Jammu & Kashmir High Court
M/S Ladakh Road Lines vs Union Territory Of J&K And Ors on 30 December, 2020
Author: Sanjay Dhar
Bench: Sanjay Dhar
IN THE HIGH COURT OF JAMMU AND KASHMIR
AT JAMMU
(THROUGH VIRTUAL MODE)
AA No. 14/2020
CM Nos. 6914/2020 &
6915/2020
Reserved on: 18.12.2020
Pronounced on: 30.12.2020
M/S Ladakh Road Lines ... Petitioner(s)
Through: - Mr. K.S.Johal Sr. Advocate with
Mr. Supreet Singh Johal Advocate
Vs.
Union Territory of J&K and ors ...Respondent(s)
Through: - Mr.Altaf Haqani Sr. Advocate with
Mr. Shaqir Haqani Advocate for
R-2 to 4 and 6 to 8.
Mr.Z.A.Qureshi Sr. Advocate with
Ms. Rehana Advocate for R-9
CORAM: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGMENT
1 The appellant abovenamed has filed the instant petition under Section 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as „the Act of 1996‟) against the judgment and order dated 09.11.2020 passed by the learned Commercial Court (Additional District Judge), Jammu hereinafter referred to as the „Commercial Court‟) whereby the petition of the appellant/petitioner filed under Section 9 of the Act has been dismissed.
2 AA 14/20202 Briefly stated, the facts giving rise to filing of this appeal are that on 21.08.2020, Jammu and Kashmir Road Transport Corporation (hereinafter referred to as the „JKRTC‟) through its Managing Director invited e-tender vide its Notice No. JKRTC/GML/CHT/2020- 22/KMR/359 for supply of Trucks (HCVs/LCVs) for various Stations of Kashmir province, for two years viz. for the years 2020-2022. The bidding process was through online mode and the technical bids were to be opened on 09.09.2020 at 2:00 p.m. Certain conditions with regard to eligibility were prescribed in the tender notice and the bidders were required to upload the requisite documents along with their offers. It appears that the appellant/petitioner as well as respondent No.9 herein responded to the aforesaid tender notice and submitted their offers online. JKRTC, after finding that the appellant/petitioner as well as respondent No.9 have qualified the technical bid, opened the financial bid, whereafter contract in respect of Clusters bearing Code K-1 to K4 was allotted in favour of respondent No.9, whereas contract in respect of Clusters bearing Code K-5 and K-6 was allotted to New J&K Roadways, Srinagar. Allotment of contract in respect of Cluster K-7 was made in favour of appellant/petitioner.
3 According to the appellant/petitioner, respondent No.9 was not eligible to participate in the bidding process as it was not a registered transport firm. It is averred that respondent No.9 had not uploaded the requisite documents along with its offer. On this ground, it is urged that allotment of contract in favour of respondent No.9 is not in accordance 3 AA 14/2020 with law. It is pertinent to mention here that the tender document contains an arbitration clause which reads as under:
"Any dispute arising between the Corporation and any tenderer in respect of the tender or process undertaken therein shall be referred to Arbitrator under the provisions of J&K Arbitration and Conciliation Act, to the arbitration of Administrative Department".
4 Feeling aggrieved of the action of JKRTC, whereby the contract for supplying of vehicles for certain clusters was allotted to respondent No.9, the appellant/petitioner filed a petition under Section 9 of the Act before the learned Commercial Court, Jammu seeking an interim injunction to stay the following actions of the official respondents:
"(i) decisions taken by the official respondents to declare the private respondents No.9 and 10 qualified in the Technical Bid;
(ii) order No. JKRTC/GM/Load/Plg&Sts/392 dated 17.09.2020 issued by respondent No.3/4 whereby respondent No.9 has been declared as qualified in the Technical Bid and fixed the contract of transportation for engagement of Civil Hire Transport (CHT) contractors to meet the left over demand of JKRTC for various designated clusters/stations viz. Cluster Code K-1,K-2,K-
3 and K-4 in Kashmir province for the year 2020-22 (for 2 years)".
5 The aforesaid petition was contested by JKRTC as well as by respondent No.9 herein by filing their separate replies thereto. JKRTC in its reply before the learned Commercial Court, besides contesting the 4 AA 14/2020 petition on merits, raised a preliminary objection with regard to the jurisdiction of the Commercial Court, Jammu to entertain the petition. According to the said respondent, no part of cause of action had arisen within the jurisdiction of learned Commercial Court, Jammu, as such, the petition could not be entertained by the said Court. 6 Respondent No.9 in its reply before the learned Commercial Court, Jammu had contended that no arbitration agreement between the appellant/petitioner and respondent No.9 had taken place, as such, there could not be existence of any dispute between them. On merits, the said respondent had contended that it was eligible to participate in the tender process in terms of the conditions of the tender notice, inasmuch as even proprietor of a firm was eligible to participate in the aforesaid process.
