NARAIN INDUSTRIES Vs. DIAMOND CEMENTS

JUDGEMENT

(1.) THIS is an application filed under Section 11 (6) of the Arbitration and conciliation Act, 1996 (for short 'the Act') seeking appointment of the arbitrator.

(2.) THE applicant, a proprietory concern entered into an agreement with non-applicant No. 1 on 11-10-1999. As per the said agreement, applicant was to work as representative of the non-applicant No. 1 for clearing/storing and forwarding of their product cement. The applicant deposited Rs. 30,00,000/-by way of demand draft as cash security and started carrying on the business.

(3.) ON 15-5-2000 the applicant received a letter sent by the non-applicant No. 1 terminating the agreement dated 11-10-99 alleging losses incurred by it after the agency has been given to the applicant and also alleging lapses on the part of the applicant. The applicant by letter dated 26-5-2000, objected the said premature termination of the agreement and requested the non-applicant no. 1 to recall its letter dated 15-5-2000. The aforesaid request of the applicant was rejected by the non-applicant No. 1. Since the applicant was not getting any positive response in respect of its further correspondence, the applicant by notice dated 19-10-2000 requested the non-applicants to appoint an arbitrator to settle the claim and dispute between the parties as per Clause 32 of the aforesaid agreement dated 11-10-1999. The said notice was received by the non-applicants on 21-10-2000. As the non-applicants failed to appoint the arbitrator, the applicant filed an application under Section 11 (6) of the Act in the High Court of Judicature at Patna seeking appointment of arbitrator. The said application was rejected by the Hon'ble High Court of Patna by order dated 28-6-2004 on the ground of territorial jurisdiction. It held that vide Clause 33 of the agreement dated 11-10-1999 the parties had specifically agreed "that the courts having jurisdiction over Damoh (M. P.) shall, to the exclusion of all other courts, will have the exclusive jurisdiction in proceedings arising out of or relating to this agreement", in the circumstances the Patna High Court will have no jurisdiction. Accordingly, the applicant filed the present application stating therein that the agreement was executed at Damoh, the subject-matter involves dispute exceeding Rs. 25 lakhs and also in view of the Clause 33 of the agreement, the matter is within the jurisdiction of this Court.