9911796707
TMI Blog2002 (8) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... 28-2-2001 with respondent No. 1 and its promoters respondents 2, 3 and 4. In terms of this agreement the applicant and investors consented to invest in the equity share capital of respondent No. 1 by subscribing to preferential issue on the basis of certain representations, warranties, undertakings, statements and covenants made by respondent Nos. 2, 3 and 4 on behalf of respondent No. 1. After the applicant and Investor Nos. 1 and 2 had subscribed to the equity shares of respondent No. 1 and allotment of shares had been made the petitioner-applicant discovered that the representations, warranties, undertaking, statements and covenants made in the agreement by respondents 2, 3 and 4, on behalf of respondent No. 1, were incorrect and untrue. It was stated that these misleading and wrong representations constituted breach of agreement. In terms of the agreement the petitioner invoked put option clause as contained in Article 32.2 of the agreement and required the respondents to purchase the shares owned by the applicant but the respondent Nos. 1 and 2 failed to fulfil their obligations and as such disputes. Efforts were made to settle disputes and differences amicably but without a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication under section 9 of the Act in the Bombay High Court all other Courts having jurisdiction in the matter are precluded from entertaining any other petition/application under the Act in regard to the disputes between the parties arising out of alleged agreement between the parties. It is submitted that the petitioner and his co-investors are indulging in forum shopping and after failing to obtain interim relief to their entire satisfaction from the High Court of Bombay they have come to Delhi High Court and filed not only the present application but an application under section 9 of the Act also in which interim orders have been issued in their favour putting serious restrictions upon respondent No. 1 in the matter of its day to day functioning and operation of Bank Accounts. 5. I have heard Shri Rajiv Nayyar, Sr. Advocate for the petitioner, Shri Manmohan, Advocate for respondent Nos. 1 and 2, Shri R.K. Anand, Sr. Advocate for respondent No. 4 and Shri S.K. Dubey, Advocate for respondent No. 3. 6. Relying upon the Apex Court Judgment in Konkan Railway Corpn. Ltd. v. Rani Construction (P.) Ltd. 2002 (2) SCC 388 Shri Rajiv Nayyar, Sr. Advocate for the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the co-investors of the petitioner has already invoked the jurisdiction of the High Court of Bombay by filing an application under section 9 of the Act in which even interim relief was granted by the Court. The petitioner and the said co-investors are entitled to nominate only one Arbitrator under the agreement and as such, there is commonality of interest between them. It is submitted that the petitioner had no right to move Delhi Courts under section 11 of the Act and this application ought to have been filed in High Court of Bombay only. 8. Counsel for the petitioner, however, submits that the jurisdiction of the Courts in the matter of applications under the Act is governed by section 2( e ) of the Act and since no part of cause of action had arisen within the jurisdiction of High Court of Bombay, the Courts at Mumbai have no jurisdiction to entertain any petition arising out of the Agreement between the parties and only Delhi Courts have jurisdiction in the matter. He contends that the parties have no right to confer jurisdiction on any Court by an agreement. It is pointed out that respondents had pleaded before Bombay High Court that it had no jurisdiction in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which laid down general conditions governing the jurisdiction of the Courts, specifically stated that the Agreement shall be governed by and shall be subject to the exclusive jurisdiction of the Courts at Mumbai. Anyone who intends to invoke the jurisdiction of a Court other than a Court at Mumbai, therefore, has to show that no part of cause of action had arisen at Mumbai and as such the stipulation in the Agreement was non est and unenforceable. The petitioner, therefore, was under an obligation to show to this Court that the Courts at Mumbai had no jurisdiction and the stipulations in Articles 36.1 and 37.1 of the Agreement were void. The petitioner, however, failed to plead even in his petition anything in this behalf and as such this Court is not in a position to hold that the Courts at Mumbai have no jurisdiction in the matter or that no part of cause of action had arisen within the territorial jurisdiction of Mumbai Courts. 11. It is to be added further that under the Agreement on the basis of which the petitioner has approached this Court, under section 11 of the Act for nominating an Arbitrator on behalf of Respondent No. 1, a right was given to the petitioner and hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of which different parts of cause of action might have arisen. The contention of learned counsel for the petitioner that section 42 of the Act creates a bar only when the earlier application is before a Court of competent jurisdiction is absolutely correct but the question as to whether the Court before whom an earlier application has been filed is a Court of competent jurisdiction or not has to be adjudicated by that Court itself. Other Courts cannot come into picture and entertain subsequent applications till the earlier Court holds that it has no jurisdiction. Therefore, so long Bombay High Court does not hold that it has no territorial jurisdiction in the matter and the Agreement between the parties conferring jurisdiction upon the Courts at Mumbai is not enforceable all applications under the Act have to be made before Bombay High Court only and in no other Court even if a part of cause of action has arisen within the jurisdiction of some other Court also. 13. In the case of D.L.F. Industries Ltd. v. Standard Chartered Bank AIR 1999 Delhi 11, the terms of Arbitration Agreement between the parties were quite identical to the terms between the parties in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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