7 The learned Commercial Court Jammu, after hearing the parties, found merit in the contention of JKRTC that the said Court does not have territorial jurisdiction to adjudicate upon the dispute between the parties and, accordingly, the petition was dismissed in terms of the impugned judgment. The Court did not go into the merits of the contentions raised by the parties. It is this order of dismissal of the petition which is under challenge before this Court by way of instant appeal.
8 I have heard learned counsel for the parties and perused the material on record.
5 AA 14/20209 It has been vehemently contended by learned counsel for the appellant that the impugned order passed by the learned Commercial Court, Jammu is unsustainable in law as the same is not a speaking order. He has further contended that the Head Office of JKRTC is at Jammu, as such, the Courts at Jammu have the jurisdiction to entertain the petition. It has also been contended that the appellant had participated in the tender process from Jammu and one of the Clusters K-7 pertains to Jammu District, therefore, the Courts at Jammu have the jurisdiction to entertain the petition.
10 On the other hand, learned counsel for JKRTC has contended that no part of cause of action had arisen within the jurisdiction of the Commercial Court, Jammu as the tender notice was issued from Srinagar, the site of contract is located in Kashmir Province and even the appellant/petitioner is ordinarily residing in Kashmir province. 11 In order to determine the issue as to which Court is vested with jurisdiction to entertain a petition under Section 9 of the Act, we need to notice the said provisions. It provides that a party may, before or during arbitral proceedings or at any time after making the arbitral award but before it is enforced in accordance with Section 36, apply to a Court. The word „Court‟ is defined in Section 2(1)(e)) of the Act, which reads as under:
"2(1)...............................................................
(a)................................................................
(b).................................................................
(c)................................................................6 AA 14/2020
(d)...............................................................
(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"
12 From a perusal of the above provision, it appears that for determining the issue with regard to jurisdiction of Courts to entertain a petition under Section 9 of the Act, one has to answer the question as to which Court would have jurisdiction had it been a civil suit. If the subject matter of a petition and the issues arising therein can be adjudicated upon in a civil suit by Court at a particular place, then the Court defined under Section 2(1)(e) of the Act of that place is eligible to entertain a petition under section 9 of the Act. Thus, the Court referred to in Section 9 of the Act would be a Court having jurisdiction to decide the questions forming subject matter of arbitration if the same had been subject matter of a civil suit. The definition of word „Court‟ under Section 2(1)(e) is largely a repetition of corresponding definition under the Arbitration Act, 1940 which under Section 2(c) defined it to mean a civil Court having jurisdiction to decide the questions forming the subject matter of reference if the same had been the subject matter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court.
7 AA 14/202013 The Division Bench of High Court of Madras High Court, in the case of M. Venkatasamaiappa vs. Srinidhi Ltd., 63 LW 468 formulated the following tests in order to determine which is the Court having jurisdiction in the matter. The Court observed as follows:
"In order to determine which is the Court having
jurisdiction in the matter, you should first of all
ascertain what the questions are, which form the
subject-matter of the reference to arbitration. You then proceed to ask, supposing these questions had arisen in a suit, which is the Court which would have jurisdiction to entertain the suit ? That Court would be the Court having jurisdiction under the Arbitration Act also". 14 From the above, it is clear that in order to determine the question with regard to jurisdiction of a Court within the meaning of Section 9 of the Act, we will have to go to the relevant provisions of CPC i.e., Section 20 to determine whether the said Court could adjudicate upon a dispute had it been a civil suit. To answer this question, it is necessary to notice the provision contained in Section 20 of CPC. It reads as under:
"20.Other suits to be instituted where defendants reside or cause of action arises"-Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or 8 AA 14/2020
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
Explanation- A corporation shall be deemed to carry on business at its sole or principal office in (the State) or, in respect of any cause of action arising at any place where it has a subordinate office, at such place".
