Research › Search › Judgment

Allahabad High Court · body

2016 DIGILAW 3501 (ALL)

STATE OF U. P. v. S & P INFRASTRUCTURE DEVELOPERS PVT. LTD.

2016-10-20

K.J.THAKER, SUDHIR AGARWAL

body2016
JUDGMENT By the Court.—The delay in filing this appeal having been condoned vide order of date passed on Delay Condonation Application, let appeal be registered with regular number and old number shall also continue to be shown in bracket for finding out details of case, whenever required by parties with reference to either of the two numbers. 2. Heard Sri S.K. Mehrotra, learned counsel for appellants and Sri Alok Mishra, counsel for respondent. 3. This appeal filed under Section 37(1)(b) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as “Act 1996”) has come up at the instance of applicant-appellant since their objection/petition under Section 34 of Act 1996 for setting aside award dated 14.9.2013 has been rejected by District Judge, Gorakhpur vide impugned order dated 23.8.2014 on the ground that it has no territorial jurisdiction. From the order passed by Court below it is evident that parties counsel admitted before Court below that cause of action actually arose at Allahabad, Kushinagar and New Delhi. 4. In order to appreciate the aforesaid findings and view taken by Court below, we may refer in brief certain admitted facts;- 5. A work contract for carrying on widening of National Highway No. 28 from Kilometre No. 152 to kilometre No. 166 was entered between M/s. S & P Infrastructures Developers Pvt. Ltd. (hereinafter referred to as “Contractor’) and National Highway Authority of India through its Chairman as well as Chief Engineer, National Highway, P.W.D. Lucknow and Superintendent Engineer, 18th Circle (National Highway), P.W.D. at Allahabad. 6. In the year 2007-08 Superintendent Engineer, 18th Circle (National Highway), P.W.D. at Allahabad invited tenders for aforesaid widening of road which formed part of district Kushinagar. The tenders submitted by Contractor were accepted on 30.7.2008 and 9.9.2008 and two separate agreements on 9.9.2008 and 30.12.2008 were executed between Contractor and Superintendent Engineer, 18th Circle (National Highway), P.W.D. Allahabad. Under agreement dated 9.9.2008, total estimated cost of work was Rs. 124494027.20, date of commencement of work was 9.9.2008 and date of completion of work was 8.3.2010. Similarly, under agreement dated 30.12.2008, estimated cost of work was Rs. 122801955.67, date of commencement of work was 30.12.2008 and date of completion of work was 29.6.2010. 7. During course of work, running account bills were submitted by Contractor in the office of Resident Engineer, Temporary Divisional Construction Unit (National Highway), P.W.D. Gorakhpur and payments after verification of work approved thereat. 8. 122801955.67, date of commencement of work was 30.12.2008 and date of completion of work was 29.6.2010. 7. During course of work, running account bills were submitted by Contractor in the office of Resident Engineer, Temporary Divisional Construction Unit (National Highway), P.W.D. Gorakhpur and payments after verification of work approved thereat. 8. Contractor thereafter raised certain dispute with regard to extra work and filed an application under Section 11 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as “Act 1996”) in Delhi High Court for appointment of Arbitrator. 9. During pendency of said petition, department nominated Sri N.K. Kanaudiya (Retd.) Chief Engineer U.P. P.W.D as Arbitrator and Contractor nominated Sri B.D. Joshi (Retd.) Engineer in Chief, Himanchal Pradesh P.W.D. as Arbitrator and both nominated Sri Ashok Kumar, Chief Engineer (Retd.), (Ministry of Road Transport and Highway) as Presiding Arbitrator. The said Arbitrators proceeded with arbitration on different dates at Lucknow and made award on 14.9.2013 at Delhi. The appellants being dissatisfied with award made an application under Section 34 for setting aside award in the Court of District Judge, Gorakhpur. 10. It is in these facts and circumstances, District Judge, Gorakhpur has found that arbitration agreement was executed at Allahabad, arbitration proceedings continued at Lucknow and award was made at Delhi. Therefore, for the purpose of Section 34 no cause of action has arisen at Gorakhpur so as to confer territorial jurisdiction upon District Judge, Gorakhpur to proceed upon an application under Section 34 of Act 1996. 11. The word “Court” has been defined in Section 2(e) of Act 1996 and reads as under : “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes; 12. Thus for the purpose of jurisdiction, we have to examine as to whether in the similar circumstances, suit could have been filed at Gorakhpur. 13. In this regard, we have to go to Section 16, 18 and 20 of Civil Procedure Code. Thus for the purpose of jurisdiction, we have to examine as to whether in the similar circumstances, suit could have been filed at Gorakhpur. 13. In this regard, we have to go to Section 16, 18 and 20 of Civil Procedure Code. For the purpose of Section 16, subject-matter would situate in the present case either at Allahabad where agreement was executed between the parties, or at Lucknow, where arbitration proceedings were held or at Delhi where award was made. The mere fact that during execution of agreement, bills were submitted or payments were made at Gorakhpur, would not create a situation so as to claim that subject-matter also was at Gorakhpur. 