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CASE NO.: Appeal (civil)  3773 of 2006

PETITIONER: Jindal Vijayanagar Steel (JSW Steel Ltd.)

RESPONDENT: Jindal Praxair Oxygen Company Ltd.

DATE OF JUDGMENT: 29/08/2006

BENCH: Dr. AR. Lakshmanan & Lokeshwar Singh Panta

JUDGMENT: J U D G M E N T (Arising out of SLP (C) No. 7078/2006)

Dr. AR. Lakshmanan, J.

       Leave granted.

The above appeal was filed by the appellant seeking  special leave to appeal against the final order dated  02.03.2006 passed by the High Court of Bombay in Arbitration  Petition No. 459 of 2004.  By the said order, the High Court,  according to the appellant, has wrongly assumed jurisdiction  to entertain petitions under Section 9 of the Arbitration and  Conciliation Act, 1996 (hereinafter referred to as ’the Act’)  despite holding that the entire cause of action has arisen  outside its territorial jurisdiction.  In other words, the appellant seek to impugn the  judgment dated 02.03.2006 whereby the High Court has held  that jurisdiction of the Court under the provisions of the  Arbitration Act may be assumed by a Court exercising  jurisdiction in a place where no part of the cause of action has  arisen, if the respondent being a Company has a Corporate  Office at the place where the Court is moved.   The facts leading to the filing of the above appeal are as  follows: The appellant was in the process of setting up an  integrated steel plant having the capacity of 1.25 million  tonnes of the manufacture of iron and steel in Bellary District,  Karnataka.  For its manufacturing operations, the appellant  required large quantities of industrial gases, namely, oxygen,  nitrogen and argon for such production.  To this end, the  appellant, in conjunction with M/s Praxair Pacific Limited  decided to enter into agreements to incorporate the  respondent-Company in Karnataka.  The respondent- Company was to set up an Air Separation Plant (ASP) in the  same complex in Bellary, Karnataka for the purpose of  supplying the appellant with the required quantities of  industrial gases.  The respondent-Company was incorporated in Bangalore  with a 50:50% share holding between the appellant and the  Praxair Pacific Limited, which was subsequently changed to  26:74%.  On 19.02.1996, Pipeline Supply Agreement (PSA)  was entered into between the appellant and the respondent at  Bangalore wherein the respondent would supply to the  appellant its requirement of industrial gases, namely, gaseous  oxygen, gaseous nitrogen and the gaseous argon.  Product  Supply Agreement was entered into between the respondent

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and Praxair India Private Limited (PIPL), a wholly-owned  subsidiary of Praxair Pacific Limited at Bangalore for supply of  liquid oxygen, nitrogen and argon to PIPL.  This agreement  was entered into on 01.06.1996.  As several disputes/issues of  technical and commercial nature in relation to the  implementation of the PSA and the performance of the ASPs  had arisen between the parties, the representatives of the  appellant, respondent, Praxair Pacific Limited, Praxair Inc. and  PIPL made in Singapore to resolve the issues.  On 23.06.2002, an agreement was arrived at between the  parties (Settlement Agreement).  The Settlement Agreement  was approved by the Board of Directors of both the parties in  Bangalore.  The interpretation of the obligations of parties  under various provisions of the Settlement Agreement  including the above provisions and the PSA is presently in  dispute in arbitration invoked by the respondent against the  appellant.  Accordingly, the respondent implemented those  provisions of the Settlement Agreement which were favourable  to it, whilst delaying the implementation of terms favourable to  the appellant.  As a result thereof in various issues/disputes  including all power norms, reimbursement of excise duty and  income-tax claims, maintenance of adequate quantities of  suppliable liquids in the storage tanks of the respondent etc.  arose between the parties.  To settle the disputes, the respondent invoked dispute  resolution process pursuant to Article 17 of the PSA by issuing  a notice from Bellary, Karnataka to the appellant in Bellary  Karnataka.  Article 17 of the Dispute Resolution reads as follows: "17.1.  In the event that a party to this Agreement has  reasonable grounds to believe that the other Party  hereto has failed to fulfill any obligations hereunder or,  that its expectation of receiving due performance under  this Agreement may be impaired, such Party will  promptly notify the other party in writing of the  substance of its belief.  The party receiving such notice  must respond in writing within thirty (30) days of  receipt of such notice and either provide evidence of  cure of the condition specified, or provide an  explanation of why is that its performance is in  accordance with the terms and conditions of this  Agreement, and also specify three (3) dates, all of which  must be within thirty (30) days from the date of its  response, for a meeting to resolve the dispute.  The  claiming party will then select one (1) of the three (3)  dates, and a dispute resolution meeting will be held at  the place specified by the responding party.  Each party  shall have the right to require that individuals  representing Buyer and Seller who have the authority to  execute this Agreement or amendments thereto, be in  attendance at the dispute resolution meeting.  If the  parties cannot, in good faith discussions, resolve their  dispute, they shall submit the dispute to arbitration in  the manner set forth below in Article 17.2

17.2    Any dispute, controversy, or claim arising out of or  relating to this Agreement, or the breach, termination,  non-performance, interpretation of the respective rights  and liabilities of the parties under the Agreement; or  invalidity thereof which cannot be fully and  satisfactorily resolved or settled by the parties hereto  pursuant to Section 17.1 shall, at the request of either  party, be submitted to, and be settled by arbitration,  which shall, except to the extent provided herein, be

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held in accordance with the Rules of the U.N.  Commission of International Trade Law (UNCITRAL)  ("Rules") in effect on the date of this Agreement except  as modified by this Article 17.2.  This Article 17.2 shall  supercede any Conflicting provision of the Rules.  

(i) The number of arbitrators shall be two (2), one (1)  each appointed by the respective parties.  The two  arbitrators shall within 30 days of the appointment of  the second arbitrator appoint an Umpire.  If the two  arbitrators are unable to agree upon the appointment of  the Umpire within the aforesaid period, then either  party may ask the Secretary General of the Permanent  Court of Arbitration at the Hague to appoint the Umpire.   The arbitrators and the Umpire shall have expertise in  the area of corporate law and shall be disinterested  persons of either Indian, English or United States  nationality except that the Umpire shall be of British or  Swiss nationality and shall have had no previous  dealing or relationship, direct or indirect, with either of  the parties.  The arbitration shall be conducted in  Bombay, India.  Any decision or resolution of the  dispute shall be based on Indian law (except that British  law shall apply to procedural matters such as appeals),  shall be a unanimous decision of the arbitrators or the  Umpire if the arbitrators cannot agree, and shall be set  forth in a reasoned written opinion, based on applicable  law, stating the reasons with legal basis for the decision.   The proceedings shall be conducted in English in  facilities, arranged for by the arbitrators and Umpire  held at such time, as the arbitrators and Umpire shall  direct.  

