High Court · 2025
Legal Reasoning
912-arb-08-2024+-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD912 ARBITRATION APPLICATION NO. 8 OF 2024M/s Manraj Motors Pvt. Ltd.Through Its Director, Mr. Ashok Kantilal BedmuthaAge : 68 Years, Occu : businessHaving his office at Survey No.557,Meharoon Shivar, Ajanta RoadMIDC, Jalgaon...PetitionerVERSUS1.M/s. Ashoka Builders And DevelopersA registered Partnership FirmHaving its office at Ashoka Marg, Vadala, NashikTal. & dist. Nashik2.Mr. Ashok Motilal KatariyaAge : 73 years, Occu : Business,R/o: M/s. Ashoka builders and Developers,Ashoka House, Ashoka Marg,Vadala, Nashik3.Sau. Snehal Satish Parakh@ Snehal Manjeet KhatriAge : 41 Years, Occu : Business,R/o. Ashoka House Ashoka Marge,Vadala, NashikSecond Address : Aditya, IBP Colony, Savarkar Nagar,Gangapur Road, Nashik, Tal & Dist. Nashik4.Mr. Ashish Ashok KatariyaAge : 43 years, Occu: Business,R/o. Ashoka House Ashoka Marg,Vadala, NashikSecond Address:Aditya, IBP Colony, Savarkar Nagar,Gangapur Road, Nashik, Tal & Dist. NashikNarwade
Legal Reasoning
912-arb-08-2024+-2- 5.Sau. Asha Ashok KatariyaAge : 66 Years, Occu: Business,R/o Arpana Society, Takli RoadNashik6.Mr. Satish Dhondumal ParakhAge “ 60 years, Occu “ Business,R/o Garden Housing Society,Gangapur Road, Nashik7.Mrs. Shobha Satish ParakhAge : 57 years, Occu : Business,R/o : Garden Housing Soceity,Gangapur Road, Nashik8.Mr. Pradeep Bansilal Raisoni,Age : 59 Years, Occu BusinessR/o Puja, 28, Prem Nagar, Pune9.Mr. Bansilal Bhalchandraji Raisoni,Age : 79 Years, Occu. Business,R/o Puja, 28, Prem Nagar, Pune10.Miss Shweta Ashok KatariyaAge : 42 years, Occu: Business,R/o. : Arpana Society, Takli Road Nashik11.Mr. Aditya Satish ParakhAge : 37 Years, Occu. BusinessR/o. Garden Housing Society,Gangapur Road, Nashik12.Mr. Kunal Pradip RaisoniAge : 40 years, Occu. Business,R/o Puja, 28, Premangar, Pune13.Mr. Piyush Pradip RaisoniAge : 40 years, Occu. Business,R/o Puja, 28, Premangar, Pune14.Mr. Sagar Sunil RaisoniAge : 34 years, Occu. Business,R/o Puja, 28, Premangar, PuneNarwade 912-arb-08-2024+-3- 15.M/s. Rajmal LakhichandA partnership firm having its office at 169, Joahari Bazar, Balaji Peth, JalgaonThrough its PartnershipRespondent No.16.16.Mr. Ishwarlal Shankarlal JainAge : 74 years, Occu: Business,R/o. Johari Bazar, Balaji Peth,Jalgaon...Respondents...Mr. Anand P. Bhandari, Advocate for ApplicantMr. P. P. Giri, Advoctae for Respondent Nos.1 to 7,10 & 11 inArbitration Application No.8 of 2024 and for Respondent Nos.1 to 5in Arbitration Application No.7 of 2024...WITHARBITRATION APPLICATION NO. 7 OF 2024M/s Manraj Motors Pvt. Ltd.Through Its Director, Mr. Ashok Kantilal BedmuthaAge : 68 Years, Occu : businessHaving his office at Survey No.557,Meharoon Shivar, Ajanta RoadMIDC, Jalgaon...PetitionerVERSUS1.M/s. Ashoka Builders And DevelopersA registered Partnership FirmHaving its office atAshoka House, through its Partner Mr. Ashok Motilal KatariyaAge : 73 years, Occu : Business, R/o. Ashoka House, Ashoka Marge,Vadala, Nashik2.Mr. Ashok Motilal KatariyaAge : 73 years, Occu : Business,R/o: Ashoka House, Ashoka Marg,Narwade 912-arb-08-2024+-4- Vadala, Nashik3.Mr. Satish Dhondilal ParakhAge Major, Occu : Business,R/o : Garden Housing Society,Gangapur Road, Nashik4.Mr. Ashish Ashok KatariyaAge : 43 years, Occu: Business,R/o. Ashoka House Ashoka Marg,Vadala, Nashik5.Mr. Rajendra Chindulal BuradAge : 53 years, Occu: