1. By this chamber summons, the applicants (original respondent nos.1 to 5) seek revocation of the leave granted by this Court on 31st July 2013 to the original petitioners under Clause XII of the Letters Patent to institute and prosecute the proposed petition in this Court against the respondents on various grounds.
2. Though the applicants have applied for revocation of the leave under Clause XII of the Letters Patent, Dr.Sathe, learned senior counsel appearing for the applicants without going into the issue as to whether any such leave under Clause XII of the Letters Patent was required to be obtained by the petitioners or not, contends before this Court that this Court has no territorial jurisdiction to entertain, try and dispose of the Arbitration Petition No.1036 of 2013 filed by the petitioners under Section 9 of the Arbitration and Conciliation Act, 1996 (for short âthe Arbitration Actâ?) and thus leave granted by this Court be revoked. For the sake of convenience, parties described in this order are as they are described in the arbitration petition. Some of the relevant facts for the purpose of deciding this chamber summons are as under:-
3. The petitioner no.1 and the respondent no.1 are brothers and are both permanent Directors of the Maharashtra Erectors Pvt. Ltd. The petitioner nos.2 and 3 are the wife and daughter of the petitioner no.1 respectively. The respondent no.2 is the wife of the respondent no.1. The respondent nos.3 to 5 are the children of the respondent nos.1 and 2. The respondent nos.6 to 8 are family companies through which the petitioner no.1 and the respondent no.1 hold assets and businesses.
4. According to the petitioners, disputes and differences arose between the petitioner no.1 and the respondent no.1 sometime in the month of January 2005 on account of a personal letter dated 14th January 2005 addressed by the respondent no.1 to the petitioner no.1 by which the respondent no.1 had claimed that he was entitled to a 75% share in the family businesses and assets held by the brothers through the Sanghvi Group entities on the ground that the respondent no.1 has three children and the petitioner no.1 has one child.
5. On 8th January 2006, the petitioner no.1 and the respondent no.1 entered into a Memorandum of Understanding (MOU). According to the petitioners, the said MOU dated 8th January 2006 was subsequently superseded by a Deed of Family Settlement and Arrangement dated 24th April 2006 on the terms and conditions recorded therein.
6. It is the case of the petitioners that the dispute arose between the parties which were referred to the arbitrator named in the erstwhile agreement i.e. Mr.Tulsi Tanti. It is the case of the petitioners that the respondent nos.1 to 5 disputed the existence of the said erstwhile agreement and contested the claim of the petitioners on various grounds.
7. On 11th March 2010, the petitioners accepted the repudiation of the respondents of the erstwhile agreement by their notice and stated that the erstwhile agreement had come to an end and in any event, the same was terminated. It is the case of the petitioners that the petitioners accordingly applied to the arbitrator Mr.Tulsi Tanti to terminate the proceedings in those circumstances which were set out in the application for termination. The said application for termination of the proceedings was opposed by the respondent nos.1 to 5 by filing a reply on 12th April 2010. The petitioners filed their rejoinder to the said reply on 13th May 2010. By an order dated 30th October 2010, the learned arbitrator Mr.Tulsi Tanti terminated the said arbitration proceedings for the reasons recorded in the said order.
8. On 9th December 2010, the respondent no.1 herein filed a Civil Suit No.145 of 2010 before the Civil Judge, Junior Division, Pimpri, Pune inter alia praying for injunction restraining the petitioner no.1 from acting as the Chairman of the Maharashtra Erectors Pvt. Ltd. The learned trial Judge refused to grant any interim relief in favour of the respondent no.1. The learned District Judge, however, granted interim measures in favour of the respondent no.1. The said order is the subject matter of the writ petition (10352 of 2011) filed by the petitioner no.1 in this Court which is pending.
9. On 24th December 2010, the petitioners herein filed a suit (50 of 2011) before the Civil Judge, Senior Division, Pune for partition of the HUF of the father of the petitioner no.1 and the respondent no.1. The trial Judge in the said proceedings refused to grant any interim relief in favour of the petitioner no.1. Appeal From Order No.275 of 2012 filed by the petitioner no.1 is pending in this Court. The respondents had filed an application under Section 8 of the Arbitration Act in the said Suit No.50 of 2011 which was dismissed. The respondents have preferred a Civil Revision Application (67 of 2011) before this Court.
10. It is the case of the petitioners that while the petitioner nos.1 and 2 were abroad, the respondent no.1 in collusion with the respondent nos.2 and 5 purported to transfer 1.45 crores shares of Sanghvi Movers Ltd. held by the Maharashtra Erectors Pvt.Ltd. to the respondent nos.1, 2 and 5 without any consideration. On 13th September 2011, the petitioner nos.1 and 2 filed a Civil Suit (1800 of 2011) against the respondent nos.1, 2 and 5 and the said Sanghvi Movers Ltd impugning the alleged illegal and fraudulent transfer of 1.45 crores shares of Sanghvi Movers Ltd. The respondent nos.1, 2 and 5 filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 in the said suit which came to be dismissed. Civil Revision Application filed by the respondents against the said order is pending in this Court. The application for interim relief filed by the petitioner no.1 came to be dismissed by the learned Civil Judge and Appeal from Order (55 of 2013) filed by the petitioners against the said order is pending in this Court. The said appeal from order had been admitted on 13th February 2013.
11. It is the case of the petitioners that the respondent no.1 illegally transferred 8,05,380 shares of Sanghvi Movers Ltd held by Sanghvi Hi-Lift Pvt. Ltd. without any consideration. The petitioner no.2 has filed a suit (541 of 2012) before the Civil Judge, Senior Division, Pune and also a criminal complaint against the respondent no.1 and the same are pending.
12. On 13th February 2012, the respondent no.1 filed an arbitration application (34 of 2012) in this Court seeking appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The said arbitration application was opposed by the petitioners. By an order dated 7th September 2012, this Court referred the dispute to the mediator Mr.Sriram Panchu, Senior Advocate who filed his interim report on 10th January 2013.
13. On 31st January 2013, the petitioners filed a Notice of Motion No.167 of 2013 in the Arbitration Application no.34 of 2012 inter alia praying for continuation of the mediation and for appropriate direction not to disturb the status quo order between the parties. On 1st February 2013, this Court granted ad-interim relief as prayed in the Notice of Motion No.167 of 2013 and directed the parties to maintain status quo. The respondent nos.1 and 2 were restrained from acting upon or in furtherance of the illegal notice dated 28th January 2013.
14. On 28th February 2013, the petitioners through their advocate's notice referred the dispute to the sole arbitrator Mr.R.A. Kapadia, a Senior Advocate of this Court. On 3rd April 2013, the petitioners filed an Arbitration Application No.144 of 2013 in this Court seeking appointment of an arbitrator in respect of the disputes concerning the parties. By a common judgment delivered by Shri.Anoop V. Mohta, J. on 20th June 2013, the Arbitration Application no.144 of 2013 came to be allowed. Mr.Justice N.K. Sodhi, a former High Court Judge was appointed as the sole arbitrator. The respondent nos.1 to 5 withdrew their Arbitration Application No.34 of 2012 and this Court continued the interim order dated 1st February 2013 for a further period of eight weeks and disposed of the Notices of Motion No.167 of 2013 and 248 of 2013.