(ii) The arbitration proceeding shall be initiated by a  Party lending an arbitration demand to the other party.   The demand shall be sent in accordance with Article  17.2 of this Agreement.  The demand shall be sent to  the Party at the address and to the individual specified  in Article 17.2.

(iii) \005\005. (iv)\005\005 (v)\005\005." A meeting was held at Mumbai between the  representatives of the parties on 04.10.2004.  However, the  respondent filed a petition under Section 9 of the Act in the  Bombay High Court being Arbitration Petition No. 459 of 2004.   The respondent, on 14.10.2004, issued notice of arbitration  pursuant to Article 17.2 of the PSA.  The notice of arbitration  was issued by the respondent in Bellary, Karnataka and  served upon the appellant in Bellary and Bangalore,  Karnataka.  The appellant wrote a letter pointing out that  unilateral action threatened by the respondent was contrary to  the letter and spirit of the PSA read with the Settlement  Agreement, as the respondent was under the obligation to first  meet the product requirements of the appellant.  The  appellant, in view of the urgent need to protect its interests,  filed Arbitration Petition No. 9 of 2005 before the Principal  District Judge, Bellary on 06.02.2005 seeking appropriate  orders to restrain the respondent from breaching the PSA read  with the Settlement Agreement. On 07.02.2005, an interim  order was passed by the Principal District Judge, Bellary  restraining the respondent from insisting upon an artificial  ceiling of 40 TPD of LAR.  The respondent filed an I.A. No.4 in  the said arbitration petition under Section 151 of the CPC read

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with Section 42 of the Arbitration Act to dismiss the  arbitration petition filed by the appellant at Bellary.  On  05.03.2005, the Principal District Judge, Bellary dismissed  I.A. No. 4 in arbitration petition and held that as the entire  cause of action had arisen in Bellary, the Bellary Court had  jurisdiction to decide the matter.  An appeal was preferred by  the respondent against the order passed by the Principal  District Judge, High Court of Karnataka which allowed the  appeal filed by the respondent and directed that the issue of  jurisdiction would have to be decided by the Bombay High  Court in respondent’s Arbitration Petition No. 459 of 2004.  By  the impugned order dated 02.03.2006, the Bombay High  Court held that it had the jurisdiction to entertain Arbitration  Petition No. 459 of 2004.  Hence the present appeal. The High Court, in para 16 of its order, has held as  under:- "16.  Under the circumstances, by virtue of clause 12 of  the Letters Patent, this Court has jurisdiction to  entertain this Petition as the respondent is having  corporate office in Mumbai from where it was carrying  on its business.  Moreover, since during the pendency of  this petition the registered office of the respondent has  also been shifted to Mumbai, it is needless to say that  the respondent is carrying on business in Mumbai.   Therefore, this Court has jurisdiction to entertain the  petition.  I, therefore, reject the contention raised on  behalf of the respondent that this Court has no  jurisdiction to entertain the petition filed under Section  9 of the Arbitration  & Conciliation Act, 1996."  

We heard Mr. R.F. Nariman, learned senior counsel for  the appellant and Mr. C.A. Sundaram, learned senior counsel  for the respondent.  Mr. R.F. Nariman submitted that: a)      the High Court erred in rejecting the contention  of the appellant that the Bombay High Court had  no jurisdiction to entertain the petition filed by  the respondent in the Bombay High Court under  Section 9 of the Act;  b)      the High Court erred in holding that by virtue of  Clause 12 of the Letters Patent Act, the Bombay  High Court has jurisdiction to entertain the  petition filed by the respondent in the Bombay  High Court; c)      the High Court failed to appreciate that as per  Section 2(1)(e) of the Act, only a court having  jurisdiction to decide the questions forming the  subject-matter of the arbitration if the same had  been the subject-matter of a suit, would have  jurisdiction under the act; d)      the High Court failed to appreciate that being a  special enactment for arbitration, the provisions  of the Act would prevail over the provisions of the  Letters Patent when determining questions under  the Act, including questions as to jurisdiction; e)      the High Court ought to have appreciated that for  a court to exercise jurisdiction under section 9 of  the Act, the court must be a "Court" as defined  under Section 2(1)(e) of the Act and where the  cause of action has arisen; f)      the High Court, after observing in paragraph 7 of  the Impugned Order that no part of the cause of  action had arisen at Mumbai failed to appreciate  that it was only the Bellary Courts, which had  the jurisdiction to entertain disputes arising from  the PSA and the Settlement Agreement since the

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entire cause of action had arisen in Mumbai; g)      the High Court erred in ignoring the settled law  that it is the situs of cause of action and not the  place of business, which is the deciding factor in  determining jurisdiction under Section 2(1)(e) of  the Act; h)      the High Court failed to appreciate that the mere  venue of arbitration, and situs of the corporate  office of the respondent does not vest jurisdiction  in a court under Section 2(1)(e) of the Act.  It is also contended that the judgment of this Court in  Food Corporation of India vs. Evdomen Corporation,  (1999) 2 SCC 446 is per incuriam.  It is the contention of Mr. Nariman that the High Court  has failed to notice and appreciate that the cause of action as  set out hereunder arose in Bellary: a)      the disputes raised by both the parties emanate  from the maintenance of product levels  stored/supplied from the plants of both the  parties, which are situated in Bellary, Karnataka; b)      at the relevant time, the registered office of the  appellant was situated in Bellary, Karnataka; c)      the registered office of the respondent is situated  in Bellary, Karnataka; d)      the action threatened by the respondent to limit  the supply of Liquid Argon ("LAR") up to 40  Tonnes per day ("TPD") was proposed to be made  in Bellary, Karnataka; e)      the consequences of such actions would also  have an effect on the plant of the appellant and  the ancillary units in the same situated in  Bellary; f)      the entire chain of events leading to the  unilateral threat issued by the respondent to  restrict the supply of Liquid Argon occurred in  Bellary.  The High Court also is not correct in holding that since  during the pendency of the petition filed by the respondent  before it, the Registered Office of the appellant had shifted to  Mumbai, the appellant was carrying on business in Mumbai,  and that this would vest jurisdiction in the Bombay High  Court under Section 9 of the Act, in relation to disputes which  had arisen prior to the shifting of the Registered Office.   According to learned senior counsel, the subsequent  events do not retrospectively confer jurisdiction upon Courts  to entertain pending cases, where there was no jurisdiction to  entertain them at inception and that the sole intention of the  respondent in filing a petition under Section 9 of the Act before  the Bombay High Court was to oust the jurisdiction of the  competent Court under Section 2(1)(e) of the Act and that the  High Court by claiming jurisdiction rendered the petition filed  in the Bellary Court by the appellant nugatory and ineffective.  Mr. Nariman also submitted that the test under Section  2(e) of the Act applies uniformly across India and that the  principle in the explanation to Section 20 CPC should be  applied to Clause 20 of the Bombay Letters Patent.   Concluding his argument, Mr. Nariman submitted that the  High Court in passing the impugned order has mis-interpreted  the provisions of the Act and Clause 12 of the Letters Patent  and the net effect of the impugned order is that it renders  nugatory the competency of the Courts having jurisdiction  where admittedly the entire cause of action has arisen.   Further it affords jurisdiction to courts on the basis of an  enactment, namely, the Letters Patent which would not apply  since in arbitration matters, jurisdiction must be solely

