Justice Rajiv Sharma, Judge.
This petition is directed against the order dated 28.12.2012 passed by the District Judge, Sirmaur at Nahan in case No. 7-Exe/10 of 2012.
2. “Key facts” necessary for the adjudication of this petition are that written agreement was executed between the parties on 31.5.2007 A dispute arose between the parties and Sh. Nitin Chavan was appointed as Sole Arbitrator by the respondent under clause 23 of the agreement dated 31.5.2007 Sh. Nitin Chavan entered into reference. He issued a notice to respondent by hand delivery and to the petitioners under certificate of posting on 22.2.2010 He directed the parties to appear before him in his office on 18.3.2010 Petitioners did not put in appearance pursuant to notice dated 22.2.2010 Fresh notice was issued by the Arbitrator on 30.4.2010 to the petitioners by R.P.A/D. Copy of the claim petition was also sent to the petitioners alongwith second notice. No appearance was made on behalf of the petitioners. Arbitrator awarded a sum of Rs. 3,22,576/- to the respondent-claimant with interest @ 12% per annum. He also permitted the respondent for the purpose of realization/satisfaction of the amount by selling/transferring the vehicle bearing registration No. ACE/HP-17A-6485. He also imposed cost of Rs. 5,000/-.
3. Respondent filed an execution petition in the court of District Judge, Sirmaur at Nahan for the purpose of execution of award dated 20.8.2010 Petitioners filed objections to the same. Petitioners have also taken objection of jurisdiction of the District Judge. The District Judge rejected the objections on 28.12.2012 Hence, the present petition.
4. Mr. V.S Chauhan has vehemently argued that as per clauses 23 and 24 of the agreement, the courts in Mumbai had the jurisdiction in the matter, including execution of the award dated 20.8.2010
5. Mr. Atul Jhingan has supported the order dated 28.12.2012
6. I have heard the learned counsel for the parties and have perused the pleadings and order dated 28.12.2012 carefully.
7. What emerges from the facts enumerated hereinabove is that the agreement was executed between the petitioners and respondent on 31.5.2007 Clauses 23 and 24 of the agreement read as under:
“23. ARBITRATION
All disputes differences and/or claims arriving out of this loan agreement or as to the constitution, meaning or effect hereof or as to the rights and liabilities of the parties hereunder shall be settled by arbitration to be held in Mumbai in accordance with the Arbitration and Conciliation Act, 1996 or any statutory amendments thereof and shall be referred to a person to be appointed by the lender. In the event of death, refusal, neglect, inability or incapability of the person so appointed as act an Arbitrator, the lender may appoint a new Arbitrator. The award of the Arbitrator shall be final and binding on all parties concerned.
24. JURISDICTION
Subject to the provisions of clause 23 above, any suite, petition, reference or other filing permitted or required to be made pursuant to the Arbitration and Conciliation Act, 1996 in respect of the matters arising out of the agreement including without limitation, a petition for appointment of an Arbitrator or Arbitrators under section 11 of the Arbitration and Conciliation Act, 1996 shall be instituted only in competent courts at Mumbai.”
8. Respondent has appointed Sh. Nitin Chavan as Sole Arbitrator. Arbitrator issued notice to the petitioners and despite that no representation was made on their behalf before the Arbitrator. Arbitrator has passed award on 20.8.2010 Execution has been filed before the District Judge for the enforcement of award dated 20.8.2010 under section 36 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act” for brevity sake).
9. Section 2 (e) of the Act reads as under:
“2 (e) “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 forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.”
10. Section 36 of the Act reads as under:
“36. Enforcement.
Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the court.”
11. In the instant case, according to clause 23, the arbitration proceedings were to be settled in Mumbai in accordance with the Act. Jurisdiction of other courts has been ousted except competent courts in Mumbai as per clause 24. Since the award has been made in Mumbai by conjointly reading clauses 23 and 24 of the agreement dated 31.5.2007, the execution petition ought to have been filed before the courts in Mumbai. Filing of the execution petition before the District Judge, Sirmaur at Nahan for the enforcement of award made was misconceived. Since the Mumbai courts alone had the jurisdiction and the arbitration proceedings were to be held in Mumbai, the execution petition was to be filed before the competent court at Mumbai and thereafter an application could be filed for transfer of decree as per section 39 of the Code of Civil Procedure.