15 From the above, it appears that a suit can be instituted in a Court within the local limits of whose jurisdiction; (i) a defendant/defendants reside or carry on business;(ii) any one of the defendants resides or carries on business and (iii) the cause of action, wholly or in part, arises. The explanation to the provision provides that a Corporation shall be deemed to carry on business at its principal office or in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
16 On the basis of aforesaid explanation to Section 20 of CPC, learned counsel for the appellant has vehemently contended that admittedly, JKRTC has one of its offices situated at Jammu, as such, the Courts at Jammu are vested with jurisdiction to entertain a suit against the said Corporation and consequently, a petition under Section 9 of the Act. The question, whether the place where subordinate office of a Corporation or Company, without any part of cause of action 9 AA 14/2020 having arisen in that particular location, would automatically get jurisdiction to entertain a suit against the said Corporation/Company, has remained a matter of discussion before various High Courts of the Country .
17 In Bharat Insurance Company vs Wasudeo Ramchandra, AIR 1956 Nag 203, the High Court of Nagpur, while interpreting the explanation to Section 20 of CPC, held that a Corporation can be sued at a place where it has a subordinate office only in respect of cause of action arising at such a place and not otherwise. Similar view has been taken by High Court of Kerala in the case of Nedungadi Bank Ltd. Vs. Central Bank of India, AIR 1961 Kerala 50. While doing so, the Court observed as under:
4 It is common ground that the head office of the Central Bank of India Limited is in Bombay, and that it has a branch at Kozhikode. Under section 20(a) of the Code of Civil Procedure, 1908, it is possible to institute a suit where the defendant "carries on business", and under Section 20(c) where the "cause of action, wholly or in part, arises".
Explanation II to Section 20 provides :
"A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place".
5. As pointed out by Chitaley :
"The result of this explanation is to restrict the meaning of the expression "carries on business" in Clause (a) in relation to corporations. But in the presence of Clause (c) the purpose 10 AA 14/2020 of the second part of the explanation is obscure. However that may be where' the suit is instituted at a place where a corporation maintains a subordinate office, the Court cannot dispense with the requirement that the cause of action must arise at such a place". In other words, if no part of the cause of action arises at the place where the branch office is situate, the mere fact of the corporation having a branch office will not give the court of that place jurisdiction to entertain a suit".
18 In Kamala Chopra vs Life Insurance Corporation of India, AIR 1975 Delhi 15, the High Court of Delhi, while relying upon the aforesaid judgments of Nagpur High Court and Kerala High Court interpreted the explanation to Section 20 of CPC and observed as under:
"26. There is no doubt that the central office of the Corporation being at Bombay the plaintiff, if she so chooses, can bring her suit at Bombay. The question is whether there is a subordinate office at Delhi. Assuming: that Delhi is a subordinate office but if no part of the cause of action has arisen at the place where the branch of subordinate office is situated the mere fact of the corporation having a branch office will not give the Court of that place jurisdiction to entertain a suit. The law is well settled that if no part of the cause of action arises at the place of the branch office, the mere fact of the Corporation having a branch office at the place will not give the Court jurisdiction".
19 However, Punjab and Haryana High Court in the case of Surinder Kumar Arora vs. The Bengal National Textile Mills, AIR 1978 P&H 156 has taken a contrary view in the matter. The Court, 11 AA 14/2020 while dealing with the contention that, to give jurisdiction to a Court in the mater, it is not enough that the branch office of the defendant, exists at that place, for it must further be established that within the jurisdiction of the said Court, the part of the cause of action has also arisen, negatived the said contention in the following manner:
9.I am afraid this plea of the learned counsel does not carry conviction with me. If the cause of action, wholly or in part, had arisen within the jurisdiction of a given Court, then it is superfluous for the party to invoke either cause (a) or clause
(b), for then the matter would squarely fall within the ambit of clause (c). It is only when the case does not fall within clause (c) that it has to be seen whether it falls within the ambit of clauses (a) or (b).
10. A plain reading of section 20 would show that unless a case could be brought within the ambit of clause (c), it is the convenience of the defendant which appeared to be uppermost in the mind of the framers of the Code. That is why, clauses (a) and (b) sought to confer the jurisdiction only on such Courts where the defendant or the defendants resided or carried on business etc. Explanation II, in some measure, sought to take into view the convenience of the plaintiff as well where it happened to be pitched against a Corporation having, apart from its head-office, Branch Offices located at different places, for in such a case, so far as the Corporation as a defendant is concerned, it would not be inconvenienced for the reason that it happened to have its Branch Office at the place on the Courts whereof Explanation II read with clause (a) sought to confer jurisdiction in a suit against it.12 AA 14/2020
11. Mr. K.L. Kapur, learned counsel for the respondent, has vehemently urged that if a Corporation has more than one Branch Office, then only that Court would have the jurisdiction where, in addition to the location of a Branch Office of the defendant Corporation, the cause of action, partly or wholly, had also arisen, otherwise it would be open to the plaintiff to file a suit in the Courts of a place where any of the Branch Offices of the said defendant Corporation may happen to be located. I see no harm in this, because so far as the convenience of the Corporation is concerned it stands in no way affected if that view is taken, because its interest shall be looked after by its Branch Office. As far as the plaintiff is concerned, he shall see his own convenience which apparently appears to be the purpose behind Explanation II.
