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TMI Blog2013 (1) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... xygen and Nitrogen gases and liquid argon, which are required for the Steel Melt Shop of the applicant's factory. The said agreement was styled as "Build, Own and Operate basis" shortly known as "BOO". The first respondent was expected to incur the entire cost of the project for setting up the gas plant. However, in accordance with the terms of the agreement, the applicant placed Rupees Two Crores at the disposal of the first respondent as an interest free commitment in 2008. As per the agreement, the applicant has to bear the cost of civil work and provide other facilities like land, water, electricity etc. for the gas plant. After the agreement, the first respondent informed the applicant of certain financial assistance availed from their bank, namely the 2nd respondent bank and as per the request of the first respondent, a tripartite agreement was also entered into among the applicant, first respondent and second respondent on 25.05.2009. In accordance with the said tripartite agreement, the applicant had handed over 60 post-dated cheques drawn on Indian Bank, Harbour branch, Chennai in favour of the second respondent in respect of A/c No.728276905 on the understanding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Arbitration and Conciliation Act, 1996 before the High Court of Delhi at New Delhi. The said petition is being resisted on the question of jurisdiction on the premise that no part of the cause of action had arisen within its territorial jurisdiction. The High Court of Delhi passed an order directing the first respondent to supply gases in terms of the agreement and at the same time restraining the applicant from purchasing gases from third parties. Since the agreement was signed in Chennai and nothing is required to be performed in New Delhi and the plant is also in Andhra Pradesh, the maintainability of the said application before the Delhi High Court is challenged on the ground of lack of jurisdiction. While so, the first respondent issued a notice dated 05.04.2012 invoking the arbitration clause under the agreement dated 07.08.2008. In addition, the first respondent also issued a notice on the same day for the applicant's winding up under sections 433 and 434 of the Companies Act, 1958. Immediately applicant sent a reply refuting the allegations found in the notice and nominating its Arbitrator. Meanwhile, the applicant was served with a notice under section 138 of the N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mands of the first respondent. Since the Arbitral Tribunal is yet to commence the hearing, the applicant has no other alternative than to approach this court under section 9 of the Arbitration and Conciliation Act, 1996 for the relief of injunction in the nature stipulated supra. 3. The respondents 1 and 2 have filed separate counter affidavits disputing the various contentions raised by the applicant relating to the merits of the dispute, which has already been referred to an Arbitral Tribunal consisting of three Hon'ble retired Judges of the Supreme Court. In addition, the first respondent, in their counter affidavit have contended that the present application by the applicant under section 9 of the Arbitration and Conciliation Act, 1996 is barred under section 42 of the said Act, since a previous application filed under section 9 of the Arbitration and Conciliation Act, 1996 was entertained by the Delhi High Court regarding the subject matter of the arbitration and orders were passed on merits, wherein no objection had been raised on the question of jurisdiction. As such it was requested on behalf of the first respondent that the question of maintainability of the Origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the applicant would contend that the bar contemplated under section 42 of the Arbitration and Conciliation Act, 1996 would apply only if the previous application was filed in a court having jurisdiction and if the previous application was filed in a court having no jurisdiction, the same would not attract the bar provided under section 42 of the Act for the entertainment of any application under Section 9 by another Court having jurisdiction. Learned counsel for the applicant would contend further that the negotiation for original agreement were held in Chennai and the agreement itself was executed in Chennai; that the subsequent amended agreement was also entered into at Chennai; that the plants are established in Andhra Pradesh and not within the territorial jurisdiction of the High Court of Delhi; that none of the part of the contract is agreed to be performed within the jurisdiction of the Delhi High Court; that except the fact that the registered office of the first respondent is in New Delhi, no part of the cause of action arose within the jurisdiction of Delhi High Court to clothe the Delhi High Court with jurisdiction to entertain an application under section 9 of the Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Pointing out the same, the learned senior counsel has contended that when the other court, namely the Delhi High Court, is seized of an earlier application filed by the first respondent under section 9 of the Arbitration and Conciliation Act, 1996 relating to the very same subject matter, unless and until the said application is successfully resisted on the ground of absence of jurisdiction, the bar under section 42 of the Arbitration and Conciliation Act, 1996 shall stand attracted towards the present original application and that hence the present application should be dismissed as barred under section 42 of the said Act. 9. Section 42 of the Arbitration and Conciliation Act, 1996 is reproduced here under for better appreciation. 42. Jurisdiction. Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court. &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. Section 20 provides for the following: (i) Where the defendant, if there is only one defendant, or each one of the defendants, where there are more than one defendant, actually and voluntarily resides, or carries on business, or personally works for gain, within the local limits of a court, then the suit can be instituted in such court; (ii) Where there are more than one defendant, if any one of the defendants, actually and voluntarily resides and carries on business, or personally works for gain within the local limits of the jurisdiction of cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und in section 2(1)(e) of the Arbitration and Conciliation Act, 1996 will amount to over stretching the said definition, which could not be the intention of the legislature. When a court is empowered to entertain a suit after granting leave, it cannot be said that such court does not have the jurisdiction. 14. Of course the learned counsel for the applicant is also conscious of the said position and that is the reason why the learned counsel for the applicant was content with contending that no part of the cause of action did arise within the jurisdiction of the Delhi High Court and hence the application filed by the first respondent on the file of the Delhi High Court is an application filed in a court having no jurisdiction and the same will not attract the bar provided under section 42 of the said Act. Factually, the above said contention of the applicant cannot be countenanced. In the original agreement dated 07.08.2008, there is no indication regarding the place of its execution. The applicant contends that the agreement was entered into in Chennai. On the other hand, the first respondent contends that the agreement was signed both in Chennai and in Delhi. Furthermore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sen to confer a jurisdiction on a court, which would not have otherwise jurisdiction to entertain a suit regarding the dispute between the parties. When more than one court can entertain a suit regarding the dispute between the parties, the parties by mutual agreement can select one of such courts as the court having exclusive jurisdiction and thereby oust the jurisdiction of the other courts. The parties by selecting the courts in New Delhi under clause 9.5 of the escrow agreement, have exercised the said option of selecting of one of the courts and ousting the jurisdiction of others. Therefore, on facts, the contention of the applicant that the application filed by the first respondent before the Delhi High Court is one filed in a court having no jurisdiction, has got to be discountenanced. 16. The applicant has also enclosed a copy of the Original Miscellaneous Petition filed by the first respondent under section 9 of the Arbitration and Conciliation Act, 1996 before the Delhi High Court. Therein the cause of action for filing the petition has been stated as follows: " The cause of action for filing the present petition has arisen substantially at New Delhi. Negotiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction of the said court in the present original application filed in this court has got to be countenanced. Furthermore, the comity of courts will require this court not to venture to go into the question whether the Delhi High Court has got jurisdiction to entertain the original miscellaneous petition No.236/2012 pending on its file. If this court ventures to do so, it will amount to usurping the powers of the Delhi High Court to decide on its jurisdiction. Admittedly, the said Original Miscellaneous Petition, which was filed earlier in point of time regarding the dispute forming the subject-matter of arbitration is pending on the file of the Delhi High Court. Unless and until the Delhi High Court rejects the petition holding that it does not have jurisdiction to entertain that petition, the bar provided under section 42 of the Arbitration and Conciliation Act, 1996 shall stand attracted. 17. For all the reasons stated above, this court comes to the conclusion that the present original application filed by the applicant under section 9 of the Arbitration and Conciliation Act, 1996 cannot be maintained in view of the fact that similar petition O.M.P.No.236 of 2012 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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