12. The parties have agreed that jurisdiction in the subject matter of the proceedings were to be vested by agreement only in courts at Mumbai. This question is no more res integra in view of the latest judgment of the Hon'ble Supreme Court in Swastik Gases Private Limited v. Indian Oil Corporation Limited, JT 2013 (10) SC 35. The majority view reads as under:
“10. We have heard Mr. Uday Gupta, learned counsel for the appellant and Mr. Sidharth Luthra, learned Additional Solicitor General for the company. Learned Additional Solicitor General and learned counsel for the appellant have cited many decisions of this Court in support of their respective arguments. Before we refer to these decisions, it is apposite that we refer to the two clauses of the agreement which deal with arbitration and jurisdiction. Clause 17 of the agreement is an arbitration clause which reads as under:
17.0 Arbitration
If any dispute or difference(s) of any kind whatsoever shall arise between the parties hereto in connection with or arising out of this Agreement, the parties hereto shall in good faith negotiate with a view to arriving at an amicable resolution and settlement. In the event no settlement is reached within a period of 30 days from the date of arising of the dispute(s)/difference(s), such dispute(s)/difference(s) shall be referred to 2 (two) Arbitrators, appointed one each by the parties and the Arbitrators, so appointed shall be entitled to appoint a third Arbitrator who shall act as a presiding Arbitrator and the proceedings thereof shall be in accordance with the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof in force. The existence of any dispute(s)/difference(s) or initiation/continuation of arbitration proceedings shall not permit the parties to postpone or delay the performance of or to abstain from performing their obligations pursuant to this Agreement.
11. The jurisdiction clause 18 in the agreement is as follows: 18.0 Jurisdiction
The Agreement shall be subject to jurisdiction of the courts at Kolkata.
12. The contention of the learned counsel for the appellant is that even though clause 18 confers jurisdiction to entertain disputes inter se parties at Kolkata, it does not specifically bar jurisdiction of courts at Jaipur where also part of the cause of action has arisen. It is the submission of the learned counsel that except execution of the agreement, which was done at Kolkata, though it was signed at Jaipur, all other necessary bundle of facts forming ‘cause of action’ have arisen at Jaipur. This is for the reason that: (i) The regional office of the respondent - company is situate at Jaipur; (ii) the agreement was signed at Jaipur; (iii) the consignment agency functioned from Jaipur; (iv) all stock of lubricants was delivered by the company to the appellant at Jaipur; (v) all sales transactions took place at Jaipur; (vi) the godown, showroom and office of the appellant were all situated in Jaipur; (vii) various meetings were held between the parties at Jaipur; (viii) the company agreed to lift the stock and make payment in lieu thereof at a meeting held at Jaipur and (ix) the disputes arose at Jaipur. The learned counsel for the appellant would submit that since part of the cause of action has arisen within the jurisdiction of the courts at Jaipur and clause 18 does not expressly oust the jurisdiction of other courts, Rajasthan High Court had territorial jurisdiction to try and entertain the petition under Section 11 of the 1996 Act. He vehemently contended that clause 18 of the agreement cannot be construed as an ouster clause because the words like, ‘alone’, ‘only’, ‘exclusive’ and ‘exclusive jurisdiction’ have not been used in the clause.
13. On the other hand, the learned Additional Solicitor General for the company stoutly defended the view of the designate Judge that from clause 18 of the agreement, it was apparent that the parties intended to exclude jurisdiction of all courts other than the courts at Kolkata.
14. Hakam Singh[3] is one of the earlier cases of this Court wherein this Court highlighted that where two Courts have territorial jurisdiction to try the dispute between the parties and the parties have agreed that dispute should be tried by only one of them, the court mentioned in the agreement shall have jurisdiction. This principle has been followed in many subsequent decisions.