14. For the purpose of territorial jurisdiction, pursuant to agreement executed between parties no “cause of action” had arisen at Gorakhpur. 15. “Cause of action” denotes whole bundle of material facts based on which plaintiffs relief prayed for, is based. It is not a piece of evidence of events, but a bundle of events. Neither it has any relation with the evidence set up by defendant nor depends upon character of relief prayed for. It generally consists of facts and situation which gives a party, a right, to file a suit and obtain a remedy from another person with the help of Court. It gives rise to enforcement of a right through Court of law. The “cause of action” thus consists of bundle of facts which give right to enforce legal injury for redress in a Court of law. 16. The work was performed by Contractor at Kushinagar. He claimed that it included extra work for which extra money is payable, and thus on the basis of agreement executed at Allahabad between parties, arbitration proceedings were initiated. Award was rendered at New Delhi. Therefore, Court below found that cause of action, wholly or partly, arose at three places i.e. Allahabad, Kushinagar and New Delhi. The mere fact that appellants had office at Gorakhpur where during execution of work at Kushinagar, bills were received and payments were made, would not confer cause of action since that payment is not in dispute and mere existence of office at Gorakhpur will not result in creating a cause of action, even partly, at Gorakhpur. 17. The mere fact that appellants had office at Gorakhpur where during execution of work at Kushinagar, bills were received and payments were made, would not confer cause of action since that payment is not in dispute and mere existence of office at Gorakhpur will not result in creating a cause of action, even partly, at Gorakhpur. 17. It is no doubt admitted that appellants filed application under Section 34 at Gorakhpur justifying territorial jurisdiction thereat only on the ground that some payment was received by contractor at Gorakhpur. This has been dealt with by Court below in following manner : “It is admitted fact between parties through their pleadings and arguments that cause of action arose between applicants and respondent in Allahabad, Kushinagar and New Delhi. Work contract was executed in Allahabad, work was done in Kushinagar and arbitrators heard the matter and passed the award in question in New Delhi. Even respondent reside in New Delhi. Except the office/residence of applicant No. 3 there is nothing concerning to present work contract and arbitration agreement or arbitral award that relate to territory of district Gorakhpur. Thus the district Gorakhpur cannot be place where any portion of cause of action relating to present matter arose. So Gorakhpur cannot be place for challenging the said award. Therefore the Court of district Gorakhpur has no territorial jurisdiction for hearing the dispute mentioned in present petition. Learned counsel for applicant-petitioner contended since payment was received by applicant No. 3 in Gorakhpur, therefore Court of this place has jurisdiction to entertain dispute relating to this matter. This argument is unacceptable. Accepting any non-disputed amount cannot enable any Court to usurp that territorial jurisdiction which it does not initially has. If a Court does not have initial or original jurisdiction of hearing of any matter then such jurisdiction cannot be acquired or usurped only by disposing or entertaining any application later on. Mere moving of an application/petition in a Court having no jurisdiction to entertain the matter cannot equip such Court with jurisdiction. Section 16 to 20 of the Code of Civil Procedure enumerates the place of institution of any suit. According to these provisions the cause of action for the present petition arose either in district Allahabad or in district Kushinagar or in New Delhi; and the territory of district Gorakhpur has no concern with anything relating to present petition. Section 16 to 20 of the Code of Civil Procedure enumerates the place of institution of any suit. According to these provisions the cause of action for the present petition arose either in district Allahabad or in district Kushinagar or in New Delhi; and the territory of district Gorakhpur has no concern with anything relating to present petition. Neither the subject-matter situates in Gorakhpur nor the defendants/respondent reside here. No cause of action arose in Gorakhpur. It is apparent that only Court of district Allahabad or in district Kushinagar or in New Delhi has territorial jurisdiction for hearing of dispute mentioned in present petition.” 18. Counsel for appellants could not dispute that no cause of action in respect to dispute involved in the matter had arisen at Gorakhpur and mere some payment received at other place does not confer jurisdiction in respect to cause of action which has not arisen in that case. 19. We therefore, do not find any error in the impugned order warranting interference. Appeal is accordingly dismissed at the stage of hearing under Order 41 Rule 11 C.P.C. 20. Interim order, if any, stands vacated.