Madhya Pradesh High Court
M/S Rean Water Tech Private Limited A ... vs Madhya Pradesh Jal Nigam Maryadit on 10 April, 2026
Author: Gurpal Singh Ahluwalia
Bench: G. S. Ahluwalia
NEUTRAL CITATION NO. 2026:MPHC-GWL:12030
1 AA-108-2026
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE G. S. AHLUWALIA
&
HON'BLE SHRI JUSTICE PUSHPENDRA YADAV
ON THE 10th OF APRIL, 2026
ARBITRATION APPEAL No. 108 of 2026
M/S REAN WATER TECH PRIVATE LIMITED
Versus
MADHYA PRADESH JAL NIGAM MARYADIT AND OTHERS
Appearance:
Shri Sanjay Kumar Dwivedi, Advocate with Shri Somyadeep Dwivedi and Shri
Manu Chaubey, Advocates for the appellant.
Shri Vivek Khedkar, Senior Advocate with Shri Kartik Karara and Shri Prashant
Mishra, Advocates for respondents.
ORDER
Per: Justice Gurpal Singh Ahluwalia This arbitration appeal has been filed against the order dated 23/3/2026 passed by Commercial Court And Commercial Appellate Court, Gwalior in Case No. Ex AV/29/2026, by which an application filed by appellant under section 9 of the Arbitration and Conciliation Act, 1996 (for short "the Act") for passing of an interim order, has been rejected on the ground of territorial jurisdiction.
2. Since the controversy lies in a very narrow compass, therefore, it is suffice to mention here that an agreement was signed under Ghategaon Bhitarwar Multi Village Drinking Water Supply Scheme, District Gwalior & Morena. The cost of work was Rs.343,89,00,000/- and it was to be completed within a period of 24 months including rainy season. Clause 8.7 Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 2 AA-108-2026 of the agreement deals with dispute resolution system, whereas clause 12 of the agreement deals with legal jurisdiction. The contract of appellant was terminated. Order of termination was challenged by appellant by filing W.P. No.5880/2026 before Principal Seat at Jabalpur and by order dated 18/2/2026, W.P. No.5880/2026 was permitted to be withdrawn by Division Bench with liberty to the appellant to initiate alternative dispute resolution mechanism with a right to claim for restitution of amount wrongfully appropriated by respondents by invocation of bank guarantee. It was also observed that rights and contentions of the parties are reserved. Thereafter, according to appellant he has approached the competent Authority for redressal of his grievances but the said application is still pending.
3. It is submitted by counsel for appellant that appellant has preferred an application under section 9 of the Act before the Commercial Court, Gwalior which has been rejected on the ground of territorial jurisdiction. It is submitted that since work was to be carried out within the territorial jurisdiction of Commercial Court at Gwalior, therefore, the Commercial Court at Gwalior had jurisdiction to entertain the application filed under S.9 of the Act and referred to Clause 8.7 of the agreement.
4 . Per contra counsel for respondent, by referring to Clause 12 of the agreement, submitted that appellant and respondent had agreed to oust the jurisdiction of all other Courts which otherwise had territorial jurisdiction and agreed to confer it on Commercial Court at Bhopal or Commercial Division at the High Court of Madhya Pradesh, Jabalpur and thus, in view of section 28 of the Contract Act, when parties had ousted the jurisdiction of Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 3 AA-108-2026 other Courts and conferred jurisdiction on one Court, then appellant cannot maintain his application under S.9 of the Act before the Commercial Court at Gwalior. Accordingly, it is submitted that Commercial Court at Gwalior has rightly rejected the application on the ground of territorial jurisdiction.
5. Heard, learned counsel for the parties.
6. Clause 8.7 and clause 12 of the agreement read as under:-
8.7. Dispute Resolution System
(i) No dispute can be raised anywhere else except before the Competent Authority i.e. Project Director, Madhya Pradesh Jal Nigam in writing after giving full description and grounds of dispute. It is clarified that merely recording protest while accepting measurement and/ or payment shall not be considered as raising a dispute.
(ii) Limitation: No dispute can be raised after 45 days of its first occurrence. Any dispute raised after expiry of 45 days of its first occurrence shall not be entertained and the Employer shall not be liable for claims arising out of such dispute.
(iii) After receiving the dispute, it shall be put up within the MPJN Technical committee for discussion & recommendations to the Competent Authority i.e., Project Director, who shall decide the matter within 45 days.
(iv) Appeal against the order of the Competent Authority i.e., Project Director must be preferred within 30 days to the Appellate Authority i.e, Managing Director of MPJN. The Appellate Authority i.e., Managing Director (MD) of MPJN shall decide the dispute within 45 days.