15. In Globe Transport[4] while dealing with the jurisdiction clause which read “the Court in Jaipur City alone shall have jurisdiction in respect of all claims and matters arising (sic) under the consignment or of the goods entrusted for transportation”, this Court held that the jurisdiction clause in the agreement was valid and effective and the courts at Jaipur only had jurisdiction and not the courts at Allahabad which had jurisdiction over Naini where goods were to be delivered and were in fact delivered. 16. In A.B.C Laminart1, this Court was concerned with clause 11 in the agreement which read, “any dispute arising out of this sale shall be subject to Kaira jurisdiction”. The disputes having arisen out of the contract between the parties, the respondents therein filed a suit for recovery of amount against the appellants therein and also claimed damages in the court of subordinate judge at Salem. The appellants, inter alia, raised the preliminary objection that the subordinate judge at Salem had no jurisdiction to entertain the suit as parties by express contract had agreed to confer exclusive jurisdiction in regard to all disputes arising out of the contract on the civil court at Kaira. When the matter reached this Court, one of the questions for consideration was whether the court at Salem had jurisdiction to entertain or try the suit. While dealing with this question, it was stated by this Court that the jurisdiction of the court in the matter of contract would depend on the situs of the contract and the cause of action arising through connecting factors. The Court referred to Sections 23 and 28 of the Indian Contract Act, 1872 (for short, ‘Contract Act’) and Section 20(c) of the Civil Procedure Code (for short ‘Code’) and also referred to Hakam Singh3 and in paragraph 21 (pgs. 175-176) of the Report held as under: “……When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like ‘alone’, ‘only’, ‘exclusive’ and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim ‘expressio unius est exclusio alterius’;— expression of one is the exclusion of another — may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed.”
Then, in paragraph 22(pg. 176) of the Report, this Court held as under: “…..We have already seen that making of the contract was a part of the cause of action and a suit on a contract therefore could be filed at the place where it was made. Thus Kaira Court would even otherwise have had jurisdiction. The bobbins of metallic yarn were delivered at the address of the respondent at Salem which, therefore, would provide the connecting factor for court at Salem to have jurisdiction. If out of the two jurisdictions one was excluded by clause 11 it would not absolutely oust the jurisdiction of the court and, therefore, would not be void against public policy and would not violate Sections 23 and 28 of the Contract Act. The question then is whether it can be construed to have excluded the jurisdiction of the court at Salem. In the clause ‘any dispute arising out of this sale shall be subject to Kaira jurisdiction’ ex facie we do not find exclusionary words like ‘exclusive’, ‘alone’, ‘only’ and the like. Can the maxim ‘expressio unius est exclusio alterius’ be applied under the facts and circumstances of the case? The order of confirmation is of no assistance. The other general terms and conditions are also not indicative of exclusion of other jurisdictions. Under the facts and circumstances of the case we hold that while connecting factor with Kaira jurisdiction was ensured by fixing the situs of the contract within Kaira, other jurisdictions having connecting factors were not clearly, unambiguously and explicitly excluded. That being the position it could not be said that the jurisdiction of the court at Salem which court otherwise had jurisdiction under law through connecting factor of delivery of goods thereat was expressly excluded……”
17. In R.S.D.V Finance[5] the question that fell for consideration in the appeal was, in light of the endorsement on the deposit receipt “subject to Anand jurisdiction”, whether the Bombay High Court had jurisdiction to entertain the suit filed by the appellant therein. Following A.B.C Laminart1, this Court in paragraph 9 (pgs. 136-137) of the Report held as under :
“We may also consider the effect of the endorsement ‘Subject to Anand jurisdiction’ made on the deposit receipt issued by the defendant. In the facts and circumstances of this case it cannot be disputed that the cause of action had arisen at Bombay as the amount of Rs 10,00,000 itself was paid through a cheque of the bank at Bombay and the same was deposited in the bank account of the defendant in the Bank of Baroda at Nariman Point, Bombay. The five post-dated cheques were also issued by the defendant being payable to the plaintiff at Bombay. The endorsement ‘Subject to Anand jurisdiction’ has been made unilaterally by the defendant while issuing the deposit receipt. The endorsement ‘Subject to Anand jurisdiction’ does not contain the ouster clause using the words like ‘alone’, ‘only’, ‘exclusive’ and the like. Thus the maxim ‘expressio unius est exclusio alterius’ cannot be applied under the facts and circumstances of the case and it cannot be held that merely because the deposit receipt contained the endorsement ‘Subject to Anand jurisdiction’ it excluded the jurisdiction of all other courts who were otherwise competent to entertain the suit. The view taken by us finds support from a decision of this Court in A.B.C Laminart Pvt. Ltd. v. A.P Agencies, Salem.”
