- (1.) THIS is an application under S. 8 of the Arbitration Act for appointment of an umpire. The petitioner entered into a contract on 22nd/23rd Nov. 1982 by accepting the tender submitted by the respondent. The contract contained an arbitration clause that disputes arising out of the contract would be decided by arbitration. Disputes arose and reference was made to the joint arbitrators in accordance with the agreement. By a letter dt. 13-4-84 the arbitrators intimated the petitioner that they had received the statement of claim from the respondent and called upon the petitioner to submit its counter-statement on or before 2-5-84. The petitioner alleges that the joint arbitrators entered upon the reference without appointing an umpire. The petitioner by letter dt. 23-4-84 pointed out to the joint arbitrators that they did not appoint an umpire before entering upon the reference and requested them to appoint the umpire. It is alleged that in spite of such notice, the joint arbitrators did not appoint any umpire. Hence the present application was taken out on 30-5-85. The petitioner has invoked the jurisdiction of this Court on the ground that the tender submitted by the respondent was accepted by the petitioner at its office at No. 1, Shakespeare Sarani, Calcutta-700 071, situate within the jurisdiction of this Court. In short the petitioner alleges that the contract was concluded within the jurisdiction and as such part of the cause of action arose within the local limits of this court. The respondent in the present case, has taken a preliminary objection that the jurisdiction of this Court has been invoked on the ground that part of the cause of action has arisen within the jurisdiction but the rest has arisen outside. Therefore this application could not have been made in this court without first obtaining leave under Cl.12 of the Letters Patent and as such this application must be rejected in limine. In support of his contention, the respondent's counsel Mr.Bhabra, strongly relies on our Division Bench judgment reported in AIR 1984 Cal 24 (Tobu Enterprises Pvt. Ltd. v. Camco Industries Ltd.). THIS case requires a careful consideration. The facts of this case were that on 25-1-84 this Court granted leave under Cl.12 of the Letters Patent to the respondent to make an application under S.20 of the Arbitration Act 1940. The said application was registered as Special Suit No.3A of 1983. The respondent Tobu Engineering preferred an appeal against the order dt. 25-1-83 granting leave under Cl.12 of the Letters Patent. The respondent in this appeal raised an objection that the appeal was not maintainable under S.39(1) of the Arbitration Act as the order granting leave under Cl.12 of the Letters Patent must be treated as an order passed under the Arbitration Act on account of the provisions of Ss.2(c) and 31(2) of the Act. The question, therefore, arose whether the order dt. 25-1-83 was passed under the Arbitration Act or only under Cl.12 of the Letters Patent. If that order was under Cl.12 only then S.39(1) of Arbitration Act will have no application and the order will be appealable. The Appeal Court rejected the contention of the respondent that the order dt.25-1-83 was passed under the Arbitration Act and held in para 9 at page 27 :- "It is difficult for us to accept the contention of the respondent that an order under Cl.12 of the Letters Patent is an order under the Arbitration Act. Neither Sec.31 nor S.2(c) refers to Cl.12 of the Letters Patent. The question of passing any order under the Arbitration Act will arise after leave under Cl.12 is granted enabling a party to file an application under S.20 of the Arbitration Act. So long as the leave is not granted there is no proceeding before the court under the Arbitration Act and as such there can be no order under the Arbitration Act."
(2.) IT was further argued in that case on behalf of the respondent, that the jurisdiction of this High Court to entertain an application under the Arbitration Act depended wholly on the provisions of S.2(c) and S.31(1) and (2) of the Arbitration Act and not on Cl.12 of the. Letters Patent and as such no leave under Cl.12 of the Letters Patent would be necessary to make an application under the Arbitration Act on the ground that only a part of the cause of action arose within the jurisdiction. The respondent's counsel, in support of his contention had cited AIR 1963 Cal 642 (Rebati Ranjan Chakraborty v. Suranjan Chakravarti). IT was an appeal before Sinha and Dutta JJ. In this case Sinha J. held that the appeal was not maintainable and as such he did not decide the question of jurisdiction and/or whether leave under Cl.12 of the Letters Patent would be necessary to make an application under S.20 of the Act on the ground that a part of the cause of action had arisen within the jurisdiction of that court. But Dutta J. held :- "Clause 12 of the Letters Patent does not determine the jurisdiction of the Court but S.2(c) read with Sec.31 does it, and in so doing S.2(c) indirectly incorporates the provisions of the Letters Patent. To put it differently, Cl.12 of the Letters Patent cannot determine the jurisdiction but for Sec.2(c) read with S.31. Hence jurisdiction of the court to entertain an application for appointment of Receiver and/or Award does not flow from the Letters Patent but springs from Sec. 31 read with S.2(c) which by reference attracts Cl.12 of the Letters Patent................. In this view of the matter it is immaterial to consider whether it is necessary in order to find jurisdiction in the High Court that a part of the cause of action should arise within the local limits of jurisdiction and further in such a case leave should be taken before filing the plaint or it is sufficient if a part of cause of action only arises within the local limits of the jurisdiction." (emphasis supplied). Dealing with Dutta J.'s observation in AIR 1963 Cal 642, the Division Bench in AIR 1984 Cal 24 observed in para 12 as follows :- "While it is true that S.2(c) read with S.31 of Arbitration Act determines the jurisdiction of the Court, most respectfully we beg to differ with the observation of the learned Judge that S.2(c) indirectly incorporates the provisions of the Letters Patent or that it attracts Cl.12 of the Letters Patent. Consequently, we are unable to subscribe to the view of the learned Judge that it is immaterial whether part of the cause of action should arise within the jurisdiction of this court or leave under Cl.12 should be taken or not."
(3.) THE Division Bench also gave their reasons for differing with the view taken by Dutta J. by analysing the scope and effect of Ss.2(c) and 31(1) and (2) of the Arbitration Act in manner stated in para 13 of the report. THE reasonings are as follows :- "THE word 'questions' in S.2(c) is significant to be noticed. S.2(c) enjoins that the civil court should have jurisdiction to decide the 'questions' that is to say all thequestions forming the subject matter of a reference. It, therefore, follows that if, in a given case, the civil court has not the jurisdiction to decide all the questions, but only one or some of the questions forming the subject matter of a reference that particular civil court will not have jurisdiction in terms of S.2(c). Similarly, under sub-secs.(1) and (2) of S.31 of the Arbitration Act, a court not having jurisdiction in the matter to which the reference relates in a particular case, will have no jurisdiction to decide the questions referred to in sub-sec.(2). Here also the word. 'matter' in sub-sec.(1) refers to, the entire matter and not part of it. In view of, however, of the provision of Secs.17, 19 and 20 of the Civil P.C., such a situation create no difficulty in filing a suit in a Civil Court." (emphasis supplied).;