Mohan Meakin Ltd. vs International Breweries Ltd. and Another

Mukul Mudgal, J.—This appeal challenges the order of the learned Single Judge dated 4.9.2008 in I.A. No. 9781/2008.

The facts of the case are as under:

(a) The appellant is a Limited Company existing under the Companies Act, 1956 and having its Registered Office at Solan Brewery Distt. Solan, Shimla Hills, Himachal Pradesh and Corporate Office at Mohan Nagar, Ghaziabad, Uttar Pradesh.

(b) The Respondent No. 1 is a Company Registered under the Companies Act, 1956 and having its Registered Office at New Delhi.

(c) The Appellant and the Respondent No. 1 had entered into an Agreement dated 14.06.2001, which was subsequently extended by the letter dated 26.7.2006 and thereafter another Brewing Agreement dated 1.5.2007 was executed between the Appellant and the Respondent No. 1.

(d) Sh. N.K. Tyagi who was appointed as a Sole Arbitrator, passed an interim award dated 22.10.2007.

(e) The arbitration proceedings were concluded and the learned Arbitrator passed the final award dated 23.4.2008.

(f) In the final award, it was held that the Appellant has to recover from the Respondent No. 1 a sum of Rs. 1,42,82,463.87 along with interest @ 7% calculated w.e.f. 13.07.2007 till the date of recovery.

(g) It was further stated in the Final Award that the interim Award dated 22.7.2007 is also made final i.e. the respondent No. 1 has been restrained from operating or transferring funds from the accounts of its various banks.

(h) The said Banks refused to honour the award passed by the learned Arbitrator stating that they are not bound by the same.

(i) The Appellant thereafter filed an OMP being OMP No. 332/2008 u/s 9 of the Arbitration and Conciliation Act, wherein it was prayed that the Respondent No. 1 be restrained from operating and transferring funds from the accounts held by it with the various Banks.

(j) The OMP came up before the learned Vacation Judge on 16.06.2008 who passed ex-parte order restraining the Banks from releasing the amount of Rs. 1,42,82,464/- from the bank account No. 01213/ 000790 in Scotia Bank, account No. 600520100012020 in Bank of India and account Nos. 0322320001305 & 0322002211363 in HDFC Bank and account No. 000705004892 in ICICI Bank.

(k) Subsequent to the passing of the said order and the implementation of the said order dated 16.06.2008 by the Banks, the Respondent No. 1 herein filed Objections u/s 34 before this Hon''ble Court being OMP No. 337/2008.

(l) The objection of the counsel for the Appellant was rejected by the learned Single Judge by its order dated 4.9.2008 and a notice was issued against the Appellant as a result the appellant filed the FAO(OS) No. 342/2008.

A preliminary objection was raised before the learned Single Judge with regard to the territorial jurisdiction of this Court. The learned Single Judge while dismissing the application filed by the appellant after hearing the preliminary objections held as follows:

Even otherwise, in my view, the procedure as adopted by the Respondent/Applicant ought not to be permitted. The Respondent/Applicant instead of filing reply to the application u/s 34 of the Act wants a piecemeal adjudication. It was put to the counsel for the Respondent/Applicant on 29th August, 2008 that he may file the reply to the objections but he refused to do so. The Petitioner has, in the application u/s 34 of the Act invoked the jurisdiction of this Court by stating that a part of the cause of action has arisen at Delhi and the Respondent/Applicant has its sales office in Delhi and the orders to the Respondent/Applicant were placed from Delhi and all the payments against the invoices were made at Delhi and numerous communications were made between the parties at Delhi. The Respondent/Applicant is as yet to reply to the application. The record of the Arbitral proceedings has also not been received by this Court as yet and without the same, no view on the respective contentions of the parties with respect to territorial jurisdiction could be taken, leave apart the provision of Section 42 of the Act.

The appellant has not yet filed a reply to the application and the court of the learned Single Judge has also not received the record of the arbitration proceedings. In this view of the matter, Mr. Agnani stated that he will not press the issue of jurisdiction raised in this appeal at this stage so as to await the order of the learned Single Judge after the perusal of the reply to be filed by the appellant. Accordingly, we are not pronouncing on the correctness of the learned Single Judge''s judgment but leave it open to the appellant to raise the issue of jurisdiction upon the filing of the reply by the appellant before the learned Single Judge. It is, therefore, proper that we do not deal with this issue of the correctness of the impugned order and it is open to the respondent to challenge the order of the learned Single Judge in accordance with law, in case the learned Single Judge after perusing the reply to the application and arbitrator''s record holds against it.

The appeal stands disposed of.