15. On 31st July 2013, the petitioners herein filed a petition under Section 9 of he Arbitration and Conciliation Act, 1996 inter alia praying for various interim measures against the respondents.
16. By an order dated 31st July 2013, the learned Chamber Judge granted leave under Clause XII of the Letters Patent in Letters Patent Petition No.226 of 2013 in favour of the petitioners. On 26th August 2013, the respondent nos.1 to 5 herein filed this chamber summons inter alia praying for revocation of the leave under Clause XII of the Letters Patent on various grounds.
17. The petitioners have filed an affidavit-in-reply opposing the chamber summons on various grounds. Learned senior counsel appearing for the parties have addressed this Court at length on the issue whether this Court has territorial jurisdiction to entertain, try and dispose of the Arbitration Petition No.1251 of 2013 filed by the petitioners for interim measures and whether this Court would be a Court within the meaning of Section 2(1)(e) of the Arbitration and Conciliation Act, 1996.
18. Dr. Sathe, learned senior counsel appearing for the applicants in support of the chamber summons invited my attention to the averments made in paragraphs 3 and 4 of the Letters Patent Petition and submits that the entire basis of making an application for leave under Clause XII by the original petitioners was that all the mediation hearings had taken place in Mumbai and thereafter, the petitioners had addressed a letter through their advocates for appointment of an arbitrator in Mumbai. It was the case of the petitioners that the respondent nos.1 to 5 through their advocates in Mumbai caused a letter dated 28th February 2013 addressed by their advocates purporting to withdraw Arbitration Application no.34 of 2012. He submits that it is an admitted position that the petitioners as well as the respondent nos.1 to 5 do not reside in Mumbai and in fact residing in Pune. The respondent nos.6 to 8 are the companies, all of which have their registered offices in Pune and had no place of business in Mumbai. He submits that the respondent nos.6 to 8 have been carrying on their business entirely from Pune. All the board meetings are held in Pune and the personnel of those companies are based in Pune. He submits that no cause of action had arisen within the territorial jurisdiction of this Court and thus this Court would not be a Court within the meaning of Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 having jurisdiction over the subject matter of the dispute. In support of this submission, learned senior counsel also invited my attention to the notice invoking arbitration addressed by the petitioners' advocates dated 28th February 2013.
19. It is submitted by the learned senior counsel that the subject matter of the arbitral reference was the termination sought by the petitioners of the Deed of Family Settlement and Arrangement dated 24th April 2006 which was formulated and entered into by the parties in Pune and was outside the jurisdiction of this Court.
20. It is submitted by the learned senior counsel that the petitioners had also applied for a relief that the petitioners group i.e. the APS Group be restored to its position status quo ante i.e. the petitioner no.1 be made a Joint Managing Director of Sanghvi Movers Ltd. whose registered office is in Pune. Similarly, the petitioners had also sought that the affairs of Maharashtra Erectors Private Ltd. be conducted and managed jointly by the APS Group and the group headed by the respondent no.1 i.e. CPS Group. The registered office of Maharashtra Erectors Private Ltd. is in Pune which conducts its day to day business operations from Pune. He submits that neither the Sanghvi Movers Ltd. nor Maharashtra Erectors Private Ltd. have a place of business in Mumbai. He submitted that all the reliefs claimed in the petition filed by the original petitioners under Section 9 are in respect of movable and immovable properties which are all situated in Pune. He submitted that out of 11 bank accounts listed by the petitioners, all of the bank accounts are with the designated branches of the banks in Pune. He submits that the petitioners have applied for a relief against the respondent nos.1 to 5 from dealing with the movable assets of the respondent no.6 listed at Exhibit D which consists of deposits lying with third parties which are based in Pune; cranes and trailors are also situated in Pune. He submitted that there is no question of granting any of the reliefs relating to the properties situated outside the jurisdiction of this Court.
21. Learned senior counsel submits that in so far as the properties described at Exhibits E and E-1 are concerned, i.e. the properties of the respondent nos.6 and 7 except two properties, all the remaining four properties are situated outside the jurisdiction of this Court. In any event, both the properties are not in possession of the respondent no.6-company and the same continued to be in the possession of the developer. He submits that merely because the relief is claimed in respect of the officers at Nariman Point and Bandra-Kurla Complex which is one out of 15 reliefs claimed by the petitioners, this Court cannot have jurisdiction. He submits that even if in respect of those two properties, the material cause of action has not arisen within the jurisdiction of this Court, petition filed under Section 9 of the Arbitration Act is not maintainable.
22. Learned senior counsel for the applicants submits that the petitioners themselves have described 23 proceedings in the petition filed under Section 9 which are pending between the parties. Out of 23 proceedings, three suits have been filed by the petitioners against the respondents in the Court of Civil Judge, Senior Division, Pune. He submits that the reliefs sought in those three suits filed by the petitioners in the Court of Civil Judge, Senior Division, Pune are identical to the prayers sought in the petition filed under Section 9 of the Arbitration Act. He submits that it is averred by the petitioners in those three suits that the Court in Pune has jurisdiction in respect of the subject matter of those three suits.
23. Learned senior counsel for the applicants then submits that in the earlier arbitration proceedings before Arbitrator Mr.Tulsi Tanti, the first arbitration meeting was held in Pune and thereafter, several meetings were held in Pune and very few meetings were held in Mumbai. He submits that in the arbitration meeting held in Pune on 3rd August 2013, learned arbitrator had directed that henceforth the arbitration proceedings will be held alternatively in Mumbai and Pune till further directions. He submitted that the sum of Rs.45 crores belonging to the respondent no.6 which had been invested by Enam Asset Management Co. Pvt. Ltd., having its registered office in Mumbai with Deutsche Bank and also having its office in Mumbai, therefore does not give rise to the cause of action within the jurisdiction of this Court. He submits that merely because some monies of the respondent no.6 have been invested by its portfolio manager with the Mumbai Branch of Deutsche Bank, that does not give rise to the cause of action for the entire reliefs sought by the respondents, all of which are related to movable and immovable properties of the companies situated in Pune and having their registered office in Pune which is outside the jurisdiction of this Court.
24. It is submitted by the learned senior counsel that merely because the respondents had filed Arbitration Application No.34 of 2013 before the designated Court under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator, that did not confer jurisdiction upon this Court to entertain the petition filed under Section 9 of the Arbitration Act. He submits that as per order dated 7th September 2012 passed in the said arbitration application, the mediator was to hold a meeting in Pune, however, the parties subsequently agreed to hold a meeting in Mumbai.