(v) Appeal against the order of the Appellate Authority can be referred before the Madhya Pradesh Arbitration Tribunal constituted under Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.
(vi) The contractor shall have to continue execution of the works with due diligence notwithstanding pendency of a dispute before any authority or forum, Note :This clause shall supersede the dispute resolution related provisions in Clause 17 of Form F.
12. Legal Jurisdiction Arbitration shall always remain the primary method of resolution of dispute relating to or arising out of this contract. Judicial proceedings shall not be an alternative for arbitration. Subject to the provisions of the clause relating to Dispute Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 4 AA-108-2026 Resolution, the Commercial Court, Bhopal or the Commercial Division at the High Court of Madhya Pradesh, Jabalpur, as the case may be, constituted under the provisions of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act,2015 shall have the exclusive jurisdiction relating to all the disputes relating to and regarding this contract. No other Courts in India or in any other legal system or country shall have the original jurisdiction. The Commercial Court, Bhopal or the Commercial Division at the High Court of Madhya Pradesh, Jabalpur shall apply only the laws for time being in force in India. The law, whether substantive law or procedural law, of any other legal system or country, other than those of India, shall have no application to this contract or to the dispute arising out of this contract.
7. It is well established principle of law that where a part of cause of action has arisen within the territorial jurisdiction of multiple Courts, then the parties by entering into an agreement can oust the jurisdiction of all the Courts and can confer the jurisdiction on one of the Court. However the only exception is that the parties cannot confer a jurisdiction on a Court which otherwise does not have the same.
8. The Supreme Court in the case of A.B.C. Laminart (P) Ltd. v. A.P. Agencies reported in AIR 1989 SC 1239 has held as under:-
"16. So long as the parties to a contract do not oust the jurisdiction of all the courts which would otherwise have jurisdiction to decide the cause of action under the law it cannot be said that the parties have by their contract ousted the jurisdiction of the court. If under the law several courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them it cannot be said that there is total ouster of jurisdiction. In other words, where the parties to a contract agreed to submit the disputes arising from it to a particular jurisdiction which would otherwise also be a proper jurisdiction under the law their agreement to the extent they agreed not to submit to other jurisdictions cannot be said to be void as against public policy. If on the other hand the jurisdiction they agreed to submit to would not otherwise be proper jurisdiction to decide disputes arising out of the contract it must be declared void being against public policy. Would this be the position in the instant case?
17. In S. Manuel Raj & Co. v. J. Manilal & Co. [AIR 1963 Guj 148 : (1963) 4 Guj LR 540] where one of the parties to the Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 5 AA-108-2026 contract signed an order form printed by the other party containing the words "subject to Madras jurisdiction" and sent the order form to the other party it was held that the party must be assumed to have agreed that Madras was the place for settlement of the dispute and it was not open to that person who signed the order form of the opposite party containing the printed words to show that printed words were not part of the contract and that those words in the contract was to exclude the jurisdiction of other courts and to keep sole jurisdiction to one court. It was observed that the object of printing such words, as "subject to Madras jurisdiction" in the contract was to exclude the jurisdiction of other courts and to give sole jurisdiction to one court and it was in consonance with the commercial practice in India. Similarly in Sri Rajendra Mills v. H.V.M. Hazi Hassan Dada [AIR 1970 Cal 342 :
ILR (1969) 2 Cal 142] where there was a contract between the plaintiff and Defendant 1 under which the parties agreed that all suits arising on or out of the contract, would be instituted in the court at Salem, the Division Bench held that it was true that the suit could have been instituted either at Salem or at Howrah under Section 20(c) of the Code of Civil Procedure, as the cause of action, admittedly arose in part in both the places and it was therefore a case where two courts had concurrent jurisdiction and, in such a case, it was open to the parties to make a choice restricting the court in which the suit under or upon the contract could be instituted. In other words, both the courts having territorial jurisdiction, the parties by their agreement waived their right, to institute any action, as aforesaid except at Salem. It was observed that under those circumstances it was not open to the plaintiff to object to the order for return of the plaint for presentation to the court at Salem as the choice of forum in case of alternative forums lies with the plaintiff and the plaintiff having debarred or precluded itself from going to any other court except at Salem which would be a proper court as against the defendants it would not be just to allow the plaintiff at the instance of any other party or under cover of its objection to institute the suit except in the court at Salem.
