THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.54 of 2011 (Dated : 23-12-2011) Between: NAC Infrastructure Equipment Ltd. Rep. by its Company Secretary, Mr. Dheeraj Bohra …Applicant A n d Sri Sai Venkataramana Constructions Nellore …Respondent THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.54 of 2011 ORDER: This arbitration application has been taken out by NAC Infrastructure Equipment Limited under sub-sections (4) and (6) of Section 11 of the Arbitration & Conciliation Act, 1996 read with the Scheme for appointment of Arbitrator, 1996 seeking appointment of arbitrator for resolution of the disputes relatable to Equipment Service Contract/Rental Agreement dated 02.5.2007. 2. The case of the applicant, in brief, is:- The applicant is a company incorporated under the provisions of the Companies Act, 1956 and it is engaged in the business of leasing and hiring of infrastructure equipments to its clients. In the month of April, 2007 respondent approached the applicant and sought to avail six Transit Mixer (equipments) along with two sets of crew for its project at Kalahasthi on rent. The applicant and the respondent entered in equipment Service Contract/Rental Agreement (“Agreement” in short) dated 2-5-2007. Pursuant to the said agreement, the applicant rented six Transit Mixer (equipments) along with two sets of crew/operator to the respondent for the purpose of a project to be carried out at Kalahasthi. The respondent while continuing to enjoy the use of the said equipments committed default in payment of rentals. The total amount due from the respondent towards rentals is Rs.6,81,007/-. The respondent made a counter claim of Rs.15,45,000/-. The applicant issued notice dated 11-01-2008 disputing the claim made by the respondent. The respondent filed a suit in O.S.No.61 of 2008 on the file of the District Court, Nellore, against the applicant for recovery of Rs.15,45,000/- . In the said suit, the applicant filed an application under Section 8 of the Arbitration & Conciliation Act and the said application is pending consideration. The applicant invoked arbitration clause in the agreement under notice dated 18-4-2009 appointing Mr. Justice A.S.Garg (Retd.), Punjab and Haryana High Court and requesting the consent of the respondent. The respondent having received the notice failed to give consent. Hence this application. 3. Notice to the respondent came to be ordered on 8-7-2011. The respondent entered appearance and filed counter. 4. It is stated in the counter that the applicant filed I.A.No.1153 of 2008 in O.S.No.61 of 2008 for referring the matter to the arbitration and the same is pending for consideration before the District Judge, Nellore, and therefore, this instant application is not maintainable. It is also stated in the counter that the applicant moved Arbitration Application No.330 of 2009 before the High Court of Delhi and subsequently, got it dismissed as withdrawn. As per the terms of the agreement, the parties agreed that all disputes shall be subject to the jurisdiction of Delhi High Court and as such, this Court has no jurisdiction to entertain this application. 5. Heard learned counsel appearing for the parties. 6. Learned counsel appearing for the applicant submits that the applicant moved Arbitration Application No.330 of 2009 before the Delhi High Court and subsequently, withdrew the same as no cause of action has arisen within the jurisdiction of Delhi High Court. A further submission has been made that as per the agreement, the disputes between the parties are required to be settled by way of arbitration and therefore, the application is maintainable. 7. Learned counsel appearing for the respondent submits that the arbitration clause referred in the agreement does not indicate that it is mandatory in nature and as one of the parties to the agreement invoked the jurisdiction of the civil Court, the arbitration clause is deemed to have been ignored and therefore, the present application is liable to be dismissed. It is also contended by him that as per the agreement, the parties subjected themselves to the jurisdiction of Delhi High Court and therefore, the application moved by the applicant before this Court is not maintainable. 8. Indisputably, the applicant approached the Delhi High Court seeking appointment of Arbitrator and subsequently, got it dismissed as withdrawn. There is no dispute that no cause of action has arisen within the jurisdiction of the Courts situated at Delhi. It is well settled that the parties by way of consent cannot confer jurisdiction on Court which is otherwise is not competent to entertain the application. Since the entire cause of action has arisen within the jurisdiction of this Court, the application filed by the applicant seeking appointment of arbitrator is maintainable. As per the terms of the agreement, the disputes between the parties are required to be resolved by taking recourse to arbitration in accordance with the provisions of Arbitration & Conciliation Act, 1996 and the rules made thereunder. For better appreciation, I may refer the relevant clause in the agreement, which reads as hereunder:- “ In the event of any claim, controversy, dispute or difference between parties hereto, arising out of or in connection with or in relation to this Contract, either party will be entitled to refer the same to arbitration in accordance with the Arbitration and Conciliation Act, 1996 and the rules made thereunder. The parties agree that all disputes shall be subjected to the jurisdiction of Delhi Court.” 9. The material on record indicates that the applicant has a claim against the respondent and whereas the respondent has a counter claim against the applicant. The claim and counter claim are required to be resolved by taking recourse to the arbitration. In that view of the matter, I find that the applicant made out a valid ground for appointment of arbitrator for resolution of the disputes relatable to the Equipment Service Contract/Rental Agreement dated 02-5-2007. 10. Accordingly, the application is allowed appointing Sri M.P.Chandramouli, a practicing Advocate, as arbitrator for resolution of the disputes between the parties relatable to the Equipment Service Contract/Rental Agreement dated 02-5-2007. He is at liberty to fix his own fee. No costs. _____________________ B.SESHASAYANA REDDY, J Dt.23-12-2011 RAR