25. It is submitted by the learned senior counsel for the applicants that under Section 2(1)(e), 'Court' would be a Civil Court where the suit could have been filed if there was no arbitration agreement. He submits that this Court shall have jurisdiction to decide the substance of the dispute. He submits that merely because few meetings were held at Mumbai, the Mumbai was only to be considered as a venue of arbitration and not a seat of arbitration, a portfolio meeting can hardly be a cause of action for dispute.
26. It is submitted that both the parties have filed proceedings under Section 11 of the Arbitration and Conciliation Act, 1996 before the Hon'ble the Chief Justice of this Court, however, that would not confer any jurisdiction upon this Court to entertain the petition filed under Section 9 of the Arbitration Act. He submits that the application must be under Part I of the Arbitration and Conciliation Act, 1996 for the purposes of ascertaining the jurisdiction of this Court within the meaning of Section 2(1)(e) of the Arbitration Act. He submits that even the appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 would be an appeal before the Appellate Forum and the same would not be a proceeding before the Court within the meaning of Section 2(1)(e) of the Arbitration Act.
27. Learned senior counsel placed reliance on the judgment of the Supreme Court in the case of State of West Bengal and Ors. Vs. Associated Contractors, reported in (2015) 1 SCC 32 and in particular paragraphs 3, 11, 13, 16, 20 and 22 to 25 and would submit that the Court must be a Court which is competent Court having jurisdiction in respect of the subject matter of the dispute. He submits that appeal under Section 37 is not an original proceeding. He submits that the appeal proceeding prescribed under Section 37 has to be heard by the Court authorised by law to hear appeal. He submits that the real test is that in the absence of an arbitration agreement, whether the suit could have been filed before such Court within the meaning of Section 2(1)(e) of the Arbitration Act.
28. Dr.Sathe, learned senior counsel for the applicants distinguishes the judgment of the Supreme Court in the case of Bharat Aluminium Company Vs. Kaiser Aluminium Technical Services INC., reported in (2012) 9 SCC 552 and invited my attention to paragraphs 97 and 98 of the said judgment and would submit that the said judgment would not apply to the facts of this case on the ground that the arbitration agreement in this case does not provide that Mumbai would be a seat or a place of arbitration and even if in the earlier arbitration proceedings, some of the arbitration meetings were held at Mumbai, at most it would be a venue of the arbitration and not a seat of the arbitration.
29. Dr.Sathe, learned senior counsel also distinguishes the judgment of the Division Bench of this Court in the case of Konkola Copper Mines (PLC) Vs.Stewarts and Lloyds of India Limited delivered on 9th July 2013 in Appeal (L) No.199 of 2013 in Arbitration Petition No.160 of 2013 and invited my attention to paragraphs 7, 8 and 13 of the said judgment and submits that in that matter, place of arbitration in the agreement itself was at Mumbai. The proceedings were filed under Section 9 of the Arbitration Act at Mumbai. In that context, this Court has held that the proceedings under Section 9 of the Arbitration Act was maintainable in Mumbai. However, in this case, no clause was recorded in the arbitration agreement that the place of arbitration would be at Mumbai.
30. Learned senior counsel placed reliance on the judgment of this Court in the case of Upendra Kantilal Thanawala and Ors. Vs.Shree Ram Builders and Ors., delivered on 8th January 2013 passed in Chamber Summons No.545 of 2012 in Leave Petition No.211 of 2012 in Arbitration Petition (L) No.404 of 2012 and in particular paragraphs 3, 9, 12, 17 to 19 and 21 thereof and would submit that merely because two properties out of several properties were situated in Mumbai, it could not be said that the suit would a suit for land. He submits that the proceedings filed by the original petitioners were for enforcement of a Family Settlement and Arrangement and thus the situation of the properties of the Companies could not be situs test for the purpose of deciding the jurisdiction of the Court contemplated under Section 2(1)(e) of the Arbitration Act. He submits that assets of the companies are at various places such as Mumbai, Gaziabad, Pune which would not make the proceedings as a suit for land.
31. My attention is invited to the averments made in paragraph 47 of the Arbitration Petition No.1036 of 2013 and submits that those averments read with the averments made in paragraphs 3 and 4 of the Letters Patent Petition clearly indicate that the jurisdictional facts pleaded in those paragraphs did not answer the test of Clause XII of the Letters Patent or would give rise to a cause of action to be tried by the Court under Section 2(1)(e) of the Arbitration Act. He submits that since the appeal under Section 37 was not before the Court under Section 2(1)(e), bar under Section 42 of the Arbitration Act would not apply.
32. Dr.Sathe, learned senior counsel invited my attention to some of the averments made in the Arbitration Appeal No.3 of 2010 which was filed by the respondent nos.1 to 5 (applicants herein) before this Court and also to the order passed by this Court on 19th March 2010 therein.
33. Mr.Devitre, learned senior counsel appearing for the petitioners, on the other hand, invited my attention to the order passed by the learned arbitrator in the earlier arbitration proceedings on 30th October 2010 terminating the arbitral proceedings at Mumbai and would submit that the said proceedings were terminated in Mumabi in view of the original petitioners accepting the repudiation of Family Settlement and Arrangement at Mumbai.
34. In support of this submission, learned senior counsel invited my attention to the order dated 30th October 2010 passed by the erstwhile arbitrator recording that by the said application, the petitioners (claimants) had now accepted the repudiation of the respondents of the Family Settlement and Arrangement and exercised his powers under Section 32(c) of the Arbitration and Conciliation Act, 1996 and terminated the arbitration proceedings before him at Mumbai.
35. Mr.Devitre, learned senior counsel invited my attention to the appeal memo of the Arbitration Appeal No.3 of 2010 filed by the applicants herein in this Court and more particularly paragraph 54 thereof and would submit that it was averred by the applicants themselves that this Court had jurisdiction to grant interim relief. He submits that the order dated 19th March 2010 passed by the learned arbitrator was set aside by consent of the parties. He submits that the applicants, therefore, cannot be allowed to now urge that this Court has no jurisdiction to entertain the present proceedings filed under Section 9 on the ground of jurisdiction contrary to their own stand taken in the Arbitration appeal filed by the applicants herein before this Court.
36. Learned senior counsel also invited my attention to the Arbitration Application (34 of 2012) filed under Section 11 of the Arbitration Act by the respondent nos.1 to 5 (applicants herein) before the Chief Justice of this Court in which the parties were referred to mediation. My attention is also invited to the order dated 23rd January 2013 passed by the Division Bench in the Letters Patent Appeal No.45 of 2013 in Appeal From Order No.275 of 2012 and also to the orders dated 1st February 2013 passed by the Hon'ble Chief Justice in Notice of Motion No.167 of 2013 in Arbitration Application No.34 of 2012 filed under Section 11 of the Arbitration Act.
