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2003 DIGILAW 118 (DEL)

SHARMA ENTERPRISES v. C. M. C. LIMITED

2003-02-04

J.D.KAPOOR

body2003
J. D. KAPOOR, J. ( 1 ) THIS is a petition for appointment of an arbitrator as the petitioner seeks the appointment of the arbitrator stationed at delhi whereas the respondent/objector has questioned the territorial jurisdiction of this court by contending that not only the agreement between the parties was entered and executed at Secundrabad but also the work was executed at Hyderabad and parties had agreed to invoke the jurisdiction of the courts at Secundrabad in respect of the disputes arising of and in any way connected with the agreement. ( 2 ) ADMITTEDLY, the Corporate Office of petitioner is situated in Delhi though the registered office is at Hyderabad. It is admitted that part payment was made at Delhi though most of the payments were made at hyderabad. In the face of these facts, the arbitration clause is most important for deciding the jurisdiction. Relevant Clause is 34. It provides that "all disputes and differences shall be referred to and settled by the Project manager, Consultant. Admittedly, the Project manager Consultant is stationed at Delhi. ( 3 ) SECTION 20 (c) of the Civil Procedure Code provides help in deciding the jurisdiction of the court. Sub clause (c) of Section 20 entitles a party to institute a suit at a place where either whole or part of cause of action arises. Where corporation is involved, it is deemed to carry on business at its sole or principal office or in respect of any cause of action arising at any place where it has also subordinate office at such place. ( 4 ) THE agreement between the parties though shows that it was executed at hyderabad but the additional affidavit filed by petitioner shows the actual position. Even if it is assumed that the work was executed at hyderabad and the agreement was signed at hyderabad, the fact remains that the petitioner has its Corporate i. e. Principal office at Delhi and further not only the agreement took place in Delhi, some of the payments were also made in Delhi. Thus, it is clear that if not the whole part of the cause of action itself arose in Delhi. Explanation of sub clause (c) of section 20 demonstrates that where the parties are doing business in different places cause of action does not confine the jurisdiction to one place. Thus, it is clear that if not the whole part of the cause of action itself arose in Delhi. Explanation of sub clause (c) of section 20 demonstrates that where the parties are doing business in different places cause of action does not confine the jurisdiction to one place. The illustration is as under: "a is a tradesman in Calcutta B who carries on business in Delhi, by his agent in Calcutta, buys goods of A and requests A to deliver them to the East indian Railway Company. A delivers the goods accordingly in Calcutta. A may sue B for the price of goods either in calcutta, where the cause of action has arisen, or in Delhi where B carries on business. ( 5 ) THE controversy whether the court where the part of cause of action arises has jurisdiction or not has been settled once for all in number of cases. Prominent of them is laminart Pvt Ltd. Vs. A. P. Agencies (1989) 44 Taxman 443. In this case the Supreme court took the following view: "that the jurisdiction of the Court in the matter of a contract will depend on the situs of the contract and the cause of action arising through connecting factors. A 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 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 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 can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded". ( 6 ) IN view of the nature of the petition, we are encountered with the circumstances that the parties had agreed to get their disputes adjudicated from the Project Manager as who was Arbitrator stationed at Delhi. To ask the arbitrator change his situs merely, because the work was executed at Hyderabad would be too much to play with hyper technicalities of jurisdictional wranglings. Such a course would operate adversely and would be unjust against the Arbitrator. To ask the arbitrator change his situs merely, because the work was executed at Hyderabad would be too much to play with hyper technicalities of jurisdictional wranglings. Such a course would operate adversely and would be unjust against the Arbitrator. Even otherwise, the corporate office of the petitioner is situated in delhi. The terms of agreement were settled in delhi and so much so some of the payments were also made in Delhi. These facts amply provide the jurisdiction to this court. ( 7 ) IN view of the aforesaid reasons, the petition is allowed and Project Manager consultant is hereby appointed Arbitrator to decide the disputes. Arbitrator shall fix his own fees. The petition is disposed of.