18. In Hakam Singh v. Gammon (India) Ltd. [(1971) 1 SCC 286 :
(1971) 3 SCR 314] the appellant agreed to do certain construction work for the respondent who had its principal place of business at Bombay on the terms and conditions of a written tender. Clause 12 of the tender provided for arbitration in case of dispute. Clause 13 provided that notwithstanding the place where the work under the contract was to be executed the contract shall be deemed to have been entered into by the parties at Bombay and the court in Bombay alone shall have jurisdiction to adjudicate upon. On dispute arising between the parties the appellant submitted a petition to the court at Varanasi for an order under Section 20 of the Arbitration Act, 1940 that the agreement be filed and an order of reference be made to an arbitrator or arbitrators appointed by the court. The respondent contended that in view of the clause 13 of the arbitration agreement only the courts at Bombay had Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 6 AA-108-2026 jurisdiction. The trial court also held that the entire cause of action had arisen at Varanasi and the parties could not by agreement confer jurisdiction on the courts at Bombay which they did not otherwise possess. The High Court in revision held that the courts at Bombay had jurisdiction under the general law and hence could entertain the petition and that in view of clause 13 of the arbitration agreement the petition could not be entertained at Varanasi and directed the petition to be returned for presentation to the proper court. On appeal therefrom one of the questions that fell for consideration of this Court was whether the courts at Bombay alone had jurisdiction over the dispute. It was held that the Code of Civil Procedure in its entirety applied to proceedings under the Arbitration Act by virtue of Section 41 of that Act. The jurisdiction of the court under the Arbitration Act to entertain a proceeding for filing an award was accordingly governed by the provisions of the Code of Civil Procedure. By the terms of Section 20(a) of the Code of Civil Procedure read with Explanation II thereto the respondent company which had its principal place of business at Bombay was liable to be sued at Bombay. It was held that it was not open to the parties to agreement to confer by their agreement jurisdiction on a court which did not possess it under the Code. But where two courts or more have under the Code of Civil Procedure jurisdiction to try the suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such courts was not contrary to public policy and such an agreement did not contravene Section 28 of the Contract Act. Though this case arose out of an arbitration agreement there is no reason why the same rule should not apply to other agreements insofar as jurisdiction is concerned. Without referring to this decision a Division Bench of the Madras High Court in Nanak Chand Shadurain v. T.T. Elect. Supply Co. [AIR 1975 Mad 103 : (1974) 2 MLJ 431] observed that competency of a court to try an action goes to the root of the matter and when such competency is not found, it has no jurisdiction at all to try the case. But objection based on jurisdiction is a matter which parties could waive and it is in this sense if such jurisdiction is exercised by courts it does not go to the core of it so as to make the resultant judgment a nullity. Thus it is now a settled principle that where there may be two or more competent courts which can entertain a suit consequent upon a part of the cause of action having arisen therewithin, if the parties to the contract agreed to vest jurisdiction in one such court to try the dispute which might arise as between themselves the agreement would be valid. If such a contract is clear, unambiguous and explicit and not vague it is not hit by Sections 23 and 28 of the Contract Act. This cannot be understood as parties contracting against the statute. Mercantile law and practice permit such agreements."
9. The Supreme Court in the case of Hakam Singh v. Gammon (India) Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 7 AA-108-2026 Ltd. reported in (1971) 1 SCC 286 has held as under:-
"4. The Code of Civil Procedure in its entirety applies to proceedings under the Arbitration Act. The jurisdiction of the courts under the Arbitration Act to entertain a proceeding for filing an award is accordingly governed by the provisions of the Code of Civil Procedure. By clause 13 of the agreement it was expressly stipulated between the parties that the contract shall be deemed to have been entered into by the parties concerned in the city of Bombay. In any event the respondents have their principal office in Bombay and they were liable in respect of a cause of action arising under the terms of the tender to be sued in the courts at Bombay. It is not open to the parties by agreement to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two courts or more have under the Code of Civil Procedure jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. Such an agreement does not contravene Section 28 of the Contract Act."
10. From clause 12 of the agreement, it is clear that the parties had agreed to confer the jurisdiction on Commercial Court, Bhopal or the Commercial Division at the High Court of Madhya Pradesh, Jabalpur, thereby ousting the jurisdiction of all other Courts.
11. Now the only question for consideration is as to whether Commercial Court at Bhopal or Commercial Division at High Court of Madhya Pradesh, Jabalpur had any territorial jurisdiction to adjudicate the dispute or not.
