{"id":169350,"date":"2000-03-27T00:00:00","date_gmt":"2000-03-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/khaleel-ahmed-dakhani-vs-haiti-gold-mines-co-ltd-on-27-march-2000"},"modified":"2015-05-01T06:27:34","modified_gmt":"2015-05-01T00:57:34","slug":"khaleel-ahmed-dakhani-vs-haiti-gold-mines-co-ltd-on-27-march-2000","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/khaleel-ahmed-dakhani-vs-haiti-gold-mines-co-ltd-on-27-march-2000","title":{"rendered":"Khaleel Ahmed Dakhani vs Haiti Gold Mines Co. Ltd on 27 March, 2000"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Khaleel Ahmed Dakhani vs Haiti Gold Mines Co. Ltd on 27 March, 2000<\/div>\n
Bench: D.P. Wadhwa, Doraiswamy Raju<\/div>\n
           CASE NO.:\nAppeal (civil)  2232 of 2000\n\nPETITIONER:\nKHALEEL AHMED DAKHANI\n\nRESPONDENT:\nHAITI GOLD MINES CO. LTD.\n\nDATE OF JUDGMENT: 27\/03\/2000\n\nBENCH:\nD.P. WADHWA & DORAISWAMY RAJU\n\nJUDGMENT:\n<\/pre>\n
JUDGMENT<\/p>\n
2000 (2) SCR 575<\/p>\n
The Judgment of the Court was delivered by D.P. WADHWA, J. We grant leave
\nto appeal.\n<\/p>\n
This appeal is directed against judgment dated 29\/30.7.1999 of the High
\nCourt of Karnataka given in revision filed by the respondent whereby High
\nCourt set aside the orders dated 24.5.1999 and 21.6.1999 of the Principal
\nDistrict Judge, Raichur. By order dated 24.5.1999 the Principal District
\nJudge, Raichur issued warrants of attachment of moveable properties of the
\nrespondent as described in the application for execution filed by the
\nappellant. By order dated 21.6.1999 the learned Principal District Judge
\ndismissed the application of the respondent praying for lifting of the
\nattachment already issued against it.\n<\/p>\n
Appellant is a building contractor. Respondent is a Government company of
\nthe Government of Karnataka under the Companies Act, 1956. Respondent
\nawarded the contract for construction of a school building at Hatti in
\nDistrict Raichur to the appellant. An agreement dated 9.3.1995 was duly
\nentered into. Clause 35 of the agreement contained the arbitration clause.
\nDisputes and differences having arisen appellant moved the Chief Justice of
\nthe High Court of Karnataka under Section 11 of the Arbitration and
\nConciliation Act, 1996 (for short the ‘Act’) for appointment of an
\narbitrator. The application was allowed and Mr. H.S. Bhat, Chief Engineer
\n(retired), who was resident of Bangalore was appointed as an arbitrator
\nwith a direction to complete the arbitration proceedings and to submit his
\nAward within four months. Arbitration proceedings were held at Banglore
\nwhere also the Award dated 28.8.1998 was made. Arbitrator awarded some of
\nthe claims of the appellant while disallowing a few others. Respondent
\nfiled application for setting aside the Award by making an application
\nunder Section 34* of the<\/p>\n
34. Application for setting aside arbitral award. (I) Recourse to a court
\nagainst an arbitral award may be made only by an application for setting
\naside such award in accordance with sub-section (2) and sub-section (3).\n<\/p>\n
(2) An arbitral award may be set aside by the Court only if –\n<\/p>\n
(a)     the party making the application furnishes proof that -(i)     a
\nparty was under some incapacity; or<\/p>\n
(ii) the arbitration agreement is not valid under law to which the parties
\nhave subjected it or, failing any indication thereon, under the law for the
\ntime being in force; or<\/p>\n
(iii)   the party making the application was not given proper notice of the
\nappointment of an arbitrator or of the arbitral proceedings or was
\notherwise unable to present his case; or (iv)   the arbitral award deals
\nwith a dispute not contemplated by or not falling within the terms of the
\nsubmission to arbitration, or it contains decisions on matters beyond the
\nscope of the submission to arbitration :\n<\/p>\n
Provided that, if the decisions on matters submitted to arbitration, can be
\nseparated from those not so submitted, only that part of the arbitral award
\nwhich contains decisions on matters not submitted to arbitration may be set
\naside; or<\/p>\n
(v) the composition of the arbitral tribunal or the arbitral procedure was
\nnot in accordance with the agreement of the parties, unless such agreement
\nwas in conflict with a provision of this Part from which the parties cannot
