D.P Wadhwa, J.— We grant leave to appeal.
2. This appeal is directed against judgment dated 29-7-1999/30-7-1999 of the High Court of Karnataka given in revision filed by the respondent whereby the High Court set aside the orders dated 24-5-1999 and 21-6-1999 of the Principal District Judge, Raichur. By order dated 24-5-1999 the Principal District Judge, Raichur issued warrants of attachment of moveable properties of the respondent as described in the application for execution filed by the appellant. By order dated 21-6-1999 the learned Principal District Judge dismissed the application of the respondent praying for lifting of the attachment already issued against it.
3. The appellant is a building contractor. The respondent is a government company of the Government of Karnataka under the Companies Act, 1956. The respondent awarded the contract for construction of a school building at Hatti in District Raichur to the appellant. An agreement dated 9-3-1995 was duly entered into. Clause 35 of the agreement contained the arbitration clause. Disputes and differences having arisen the appellant moved the Chief Justice of the High Court of Karnataka under Section 11 of the Arbitration and Conciliation Act, 1996 (for short “the Act”) for appointment of an arbitrator. The application was allowed and Mr H.S Bhat, Chief Engineer (retired), who was a resident of Bangalore was appointed as an arbitrator with a direction to complete the arbitration proceedings and to submit his award within four months. Arbitration proceedings were held at Bangalore where also the award dated 28-8-1998 was made. The arbitrator awarded some of the claims of the appellant while disallowing a few others. The respondent filed application for setting aside the award by making an application under Section 34 of the Act in the Court of Principal City Civil Judge, Bangalore. While this application was pending the appellant as decree-holder filed an application for execution of the award in the Court of Principal District Judge, Raichur. It was on this application that orders for attachment of properties of the respondent were issued. When the respondent sought lifting of its attachment by filing an application, the same was dismissed. Aggrieved, the respondent went to the High Court in revision. The High Court allowed the revision of the respondent and set aside the two orders of the Principal District Judge, Raichur which we have mentioned above. Now it is the appellant who has come to this Court.
4. It would appear that by filing the execution application in the Court at Raichur the appellant wanted to enforce the award under Section 36 of the Act. When the Court at Raichur issued warrants of attachment it was not aware of pendency of the application of the respondent under Section 34 of the Act in the Court at Bangalore. The appellant had made no mention in his application about the pendency of the proceedings at Bangalore. However, when the respondent filed application before the Principal District Judge, Raichur for lifting of the order of attachment the pendency of the application under Section 34 of the Act for setting aside the award was brought to his notice. Now, the learned Principal District Judge, Raichur held that the Principal City Civil Court, Bangalore had no jurisdiction to entertain the application under Section 34 of the Act. On this premise he dismissed the application of the respondent and confirmed the order of attachment.
5. In support of his argument that the Court at Bangalore would have no jurisdiction Mr Rajiv Dutta, learned counsel for the appellant referred to a decision of this Court in Patel Roadways Ltd. v. Prasad Trading Co. (1991) 4 SCC 270 In this case Patel Roadways Limited had its principal office at Bombay and branch offices at various other places. Prasad Trading Company entrusted certain consignments of the goods to Patel Roadways Limited at its subordinate office in the State of Tamil Nadu for delivery at Delhi. The goods reached Delhi but in damaged condition. Prasad Trading Company instituted a suit for damages in the Court at Madras within whose jurisdiction the subordinate offices of Patel Roadways Limited were situated and where the goods were entrusted for transport. A plea was raised by Patel Roadways Limited in its defence that when the contract was entered into between the parties it was agreed that only the Bombay Court would have jurisdiction and as such the Court in Madras had no jurisdiction. It was in this context that this Court considered clause (a) of Section 20 and the explanation thereto in the Code of Civil Procedure (for short “the Code”). The question which was before this Court was as to 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. It was submitted by Patel Roadways that apart from the courts within whose territorial jurisdiction the goods were delivered to the appellant for transport, the courts at Bombay also had jurisdiction to entertain a suit arising out of the contract between the parties in view of the explanation to Section 20 of the Code inasmuch as the principal office of the appellant was situated in Bombay. According to it since courts at two places namely Madras and Bombay had jurisdiction in the matter, the jurisdiction of the courts in Madras was ousted by the clause in the contract whereunder the parties had agreed that jurisdiction to decide any dispute under the contract would be only in the courts at Bombay. Consequently the courts where the suit was instituted had no jurisdiction to entertain it. This Court said that:
“The Explanation is really an explanation to clause (a) viz. as to where the corporation can be said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a subordinate office of the corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on business, the disjunctive ‘or’ will not be there. Instead, the second part of the Explanation would have read ‘and, in respect of any cause of action arising at any place where it has a subordinate office, also at such place’.”
It, therefore, held that the explanation provides an alternative locus for the Corporation's place of business, not an additional one. Thus, this Court was of the view that clause (c) was not attracted to confer jurisdiction on the courts at Bombay and the appellant has admittedly its subordinate offices at Madras where the goods in the case were delivered to it for the purpose of transport. The Court at Bombay had no jurisdiction at all to entertain the suit and that the parties could not confer jurisdiction on the courts at Bombay by an agreement.
6. In view of the decision of this Court in Patel Roadways Ltd. v. Prasad Trading Co. (1991) 4 SCC 270 it cannot be said that the Principal District Judge, Raichur had no jurisdiction to entertain the matter. But then the question arises, as rightly posed by the High Court, if in the given facts and circumstances of the case, the Principal District Judge, Raichur could have made the orders which are impugned, particularly, when pendency of the proceedings under Section 34 of the Act in the Court of Principal City Civil Judge, Bangalore was brought to his notice where the appellant itself had filed a caveat under Section 148-A of the Code and also an application under Section 9 of the Act seeking interim relief. Learned Principal District Judge, Raichur also did not take notice of clause 35 of the contract which constituted arbitration agreement between the parties which specifically provided that only the courts in Bangalore would have jurisdiction to entertain any claim for enforcement of the award. The Principal District Judge, Raichur had no doubt jurisdiction in the matter but his holding that the Principal City Civil Judge, Bangalore would have no jurisdiction does not commend to us. It cannot always be said, in view of Section 20 of the Code, that only one court will have jurisdiction to try the suit. It is not that the Principal City Civil Court, Bangalore is not a court within the meaning of Section 2(e) of the Act. Whether the 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 we are of the view that the Principal District Judge, Raichur should not have entertained the application for execution and ordered attachment of moveable 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, we are of the view in the circumstances of the present case the Principal District Judge, Raichur should have stayed his hands and should not have entertained the execution application by the appellant. The High Court took a correct view of the matter and rightly set aside the impugned orders.
7. We, therefore, find no merit in the appeal. It is dismissed with costs.