37. It is submitted by the learned senior counsel that two prime and valuable properties which are subject matter of the arbitration petition i.e. (i) property at Bandra-Kurla Complex which is admeasuring 10000 sq.ft. and (ii) office at Maker Chambers VI, Nariman Point, are situated in Mumbai. The bulk of investments made by the parties is in Mumbai. In support of this submission, learned senior counsel invited my attention to the statement of claim made in the arbitral proceedings.
38. It is submitted by the learned senior counsel that the subject matter of the arbitration directly arises of and is in connection with the two larger properties situated at Mumbai i.e. two office premises, and investments made in Mumbai and transfer of shares in BSE. He submits that the material part of cause of action has arisen in Mumbai. The cause of action in the second arbitration was based on the fact that the Family Settlement and Arrangement was repudiated at Mumbai. The first arbitration proceedings were terminated at Mumbai which was subject matter of the arbitration agreement.
39. Reliance is also placed on the order passed by the Hon'ble Chief Justice in the said arbitration application filed under Section 11 by the original petitioners. Learned senior counsel placed reliance on the order passed by this Court on 20th June 2013 by which the learned arbitrator came to be appointed as the sole arbitrator.
40. It is submitted by the learned senior counsel for the petitioners that in case of contract, Court has to consider where the contract was required to be performed or was repudiated or a breach thereof was committed which took place in Mumbai. In his alternate submission, it is submitted that the proceeding filed by the petitioners was not a suit for land. The claims in the arbitral proceedings were based on the repudiation of the contract which was entered into at Mumbai. The petitioners have also applied for interim relief in respect of the properties situated at Mumbai. In his alternate plea, it is submitted that the arbitral proceedings are also for implementation of the Family Settlement and Arrangement in respect of the substantial properties situated at Mumbai.
41. It is submitted by the Learned senior counsel appearing for the respondents that even the claims for damages made by the petitioners are arising out of repudiation of the agreement by the applicants which was in Mumbai. The applicants have accepted the said repudiation in the arbitration meetings. Reliance is placed on the particulars of the claim annexed to the statement of claim in the arbitral proceedings. Reliance is also placed on affidavit of evidence filed by one of the petitioners in the arbitral proceedings deposing that the repudiation of the Family Settlement and Arrangement took place at Mumbai.
42. It is submitted by the learned senior counsel that place of arbitration will determine the jurisdiction of Court which is independent of the cause of action either under the Code of Civil Procedure, 1908 or Letters Patent. Learned senior counsel strongly places reliance on the paragraphs 96 and 99 of the judgment of the Supreme Court in the case of Bharat Aluminium Company Vs. Kaiser Aluminium Technical Services INC. (supra) and would submit that the Supreme Court in the said judgment has not only dealt with Part II but also dealt with the domestic arbitration. He submits that the two Courts will have concurrent jurisdiction to decide that is one where the subject matter in case of suit arises and another before the Court where place of arbitration is situated.
43. Learned senior counsel placed reliance on the averments made by the applicants in their appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 before this Court stating that the arbitration proceedings had taken place in Mumbai and thus this Court has jurisdiction to entertain, try and dispose of the said appeal. It is submitted by the learned senior counsel that in the first arbitration meeting in the earlier arbitration proceedings, the parties had agreed that the place of arbitration would be at Mumbai, that will have a bearing on the second arbitration also. It was the choice of the parties that the place of arbitration would be at Mumbai. He submits that there is no dispute that the first arbitral proceedings were substantially held in Mumbai. Learned senior counsel tendered a list containing details of such meetings. He submits that ten meetings were held at Mumbai whereas only one meeting was held in Pune which clearly reflects the choice or place of arbitration in Mumbai. He submits that since the place of arbitration was at Mumbai, that would give an independent cause of action for filing the proceedings under Section 9 of the Arbitration Act before this Court.
44. Learned senior counsel placed reliance on the judgment of the Supreme Court in the case of Enercon (India) Limited and Ors. Vs. Enercon GMBH and Anr., reported in (2014) 5 SCC 1 and in particular paragraph 106 thereof and would submit that the judgment of the Supreme Court in the case of Bharat Aluminium Company Vs. Kaiser Aluminium Technical Services INC. (supra) has been clarified by the Supreme Court in its said judgment in the case of Enercon (India) Limited and Ors. Vs. Enercon GMBH and Anr. (supra).
45. The next submission of the learned senior counsel for the petitioners is that even if two Courts have concurrent jurisdiction i.e. this Court as well as the District Judge at Pune, the proceedings have to be filed in this Court in view of the fact that this Court is superior to the Court at Pune and this Court has also jurisdiction to try the proceedings which could be tried by the District Judge at Pune. In support of this submission, learned senior counsel placed reliance on the judgment of the Supreme Court in the case of Executive Engineer, Road Development Division No.III, Panvel and Anr. Vs. Atlanta Limited, reported in AIR 2014 SC 1093 and in particular paragraphs 10, 25 and 26 thereof.
46. The next submission of the learned senior counsel for the petitioners is that the applicants themselves had filed an appeal under Section 37(2) of the Arbitration and Conciliation Act, 1996 against the order of the learned arbitrator in the first arbitration proceedings which was passed under Section 17. It is submitted that the Court which hears the appeal under Section 37(2) of the Arbitration Act would be a Court within the meaning of Section 2(1)(e) of the Arbitration Act. He submits that the Court which hears the appeal arising out of interim measures is also a Court within the meaning of Section 2(1)(e) of the Arbitration Act. It is submitted that the appeal is a continuation of the proceedings under Section 17 of the Arbitration Act. Application for interim relief even in the appeal under Section 37 is an application under Section 9 and thus the provisions of Section 42 would apply to the proceedings under Section 37 of the Arbitration Act. In support of this submission, learned senior counsel placed reliance on the judgment of the Supreme Court in the case of M/s.Pandey and Co. Builders Pvt. Ltd. Vs. State of Bihar and Anr., reported in AIR 2007 SC 465 and in particular paragraphs 23, 26 and 33 thereof.
47. Dr.Sathe, learned senior counsel appearing for the respondent nos.1 to 5 (applicants herein) in rejoinder submits that situs of immovable properties of the companies who are not parties to the Family Settlement and Arrangement is irrelevant. Even if few properties of the companies are in Mumabi, it would not confer any jurisdiction to the Court at Mumbai. He submits that there was no letter of repudiation addressed by the applicants. He invited my attention to the extract of the averments made by the applicants regarding repudiation of the erstwhile Family Settlement and Arrangement in the arbitral proceedings. He submits that the applicants are disputing the repudiation in the on going arbitral proceedings. It is submitted that letter dated 11th March 2010 which was addressed by the petitioners from Pune to the learned arbitrator was received by the learned arbitrator in Pune.