18. The question under consideration in Angile Insulations[6] was whether the court of subordinate judge, Dhanbad possessed the jurisdiction to entertain and hear the suit filed by the appellant for recovery of certain amounts due from the first respondent. Clause 21 of the agreement therein read, “This work order is issued subject to the jurisdiction of the High Court situated in Banglaore in the State of Karnataka…..”. This Court relied upon A.B.C Laminart1 and held that having regard to clause 21 of the work order which was legal and valid, the parties had agreed to vest the jurisdiction of the court situated within the territorial limit of High Court of Karnataka and, therefore, the court of subordinate judge, Dhanbad in Bihar did not have jurisdiction to entertain the suit filed by the appellant therein.
19. Likewise, in Shriram City[7], the legal position stated in Hakam Singh3 was reiterated. In that case, clause 34 of the lease agreement read “subject to the provisions of clause 32 above it is expressly agreed by and between the parties hereinabove that any suit, application and/or any other legal proceedings with regard to any matter, claims, differences and for disputes arising out of this agreement shall be filed and referred to the courts in Calcutta for the purpose of jurisdiction”. This Court held that clause 34 left no room for doubt that the parties had expressly agreed between themselves that any suit, application or any other legal proceedings with regard to any matter, claim, differences and disputes arising out of this claim shall only be filed in the courts in Calcutta. Whilst drawing difference between inherent lack of jurisdiction of a court on account of some statute and the other where parties through agreement bind themselves to have their dispute decided by any one of the courts having jurisdiction, the Court said : “9.……….It is open for a party for his convenience to fix the jurisdiction of any competent court to have their dispute adjudicated by that court alone. In other words, if one or more courts have the jurisdiction to try any suit, it is open for the parties to choose any one of the two competent courts to decide their disputes. In case parties under their own agreement expressly agree that their dispute shall be tried by only one of them then the parties can only file the suit in that court alone to which they have so agreed. In the present case, as we have said, through clause 34 of the agreement, the parties have bound themselves that in any matter arising between them under the said contract, it is the courts in Calcutta alone which will have jurisdiction. Once parties bound themselves as such it is not open for them to choose a different jurisdiction as in the present case by filing the suit at Bhubaneshwar. Such a suit would be in violation of the said agreement.”
20. In Hanil Era Textiles[8], this Court was concerned with the question of jurisdiction of court of District Judge, Delhi. Condition 17 in the purchase order in respect of jurisdiction read, “….. legal proceeding arising out of the order shall be subject to the jurisdiction of the courts in Mumbai.” Following Hakam Singh3, A.B.C Laminart1 and Angile Insulations6, it was held in paragraph 9 (pg. 676) of the Report as under: “Clause 17 says — any legal proceedings arising out of the order shall be subject to the jurisdiction of the courts in Mumbai. This clause is no doubt not qualified by the words like “alone”, “only” or “exclusively”. Therefore, what is to be seen is whether in the facts and circumstances of the present case, it can be inferred that the jurisdiction of all other courts except courts in Mumbai is excluded. Having regard to the fact that the order was placed by the defendant at Bombay, the said order was accepted by the branch office of the plaintiff at Bombay, the advance payment was made by the defendant at Bombay, and as per the plaintiff's case the final payment was to be made at Bombay, there was a clear intention to confine the jurisdiction of the courts in Bombay to the exclusion of all other courts. The Court of Additional District Judge, Delhi had, therefore, no territorial jurisdiction to try the suit.”
