Alok Sharma, J. - (1.) A challenge has been made to the order dated 24 -7 -2015 passed by the District Judge Kota whereby an application under Section 21 of the Code of Civil Procedure, 1908 (CPC) filed by the petitioner -non -applicant (hereinafter 'the non -applicant challenging the court's territorial jurisdiction to hear an application under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter 'the 1996 Act') filed by M/s. Jainco Enterprises Private Limited, the respondent No. 2 -applicant (hereinafter 'the applicant') has been dismissed.
(2.) THE facts of the case are that the applicant filed an application under Section 9 of the 1996 Act against the non -applicant impleading therein also the ICICI Bank, Branch aerodrome circle, Industrial Estate through its Manager at Kota as the second non -applicant (hereinafter 'the Bank'). It was stated that in terms of agreement dated 29 -7 -2011 between applicant and the non -applicant any dispute arising from the contracted work was arbitrable. And such a dispute having arisen, the non -applicant be restrained from invoking/encashing the bank guarantee executed by the applicant on 16 -8 -2012, the issuing ICICI Bank from acting on the Non -applicant's invocation thereof and no amount whatsoever be paid to the non -applicant thereunder. Vide an ex -parte order dated 29 -6 -2015, the trial court directed that ICICI Bank not encash the bank guarantee dated 16 -8 -2012 despite it being invoked by the non -applicant The non -applicant on receipt of notice filed an application under Section 21 of the CPC before the trial court challenging its territorial jurisdiction, as albeit part of cause of action did indeed arise at Kota under the agreement dated 29 -7 -2011 for reason of the works under the agreement being executed at Kota, yet clause 24 of the aforesaid agreement had an agreed outer clause which confined the adjudication of all disputes between the parties to the jurisdiction of the courts at Mumbai alone where the agreement was executed. Specific reference was made to clauses 24 and 23, which read as under: - "24. Jurisdiction: The contract shall be subject to the laws of Government of India and any disputes under the contract shall be subject to the jurisdiction of the courts in Mumbai. 23. Arbitration (i) The dispute arising out of this Agreement either during the execution of the work or on completion which could not be solved by the Engineer shall be referred to the Director of the lead member i.e. D.K. Infrastructure Pvt. Ltd. who is overall in charge for the work for his decision. (ii) Any unresolved disputes by the above method only shall be referred to the Arbitrator appointed as per the Indian Arbitration & Conciliation Act, 1996 or any statutory modification or re -enactment thereof and the rules made therein and for the time being in force shall apply to the Arbitration proceedings. The Chairman THE PRINCIPAL will nominate a Sole Arbitrator not lower than the rank of Retd. Chief Engineers of State/Central/Public Sector undertakings or any one from the Panel of Arbitrators approved by the Indian Council of Arbitration. The Arbitrator shall be the decision of the Sole Arbitrator shall be final and binding on both the parties. (iii) The venue of Arbitration shall be at Mumbai."
(3.) THE application filed by the non -applicant was inevitably opposed by the applicant. It was first stated that the jurisdiction conferred on Mumbai Courts under clause 24 of the agreement dated 29 -7 -2011 was not exclusive in nature and therefore did not exclude the jurisdiction of the court at Kota where the cause of action admittedly also arose for reason of the works under the agreement being executed there. It was further submitted that albeit the agreement dated 29 -7 -2011 did indeed record it being executed at Mumbai, yet in fact a concluded contract had come into existence at Kota, as the agreement dated 29 -7 -2011 after being signed by the non -applicant at Mumbai had been sent to Kota where it was signed on behalf of the applicant. It was submitted that in these circumstances the concluded contract under the agreement dated 29 -7 -2011 having come into existence at Kota, not Mumbai, hence the Mumbai courts could not have any jurisdiction at all over the dispute between the parties. It was contended that the conferment of jurisdiction on the Mumbai courts was thus of no avail and clause 24 of the agreement dated 29 -7 -2011 a non -starter. It was further submitted that the application under Section 21 of CPC objecting to the Kota court's jurisdiction was not maintainable and it was incumbent upon the non -applicant to file reply to the application under Section 9 of the 1996 Act and take its objection with regard to Kota Court's territorial jurisdiction therein, if so advised. It was also submitted that the question of jurisdiction of courts at Mumbai, on disputes under the agreement dated 29 -7 -2011 thus being a disputed one, the issue be adjudicated on the basis of evidence thereon in a trial.;