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1993 DIGILAW 23 (RAJ)

OM METAL & MINERAL PVT. LTD. v. STATE OF PUNJAB

1993-01-11

S.N.BHARGAVA

body1993
JUDGMENT S. N. Bhargava, J. - This revision petition has been filed against the order of learned Distt. Judge, Kota, dismissing application of the petitioner under Sections 14 and 17 of the Arbitration Act, 1940 on the ground that the court had no territorial jurisdiction. 2. Petitioner is a private limited company having its registered office at Kota and factory in Industrial Estate, Kota and is dealing with Ingots hoist, crane and other heavy steel structural fabrication erection work, hydro electric in Thermal Power Projects and supplying the same throughout the country. In response to the tender notice, petitioner submitted a tender on 4.5.1977 which was accepted by the non-petitioner and a work order was issued for supply of 50 sets of electrically operated mechanical hoists for Shah Nehar Barage Gates. Petitioner supplied the requisite gates to the non petitioner from Kota which have been utilised by the non petitioner. Some dispute arose between the parties in relation to the supply of said material and since in the agreement, there were terms of arbitration, as suggested by the non petitioner, Shri S. S. Mani, Chemical Engineer, Deptt. of Industries, Punjab was appointed as the Sole Arbitrator. Non petitioner participated in the arbitration proceedings and the Arbitrator passed award on 8.10.1948, awarding a sum of Rs. 14,52,000/- with interest @ 12% per annum from the date of the award till actual payment or till award is made rule of the court, whichever is earlier. Petitioner, in the presence of non petitioner, requested to the Arbitrator that award be filed in the court of Distt. Judge, Kota. No objection was raised by the representative of the non petitioner and as it had consented to the request of the petitioner, the Arbitrator agreed that the award be filed before the Distt. Judge, Kota for making it a rule of the court. The said award was filed in the court of Distt. Judge on 18.10.1984. Petitioner also filed an application under Sections 14 and 17 of the Arbitration Act for making the award rule of the court. Notice was issued. Non petitioner's counsel sought adjournment for filing reply of the application which was granted and adjournment was again sought on that day and the case was again adjourned. A reply to the application was filed on 2.5.1985 wherein a preliminary objection was raised that the Distt. Notice was issued. Non petitioner's counsel sought adjournment for filing reply of the application which was granted and adjournment was again sought on that day and the case was again adjourned. A reply to the application was filed on 2.5.1985 wherein a preliminary objection was raised that the Distt. Judge, Kota had no territorial jurisdiction and therefore, award could not be made rule of the court. The Distt. Judge after hearing the parties, came to the conclusion that the Distt. Judge had no territorial jurisdiction and therefore, refused to make the award rule of the court and dismissed the application filed by the petitioner. It is against this order that the present revision petition has been filed. 3. Learned counsel for the petitioner has submitted that goods are manufactured in Kota and the registered office of the petitioner company is also located in Kota and as per condition No. 23-A of the agreement inspection of the goods was to be carried out at Kota, by the representative of the non petitioner and only after inspection the goods were to be supplied and in fact, the goods were inspected as per Annexures 1 to 3 filed with the petition. He has further submitted that condition No. 10 of the agreement also provides that payment of 90% value of the goods was to be made against the bills after inspection immediately at Kota before they were despatched, and therefore, Distt. Judge, Kota had jurisdiction to entertain the said application and pass a decree in terms of the award as part of cause of action did arise in Kota. In this connection he has placed reliance on M/s. Guru Nanak Foundation v. Ratan Singh & Sons ( AIR 1981 SC 2075 ). 4. He has submitted that moreover in the present case, the non petitioner did not raise any objection before the Arbitrator when it was requested to move the Distt. Judge, Kota for making the award rule of the court. The non petitioner also did not file any objection within time and as such, the court should not have entertained the technical objection specially when objection was taken after the limitation had expired. He has placed reliance on National Starch and Chemicals v. Werkfield Products Co. (AIR 1990 Kerala 291) and also Neyveli Lignite Corporation v. M/s. Vinay Engineering ( AIR 1992 Mad 332 ). 5. He has placed reliance on National Starch and Chemicals v. Werkfield Products Co. (AIR 1990 Kerala 291) and also Neyveli Lignite Corporation v. M/s. Vinay Engineering ( AIR 1992 Mad 332 ). 5. He has further submitted that since the non petitioner did not file any application under Section 30 or 33 of the Arbitration Act, it is not open to the non petitioner to take such a technical objection. He has further submitted that since the petitioner's office as well as factory is also located at Kota at the time of the agreement, it is implied to be the place of performance of payment and therefore, the Distt. Judge had jurisdiction to entertain application and make rule of the court. In this connection, he has placed reliance on Ballo Ram v. Firm Seth Uttam Chahd Vishan Das (1960 RLW 397). 6. He has further submitted that in the agreement there was no positive assertion that court at Kota will have no jurisdiction and the restriction that the jurisdiction will be only in Punjab is very hard and oppressing and has therefore to be ignored and not given effect to. In this connection, he has placed reliance on Snehal Kumar Sarabhai v. E.T. Organisation (AIR 1975 Guj 72), Rajasthan Golden Transport Co. v. United India F & G Insurance Co. ( AIR 1980 Guj 184 ). 7. He has further submitted that the goods were delivered to the carrier at Kota which amounts to delivery of possession and therefore the cause of action would arise at the place of delivery and has placed reliance on Hindustan M & F Ltd. v. Indian Co. (AIR 1879 Pat 146). 8. He has then submitted that since 90% price was payable at Kota at the time of final inspection before it was handedover to the carrier, the Distt. Judge, Kota had jurisdiction to entertain the application and in this connection, has placed reliance of AIR 1985 Cal 74 . 