JUDGMENT
Swatanter Kumar, J.
1. The petitioner company which is duly registered and incorporated under the Companies Act, 1956 entered into an agreement with the respondents dated 9th June, 1998. Two different agreements were signed between the parties, one relating to the Hotel Operation Agreement and another is a Hotel Franchise Agreement. Certain disputes arose between the parties. According to the petitioners, they filed a petition under section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as `the Act’) being OMP 69/2005 before this Court and thereafter praying for certain interim directions. The said petition is stated to be pending and where after the present petition under Section 11(5) of the Act has been filed in this Court for appointment of an arbitrator and reference of the disputes raised in this petition to such arbitrator, as the respondents had failed to act despite the service of notices dated 31st January, 2005 and 18th February, 2005. The arbitrator nominated by the petitioner was not accepted by the respondents and the petitioner has filed the present petition for appointment of a sole arbitrator.
2. Respondents were served with the notice of this petition. The respondents filed IA 6309/2005 under section 42 of the Act praying that the petition of the petitioner under section 11 of the Act be returned to the petitioner to file it in the Court of Principal District Judge, Madurai. Thereafter the respondents also filed another application being IA 7015/2005 under section 21 of the Act read with Section 151 CPC stating that arbitration petition filed by the petitioner under section 11 of the Act be returned to the petitioner to file the same before the High Court of Judicature at Madras. The grounds taken in both these applications are somewhat common. It is stated that respondents had filed a petition under section 9(2) read with section 11 of the Act before the Principal Distt. Judge, Madurai which was dismissed by that Court vide its order dated 13.4.2005 holding that the High Court of Judicature at Madras would have the jurisdiction for appointing an arbitrator. This petition was filed by the respondents before that Court on 17th February, 2005 while the present petition has been filed by the petitioner under section 11 of the Act on 28th May, 2005 as such in terms of Section 42 of the Act, the petition should ought to have been filed in the Courts at Madurai or at Madras as the case may be. The copy of the order passed by the courts at Madurai has been placed on record. In these circumstances, it is prayed that the petition be returned for presentation before the competent Court of jurisdiction.
3. To both these applications, replies have been filed on behalf of the petitioner non-applicant. Therein it is stated that the petition was filed before the Court at Madurai which has been dismissed. The said order has attained finality. On 8th February, 2005, the respondents had filed a suit being OS No.187/2005 in the Distt. Munsif Court, Madurai for permanent injunction and obtained an ex-parte order restraining the petitioner from interferring in the rights of the respondent to operate the Hotel under the terms of the agreement. Thereafter on 14th February, 2005, the petition under sections 9 and 11 was filed in the Court of Distt. Judge, Madurai. On 18th February, 2005, the petitioner had sent notice of invocation of Arbitration Act and on 21st February, 2005, the petitioner filed an application under Section 9 of the Act in this High Court. In the suit, the petitioner filed an application under section 8. Vide order dated 10th March, 2005, the Distt. Munsif Court, Madurai allowed the application under section 8 while the Distt. Judge, Madurai dismissed the application of the respondent under sections 9 and 11 vide order dated 13th April, 2005. It is the case of the petitioner now that the respondents are resorting to Forum Shopping and are simultaneously filing multiple litigations just to overwrite the process of law as their petition under section 9 was filed in this Court which is the Court of proper jurisdiction and as such even in-consonance with the provisions of Section 48 of the Act, all petitions should be filed in this Court. Even otherwise, the cause of action has arisen between the territorial jurisdiction of this Court and the courts at Madurai have no jurisdiction to entertain and decide the petition. In order to examine the merit of the contentions raised by the respective parties before this Court on these two applications, the first and foremost document which needs to be referred is the order passed by the Distt. Judge , Madurai by which the petition filed by the respondent under section 9(2) and 11 of the Act was dismissed. The relevant part of the order dated 13th April, 2005, reads as under :-
5. Point No. 1 :- Admittedly for the relief of injunction the petitioner had moved the District Munsif Court, Madurai in O.S.187/05, for a prayer restraining the respondent from interfering with the operations of the hotel business. An ad-interim injunction has been granted till 15.2.05 by the learned Prl. District Munsif, Madurai as per its order in I.A.155/05 in O.S.187/05. The parties are the petitioner and respondent herein as plaintiff and defendant. So the prayer for granting injunction once again is not maintainable before this Court. Hence I hold on point No. 1, that the petitioner is not entitled to any order of injunction as prayed in this petition. Point No. 1 is answered accordingly.