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determined by Section 2(1)(e) of the Act.  Mr. C.A. Sundaram, learned senior counsel appearing for  the respondent submitted that an order holding that the Court  has no jurisdiction to entertain, try and dispose off an  arbitration petition under Section 9 of the Act would  necessarily imply or entail a refusal to grant relief under  Section 9 of the Act and that such an order would, therefore,  be an order under Section 9 of the Act and would, therefore,  be appealable.  In other words, where a Court holds that it has  jurisdiction to entertain, try and dispose off a petition under  Section 9 of the Act, such determination of an issue would be  one in aid of determination of an issue under Section 9 and  would, therefore, also be a decision under Section 9 of the Act.  It is, therefore, submitted that an order on the issue of  jurisdiction to entertain, try and dispose off an arbitration  petition under Section 9 of the Act is clearly an appealable  order under Section 37(1)(a) of the Act.  Since the matter was argued on merits, we do not  propose to consider the submission on the maintainability of  the appeal in this Court and we proceed to consider the rival  claims on merits as advanced by the respective senior counsel  appearing on either side.  According to Mr. Sundaram, the Bombay High Court has  jurisdiction to entertain, try and dispose off the said  arbitration petition for the following reasons: a)      The High Court of Bombay is a Chartered Court  under the Letters Patent; b)      Clause XII of Letters Patent prescribes the  jurisdiction of a Chartered Court; Clause XII of the Letters Patent reads as under:- "Original jurisdictions as to suits.- And We do further  ordain that the said High Court of Judicature at  Bombay, in the exercise of its ordinary original civil  jurisdiction, shall be empowered to receive, try, and  determine suits of every description, if, in the case of  suits for land or other immovable property such land or  property shall be situated, or in all other cases if the  cause of action shall have arisen, either wholly, or, in  case the leave of the Court shall have been first  obtained, in part, within the local limits of the ordinary  original jurisdiction of the said High Court or if the  defendant at the time of the commencement of the suit  shall dwell or carry on business, or personally work for  gain, within such limits; except that the said High Court  shall not have such original jurisdiction in cases falling  within the jurisdiction of the Small Cause Court at  Bombay, or the Bombay City Civil Court."

According to learned senior counsel, the Bombay High  Court would have jurisdiction under Clause XII of the Letters  Patent; if a defendant dwells or carries on business or works  for gain within the limits of Mumbai.  Where the cause of  action has accrued wholly or in part within or without the  limits of the said jurisdiction is wholly irrelevant in the  circumstances.  Explaining further, Mr. Sundaram submitted  that, in the present case, at the time of filing of Section 9  petition, the appellant had its Corporate Office at Mumbai and  was, therefore, carrying on business within the local limits of  the Oridinary Original Jurisdiction of the Bombay High Court.   During the pendency of the said Section 9 petition, the  Registered Office of the appellant was transferred to Mumbai.   At the time when the issue of jurisdiction was argued before  the learned Single Judge, the Registered Office of the appellant  had already been transferred to and was situated in Mumbai  within the local limits of the Ordinary Original Jurisdiction of

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the Bombay High Court.  It is submitted that by Section 120 of the CPC, various  sections of the Code including Section 20 thereof, are made  inapplicable to Chartered High Courts like the Bombay High  Court.  Therefore, it is submitted that for determining the  question of jurisdiction of the Bombay High Court as a  Chartered Court, the provisions of Section 20 of the CPC are  inapplicable and that only the provisions of Clause XII of the  Letters Patent are applicable.  Mr. Sundaram submitted  further that the jurisdiction of a Court under Section 2(1)(e) of  the 1996 Act is not in any manner restricted to the situs of the  cause of action and that it is inconceivable that the legislature  could have intended to restrict or circumscribe the scope and  ambit of the jurisdiction of the Court under Section 2 (i) (e) of  the 1996 Act and make it inferior to the jurisdiction of the  Court prescribed under the Code of CPC or Letters Patent. We have given our careful consideration to the rival  submissions made by the learned senior counsel appearing for  the parties.  We shall now consider the arguments advanced  by both the learned senior counsel. This case deals with the original civil jurisdiction of the  Bombay High Court which is governed by its Letters Patent.   Clause XII whereof founds its jurisdiction.  By virtue of Section  120 CPC Sections 16, 17 and 20 CPC are expressly made  inapplicable to the Bombay High Court.  Mr. Nariman  submitted that the Division Bench decision of this Court in  Food Corporation of India vs. Evdomen Corporation,  (supra) has, without reference to the squarely applicable and  binding precedent in the Patel Roadways Limited, Bombay  vs. Prasad Trading Company, (1991) 4 SCC 270, wrongly  held that despite the disjunctive term ’or’ used in the  explanation to Section 20 CPC, a Corporation would be  deemed to be carrying on business at its principal office and  also at the subordinate office situated at the place  in which  the cause of action arose.  He submitted that the said Division  Bench decision is per incuriam the decision of this Court in  Patel Roadways Limited case (supra) and, therefore, cannot  be said to have laid down the correct law in this regard.  He  would further submit that the Division Bench of this Court in  Food Corporation of India case (supra) also erred in failing to  consider the crucial question of whether the provisions of  Letters Patent should be interpreted in the light of the  principles enshrined in the pari materia provisions of the CPC.   He would further submit that a three-Judge Bench of this  Court in the case of Patel Roadways Limited case (supra)  held that the explanation to Section 20 is purely clarificatory  and does not extend the principle enunciated in Section 20.   Further, it has held that in view of the term ’or’ used in the  explanation to Section 20 CPC a Corporation would be deemed  to be carrying on business only at the place at which the  cause of action arose, provided that it had a subordinate office  at that place, failing which, it would be deemed to be carrying  on business only at the place at which it maintained its  principal office.  It is, therefore, submitted that the same  principle in Section 20 including the clarification made by the  explanation, should be read in Clause 12 of the Letters Patent.  In our opinion, no good reason has been made out in  reconsideration of the judgment in Food Corporation of India  case (supra).  The reasons are as under: In our view, a judgment of this Court will not be  reconsidered unless a subsequent Bench believes it has laid  down wrong principles of law by ignoring a provision of law or  otherwise not following a direct binding precedent.  In the  instant case, this Court in Food Corporation of India case  (supra) followed the provision of law i.e. Clause 12 of Letters

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Patent and Section 120 CPC which itself made the provisions \026  Section 16, 17 and 20 CPC inapplicable.  The judgment of this  Court will not be referred for reconsideration by a subsequent  coordinate Bench merely because the subsequent Bench may  have arrived at a different conclusion had there not been an  earlier judgment.  That law is the principle of stare decisis  adopted and followed in the Indian Courts.  None of the  conditions necessary for reconsidering an earlier direct  precedent has arisen in the instant case.  Hence, the  submission made by Mr. Nariman in this context has no force.  

