1 dgm IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. ARBITRATION PETITION NO. 413 OF 2009 INDIABULLS FINANCIAL SERVICES LTD. .... Petitioner vs Loyal Motors Pvt. Ltd. .... Respondents ALONG WITH ARBITRATION PETITION NO. 414 OF 2009 INDIABULLS FINANCIAL SERVICES LTD. .... Petitioner vs M/s. Sri Ram Carrier .... Respondents ALONG WITH ARBITRATION PETITION NO. 415 OF 2009 INDIABULLS FINANCIAL SERVICES LTD. .... Petitioner vs Narendra Agencies .... Respondents ALONG WITH ARBITRATION PETITION NO. 416 OF 2009 INDIABULLS FINANCIAL SERVICES LTD. .... Petitioner vs Ravi Organics .... Respondents ALONG WITH ARBITRATION PETITION NO. 417 OF 2009 INDIABULLS FINANCIAL SERVICES LTD. .... Petitioner vs 2 Chaitas Surgical Corporation .... Respondents ALONG WITH ARBITRATION PETITION NO. 418 OF 2009 INDIABULLS FINANCIAL SERVICES LTD. .... Petitioner vs Mahavir Marketing .... Respondents ALONG ALONG WITH ARBITRATION PETITION NO. 409 OF 2009 INDIABULLS FINANCIAL SERVICES LTD. .... Petitioner vs Venture Travel Services .... Respondents Mr.Shekhar Jagtap with Mr.Shailesh Chavan for the petitioner in all matters. Mr.J. G. Shukla for the respondents in Arbitration Petition No.515/2009 only. CORAM: ANOOP V. MOHTA, J. DATE : 30th June, 2009 ORAL JUDGMENT: 1 All these petitions can be disposed of by this common order in view of the fact that basic clauses/agreements between the parties are same and identical. 2 Arbitration Petition No.409/2009 is not on board, but upon mentioning of the learned counsel for the petitioners, the same is taken on board as the issues involved are the same and identical with other petitions. 3 The petitioner has invoked Section 9 of the Arbitration and Conciliation 3 Act, 1996 (for short, the Act) and prayed for an interim measures/injunction restraining the respondents from disposing of, selling, alienating, transferring or creating any third party right, interest in respect of immovable properties as described. 4 The basic terms and conditions of the Personal Loan Agreement in questions are as under: 14.6 Governing Law and Jurisdiction These Terms and conditions shall be construed and governed in all respects, including validity, interpretation and effect in accordance with the laws of India. All disputes arising out of these Terms and Conditions shall be subject to the exclusive jurisdiction of the Courts or tribunals at New Delhi. 14.7 Arbitration Any question, dispute or claim arising out of or in connection with these Terms and Conditions including any question on its existence, validity or termination shall be referred to and finally adjudicated through arbitration by a sole arbitrator and in accordance with the Arbitration and Conciliation Act, 1996. The sole arbitrator will be appointed by the IBFSL. The Sole Arbitrator shall conduct arbitration proceedings at New Delhi/Delhi. The arbitration award shall be final and binding on all the parties in connection with any question of law arising in the course of arbitration or with respect to any award made. Further, the present clause shall survive the termination of the present agreement. That the court at Delhi shall have exclusive jurisdiction (subject to the arbitration proceedings which are to be also conducted at Delhi.) over any or all disputes arising out of this agreement. That the present clause along with the clause for payment of interest, additional interest by the Borrower shall survive the termination of the present agreement. 5 Section 2(1)(e) of the Act defines the concept of “Court” as under: “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of 4 its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes. 6 Section 9 of the Act refers to the Court in the following words: 9. Interim measures, etc. by court. - A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court:- 7 Section 42 of the Act refers to “jurisdiction” as under: 1. Jurisdiction. - Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court. 8 There is no bar or any prohibition that the parties cannot enter into such agreement. Having once signed, the Court as agreed has only jurisdiction to decide and deal with all the arbitration proceedings between the parties to resolve disputes arising out of the agreements. In the present case, admittedly, the respondents have failed to make the payment as agreed and there is a consistent default in the payment of instalments. The petitioner demanded the same by notice but in vain. Therefore, there arose dispute between the parties arising out of the terms and conditions of the agreement. Once the dispute arose and as parties have agreed that the Court at Delhi shall have jurisdiction to decide the questions forming the subject matter of arbitration, then such petition filed under section 9 of the Act before this Court, though part cause of action arose in 5 Mumbai, still in view of the specific permissible agreement, the Delhi Court alone shall have jurisdiction to adjudicate thereupon. In my view, this Court at Mumbai therefore has no jurisdiction to pass any order even on this petition. 9 The Apex Court in Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited, (2009) 3 SCC 107, by referring to other decisions of the Apex Court has observed while dealing with Section 20 of Code of Civil Procedure read with Sections 20 and 41 of the Arbitration Act, 1940 and Sections 2(1)(e) and 42 of the Act, apart from similar contractual agreement/clauses and observed as under: “24. A. B. C. Laminart case, (1989) 2 SCC 163 also referred to and relied upon an earlier decision of this Court in Hakam Singh v. Gammon (India) Ltd., (171) 1 SCC 286. The said decision was rendered in the light of facts of a similar contract where Clause 12 of the tender provided for arbitration whereas Clause 13 provided: (Hakam Singh case, SCC p. 287, para 1) “... 13. Notwithstanding the place where the work under this contract is to be executed, it is mutually understood and agreed by and between the parties hereto that this contract shall be deemed to have been entered into by the parties concerned in the city of Bombay and the court of law in the city of Bombay alone shall have jurisdiction to adjudicate thereon.” 25. ........ It was further held in Hakam Singth case, (SCC p. 288, para 4) that where two or more courts have jurisdiction to try a suit or proceeding, an agreement between the parties that the dispute between them shall be tried in one of such courts was not contrary to public policy and that such an agreement did not contravene the provisions of Section 28 of the Contract Act. Similar view as also reiterated in Angile Insulations v. Davy Ashmore India Ltd. [ (1995) 4 SCC 153 ]. 35. The parties have clearly stipulated and agreed that no 6 other court, but only the court at Jaipur will have jurisdiction to try and decide the proceedings arising out of the said agreements, and therefore, it is the civil court at Jaipur which would alone have jurisdiction to try and decide such issue and that is the court which is competent to entertain such proceedings. The said court being competent to entertain such proceedings, the said court at Jaipur alone would have jurisdiction over the arbitration proceedings and all subsequent applications arising out of the reference. The arbitration proceedings have to be made at Jaipur Court and in no other court.” 10 In view of above, in my opinion, the Court at Delhi will have exclusive jurisdiction to try and decide the arbitration proceedings between the parties and also to entertain the petition of this nature. 11 Resultantly, all the above Petitions are dismissed for want of jurisdiction. However, the liberty is granted to the petitioner to take appropriate proceedings accordingly. The interim order, if any, shall also stands vacated. 12 No costs. (ANOOP V. MOHTA, J.)