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So there is a written agreement between the parties to refer the matter to an arbitrator if there is any dispute arise between the parties. There is a dispute now between the parties is admitted by both the parties. They have approached the Delhi High Court, and also this Court and District Munsif Court. As per the agreement between the petitioner and the respondent dated 9th day of June, 1998 paragraph XIII disputes and resolution, it has been agreed between the parties that the seat of arbitration will be at Chennai or Madurai. Now the petitioner has come forward with this petition under section 9(2) r/w 11 of Arbitration and Conciliation Act, 1996. The power of granting injunction has been vested under section 9 of Arbitration Act. Section 11 deals with appointment of arbitrators. Section 11(4)(b) clearly shows that the arbitratory shall be appointed by the Chief Justice or any person instituted or designated by him. Clauses 5 to 11 also emphasise that the appointment of arbitrator shall be made by the Chief Justice or any person instituted or designated by him. So an Arbitrator under section 11 can only be appointed by the Honourable Chief Justice or by any person or instituted, designated by him. Under such circumstances, under section 11, an arbitrator cannot be appointed by this Court which is only a District Court. So the appropriate remedy to the petitioner is to move a petition under section 11 before the Honourable High Court of Judicature, Madras for appointing an arbitrator by the Honourable Chief Justice. Hence I hold on point No. 2, the petition is not maintainable before this Court. Point No. 2 is answered accordingly.
In the result the petition is dismissed.
Dictated to the shorthand writer, transcribed by her, corrected and pronounced by me in open court this the 13th day of April, 2005.
4. The bare reading of the above order shows that the petition under section 9(2) of the respondent herein before the Madurai Court was dismissed on the ground that they had already invoked the jurisdiction of the civil court and wherein the Civil Court was dealing with the matter and interim protection was granted. While the petition under Section 11(2) was not dismissed on the ground that the Distt. Judge, Madurai was not the nominee of the Chief Justice to deal with the petition under Section 11 of the Act. In other words, the very presentation of the Act of the petition under section 11 of the Act before that Court was defective and before a Court which had no jurisdiction to entertain and decide such a petition in the eye of law as already noticed above, the Civil Court in the meanwhile, had allowed the application of the present petitioner under section 8 of the Act and directed the matter to be referred to arbitration in accordance with the arbitration agreement between the parties. The orders passed by the Civil Court as well as by the Distt. Judge Madurai have attained finality and there is no dispute before this Court that none of the parties to those proceedings have challenged the orders before the appellate or the original Court in any jurisdiction. The effect in law of the above orders which have attained finality is that no proper petition has been presented by the respondent herein before the Courts at Madurai.
5. In the meanwhile, the petitioners in this petition had already filed a petition under Section 9 of the Act being OMP 69/2005 invoking the arbitration clause under the Head Quarter Agreement on 21st February, 2005. Notice of this petition was issued to the respondents and the said petition is stated to be pending before this Court. The provisions of Section 42 of the Act would obviously tilt in favor of the present petitioner as no proper petition was ever presented by the respondent herein before the Court at Madurai either under Section 9 or 11 of the Act. Institution of a petition before the Court which has no jurisdiction would thus be inconsequential and cannot be equated to presentation of the petition before a Court of jurisdiction. The Distt. Judge at Madurai has inherent jurisdiction to entertain and decide this petition. Another factor which the Court needs to notice at this stage itself is that the agreement dated 9th June, 1998 was signed by the parties at New Delhi and this agreement contains the arbitration clause between the parties being article No. 29 in relation to settlement of disputes. The agreement was terminated and it was conveyed to the petitioner at Delhi. As such the presentation of the petition under Section 9 and the present petition under Section 11 by the petitioner cannot be said to be presented at least, prima facie before a Court within whose territorial jurisdiction no cause of action has arisen. The petition under section 11 filed by the respondent before the Court at Madurai was not entertained and decided on merits but related to lack of inherent jurisdiction in the Court. The arguments raised on behalf of the respondents while relying upon the judgment of this Court in Sasken Communication Technologies Ltd. v. Prime Telesystems Ltd. and Ors. 99 (2002) DLT 640 is misplaced in as much as the principle of law stated in this judgment can hardly be disputed but in that case the application under section 9 had been filed before the Court of competent jurisdiction and was pending. It is only when the basic ingredients for filing of arbitration proceedings before a Court of Competent jurisdiction is satisfied that the bar contemplated under section 42 of the Act can be enforced against the maintainability of a petition before another Court. Learned counsel appearing for the petitioner relied upon the judgments in the cases of ESM Dass, Secunderabad v. Alfa Laval India Limited, Pune, 2001(3) Arb.L.R, 218 (AP) and Union of India v. P. Anantharam, Chief Engineer (MES) and Anr. 1991(2) Arb.L.R. 293. It is contended that this Court alone has the jurisdiction on the basis of the documents and the factum of pendency of the petition under Section 9 before this Court would tilt the balance in terms of provisions of Section 42 of the Act in favor of the petitioner.
6. I have discussed in detail that the applicant cannot seek any benefit on the basis of section 42 of the Act. It is not disputed by learned counsel appearing for the respondents that the orders passed by the Court at Madurai have already attained finality and no petition or suit arising there from is pending before any Court of competent jurisdiction. For the reasons afore-recorded I find no merit in the objections raised on behalf of respondents and consequently IA 7015/2005 as well as the objection raised on behalf of the respondents with regard to territorial jurisdiction of this Court are rejected while leaving the parties to bear their own costs.