JURISDICTION OF THE COURT:         Mr. Nariman submitted that the test under Section 2(e) of  the Act applies uniformly across India.  The Arbitration and  Conciliation Act, 1996 is the Central Act and lays down a  single, uniform law in respect of arbitration and conciliation  for the whole of India and, therefore, submitted that it must be  read to lay down principles that apply uniformly across the  country.          It is submitted that Section 2(e) of the 1996 Act defines  the term ’court’ and in doing so, it lays down the test to  determine which the court has the jurisdiction to supplement  and complement arbitration proceedings.  It is submitted that  Section 2(e) must be read to lay down one uniform test to  determine the ’court’ of competent jurisdiction for application  across the country, regardless of whether the principal Civil  Court of ordinary jurisdiction referred to in the said test is a  High Court or a District Court.           In our view, an arbitration petition is required to be filed  in a Court having jurisdiction.  The definition of the "Court"  under the 1996 Act is as follows:- "Sec.2(e): "Court" means the principal Civil Court of  original jurisdiction in a district, and includes the High  Court in exercise of its original civil jurisdiction, having  jurisdiction to decide the questions forming the  subject-matter of the arbitration if the same had been  the subject-matter of a suit, but does not include any  Civil Court of a grade inferior to such principal Civil  Court, or any Court Of Small Causes;"                                                                     (emphasis supplied)

"Court" has been defined in the Arbitration Act, 1940 as  follows:- "Sec. 2(c): "Court" means 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 includes a Small Cause  Court;"

The definition of "Court" in the two sections are,  therefore, pari materia except that under the 1996 Act, the  definition restricts Subordinate Courts competent to hear such  matters to the Principal Civil Court and expressly includes  High Courts in exercise of their original civil jurisdiction.  On a plain reading of the definition of "Court" under  section 2(e) of the 1996 Act, it is evident that the Arbitration  Petition can be filed before:- (i)     a principal Civil Court of original jurisdiction in   district.  (ii)    a High Court in exercise of its original civil  jurisdiction\005\005having jurisdiction to decide the  questions forming the subject matter of the  arbitration if the same had been the subject  matter of a suit.

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For the purpose of the present Petition under Section 9 of  the 1996 Act, we are concerned with the jurisdiction of the  Bombay High Court which is a Chartered High Court under  the Letters Patent exercising Original Civil Jurisdiction. It is  relevant that there are only three Chartered High Courts in  India which exercise jurisdiction under their respective Letters  Patent which continue to apply in full force and effect which  Letters Patent are inter alia protected by Article 225 of the  Constitution. Mr. Nariman submitted that the principle in the  explanation to Section 20 CPC should be applied to Clause 12  of the Bombay Letters Patent.  It is submitted that although  admittedly, Section 20 of the CPC does not, in terms, apply to  the High Court in exercise of its original civil jurisdiction, it is  settled law that the principles of the CPC should nevertheless  be applied, as far as possible, to proceedings of a civil nature,  even where the application of the CPC has been barred.  This  Court has, in the case of Sarguja Transport Service vs.  State Transport Appellate Tribunal, M.P. Gwalior & Ors.,  (1987) 1 SCC 5, held that principles from the CPC can and  should be applied even to writ proceedings, despite the fact  that the explanation to Section 141 of the CPC, expressly  states that the stipulation in Section 141 that the procedure  provided in the CPC shall be followed, as far as it can be made  applicable, in all proceedings in any Court of civil jurisdiction,  does not apply to proceedings under Article 226 of the  Constitution.  It is submitted that Clause 12 of the Bombay Letters  Patent is in pari materia with Section 20 of the CPC.  Both  provisions deal with the jurisdiction of a court of ordinary  original civil jurisdiction, and they set out similar tests for the  determination of where a suit may be filed.  Clause 12 of the Letters Patent states that a suit may be  filed in either the Madras, Calcutta or Bombay High Court in  the following circumstances: "\005 if the cause of action shall have arisen, either wholly,  or, in case the leave of the Court shall have been first  obtained, in part, within the local limits of the ordinary  original jurisdiction of the said High Court, or if the  defendant at the time of the commencement of the suit  shall dwell or carry on business or personally work for  gain, within such limits".  It may thus be noted that Section 20 of the CPC and  Clause 12 of the Letters Patent lay down the same test for  determining the court of appropriate jurisdiction in which to  proceed against a non-corporate defendant.  It is submitted  that in the absence of any reason to believe that there was any  intention to apply different tests in the CPC and the Letters  Patent to determine the appropriate forum to sue a corporate  defendant, it cannot be said that the two statutes provide  different tests, and that the principles in one cannot be used  to interpret the principle in the other.  The above argument was countered by Mr. C.A.  Sundaram under Section 120 of CPC, 1908.  The provisions of  Sections 16, 17 and 20 of the Code of CPC are inapplicable to  Chartered High Courts exercising Original Civil Jurisdiction  under the Letters Patent.  Section 120 reads as follows:  "Section 120"- Provisions not applicable to High Court  in original civil jurisdiction- (1) The following provisions  shall not apply to the high Court in the exercise of its  original civil jurisdiction, namely, section 16, 17 and  20."

