under section 9 by the petitioner itself was outside the jurisdiction of this court and bar under section 42 in the facts of this case would not apply in filing petition in any other court. This petition is thus not competent within the jurisdiction of this court even on granting leave under clause 12 of Letters Patent.
22. Mr. Kamdar, the learned senior counsel vehemently urged that the respondent could not be permitted to submit that the issue of jurisdiction was kept open while disposing of the petition filed under section 9 by this court. The learned senior counsel submits that though ad interim order was passed without prejudice to the rights and contentions of the respondents as regards the jurisdiction of this court, while disposing of the said petition on 27 th February, ::: Downloaded on - 09/06/2013 19:32:59 ::: 27/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw 2012, the respondent did not pursue the objection regarding the jurisdiction and proceeded with the matter on merits. The learned senior counsel submits that in view of the petition (367 of 2011) having been disposed of on merits, this court had exercised its jurisdiction to entertain such petition filed under section 9 of the Act and thus this subsequent petition filed under section 34 of the Act also is maintainable in this court.
23. Mr. Dhakephalkar, the learned senior counsel on the other hand submits that the issue of jurisdiction was kept open as is apparent from the bare perusal of both the orders passed by this court in Arbitration Petition No. 367 of 2011. In any event, based on the consent of both the parties, jurisdiction cannot be conferred on the court which does not have jurisdiction to entertain the petition.
24. From the perusal of the order dated 3rd May, 2011 and 27th February, 2011, it is clear that the respondent had raised the issue of jurisdiction in respect of the said petition under section 9 of the Act filed by the petitioner and the ad interim order was passed without prejudice to all the rights and contentions of the respondents as regards jurisdiction of this court. Even while disposing of the petition on 27th February, 2012, it was made clear that the petition was disposed of keeping all points open. In my view, even if this order is construed as if the same is passed on merits, and the issue of jurisdiction was not kept open, the parties by consent cannot confer jurisdiction on the court which does not have jurisdiction. In my view, in any event, this court was not competent to entertain ::: Downloaded on - 09/06/2013 19:32:59 ::: 28/28 CHAMBER SUMMONS NO. 545 OF 2012.sxw that petition filed under section 9 and the said petition was without jurisdiction and as such the petition under section 34 of the Act could not have been filed in this court, even if three out of five respondents were residing within the territorial jurisdiction of this court. In the facts of this case, this court could not have granted the leave under clause 12 of the Letters Patent. In my view the leave thus granted by this court deserves to be revoked. I, therefore, pass the following order :
Chamber summons is made absolute in terms of prayer clause (a). The order dated 15th March, 2012 passed in Leave Petition No. 211 of 2012 granting leave under clause 12 of the Letters Patent is revoked. The petition is liable to be returned to the petitioner for presentation before the appropriate court having jurisdiction and is ordered accordingly. There shall be no order as to costs.
(R.D. DHANUKA,J.) ::: Downloaded on - 09/06/2013 19:32:59 :::