JUDGMENT
F.I. Rebello, J.
1. The petitioners by the present petition have invoked he provisions of Section 9 of the Arbitration & Conciliation Act, 1996. The contract was entered into on 18th December, 2000. There is no dispute that the contract was entered into at Chennai. There is also no dispute that none of the respondents are residing or having their offices or carrying on business within the jurisdiction of this court. The only argument advanced at the hearing of the petition is that the letter of termination in respect of the subject matter of the contract was issued from Mumbai. There is a clause in the agreement under which it is set out that the Courts in Mumbai alone shall have exclusive jurisdiction. It is, therefore, contended on behalf of the petitioners herein that this Court would have jurisdiction to hear, entertain and decide this application relying on the judgment of the Apex Court in Hakam Singh v. Gammon (India) Ltd. and A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem, (1989) 2 SCC 1643. Reliance is also placed on the judgment in Globe Transport Corporation v. Triveni Engineering works, .
On the other hand on behalf of the respondents their learned Counsel contends that notwithstanding the clause in the contract which provides for conferring of jurisdiction on this Court as no part of the cause of action has arisen within the jurisdiction of this Court this Court would have no jurisdiction. Parties it is contended, cannot confer jurisdiction on the Court which it odes not have, it is also pointed out that the petition under Section 9 by the petitioner herein could have only been maintained if the predicates of explanation to Section 20 of the C.P.C. were met. In the instant case the petitioners, it is contended, carry on business at Chennai and also have an office down there. The agreement was entered into at Chennai and consequently considering the explanation to Section 20 it will be the Court at Chennai which would have jurisdiction. Learned Counsel relied upon the judgment in the case of Patel Roadways Ltd. v. Prasad Trading Company, .
2. With the above the controversy in issue may be decided. The provisions of the Civil Procedure Code and the corresponding provisions of the Letters Patent of this court govern in the provisions as to jurisdiction. Therefore, on the facts of this case and the arguments advanced considering the ouster clause as contained in Clause 7.6 would this court have exclusive jurisdiction; it may be pointed out that under Clause 7.5 arbitration shall be held in Mumbai. The place of Arbitration, however, does not confer jurisdiction on the Court. That jurisdiction would be considering the definition of Court under Section 2(e) of the Act of 1996. The Court therein must mean the principal Civil Court of original jurisdiction in a district having jurisdiction to decide the question forming the subject matter of the arbitration. If the same had been the subject matter of suit and includes the High Court in exercise of its ordinary Original Civil Jurisdiction. Therefore, the test to be applied is could the plaintiff have instituted the suit before this Court in respect of the cause of action pleaded by them. The jurisdiction must be in respect of the subject matter and not pecuniary jurisdiction. The territorial jurisdiction would come into play while considering which is the Court of Principal Original Civil Jurisdiction in the district. For the purpose of deciding the controversy we may address ourselves to the judgments of the Apex Court to find out if the matter stands concluded or is still open for consideration. Hakam Singh v. Gammon (India) Ltd. (supra) was a case before the amendment to the Code of Civil Procedure by the amendment Act of 1976. In that case the Arbitral clause contained a provision that the contract shall be deemed to have been entered into by the parties in the City of Bombay and the Court of Law in the City of Bombay alone shall have jurisdiction to adjudicate thereon. The facts are not disputed that in that case no part of the cause of action has arisen in the City of Bombay. The argument as to jurisdiction was solely on this clause as noted earlier. The Apex Court held agreeing with the view of the Allahabad High Court that Clause 13 would permit ouster of jurisdiction of other Courts. It relied on Clause 13 of the agreement which stipulated that the contract shall be deemed to have been entered into by the parties in the city of Bombay. In the alternative that as the respondents had their principal office in Bombay they were liable in respect of a cause of action arising out of the terms of the tender to be sued in the Court at Bombay and as such there would be ouster of jurisdiction of other Courts. This view was reiterated by the Apex Court in the case of Globe Transport Corporation v. Triveni Engineering Works and Anr., .
3. We may now advert to the judgment in the case of A.B.C. Laminart Pvt. Ltd. (supra). That was a case again where the respondents before the Apex Court had filed a suit in the year 1975 before the Subordinate Judge of Salem. There was a clause in the agreement providing that any dispute arising out of that sale shall be subject to Kaira jurisdiction. A preliminary issue was raised whether the Court had jurisdiction. The trial Court found that it had no jurisdiction considering Clause 11. In an Appeal preferred the Madras High Court allowed the Appeal and set aside the judgment of the trial Court. That is how an S.L.P. was preferred before the Apex Court. The Apex Court quoted with approval the observation of Lord Denning in Lee v. Showmen’s Guild of Great Britain, (1952) 1 All ER 1175 that “Parties cannot by contract oust the ordinary courts of their jurisdiction.” In A.B.C. Laminart’s case there was an additional issue as to whether such an agreement ousting jurisdiction would be hit by Section 28 and 23 of the Indian Contract Act. The Apex Court referred to the judgment in Hakam Singh (supra) and approved the ratio of that judgment. The Apex Court noted that “where there may be two or more competent courts which can entertain a suit consequent upon a part of the cause or action having arisen within the jurisdiction of one such Courts to try the dispute which might arise as between themselves, the agreement would be valid, however by such an agreement the parties could not confer jurisdiction on a Court where no part of cause of action had arisen.