9. He has placed strong reliance on Louis Dreyfus & Co. v. Daulatram Devidial (4 Indian Cases 1147), wherein it has been held as under : "An agreement was entered into at Amritsar between the defendant, who resided at Amritsar, and the plaintiffs who carried on business at Karachi. 9. He has placed strong reliance on Louis Dreyfus & Co. v. Daulatram Devidial (4 Indian Cases 1147), wherein it has been held as under : "An agreement was entered into at Amritsar between the defendant, who resided at Amritsar, and the plaintiffs who carried on business at Karachi. The defendant agreed to sell to the plaintiffs a certain quantity of grain not ascertained at the time; it was stipulated that the defendant would despatch the goods from Amritsar to the plaintiffs, consigning them at his own risk, in the name of plaintiffs branch at Amritsar, to the plaintiffs' firm at Karachi, that the defendant will receive 90% of the contract price, as an advance, in exchange for Railway receipts; but that the goods will be examined and weighed, and rejected or accepted after arrival at Karachi, and that the balance, if any, due will be paid after the plaintiffs had reported on the goods. As the goods were uncertained at the time of the agreement to sell, the sale could not be completed until the buyers had passed and accepted the goods at Karachi and that therefore, the performance of the contract was to be completed at Karachi. Consequently, the Karachi Court had jurisdiction to entertain an application to file an award relating to the disputes arising out of the agreement." 10. On the other hand, learned counsel for the non-petitioner has submitted that the agreement between the parties clearly states that courts in Kota will have no jurisdiction but it will be court in Chandigarh alone which have jurisdiction and where the goods were supplied and it is immaterial whether the inspection was made at Kota. Petitioner is bound by the condition mentioned in the agreement. It this connection, he has placed reliance on Singhal Transport Co. v. Jaisa Ram (1967 RLW 129) and Virendra Sahgal v. Sumati Lal Jaman Lal (AIR 1970 Delhi 14) wherein it has been held that the court which could have entertained suit between the parties wherein controversies were same as are subject matter of arbitration, is competent court within the meaning of Section 31 of the Arbitration Act, and also that filing of award could not confer jurisdiction on the court. 11. 11. He has then placed reliance on Hakam Singh v. Gammon (India) ( AIR 1971 SC 740 ) wherein it has been held that the parties cannot by agreement confer jurisdiction on court not possessed by it under the Code. 12. He has also drawn my attention to Indian Oil Corporation v. Multimetals Ltd. (AIR 1981 Delhi 90) wherein it has been held that payment for goods received by cheques drawn by petitioner on his bank at 'D' - collection of payment through respondent bank at 'K' - court at 'D' has jurisdiction. 13. He has also placed reliance on Globe Transport Corporation v. Triveni Engineering Works and another (1984 (II) ACC 34) wherein it has been held that contracting parties by agreement, can opt for jurisdiction at one particular place of suing excluding other places which are otherwise open to them for suing. 14. He has then placed reliance on AIR 1988 SC 1003 wherein it was held that Delhi High Court had no jurisdiction. 15. Lastly, he has placed reliance on Chobe Jagdish Prasad v. Ganga Prasad ( AIR 1959 SC 492 ) and has submitted that this court should not interfere in such matters in civil revision. 16. I have given my thoughtful consideration to the whole matter. It is not disputed that the company has its registered office at Kota and also its factory in Industrial Estate, Kota, where the goods supplied are manufactured and as per the agreement between the parties, petitioner company was to supply goods from its factory at Kota after inspection and final approval by the non petitioner at Kota and 90% payment was to be made at Kota against the bills accompanies by inspection notes of the non petitioner immediately. It is also not disputed that the petitioner had requested the Arbitrator that the award be filed in the court of District Judge, Kota and then request was not opposed by the non petitioner by its representative who was present at that time and therefore, on the joint request, the Arbitrator submitted award before the Distt. Judge, Kota for making it a rule of the court. Moreover, the non petitioner did not file objections within time and submitted the objections very belated. Judge, Kota for making it a rule of the court. Moreover, the non petitioner did not file objections within time and submitted the objections very belated. Supreme Court has observed in many cases that the State Government should not take technical objections like limitation or jurisdiction, more so when the parties had referred the matter to arbitration and the Arbitrator has given its award. Merely because the award is in favour of the petitioner and against the non petitioner, the non petitioner ought not to have raised such an objection because the intention of the parties was that the matter should be referred to arbitration which was done and the Arbitrator had given its award. It is immaterial whether the award is made rule of the court by the court located at Kota or at somewhere else. Non petitioner will have ample opportunity to challenge the validity of the award if it so desired within the four corners of the Arbitration Act. The matter related to supply of goods in the year 1977-78. The award was passed on 8.10.1984 and now, we are in 1993 so if it is held that the Kota court had no jurisdiction then the whole matter will have to be sent to other court having jurisdiction according to the non petitioner and will linger on with no useful purpose. These days when there is delay in disposal of cases on account of heavy pressure on the courts, a reasonable view should be taken. Moreover, in the present case, there is no total prohibition in the agreement that the Kota court will have no jurisdiction. 17. In view of the observations in the case of Louis Dreyfus & Co. (supra), I am inclined to allow this revision petition, set aside the order of the Distt. Judge, Kota and hold that the Distt. Judge, Kota had jurisdiction to entertain application under Sections 14 and 17 of the Arbitration Act and also to make award a rule of the court. It will be open for the non petitioner to take any objection on merits with regard to the award, in accordance with law and within the four corners of the Arbitration Act. Parties are lief to bear their own costs.