Jain Udyog Limited vs Mahindra and Mahindra Ltd.

Sushil Harkauli, J.—I have heard learned Counsel for the applicant who has sought review of the order of this Court dated 23.7.2010.

The argument on the review opened with the contention that the application moved by the applicant was u/s 11(6) and not u/s 11(4) of the Arbitration and Conciliation Act, 1996. Considering the contents of the order sought to be reviewed, it would make no difference whatsoever whether the application is under Sub-Section 6 or Sub-Section 4 of the Section 11 of the Arbitration and Conciliation Act, because in both the Sub-sections the word used is the "Chief Justice". According to the order sought to be reviewed, the "Chief Justice" must be the "Chief Justice" of the High Court having jurisdiction over the Civil Court which would have jurisdiction over the subject matter of the arbitration.

Learned Counsel for the applicant has relied upon a decision of Supreme Court in the case of M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company, for the proposition about where the cause of action or its part can be said to have arisen.

The decision is wholly irrelevant to the subject under consideration. The Clause 37 of the agreement says that it has been signed in Mumbai. This Clause 37 is contained in agreement which has been signed by the applicant himself, and therefore it is not open to the applicant to lead collateral evidence to contradict the statement in Clause 37 of the agreement, in view of Section 91 and 92 of the Indian Evidence Act, 1872.

Therefore, this Court must proceed on the assumption that agreement was signed in Mumbai. It has been held in the order sought to be reviewed that if the agreement was signed in Mumbai, part of the cause of action obviously arose in Mumbai where the suit can be instituted in the Civil Court. Where more than one Court has territorial jurisdiction, it is open, u/s 28 of the Indian Contract Act, 1872, for the parties to agree to confine the jurisdiction to any one or more of such several courts having the territorial jurisdiction. What Section 28 prohibits is firstly a total ouster of Civil Courts'' jurisdiction by contract with which we are not concerned here and it also prohibits creation of jurisdiction in a Civil Court by agreement which otherwise has no territorial jurisdiction.

As stated above, because the Mumbai Court had jurisdiction, part of the cause of action having arisen there, therefore, Clause 37 of the agreement is valid u/s 28 of the Indian Contract Act to the extent to which it confines to the jurisdiction to the Courts in Mumbai. In that view of the matter, the Civil Court in Mumbai and not Ranchi Civil Courts would have jurisdiction in view of the agreement between the parties. Therefore, the "Chief Justice" would mean the "Chief Justice" of Bombay High Court and not the "Chief Justice" of Jharkhand High Court.

Learned Counsel for the applicant has relied upon a decision of the Supreme Court in the case of of Bhagwandas Goverdhandas Kedia Vs. Girdharilal Parshottamdas and Co. and Others, , and also upon the provision of Section 4 of the Indian Contract Act in an attempt to show where the Contract must be deemed to have been executed. As stated above, in view of the express words in Clause 37 of the agreement between the parties, and Section 91 and 92 of the Indian Evidence Act, all these arguments are totally irrelevant because what we are concerned with is whether the Mumbai Court had or did not have territorial jurisdiction under Statute. As stated above, the agreement having been signed in Mumbai, the Mumbai Courts had territorial jurisdiction. Thereafter, everything is relevant in view of the agreement which confines the territorial jurisdiction to the Mumbai Courts.

The review petition is wholly misconceived and is accordingly dismissed.