12. The agreement/contract was signed at Bhopal. The work order was issued from Bhopal. The termination order dated 9/2/2026 was issued by Chief General Manager, Gwalior Zone with the approval of Managing Director and the said termination order was sent to the registered office of the appellant at Rajarhat Kolkata. The work order was executed within the Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 8 AA-108-2026 territorial jurisdiction of Commercial Court at Gwalior. Therefore, by no stretch of imagination, it can be said that no part of cause of action had arisen within the territorial jurisdiction of Commercial Court at Bhopal. Therefore, it is clear that Bhopal also had a territorial jurisdiction because a part of cause of action had arisen in Bhopal as not only the contract was signed at Bhopal but the approval to issue the termination order was given by the Managing Director from Bhopal. Even otherwise, it is the case of appellant that since the termination order was issued by Chief General Manager, Gwalior Zone with the approval of Managing Director, therefore, he has lost an opportunity to file an appeal before the Managing Director, Bhopal.
13. Be that whatever it may be.
14. Since a part of cause of action has arisen in Bhopal, therefore, the conferral of exclusive jurisdiction on the Commercial Court at Bhopal and the Commercial Division at High Court of Madhya Pradesh, Jabalpur thereby ousting the jurisdiction of other Courts is in accordance with section 28 of Contract Act.
15. The Supreme Court in the case of Arif Azim Co. Ltd. v. Micromax Informatics FZE reported in (2025) 9 SCC 750 has held as under:-
77. From the above exposition of law, the following position of law emerges:
77.1. Part I of the 1996 Act and the provisions thereunder only applies where the arbitration takes place in India i.e. where either (I) the seat of arbitration is in India OR (II) the law governing the arbitration agreement are the laws of India.
77.2. Arbitration agreements executed after 6-9-2012 where the seat of arbitration is outside India, Part I of the 1996 Act and the provisions thereunder will not be applicable and would fall beyond the jurisdiction of Indian courts.
Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 9 AA-108-2026 77.3. Even those arbitration agreements that have been executed prior to 6-9-2012 Part I of the 1996 Act will not be applicable, if its application has been excluded by the parties in the arbitration agreement either explicitly by designating the seat of arbitration outside India or implicitly by choosing the law governing the agreement to be any other law other than Indian law. 77.4. The moment "seat" is determined, it would be akin to an exclusive jurisdiction clause whereby only the jurisdictional courts of that seat alone will have the jurisdiction to regulate the arbitral proceedings. The notional doctrine of concurrent jurisdiction has been expressly rejected and overruled by this Court in its subsequent decisions.
77.5. The "Closest Connection Test" for determining the seat of arbitration by identifying the law with which the agreement to arbitrate has its closest and most real connection is no longer a viable criterion for determination of the seat or situs of arbitration in view of the Shashoua Principle. The seat of arbitration cannot be determined by formulaic and unpredictable application of choice of law rules based on abstract connecting factors to the underlying contract. Even if the law governing the contract has been expressly stipulated, it does not mean that the law governing the arbitration agreement and by extension the seat of arbitration will be the same as the lex contractus.
77.6. The more appropriate criterion for determining the seat of arbitration in view of the subsequent decisions of this Court is that where in an arbitration agreement there is an express designation of a place of arbitration anchoring the arbitral proceedings to such place, and there being no other significant contrary indicia to show otherwise, such place would be the "seat" of arbitration even if it is designated in the nomenclature of "venue" in the arbitration agreement.
77.7. Where the curial law of a particular place or supranational body of rules has been stipulated in an arbitration agreement or clause, such stipulation is a positive indicium that the place so designated is actually the "seat", as more often than not the law governing the arbitration agreement and by extension the seat of the arbitration tends to coincide with the curial law. 77.8. Merely because the parties have stipulated a venue without any express choice of a seat, the courts cannot sideline the specific choices made by the parties in the arbitration agreement by imputing these stipulations as inadvertence at the behest of the parties as regards the seat of arbitration. Deference has to be shown to each and every choice and stipulations made by the parties, after all, the courts are only a conduit or means to arbitration, and the sum and substance of the arbitration is derived from the choices of the parties and their intentions contained in the arbitration agreement. It is the duty of the court to give weight and due consideration to each choice made by the parties and to construe the arbitration agreement in a manner that aligns the most with such stipulations and intentions.
77.9. We do not for a moment say that, the Closest Connection Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 10 AA-108-2026 Test has no application whatsoever, where there is no express or implied designation of a place of arbitration in the agreement either in the form of "venue" or "curial law", there the closest connection test may be more suitable for determining the seat of arbitration.
