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1975 DIGILAW 186 (KAR)

M/S. COTMAC COY v. M/S RALLIS INDIA LTD

1975-12-04

SRINIVASA IYENGAR

body1975
( 1 ) THE petitioner is the respondent in AC. 5 cf 1974 on the file of the court of the Civil Judge, Hubli. ( 2 ) PURSUANT to an agreement in relation to supply of cotton entered into between the petitioners and the respondent dispute arose in regard to alleged default committed by the petitioners in respect of the supply under 4 cotton contracts. The agreement entered into between the petitioners and respondent provided for arbitration by two arbitrators, one to be apponted by each of the parties and such arbitrators appointed choosing their own ummire. The dispute had to be decided by the arbitrators at Bombay. The agreement did not contain any particular time with which the arbitrators had to give their award. Therefore, in accordant with the first, schedule to the Arbitration Act. award had to be given within four months from the date of entering' on the reference. As it was not possible for such an award being made within time, the respondent fifed an application under S. 28 of the Arbitration Act in the Court of the civil Judge, Hubli, for extention of time. The application was filed on 17-4-74 end the prayer was to extend the time till 21-8-74 on the basis that the date of entry on reference was 21-12-73 and the period of four months world expire on 21-4-74. This application was registered as Arbitration case 5 of 1974, By virtue of the adiqurnments taken, and the award proceedings not having been proceeded with, resnondpnt filed the application ia-I on 21-8-74 for an amendment to the original application so as to extend the time by another three months. The application purported to be under s. 148 read with S. 151 CPC. This was opposed on behalf of the petitioners contending that the Court had no jurisdietion to entertain the original application itself and therefore could not entertain this application for amendsment also and that it should be dismissed. I may mention that though in the objection statement filed objection raised was that the application under S. 148 read with S. 151 was not maintainable, it is clear that the point urged before the learned Civil Judge was as above. I may mention that though in the objection statement filed objection raised was that the application under S. 148 read with S. 151 was not maintainable, it is clear that the point urged before the learned Civil Judge was as above. ( 3 ) THE learned Civil Judge did not uphold the contention urged for the petitioners and held that the Court had jurisdiction to entertain the original application and also the application for amendment. It is also relevant to point out that within expiry of the time prayed for by virtue of ia. No. I, another application has been filed by the respondent before the court below and it is said to be pending. It transpires that in the meantime the petitioners filed a suit in the Court of the Munsiff, Hubli, in OS. 198 of 1974 contending that the contracts entered into were void and the defendant therein viz, the respondent herein should be restrained from taking any proceedings to enforce the said contract or from recovering any amounts thereunder. It is in these circumstances that the prayer made in the further application was that the time to make the award should be extended by a suitable period till after the disposal of the suit. ( 4 ) IT is contended by Shri W. K. Joshi learned Counsel for the petitioners, that under S. 31 of the Arbitration Act, Hubli Court would not have jurisdiction because the contract had been entered into at Bailhongal which was in Belgaum District and outside the jurisdiction of the Court at Hubli. Shri Sundaraswamy, learned Counsel for the respondent, has urged that this contention is without any substance and under the terms of the contract it is clear that the performance of the contract was at Hubli and the breach alleged has occurred at that place and by virtue of S. 2 (c) of the arbitration Act, the Civil Court having jurisdiction to decide the question forming the subject-matter of the reference would be the Court which could try the suit if the same had been the subject matter of a suit. He submitted that the cause of action accrued at Hubli within the jurisdiction of Hubli Court and the Civil Judge's Court had jurisdiction to entertain the application. ( 5 ) SEC. He submitted that the cause of action accrued at Hubli within the jurisdiction of Hubli Court and the Civil Judge's Court had jurisdiction to entertain the application. ( 5 ) SEC. 2 (C) of the Arbitration Act defines Court as :"'court' means a Civil Court, having jurisdiction to decide the the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under S. 21, include a Small Cause court;". this definition will have to be applied in interpreting S. 28 which empowers the Court to enlarge from time to time the time for making the award. The question to be considered is what are the questions forming the subject matter of the reference and where a suit in regard to such subject-matter would lie. The subject-matter of the reference is the alleged breach of the contract to supply cotton in accordance, with the agreement and on account of the non-supply and breach of the agreement to what damages if any the buyer is entitled to. The material clause in the contract is that cotton had to be delivered at Hubli or any other station in one or more tenders. The agreement also provides that if the delivery is not made in accordance with the agreement, the buyer had the right to close the contract or the undelivered portion thereof and recover from the seller the difference between the rate mentioned in the contract and the market rate ruling at Hubli on the due date of the contract. It is therefore clear that the performance of the contract was to be at Hubli and consequently breach if any would occur at Hubli and the cause oi action to the buyer in respect of such breach would accrue at Hubli and and suit in respect of such a cause oi action would lie in a competent Court at Hubli. Accordingly, the application for extension of time can be filed in the Civil Judge's Court at hubli having regard to the value of the subject matter. ( 6 ) A similar interpretation has been placed on the provisions of s. 2 (c) of the Arbitration Act, by the High Court of Madras in a decision in 1951 Madras Law Journal, 709 (1 ). ( 6 ) A similar interpretation has been placed on the provisions of s. 2 (c) of the Arbitration Act, by the High Court of Madras in a decision in 1951 Madras Law Journal, 709 (1 ). ( 7 ) IN the light of the provisions in S. 2 (c) of the Arbitration Act, the finding of the Civil Judge that he had jurisdiction to deal with the application is correct and must be upheld. Accordingly the revision petition fails and is dismissed. The Civil Judge will now consider the further application filed by the respondent in the light of this order and in accordance with law. Parties shall bear their own costs in this revision petition. --- *** --- .