2009 (7) TMI 1392 - HC - Indian Laws

Summary

Issues Involved:
1. Territorial Jurisdiction of the Court
2. Validity of the Arbitral Proceedings and Appointment of Arbitrator

Summary:

1. Territorial Jurisdiction of the Court:
The primary issue raised by the respondents was whether the Calcutta High Court had the territorial jurisdiction to entertain the writ petition. The petitioners argued that part of the cause of action arose in Kolkata as various letters, including the appointment of the arbitrator, were received there. However, the Court held that the mere service of notices in Kolkata did not constitute an integral part of the cause of action. The decisions to appoint the arbitrator and the arbitral proceedings were conducted in New Delhi and Mumbai, respectively. Therefore, the Court concluded that it lacked territorial jurisdiction to entertain the writ petition, relying on precedents such as *State of Rajasthan v. Swaika Properties* and *Oil and Natural Gas Commission v. Utpal Kumar Basu*.

2. Validity of the Arbitral Proceedings and Appointment of Arbitrator:
The petitioners sought to quash the arbitral proceedings initiated by the Director General of Supplies and Disposals, arguing that the appointment of the arbitrator after the termination of previous proceedings was invalid. The Court noted that the controversies involved whether the Director General had the power to appoint a new arbitrator after the termination of previous proceedings u/s 32 of the Arbitration and Conciliation Act, 1996, and whether the new arbitrator had jurisdiction. However, the Court refrained from expressing any opinion on the merits of these controversies, as it had already determined that it lacked jurisdiction to entertain the writ petition.

Conclusion:
The writ petition was dismissed due to the lack of territorial jurisdiction. The Court emphasized that the service or receipt of letters in Kolkata did not constitute a material, integral, or essential part of the cause of action. Consequently, the petitioners' arguments regarding the validity of the arbitral proceedings and the appointment of the arbitrator were not addressed on merits. The Court also denied the petitioners' request for a stay of the judgment, as there was nothing to stay following the dismissal of the writ petition.