TaxTMI 
TaxTMI 
2007 (3) TMI 722
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.... time, the appellant was residing at Faridabad. Under the above agreement, the Developer agreed to construct a housing complex on a plot bearing No. G-13, Saket, New Delhi. Under the said Agreement, the Developer agreed to finance the construction from its own resources. Clauses 11, 20 and 21 of the said agreement read as follows: "11. In case of any dispute arising between the parties in this respect, the matter shall be referred to the Sole Arbitrator for his valuable decision and his decision shall be final and binding on both the parties. 20. That in case of any dispute arising between the parties in respect of these presents, the same shall be referred for arbitration to the sole Arbitrator. Shri Damodar Sharma, 5-N/35, NIT Faridabad shall be the sole Arbitrator and the decision shall be binding on both the parties. 21. The agreement has been entered into between the parties at Faridabad and the Faridabad Courts only shall have the jurisdiction in case of any dispute between the parties to the said agreement." In terms of the said agreement, when the dispute arose between the parties, the appellant herein requested for a reference to the named Arbitrator. This was ....
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....l court for adjudication of the dispute and, in the circumstances, the Arbitrator could not have made an ex parte Award dated 29.3.1994. According to the appellant, the said ex parte Award passed by the Arbitrator was in violation of the provisions of the Act; that it was non est, and, therefore, the same could not be made rule of the Court. The trial court on the basis of the above pleadings framed several issues. Two of the six issues were, whether Award dated 29.3.1994 was non est as the Arbitrator had become functus officio and whether the trial court had no territorial jurisdiction to entertain the matter since the suit lands are located in Saket, New Delhi. By impugned judgment dated 24.9.1996, the trial court held that in view of section 31(4) of the Act, since the land in question stood located in Saket, New Delhi and since the appellant herein is the resident of Delhi and since the Developer was carrying on business in Delhi the trial court had no territorial jurisdiction to pass the decree in terms of the Award. The trial court rejected the contention of the Developer that the subject matter of the reference was the contract between the parties; that under the contr....
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....ein had moved the Delhi High Court under section 20 of the Act in which the address of the appellant was shown as G-13, Saket, New Delhi. The trial court also look into account one more circumstance, namely, that the Developer had instituted Civil Suit No. 945/92 against the appellant herein. In that suit, the Developer had asked for a decree for permanent injunction. In that suit the appellant herein was the defendant. In that suit, the address of the appellant as defendant was also shown as G-13, Saket, New Delhi. In the circumstances, the trial court held that the Developer had invoked the territorial jurisdiction of the Delhi High Court much prior to his application under section 14 of the Act to the trial court herein on 12.4.1994. In the circumstances, the trial court held that the proviso to section 16 CPC was not applicable and that the application filed by the Developer under section 14 of the Act dated 12.4.1994 should have been instituted in the Delhi Court within the local limits of whose jurisdiction the suit property stood located. In the circumstances, it was held by the trial court that clause 21 of the agreement conferring jurisdiction to the Faridabad court cannot....
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....1. It was further urged on behalf of the Developer that it had instituted the above suit for permanent injunction in the Delhi High Court. That suit was Suit No. 945/92 for permanent injunction which was for a relief which had no correlation with the arbitration matter. Moreover, that suit was for permanent injunction. Such a suit could have been filed in Delhi courts alone as in that suit it was alleged that the appellant herein was attempting to interfere with the Developer's possession. Such a suit did not constitute a waiver. On behalf of the Developer, it was further urged that the trial court had erred in coming to the conclusion that Ex. P-1 cannot be given effect as the suit property was located at Saket, New Delhi and that the parties were residing at Delhi. On behalf of the appellant herein, it was sought to be argued before the High Court that although Ex. P-1 was executed at Faridabad and although at the relevant time the appellant resided in Faridabad, the dispute was in connection with recovery of possession and, therefore, the civil court at Faridabad had no jurisdiction to entertain, try and dispose of the Developer's application under section 14 of the A....
