Goyal Rice Mills vs Punjab State Civil Supplies Corporation Ltd.

Dr. (Mrs.) Sarojnei Saksena, J.—This order shall dispose of C.R. 3009/1995 as well as C.R. No. 3127/1995, because identical question of law is involved in both the revision petitions.

The petitioner has challenged impugned order whereby his objections were rejected by the trial court vide order dated 8.11.1993 which is affirmed by Additional District Judge, Chandigarh by dismissing their appeal on 23rd May, 1995.

This revision was admitted on 21st August, 1995 only qua the point of jurisdiction.

Brief facts of the case are that the petitioner is a partnership firm. It entered into an agreement on 12.11.1986 with the Punjab State Civil Supplies Corporation (PUNSUP), Chandigarh for shelling of paddy. Allegedly on not giving the rice after shelling according to the terms and conditions of the agreement, a dispute arose between the parties. The agreement contained in arbitration clause. Therefore, the dispute was referred to arbitrator who gave his award on 12.1.1990 in favour of the respondentCorporation.

Thereafter the respondent filed a petition under Section 14 read with Section 17 of the Arbitration Act, 1940 before the lower Court praying that award along with arbitration proceedings be called and award be made rule of the Court. After receiving notice of the filing of the said petition and the award, the petitioner raised certain objections. One such objection was that Chandigarh Court has no jurisdiction to entertain such a petition and make the award rule of the court. All the objections raised by the petitioner were set aside by the trial Court vide judgment dated the November, 1993 and the award was made rule of the Court. In the appeal also, the petitioners raised those very contentions; one of them was about the jurisdiction as well but even the Additional District Judge, Chandigarh dismissed the appeal on 23rd May, 1995. The petitioner''s contention is that the said agreement was executed at Dhuri, Distt. Sangrur. Shelling of rice was also done at Dhuri but when a dispute arose, the respondent appointed arbitrator at Chandigarh. The arbitrator conducted the proceedings at Chandigarh and gave his award at Chandigarh. The respondentCorporation filed petition under Sections 14 and 17 of the Arbitration Act in the Court of Sub Judge Ist Class, Chandigarh which was decided by that Court on 8.11.1993. Thus according to him only the Sangrur Court had jurisdiction to decide such a petition, Chandigarh Court had no such jurisdiction.

During arguments, the respondent''s learned counsel raised a preliminary objection that under Section 21 of the Code of Civil Procedure such a petition cannot be heard unless the petitioner is able to show to the court that since the matter pertaining to Sangrur Court jurisdiction has been decided by the Civil Court, Chandigarh, it has resulted in failure of justice.

Section 21(1) of the Code provides that no objection as to the place of suing shall be allowed by the any Appellate or Revisional Court unless such objection was taken in the court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement and unless there has been a consequent failure of justice. If clause 2 provides that on such objection about the competence of court with reference to pecuniary limits of its jurisdiction shall be allowed by the Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases whose issues are settled on or before such settlement and unless there has been a consequent failure of justice. Its clause 3 relates to the competence of the executing court. Thus, this clause lays down three important things which are required to be satisfied by the petitioners before such an objection can be entertained by any appellate or revisional court and they are:

(i) the objection was taken in the Court of first instance;

(ii) it was taken at the earliest possible opportunity and in cases where issues are settled, on or before such settlement; and

(iii) there has been a consequent failure of justice.

In this case, the petitioner''s learned counsel submitted that even in the trial Court, such an objection was raised by the petitioner but that objection was not accepted by the trial Court. Before the appellate court also, the petitioner had taken such an objection but even appellate court in its impugned order, in paras 12 and 13, has not accepted this objection. But he could not satisfy this Court whether thereby there has been a consequent failure of justice.

It is pertinent to mention that no doubt the agreement was entered into at Dhuri, District Sangrur, the assigned work was also done in Dhuri, District Sangrur. But said agreement contained arbitration clause and the respondentCorporation appointed an arbitrator in Chandigarh to settle the dispute arising out of the said agreement. When arbitrator was appointed at Chandigarh, the petitioner participated in the proceedings and finally the arbitrator gave his award at Chandigarh. When the proceedings were pending before the arbitrator, the petitioner never raised such objection, and never tried to avail any legal remedy saying that in Chandigarh, arbitration proceedings cannot be held in pursuance to the agreement which was executed in Dhuri, Distt. Sangrur. Thus the arbitrator gave his award. After the award, the petitioner cannot raise an objection that Civil Court at Chandigarh had no territorial jurisdiction to make the award rule of the law.

Lastly, the petitioner''s learned counsel could not point out a single fact showing that this subsequently resulted in failure of justice. Relying on Pathumma v. Kuntalan Kutty, AIR 1981 SC 1683, I hereby dismiss this revision on the short ground that the petitioner could not satisfy whether the impugned judgments of the lower courts at Chandigarh have resulted in failure of justice because they had no territorial jurisdiction to decide the said matter. Resultantly, finding no force in the revisions, the same are hereby dismissed with costs.