AMITAVA LALA, J. - (1.) THIS appeal has been preferred by the appellant upon being aggrieved by and/or dissatisfied with the judgement and order of the District Judge in -charge, Jhansi dated 13th February, 2008 rejecting the application for ad interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter in short called as the 'Act') passed in Misc. Petition No. 01 of 2008 (M/s. Magnum Builders & Developers and Chawala Constructions Vs. Ircon International Limited and another). However, Ircon International Ltd. and another, the respondents herein, have filed cross -objection. Therefore, both have been heard analogously.
(2.) THE order impugned passed by the Court below is distinctly divided into three parts i.e. (a) jurisdiction; (b) maintainability; and (c) merit. Since the question of jurisdiction is involved, we have called upon the learned Counsel appearing for the parties to make their respective submissions on that score, but Mr. S.M.A. Kazmi, learned Senior Counsel appearing for the appellant, wanted to make a composite argument in respect of all the points and left the matter to the Court for due consideration. However, according to us, jurisdictional point is to be considered at first. Therefore, we make it clear that if we come to the ultimate conclusion that the Court has no jurisdiction, the Court will obviously conclude the finding therein instead of making unnecessary discussion on merit, otherwise the Court will deal with other points. The dispute is in respect of territorial jurisdiction. On an earlier occasion when an appeal was preferred before this Court, the Court held that irrespective of the order for the time being passed on 17th January, 2008 the question of jurisdiction and maintainability will be considered by the Court below at first on an issue that Delhi High Court has considered the matter on merit and passed an order, which was concealed by the contesting respondent therein. However, following such direction of this High Court, the Court below has considered the point of jurisdiction and drawn an inference that the Court below has jurisdiction to entertain, try and determine the application on the following grounds: "1. There is no dispute that the work place for the construction of 294 doubling units in Marid Accommodation Project lies in Jhansi. 2. There is no dispute with regard to the fact that subordinate office of the opposite parties is situated in Jhansi. 3. For the work of 294 doubling units tender notice was published in Jhansi. 4. The agreement/contract dated 16.8.2005 between Ircon International Ltd. Palika Bhawan Sector -XIII, R.K. Puram, New Delhi and the petitioner was executed by Addl. General Manager, Married Accommodation Project, DH/1/13, Virangana Nagar, Jhansi. The agreement indicates that Addl. General Manager, Jhansi was acting for the opposite parties. 5. The agreement also indicates that both parties and witnesses had signed the agreement in Jhansi. 6. The tender acceptance letter dated 26.4.2005, issued by the opposite parties, indicates that the petitioner was requested to furnish performance security for an amount of Rs. 86,01,087/ - to Addl. General Manager/Civil/PH/Jhansi. 7. The termination notice of the contract was given in Jhansi and was received by the petitioner in Jhansi. 8. After termination notice the opposite parties had issued revival letter dated 20.2.2007 at Jhansi. 9. The petitioner had carried out certain works on trial basis in view of revival letter in Jhansi. 10. Fresh legal tenders have also been issued from subordinate office of opposite parties at Civil Lines, Jhansi." Factually, M/s. Ircon International Limited, a Government of India undertaking, the respondent herein, has its Corporate Office at Palika Bhavan, Sector -XIII, R.K. Puram, New Delhi -110066. It has a Project Office at DH -1/13 Veerangana Nagar, Jhansi -284128. On 28th February, 2005 notice inviting tender was issued by the respondent company from its office at New Delhi inviting bonafide firms/companies/joint ventures having requisite experience and financial capacity for execution of the work at Jhansi, Uttar Pradesh. On 26th April, 2005 the respondents accepted the tender of the appellant by treating the letter as contract subject to completion of formalities of agreement for execution of work within the specified date at Jhansi. Special Conditions of Contract, General Conditions of Contract, Particular Technical Specifications, General Technical Specifications, Relevant Codes and Standards, Drawings and Bill of Quantities have been made part and parcel of the conditions. Under the General Conditions of Contract, there is an arbitration clause, which is as follows: "72.2 Conciliation/Arbitration 72.2.1 It is a term of this contract that Conciliation/Arbitration of disputes shall not be commenced unless an attempt has first been made by the parties to settle such disputes through mutual settlement. 