TaxTMI 
TaxTMI 
2009 (1) TMI 779
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.... clause 5 of the said purchase order, the respondent was required to deposit security in the form of bank guarantee for an amount equivalent to 2 per cent of the contract value. In addition, the respondent was also required to furnish a performance guarantee equivalent to 5 per cent of the contract value for satisfactory performance and due execution of the said contract. Subsequent to the aforesaid purchase order, an agreement was also entered into between the parties on 16.10.1985 at Jaipur. 3. Subsequently the appellant Board placed another purchase order vide No. RSEB/SE/Proc.I/TN-1312/202 dated 02.12.1987 for supply of 150 kiloliter of transformer oil for an amount of Rs. 19,50,000/-. Similar to the previous purchase order, in the present purchase order also the respondent was required to furnish the bank guarantee equivalent to 2 per cent of the contract value towards security deposit and equivalent to 5 per cent of the contract value towards performance guarantee. Accordingly an agreement was also entered into between the parties on 16.12.1987 at Jaipur. 4. In terms of the abovesaid two purchase orders and agreements thereon the respondent was required to furnish bank guar....
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....o have arisen at Jaipur (Rajasthan) and no Court other than the Court at Jaipur (Rajasthan) shall have jurisdiction to entertain or try the same." A clause, namely, Clause 7 was also incorporated in the bank guarantee which is with respect to the jurisdiction of Courts for adjudication of disputes arising under the bank guarantee. The said clause reads as under:- "All disputes arising in the said Bank Guarantee between the Bank and the Board or between the supplier or the Board pertaining to this guarantee shall be subject to the courts only at Jaipur in Rajasthan." 6. Somehow the disputes arose between the parties. The appellant alleged that the respondent has failed to perform his part of the contract inasmuch as the respondent has supplied defective transformer oil and as such on receipt of such supply, the same was rejected by the Board requiring the respondent to replace the same. Thereafter the appellant took steps for invocation of the bank guarantees in view of the fact that the respondent has failed to adhere to the aforesaid requirement and also neglected to replace the defective transformer oil. 7. The respondent being aggrieved by the actions taken by the appellant ....
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....ct. 12.According to the appellant, the Calcutta High Court would have no jurisdiction to entertain and decide the aforesaid petition under Section 20 of the Act and that it is only the Court at Jaipur which would have territorial jurisdiction to entertain and decide any such petition filed by any of the party, in view of the specific intention of the parties as disclosed from the stipulations in the purchase order and agreements entered into between the parties. 13.The learned counsel for the respondent, on the other hand submitted before us that the provision of Section 31 of the Act is clear and in terms thereof and in view of the specific prohibition therein any proceeding between the parties would have to be instituted within the jurisdiction of the Calcutta High Court and therefore the impugned judgment and order passed by the High Court of Calcutta is legal and valid. 14.In the light of the aforesaid submissions made by learned counsel for both the parties, we proceed to decide the issues as to whether or not the Calcutta High Court had territorial jurisdiction to entertain the petition filed by the respondent under Section 20 of the Act as also the application filed under....
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...., and in relation to, any proceedings before the Court: Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters. 15.There is no dispute with regard to the fact that the parties entered into various agreements which are referred to above. The said agreements admittedly also contained forum selection clauses between the parties whereby and whereunder the parties agreed that the said contracts and agreements, in relation to any dispute or difference would be subject to the jurisdiction of courts at Jaipur in Rajasthan. 16. Therefore, the issues which we are required to address here is whether the ouster clause in the agreement between the parties will also be applicable in ascertaining the competent court for making an application for reference under section 20 of the Act. As per Section 41 (1) of the act the provisions of the Code of Civil Procedure, 1908, (for short "the Code") shall apply to all proceedings before the Court, and to all appeals, under the Act. Section 20 of the Code, which is with respect to the jurisdiction of courts for institution of suit, rea....
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....exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed." 18. The said decision also referred to and relied upon an earlier decision of this Court in Hakam Singh v. M/s. Gammon (India) Ltd. [1971 (1) SCC 286]. The said decision was rendered in the light of facts of a similar contract where clause 12 of the tender provided for arbitration whereas clause 13 provided; "Notwithstanding the place where the work under this contract is to be executed, it is mutually understood and agreed by and between the parties hereto that this Contract shall be deemed to have been entered into by the parties concerned in the city of Bombay and the court of law in the city of Bombay alone shall have jurisdiction to adjudicate thereon." The question which fell for consideration of this Court in the said case was whether the Court at Bombay alone had jurisdiction over the dispute. In that context, it was held that the Code in its entirety applied to proceedings under the Arbitration Act by virtue of Section 41 of that Act and that the jurisdiction of the Cou....
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.... and decided through the process of arbitration and that no court other than the court at Jaipur shall have jurisdiction to entertain or try the same. In both the agreements in clause 30 of General Conditions of the Contract it was specifically mentioned that the contract shall for all purposes be construed according to the laws of India and subject to jurisdiction of only at Jaipur in Rajasthan Courts only and in addition in one of the purchase order the expression used was that the Court at Jaipur only would have jurisdiction to entertain or try the same. 22.In the light of the aforesaid facts of the present case, the ratio of all the aforesaid decisions which are referred to hereinbefore would squarely govern and apply to the present case also. There is indeed an ouster clause used in the aforesaid stipulations stating that the courts at Jaipur alone would have jurisdiction to try and decide the said proceedings which could be initiated for adjudication and deciding the disputes arising between the parties with or in relation to the aforesaid agreements through the process of arbitration. In other words, even though otherwise the Courts at Calcutta would have territorial jurisd....
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....iction over the dispute between the parties for adjudication. 25. Section 20 of the Code will apply in respect of deciding the issue with regard to territorial jurisdiction of a court in respect of a matter relating to arbitration also, for in Hakam Singh (supra), it was held that the jurisdiction of the court under the Act to entertain the proceeding for filing an Award was governed by the provisions of the Code. We also at this stage may appropriately refer to the definition of the word "Court" as appearing in Section 2(c) of the Act wherein the expression "Court" is defined to mean "a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but does not except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court." 26.Sub-section (3) precedes sub-Section (4) of Section 31 of the Act. The said sub-Section provides that all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the Award has been or may be filed and to no other court. Sub-Section (4) on the other hand ....