48. It is submitted that in the arbitration petition filed by the petitioners, it is not the case of the petitioners that the repudiation had taken place in Mumbai. Learned senior counsel invited my attention to paragraph 47 of the arbitration petition in which the petitioners have averred as to why this Court would have jurisdiction to entertain and try the arbitration petition. He submits that none of the grounds mentioned therein could confer jurisdiction on this Court. He submits that merely because the learned arbitrator had passed an order in Mumbai is irrelevant for the purpose of conferring the jurisdiction on this Court. It is submitted that in any event, the order passed by the learned arbitrator does not show that the repudiation took place in Mumbai. He submits that in paragraph 47 of the arbitration petition also, the petitioners had not pleaded that the repudiation of the Family Settlement and Arrangement took place at Mumbai. My attention is also invited to the averments made in paragraphs 15, 19 and 20 of the arbitration petition and also to the prayers made in the statement of claim in which the petitioners have applied for declaration that the Family Settlement and Arrangement is subsisting.
49. Dr.Sathe, learned senior counsel placed reliance on the Minutes of Meeting held on 3rd August 2013 by the learned arbitrator in the present proceedings which meeting was admittedly held at Pune. In paragraph 3 of the Minutes of Meeting, learned arbitrator held that the meetings would be held at Pune or Mumbai. He submits that the arbitration agreement is silent about the seat of arbitration and thus under Section 20(2) of the Arbitration and Conciliation Act, 1996, the learned arbitrator could decide the place or venue of the arbitration. The learned arbitrator has fixed the venue under Section 20(3) which does not confer jurisdiction upon him. He submits that there is a distinction between the place of arbitration and venue of the arbitration. Learned senior counsel distinguishes the judgment of the Supreme Court in the case of Bharat Aluminium Company Vs. Kaiser Aluminium Technical Services INC. (supra) and places reliance on paragraphs 96 and 100 of the said judgment. He also distinguishes the judgment of the Supreme Court in the case of Enercon (India) Limited and Ors. Vs. Enercon GMBH and Anr. (supra) and places reliance on paragraphs 71.5, 97, 98 and 106 of the said judgment. It is submitted that if the place and venue of the arbitration are the same, the Court at such place or venue will have jurisdiction. Learned arbitrator, however, had only decided the venue under Section 20(3) of the Arbitration Act and not the seat or place of arbitration. Learned senior counsel distinguishes the judgment of the Supreme Court in the case of M/s.Pandey and Co. Builders Pvt. Ltd. Vs. State of Bihar and Anr. (supra) and places reliance on paragraphs 23, 26 and 33 thereof.
50. In so far as the issue raised by the learned senior counsel for the petitioners that whether the proceedings filed under Section 37 of the Arbitration Act would be before a Court contemplated under Section 2(1)(e) of the Arbitration Act or not is concerned, it is submitted by Dr.Sathe that there was no such plea raised in the reply to the said appeal. It is submitted by the learned senior counsel for the respondent nos.1 to 5 that since there was no adjudication by this Court in the appeal filed under Section 37(2) as to whether this Court had jurisdiction or not to entertain the said appeal, the order passed by this Court in the said proceedings would not be res judicata. He submits that the said proceedings under Section 37 were not before the Court as contemplated under Section 2(1)(e) of the Arbitration Act.
51. It is submitted by the learned senior counsel that interim relief claimed in the appeal filed under Section 37 could not be considered as an application under Section 9. It is submitted that since the appeal under Section 37 was not under Part I, interim relief in appeal also would not be an application under Part I for the purpose of Section 42. He submits that the Appellate Court has general powers under Section 107 of the Code of Civil Procedure, 1908 for passing interim orders. Since the issue of jurisdiction of this Court has not been raised by the any party in appeal under Section 37, the earlier order passed by this Court under Section 37 of the Arbitration and Conciliation Act, 1996 is irrelevant. This Court has to decide the issue of jurisdiction within the parameters of Section 2(1)(e) of the Arbitration Act. Reliance is also placed on the judgment of the Supreme Court in the case of State of West Bengal and Ors. Vs. Associated Contractors (supra).
52. In so far as the judgment of the Supreme Court in the case of Executive Engineer, Road Development Division No.III, Panvel and Anr. Vs.Atlanta Limited (supra) is concerned, Dr.Sathe, learned senior counsel for the respondent nos.1 to 5 distinguishes the said judgment on the ground that this Court exercising powers under the Original Side has no power to decide the proceedings which can be decided by the District Judge at Pune. He submits that it is not the case of the petitioners that the subject matter of the arbitration could be decided by the City Civil Court, Bombay and also by the High Court on the Original Side. He submits that the judgment of the Supreme Court in the case of Executive Engineer, Road Development Division No.III, Panvel and Anr. Vs.Atlanta Limited (supra) thus does not assist the case of the petitioners.
REASONS AND CONCLUSIONS :-
Whether material part of cause of action had arisen within the territorial jurisdiction of this court?
53. There is no dispute that the petitioners as well as respondent nos. 1 to 5 do not reside in Mumbai and are residing in Pune. The respondent nos. 6 to 8 are the companies all of which have their registered offices in Pune and had no place of business in Mumbai. Respondent nos. 6 to 8 have been carrying on their business entirely from Pune. All the board meetings of the respondent nos. 6 to 8 are held in Pune. The personnel of respondent nos. 6 to 8 are based in Pune. A perusal of the statement of claim filed before the learned arbitrator by the petitioners herein clearly indicates that all the reliefs claimed by the petitioners are in respect of movable and immovable properties which are situated in Pune except two properties which are in Mumbai. Out of the 11 bank accounts listed by the petitioners, all of the bank accounts are with the designate branches in Pune.
54. The reliefs applied against respondent nos. 1 to 5 from dealing with the movable assets of the respondent no.6 listed at Exhibit D which consist of deposits lying with third parties which are based in Pune. A perusal of the description of the properties described at Exhibits E and E-1 clearly indicates that the properties of the respondent nos.6 and 7 except two properties, all the remaining four properties are situated outside the jurisdiction of this Court. Both those properties are alleged to be also not in possession of the respondent no.6 company and the same continued to be in the possession of the developer.
55. A perusal of the statement filed by the petitioners indicates that out of 23 proceedings, three suits had been filed by the petitioners against the respondents in the Court of Civil Judge, Senior Division, Pune which were stated to be identical to the prayers sought in the petition filed under section 9 of the Arbitration and Conciliation Act, 1996. It is averred by the petitioners in those three suits that the court in Pune has jurisdiction in respect of the subject matter of those three suits. Respondent nos. 6 to 8 companies were not even party to the arbitration agreement.