Thus for the purpose of determining the Original Civil  Jurisdiction of the Bombay High Court, Section 20 of the CPC

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1908 has been specifically excluded and has no application.  Only the provisions of clause 12 of the Letters Patent are  required to be considered to determine the jurisdiction of the  Hon’ble Bombay High Court. Under Clause 12 of the Letters Patent, the Bombay High  Court would have jurisdiction to entertain and try an  Arbitration Petition even if no cause of action has arisen  within its jurisdiction, provided the Respondent has an office  at Mumbai. This Court in Food Corporation case while considering  the definition of "Court" under section 2(c) of the 1940 Act has  held that:  (i)     jurisdiction of a Chartered High court is to be  determined by clause 12 of the Letters Patent.  (ii)    by virtue of the section 120 of the CPC, 1908, the  provisions of section 20 of the CPC do not apply to  Chartered High Courts (such as Bombay) exercising  original civil jurisdiction.  (iii)   that under clause 12  of the Letters Patent, the  Bombay High Court would have jurisdiction over  the subject matter of arbitration if the Respondent  has an office in Mumbai, regardless of the fact that  no cause of action may have arisen at Mumbai. By such judgment this Hon’ble Court merely expressed  the law as it stands and as is ex facie clear from the applicable  Statutes/provisions of law. The appellant, in the present case, concedes that by  virtue of the judgment of Food Corporation of India case  (supra), the Bombay High Court would have jurisdiction to  entertain and try the Section 9 petition.  However, the  appellant contends the judgment in the Food Corporation of  India case is per incuriam requiring reconsideration and  should be referred to a larger Bench of this Court since it  failed to consider the judgment of this Court in the case of  Patel Roadways Limited (supra). This Court in Patel Roadways Limited case held: (i)     an action can be filed in a Court where a  subordinate office of the Defendant is situated if a  part of the cause of action has arisen thereat.  (ii)    no action would lie in a court within whose  jurisdiction the principal office of the Defendant is  situated if no cause of action has arisen thereat. Section 20 CPC reads as under: "20. Other suits to be instituted where defendants  reside or cause of action arises- Subject to the  limitations aforesaid, every suit shall be instituted  in a court within the local limits of whose  jurisdiction-  

(a) the defendant, or each of the defendants where  there are more than one, at the time of the  commencement of the suit, actually and voluntarily  resides, or carries on business, or personally works  for gain; or  

(b) any of the defendants, where there are more  than one, at the time of the commencement of the  suit, actually and voluntarily resides, or carries on  business or personally works for gain, provided  that in such case either the leave of the Court is  given, or the defendants who do not reside, or  carry on business, or personally work for gain, as  aforesaid, acquiesce in such institution; or  

(c) the cause of action, wholly or in part, arises

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Explanation- A corporation shall be deemed to  carry on business at its sole or principal office in  India or, in respect of any place where it has also a  subordinate office, at such place."

It is ex facie clear from the section that a suit can be filed  where a part of the cause of action arises or where the  principal office is located meaning thereby that what their  Lordships in the Patel Roadways case held that was that a suit  can be filed where a subordinate office is situate if a part of  the cause of action arises or otherwise only where the  principal office is situate. In Food Corporation case, this court pointed out that as  per section 20 (and a mere perusal of such section would show  this is so) a suit can be filed where the cause of action arises  or where the principal office is situate. In any event, it is  submitted that such observation was merely obiter in seeing  out what section 20 CPC stated and formed no part of the  judgment and ratio decidendi, since this court then proceeded  to hold that section 20 had no application to the Bombay High  Court by virtue of section 120 CPC (which was never a matter  in issue in the Patel Roadways case) but was the only matter  in issue in the Food Corporation case and proceeded to  consider the jurisdiction of the Bombay High Court under  clause 12 of its Letters Patent. While doing so, an  interpretation of section 20 CPC became totally unnecessary  for arriving at its decision in the Food Corporation case and in  fact was not applied at all. There is therefore, no question of  this court in the Food Corporation of India case failing to  consider whether the provisions of the Letter Patent should be  interpreted in light of the principles of the CPC. The only ground on which the appellant seeks  reconsideration of the Food Corporation case is that as per the  appellant the interpretation of Section 20 of CPC in the Food  Corporation case (supra) is erroneous and contrary to the  judgment of the Supreme Court in the Patel Roadways case  (supra) in that it erroneously interprets the explanation to  section 20of the CPC, 1908. As stated above, even assuming  without admitting that the appellant is correct, the said  statement of the Food Corporation case was purely obiter qua  the issue to be decided and the reason behind it therein and  can never be the basis for a subsequent Bench to refer the  same for reconsideration. Furthermore, the appellant loses sight of the fact that the  judgment in the Patel Roadways case is clearly distinguishable  on facts since in that case this Court was dealing with the  jurisdiction of the 3rd Assistant City Civil Judge, Chennai who  was governed by the CPC and the section 20 therefore and not  by the Letters Patent. It is for this reason that in the Patel  Roadways case the Court was only concerned with section 20  CPC and was in no way concerned with the Letters Patent  jurisdiction. In fact, nowhere in the Patel Roadways judgment  is there a whisper on the scope of either the Letters Patent  jurisdiction of the High Court or section 120 CPC which will  clearly distinguish the Patel Roadways case both on facts and  law from the instant case or the Food Corporation case  decided by this Court. The appellant has also urged that: (i) even if section 20 of the CPC, 1908 is not applicable to  the Bombay High Court, the principles of the section and  in particular explanation to section 20 would be attracted  when corporations are being sued and relies on the  judgment of this Court in Sarguja Transport case  (supra) where the Supreme Court held that even though

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section 141 of the CPC, 1908 did not apply to writ  petitions, the principles would be applicable. (ii) that a "Uniformity Rule" on jurisdiction should be  applied to all courts in the country since the 1996 Act is  a central Statute. In our opinion, the argument of Mr. Nariman that the  principles of Section 20 of the Code can be applied to Letters  Patent has no substance and merit.   The principles of Section 20 cannot be made applicable to  clause 12 of the Letters Patent since the CPC itself by section  120 specifically excludes the applicability of Section 20 of the  CPC to Chartered High Courts. It is submitted that when the  CPC itself provides that Section 20 is specifically excluded, the  principles of Section 20 cannot be made applicable or be  attracted when a corporation is being sued under the Letters  Patent. The judgment of this Court in Sarguja Transport case  (1987) 1 SCC 5 cannot apply for the following reasons:- (i)     the principles of CPC were made applicable to Writ  Petitions on the premise that these would not be  contrary to the provisions of Article 226. (ii)    If the appellant’s argument is accepted it would  render section 120 of the CPC nugatory and otiose  since section 120 expressly refers to three sections  (i.e. sections 16, 17 and 20) and makes them  inapplicable. (iii)   The Letters Patent, is a special charter conferring  jurisdiction on Chartered High Courts. When there  is a special enactment such as the Letters Patent,  which expressly lays down the criteria on the  jurisdiction of the Chartered High Court, it is totally  unnecessary and in fact futile to refer to another  legislation such as the CPC (which is not applicable)  to determine the jurisdiction of the Chartered High  Court. (iv)    The facts in the Sarguja Transport Case (supra)  were entirely different since there was no  corresponding legislation which laid down the  territorial of the Court exercising Writ Jurisdiction. Thus the judgment of this Court in Sarguja transport  case cannot be applied in the facts of the present case. Our attention was drawn to the decision of a Constitution  Bench of this Court in the case of P.S. Sathappan (dead) by  LRs. Vs. Andhra Bank Ltd. and Others, (2004) 11 SCC 672  in para 32 this Court has held has follows:- "\005. To submit that a Letters Patent is a subordinate piece of  legislation is to not understand the true nature of a Letters  Patent. As has been held in Vinita Khanolkar case and  Sharda Devi case a Letters Patent is the Charter of the High  Court. As held in Shah Babulal Khimji case a Letters Patent  is the specific law under which a High Court derives its  powers. It is not any subordinate piece of legislation. As set  out in the aforementioned two cases a Letters Patent cannot  be excluded by implication. Further it is settled law that  between a special law and a general law the special all will  always prevail.  A Letters Patent is a special law for the  High Court concerned.  The Civil Procedure code is a general  law applicable to all courts.  It is well settled law, that in the  event of a conflict between a special law and a general law,  the special law must always prevail."

