Delhi High Court - Orders
L & T Housing Finance Limited vs Yatinn Shivaji Patil & Anr on 1 February, 2019
Author: Navin Chawla
Bench: Navin Chawla
$~23
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 28/2019
L & T HOUSING FINANCE LIMITED ..... Petitioner
Through: Mr.S.K.Sen, Adv.
versus
YATINN SHIVAJI PATIL & ANR. ..... Respondents
Through: Nemo
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
ORDER
% 01.02.2019 IA 1518/2019 Exemption allowed subject to all just exceptions. IA 1519/2019 (delay of 49 days in re-filing the petition) This is an application seeking condonation of 49 days' delay in re- filing the petition.
For the reasons stated in the application, the delay is condoned and the application stands allowed.
OMP (I)(Comm) 28/2019 & IA 1517/2019
1. This petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed by the petitioner inter alia praying for the following reliefs:
"1) Freeze / Attach the account bearing No. 007130100003825 maintained with (Punjab & Maharashtra Co-operative Company) PMC Company, Bhandup, Maharashtra in the name of their Company i.e. Digipro System Pvt. Ltd. in which the Respondents are the Directors in favour of the petitioner to the tune of Rs.
2,66,78,771.49/- (Rupees Two Crore Sixty Six Lakh Seventy Eight Thousand Seven Hundred Seventy One and Forty Nine Paise Only).
2) Direct the Respondents to furnish additional security to the tune of 2,66,78,771.49/- (Rupees Two Crore Sixty Six Lakh Seventy Eight Thousand Seven Hundred Seventy One and Forty Nine Paise Only) to secure the outstanding payment against the above stated loans.
3) Direct the Respondents to disclose their details of other assets (both moveable and immoveable including Company Accounts, Details of Shares & Debentures, Securities, in the name of their company or in their personal names and to attach the disclosed properties for securing the outstanding dues of the Petitioner."
2. The petition is based on the following loan Agreements executed between the parties:
AGREEMENT AGREEMENT LOAN DISBURSED TENURE EMI NO. DATE AMOUNT AMOUNT AMOUNT MUMHL16001247 21.06.2016 93,00,000/- 93,00,000/- 247 94417/-
MONTH MUMHL17000560 12.06.2017 92,55,000/- 92,55,000/- 255 86269/-
MONTH MUMHL17000870 12.06.2017 17,90,000/- 17,90,000/- 189 20346/-
MONTH MUMHL17000561 12.06.2016 15,80,000/- 15,80,000/- 189 17959/-
MONTH MUMHL16000716 31.04.2016 90,00,000/- 90,00,000/- 256 81320/-
MONTH MUMHL17000869 31.05.2017 16,80,000/- 16,80,000/- 189MONTH 19095/-
3. The Agreements were executed at Mumbai and contain the following stipulations that are relevant for determining the territorial jurisdiction of this Court:
"ARTICLE- 12 : ARBITRATION.
12.1 Without prejudice to any other rights available to the Lender under any other statute to enforce the Security Interest/take action against the Borrower/Property, any dispute or difference or claim that arises between parties or any of them touching or concerning this Agreement or any condition herein/therein contained or as to the rights, duties or liabilities of parties hereto or any of them either during the continuance of the Agreement or after the completion or termination or purported termination hereof shall be referred to Arbitration by a Sole Arbitrator, to be appointed by the Lender, according to the provisions of Arbitration & Conciliation Act, 1996 and rules thereunder and any amendment thereto from time to time; xxxxxx 12.5 The venue of arbitration shall be Mumbai/New Delhi or such other place as may be determined at the sole discretion of the Lender and courts in Mumbai/New Delhi or such other place shall have exclusive jurisdiction. xxxxxx ARTICLE - 13: JURISDICTION 13.1 This Agreement shall be governed by and construed in all respects with the Indian laws and the parties hereto agree that any matter or issues arising hereunder or any dispute hereunder shall, at the option / discretion of the Lender, be subject to the non-exclusive jurisdiction of the courts of the city of New Delhi/Mumbai*. This shall not however limit the rights of the Lender to take proceedings in any other court of competent jurisdictions."
*Note: In three of the Agreements the following additional words appear "or such other place as may be determined at the sole discretion of the Lender"
(Emphasis Supplied)
4. A reading of the above would clearly show that the 'Venue' of the arbitration has been agreed to be at Mumbai/New Delhi, albeit at the sole discretion of the petitioner. The same, therefore, cannot vest exclusive territorial jurisdiction in this Court.
5. Counsel for the petitioner submits that the petitioner has already invoked arbitration and the arbitral proceedings are being conducted at New Delhi. In my opinion, the same would again be relevant only as a 'Venue' of arbitration and not as a 'Seat' of arbitration.
6. Article 13 of the Agreement also vests 'non exclusive jurisdiction' in Courts at New Delhi/Mumbai. This again cannot be used to confer exclusive jurisdiction in this Court.
7. In the terms of Section 2(1) (e) of the Act, 'Court' has been defined as follows:
"2.(1)(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."
8. Section 11 (12) (b) further states that for a petition under Section 11, it would be the High Court within whose local limits the principal Civil Court referred to in Clause (e) of sub-section (1) of Section 2 is situated that would have territorial jurisdiction.
9. In the present case, not only are the Agreements executed at Mumbai, the Loan transaction has also taken place at Mumbai and the respondents are also stated to be residents of Mumbai.
10. In my view, therefore, merely because the petitioner has chosen Delhi as the 'Venue' of arbitration, this Court would not have territorial jurisdiction to entertain the present petition.
11. The petition is accordingly dismissed, with no order as to costs.
NAVIN CHAWLA, J FEBRUARY 01, 2019 RN