\nderogate, or, failing such agreement, was not in accordance with this part;<\/p>\n
\nor\n\n(b)    the court finds that -\n\n<\/pre>\n
(i) the subject-matter of the dispute is not capable of settlement by
\narbitration under the law for the time being in force, or Act in the court
\nof Principal City Civil Judge, Bangalore. While this application was
\npending appellant as decree-holder filed an application for execution of
\nthe Award in the court of Principal District Judge, Raichur. It was on this
\napplication that orders for attachment of properties of the respondent were
\nissued. When respondent sought lifting of its attachment by filing an
\napplication, the same was dismissed. Aggrieved respondent went to the High
\nCourt in revision. High Court allowed the revision of the respondent and
\nset aside the two orders of the Principal District Judge, Raichur which we
\nhave mentioned above. Now it is the appellant who has come to this Court.\n<\/p>\n
It would appear that by filing the execution application in the court at
\nRaichur appellant wanted to enforce the Award under Section 36** of the
\nAct. When the court at Raichur issued warrants of attachment it was not
\naware of pendency of the application of the respondent under Section 34 of
\nthe Act in the court at Bangalore. Appellant had made no mention in his
\napplication about the pendency of the proceedings at Bangalore. However,
\nwhen the respondent filed application before the Principal District Judge,
\nRaichur for lifting of the order of attachment it was brought to his notice
\nthe pendency of the application under Section 34 of the Act for setting
\naside the Award. Now, the learned Principal District Judge, Raichur held
\nthat Principal City Civil Court, Bangalore had no jurisdiction to entertain
\nthe application under<\/p>\n
(ii)    the arbitral award is in conflict with the public policy of India.\n<\/p>\n
Explanation. – Without prejudice to the generality of sub-clause (ii), it
\nis hereby declared, for the avoidance of any doubt, that an award is in
\nconflict with the public policy of India if the making of the award was
\ninduced or affected by fraud or corruption or was in violation of section
\n75 or section 81.\n<\/p>\n
(3)    An application for setting aside may not be made after three months
\nhave elapsed from the date on which the party making that application had
\nreceived the arbitral award or, if request had been made under section 33,
\nfrom the date on which that request had been disposed of by the arbitral
\ntribunal :\n<\/p>\n
Provided that if the court is satisfied that the applicant was prevented by
\nsufficient cause from making the application within the said period of
\nthree months it may entertain the application within a further period of
\nthirty days, but not thereafter.\n<\/p>\n
(4)    On receipt of an application under sub-section (1), the court may,
\nwhere it is appropriate and it is so requested by a party, adjourn the
\nproceedings for a period of time determined by it in order to give the
\narbitral tribunal an opportunity to resume the arbitral proceedings or to
\ntake such other action as in the opinion of arbitral tribunal will
\neliminate the grounds for setting aside the arbitral award.\n<\/p>\n
** 36. Enforcement. – Where the time for making an application to set aside
\nthe arbitral award under section 34 has expired of such application having
\nbeen made, it has been refused, the award shall be enforced under the Code
\nof Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a
\ndecree of the court. Section 34 of the Act. On this premise he dismissed
\nthe application of the respondent and confirmed the order of attachment.\n<\/p>\n
In support of his argument that court at Bangalore would have no
\njurisdiction Mr. Rajiv Dutta, learned counsel for the appellant, referred
\nto a decision of this Court in Patel Roadways Limited, Bombay v. Prasad
\nTrading Company,<\/a> [1991] 4 SCC 270. In this case Patel Roadways Limited had
\nits principal office at Bombay and branch offices at various other places.
\nPrasad Trading Company entrusted certain consignments of goods to Patel
\nRoadways Limited at its subordinate office in the State of Tamil Nadu for
\ndelivery at Delhi. The goods reached Delhi but in damaged conditions.
