Delhi High Court
Advance Structurals Pvt. Ltd. vs Union Of India (Uoi) And Ors. on 30 May, 2002
Equivalent citations: 98(2002)DLT755, [2003]41SCL271(DELHI)
Author: Mukundakam Sharma
Bench: Mukundakam Sharma
JUDGMENT Mukundakam Sharma, J.
1. This is a petition filed by the petitioner under Section 11 of the Arbitration and Conciliation Act, 1996, against the respondents praying for appointment of an arbitrator for adjudicating the disputes arising between the parties.
2. On 31st January, 1992, a tender was floated by the General Manager, Electrification, Allahabad, in response to which the petitioner submitted his tender which was accepted by the General Manager, Railway Electrification, acceptance letter is dated 24th July, 1992 and the same is annexed as Annexure 1 to the reply submitted by the respondents.
3. An agreement was entered into between the parties for commissioning of 5 tonne capacity Diesel Hydraulic Cranes 3 numbers. The said Agreement was signed at Allahabad. In the petition it is stated that disputes having arisen between the parties while executing the aforesaid contract, the said disputes are required to be adjudicated upon the decided by appointing an arbitrator. It is also contended that the work was executed at Tughlakabad Railway gravel siding, New Delhi, and that the parties reside and work for gain at Delhi and that the respondents also have their office at Delhi and, therefore, this Court has territorial jurisdiction to try and decide the present petition.
4. The respondents have entered appearance and have filed their reply contending, inter alia, that this Court does not have territorial jurisdiction to try the present petition. It is stated that in terms of the contract between the parties, the Courts at place from where acceptance of tender was issued would alone have the jurisdiction to try any dispute arising out of or in respect of the contract and, therefore, this Court does not have territorial jurisdiction to entertain and decide the present petition. It was also submitted that the offer of the petitioner was accepted by the General Manager, Railway Electrification, Allahabad and, therefore, only that Court will have jurisdiction who shall have territorial jurisdiction over the office of the General Manager, Railway Electrification, Allahabad.
5. In view of the aforesaid preliminary objection raised by the respondents in their reply in respect of the maintainability of this petition, I have heard the learned counsel appearing for the parties.
6. It cannot be denied that the tender was floated by the General Manager, Electrification, Allahabad and the tender submitted by the petitioner was also accepted by the General Manager, Railway Electrification, Allahabad. A bare reference to 'Annexure 1' to the reply makes the aforesaid position clear. The agreement between the parties for the aforesaid work was also signed at Allahabad. The petitioner seeks to invoke the jurisdiction of this Court on the ground that the petitioner executed the work at Tughlakabad Railway gravel siding, pursuant to the aforesaid agreement, which is located within the jurisdiction of this Court and also because the respondents have their office at Delhi.
7. The tender papers pursuant to which tender was submitted by the petitioner define the expression "General Manager" to mean the Officer in Administrative charge of Railway Electrification and shall mean and include the Officers to whom the functions are delegated. The expression "Railway Administration" is also defined therein. The said expression means the President of Republic of India or the Administrative Officers of the Railway Electrification authorised to invite tenders and enter into contracts for works on his behalf.
8. It also cannot be disputed that the Indian Railway Standard Conditions of contract is applicable to the contract in question. The "Standard Specifications" is also defined in the tender papers meaning Indian Railway Standard Specifications, Indian Standard Specifications and any other Standard Specifications referred to in the Tender Papers. Therefore, the said Standard Conditions of contract would also be applicable to the facts and circumstances of this case. Clause 2703 of the Indian Standard Condition of Contract is also one of the clauses which governs the disputes of the parties in the present case. The said clause provides as follows:-
" Jurisdiction of courts- The courts of the place from where the acceptance of tender has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contract."
9. The petitioner invoked the arbitration clause by letter dated 17th August, 1995 which was addressed to General Manager (CORE), Railway Electrification, Allahabad. The General Manager, Electrification, CORE, Allahabad, by his letter dated 30th August, 1995, rejected the request for appointment of arbitrator by pointing out that the cancellation of the agreement is an excepted matter and, therefore not arbitrable.
10. When the Courts may have jurisdiction to decide a particular dispute, the parties by their conduct and action can vest the exclusive jurisdiction on one of the several Courts which may have jurisdiction over the subject matter. The aforesaid position is by now settled by the decision of the Supreme Court in the case of A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem; . In paragraph 18 of the said judgment, the Supreme Court held 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 therewith, if the parties to the contract agree to vest jurisdiction in one such court to try the dispute which might arise as between themselves, the agreement would be valid. The ratio of the aforesaid decision is fully applicable to the facts of the present case.