21. In New Moga Transport[9], the question that fell for consideration before this Court was whether the High Court's conclusion that the civil court at Barnala had jurisdiction to try the suit was correct or not? The clause in the consignment note read, “the court at head office city shall only be the jurisdiction in respect of all claims and matters arising under the consignment at the goods entrusted for transport.” Additionally, at the top of the consignment note, the jurisdiction has been specified to be with Udaipur court. This Court considered Section 20 of the Code and following Hakam Singh3 and Shriram City7, in paragraph 19 (pg. 683) of the Report held as under : “19. The intention of the parties can be culled out from use of the expressions “only”, “alone”, “exclusive” and the like with reference to a particular court. But the intention to exclude a court's jurisdiction should be reflected in clear, unambiguous, explicit and specific terms. In such case only the accepted notions of contract would bind the parties. The first appellate court was justified in holding that it is only the court at Udaipur which had jurisdiction to try the suit. The High Court did not keep the relevant aspects in view while reversing the judgment of the trial court. Accordingly, we set aside the judgment of the High Court and restore that of the first appellate court. The court at Barnala shall return the plaint to Plaintiff 1 (Respondent 1) with appropriate endorsement under its seal which shall present it within a period of four weeks from the date of such endorsement of return before the proper court at Udaipur…..”
22. The question for consideration in Shree Subhlaxmi Fabrics[10], was whether city civil court at Calcutta had territorial jurisdiction to deal with the dispute though condition 6 of the contract provided that the dispute under the contract would be decided by the court of Bombay and no other courts. This Court referred to Hakam Singh3, A.B.C Laminart1 and Angile Insulations6 and then in paragraph 18 (pg. 713) and paragraph 20 (pg. 714) of the Report held as under :
“18. In the case on hand the clause in the indent is very clear viz. “court of Bombay and no other court”. The trial court on consideration of material on record held that the court at Calcutta had no jurisdiction to try the suit.”
xxx xxx xxx
“20. In our opinion the approach of the High Court is not correct. The plea of the jurisdiction goes to the very root of the matter. The trial court having held that it had no territorial jurisdiction to try the suit, the High Court should have gone deeper into the matter and until a clear finding was recorded that the court had territorial jurisdiction to try the suit, no injunction could have been granted in favour of the plaintiff by making rather a general remark that the plaintiff has an arguable case that he did not consciously agree to the exclusion of the jurisdiction of the court.”
23. In Harshad Chiman Lal Modi[11], the clause of the plot buyer agreement read, “Delhi High Court or courts subordinate to it, alone shall have jurisdiction in all matters arising out of, touching and/or concerning this transaction.” This Court held that the suit related to specific performance of the contract and possession of immovable property and the only competent court to try such suit was the court where the property was situate and no other court. Since the property was not situated in Delhi, the Delhi Court had no jurisdiction though the agreement provided for jurisdiction of the court at Delhi. This Court found that the agreement conferring jurisdiction on a court not having jurisdiction was not legal, valid and enforceable.
