CENTRAL COALFIELDS LTD Vs. RATANLAL TRANSPORT

JUDGEMENT

(1.) This appeal has been preferred from an order dated 15th January 1992 directing the filing of an agreement under section 20(1) of the Arbitration Act, 1940 (hereinafter referred to as the Act). According to the appellant, the court lacked the territorial jurisdiction either to entertain the application under section 20 or to pass any order thereon.

(2.) According to the appellant only the court having jurisdiction with respect to the subject matter of the agreement could entertain an application under section 20 of the Act. It is stated that the agreement had been executed in Bihar. The entire work and/or transaction had been carried on under the agreement in Bihar and that no part of the cause of action had arisen within the jurisdiction of this court. It is submitted that as the subject matter of the agreement had taken place wholly outside the jurisdiction of this court, the order under appeal was passed without jurisdiction. The appellants have relied upon M. Venkatasamiappa v. Srinidhi Limited : 1950 (1) MLJ 709; Sushil Majumdar v. Sova Rani Biswas : AIR 1983 Cal. 57 (DB); Union of India v. Electronic Controls and Instrument Engineers : 1997(2) Arb. LR 691; M/s. Patel Roadways Ltd. v. M/s Prasad Trading Co. : AIR 1992 SC 1514; Aligarh Muslim University and Anr. v. Vinay Engineering Enterprises (P) Ltd. : 1994(4) SCC 710 and an unreported order dated 31st March 1995 of the Supreme Court in Civil appeal No. 586178 of 1995 arising out of Special Leave Petition (Civil) No. 17131 of 1994; Bharat Coking Coal Ltd. v. M/s. Chakraborty & Mondal in support of their submission.

(3.) The respondent has conceded that no part of the cause of action has arisen within the jurisdiction of this court but has sought to justify the making of the application before this court on the basis of the provisions of Clause 12 of the Letters Patent. It is argued that Clause 12 allows for a suit to be filed against a defendant carrying on business within the jurisdiction of this court. The respondent has relied upon the statement in the affidavit of the appellant that the appellant had a sales office within this court's jurisdiction, to contend that therefore this court could entertain the application under section 20. The respondent has contended that the Explanation to section 20 of the Civil Procedure Code whereby a defendant which was a corporate entity was deemed to carry on business at its subordinate office only if part of the cause of action arose where the subordinate office was situate, was inapplicable to clause 12. The decision of a learned Single Judge of this court in Babu Lall Choukhani v. Caltex (India) Ltd. : AIR 1967 Cal. 205 as well a Full Bench decision of the Delhi High Court in Shri Ram Ratan Bhartia v. Food Corporation of India : AIR 1978 Delhi 183 have been cited for this purpose.