11. It was contended by the counsel appearing for the petitioner that since the work was executed at Tughlakabad Railway gravel siding, New Delhi, and since the respondents reside and work for gain at Delhi and have their office at Delhi, this Court would have jurisdiction. Even assuming that the aforesaid contention of the counsel appearing for the petitioner is correct even then, it cannot be denied that since the tender papers were issued from Allahabad, the tender of the petitioner was accepted at Allahabad and agreement was executed at Allahabad and, therefore, the Court at Allahabad shall also have the jurisdiction to try and decide the subject matter of the present petition. So, therefore, the parties by their conduct and action could vest the jurisdiction to decide the subject matter of the present dispute in the Court of the place from where the acceptance of tender was issued and, therefore, the aforesaid vesting of jurisdiction in Allahabad Court wherefrom the acceptance of tender was issued would be valid in the eye of law.
12. Counsel appearing for the petitioner in support of his contention relied upon the decision of the Full Bench of this Court in Shri Ram Rattan Bhartia v. Food Corporation of India and Anr; . I have perused the said decision rendered by the Full Bench of this Court. In this connection, reference may also be made to the decision of the Division Bench in Union of India v. Electronic Controls & Instrument Engineers; reported in 68 (1997) Delhi Law Times 739. In the said judgment, it was held by the Division Bench of this Court that in view of the ratio of the Supreme Court in Bakhtawar Singh Bal Krishan v. Union of India and Ors; , which fully approved the decision in Binani Bros. Ltd. v. Union of India; reported in I.L.R. (1975) 2 Delhi 196, the decision of Full Bench in Shri Ram Rattan Bhartia's case (supra), cannot be said to be holding the field.
13. In this connection, reference is also to be made to the decision of the Supreme Court in Patel Roadways Limited, Bombay v. Prasad Trading Company; . In the said decision, the Supreme Court interpreted the explanation to Section 20 of the Code showing that the Explanation clarifies the scope of Clause (a) to Section 20 which is in two parts, one before the word "or" occurring between the words "office in India" and the words "in respect of" and the other thereafter. In terms of the said decision, the Courts within whose jurisdiction the sole or principal office of the defendant is situated will also have jurisdiction in asmuch as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation. However, the latter part of the Explanation takes care of a case where the defendant does not have a sole office but has a principal office at one place and has also a subordinate office at another place and if the case falls within the latter part of Explanation, it is not the Court within whose jurisdiction the principal office of the defendant is situated but the Court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office".
14. The General Manager, Railway Electrification, Allahabad has his principal office at Allahabad and merely because the Railway Board has its office at Delhi, the same could not give jurisdiction to this Court to entertain the present petition. In this connection, reference may also be made to a Full Bench decision of this Court in Hindustan Metal Works v. Union of India; reported in 1987 (1) Arbitration Law Reporter 6. In the said decision, it was held that the principal place of business cannot be made to depend on each tender for it is well known that tenders are issued by various authorities depending upon their respective financial powers. It was further held that principal place of business must be a regular, fixed place independent of each tender and that it may be noted that under Section 80 of the Code of Civil Procedure where a notice has to be given it is provided that in the case of the suit where it relates to the railways, the General Manager of that railway is the competent authority to receive notice. Having decided thus, the Full Bench proceeded to hold that in that view, if any suit is to be filed notice has to be given to the General Manager of the concerned Railway and that the General Manager's office which is the headquarters of each railway must, therefore, be taken to be the place where the general management and control is exercised.
15. Therefore, from whatever angle t he aforesaid preliminary objection is looked into, there can be doubt in the light of the facts and circumstances of the present case that this Court shall not have territorial jurisdiction to try and decide the subject matter of the present petition and the territorial jurisdiction would be that of the Court at Allahabad. In view of the aforesaid conclusions arrived at by me, I hold that this petition is not maintainable in this Court. This petition shall be returned to the petitioner so as to enable the petitioner to file the same in an appropriate Court.
16. It is also contended by the counsel appearing for the respondents that the disputes raised herein are not referable to arbitration as they are excepted matters. It is made clear that since it is held that the present, petition is not maintainable in this Court, there is no scope for entering into the aforesaid issue raised by the respondents and the same is kept open to be decided by the appropriate Court.
17. The petition stands disposed of in terms of the aforesaid order.