\nPrasad Trading Company instituted a suit for damages in the court at Madras
\nwithin whose jurisdiction the subordinate offices of Patel Roadways Limited
\nwere situated and where the goods were entrusted for transport. A plea was
\nraised by the Patel Roadways Limited in its defence that when the contract
\nwas entered into between the parties it was agreed that only Bombay court
\nwould have jurisdiction and as such court in Madras had no jurisdiction. It
\nwas in this context that this Court considered clause (a) of Section 20 and
\nexplanation thereto in Code of Civil Procedure (for short ‘Code’)*. The
\nquestion which was before this Court was as to whether in view of the
\nrelevant clause in the contract between the parties the court at Bombay
\nalone had jurisdiction and the jurisdiction of the courts at Madras where
\nthe suit was instituted was barred. It was submitted by the Patel Roadways
\nthat apart from the courts within whose territorial jurisdiction the goods
\nwere delivered to the appellant for transport, the courts at Bombay also
\nhad jurisdiction to entertain a suit arising out of the contract between
\nthe parties in view of the Explanation to<\/p>\n
* 20 Other suits to be instituted where defendants reside or cause of
\naction arises. – Subject to the limitations aforesaid, every suit shall be
\ninstituted in a Court within the local limits of whose jurisdiction –\n<\/p>\n
(a)     the defendant, or each of the defendants where there are more than
\none, at the time of the commencement of the suit, actually and voluntarily
\nresides, or carries on business, or personally works for gain; or<\/p>\n
(b)    any of the defendants, where there are more than one, at the time of
\nthe commence-ment of the suit, actually and voluntarily resides, or carries
\non business, or personally works for gain, provided that in such case
\neither the leave of the Court is given, or the defendants who do not
\nreside, or carry on business, or personally work for gain, as aforesaid,
\nacquiesce in such institution; or<\/p>\n
(c)    the cause of action, wholly or in part, arises.\n<\/p>\n
Explanation. A corporation shall be deemed to carry on business at its sole
\nor principal office in India or, in respect of any cause of action arising
\nat any place where it has also a subordinate office, at such place. Section
\n20 of the Code inasmuch as the principal office of the appellant was
\nsituated in Bombay. According to it since courts at two places namely
\nMadras and Bombay had jurisdiction in the matter, the jurisdiction of the
\ncourts in Madras was ousted by the clause in the contract whereunder the
\nparties had agreed that jurisdiction to decide any dispute under the
\ncontract would be only in the courts at Bombay. Consequently the courts
\nwhere the suit was instituted had no jurisdiction to entertain it. This
\nCourt said that “the explanation is really an Explanation to clause (a)
\nviz. as to where the corporation can be said to carry on business. This, it
\nis clarified, will be the place where the principal office is situated
\n(whether or not any business actually is carried on there) or the place
\nwhere a business is carried on giving rise to a cause of action (even
\nthough the principal office of the corporation is not located there) so
\nlong as there is a subordinate office of the corporation situated at such
\nplace. The linking together of the place where the cause of action arises
\nwith the place where a subordinate office is located clearly shows that the
\nintention of the legislature was that, in the case of a corporation, for
\nthe purposes of clause (a), the location of the subordinate office, within
\nthe local limits of which a cause of action arises, is to be the relevant
\nplace for the filing of a suit and not principal place of business. If the
\nintention was that the location of the sole or principal office as well as
\nthe location of the subordinate office (within the limits of which a cause
\nof action arises) are to be deemed to be places where the corporation is
\ndeemed to be carrying on business, the disjunctive “or” will not be there.
\nInstead, the second part of the Explanation would have read “and, in
\nrespect of any cause of action arising at any place where it has a
\nsubordinate office, also at such place”. It, therefore, held that the
\nexplanation provides an alternative locus for the Corporation’s place of
\nbusiness, not an additional one. Thus, this Court was of the view that
\nclause (c) was not attracted to confer jurisdiction on courts at Bombay and
\nthe appellant has admittedly its subordinate offices at Madras where the
\ngoods in the case were delivered to it for the purpose of transport the
\nCourt at Bombay had no jurisdiction at all to entertain the suit and that
\nthe parties could not confer jurisdiction on the courts at Bombay by an
\nagreement.\n<\/p>\n
In view of the decision of this Court in Patel Roadways Limited, Bombay v.
