M/S RAVI RANJAN DEVELOPERS PVT. LTD versus ADITYA KUMAR CHATTERJEE

Citation: [2022] 15 S.C.R. 1117 · Decided: 24-03-2022 · Supreme Court of India · Bench: INDIRA BANERJEE · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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   [2022] 15 S.C.R. 1117
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M/s RAVI RANJAN DEVELOPERS PVT. LTD
v.
ADITYA KUMAR CHATTERJEE
(Civil Appeal Nos. 2394-2395 of 2022)
MARCH 24, 2022
[INDIRA BANERJEE AND A. S. BOPANNA, JJ.]
Arbitration and Conciliation Act, 1996 – ss. 2(1)(e), 9, 11(6)
& 42 - Arbitration Agreement - Seat of Arbitration - Jurisdiction of
High Court - Appellant and respondent entered into a Development
agreement for development of property situated at Muzaffarpur in
Bihar - The agreement contains Arbitration clause which provides
Kolkata as the place of Arbitral Tribunal - As the dispute arose,
respondent terminated the said Development Agreement -
Respondent moved an arbitration petition in the Calcutta High Court
u/s 11(6) of the Act for appointment of Arbitrator - The appellant
objected the territorial jurisdiction of the Calcutta High Court -
High Court allowed the Arbitration Petition and appointed a retired
judge as Sole Arbitrator - There was no finding by the High Court
with regard to its jurisdiction - On appeal, held: The Development
Agreement was admittedly executed and registered outside the
jurisdiction of the Calcutta High Court – The suit pertains to
immovable property situated in Bihar - No part of the cause of action
had arisen within the territorial jurisdiction of the Calcutta High
Court - Section 11(6) of the Act has to be harmoniously read with
Section 2(1)(e) of the A&C Act - An application under Section 11(6)
of the Act for appointment of an Arbitrator/Arbitral Tribunal cannot
be moved in any High Court in India, irrespective of its territorial
jurisdiction - The parties cannot, by consent, confer jurisdiction
on a Court which inherently lacked jurisdiction - The parties never
agreed to submit to the jurisdiction of Calcutta High Court in respect
of disputes, nor did the parties agree upon Kolkata as the seat of
arbitration – Parties to the arbitration agreement only agreed that
the sittings of the Arbitral Tribunal would be in Kolkata – Kolkata
was only the venue for sittings of the Arbitral Tribunal – Calcutta
High Court inherently lacks jurisdiction to entertain the application
of the Respondent under Section 11(6) of the Arbitration Act.
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SUPREME COURT REPORTS
[2022] 15 S.C.R.
Allowing the appeals, the Court
HELD: 1.1 In the present case, no suit could have been
filed in any Court over which the Calcutta High Court exercises
jurisdiction, since as stated above, the suit admittedly pertains
to immovable property situated at Muzaffarpur in Bihar, outside
the territorial jurisdiction of the Calcutta High Court and
admittedly, no part of the cause of action had arisen within the
territorial jurisdiction of the Calcutta High Court. The Appellant
who would be in the position of Defendantin a suit, neither resides
nor carries on any business within the jurisdiction ofthe Calcutta
High Court. [Para 25][1129-E-G]
1.2 Of course, under Section 11(6), an application for
appointment of an Arbitrator necessarily has to be moved in the
High Court, irrespective of whether the High Court has the
jurisdiction to decide a suit in respect of the subject matter of
arbitration and irrespective of whether the High Court at all has
original jurisdiction to entertain and decide suits. As such, the
definition of Court in Section 2(1)(e) of the A&C Act would not
be applicable in the case of a High Court exercising jurisdiction
under Section 11(6) of the A&C Act to appoint an Arbitrator/
Arbitral Tribunal. At the same time, an application under Section
11(6) of the A&C Act for appointment of an Arbitrator/Arbitral
Tribunal cannot be moved in any High Court in India, irrespective
of its territorial jurisdiction. Section 11(6) of the A&C Act has to
be harmoniously read with Section 2(1)(e) of the A&C Act and
construed to mean, a High Court which exercises
superintendence/supervisory jurisdiction over a Court within the
meaning of Section 2(1)(e) of the A&C Act. It could never have
been the intention of Section 11(6) of the A&C Act that arbitration
proceedings should be initiated in any High Court in India,
irrespective of whether the Respondent resided or carried on
business with in the jurisdiction of that High Court, and
irrespective of whether any part of the cause of action arose within
the jurisdiction of that Court, to put an opponent at a disadvantage
and steal a march over the opponent. [Para 26-28][1129-G-H;
1130-A-D]
1.3. Section 42 cannot possibly have any application to an
application unde

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