We then have the judgment of the Apex Court in the case of M/s. Patel Roadways Ltd. (supra) which judgment is in respect of a cause arising after the amendment to the Code of Civil Procedure by the Act of 1976. A Bench consisting of 3 Judges of the Apex Court was considering Section 20 and the explanation to the C.P.C. The Court noted that before the amendment there were two explanations. The 1st explanation had been dropped and the second explanation was now the only explanation. We may refer to the said explanation as the entire argument and the judgment of the Apex Court was based on that explanation.
Explanation:- A Corporation shall be deemed to carry on business at its sole of 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.”
In para. 8 the Apex Court posed the following question:-
“The question, however, is as to whether in any of these two suits, the courts at Bombay also had jurisdiction apart from the courts within whose jurisdiction the goods were entrusted to the appellant for purposes of transport.
The Apex Court answered the question as under:-
“Having given our anxious consideration to the matter we are of the opinion that the Courts at Bombay in these two cases did not at all have jurisdiction and consequently the agreement between the parties conferring exclusive jurisdiction on courts at Bombay is of no avail.”
It was admitted in those two cases that no part of the cause of action had arisen within the jurisdiction of Bombay. The jurisdiction was sought to be pleaded based on the agreement between the parties. The trial Court held that the Court had no jurisdiction. The order was affirmed in Appeal by the Madras High Court and that is how the matter went upto the Apex Court.
The explanation for consideration may now be split up for the purpose of correctly understanding it. So suit up. it can be read as under:-
“A Corporation shall be deemed to carry on business at its sole or principal office in India;
“A corporation shall be deemed to carry on business in respect of any cause of action arising at any place where it has also a subordinate office, at such place.”
The Apex Court noted this aspect of the matter and held that this explanation refers to Section 20(a) of the C.P.C. alone. The Apex Court thereafter held that the Corporation can be sued at its sole or principal office in India as by the explanation it is deemed to carry on business. Secondly if the Corporation has a subordinate office at any other place and the cause of action has arisen at that place then the deemed place to carry on business is with such place. The observations are reflected in the following passage:-
The Explanation is really an explanation to Clause (a). It is in the nature of a clarification on the scope of Clause (a) viz. as to where the corporation can be said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried off there) or the place where a business is carried on dividing rise to a cause of action (even though the principal office of the Corporation is not located there) so long as there is a subordinate office of the Corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of Clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal lace of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on business, the disjunctive “or” will not be there. Instead, the second part of the Explanation would have read” and, in respect of any cause of action arising of any place where it has a subordinate office, also at such place”.
4. If the law declared by the Apex Court is now so understood the question would be on the facts of the case as to which is the deemed place where the Corporation carries on business. Merely because the plaintiff issued the notice of termination at Mumbai that by itself would not give a cause for filing a suit in Mumbai if the defendants were not carrying on business in Mumbai or residing in Mumbai as admittedly the agreement was entered into at Chennai. The defendants reside or carry off business at Chennai. The clause pertaining to ouster was based on the fact that the petitioners were deemed to be carrying on business at Mumbai. Once petitioner had a subordinate office at Chennai, the loan was granted in Chennai as also the agreement was entered into at Chennai and it is that place where the cause of action has arisen which is the deemed place where the petitioners are carrying on business. If that be so the clause in the agreement would be of no consequence considering Sections 23 and 28 of the Indian Contract Act and consequently, the preliminary objection raised that this Court has no jurisdiction, will have to be upheld.
5. That would be the position under Section 20 of the C.P.C. Considering Section 120 of C.P.C. Sections 16, 17 and 20 shall not apply to the High Court in the exercise of its Original Civil Jurisdiction which includes this High Court. Therefore, the judgment in M/s. Patel Roadways Ltd. (supra) in so far as this Court is concerned will be inapplicable as the judgment is based on the interpretation of the explanation to Section 20. Filing of Suits on the Original Side of this court are governed by Clause 12 of the Amended Letters Patent of this Court. The same reads as follows:-
“And we do further ordain that the said High Court of judicature at Bombay, in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try, and determine suits of every description, lif, in the case of suits for land or other immovable property such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly, or in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Causes Court at Bombay, or the Bombay City Civil Court.”
Applying Clause 12 it will be clear that as the defendants do not dwell, carry on business or personally work for gain and for that matter the suit is not in respect of immovable property situated within the jurisdiction of this Court and as no part of the cause of action has arisen, wholly within the jurisdiction of this Court, this Court could not be the Court having jurisdiction over the subject matter considering Section 2(e) of the Arbitration & Conciliation Act, 1996. It is, therefore, clear that the application under Section 9 moved before this Court would be without jurisdiction.
6. It is made clear that an application under Section 9 is purely an interim application to protect the subject matter of cause pending arbitration. In these circumstances the question of returning the papers would not arise as it will be open to the petitioners to invoke the jurisdiction of the Court competent to entertain the petition, considering Section 2(e) of the Act of 1996, as issue of limitation would not arise in such a proceeding.
Considering the findings on the issue of jurisdiction it is not necessary to do into the merits of the matter which are left open for consideration before the Appropriate Court of Forum having jurisdiction.
7. For the aforesaid reasons, the petition is rejected. No order as to costs.
8. Parties/Authorities to act on an ordinary copy of this order duly authenticated by the Associate/Personal Secretary of this Court.