Daulat Rai and Sons vs Union of India

K. Ramamoorthy, J.—This is a petition u/s 20 of the Arbitration Act, 1940. The existence of the arbitration Clause is not disputed. The learned Counsel appearing for the respondent very forcefully submitted two parts. First is that this Court has no territorial jurisdiction because the work was done outside the jurisdiction and the contract was executed outside the jurisdiction of Delhi. Second the disputes enumerated (adumbrated) in the petition are outside the preview of arbitration on per the terms of the contract and they cannot make the subject matter of the arbitration. Mr. Sharma appearing for the petitioner submits that the fact that the site where the work was done is not within the jurisdiction of this Court cannot be disputed but the Engineer-in-chief who is to nominate arbitrator is functioning within the jurisdiction of this Court and that will be suffice for the purpose of considering the application u/s 20 of the Arbitration Act, 1940. He further submits that it will be convenient to the respondent to have arbitration in Delhi instead of outside Delhi.

The learned Counsel for the respondent brought to my notice a judgment delivered by this Court. I have taken the view that a petition u/s 20 of the Arbitration Act, 1940 in that case the nominating authority is in Chandigarh which is not the jurisdiction of this Court and the petition has been returned for presentation before appropriate Court. Mr. Sharma learned Counsel for petitioner brought to my notice the judgment passed by Hon''ble Mr. Justice N. G. Nandi M/s. Baleshwar Dass v. Union of India & Ors. (A.A. No. 44/96, decided on 24-5-1996), according to him the judgment delivered by Hon''ble Mr. Justice N. G. Nandi will cover this case. In a matter relating to the question of territorial jurisdiction, there can be no hard and fast rule and it depends upon so many practices including the convenience of the parties. The respondent cannot be too technical in respect of the territorial jurisdiction especially in a petition which has been filed u/s 20 of the Arbitration Act, 1940.

Therefore, I have no difficulty in coming to the conclusion that the petition u/s 20 of the Arbitration Act, 1940 hereon the facts and circumstances of the case is competent.

Relating to the other disputes about the excepted Clauses and certain things are not arbitrable, I would not like to go into because these things have to be decided by the arbitrator. The parties are at liberty to put forth their respective contention before the arbitrator and the arbitrator apart from deciding the claims on merits shall also deal with this question.

Accordingly the petition is allowed. I direct the Engineer-in-Chief, Military Engineering Service, Army Head Quarter, Kashmere House, New Delhi to appoint/nominate the arbitrator within 4 weeks from today.

With the above directions the suit stands disposed off. There shall be no order as to costs. A copy of this order shall be given dusty to both the parties.

Petition allowed.