BINANI BROS PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This appeal is directed against the order of the learned single Judge holding that the courts at Delhi had no jurisdiction to entertain the appllication filed by the appellant under section 33 of the Arbitration Act (hereafter called "the Act").

(2.) The appellant is a limited company with its registered office at Calcutta. The Director General of Supplies and Disposals which is a central purchase organisation of the Government of India entered into a contract with the appellant through the Director of Supplies and Disposals, Bombay for the purchase of 780 cwts. of pig-lead. According to the application the appellant fully executed this contract in the year 1959 and also received payments for the goods supplied but the Director of Supplies and Disposals, Bombay "unilaterally altered a clause of the contract" in regard to payment of sales-tax and sent to the Company a demand for refund of the amount already paid to it and thus raised a dispute. By letter dated September 27, 1968 the Director of Supplies and Disposals, Bombay called upon the Director General of Supplies and Disposals, New Delhi to enter on the reference or to appoint some arbitrator in his place in terms of clause 21 of the General Conditions of the Contract to decide this dispute. The appellant, in these circumstances, filed the present application praying for a declaration that for reasons mentioned in the application no arbitration agreement subsisted between the parties to call for arbitration.

(3.) in para 16 of the application, jurisdiction of the court at Delhi was invoked on the ground that "in terms of the agreement between the parties, the sole named arbitrator is the Director General of Supplies and Disposals functioning in Delhi". The application was opposed and the jurisdiction of the court was denied. The appellant made an application under Order 6 rule 17 Civil Procedure Code . (I.A. 1192 of 1969) lo amend para 16 of the application in substance to add the plea that because Union of India was carrying on business through the Director of Supplies and Disposals at New Delhi the court at Delhi had territorial jurisdiction in view of Section 20(a) of the Code of Civil Procedure to entertain the application. The learned single Judge by order dated September 12, 1969 held that the prayer for amendment could not be allowed until it was found that the court at Delhi had jurisdiction to entertain the application under Section 33. On the merits of the plca, by order dated September 12, 1969 the learned single Judge held that the court at Delhi had no jurisdiction and with this finding the application was returned to be presented at Bombay.