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2006 DIGILAW 605 (DEL)

WIPRO FINANCE LTD. v. SAND PLAST (INDIA) LTD.

2006-03-23

A.K.SIKRI

body2006
( 1 ) IN this petition filed under Sections 7, 8 and 11 of the Arbitration and conciliation Act, 1996 prayer is made for appointment of an arbitrator as disputes have arisen between the parties. ( 2 ) THE petitioner which is non-banking financial company had given financial accommodation to the respondent No. 1 and the respondent No. 2 stood guarantee for the repayment of the said amount. The terms on which the money was advanced to the respondents are in detail in the petition. It is alleged that the respondents have not repaid the entire amount and as the lease agreement executed between the parties contained an arbitration clause and Clause 32 thereof, present petition is filed. ( 3 ) NOBODY appears on behalf of the respondents. Same was the position on the last date as well. However, I have seen the reply filed by the respondents. Two preliminary submissions which need consideration are the following: (a) In view of Clause 32 of the lease agreement dated 19th December, 1994 this Court has no territorial jurisdiction. (b) Procedure prescribed in Clause 32 of the lease agreement dated 19th December, 1994 was not followed and, therefore, present petition is not maintainable. ( 4 ) INSOFAR as first submission is concerned, reliance is placed on Clause 33 which states that the Courts at Bangalore city alone shall have exclusive jurisdiction. It is in the following terms:33. Jurisdiction- subject to the provision of Clause 32 above, as a part of the cause of action arises in Bangalore, it is agreed between the parties that in respect of any suit touching any matter, claims or disputes arising out of or in any way relating to this agreement, supplemental agreement, the Courts at bangalore City alone shall have exclusive jurisdiction. " ( 5 ) LEARNED Counsel for the petitioner states that though in the said clause it is mentioned that part of cause of action arises in Bangalore, in fact, no part of action had arisen in Bangalore. No doubt the petitioner has its registered office at bangalore. However, the money was advanced, in the instant case, by the petitioner through its branch office at New Delhi to the respondents which is also having its branch office at New Delhi. No doubt the petitioner has its registered office at bangalore. However, the money was advanced, in the instant case, by the petitioner through its branch office at New Delhi to the respondents which is also having its branch office at New Delhi. In support of this submission, he has taken me to the lease agreement as well as other documents signed between the parties where the witnesses who have signed the agreement clearly stated that they signed at Delhi/ new Delhi. ( 6 ) IT appears that no cause of action or part of cause of action had arisen in bangalore. May be because of the reason that the petitioner is having its registered office at Bangalore, for its own convenience, aforesaid clause was inserted. While i deprecate the this practice of the petitioner in stipulating such clauses, in view of the fact that no part of cause of action had arisen in Bangalore and as the lease agreement was signed in Delhi and the amount advanced to the respondent at Delhi, i am of the opinion that this Court has the territorial jurisdiction to entertain this petition. ( 7 ) INSOFAR as other submission of the respondent is concerned. It is stated in the reply that as per the agreement one party each was to appoint/nominate its arbitrator and without taking recourse to this procedure, present petition is filed. ( 8 ) LEARNED Counsel for the petitioner has contended that the aforesaid procedure was prescribed having regard to the provisions of the Arbitration Act, 1940 which is clearly mentioned in the Clause 32 itself. However, as per Section 10 of the Arbitration and Conciliation Act, 1996, it is not permissible to have even number of arbitrators and, therefore, the clause relating to appointment of one arbitrator by each party became redundant. The learned Counsel for the petitioner is right in this submission. ( 9 ) OTHER submissions raised in the petition touch the merits of the dispute and it would be open to the respondents to take up the pleas raised therein before the learned arbitrator. ( 10 ) AS the disputes have arisen and as per the agreement they are to be resorted to by the arbitration clause, Mr. Justice R. C. Chopra, a retired Judge of this court is appointed as the arbitrator to adjudicate the said disputes. His fee is fixed at Rs. 10,000. ( 10 ) AS the disputes have arisen and as per the agreement they are to be resorted to by the arbitration clause, Mr. Justice R. C. Chopra, a retired Judge of this court is appointed as the arbitrator to adjudicate the said disputes. His fee is fixed at Rs. 10,000. 00 per hearing subject to a maximum of Rs. 1,00,000. 00. Ordered accordingly. .