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.... ineffective and whether the appellant is right in his contention that the application made by the Developer under section 14 of the Act was not maintainable in the Faridabad court on the ground of lack of territorial jurisdiction. Mr. Sunil Gupta, learned senior counsel appearing on behalf of the appellant submitted that the Award made by the arbitrator dated 29.3.1994 being an ex parte Award was non est as it was passed after expiry of four months from the date when the arbitrator entered upon the reference. He contended that on 20.8.1992 the appellant had referred the dispute to the arbitrator. On 24.8.1992 the arbitrator entered upon the reference and fixed the date of hearing on 5.9.1992 on which date the appellant was present. On that date neither the arbitrator nor the Developer was present. On that date, the appellant herein sought the next date of hearing. Despite the telegram seeking the next date of hearing, the arbitrator did not respond. During the period October, 1992 and November, 1992 disputes arose when the MCD had issued notices directing the appellant herein to show cause why the building plan submitted by the Developer should not be revoked. Learned counsel p....
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....h Court being Writ Petition No. 5038/93 against the revocation by M.C.D.. On the first question on the lack of territorial jurisdiction, we do not find any merit in the contentions advanced on behalf of the appellant. We have examined Ex. P-1 between the appellant and the builder (Developer) dated 16.3.1990. The agreement describes the appellant as the owner. It describes M/s Chopra Land Development Pvt. Ltd. as the builder. Under the agreement, the appellant remains the owner. Under the agreement, the appellant applies to D.D.A. for time to construct a housing complex on a plot of land at Saket owned by the appellant. Under the agreement, the Developer agrees to construct a housing complex on the plot bearing No. G-13, Saket, New Delhi. Under the agreement, the entire construction cost is financed by the Developer. Under the agreement, the housing complex consisted of basement, ground floor, mezzanine first floor, second floor and third floor. Under the agreement, the Developer agreed to construct the housing complex without prejudice to the owner's right. Under the agreement, the owner was required to give permission to the builder to construct the housing complex. Under t....
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.... party agrees to develop certain property for a certain consideration. Under the agreement, the appellant herein continues to remain the owner. He has to apply for permission to construct the building to the D.D.A.. The Developer agrees to construct on the land. The Developer agrees to finance the entire construction cost and in lieu of the Developer's services in the matter of construction of housing complex the owner (appellant herein) agrees to permit transfer of the ownership a part of the complex to the Developer. It is for this reason, as indicated by the events enumerated above, that M.C.D. had issued notice to the appellant on 21.9.1992 to show cause why the building plan submitted should not be revoked. It is for the above reasons, that M.C.D. ultimately revoked the sanction for the construction of the housing complex on 18.5.1993 and it is the appellant herein as owner who had sought to challenge the revocation vide Writ Petition No. 5038/93. On the facts of this case, therefore, it cannot be said that the trial court at Faridabad had no jurisdiction to make the Award the rule of the court under section 14 of the Act. Section 31(1) of the Act provides that an Award ma....
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....as been filed or may be filed. Section 2(c) lays down the forum. The application has to be moved in the court within whose jurisdiction the opposite party resides or carries on business or within whose jurisdiction any part of the cause of action arises. Residence or carrying on business of a party, apart from the place of accrual of a cause of action is relevant for determining the territorial jurisdiction of the court in arbitration cases, if the question so arises in connection with the subject matter of the dispute. Applying the above tests to the facts of the present case, we are of the view that at the relevant time the appellant resided at Faridabad. He resided at Faridabad when the contract was made. Under the contract, the parties agreed to refer all disputes to the Faridabad court. Apart from the residence, we are also concerned with the place of accrual of the cause of action. In the present case, a bare reading of the agreement indicates that it is an agreement to develop. The appellant remains the owner, the Developer remains the contractor. The Developer is the financer. The appellant is the owner of an asset. The contractor/ Developer agrees to exploit that asset ....
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....n is important. This difference between section 8 and section 20 shows that the reference flows from an agreement between the parties in the cases falling under section 8. The reference flows from the agreement in cases falling under Chapter II of the Arbitration Act and as long as the agreement stands, the reference remains valid unless it is superseded by an order of the court under section 19. Under that section, where award becomes void under section 16(3) or where an award is set aside, the court may by an order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect. Therefore, till such time as the order is passed by the court under section 19 superseding the reference, the same shall remain valid till the agreement is superseded. This is the scope of section 8 read with section 19 of the Act. On the other hand, in cases falling under section 20 of the Act, power is conferred on the court to make an order of reference to the arbitrator. That power is conferred on the court which orders the agreement to be filed before it. In a proceeding under section 8, disputes are presented by the parties before the arbitrator. Whereas i....