Thus neither of the CPC nor its principles can be made  applicable to the Letters Patent qua sections 16,17 and 20 of  CPC. It is therefore not only impermissible but also  unnecessary to apply the CPC or import the principles of  section 20 of the CPC into the Letters Patent more so when the

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court has already held in the FCI case that the jurisdiction of  the Civil Court under section 20 of CPC is different from the  jurisdiction of the High Court under clause 12 of Letters  Patent. The appellant has urged that P.S. Satthappan’s case will  apply only in case there is a conflict between the Letters  Patent and the CPC and that there is no conflict. Such a  submission, in our view, is clearly fallacious for the following  reasons: (i)     the Letters Patent  and CPC operate in separate  fields i.e. The Letters Patent specifically conferring  jurisdiction on Chartered High Courts and the CPC  conferring jurisdiction on all other courts. (ii)    There is clearly a difference between the scope of  the Letters Patent and the CPC. The difference being  evident upon a plain reading of section 120 of the  CPC. Mr. Nariman, in reply to the above submission of Mr.  Sundaram, contended that the above decision supports the  appellant’s stand, since there is no conflict whatsoever  between relevant provisions of the Letters Patent and the CPC  in the instant case.  It is submitted that clause 12 of Letters  Patent and Section 20 of CPC are in pari materia and sets out  similar test for the determination of where a suit may be filed  and that the appellant is merely seeking to apply the  additional clarificatory principle relating to corporate  defendants stated in Section 20 of CPC to Clause 12 of the  Letters Patent.  It is, therefore, submitted that the decision of  this Court in P.S. Sathappan case (supra) does not detract  from the appellant’s contention but in fact supports its  contention.  UNIFORMITY RULE:          There is no question of uniformity rules applying since  section 2(e) of the 1996 Act expressly recognizes that not only  district courts but also High Courts exercising original civil  jurisdiction would have jurisdiction under the 1996 Act. The  Act thus recognizes that Chartered High Courts exercising  Original Civil Jurisdiction would exercise jurisdiction. It is  submitted that apart from the 3 Chartered High Courts who  are governed by the Letters Patent only two other High Courts  in the country (Delhi and Jammu & Kashmir under their  respective High Courts Acts) exercise original civil jurisdiction.  This issue is therefore not question of all India application as  it does not affect jurisdiction of most High Courts. There is  therefore no question of a "uniformity rule" being required to  be applied. There cannot be a rule of uniformity applied  between unlikes. The appellant seeks to apply such uniformity  rule between the subordinate Courts (governed by the CPC)  and the High Courts (governed by the Letters Patent).  The appellant further cited: (i)     Globe Cogeneration Power Ltd vs. Sri. Hiranyakeshi  (AIR 2005 Karn 94 (Karnataka High Court) (ii)    Kamal Pushp Enterprises vs. Chairman Cum  Managing Director, Gas Authority of India Ltd.,  (Vol.31 DRJ 651) (Delhi High Court). for the proposition that the jurisdiction of the Court is  not to be determined on the basis of the residence of the  respondent but only on the basis of where the subject  matter of arbitration is situated. In our view, neither of the two judgments above are  applicable and in any event can be distinguished for the  following reasons:- (a)     (i)     The judgment of the Karnataka High Court in the  Globe Congeneration case(supra) was one where the  litigant had initiated the proceedings in the City Civil

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Court (exercising jurisdiction under section 16(d) of the  CPC, 1908) which is admittedly not a Chartered High  Court Exercising jurisdiction under the Letters Patent.  The city Civil Court was following 16(d) of CPC. (ii)    Further the Karnataka High Court was dealing with  a case under section 16(d) of the CPC dealing with  disputes relating to immovable property. It is well settled  that an action can be instituted only in a Court where the  immovable property is situated. Thus clause 12 of the  Letters Patent never arose for consideration. (b)     (i) The judgment of the Delhi High Court in the Kamal  Pushp Enterprise case (supra) was one where the Delhi  High Court was interpreting section 20 of the CPC and  not clause 12 of the Letters Patent. That this was clearly  the case is made evident from the fact that the learned  judge (Hon’ble Justice Lahoti as he then was) who  rendered this judgment was a party to the Bench of this  Court in the FCI case which was concerned with clause  12 of the Letters Patent and applies with full force in this  case. (c)     the interpretation of the key words "the questions  forming" the subject matter have been completely  overlooked and/or not given effect to by the Karnataka  High Court and the Delhi High Court. The respondent  submits that the subject matter of arbitration may be  situated anywhere but a Chartered High Court would  nonetheless have jurisdiction to decide "the questions"  forming subject matter of arbitration if the requirements  of clause 12 of the Letters Patent are satisfied. (d)     This Court in the FCI case which arose while interpreting  section 2(c) of the Arbitration Act (which is in pari  materia with section 2(e) of the 1996 Act) qua clause 12  of the Letters Patent has held that Bombay High Court  would have jurisdiction under clause 12 of the Letters  Patent if the respondent has an office in Mumbai even if  no part of the cause of action has arisen thereat. The appellant also relied upon the judgment of the High  Court in Dayanand Prasad Sinha vs. Hindustan Steel  works Construction Ltd. (AIR 2001 CAL 71) to contend that  where there is a conflict between the place of residence and of  carrying business and the place where the cause of action has  arisen, the Court must apply the test of forum conveniens and  accept the place in respect of the cause of action as having  overriding value over the place of residence and business. It is submitted that under domestic law i.e. CPC or  Letters Patent as the case may be, a plaintiff has the option of  instituting proceedings in any of the courts which would have  jurisdiction, the test of forum non convenience cannot be  applied under Domestic Law and if applied would wrongfully  restrict or negate the amplitude of the provisions of CPC and  of the Letters Patent. The view of the Calcutta High Court is  clearly erroneous in the light of the observation of this Court  in the case of "Khaleel Ahnmed vs. Hatti Gold Mines Co.  Ltd. (2000) 3 SCC 755 where this court has observed that " It  cannot always be said in view of section 20 of the Code, that  only one Court will have jurisdiction to try the suit". The said  judgment of the Calcutta High Court is therefore erroneous  and cannot and ought not to be relied upon. In any event the  rule of Forum Conveniens is expressly excluded by section 42  of the Arbitration Act, 1996 which mandates that all future  actions be filed only in the court where the first application  with regard to a arbitration was filed. CAUSE OF ACTION:  Mr. Nariman, learned senior counsel submitted that the  Bombay High Court has correctly come to the conclusion that