\nPrasad Trading Company,<\/a> [1991] 4 SCC 270, it cannot be said that the
\nPrincipal District Judge, Raichur had no jurisdiction to entertain the
\nmatter. But then the question arises, as rightly posed by the High Court,
\nif in the given facts and circumstances of the case, could the Principal
\nDistrict Judge, Raichur had made to orders which are impugned,
\nparticularly, when it was brought to his notice pendency of the proceedings
\nunder Section 34 of the Act in the Court of Principal City Civil Judge,
\nBangalore where the appellant itself had filed a CAVEAT under Section 148A
\nof the Code and also an application under Section 9* of the Act seeking
\ninterim relief. Learned Principal District Judge, Raichur also did not take
\nnotice of clause 35 of the contract which constituted arbitration agreement
\nbetween the parties which specifically provided that only the courts in
\nBangalore would have jurisdiction to entertain any claim for enforcement of
\nthe award. Principal District Judge, Raichur had no doubt jurisdiction in
\nthe matter but his holding that the Principal City Civil Judge. Bangalore
\nwould have no jurisdiction does not commend to us. It cannot always be
\nsaid, in view of Section 20 of the Code, that only one court will have
\njurisdiction to try the suit. It is not that the Principal City Civil
\nCourt, Bangalore is not a court within the meaning of Section 2(e)** of the
\nAct. Whether Principal City Civil Judge, Bangalore has jurisdiction in the
\nmatter or not is still pending with him which proceedings were filed
\nearlier in time than the execution application by the appellant in the<\/p>\n
* 9. Interim measures, etc. by court. – A party may, before or during
\narbitral proceedings or at any time after the making of the arbitral award
\nbut before it is enforced in accordance with section 36, apply to a court-\n<\/p>\n
(i)     for the appointment of a guardian for a minor or a person of
\nunsound mind for the purpose of arbitral proceedings, or<\/p>\n
(ii)   for an interim measures of protection in respect of any of the
\nfollowing matters, namely-\n<\/p>\n
(a) the preservation, interim custody or sale of any goods which are the
\nsubject-matter of the arbitration agreement;\n<\/p>\n
(b) securing the amount in dispute in the arbitration;\n<\/p>\n
(c) the detention, preservation or inspection of any property or thing
\nwhich is the subject-matter of the dispute in arbitration, or as to which
\nany question may arise therein and authorising for any of the aforesaid
\npurposes any person to enter upon any land or building in the possession of
\nany party, or authorising any samples to be taken or any observation to be
\nmade, or experiment to be tried, which may be necessary or expedient for
\nthe purpose of obtaining full information or evidence;\n<\/p>\n
(d) interim injunction or the appointment of a receiver;\n<\/p>\n
(e) such other interim measure of protection as may appear to the court to
\nbe just and convenient,<\/p>\n
and the Court shall have the same power for making orders as it has for the
\npurpose of, and in relation to, any proceedings before it<\/p>\n
* *    “Court” means the principal Civil Court of original jurisdiction in
\na district, and includes the<\/p>\n
High Court in exercise of its ordinary original civil jurisdiction, having
\njurisdiction to decide the questions forming the subject matter of the
\narbitration if the same had been the subject matter of a suit, but does not
\ninclude any civil court of a grade inferior to such principal Civil Court,
\nor any Court of Small Causes” District Court at Raichur. The award had not
\nattained finality. In these circumstances we are of the view that the
\nPrincipal District Judge, Raichur should not have entertained the
\napplication for execution and order attach-ment of movable properties of
\nthe respondents. The High Court referred to the concession by both the
\nparties that all the applications under the Act had to be treated as
\noriginal suits and if the court finds that it had no jurisdiction to
\nentertain, it cannot dismiss the suit but has to return the same for the
\npresentation to the proper Court. Whatever may be the concession of the
\nparties, we are of the view in the circumstances of the present case
\nPrincipal District Judge, Raichur should have stayed his hands and should
\nnot have entertained the execution application by the appellant. High Court
\ntook a correct view of the matter and rightly set aside the impugned
\norders.\n<\/p>\n
We, therefore, find no merit in the appeal. It is dismissed with costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Khaleel Ahmed Dakhani vs Haiti Gold Mines Co. Ltd on 27 March, 2000 Bench: D.P. Wadhwa, Doraiswamy Raju CASE NO.: Appeal (civil) 2232 of 2000 PETITIONER: KHALEEL AHMED DAKHANI RESPONDENT: HAITI GOLD MINES CO. LTD. DATE OF JUDGMENT: 27\/03\/2000 BENCH: D.P. WADHWA & DORAISWAMY RAJU JUDGMENT: JUDGMENT 2000 (2) SCR 575 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-169350","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nKhaleel Ahmed Dakhani vs Haiti Gold Mines Co. 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