56. Insofar as submission of the learned senior counsel for the respondents that two of the bank properties which are subject matter of the arbitration are situated at Nariman Point and Bandra-Kurla Complex in Mumbai and thus this court has no jurisdiction to entertain, try and dispose of the arbitration petition is concerned, a perusal of the statement of claim filed by the petitioners clearly indicates that there are about more than 25 prayers out of which the substantial reliefs claimed by the petitioners were in respect of the Family Settlement and Arrangement whereas very few reliefs were claimed in respect of the said two properties situated in Mumbai. In my view merely because two of the properties which belong to the respondent nos. 6 to 8 companies are claimed in the arbitration petition, in which there are large number of other reliefs claimed in respect of the properties and/or in respect of the subject matter of the proceedings relating to Pune jurisdiction, this court will have no jurisdiction to entertain, try and dispose of the present petition under section 9. For the purpose of conferring jurisdiction under section 9 and for seeking leave under clause XII of the Letters Patent, the court has to see whether material part of cause of action had arisen at Mumbai. A perusal of the prayers in the arbitration petition does not indicate that the material part of cause of action had arisen in Mumbai. Without going into the issue whether leave was required to be obtained by the petitioners under clause XII of the Letters Patent or not for filing petition under section 9 of the Arbitration and Conciliation Act, 1996, in my view this court could not have granted leave under clause XII of the Letters Patent, since the material part of cause of action which was subject matter of the agreement had arisen in Pune and not in Mumbai. Whether seat and/or place of arbitration was in Mumbai and if so, whether this court would be a court within the meaning of section 2(1)(e) of the Arbitration and Conciliation Act, 1996 ?
57. It is not in dispute that in the arbitration agreement which was forming part of the Family Settlement and Arrangement it was not agreed by and between the parties that the seat and/or place of the arbitration would be in Mumbai. The respondent heavily placed reliance on the order passed by Mr.Tulsi R.Tanti, the erstwhile arbitrator on 30th October, 2010 in support of his submission that the repudiation of the Family Settlement and Arrangement done by the respondent nos. 1 to 5 was accepted by the petitioners in Mumbai. The learned arbitrator Mr.Tulsi R.Tanti had accepted the repudiation of Family Settlement and Arrangement as canvassed by the petitioner in the said order dated 30th October, 2010 which order was passed in Mumbai while terminating the proceedings under section 32(c) of the Arbitration and Conciliation Act, 1996. It is also vehemently canvassed by the learned senior counsel for the petitioners that the claims for damages by the petitioners was based on the repudiation of the Family Settlement and Arrangement which took place in Mumbai. It is also the case of the petitioners that except one meeting, remaining 10 arbitration meetings were held in Mumbai and since the parties have agreed that all the meetings would be held in Mumbai and as a matter of fact were held in Mumbai which was a seat of the arbitration and/or place of arbitration, this court would be a court within the meaning of section 2(1) (e) of the Arbitration and Conciliation Act, 1996 irrespective of the fact whether material part of cause of action had arisen in Mumbai or not.
58. A perusal of the record indicates that the petitioners had addressed a letter to the learned arbitrator on 11th March, 2010 by which the petitioners had alleged to have accepted the repudiation of Family Settlement and Arrangement. The said letter was received by the learned arbitrator in Pune. In the arbitration petition filed by the petitioners under section 9, there was no plea raised by the petitioners that the repudiation of the Family Settlement and Arrangement took place in Mumbai. The order passed by the learned arbitrator on 30th October, 2010 also does not indicate that the repudiation of the Family Settlement and Arrangement by the respondent nos.1 to 5 was in Mumbai or that the same was accepted by the petitioners in Mumbai. A perusal of the statement of claim filed by the petitioners before the learned arbitrator on the contrary indicates that it was also one of the plea of the petitioners that the said Family Settlement and Arrangement is subsisting.
59. A perusal of the minutes of the meeting held by the present arbitrator on 20th June, 2013 indicates that in the said preliminary meeting, learned arbitrator had heard both the parties in regard to the venue of the proceedings. The respondent nos. 1 to 5 had suggested the proceedings to be held at Chandigarh which is the native place of the learned arbitrator or in the alternative in Delhi. In the said meeting, the learned arbitrator directed that the arbitral proceedings shall be held alternatively at Pune and Mumbai till further directions. It was further directed that after filing of the pleadings, the case to come up for directions on 1st February, 2014 at Mumbai at 11.00 a.m. at neutral place to be arranged by the parties under intimation to all parties. It is thus clear that the parties had not agreed that the seat of arbitration and/or place of arbitration would be in Mumbai.
60. The learned arbitrator in the said meeting held on 20th June, 2013 had directed that the proceedings shall be held alternatively at Pune and Mumbai till further directions. I am thus not inclined to accept the submission of Mr.D'vitre, learned senior counsel for the petitioners that the seat and/or place of the arbitration agreed between the parties was in Mumbai. Merely because situs of two of the immovable properties of the respondent nos.6 to 8 who were not even parties to the Family Settlement and Arrangement would be irrelevant and/or for conferring jurisdiction on this court. The petitioners had not produced any letter on record addressed by the respondent nos.1 to 5 thereby repudiating Family Settlement and Arrangement or that the same was received and accepted by the petitioners in Mumbai.
61. A perusal of the arbitration proceedings filed by the petitioners does not indicate that the said proceedings are arising out of the order passed by the erstwhile arbitrator Mr.Tulsi R.Tanti on 30th October, 2010 by which the arbitrator had alleged to have recorded any finding that the respondent nos.1 to 5 had repudiated the Family Settlement and Arrangement in Mumbai. Merely because few meetings were held by the learned arbitrator in earlier arbitration proceedings which were terminated ultimately by the learned arbitrator Mr.Tulsi R.Tanti, that would not confer any jurisdiction on this court to entertain, try and dispose of the proceedings under section 9 of the Arbitration and Conciliation Act, 1996.
62. Learned senior counsel for both the parties on this issue have placed reliance on the judgments of Supreme Court and this court which are dealt with hereinafter.
63. Insofar as judgment of Supreme Court in case of Bharat Aluminium Company (supra) relied upon by the learned senior counsel for the petitioners is concerned, the issue before the Supreme Court was whether in case of international commercial arbitration whose juridical or legal seat of arbitration is outside India, whether Part I of the Arbitration and Conciliation Act, 1996 would apply or Part II of the said Act would apply. It is held by the Supreme Court that the term 'subject matter of the arbitration' cannot be confused with 'subject matter of the suit'. In the said judgment, the Supreme Court held that the Arbitration Act, 1996 had accepted the territoriality principle which had been adopted in the Unitoral Modern Law. It is held that section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India and that part would have no application to International Commercial Arbitration held outside India. It is however clarified that the law declared by the Supreme Court by the said judgment shall apply prospectively in all the arbitration agreements executed after delivery of the said judgment i.e. on 6th September, 2012. In my view Dr.Sathe, learned senior counsel appearing for the respondent nos. 1 to 5 has rightly distinguished the said judgment of Supreme Court in case of Bharat Aluminium Company (supra) on the ground that in the arbitration agreement in this matter, there was no provision that the Mumbai would be the seat or place of arbitration and on the ground that the said judgment of the Supreme Court would apply with the prospective effect and not with retrospective effect.
64. Insofar as judgment of Division Bench of this court in case of Konkola Copper Mines (PLC) vs.Stewarts and Lloyds of India Limited in Appeal (L) No.199 of 2013 along with connected matters delivered on 9th July,2013 relied upon by the learned senior counsel for the petitioners is concerned, even in the said judgment the parties had agreed in the arbitration agreement that the place of the arbitration would be in Mumbai whereas in this case there was no such agreement about the place of arbitration recorded by the parties in the said agreement.