77.10. Where two or more possible places that have been designated in the arbitration agreement either expressly or impliedly, equally appear to be the seat of arbitration, then in such cases the conflict may be resolved through recourse to the doctrine o f forum non conveniens, and the seat be then determined based on which one of the possible places may be the most appropriate forum keeping in mind the nature of the agreement, the dispute at hand, the parties themselves and their intentions. The place most suited for the interests of all the parties and the ends of justice may be determined as the "seat" of arbitration."
16. Clause 8.7 of the agreement would apply to the merits of the case and if any of the party wants to raise a dispute, then it has to act in accordance with clause 8.7. In the present case, the appellant had filed an application under section 9 of the Act. Since the parties have agreed to confer the jurisdiction on the Commercial Court at Bhopal thereby ousting the jurisdiction of all other Courts, therefore, the commercial Court at Gwalior had no territorial jurisdiction to entertain the application filed under section 9 of the Act.
17. Accordingly, this Court does not find any reason to interfere with the order passed by the Court below.
18. At this stage, it is submitted by counsel for appellant that appellant may be granted some breathing time to approach the appropriate forum and respondents may be directed to maintain status quo and not to award contract to third party and protect the machinery and material of the appellant which are lying on the spot.
19. Considered the aforesaid submissions made by counsel for the appellant.
Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 11 AA-108-2026
20. The Supreme Court in the case of Kalabharati Advertising v. Hemant Vimalnath Narichania reported in (2010) 9 SCC 437 has held as under:-
22. It is a settled legal proposition that the forum of the writ court cannot be used for the purpose of giving interim relief as the only and the final relief to any litigant. If the court comes to the conclusion that the matter requires adjudication by some other appropriate forum and relegates the said party to that forum, it should not grant any interim relief in favour of such a litigant for an interregnum period till the said party approaches the alternative forum and obtains interim relief. (Vide State of Orissa v. Madan Gopal Rungta [1951 SCC 1024 : AIR 1952 SC 12] , Amarsarjit Singh v. State of Punjab [AIR 1962 SC 1305] , State of Orissa v. Ram Chandra Dev [AIR 1964 SC 685] , State of Bihar v. Rambalak Singh "Balak" [AIR 1966 SC 1441 : 1966 Cri LJ 1076] and Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke [(1976) 1 SCC 496 : 1976 SCC (L&S) 70 : AIR 1975 SC 2238] .)
23. It is settled proposition that an order of withdrawal of a suit does not amount to a decree of the court, which can be executed.
(See Kandapazha Nadar v. Chitraganiammal [(2007) 7 SCC 65 :
AIR 2007 SC 1575] .)
24. It is not permissible for a party to file a writ petition, obtaining certain orders during the pendency of the petition and withdraw the same without getting proper adjudication of the issue involved therein and insist that the benefits of the interim orders or consequential orders passed in pursuance of the interim order passed by the writ court would continue. The benefit of the interim relief automatically gets withdrawn/neutralised on withdrawal of the said petition. In such a case concept of restitution becomes applicable otherwise the party would continue to get benefit of the interim order even after losing the case in the court. The court should also pass order expressly neutralising the effect of all consequential orders passed in pursuance of the interim order passed by the court. Such express directions may be necessary to check the rising trend among the litigants to secure the relief as an interim measure and then avoid adjudication on merits.
(Vide Abhimanyoo Ram v. State of U.P. [(2008) 17 SCC 73 :
(2010) 1 SCC (L&S) 904] )"
21. Under these circumstances, once this Court has held that the Commercial Court at Gwalior has no territorial jurisdiction to entertain the application filed under section 9 of the Act and only commercial Court at Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 16-04-2026 18:04:48 NEUTRAL CITATION NO. 2026:MPHC-GWL:12030 12 AA-108-2026 Bhopal has a jurisdiction to entertain such an application (if maintainable), then as a natural corollary, this Court will also not have any territorial jurisdiction to entertain any prayer for grant of interim relief as provided under section 9 of the Act. Even otherwise, once this Court has refused to entertain the appeal filed by the appellant, then this Court has no jurisdiction to pass any interim order.
22. Considering the totality of the facts and circumstances of the case, this Court is of considered opinion that no case is made out warranting interference.
23. Accordingly, order dated 23/3/2026 passed by Commercial Court And Commercial Appellate Court, Gwalior in Case No. Ex AV/29/2026, is hereby affirmed.
24. Appeal fails and is, hereby, dismissed.
(G. S. AHLUWALIA) (PUSHPENDRA YADAV)
JUDGE JUDGE
(and)
Signature Not Verified
Signed by: ANAND
SHRIVASTAVA
Signing time: 16-04-2026
18:04:48