24. In Rajasthan State Electricity Board2, two clauses under consideration were clause 30 of the general conditions of the contract and clause 7 of the bank guarantee. Clause 30 of the general conditions of the contract stipulated, “the contract shall for all purposes be construed according to the laws of India and subject to jurisdiction only at Jaipur in Rajasthan courts only……” and clause 7 of the bank guarantee read, “all disputes arising in the said bank guarantee between the Bank and the Board or between the supplier or the Board pertaining to this guarantee shall be subject to the courts only at Jaipur in Rajasthan”. In light of the above clauses, the question under consideration before this Court was whether Calcutta High Court where an application under Section 20 of the Arbitration Act, 1940 was made had territorial jurisdiction to entertain the petition or not. Following Hakam Singh3, A.B.C Laminart1 and Hanil Era Textiles8, this Court in paragraphs 27 and 28 (pgs. 114-115) of the Report held as under:
“27. The aforesaid legal proposition settled by this Court in respect of territorial jurisdiction and applicability of Section 20 of the Code to the Arbitration Act is clear, unambiguous and explicit. The said position is binding on both the parties who were contesting the present proceeding. Both the parties with their open eyes entered into the aforesaid purchase order and agreements thereon which categorically provide that all disputes arising between the parties out of the agreements would be adjudicated upon and decided through the process of arbitration and that no court other than the court at Jaipur shall have jurisdiction to entertain or try the same. In both the agreements in Clause 30 of the general conditions of the contract it was specifically mentioned that the contract shall for all purposes be construed according to the laws of India and subject to jurisdiction only at Jaipur in Rajasthan courts only and in addition in one of the purchase order the expression used was that the court at Jaipur only would have jurisdiction to entertain or try the same.
28. In the light of the aforesaid facts of the present case, the ratio of all the aforesaid decisions which are referred to hereinbefore would squarely govern and apply to the present case also. There is indeed an ouster clause used in the aforesaid stipulations stating that the courts at Jaipur alone would have jurisdiction to try and decide the said proceedings which could be initiated for adjudication and deciding the disputes arising between the parties with or in relation to the aforesaid agreements through the process of arbitration. In other words, even though otherwise the courts at Calcutta would have territorial jurisdiction to try and decide such disputes, but in view of the ouster clause it is only the courts at Jaipur which would have jurisdiction to entertain such proceeding.”
Then, in paragraph 35 (pg. 116) of the Report, the Court held as under: “35. The parties have clearly stipulated and agreed that no other court, but only the court at Jaipur will have jurisdiction to try and decide the proceedings arising out of the said agreements, and therefore, it is the civil court at Jaipur which would alone have jurisdiction to try and decide such issue and that is the court which is competent to entertain such proceedings. The said court being competent to entertain such proceedings, the said court at Jaipur alone would have jurisdiction over the arbitration proceedings and all subsequent applications arising out of the reference. The arbitration proceedings have to be made at Jaipur Court and in no other court.”
25. In Balaji Coke[12] the question was, notwithstanding the mutual agreement to make the high-seas sale agreement subject to Kolkata jurisdiction, whether it would be open to the respondent-company to contend that since a part of cause of action purportedly arose within the jurisdiction of Bhavnagar (Gujarat) Court, the application filed under Section 9 of the 1996 Act before the Principal Civil Judge (Senior Division), Bhavnagar (Gujarat) could still be maintainable. This question arose in light of clause 11 of the agreement which contained an arbitration clause and read as under :
“In case of any dispute or difference arising between the parties hereto or any claim or thing herein contained or the construction thereof or as to any matter in any way connected with or arising out of these presents or the operation thereof or the rights, duties or liabilities of either party thereof, then and in every such case the matter, differences or disputes shall be referred to an arbitrator in Kolkata, West Bengal, India in accordance with and subject to the provisions of the Arbitration and Conciliation Act, 1996, or any other enactment or statutory modifications thereof for the time being in force. The place of arbitration shall be Kolkata.”
26. This Court held in para 30 (pg. 409) of the Report, that the parties had knowingly and voluntarily agreed that the contract arising out of the high-seas sale agreement would be subject to Kolkata jurisdiction and even if the courts in Gujarat also had the jurisdiction to entertain any action arising out of the agreement, it has to be held that the agreement to have the disputes decided in Kolkata by an arbitrator in Kolkata was valid and respondent had wrongly chosen to file its application under Section 9 of the 1996 Act before the Bhavnagar court (Gujarat).
