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TMI Blog2013 (1) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... s court not to venture to go into the question whether the Delhi High Court has got jurisdiction to entertain the original miscellaneous petition No.236/2012 pending on its file. If this court ventures to do so, it will amount to usurping the powers of the Delhi High Court to decide on its jurisdiction. Admittedly, the said Original Miscellaneous Petition, which was filed earlier in point of time regarding the dispute forming the subject-matter of arbitration is pending on the file of the Delhi High Court. Unless and until the Delhi High Court rejects the petition holding that it does not have jurisdiction to entertain that petition, the bar provided under section 42 of the Arbitration and Conciliation Act, 1996 shall stand attracted. This court comes to the conclusion that the present original application filed by the applicant under section 9 of the Arbitration and Conciliation Act, 1996 cannot be maintained in view of the fact that similar petition O.M.P.No.236 of 2012 filed earlier on the file of the Delhi High Court by the first respondent herein is pending. Section 42 of the Arbitration and Conciliation Act, 1996 provides a bar for entertaining such an application by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant had handed over 60 post-dated cheques drawn on Indian Bank, Harbour branch, Chennai in favour of the second respondent in respect of A/c No.728276905 on the understanding that the monthly payment was to be made directly into an escrow account maintained with the second respondent in New Delhi. ii) By a subsequent amended agreement dated 05.03.2010, the 60 post-dated cheques, each one of them valued at Rs.35,00,000/- already given by the applicant, had become stale and were liable to be returned to the applicant. The first respondent even before starting the commercial production, presented some of the cheques, which had been given as security. Though initially the applicant was given to understand that the applicant had to spend about a sum of Rs.1 Crore for civil work, applicant was forced to spend nearly Rs.12 Crores towards the cost of civil work and various other capital expenses. Even then, the first respondent was not in a position to commence production within the expected time, resulting in heavy loss to the applicant. Even after the commission of the gas plant with inordinate delay, the quality and pressure of the gas supplied were poor, which severely affect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ediately applicant sent a reply refuting the allegations found in the notice and nominating its Arbitrator. Meanwhile, the applicant was served with a notice under section 138 of the Negotiable Instruments Act, 1881 informing the presentation and dishonour of five cheques. Out of a sum of Rs.87,68,164/-, the actual liability of the applicant for the period between December 2010 and April 2012, the applicant paid a sum of Rs.25,00,000/- on 21.04.2012 to the second respondent through the escrow account, since the tripartite agreement requires the applicant to remit any amount payable to the first respondent directly to the escrow account maintained with the second respondent and not to pay directly to the first respondent. As the first respondent, instead of returning all the 60 post-dated cheques to the applicant, had presented five cheques for encashment and on their return, had issued notice under section 138 of the Negotiable Instruments Act, 1881, in order to avoid any kind of embarrassment, the applicant enclosed a demand draft of Rs.1,75,00,000/- even though the amount payable was Rs.62,68,164/-. The same was done, as the applicant was under the threat of being prosecuted. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein no objection had been raised on the question of jurisdiction. As such it was requested on behalf of the first respondent that the question of maintainability of the Original Application in this court, should be taken up as a preliminary issue. Besides raising the objections on the merits of the dispute, the second respondent has also raised a preliminary objection regarding the maintainability of the original application in this court contending that the application is barred under section 42 of the Arbitration and Conciliation Act, 1996. Hence this court had to hear the parties on the above said preliminary objection. 4. Accordingly, the arguments advanced by Mr.S.R.Ragunathan, learned counsel appearing for Mr.V.Anil Kumar counse on record for the applicant and by Mr.AR.L.Sundaresan, learned senior counsel appearing for Mr.S.L.Sudharsanam, counsel on record for the first respondent and by Mr.C.P.G.Yoganand, learned counsel for the second respondent on the above said preliminary objection were heard and the materials placed were also considered. 5. The point that arises for consideration in this original application is "Whether the original application is barred u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of action arose within the jurisdiction of Delhi High Court to clothe the Delhi High Court with jurisdiction to entertain an application under section 9 of the Arbitration and Conciliation Act, 1996 in respect of the subject transaction between the parties; that the application filed by the first respondent before the Delhi High Court and pending on the file of the Delhi High Court should be held to be one filed in a court having no jurisdiction and that hence the same would not constitute a bar for a proper court, namely this court, having jurisdiction to entertain the present original application under section 9 of the Arbitration and Conciliation Act, 1996. 