Hence for the reasons aforesaid, I am of the view that Amritsar Courts do have jurisdiction to entertain the present suit in view of the fact that, admittedly, a Branch Office of the defendant Company is located at Amritsar and by virtue of Explanation II, the Company shall be deemed to be carrying on business there whether or not that Branch Office in fact, carries on any business".
20 The controversy, it seems, has been set at rest by the judgment of the Supreme Court in the case of Food Corporation of India vs. Evdomen Corporation, (1999) 2 SCC 446. The Court, while interpreting Section 2(c) of Arbitration Act, 1940, which is in pari materia with Section 2 (e) of the Arbitration and Conciliation Act, 1996, has observed as under:
"6.Ordinarily, the phrase "Civil Court having, jurisdiction to decide" in Section 2(c) of the Arbitration Act, 1940 would refer to a Court having jurisdiction under Section 20 of the 13 AA 14/2020 Civil! Procedure Code. Section 20(a) of the Civil Procedure Code provides, "subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction (a) the defendant or each of the defendant where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides or carries on business or personally works; for gain...(c) the cause of action wholly or in part arises." In the present case no part of the cause of action has arisen within the jurisdiction of the Bombay High Court. We have, therefore, to see whether Section 20(a) would confer jurisdiction on Bombay High Court as has been held; in the impugned judgment. Section 20(a) has to be read along with the explanation to Section 20 which provides as follows:--
Explanation: A Corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arises at any place where it has also a subordinate office at such place.
In view of this Explanation, the appellant under Section 20 is deemed to carry on business at its principal office in India. In respect of any cause of action which arises at a place where it has its subordinate office, the Court at that place would also have jurisdiction. In view of this Explanation, the Bombay High Court would not have jurisdiction under Section 20 of the Civil Procedure Code".
21 In the aforenoted case, although Food Corporation of India had one of its places of business at Bombay, but because no part of cause of action had arisen within the jurisdiction at Bombay, as such, the Court held that mere location of one of the offices of FCI at Bombay, would 14 AA 14/2020 not give jurisdiction to the Court located at Bombay to adjudicate upon the dispute.
22 From the foregoing discussion of law on the subject, it is clear that, in the case of a Corporation or a Company, it shall be deemed to carry on business at a place where its principal office is located and location of its subordinate office would give jurisdiction to Courts of that area only if any part of cause of action arises at that place. The explanation to Section 20 CPC is very clear about it. It uses the words "in respect of any cause of action arising at any place where it has also a subordinate office, at such place". If the intention of the Legislature would have been to confer jurisdiction on Courts located at a place where subordinate office of a Company is situated irrespective of the cause of action, in that case, there was no need to use the words "in respect of any cause of action arising at any place" in the Explanation to Section 20 of CPC.
23 Thus, it is beyond any shadow of doubt that the Court situated at a place where subordinate office of a Corporation is located would get jurisdiction only if any part of cause of action has arisen within the jurisdiction of the said Court and not otherwise. Mere location of subordinate office of the Corporation which is defendant in the suit would not give jurisdiction to courts located over there. 24 In the light of aforesaid legal position, let us now advert to the facts of the present case. Admittedly, the principal office of JKRTC is located at Srinagar. The contention of the petitioner is that the office of 15 AA 14/2020 Managing Director of JKRTC is located at Jammu which is one of its offices. The question arises, whether in this case any part of cause of action has arisen with the territorial jurisdiction of the Courts at Jammu. If the answer to this question is in affirmative, then the Commercial Court at Jammu would get jurisdiction to adjudicate upon the dispute or else the said Court cannot entertain a petition under Section 9 of the Act.
24 So far as the expression "cause of action" is concerned, the same has been explained by the Supreme Court in the case of M/S South East Asia Shipping Co. vs M/S Nav Bharat Enterprises Pvt. Ltd, 1996 SCC (3) 443 as consisting of bundle of facts which give cause to enforce the legal injury for redress in a Court of law. The Court further observed that the cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action would possibly accrue or would arise.
