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2005 DIGILAW 41 (HP)

SANAT KUMAR v. KING PARK RESORT PVT. LTD.

2005-03-10

V.K.GUPTA

body2005
JUDGMENT V.K. Gupta, C.J. (Oral).—On this petition coming up for hearing today, Mr. Goel learned counsel appearing for the respondents has raised a preliminary objection about the jurisdiction of this Court to entertain and receive this petition in view of the specific clause in the agreement which says that the Courts at Noida, to the exclusion of all other Courts, shall have the jurisdiction to entertain and receive petitions etc. for settlement of any dispute or difference between the parties. 2. My attention was invited to the text of the arbitration agreement between the parties in which, apart from the stipulation that the disputes and differences between the parties shall be settled through arbitration, there is also a stipulation to the effect that the Courts at Noida shall have the exclusive jurisdiction to receive and try the matters in dispute between the parties. For ready reference the aforesaid part of the agreement is reproduced herein which reads thus:— "In the event of any dispute or difference of opinion the parties arising out of or in connection with this agreement or with regards to performance of any obligation by either party, the matter shall be referred to sole Arbitrator Mr. V.D. Yadav S/o Dr. H.N. Yadav R/o Noida (UP) for arbitration. The parties agree to be bound for settlement of any dispute, difference, etc., touching upon the arbitration / agreement or otherwise, only in the sole and exclusive jurisdiction of the Court exercising competent jurisdiction situated at Noida to the exclusion of all other Courts." 3. It is an undisputed fact that the agreement was executed at Noida on 10th October, 2003. If the agreement was executed at Noida. undoubtedly a part of cause of action arose at Noida and, therefore, the Courts at Noida have the jurisdiction to try a suit or other proceedings between the parties. Undoubtedly also the Courts in Himachal Pradesh would have the jurisdiction to try the suit or other proceedings between the parties because a part of cause of action arose in Himachal Pradesh as well. In a situation where two or more Courts have concurrent jurisdiction to try the suit or other proceedings, the parties by agreement can confer jurisdiction upon one of such Courts and correspondingly oust the jurisdiction of all other Courts. 4. In a situation where two or more Courts have concurrent jurisdiction to try the suit or other proceedings, the parties by agreement can confer jurisdiction upon one of such Courts and correspondingly oust the jurisdiction of all other Courts. 4. In the case Hakam Singh v. M/s. Gammon (India) Ltd., reported in 1971 (1) SCC 286 their Lordhsip of Supreme Court while dealing with this issue observed as under:— "......The Code of Civil Procedure in its entirety applies to proceedings under the Arbitration Act. The jurisdiction of the Courts under the Arbitration Act to entertain a proceeding for filing an award is accordingly governed by the provisions of the Code of Civil Procedure. By Clause 13 of the agreement it was expressly stipulated between the parties that the contract shall be deemed to have been entered into by the parties concerned in the City of Bombay. In any event the respondents have their principal office in Bombay and they were liable in respect of a cause of action arising under the terms of the tender to be sued in the Courts at Bombay. It is not open to the parties by agreement to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two Courts or more have under the Code of Civil Procedure jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. Such an agreement does not contravene Section 28 of the Contract Act.". 5. The aforesaid ratio in Hakam Singh v. M/s. Gammon (India) Ltd., came to be noticed in the case of Man Roland Druckimachinen AG v. Multicolour Offset Ltd. and another, reported in (2004) 7 SCC 447 where it was observed as under :— "Undoubtedly, when the parties have agreed on a particular forum, the courts will enforce such agreement. This is not because of a lack or ouster of its own jurisdiction by reason of consensual conferment of jurisdiction on another court, but because the court will not be party to a breach of an agreement. Such an agreement is not contrary to public policy nor does it contravene Section 28 or Section 23 of the Contract Act. This is not because of a lack or ouster of its own jurisdiction by reason of consensual conferment of jurisdiction on another court, but because the court will not be party to a breach of an agreement. Such an agreement is not contrary to public policy nor does it contravene Section 28 or Section 23 of the Contract Act. This has been held in Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC 286; A.B.C. Laminart (P) Ltd. v. A.P. Agencies, (1989) 2 SCC 163 and Modi Entertainment Network v. W.S.G. Cricket Pte, Ltd., (2003) 4 SCC 341. The decision of the Delhi High Court in Rajendra Sethia v Punjab National Bank, AIR 1991 Del 285, relied on by the Commission which holds to the contrary is, therefore, clearly erroneous." 6. In view of the aforesaid ratio laid by the Supreme Court it is manifestly clear that the parties were at liberty to enter into a lawful agreement with each other conferring exclusive jurisdiction upon Noida Courts and ousting the jurisdiction of other Courts. 7. Mr. Mehta, learned counsel appearing for the petitioner, however, submits that the jurisdiction of Courts in Himachal Pradesh cannot be ousted and in support of his said submission, he has relied upon two Single Bench Judgments in the cases of Indian Rare Earths Ltd. and others v. M/s Unique Builders Ltd. reported in AIR 1987 Orissa 30 and M/s. Snehalkumar Sarabhai v. M/s. Economic Transport Organisation and others reported in AIR 1975 Gujarat 72. 8. I have gone through the aforesaid Single Bench Judgment of Orissa High Court in the case of Indian Rare Earths Ltd. and others v. M/s. Unique Builders Ltd., and find that the ratio in the aforesaid judgment is apparently derived from the aforesaid Single Bench Judgment of Gujarat High Court in the case of M/s. Snehalkumar Sarabhai v. M/s. Economic Transport Organisation and others. In view of the aforesaid two Sunrpme Court judgments laying down the ratio in clear and unambiguous terms that where a Court otherwise has the inherent jurisdiction to try the suit or other proceedings the parties by agreement can confer jurisdiction to such a Court, and in the process exclude and oust the jurisdiction of other Courts, with utmost respect and due deference I do not agree with the view expressed in the aforesaid two Single Bench Judgments of Orissa and Gujarat High Courts. 9. 9. In view of the aforesaid observations, this petition is dismissed for want of territorial jurisdiction. The petitioner is at liberty to file an appropriate petition in the Court of competent jurisdiction in the light of aforesaid observations. Actually Mr. Goel, learned counsel appearing for the respoitdents has informed me at the bar that the respondents already have filed petitions under Section 11 of the Arbitration and Conciliation Act, 1996 in the High Court of Allahabad at Allahabad and those petitions are pending disposal. Mr. Mehta, learned counsel for the petitioner has confirmed this fact and has submitted that in those petitions the petitioner herein (who is respondent therein) has filed his reply(s). The parties are, therefore, left to prosecute/ defend the aforesaid petitions in Allahabad High Court as per their choice. The petition is dismissed. Writ petition dismissed.