72.2.2 If the Contractor is not satisfied with the settlement by the Employer on any matter in question, disputes or differences, the Contractor may refer to the Managing Director of the Employer in writing to settle such disputes or differences through Conciliation or Arbitration provided that the demand for Conciliation or Arbitration shall specify the matters, which are in question or subject of the disputes or differences as also the amount of claim, item wise. Only such dispute (s) or difference (s) in respect of which the demand has been made, together with counter claims of the Employer shall be referred to Conciliator or Arbitrator as the case may be and other matters shall not be included in the reference. 72.2.3 Managing Director of the Employer may himself act as Sole Conciliator/Sole Arbitrator or may at his option appoint another person as Sole Conciliator or Sole Arbitrator, as the case may be. In case, Managing Director of the Employer decides to appoint a Sole Conciliator/Sole Arbitrator, then a panel of at least three names will be sent to the Contractor. Such persons may be working/retired employees of the Employer who had not been connected with the work. The Contractor shall suggest minimum two names out of this panel for appointment of Sole Conciliator/Sole Arbitrator. Managing Director of the Employer will appoint Sole Conciliator/Sole Arbitrator out of the names agreed by the Contractor. 72.2.4 In case, the Contractor opts for settlement of disputes through Conciliation at first stage and if the efforts to resolve all or any of the disputes through Conciliation fails, the Contractor may refer to the Managing Director of the Employer for settlement of such disputes or differences through Arbitration. The appointment of Sole Arbitrator shall be done by the Managing Director of the Employer as per the procedure described above. No disputes or differences shall be referred to Arbitration after expiry of 60 days from the date of notification of failure of Conciliation. 72.2.5 The Conciliation and/or Arbitration proceedings shall be governed by the provisions of the Indian Arbitration and Conciliation Act 1996 or any statutory modification or re -enactment thereof and the rules made thereunder and for the time being in force shall apply to the conciliation and arbitration proceedings under this clause. 72.2.6 The language of proceedings, documents or communications shall be in English and the award shall be made in English in writing. 72.2.7 The conciliation/arbitration proceedings shall be held at a place decided by Conciliator/Arbitrator. 72.2.8 The fees and other charges of the Conciliator/Arbitrator shall be as per the scales fixed by the Employer and shall be shared equally between the Employer and the Contractor." Under the said General Conditions of Contract there is a forum selection clause as under Clause 72.7, which is as follows: "72.7 JURISDICTION OF COURTS: Jurisdiction of courts for dispute resolution shall be New Delhi."
(3.) Even under the Special Conditions of Contract there is a clause for settlement of disputes, which is as follows: "31.0 SETTLEMENT OF DISPUTES (This clause supercedes the clause '72.0' of General Conditions of Contract). All disputes or differences of any kind whatsoever that may arise between the Employer/Engineer and the Contractor in connection with or arising out of the contract or subject matter thereof or the execution of works, whether during the progress of works or after their completion, whether before or after determination of contract shall be referred by the Contractor to the Employer in writing for resolving the same through mutual discussions, negotiations, deliberation etc. associating representatives from both the sides and concerted efforts shall be made for reaching amicable settlement of disputes or differences." Even under the Special Conditions of Contract also, there is a clause being Clause 31.2, which speaks about the forum selection clause, as follows: "31.2 JURISDICTION OF COURTS: Jurisdiction of courts for dispute resolution shall be only at New Delhi." Mr. Kazmi has contended before this Court that neither of the parts of contract, either execution or performance or payability of any sum, arose within the jurisdiction of New Delhi, where the Head Office of the respondents is situated. The Court below considered this issue relying upon a Supreme Court judgement reported in AIR 1992 SC 1514 (M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company), which he also relied upon herein. Such decision arose in an appeal arising out of civil suit, whereunder the scope and ambit of Section 20 of the Code of Civil Procedure, 1908 (hereinafter in short called as the 'C.P.C.') was considered. Section 20 with explanation of the C.P.C. is as follows: "20. Other suits to be instituted where defendants reside or cause of action arises. - Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction - (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. Explanation. -A corporation shall be deemed to carry on business at its sole or 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." ;