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no cause of action in relation to the present dispute has arisen  in Bombay and that this finding has been recorded at 3  separate places in the impugned judgment and has not been  challenged by the respondent.  It is submitted that the  Registered Offices of both the appellant and the respondent  were situated in Bellary District at all relevant times.  Further,  the plants of both the appellant and the respondent are  situated in Bellary, the concerned products are supplied and  payment in respect of them is made at Bellary, the alleged  actions of the respondent took place at Bellary and the  consequences allegedly emanating from these actions would  be borne in Bellary.  Finally, the correspondence in relation to  the threatened action also took place at Bellary.   Mr. Nariman further submitted that as per the decision  of this Court in Patel Roadways Limited, under Section 20, the  place of business of a Corporation, for the purposes of the  institution of a suit against it, would be the place at which the  cause of action arose, if a subordinate office of the Corporation  was located at that place, or failing which, the place of the  principal office of the Corporation.  Therefore, he submitted  that in the Patel Roadways judgment, it was held that the  words ’place of business’ used in Section 20(a) of the CPC  would, in relation to a Corporation, refer exclusively to the  place at which the cause of action arose, if a subordinate office  of the Corporation was also situated there.  In such  circumstance, no suit can be initiated in the court with  jurisdiction over the principal office of the corporation under  Section 20(a).  It is only in cases where there is no subordinate  office at the place at which the cause of action arose, that a  suit may be instituted under Section 20(a) in the court with  jurisdiction over the principal office of the corporation.   Conversely, no suit may be instituted under Section 20(a) in  the court with jurisdiction over the subordinate office unless  the cause of action has also arisen within the same  jurisdiction.  It is further urged that the contrary dicta of the Division  Bench of this Court in the case of Food Corporation of India  (supra) is per incurium the dicta in the Patel Roadways (supra)  and further, it is erroneous in that it fails to consider the  crucial question of whether the provisions of the Letters Patent  should be interpreted in light of the principles enshrined in  the pari materia provisions of the CPC.  Therefore, it is  submitted that the Food Corporation of India case (supra)  ought not to be relied upon as a precedent.  It is submitted that the principles governing Section 20 of  the CPC as well as Clause 12 of the Letters Patent clearly  direct that a suit may not be instituted at the situs of the  subordinate office unless the cause of action also arose at  such place.  It is, therefore, submitted that the Bombay High Court  would not have had the jurisdiction to entertain the  respondent’s petition under Section 9 of the Act, 1996 had  Section 20 of the CPC applied to it.  Since Clause 12 of the  Letters Patent incorporates and is based upon principles  identical to those enshrined in Section 20 of the CPC, it is  submitted that the Bombay High Court erred in holding that it  had jurisdiction to entertain the said petition under Clause 12  of the Letters Patent.  It is submitted that, since admittedly the  entire cause of action in relation to the disputes between the  parties had arisen in Bellary District, Karnataka, and since  admittedly at the time of the institution of the Section 9  Petition filed by both parties, the registered and principal  offices of the parties were at Bellary, the only court with  jurisdiction to entertain the said petitions was the appropriate  court with jurisdiction at Bellary.

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We considered the above argument of Mr. Nariman.  Our  answer to the above argument is as under:- Though the Bombay High Court has in the impugned  order dated 2.3.2006 observed that no part of the cause of  action has arisen at Mumbai, it is submitted that the cause of  action against the respondents has in fact arisen within the  Ordinary Original Jurisdiction of the Bombay High Court for  the following reasons: It may be noted that the following sub  paragraphs below have been noted by the Bombay High Court  in impugned order dated 2.3.2006.  (a)     The parties themselves have chosen Mumbai to be the  situs for the Arbitration proceedings (clause 17.2 (i) of the  Agreement) (b)     The arbitration clause specifically provides for a dispute  resolution meeting to be held to resolve the dispute  between the parties as a pre-condition for invocation of  the arbitration clause which meeting was held at Bombay  at the request of the appellant. (c)     The Pipeline Supply Agreement (under which the  disputes have arisen) was approved by the Board of  Directors of the appellant Company in Bombay. (d)     The pipeline Supply Agreement as amended was reviewed  and discussed by the Board of Directors of the appellant  Company in Bombay. (e)     The Settlement Agreement dated 23.6.2003 was adopted  at the meeting of the respondent Board of Directors  where the appellant’s nominees on the respondents  Board were also present. (f)     That the entire Senior Management of the appellant is  located at Mumbai. It may be noted that in Mayur (H.K)  Ltd. & Ors vs. Owners & Parties, Vessel M. V. Fortune  Express & Ors. (2006) 3 SCC 100 this Court (in para 27)  observed that the principal place of business would be  where the governing power of the Corporation is  exercised or the place of a Corporation’s Chief Executive  Offices which is typically viewed as the verve centre or  the place designated as the principal place of business of  the Corporation in its incorporation under various  statutes. (g)     when the section 9 petition was filed the appellant had  its office at Mumbai and was carrying on business at  Mumbai and its Directors were stationed in Mumbai. (h)     The appellant had in fact shifted its registered office to  Mumbai during the pendency of the section 9 petition in  the Bombay High Court as it was more convenient to  operate its registered office from Mumbai. It is submitted  that where a Court has jurisdiction to try the suit when it  comes up for disposal, it then cannot refuse to assume  jurisdiction by reason of the fact that it had no  jurisdiction to entertain it at the date of institution as  held in Sudhir G. Angur & Ors. vs. M. Sanjeev & Ors.  (2006) 1 SCC 141 para 11) (i)     That at the time the question of jurisdiction was heard  and gone into and decided by the Bombay High Court,  the Registered Office of the appellant had been shifted to  and was in fact situated in Mumbai. The Bombay High  Court in the case of Fazlehussein vs. Yusufully AIR  1955 Bom 55, para 2 has held that: "Even if the Court had jurisdiction to entertain the suit  as filed, if by reason of subsequent events the Court has  lost jurisdiction to entertain or try the suit, the Court  will not be justified in dealing with the suit with  reference to circumstances as they existed at the date of  the institution of the suit but must proceed to decide  the dispute on the footing that if the suit had been filed