27. The question in Interglobe Aviation[13], inter alia, was whether the Permanent Lok Adalat at Hyderabad had territorial jurisdiction to deal with the matter. The standard terms which governed the contract between the parties provided, “all disputes shall be subject to the jurisdiction of the courts of Delhi only”. The contention on behalf of the appellant before this Court was that the ticket related to travel from Delhi to Hyderabad. The complaint was in regard to delay at Delhi and, therefore, the cause of action arose at Delhi and that as contract provided that the courts at Delhi only will have jurisdiction, the jurisdiction of other courts was ousted. This Court in paragraph 22 (pgs. 476-477) of the Report held as under :
“22. As per the principle laid down in A.B.C Laminart [(1989) 2 SCC 163], any clause which ousts the jurisdiction of all courts having jurisdiction and conferring jurisdiction on a court not otherwise having jurisdiction would be invalid. It is now well settled that the parties cannot by agreement confer jurisdiction on a court which does not have jurisdiction; and that only where two or more courts have the jurisdiction to try a suit or proceeding, an agreement that the disputes shall be tried in one of such courts is not contrary to public policy. The ouster of jurisdiction of some courts is permissible so long as the court on which exclusive jurisdiction is conferred, had jurisdiction. If the clause had been made to apply only where a part of cause of action accrued in Delhi, it would have been valid. But as the clause provides that irrespective of the place of cause of action, only courts at Delhi would have jurisdiction, the said clause is invalid in law, having regard to the principle laid down in A.B.C Laminart [(1989) 2 SCC 163]. The fact that in this case, the place of embarkation happened to be Delhi, would not validate a clause, which is invalid.”
28. In a comparatively recent decision in A.V.M Sales[14], the terms of the agreement contained the clause, “any dispute arising out of this agreement will be subject to Calcutta jurisdiction only”. The respondent before this Court had filed a suit at Vijayawada for recovery of dues from the petitioner while the petitioner had filed a suit for recovery of its alleged dues from the respondent in Calcutta High Court. One of the questions under consideration before this Court was whether the court at Vijayawada had no jurisdiction to entertain the suit on account of exclusion clause in the agreement. Having regard to the facts obtaining in the case, this Court first held that both the courts within the jurisdiction of Calcutta and Vijayawada had jurisdiction to try the suit. Then it was held that in view of the exclusion clause in the agreement, the jurisdiction of courts at Vijayawada would stand ousted.
29. Section 11(12)(b) of the 1996 Act provides that where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an arbitration other than the international commercial arbitration, the reference to ‘Chief Justice’ in those sub-sections shall be construed as a reference to the Chief Justice of the High Court within whose local limits the Principal Civil Court referred to in Section 2(1)(e) is situate, and where the High Court itself is the court referred to in clause (e) of subsection (1) of Section 2, to the Chief Justice of that High Court. Clause (e) of sub-section (1) of Section 2 defines ‘Court’ which means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.
30. When it comes to the question of territorial jurisdiction relating to the application under Section 11, besides the above legislative provisions, Section 20 of the Code is relevant. Section 20 of the Code states that subject to the limitations provided in Sections 15 to 19, every suit shall be instituted in a Court within the local limits of whose jurisdiction (a) the defendant, or each of the defendants where there are more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part arises. The explanation appended to Section 20 clarifies that a corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
31. In the instant case, the appellant does not dispute that part of cause of action has arisen in Kolkata. What appellant says is that part of cause of action has also arisen in Jaipur and, therefore, Chief Justice of the Rajasthan High Court or the designate Judge has jurisdiction to consider the application made by the appellant for the appointment of an arbitrator under Section 11. Having regard to Section 11(12)(b) and Section 2(e) of the 1996 Act read with Section 20(c) of the Code, there remains no doubt that the Chief Justice or the designate Judge of the Rajasthan High Court has jurisdiction in the matter. The question is, whether parties by virtue of clause 18 of the agreement have agreed to exclude the jurisdiction of the courts at Jaipur or, in other words, whether in view of clause 18 of the agreement, the jurisdiction of Chief Justice of the Rajasthan High Court has been excluded. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like ‘alone’, ‘only’, ‘exclusive’ or ‘exclusive jurisdiction’ have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties - by having clause 18 in the agreement - is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner.”
Hon'ble Mr. Justice Madan Lokur in his separate but concurring judgment has held that very existence of exclusion of jurisdiction clause in the agreement would be rendered meaningless if it is not given its natural and plain meaning.