8. The second respondent is non committal and in a way he sails with the first respondent. The learned senior counsel for the first respondent contended that though the amended agreement dated 05.03.2010 was specifically stated to have been entered into at Chennai, since the place of execution of the original agreement was not Chennai and it was partly executed in Chennai and partly executed in New Delhi, part of the cause of action should be held to have arisen within the jurisdiction of the High Court of Delhi. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Section 42 of the Act is found in Part I of the Act. Section 9 is also in Part I of the Act. Hence there cannot be any doubt that an application under section 9 is also one specifically referred to in section 42 of the Arbitration and Conciliation Act, 1996. Section 9 of the Act enables a party to the arbitration agreement to apply to a court either before initiation of arbitral proceedings or during the pendency of the arbitral proceedings or at any time after making the arbitral award but before the award is enforced in accordance with section 36 of the Act for interim measures. The section does not specify the court to which such an application by a party will lie. 10. In this regard, we have to refer to the definition of the term 'court' found in section 2(1)(e) of the Act. Section 2(1)(e) reads as follows: "Court" means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and voluntarily resides and carries on business, or personally works for gain within the local limits of the jurisdiction of court, then a suit can be instituted in such court provided either the leave of the court is obtained or the defendants who do not reside or carry on business or personally works for gain within the said jurisdiction acquiesce in such institution of the suit. (iii) In case the cause of action, wholly or in part arises within the local limits of the jurisdiction of a court, then the suit can be filed in such court. 13. Clause 12 of the Letters Patent is also similar to section 20 of the Civil Procedure Code subject to a slight deviation from clause 'c' of the condition found in section 20 of the Civil Procedure Code. In other civil courts wherein suits are filed on the ground that the part of the cause of action arose within the jurisdiction of the said court, no leave is required to be obtained from the said court, whereas in case of the Madras High Court governed by the Letters Patent, leave of the court should be obtained for filing the suit in the High Court, if only part of the cause of action has arisen within its jurisdiction. Such restrictions c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the other hand, the first respondent contends that the agreement was signed both in Chennai and in Delhi. Furthermore, the tripartite agreement dated 25.05.2009 regarding escrow account to which the petitioner, first respondent and second respondent are parties, shall no doubt recites the place of agreement to be in Chennai. But clause 9.5 of the said agreement reads as follows: 9.5 Jurisdiction: 9.5.1 The Borrower agree that the courts or tribunals in New Delhi shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that accordingly any suit, action or proceedings [together referred to "Proceedings"] arising out of or in connection with this Agreement may be brought in such courts or the tribunals and the Borrower irrevocably submits to and accepts for themselves and in respect of their property, generally and unconditionally, the jurisdiction of those courts or tribunals. It shows that the parties have chosen the jurisdiction of the Delhi court as the court having exclusive jurisdiction to decide the dispute between the parties arising out of or in respect of the tripartite agreement. Even the subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: " The cause of action for filing the present petition has arisen substantially at New Delhi. Negotiations between the parties culminating in the Agreement dated 7.8.2008 had taken place at New Delhi. The Agreement dated 7.8.2008 was signed by the Petitioner at New Delhi. The contractually agreed venue of the arbitration is at New Delhi. Various correspondences were exchanged at New Delhi..... " The said petition was dated 07.03.2012. A copy of the order dated 26.03.2012 made in the said petition has also been enclosed in the typed set of papers. A reading of the said order shows that the applicant herein, which figured as the respondent in the said petition before the Delhi High Court, took notice and made its submissions on the merits of the case opposing the grant of interim measures pending disposal of the said petition. Extracting the relevant part of the said order will be helpful to understand the scope of objections raised before the said court. It reads: " Notice. Counsel for the respondents accepts notice and seeks time to file reply. Counsel further submits that the apprehension of the petitioner is unfounded as respondents have neither stopped the ingress ..... X X X X Extracts X X X X X X X X Extracts X X X X
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