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at the later date, the Court would have been  incompetent to grant the reliefs in respect of the  properties and of the persons who are not within the  limits of the jurisdiction of the Court.  Normally, a Court  must have regard to circumstances existing as at the  date when the issue of jurisdiction is tried and must  decide it in the light of circumstances existing as at that  date."                                      (emphasis supplied)

It may be noted that when the section 9 Petition was  tried in Bombay on the issue of jurisdiction, the Respondent  had transferred its registered office to Mumbai. It is submitted that the ratio for this would be that  territorial jurisdiction does not go to the competence of the  Court as in the case of a court having jurisdiction on the  subject matter of the dispute. That is why if a court has no territorial jurisdiction (but  is otherwise competent to hear a matter) should the matter be  heard and decided by such Court without demur, the  judgment will be valid and not void or non est. It is for this  reason that insofar as territorial jurisdiction is concerned, the  relevant time to determine the existence of the jurisdiction  would be when the matter is heard. SUBSEQUENT SHIFT OF REGISTERED OFFICE CANNOT  GIVE RISE TO JURISDICTION:

Mr. Nariman contended that the subsequent shift of  Registered Office cannot give rise to jurisdiction  He submitted that the Letters Patent specifically and  expressly refers to the time of commencement of the suit as  the relevant time to determine jurisdiction of the Court.  It  states that:         "\005 if the cause of action shall have arisen, either  wholly, or, in case the leave of the Court shall have been  first obtained, in part, within the local limits of the  ordinary original jurisdiction of the said High Court, or  if the defendant at the time of the commencement of the  suit shall dwell or carry on business or personally work  for gain, within such limits".

       He further submitted that the very same principle is also  reflected in Section 20 of the CPC, which also states that the  court of the appropriate jurisdiction to decide a suit would be  the court within whose jurisdiction the defendant or each of  the defendants resided or carried out business "at the time of  the commencement of the suit".         He further submitted that this Court has in a plethora of  cases, including Rameshwar and Ors. Vs. Jot Ram and  Anr., (1976) 1 SCC 194 and Shri Kishan vs. Manoj Kumar,  (1998) 2 SCC 710 held that the rights of parties are  crystallized on the date of the institution of the suit, and  subsequent events cannot alter these rights.  It is submitted  that on the date of the institution of proceedings before the  Bombay High Court, it did not have jurisdiction, and therefore  the subsequent shifting of the appellant’s registered office  cannot operate to vest the Bombay High Court with the  requisite jurisdiction.  It is therefore submitted that the  Bombay High Court erred in assuming jurisdiction based on  the subsequent change in the appellant’s registered office.     FORUM CONVENIENS: Mr. Nariman’s contention that the situs of arbitration is  determined by the parties keeping in mind various  considerations including convenience of the prospective  arbitrators.  These same considerations do not apply in  deciding which Court would be convenient to supplement or

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compelement the arbitral proceedings.  It is submitted that the  latter question is to be determined based on the convenience  of only the parties i.e. the appellant and the respondent by  reference to the cause of action the assets under dispute and  the Registered/Principal offices of the parties.  Concluding his  submission, he submitted that in view of the fact that the  cause of action as well as the plant and machinery being the  subject-matter of the dispute, is situated in Bellary, that is  also where the Registered Offices of both the parties at the  commencement of arbitral proceedings, the Court with  jurisdiction to entertain a petition under Section 9 of the Act   would undoubtedly be the Court at Bellary. Mr. Sundaram submitted that the appellant’s contention  that Bombay High Court was not a convenient forum is totally  fallacious for the following reasons apart from being taken for  the first time in the oral submissions before this Court. (a) The arbitration hearings are being conducted at Bombay  as per the Agreement. (Clause 17.2) (b) 8 full days of hearings had already been held before this  appeal was heard. Further hearings of 4 days have also  taken place on the 7th, 9th, 10th and 11th of August, 2006  and further 5 days hearing for final and submissions are  scheduled for 16th to 20th October, 2006. (c) The record comprises of several thousand pages of  documents complied in over 12 voluminous box files all  available in Mumbai. (d) The appellants Directors and Senior Officers are in  Mumbai and have been attending the hearings to instruct  their lawyers in Mumbai. (e)     Evidence has been recorded and closed by both parties in  the arbitration. (f)     The parties had agreed on Mumbai as a convenient  location for the conduct of the arbitration. It is contended that the appellant is indulging in forum  shopping to vest jurisdiction at Bellary, Karnataka with an  ultimate objective of challenging the Award before the Civil  Court at Bellary rather than the Bombay High Court.                The appellant has relied upon two judgments, namely,  (i)     Rameshwar & Ors. Vs. Jot Ram & Anr. (1976) 1 SCC  194 (i)     Shri Kishan vs. Manojkumar (1998) 2 SCC 710 to  urge that the Courts ought to consider the rights of  parties which crystallized on the date of the institution  of the suit and subsequent events cannot alter these  rights. It is submitted that both the above two cases cited do not  apply to the facts of the case and are clearly distinguishable. In the Rameshwar & Ors vs. Jot Ram & Anr (supra),  this Court was called upon to consider whether subsequent  event of the land owners death at the appellate stage unsettled  the right acquired by the tenants or whether the Tribunal  must uphold the rights which have crystallized on the date the  applications were made. This was a mater under the Punjab  Security of Land Tenures Act, 1953. The said judgment did not  consider the subsequent events vis-‘-vis territorial jurisdiction  of the court. In fact, the said judgment can be only relied upon  for the proposition that higher Courts pronounce rights of  parties as the facts stood when the first Court was  approached. In Shri Kishan vs. Manojkumar (supra) this Court was  called upon to consider whether legal rights accrued to the  plaintiff and stood crystallized under the law applicable to  buildings at that time. This was a case under the Haryana  Urban Control of Rent and Eviction Act. This Court had the occasion to consider whether the suit

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filed before the expiry of ten years was in any matter, affected  due to the fact that during the pendency of the suit the 10  years exemption period ended. This court held that the legal  rights had accrued and stood crystallized under the law  applicable to buildings at the time of institution of the suit. Once again, the said judgment did not consider  jurisdiction of the territorial Court. The said two judgments are therefore, clearly  distinguishable. It is submitted that the judgment of Bombay  High Court in case of Fazlehussein vs. Yusufally (supra)  clearly applies to the facts of the present case. For the foregoing reasons, we are of the considered  opinion that the Bombay High Court has jurisdiction to  entertain Section 9 application of the respondents herein.  We,  therefore, request the Bombay High Court to proceed on  merits to determine the matter in accordance with law.  For  the reasons set out above, the civil appeal ought to be rejected  by this Court and we do so accordingly.  No costs.  In view of this order, the appellant is directed to file their  affidavit in reply on merits in the pending Section 9  proceedings.  27991