65. Supreme Court in case of Harmony Innovation Shipping Ltd. vs. Gupta Coal India Ltd. and Anr. 2015 SCC Online SC 190 has after adverting to the judgment of Supreme Court in case of Bhatia International vs. Bulk Trading S.A. (2002) 4 SCC 105, judgment of Supreme Court in case of Bharat Aluminium Company (supra) and several other judgments has held that the law laid down by the Supreme Court in case of Bharat Aluminium Company (supra) would apply with prospective effect. The judgment of Division Bench in case of Konkola Copper Mines (PLC) (supra) thus would not assist the case of the petitioners.
66. This court in case of Upendra Kantilal Thanawala and others (supra) has held that leave under clause XII of the Letters Patent could be applied only if the material part of cause of action had arisen within the jurisdiction of this court and not otherwise. It is held that since no cause of action had arisen within the territorial jurisdiction of this court, the application filed under section 9 of the Arbitration Act by the petitioners itself was outside the jurisdiction of this court and thus bar under section 42 would not apply while filing petition in any other court. It is held that the said petition filed under section 9 was thus not competent within the jurisdiction of this court. In my view the said judgment squarely applies to the facts of this case. I am respectfully bound by the said judgment. In my view, Dr.Sathe, learned senior counsel appearing for respondent nos.1 to 5 is right in his submission that the learned arbitrator in the ongoing arbitral proceedings had decided the venue either at Pune or at Mumbai and the same could not be considered as the seat or place of arbitration.
67. Insofar as judgment of Supreme Court in case of Enercon (India) Limited and others (supra) relied upon by Mr.D'vitre, learned senior counsel for the petitioners is concerned, Supreme Court in the said judgment after adverting to its earlier judgment in case of Bharat Aluminium Company (supra) has clarified the said judgment and held that Part I of Indian Arbitration Act, 1996 will have no application if the seat of arbitration is not in India. In the said matter, the parties had agreed in the arbitration agreement that the London shall be a venue of the arbitration. Supreme Court held that the said agreement mentioning London as a venue of arbitration thus could not be read as seat of arbitration. The said judgment of Supreme Court would assist the case of the respondents to the arbitration petition and not the petitioners herein.
68. Insofar as judgment of this court in case of L and T Finance Limited vs. Vardhman Chemtech Ltd. and Ors. delivered on 7th January, 2014 in Arbitration Petition (L) No.1460 of 2013 by the learned senior counsel for the petitioners is concerned, in the said judgment the respondents had conceded that this court had jurisdiction to entertain and dispose of the petition. The said judgment thus would not assist the case of the petitioners.
Whether arbitration applications filed by the parties under section 11 of the Arbitration and Conciliation Act or arbitration appeal filed by the respondents under section 37 of the Act were proceedings before Court within the meaning of section 2(1) (e) of the Arbitration and Conciliation Act,1996 and whether section 42 of the Act would apply?
69. It is not dispute that both the parties had filed applications under section 11 of the Arbitration and Conciliation Act before the Chief Justice of this court inter alia praying for appointment of arbitrator. There is also no dispute that the respondents herein had filed an appeal under section 37 of the Arbitration and Conciliation Act in this court. The question that arises for consideration of this court is whether both these proceedings were before the Court within the meaning of section 2(1)(e) of the Arbitration Act and thus section 42 of the Act would be attracted and thus the proceedings under section 9 filed by the petitioners in this court would be competent within the jurisdiction of this court.
70. In my view prior to the date of the ordinance amending section 11 of the Arbitration and Conciliation w.e.f. 23rd October, 2015, all such proceedings filed under section 11 of the Arbitration and Conciliation Act were not the proceedings before the Court within the meaning of section 2(1) (e) of the Arbitration and Conciliation Act, 1996 but were before the Chief Justice. Section 42 of the Arbitration and Conciliation Act, 1996 thus would not be attracted insofar as filing of such arbitration applications under section 11 of the Arbitration Act is concerned.
71. Insofar as the arbitration appeal filed by the respondent nos. 1 to 5 in this case arising out of the order passed by the erstwhile arbitrator under section 17 is concerned, Mr.Devitre, learned senior counsel for the petitioners placed heavy reliance on the averments made by the respondent nos. 1 to 5 herein in the arbitration appeal filed by them in support of the submission that the respondent nos. 1 to 5 themselves had urged before this court that this court had jurisdiction to entertain, try and dispose of the said arbitration appeal. The learned senior counsel for both the parties also placed reliance on section 37 of the Arbitration and Conciliation Act, 1996 in support of their rival contention as to whether arbitration appeal filed under section 37 would be before a court within the meaning of section 2(1) (e) of the Arbitration Act or not.
72. Supreme Court in case of M/s.Pandey and Co. Builders Pvt. Ltd. (supra) has held that section 37(2) of the Arbitration Act describes for an appeal to a court. It is held that section 42 of the 1996 Act refers to application and not to appeals.
73. Supreme Court in case of State of West Bengal and others (supra) has held that for the purpose of applicability of section 42 of the Arbitration Act, it is essential ingredient of the said section that an application under Part I must be before a court. In the said judgment it is also held that the applications under section 11 are not to be moved before the court but before the Chief Justice either of the High Court or of the Supreme Court as the case may be or their designates. In my view, the arbitration appeal filed by the respondent nos.1 to 5 herein under section 37 of the Arbitration Act was since not an applications under the provisions of Part I of the Arbitration Act, section 42 would not apply to all.
74. A perusal of section 37 of the Arbitration and Conciliation Act, 1996 clearly indicates that the said provision provides for an appeal arising out of various orders enumerated in the said section. Section 37(1) of the Arbitration Act clearly provides that the appeal shall lie from the orders mentioned in the later part of the said provision and from no other orders to the Court authorized by law to hear appeals from original decrees of the Court passing the order enumerated therein. It thus clear that the proceedings filed under section 37 is not an application for the purpose of applicability of section 42 of the Arbitration Act. The said provision in my view clearly provides for a forum for hearing the appeal arising out of the orders enumerated therein. In my view if an order is passed by the arbitrator accepting the plea under section 16(2) or 16(3) or if an arbitrator refuses or grants interim measures under section 17, the appeal against those orders would lie before a court which was authorized by law to hear the appeal from the original decree of the court.
75. The real test is that if there was no arbitration agreement and proceedings were required to be filed before court of law, which court would be authorized to hear such proceedings and which court would be authorized to hear the appeal from such orders and/or decrees. Similarly if an order is passed by a court on exercising jurisdiction on the original side of the High Court and has passed any interim measures under section 9 granting or refusing to grant any interim measures or sets aside or refuses to set aside an arbitral award under section 34 is appealable before the Division Bench of the High Court which is authorized by law to hear appeal from original order of the court passing the said order in absence of an arbitration agreement.
