Delhi High Court
Arun Khosia vs Union Bank Of India on 19 December, 1994
Equivalent citations: 1995(32)DRJ94
Author: R.C. Lahoti
Bench: R.C. Lahoti
JUDGMENT R.C. Lahoti, J.
(1) The petitioner had entered into a contract for construction of Filtration Plant for Additional Huts at Hissar Cantt. The site of the work is situated within the State of Haryana. It is a defense work to be carried out under the Engineer in Chief Army Headquarters and Chief Engineer, Military Engineering Service,-Chandigarh. Respondent No. 4 is seized of the arbitration proceedings at Lucknow. The petitioner seeks revocation of the authority of the arbitrator and his removal followed by appointment of another arbitrator. The learned counsel for the petitioner has submitted that because the appointing authority of the arbitrator is respondent No.2 situated at New Delhi and further because the contract was entered into at Delhi and letter of revocation arid the contract was also delivered to the petitioner at New Delhi, the Court at Delhi has the jurisdiction to try the petition.
(2) In Kamal Pushup Enterprises, this Court has clearly taken the view following the law laid down by a Division Bench of Madras High Court in M. Vankatasamiappa v. Srinidhi Ltd, 1950 (1) Mlj 709:
(A)The Arbitration Act does not contemplate nor does provide the Court having jurisdiction as the Court within the limits of whose territorial jurisdiction any of the parties resides. Had it been so then the Legislature could have sufficiently and simply employed such expression; (b) The jurisdiction of the Court is made to depend not on the place where the parties dwell or carry on business or personally work for gain, but solely on the subject matter; there is no reference to any other circumstance in Section 2(c) or Section 31(1) of the Act. At least one good reason why the Court having jurisdiction should have been defined in relation to the subject matter of the dispute or action is : otherwise the Court having jurisdiction might depend on the accident as to who first raised the dispute or decided to file a suit; (c) It is only when the subject matter of the dispute itself makes the jurisdiction dependent on residence that the question of residence need arise at all; (d) Section 2(c) and Section 31(1) of the Act do not contemplate the place in which the agreement was entered into being relevant for deciding territorial jurisdiction of the Court."
(3) In M/s Bakhtawar Singh Bal Kishan vs.. Uoi, 1988 Sc 1003, their Lordships have held that in the contract relating to Mes and the armed forces the activity cannot be called to be a commercial activity of the State and the question of determining jurisdiction by importing the concept of 'carrying on business' or 'working for gain' within the meaning of Section 20 CPC.does not arise.
(4) Though the learned counsel for the petitioner has relied on Abc Laminate Pvt Ltd. , but that is a case pure and simple under Section 20 Civil Procedure Code taking the view that the suit can be filed in a court within whose jurisdiction acceptance was communicated resulting into a contrtact. The case at hand is one under the Arbitration Act where the jurisdiction has to be determined by' reference to Section 2(c) of the Act. Entering into contract is not a matter of dispute. The reference to Arbitrator does not include any dispute relating to entering into or making of the contract. The jurisdiction of the court under the Arbitration Act has to be determined by reference to the questions forming the subject matter of reference.
(5) In so far as the breach is concerned, a breach of the contract take place where it was to be performed and not at the place where the revocation was communicated and delivered by a letter.
(6) This court does not have territorial, jurisdiction to entertain the petition. Same is directed to be returned to the petitioner for presentations to a proper court. Suit disposed of.