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2010 DIGILAW 682 (KAR)

Venkateswara Goods Movers Private Limited v. Vikrant Tyres Limited

2010-06-04

ASHOK B.HINCHIGERI

body2010
JUDGMENT :- Ashok B. Hinchigeri, J: This petition is filed raising the challenge to the order, dated 27.11.2008 (Annexure-E) passed by the Court of the Small Causes and Civil Judge (Sr.Dn) Mysore in O.S.No.8/2003. 2. The facts of the case in brief are that the first respondent filed the suit against the respondent No.2-Bank and the petitioner for recovering a sum of Rs.4,00,000/-, which claim arises from the petitioner’s non-adherence to the agreement, dated 1.1.1994. By the said agreement, the petitioner was appointed by the first respondent as its ‘C’ and ‘F’ agent. The petitioner filed an elaborate written statement taking several defences. Two such defences are that the suit is not maintainable, as there is a clause for arbitration in the agreement, dated 1.1.1994. The second defence taken by the petitioner is that the Civil Court in Mysore has no territorial jurisdiction to entertain the suit in question, as the agreement was prepared and signed in Pune, Maharashtra. As the contract is concluded in Pune, as all the transactions have taken place in Pune and further as the first respondent-plaintiff has its Branch Office in Pune, the suit can be filed only with the Court, which has the territorial jurisdiction over Pune. On the basis of the rival pleadings, the Trial Court framed seven issues and took up the first two issues as preliminary issues. The preliminary issues are as follows:- (i) Whether the suit is maintainable in view of the clause of appointing a nominee for resolving the dispute in agreement dated 1.1.1994? (ii) Whether this Court has territorial jurisdiction to try the suit? 3. The Trial Court has answered both the preliminary issues against the petitioner and in favour of the first respondent-plaintiff by its order, dated 27.11.2008. Aggrieved by the same, this petition is instituted. 4. Sri Rajeeva, the learned Counsel for the petitioner brings to my notice Clause-20 of the agreement, dated 1.1.1994. It reads as follows:- “20. All disputes arising between the parties including interpretation hereof will be referred to the nominee of the Managing Director of the Company whose decision in this regard shall be final and binding between the parties.” 5. Nextly, the learned Counsel brings to my notice the provisions contained in Section 8 (1) of the Arbitration and Conciliation Act, 1996. The said provision reads as follows:- “8. Nextly, the learned Counsel brings to my notice the provisions contained in Section 8 (1) of the Arbitration and Conciliation Act, 1996. The said provision reads as follows:- “8. Power to refer parties to arbitration where there is an arbitration agreement.- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.” 6. Sri Rajeeva submits that when the arbitration clause and the provisions of law extracted hereinabove are read together, it becomes clear that the Civil Court’s jurisdiction is ousted. 7. Sri Rajeeva’s next limb of submission is that the Civil Court in Mysore has no jurisdiction whatsoever because no cause of action or any part thereof has arisen within the territorial jurisdiction of the Mysore Court. He read out paragraph 3(a) of the written statement to buttress his submission that the suit is filed in Mysore because it suits the convenience of the first respondent-plaintiff. He submits that the stamp paper is purchased in Maharashtra, signed in Maharashtra and all the transactions have taken place in Maharashtra. This being the factual position, when no part of the cause of action whatsoever has taken place within the territorial jurisdiction of Mysore, the plaint ought to have been rejected in limine. 8. Sri Rajeeva’s allied submission is that the Court below has proceeded on a fallacy that the first respondent-plaintiff has no Branch Office in Pune. He brings to my notice the first respondent’s letter, dated 8.10.1993 (Annexure-D) issued by its Branch Office situated at Pune. The non-consideration of this letter would virtually reflect the non-application of mind on the part of the Trial Court, so contends Sri Rajeeva. 9. Per contra, Sri Chandrashekara.K, the learned Counsel appearing for Sri Kiran S.Javali, for the respondent No.1 submits that merely raising a plea or a defence of the existence of the arbitration clause in the written statement would not lead the petitioner anywhere because it has not made any application for reference of the matter to the arbitration. In support of his submissions, he has relied on the following decisions:- (i) AIR 2006 Rajasthan 56 Mahesh Kumar Vs. Rajasthan State Road Transport Corporation, Jodhpur. (ii) AIR 2006 Allahabad 305-Bal Kisan Bansal Vs. Pramit Bansal & Anr. In support of his submissions, he has relied on the following decisions:- (i) AIR 2006 Rajasthan 56 Mahesh Kumar Vs. Rajasthan State Road Transport Corporation, Jodhpur. (ii) AIR 2006 Allahabad 305-Bal Kisan Bansal Vs. Pramit Bansal & Anr. (iii) Order dated 31.5.2007 passed by this Court in Writ Petition No.18340/2006. 10. On the aspect of territorial jurisdiction, Sri Chandrashekara’s submission is that the agreement, dated 1.1.1994 is signed in Mysore, Bank Guarantee in furnished and invoked in Mysore and the goods are supplied in Mysore. Thus, the cause of action has substantially arisen within the territorial jurisdiction of the Mysore Court. 11. Just because the agreement provides for an arbitration clause and because the defendant has raised a plea in the written statement, the Trial Court is not obliged to refer the matter to the arbitration. The existence of the arbitration clause and taking a relevant plea in the written statement does not automatically have the effect of ousting the jurisdiction of the Trial Court. Section 8(1) of the said Act, the provisions of which are extracted hereinabove, clearly prescribes that an application has to be filed seeking the reference to the arbitration. In the absence of such an application, the Trial Court could not have refer the matter to the arbitration. In taking this view, I am fortified by the three decisions relied upon by the learned Counsel for the respondent No.1. 12. The cause of action has to be judged mainly from the allegations in the plaint and not from the defences set up by the defendants. The cause of action is independent of the defence taken by the defendants. In the case of Prem Kumar Paters Vs. 2nd Addl District and Sessions Judge, Kanpur and Others reported in AIR 1994 Allahabad 158, it is held that the cause of action is to be ascertained from the facts stated in the plaint. 13. A party cannot sue or be sued at a place where no cause of action has arisen. If the cause of action or a part thereof has arisen in two places, it has to be left to the option of the litigant to choose either of the two places. 13. A party cannot sue or be sued at a place where no cause of action has arisen. If the cause of action or a part thereof has arisen in two places, it has to be left to the option of the litigant to choose either of the two places. Prima facie, going by the averments in the plaint, it cannot be denied with any rate of success that atleast a part of the cause of action has arisen within the territorial jurisdiction of the Mysore Court in view of the supply of goods from Mysore, furnishing and invoking of Bank Guarantee in Mysore, etc., even if there is some dispute as to whether the agreement is signed in Pune or Mysore. 14. For all the aforesaid reasons, this Court finds it hard to give acceptability to the submissions urged on behalf of the petitioner that the first respondent-plaintiff has to go to Pune Court, if it wants to sue the petitioner. The insistence of the petitioner for being sued only at Pune or in some place in Maharashtra is not tenable at all. 15. In the result, this writ petitions is dismissed with no order as to costs.