13. Learned Single Judge of Karnataka High Court in I.C.D.S Ltd. v. Mangala Builders Pvt. Ltd., AIR 2001 Karnataka 364 has held that the court which has the jurisdiction to decide the subject matter of the arbitration would have jurisdiction to levy execution. Learned Single Judge has held as under:
“3. It may be noted that if one juxtaposes the expression ‘Court’ occurring in Section 36 with Section 2(e) of the Act it would mean that the award shall be enforced in the same manner as if it were a decree made by a Court having jurisdiction to decide questions forming the subject-matter of the Arbitration if the same had been the subject-matter of the suit. If that be so, the inquiry would be, which is the Court having jurisdiction to decide the question forming the subject-matter of the Arbitration, if the same had been the subject-matter of a suit. Then that Court which has the jurisdiction to decide the subject-matter of the Arbitration would have jurisdiction to levy execution. That takes us to Civil Procedure Code. We may refer to Section 38 of the Civil Procedure Code (CPC for short) which is relevant in this context. That section is as under :
“38. Court by which decree may be executed : A decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution.”
If so, which is the Court which could have passed the decree? the answer lies in Sections 15 to 20 of CPC. In the instant case, it would be Section 20 thereof. It reads thus:
“20. Other suits to be instituted where defendants reside or cause of action arises :-- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-
(a) the defendants, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, on personally works for again, or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
Explanation :-- A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.”
Therefore, on a combined reading of these provisions it can be seen that the Court which can entertain a suit with respect to the subject-matter of arbitration dispute alone can exercise the power under Section 36 of the Act as well. Mr. Gopal Hegde, counsel for the petitioner submits that the respondents reside within the jurisdiction of the District Court, Mangalore. In such an event, which is the Court before whom the suits will have to be preferred? The answer to this question is available from Section 14 of the Karnataka Civil Courts Act. This section reads as follows :
“14. Jurisdiction of District Court : (1) The District Court shall be deemed to be the principal Civil Court of original jurisdiction within the local limits of its jurisdiction.
(2) Subject to the provisions of the Code of Civil Procedure, 1908 (Central Act 5 of 1908), the jurisdiction of a District Court shall extend to all original suits and proceedings of a Civil nature.”
It means the District Court defined in the Act would be the Court of Principal District Judge. In other words, the Principal District Judge exercising jurisdiction over Mangalore alone would have jurisdiction to entertain the execution proceedings. The corollary position would be it is only that Court which could have entertained suit that can enforce the award.
4. This is also implied from the wordings of Section 36 itself. A right to enforce the award arises only after the period for setting aside the arbitral award under Section 34 has expired or such an application having been made is rejected. That is to say, the Court executing the decree has to satisfy itself, before entertaining the application for execution that, the period for setting aside the award has expired or such an application having been made has been refused. If that be so, inferentially, the Court that can exercise the power under Section 34 of the Act can alone entertain the steps to enforce the arbitral award. It means the “Court” as understood in Section 34 has alone the jurisdiction to entertain the enforcement of the arbitral award.
5. In this case, admittedly the subject-matter of Arbitration, could have been a suit before the Principal District Judge, Mangalore. The execution petition having been levied in a Court other than the Principal District Judge is obviously not maintainable. The Counsel for the petitioners Mr. Gopal Hegde, submits that they intend to withdraw the present execution petition and to file the same before the proper Court having jurisdiction under Section 36 6f the Act.
I permit them to do so. He also seeks that the present interim order granted by this Court may be allowed to continue for a period of one month to enable them to secure appropriate order from the executing Court. Though this request is objected, I feel, it will be only proper to allow the interim order made in the revision to continue for a period of one month from today to enable the petitioners to move the appropriate Court for orders to safeguard their interest. The revision petition is disposed of in the above manner. No costs.”
14. Accordingly, the petition is allowed. Order dated 28.12.2012 is set aside. Pending application(s), if any, also stands disposed of. No costs.