TaxTMI 
TaxTMI 
2018 (8) TMI 1115
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and Participants) Regulation, 1996 Bye-Laws and Operating Instructions issued by CDSL from time to time in the same manner and to the same extent as if the same were set out herein and formed part of this Agreement." xxx xxx xxx "Arbitration 11. The parties hereto shall, in respect of all disputes and differences that may arise between them, abide by the provisions relating to arbitration and conciliation specified under the Bye-Laws." xxx xxx xxx "Jurisdiction 12. The parties hereto agree to submit to the exclusive jurisdiction of the courts in Mumbai in Maharashtra (India)." 4. Though the bye-laws referred to in the agreement are under the provisions of the Depositories Act, 1996, it is common ground that the arbitration proceeding took place under the National Stock Exchange byelaws. Under these bye-laws, Chapter VII speaks of dealings by trading members and grants exclusive jurisdiction to the civil courts in Mumbai in relation to disputes that arise under the bye-laws as follows: "CHAPTER VII DEALINGS BY TRADING MEMBERS. Jurisdiction. (1) (a) Any deal entered into through automated trading system....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ss-examine the witnesses who give depositions, it is necessary that the disputed questions of fact as regards existence of territorial jurisdiction of the courts at Delhi be decided by the court below after framing an issue to this effect and permitting the parties thereafter to lead evidence on the same. 5. I may hasten to add that I have not made any observations one way or the other, for or against any of the parties herein, on the aspect of territorial jurisdiction, and this issue of territorial jurisdiction will be decided by the courts below after parties have led evidence keeping in mind that if part of cause of action is proved to have arisen in Mumbai and there is an exclusivity clause conferring territorial jurisdiction of the Mumbai courts, then even if Delhi courts otherwise have jurisdiction, possibly the courts at Delhi would not exercise territorial jurisdiction. 6. Parties to appear before the District and Sessions Judge, East Karkardooma Courts, Delhi on 7th November, 2017 and the District and Sessions Judge will now mark the objections under Section 34 of the Arbitration and Conciliation Act to a competent court for disposal in accordance with law and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or...... xxx xxx xxx" 9. The effect of an exclusive jurisdiction clause was dealt with by this Court in several judgments, the most recent of which is the judgment contained in Indus Mobile Distribution Pvt. Ltd. (supra). In this case, the arbitration was to be conducted at Mumbai and was subject to the exclusive jurisdiction of courts of Mumbai only. Af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Line Del 3744] is set aside. The injunction confirmed by the impugned judgment will continue for a period of four weeks from the date of pronouncement of this judgment, so that the respondents may take necessary steps under Section 9 in the Mumbai Court. The appeals are disposed of accordingly." 10. Following this judgment, it is clear that once courts in Mumbai have exclusive jurisdiction thanks to the agreement dated 03.07.2008, read with the National Stock Exchange bye-laws, it is clear that it is the Mumbai courts and the Mumbai courts alone, before which a Section 34 application can be filed. The arbitration that was conducted at Delhi was only at a convenient venue earmarked by the National Stock Exchange, which is evident on a reading of bye-law 4(a)(iv) read with (xiv) contained in Chapter XI. 11. However, the matter does not rest here. The learned Single Judge went on to remand the matter for a full-dressed hearing on what he referred to as a 'disputed question of fact' relating to jurisdiction. 12. What is meant by the expression "furnishes proof" in Section 34(2) (a)? In an early Delhi High Court judgment, Sandeep Kumar v. Dr. Ashok Hans, (2004) 3 Arb LR 306 a l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt held: "14. In a summary proceeding, the respondent is given an opportunity to file his objections or written statement. Thereafter, the court will permit the parties to file affidavits in proof of their respective stands, and if necessary permit cross-examination by the other side, before hearing arguments. Framing of issues in such proceedings is not necessary. We hasten to add that when it is said issues are not necessary, it does not mean that evidence is not necessary." xxx xxx xxx "17. The scheme and provisions of the Act disclose two significant aspects relating to courts vis-à-vis arbitration. The first is that there should be minimal interference by courts in matters relating to arbitration. Second is the sense of urgency shown with reference to arbitration matters brought to court, requiring promptness in disposal. 18. Section 5 of the Act provides that notwithstanding anything contained in any other law for the time being in force, in matters governed by Part I of the Act, no judicial authority shall intervene except where so provided in the Act." xxx xxx xxx "21. We may therefore examine th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hile dealing with the objections under Section 34 of the Act is not bound to grant opportunities to the parties to lead evidence as in the regular civil suit. The jurisdiction of the Court being more akin to the appellate jurisdiction; (iii) The proceedings before the Court under Section 34 of the Act are summary in nature. Even if some questions of fact or mixed questions of law and/or facts are to be decided, the court while permitting the parties to furnish affidavits in evidence, can summon the witness for cross-examination, if desired by the other party. Such procedure is keeping in view the principles of natural justice, fair play and equity." 16. The Calcutta High Court in WEB Techniques and Net Solutions Pvt. Ltd. v. M/s. Gati Ltd. and Anr., 2012 SCC OnLine Cal 4271 [C.O. No. 1532 of 2010 (decided on 02.05.2012)] after referring to Fiza Developers (supra), held that oral evidence is not required under a Section 34 application when the record before the Arbitrator would show whether the petitioners had received notice relating to his appointment. 17. In Cochin Shipyard Ltd. v. Apeejay Shipping Ltd., (2015) 15 SCC 522, this Court, in a case arising out....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... xxx xxx xxx (5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. (6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party." 21. In a recent judgment of this Bench in The State of Bihar and Ors. v. Bihar Rajya Bhumi Vikas Bank Samiti, SLP (Civil) No. 4475 of 2017 (decided on 30.07.2018), this Court, after holding that the period of one year mentioned in the aforesaid sub-section is directory, went on to hold: "27. We are of the opinion that the view propounded by the High Courts of Bombay and Calcutta represents the correct state of the law. However, we may add that it shall be the endeavour of every Court in which a Section 34 application is filed, to stick to the time limit of one year from the date of service of notice to the opposite party by the applicant, or by the Court, as the case may be. In ....