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2017 DIGILAW 1280 (RAJ)

Prahlad Singh v. A. U. Finance Limited

2017-05-18

SANGEET LODHA

body2017
JUDGMENT : Sangeet Lodha, J. 1. This petition is directed against order dated 24.7.10 passed by the Additional District Judge No. 1, Udaipur in Civil Misc. Case No. 6/10, whereby an application preferred by the petitioner herein under Section 34 of Arbitration & Conciliation Act, 1996 (for short "the Act") is directed to be returned to the petitioner for presentation before the court of competent jurisdiction. 2. The petitioner filed an application under Section 34 of the Act for setting aside arbitral award in the Court of Additional District Judge No. 1, Udaipur. The respondent by way of an application sought rejection of the application for want of jurisdiction. It was contended that as per the arbitration clause, parties intended to conduct arbitration proceedings subject to the exclusive jurisdiction of Jaipur Court only and therefore, the Court at Udaipur has no jurisdiction to entertain the application preferred under Section 34 of the Act. That apart, it was contended that an application for interim measures under Section 9 was made by the respondent before the District Judge, Jaipur City, which was later transferred to and decided by the Additional District Judge No. 9, Jaipur City and thus, by virtue of provisions of Section 42, that Court at Jaipur alone has the jurisdiction over the arbitral proceedings and all subsequent applications arising out of the agreement and the arbitral proceedings is permissible to be made in that Court and no other Court. 3. After due consideration of the rival submissions, the application preferred on behalf of the respondent has been allowed by the court below and the application under Section 34 of the Act preferred by the petitioner herein has been returned for proper presentation. Hence, this petition. 4. Learned counsel appearing for the petitioner contended that it is settled proposition of law that the place where agreement has been executed and transaction has taken place shall have the jurisdiction in respect of the dispute arising between the parties and thus, in the instant case, admittedly when the contract was executed between the parties at Udaipur, the court below has seriously erred in returning the application for want of jurisdiction. Learned counsel submitted that the parties cannot oust the jurisdiction of the court by mutual agreement and therefore, notwithstanding the arbitration clause in the contract making the arbitration proceedings subject to the jurisdiction of the Court at Jaipur, the Court at Udaipur has the jurisdiction to entertain the application. Learned counsel submitted that by virtue of provisions of Section 42, the jurisdiction of the Court at Udaipur shall not stand ousted and if on the facts and in the circumstances of the case, both the courts have jurisdiction, the application preferred by the petitioner before the Court at Udaipur, could not have been returned for want of jurisdiction. 5. On the other hand, the counsel appearing for the respondent while supporting the order impugned passed by the court below, submitted that the arbitration clause in the contract shall operate and no other Court other than the Court at Jaipur is competent to entertain the application preferred for setting aside the award. Learned counsel submitted that the jurisdiction of other court stands ousted by virtue of provisions of Section 42 of the Act, inasmuch as, in the first instance, the application preferred by the respondent under Section 9 of the Act was instituted and disposed of by the Court of competent jurisdiction at Jaipur. 6. I have considered the rival submissions and perused the material on record. 7. The Clause No. 27 of the Agreement entered into between the parties which deals with arbitration, reads as under: "The parties here to expressly agree that all dispute arising out of and/or relating to this agreement including any collateral document shall be subject to the exclusive jurisdiction of a jaipur court only." 8. A bare perusal of the above clause makes it abundantly clear that the parties intended to make the arbitration proceedings subject to exclusive jurisdiction of the Court at Jaipur. 9. In A.B.C. Laminart (P) Ltd. and Another vs. A.P. Agencies, Salem, (1989) 2 SCC 163 , the Hon'ble Supreme Court while dealing with the question of jurisdiction pursuant to an ouster clause in the contract, observed: "21. From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like "alone" and "only" and "exclusive" and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim "expressio unius est exclusio alterius" - expression of one is the exclusion of another - may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed." (Emphasis added) 10. In Swastik Gases Private Limited vs. Indian Oil Corporation Limited, (2013) 9 SCC 32 , the Hon'ble Supreme Court while dealing with the clause making the agreement subject to jurisdiction of the court at Kolkata, observed: "32. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the court at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like "alone" and "only" and "exclusive" and "exclusive jurisdiction" have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties - by having clause 18 in the agreement - is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone have jurisdiction. It is so because for construction of jurisdiction clause, like clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner." (Emphasis added) 11. Similar is the view taken by the Hon'ble Supreme Court in the matter of Indus Mobile Distribution Private Limited vs. Datawind Innovations Private Limited and Others, Civil Appeal Nos. 5370-5371 of 2017, decided on 19.4.2017. 12. Keeping in view the position of law settled as above, in the considered opinion of this court, in the present case, clause 27 of the agreement as framed certainly excludes the jurisdiction of all Courts other than the Court at Jaipur from entertaining the dispute arising out of the agreement and the arbitral proceedings. 13. Moreover, admittedly, in the instant case, keeping in view the arbitration clause in the contract, the application under Section 9 of the Act, seeking interim measures preferred by the respondent herein was instituted and decided in the Court at Jaipur and thus, by virtue of provisions of Section 42 of the Act, the Court at Jaipur alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of agreement and the arbitral proceedings are permissible to be made before that Court at Jaipur and no other Court. 14. Thus, viewed from any angle, the order impugned passed by the court below does not suffer from any infirmity, illegality or jurisdictional error so as to warrant interference by this court in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India. 15. In the result, the petition fails, it is hereby dismissed. No order as to costs.