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Judgment
M.M. Das, J.—This appeal u/s 37(1)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act'') has been preferred by the Appellant challenging the order dated 3.5.2010 passed in ARBP No. 61 of 2010 by the learned District Judge, Cuttack rejecting the application filed by the Appellant u/s 9 of the Act wherein the Appellant prayed for restraining the Respondent No. 2 from lifting the stock of materials worth around 8.500 M.T. lying over plot No. M-I at Paradeep Port Trust (in short ''PPT'') in the name of the present Respondent No. 2.
The learned District Judge has rejected the petition u/s 9 of the Act on the ground that he had no jurisdiction to decide the case in view of Clause -15 of the Memorandum of Understanding (in short ''MOU'') entered into between the parties, which mandates that only Kolkata Courts can have jurisdiction in the matter. Clause-15 of the MOU reads as follows: "In the event of any dispute the parties hereto shall make all make out efforts to serve the same through amicable settlement. If the dispute is not resolved through amicable settlement then the same shall be settled in Kolkata through Arbitration by the sole Arbitrator under the provisions of Arbitration & Conciliation Act, 1996 and all subsequent amendments thereto and the award made in pursuance thereof shall be binding on both the parties. The jurisdiction for any purpose shall be any competent court in Kolkata only.
The moot question raised in this appeal is as to whether the learned District Judge has acted contrary to law in holding that he had no jurisdiction to entertain the application u/s 9 of the Act.
Before averting to address the above question, it would be appropriate to take note of certain admitted facts of the case. Admittedly, the MOU was executed between the parties at Nagpur. The materials, which are the subject matter of MOU have been stacked at Paradeep in the Paradeep Port Trust Area and Kolkata is the official address of the Respondent No. 2 where minutes of the meeting as at Annexure-4 were recorded and to which place the Appellant sent a notice invoking the arbitration clause, addressed to the Respondent No. 2. Thus, in view of the admitted position, the jurisdiction lies at any of the above places, i.e. either at Nagpur or Paradeep or Kolkata.
INDIAN LAW REPORTS, CUTTACK SERIES [2010]
Mr. Acharya, learned Counsel for the Appellant placed reliance on the judgment of the Supreme Court in the case of M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company, where the apex Court held in paragraph -13 as follows:
As for as we can see the interpretation which we have placed on this section does not create any practical or undue difficulties or disadvantage either to the Plaintiff or a Defendant corporation. It is true that, normally, under Clauses (a) to (c), the Plaintiff has a choice of forum and cannot be compelled to go to the place of residence or business of the corporation and can file a suit at a place where the cause of action arises, if a corporation desires to be protected from being dragged into litigation at some place merely because a cause of action arises there it can save itself from such a situation by an exclusion clause as has been done in the present case. The clear intendment of the Explanation, however, is that, however the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place. It would be a great hardship if, in spite of the corporation having a subordinate office at the place where the cause of action arises (with which in all probability the Plaintiff has had dealings), such Plaintiff is to be compelled to travel to the place where the corporation has its principal place. That place should be convenient to the Plaintiff ; and 240 since the corporation has an office at such place, it will also be under no disadvantage. Thus the Explanation provides an alternative locus for the corporation''s place of business, not an additional one.
Mr. Acharya, learned Counsel for the Appellant further relying upon the decision in the case of Orissa Management and Minerals Pvt. Ltd. v. Moonet Ispat and Energy Ltd. : 2009 (I) OLR 457 submitted that this Court has held in the said decision that merely by using only the area and /or exclusive in an agreement, the jurisdiction of the other courts cannot be ousted, if a part of the cause of action has arisen in that place though there is no restriction for fixing the place for an arbitration proceeding at any place even though no cause of action has arisen at that place. He, therefore, submitted that in the facts of the present case, even tough both the parties have agreed for having the arbitration proceeding at Kolkata and in fact, a Hon''ble Retired Judge of the Calcutta High Court has been appointed as Arbitrator, it does not come on the way of the Court at Cuttack to exercise jurisdiction to entertain an application u/s 9 of the Act.