25 Coming to the instant case, the tender notice, which is subject matter of the instant petition, has been issued by the JKRTC from its Srinagar office. The site of the contract i.e supply of vehicles is Kashmir province . As is clear from the documents placed on record by the appellant, the vehicles are to be supplied for routes pertaining to 16 AA 14/2020 Srinagar, Ganderbal, Bandipora, Anantnag, Kulgam, Shopian, Pulwama, Budgam, Kupwara, Baramula and Ladakh region. None of these routes is located in Jammu province of UT of J&K. It has been contended by the appellant that in the Cluster Code K-7, routes pertaining to Ladakh region (Srinagar-Jammu/Leh/Kargil) are mentioned which means that situs of performance of contract is located at Jammu as well. I am afraid, the contention of learned senior counsel for the appellant is misconceived because the offer document only mentions the name of the National Highway i.e Srinagar- Jammu/Leh/Kargil highway. It is clearly indicated that the site of the contract is route pertaining to Ladakh region in which a portion of the aforesaid Highway falls. This does not mean that site of the contract is located at Jammu.
26 It has been contended by learned senior counsel for the appellant that the appellant has participated in the tender process from Jammu and the communications were received by it at Jammu. In this regard, the learned senior counsel has referred to the communications addressed by the appellant to JKRTC on its letter head which show that one of its offices is located at Jammu. The mere fact that the letter head of the appellant reflects that one of its offices is located at Jammu does not mean that it has corresponded with JKRTC from Jammu. In fact, the tender application submitted by the appellant in response to the NIT in question clearly reflects the address of the appellant as 36-B Fruit Market, Parimpora, Srinagar. Even the address of authorised person given in the said application is located in Ganderbal, Kashmir. This is 17 AA 14/2020 an admitted document. Therefore, by no stretch of imagination it can be stated that the appellant had corresponded with respondent-JKRTC from Jammu. Thus, the contention of the appellant is belied by its own documents on record.
27 From the above discussion of the material on record, it is clear that none of the facts which would give cause to enforce any right to appellant against the respondents has taken place in Jammu province of the UT of J&K. Thus, no part of cause of action in the instant case has arisen within the jurisdiction of the Commercial Court, Jammu. Having held so, the mere fact that one of the subordinate offices of JKRTC is located at Jammu would not give jurisdiction to the Commercial Court, Jammu to entertain the petition under Section 9 of the Act filed by the appellant before it.
28 For the foregoing discussion, the finding of learned Commercial Court, Jammu that the said Court does not have territorial jurisdiction to entertain the instant petition under Section 9 of the Act filed by the appellant, does not deserve to be interfered with. However, the manner in which the Court below has passed the impugned judgment invites a comment. A perusal of the said judgment clearly shows that it is cryptic and devoid of any reason. The learned Court has only noted the pleadings and submissions of the parties and then without giving any reasoning as to why it has accepted the contentions of one party and rejected those of other party, it has drawn the conclusion against the petitioner.
18 AA 14/202029 Reasoning is the soul of a judgment. A judgment which is devoid of reasoning would not be a judgment in accordance with the law. It is not sufficient for a Court merely to state in its judgment that on a careful consideration of the rival submissions of the parties, it has come to this or that conclusion. The material on record on a particular point for and against the parties to the case must be set out in the judgment and reasons stated for its acceptance or rejection. A Court has not only to state the points for determination and the decisions thereon, but also to give reasons for such decisions. All this is missing in the judgment passed by the learned Commercial Court, Jammu. Such type of judgments are not expected from a senior Judicial Officer of the level of a District Judge.
30 One of the options available to this Court was to remand the case back to the learned Commercial Court, Jammu with a direction to render a reasoned judgment on the issue, but then, it would amount to wastage of time which, in turn, would defeat the relief sought by the appellant/petitioner in the petition. Therefore, this Court has taken it upon itself to finally decide the controversy pertaining to the jurisdiction in these proceedings only.
31 For what has been discussed hereinabove, it is held that the Commercial Court Jammu does not have territorial jurisdiction to entertain and decide the issues arising in the petition under Section 9 of the Act, that was filed by the appellant/petitioner before the said Court. 19 AA 14/2020
The appeal is, accordingly, dismissed. The appellant/petitioner is, however, at liberty to approach the Court of competent jurisdiction.
(SANJAY DHAR) JUDGE Jammu 30.12.2020 "Sanjeev, PS"
Whether the order is speaking: Yes
Whether the order is reportable: Yes
SANJEEV KUMAR UPPAL
2020.12.31 16:16
I attest to the accuracy and
integrity of this document