2000 (3) TMI 936 - SC - Companies Law

Whether in view of the relevant clause in the contract between the parties the Court at Bombay alone had jurisdiction and the jurisdiction of the Courts at Madras where the suit was instituted was barred? Held that - Appeal dismissed. Whether Principal City Civil Judge Bangalore has jurisdiction in the matter or not is still pending with him which proceedings were filed earlier in time than the execution application by the appellant in the District Court at Raichur. The award had not attained finality. In these circumstances the Principal District Judge Raichur should not have entertained the application for execution and ordered attachment of movable properties of the respondents. The High Court referred to the concession by both the parties that all the applications under the Act had to be treated as original suits and if the Court finds that it had no jurisdiction to entertain it cannot dismiss the suit but has to return the same for the presentation to the proper Court. Whatever may be the concession of the parties in the circumstances of the present case Principal District Judge Raichur should have stayed his hands and should not have entertained the execution application by the appellant. High Court took a correct view of the matter and rightly set aside the impugned orders.

Summary

Issues:
1. Jurisdiction of the Court at Raichur to entertain the matter.
2. Consideration of arbitration agreement in determining jurisdiction.
3. Applicability of section 20 of the Code of Civil Procedure in determining jurisdiction.
4. Impugned orders of the Principal District Judge, Raichur.
5. Validity of the High Court's decision in setting aside the impugned orders.

Jurisdiction of the Court at Raichur:
The appeal involved a dispute where the Court at Raichur issued warrants of attachment without being aware of the respondent's pending application under section 34 in the Court at Bangalore. The appellant failed to mention the Bangalore proceedings in the execution application. The Principal District Judge, Raichur initially dismissed the respondent's application, citing lack of jurisdiction of the Bangalore Court. However, the High Court questioned whether the Principal District Judge, Raichur should have made the impugned orders when the Bangalore proceedings were brought to his notice, emphasizing the importance of considering all relevant factors before determining jurisdiction.

Consideration of Arbitration Agreement:
The arbitration agreement between the parties, as per clause 35 of the contract, specified that only the Courts in Bangalore would have jurisdiction to entertain claims for enforcement of the award. Despite the jurisdiction of the Principal District Judge, Raichur in the matter, the failure to acknowledge this specific clause in the agreement raised concerns about the appropriateness of the impugned orders. The High Court rightly highlighted the significance of the arbitration agreement in determining jurisdictional matters.

Applicability of Section 20 of the Code of Civil Procedure:
Reference was made to a previous case, Patel Roadways Ltd. v. Prasad Trading Co., where the Supreme Court clarified the interpretation of section 20 of the Code. The Court emphasized that the explanation provided an alternative locus for a corporation's place of business, not an additional one. This case served as a basis for understanding jurisdictional issues concerning the location of offices and the relevance of contractual clauses in determining jurisdiction.

Impugned Orders of the Principal District Judge, Raichur:
The Principal District Judge, Raichur's decision to order attachment of the respondent's properties without fully considering the arbitration agreement and the pending proceedings in Bangalore raised questions about the appropriateness of the orders. The failure to take into account all relevant factors, including the jurisdiction specified in the contract and the ongoing proceedings, led to the High Court setting aside the orders.

Validity of the High Court's Decision:
The High Court's decision to set aside the impugned orders was deemed valid, considering the failure of the Principal District Judge, Raichur to fully assess the jurisdictional aspects in light of the arbitration agreement and the pending proceedings in Bangalore. The High Court's interpretation of the situation, emphasizing the need to consider all relevant factors before making jurisdictional decisions, was upheld by the Supreme Court, leading to the dismissal of the appeal.

This detailed analysis of the judgment highlights the key issues surrounding jurisdiction, the significance of the arbitration agreement, the application of relevant legal provisions, the evaluation of impugned orders, and the validation of the High Court's decision.