Mr. R.K. Mohanty, learned Counsel appearing for the Respondent No. 2 submitted that the ratio of the decision in the case of Patel Roadways Vidhi Minerals v. Paradip Port Trust [ M.M. Das J.] Limited, Bombay (supra) can not be applied to the facts of this case. According to Mr. Mohanty, in the said case, the facts reveal that the Respondent instituted a suit in the court of Subordinate Judge, Periakulam within whose territorial jurisdiction the subordinate office of the Appellant, where the goods were entrusted for transportation was situate, for damages alleging that the fire was due to the negligence and carelessness on the part of the staff of the Appellant . Certain packets of pesticides insured in the Oriental Insurance Company were entrusted by the Respondent No. 1 in the said civil appeal, to the Appellant at its subordinate office at Madras for being carried to New Delhi. According to the Respondents therein, the goods were delivered at New Delhi in a damaged condition resulting in loss of the first Respondent. A suit was instituted for recovery of the loss by the Respondents in the court of the 3rd Assistant Judge, City Civil Court, Madras. In both the suits, the Appellant, inter alia, took the plea in its defence that in the contract entered into between them, the parties had agreed that jurisdiction to decide any dispute between them would be only with the courts at Bomaby and consequently the courts in Madras where the two suits referred to above were instituted, had no jurisdiction. With regard to that question, the Supreme Court interpreting Section 20 of the Code of CPC and finding that the courts at Bombay in both the suits had no jurisdiction at all held that the agreement between the parties conferring exclusive jurisdiction in courts at Bombay is of no avail and further taking note of the fact that it was not urged before the Supreme Court on behalf of the Appellant that the cause of action wholly or in part arose in Bombay, came to the conclusion that Clause (c ) of Section 20 Code of CPC is not attracted to the facts of the said 242 cases. Further interpreting the Explanation u/s 20 of the Code of CPC and applying the same to the facts of the said case, the Supreme Court held that the latter part of the Explanation takes care of a case where the Defendant does not have a sole office but has a principal office at one place and has also a subordinate office at another place. The words "at such place" occurring at the end of the Explanation and the word "or" which is disjunctive, clearly suggest that if the case falls within the latter part of the Explanation, it is not the court within whose jurisdiction the principal office of the Defendant is situate but the court within whose jurisdiction it has a subordinate office alone shall have jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office." In that context, the Supreme Court came to the conclusion in paragraph-13 of the judgment, which has been quoted above. Such a situation, according to Mr. Mohanty, does not arise in the present case and therefore, the ratio of the said decision can not be made applicable to the facts of the present case.
INDIAN LAW REPORTS, CUTTACK SERIES [2010]
Mr. Mohanty relied upon the decision in the case of Hakam Sing Vs. Gammon (India) Ltd., where the Supreme Court held that parties can not by an agreement confer jurisdiction on court not possessed by it under the Code, but where two courts or more have jurisdiction under the Code of CPC to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such courts does not contravene Section 28 of the Contract Act. The said judgment was reiterated in the case of A.B.C. Laminart Pvt. Ltd. and Another Vs. A.P. Agencies, Salem, and in the case of M/s. Angile Insulations Vs. M/s. Davy Ashmore India Ltd. and another, .
Considering the decision in the case of M/s. Patel Roadways Limited (supra), the Supreme Court in the case of New Moga Transport Company, through its Proprietor Krishanlal Jhanwar Vs. United India Insurance Co. Ltd. and Others, , categorically laid down in paragraphs-14 and 19 of the said judgment as follows:
By a long series of decisions it has been held that where two Courts or more have under the Code of CPC jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in any on of such Courts is not contrary to public and in no way contravenes Section 28 of the Indian Contract Act, 1872. Therefore, if on the facts of a given case more than one Court has jurisdiction, parties by their consent may limit the jurisdiction to one of the two Courts. But by an agreement parties can not confer jurisdiction to a Court which otherwise does not have jurisdiction to deal with a matter.
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The intention of the parties can be culled out from use of the expressions "only", "alone", "exclusive" and the like with reference to a particular Court. But the intention to exclude a Court''s jurisdiction should be reflected in clear, unambiguous, explicit and specific terms. In such case only the accepted notions of contract would bind the parties. The first appellate Court was justified in holding that it is only the Court at Udaipur which had jurisdiction to try and suit. The High Court did not keep the relevant aspects in view while reversing the judgment of the trial Court. Accordingly, we set aside the judgment of the High Court and restore that of the first appellate Court. The Court at Barnala shall return the plaint to the Plaintiff No. 1 (Respondent No. 1) with appropriate endorsement under its seal which shall present it within a period of four weeks from the date of such endorsement of return before the proper Court at Udaipur. If it is so done, the question of limitation shall not be raised and the suit shall VIDHI MINERALS v. PARADIP PORT TRUST [ M.M.DAS J.] be decided on its own merits in accordance with law. The appeal is allowed. No costs.
In the case of A.B.C. Laminart Pvt. Ltd. and Anr. (supra), the Supreme Court laid down that when the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of ouster clause, when words like ''alone'', ''only'', ''exclusive'' and the like have been used, there may be no difficulty but even without such words in appropriate cases, the maxim ''expressio unius est exclusio alterius'' - expression of one is the exclusion of another may be applied and what is an appropriate case shall depend on the facts of the case. It is, therefore, now well settled that where there are two or more competent courts which can entertain a suit consequent upon a part of the cause of action having been arisen therein, if the parties to the contract exclude the jurisdiction of any of such court retaining the jurisdiction of only one of such courts to try the dispute, such agreement is valid and binding.
Applying the ratio of the aforementioned decisions of the apex Court to the facts of the present case keeping in view Clause 15 of the MOU, in the instant case, it would be seen that the parties having agreed that the disputes shall be tried only at Kolkata where the principal office of the Respondent No. 2 is situate, even if a part of the cause of action has arisen within the jurisdiction of the Cuttack Court, in view of the exclusion clause, the District Judge, Cuttack can not exercise jurisdiction.
In the above premises, this Court finds no error in the impugned order dated 3.5.2010 passed by the learned District Judge, Cuttack in Arbitration Petition No. 61 of 2010 wherein the learned District Judge, Cuttack held that the petition u/s 9 of the Act is not maintainable before him due to lack of jurisdiction. This appeal being devoid of merit is, therefore, dismissed, but, in the circumstances, without cost.