J.P. Singh, J.
1. This petition under Article 227 of Constitution of India has been filed for quashing order dated 25.2.2004 passed by civil judge Karkardooma Courts, Delhi, in suit No. 113/03. Vide impugned order an application under Order VII Rule 11 CPC moved by the defendant has been dismissed.
2. I have heard Ms. S.R. Padhy, learned Counsel for the petitioner and Mr. Shraman Siwha, learned Counsel for respondent and have gone through the impugned order and the summoned record.
3. Briefly the facts are that the respondent (hereinafter referred to as the plaintiff) filed a suit for recovery of Rs. 89,816/- against the petitioner (hereinafter referred to as defendant No. 2) and Mr. Anand Mohanti (hereinafter referred to as defendant No. 1). The plaintiff is inter alias engaged in the business of consultancy. Defendant No. 1 was trainee of the plaintiff and defendant No. 2 stood surety to the service agreement executed by defendant No. 1. It was agreed that since the plaintiff would incur expenses on training of defendant No. 1 leading to his employment with plaintiff, the defendant No. 1 executed a service agreement undertaking to serve the plaintiff for a minimum period of 3 years from the date of joining and executed a bond for Rs. 50,000/- for compliance of the undertaking. In the event of the breach of the agreement the defendant was to pay the bond amount plus three months salary (Rs. 32,400/-) with 9% interest . The defendant No. 1 allegedly resigned from his service, before completing full 3 years, in violation of the terms of the agreement and allegedly became liable to pay Rs. 50,000/- plus three months salary in lieu of notice and interest thereon as agreed. Registered notice was sent to defendants to pay the sum of Rs. 89,816/- Along with 9% interest but without any fruitful result. As regards the jurisdiction it is alleged in the plaint that the terms of employment were accepted by employer No.1 in Delhi and breach of trust also took place in Delhi thereforee the courts at Delhi have jurisdiction to try the suit. In the written statement and the application under Order VII Rule 11 CPC objections were raised that the court had no jurisdiction to try and entertain the suit because no cause of action arose at Delhi. Secondly, the suit was barred under the Indian Administration Act, 1940 of or any modification or re- enactment thereof, because there was an arbitration clause and reproduced Clause 4 of the agreement in the written statement stating that the venue of the arbitration will be at Mumbai and that the courts at Mumbai will have the exclusive jurisdiction to the exclusion of all other courts. Factual averments were also denied.
4. Order sheets of the trial court show that defendant No. 2 (petitioner herein) was proceeded ex parte on 22.2.2001. The defendant No. 2 moved application under Order IX Rule 7 CPC on 23.5.2001. Later on defendant No. 1 was also proceeded ex parte. The said application under Order IX Rule 7 CPC was allowed subject to costs of Rs. 500/- on 13.11.2001 and the defendant No. 2 was given last opportunity to file written statement by next date i.e, 8.9.2003. Thereafter the defendant No. 2 moved an application under Order VII Rule 11 CPC and again the defendant No. 2 was directed to file written statement. Cost of Rs. 200/- was imposed for not filling the written statement as directed earlier. Despite objections by defendant No. 2 regarding the jurisdiction of Delhi courts, the learned civil judge noted in the order dated 31.3.2004 that since the application under Order VII Rule 11 CPC had already been dismissed which was basically on the point of jurisdiction, the defendant was to file written statement on the next date. In these facts and circumstances the written statement was filed on 25.5.2004 Learned counsel for the respondent-plaintiff has submitted that after filing written statement, the petitioner could not ask for arbitration in view of Section 8 of the Arbitration Act. As against this learned Counsel for the petitioner has submitted that filing of the written statement on specific directions of the court was not a voluntary act of taking steps by the petitioner/defendant/surety as envisaged in Section 8 of the Arbitration and Conciliation Act, 1996. I am also convinced that the petitioner-defendant right from the beginning was drawing the attention of the trial court to the arbitration clause in the agreement between the parties and also to the agreement of the parties regarding the jurisdiction of the courts. thereforee, in my view, this matter is not hit by Section 8 of the Arbitration and Conciliation Act, 1996. The jurisdiction and arbitration clause between the parties is reproduced hereunder : -
4. In the even of any dispute or disagreement over the interpretation of any of the terms hereinabove contained or any claim or liability of any party including the Surety/Sureties the same shall be referred to a person to be nominated by the parties hereto. Such references shall be deemed to a submission to Arbitration under the Indian Arbitration Act, 1940 or of any modification or re-enactment hereof. The venue of arbitration shall be Bombay. Subject hereto the Court in Bombay shall have exclusive jurisdiction to the exclusion of all other courts.
5. Learned counsel for the petitioner has submitted that a plain reading of the above clause shows that the parties have willfully agreed to have their disputes whatsoever settled at Bombay. As against this, learned Counsel for the respondent has argued that the parties cannot themselves choose jurisdiction for settlement of their disputes. In my view, this contention of learned Counsel for respondent has no force in view of the judgment titled Shriram City Unition Finance Corporation Ltd. v. Rama Mishra reported in : (2002)9SCC613 , in which the Supreme Court of India has opined as under : -
There is a difference between inherent lack of jurisdiction of any court on account of some statue and the other where parties through agreement bind themselves to have their dispute decided by any one of the courts having jurisdiction. A party is bound either by provision of the Constitution, statutory provisions or any rule or under terms of any contract which is not against the public policy. 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, through Clause 34 of the agreement, the parties have bound themselves that 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 Bhubneshwar. Such a suit would be in violation of the said agreement. thereforee, the suit filed by the respondent in the civil court at Bhubneshwar would not be valid, in view of the said agreement.
6. Considering all the facts and circumstances, in my view, there is an apparent jurisdictional error in the impugned order, the same is, thereforee, set aside. The application under Order VII Rule 11 read with Section 151 CPC is allowed. The plaint be returned to the plaintiff for presentation before the court of competent jurisdiction, under provision of Order VII Rule 10 of the Code of Civil Procedure and time be given to the plaintiff for the said presentation before the competent court as per law. Parties are, however, are left to bear their own costs. Nothing said herein will tantamount to expression of opinion on the merits of the case.
7. The parties are directed to appear before the trial court on 26th May, 2006.
8. The trial court record be sent back immediately.