JINDAL VIJAYANAGAR STEEL (JSW STEEL LTD.) versus JINDAL PRAXAIR OXYGEN COMPANY LTD.

Citation: [2006] SUPP. 5 S.C.R. 579 · Decided: 29-08-2006 · Supreme Court of India · Bench: AR. LAKSHMANAN · Disposal: Dismissed

Judgment (excerpt)

JINDAL VIJA Y ANAGAR STEEL (JSW STEEL LTD.) 
A 
v. 
JINDAL PRAXAIR OXYGEN COMPANY LTD. 
AUGUST 29, 2006 
[DR. AR. LAKSHMANAN AND LOKESHWAR SINGH PANT A, JJ.] 
B 
Arbitration and Conciliation Act, 1996, Sections 9, 2(e)-Arbitration 
petition-Jurisdiction of Bombay High Court to entertain-Held: Bombay 
High Court has Original Jurisdiction to entertain Arbitration petition even C 
if no cause of action arose within its jurisdiction, provided the party has its 
principal office at Bombay-On this question, Rules in Section 20, CPC are 
not applicable-Letters Patent (Bombay)-Clause 12-Code of Civil 
Procedure, 1908-Sections 16, 17, 20, 120-Arbitration Act, 1940-Section 
2(c). 
Letters Patent and CPC-Scope of-Distinction between. 
Principle ofincurium-Judgment of Supreme Court-Held: Cannot be 
referred for_ reconsideration by a subsequent coordinate Bench merely because 
the subsequent Bench may have arrived at a different conclusion had there 
D 
not been an earlier judgment. 
E 
The appellant was in the process of setting up a steel plant in Bellary 
Distt., Karnataka. It entered into agreements with the respondent company, 
which was incorporated in Karnataka. Respondent-company was to set up an 
Air Separation Plant in the same complex in Bellary, Karnataka for the 
purpose of supplying the appellant with the required quantities of industrial F 
gases. It entered into a Pipeline Supply Agreement with appellant for supply 
of industrial gases. This agreement contained arbitration clause. The 
agreement clearly stated that arbitration was to be conducted in Bombay. 
Dispute arose between the parties. A meeting was held at Bombay between 
the representatives of the parties. However, resp,ondent filed a petition under G 
Section 9 of the Arbitration and Conciliation Act, 1996 in Bombay High Court. · 
Respondent issued notice of arbitration in Bellary, Karnataka which was served 
upon appellant in Bellary and Bangalore in Karnataka. The appellant wrote a 
letter to respondent resenting the action taken by respondent. 
579 
H 
580 
SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R. 
A 
Appellant filed arbitration petition before Principal District Judge, 
Bellary seeking orders to restrain the respondent from breach of Pipeline 
Supply Agreement. Respondent filed an application to dismiss the arbitration 
petition filed by appellant at Bcllary. Principal District Judge dismissed the 
application and held that as the entire action had arisen at Bellary, the Bellary 
Court had jurisdiction to decide the matter. Respondent preferred an appeal 
B which was allowed and the Court directed that the issue of jurisdiction would 
have to be decided by Bombay High Court in respondent's arbitration petition. 
By the impugned order, Bombay High Court held that it had the jurisdiction 
to entertain arbitration petition. Hence the present appeal. 
C 
The appellant contended that High Court erred in holding that by virtue 
of clause 12 of the Letters Patent Act, Bombay High Court has jurisdiction 
to entertain the petition filed by respondent in Bombay High Court; that the 
High Court failed to appreciate that as per Section 2(l)(e), 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 the suit, would have 
D jurisdiction under the Act; that 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 question under 
the Act including questions as to jurisdiction; that the High Court erred in 
ignoring the settled law that it is the situs of cause of action and not the place 
E of business which is deciding factor in determining the jurisdiction. Appellant 
further contended that the Division Bench decision of this Court in Food 
Corporation of India* has, without reference to the binding precedent in the 
Patel Roadways Limited** 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 
F 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*"' hence requires re~<msideration and should 
be referred to a larger bench of this court. App~a4t further co

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