76. In my view merely because respondent nos. 1 to 5 had filed an appeal under section 37 of the Arbitration and Conciliation Act, 1996 before this court which was authorized to hear appeal from an order passed by the learned arbitrator under section 17, section 42 of the Arbitration and Conciliation Act, 1996 would not be attracted. The submission of the learned senior counsel for the petitioners that in view of there being an averments in the arbitration appeal filed by the respondent nos. 1 to 5 that this court had jurisdiction to entertain, try and dispose of the said arbitration appeal, in my view such averments also would not confer jurisdiction of this court by applying the provisions of section 42 of the Arbitration Act.
77. A perusal of the arbitration petition filed by the petitioners indicates that the petitioners have not raised any plea that this court will have jurisdiction to entertain, try and dispose of the said arbitration petition on the ground that appeal under section 37 of the Arbitration and Conciliation Act, 1996 was filed by the respondent nos. 1 to 5 in this court i.e. the court within the meaning of section 2(a) (e) of the Arbitration and Conciliation Act, 1996.
Whether the Principal District Judge, Thane as well as this court exercising Ordinary Original Civil Jurisdiction have concurrent jurisdiction over the subject matter of a suit in absence of an arbitration agreement ?
78. Learned senior counsel for the petitioners have urged before this court that even if the part of cause of action had arisen in Pune, material part of cause of action had arisen in Mumbai in view of the fact that two of the main properties which were subject matter of the arbitration petition are situated in Mumbai and the seat and/or place of arbitration agreed by the parties was in Mumbai. Learned senior counsel for the petitioners heavily placed reliance on the judgment of Supreme Court in case of Executive Engineer, Road Development Division No.III, Panvel and Anr. Vs.Atlanta Limited, AIR 2014 SC 1093. It is submitted by the learned senior counsel that since the Principal District Judge of the District Court as well as this court exercising Ordinary Original Civil Jurisdiction have concurrent jurisdiction and in view of this court being the superior court, this Court and not the Principal District Judge or District Judge will have jurisdiction. It is held that the judgment of Supreme Court in case of Executive Engineer, Road Development Division No.III, Panvel (supra) squarely applies to the facts of this case.
79. Dr.Sathe, learned senior counsel for the respondent nos.1 to 5 on the other hand distinguished the judgment of Supreme Court in case of Executive Engineer, Road Development Division No.III, Panvel and Anr. (supra) on the ground that the High Court exercising Ordinary Original Civil Jurisdiction cannot entertain the petition filed by the petitioners in view of the fact that the material cause of action had not arisen within the territorial jurisdiction of this court but had arisen in Pune.
80. For deciding the rival contentions raised by the learned senior counsel for both the parties, this court will have to first decide whether both the courts have concurrent jurisdiction to entertain, try and dispose of the subject matter of an arbitration in absence of the arbitration agreement. In my view since the material cause of action had not arisen within the territorial jurisdiction of this court but had arisen in Pune and thus even with leave granted by this court under clause XII of Letters Patent, this court would not have any jurisdiction to entertain, try and dispose of the arbitration petition. I am therefore of the view that both the courts did not have concurrent jurisdiction to decide the question forming subject matter of the arbitration. In my view the substantial part of cause of action had arisen in Pune and thus only the Principal District Judge, Pune would have jurisdiction to entertain, try and dispose of the arbitration petition filed by the petitioners and not the High Court exercising the Ordinary Original Civil Jurisdiction.
81. In my view the High Court exercising Ordinary Original Civil Jurisdiction would otherwise also have no jurisdiction to entertain, try and dispose of the arbitration petition forming the subject matter of the arbitration since the material part of cause of action has arisen in Pune. Since only Principal District Judge has jurisdiction, in my view the judgment of the Supreme Court in case of Executive Engineer, Road Development Division No.III, Panvel and Anr. (supra) would not apply to the facts of this case and is clearly distinguishable in the facts of this case.
Whether court hearing an arbitration appeal under section 37 would exercise power under section 9 of the Arbitration Act while granting interim measures?
82. A perusal of section 9 of the Arbitration and Conciliation Act, 1996 clearly indicates that under the said provisions, the court within the meaning of section 2(1) (e) has power to grant interim measures before or during arbitral proceedings or at any time after making the arbitral award before it is enforced in accordance with section 36. This court has already taken a view aforesaid that the appeal under section 37 of the Arbitration and Conciliation Act would not be a proceedings before court within the meaning of section 2(1)(e) but the expression court described in section 37 is a forum which is authorized in law to hear the appeal arising out of various orders enumerated therein.
83. A perusal of section 37 of the Arbitration and Conciliation Act, 1996 indicates that the said provision does not indicate that the Appellate Court hearing the appeal under section 37 would have same power of a court as provided in section 9 of the Arbitration and Conciliation Act which is a court within the meaning of section 2(1) (e) of the Arbitration and Conciliation Act, 1996. In my view, the Appellate Court exercising power under section 37 can grant interim relief if any, by exercising power under the provision of Code of Civil Procedure, 1908 and more particularly section 107 of the Code of Civil Procedure, 1908. I am thus not inclined to accept the submission of the learned senior counsel for the petitioners that the Appellate Court while granting interim reliefs if any while hearing the appeal under section 37 is exercising power under section 9 of the Arbitration and Conciliation Act, 1996. In my view this submission of the learned senior counsel has no merits also for the reason that there is no second appeal provided against the order passed by the Appellate Court exercising power under section 37 whereas remedy of appeal is provided against an order passed by court under section 9 under section 37.
84. In my view since material part of cause of action has arisen within the territorial jurisdiction of court at Pune, even if any leave was required to be obtained by the petitioners for filing arbitration petition under section 9 of the Arbitration and Conciliation Act under clause XII of the Letters Patent, this court could not have granted any leave to file the said proceedings in this court under clause XII of the Letters Patent. I am therefore of the view that this court has no jurisdiction to entertain, try and dispose of the Arbitration Petition No.1036 of 2013. The leave thus granted by this court on 31st July 2013 to the petitioner under Clause XII of the Letters Patent is liable to be revoked.
85. I, therefore, pass the following order:-
(a) Chamber Summons No.905 of 2013 is allowed in terms of prayer clause (a);
(b) The leave granted by this court on 31st July 2013 in Letters Patent Petition No.226 of 2013 in favour of the petitioners is revoked. In view of the revocation of the leave granted under clause XII of the Letters Patent, Arbitration Petition No.1036 of 2013 is dismissed on the ground that this court has no jurisdiction to entertain, try and dispose of the said petition;
(c) No order as to costs.
Mr.Devitre, learned senior counsel appearing for the petitioners seeks continuation of the interim protection granted by this Court to enable the petitioners to impugn the order passed by this Court today before the Division Bench. Interim protection granted by this Court in Arbitration Petition No.1036 of 2013 to continue for a period of six weeks from today.