Business,R/o Ashoka House, Ashoka Marg,Vadala, Nashik6.Rajmal LakhichandA Partnership Firm Having its Registered Office at 169, Johri Bazar, Balaji Peth, JalgaonThrough Respondent No.7.8.Mr. Ishwarlal Shankarlalji Lalwani (Jain)Age : 76 years, Occu: Business,R/o. 169, Balaji Peth, JalgaonDistrict Jalgaon...Respondents… CORAM :ROHIT W. JOSHI, J. RESERVED ON :17th JULY 2025 PRONOUNCED ON : 31st JULY 2025JUDGMENT :- 1.Both these matters are applications filed under Section 11 ofthe Arbitration and Conciliation act, 1996 (hereinafter referred to as“the Arbitration Act”) seeking appointment of Arbitrator. Initially onNarwade 912-arb-08-2024+-5- 23.09.2015 a Joint Venture Agreement for development of propertieswas executed by and between Rajendra Chindhulal Bura as landowner, Rajmal Lakhichand a partnership firm as the developer andM/s. Ashoka Engineering Company, a partnership firm as anintending purchaser. This Joint Venture agreement dated 23.09.2015pertains to development of a residential project on the subject landswhich are situated in a village, Adgaon, Tahsil and District Nashik andVillage Vihigaon, Tahsil Shahpur, District Thane. The Joint VentureAgreement is executed at Nashik. Subsequently, vide Deed ofAssignment dated 03.03.2017, the rights vested with RajmalLakhichand as developer are assigned in favour of the applicant/M/s.Manraj Motors Pvt. Ltd. which is a company registered under theCompanies Act. 2.There is confusion as regards place at which this Deed ofAssignment was executed. In the opening sentence of the document itis mentioned that the same is executed at Nashik whereas in theconcluding sentence, before the signatures of parties, it is stated thatthe document is executed at Jalgaon. Clause-2 of the deed ofassignment provides that all the terms and conditions mentioned inthe Joint Venture Agreement dated 23.09.2015 shall form a part andNarwade 912-arb-08-2024+-6- parcel of the Deed of Assignment and shall be binding on all theparties to the Deed of Assignment. 3.Clause-20 of the Joint Venture Agreement provides that in theevent of any dispute between the parties the same shall beadjudicated by way of arbitration. It is stated that the arbitral tribunalshall conduct the arbitration proceedings at Nashik. 4.It appears that certain disputes arose between the presentApplicant (M/s Manraj Motors Pvt. Ltd.) and other parties to the Deedof Assignment as a consequence of which the applicant filed a suitbeing Commercial Civil Suit No.5 of 2020. In the said Suit thedefendants who are respondents herein, filed application underSection 8 of the Arbitration and Conciliation Act inter alia prayingthat the matter be referred to arbitration in view of the arbitrationclause contained in the Joint Venture Agreement. The applicant filedreply to this application and agreed for resolution of the disputethrough arbitration.5.In view of the aforesaid, the present applications are filedunder Section 11(6) of the Arbitration Act for appointment ofNarwade 912-arb-08-2024+-7- Arbitrator. 6.The respondents have raised a preliminary objectioncontending that the application ought to have been filed before theprincipal seat of this Court, since the agreement provides thatarbitration proceedings will be conducted at Nashik which falls underthe jurisdiction of the principal seat of this Court. It is contended thatthe bench at Aurangabad will not have the territorial jurisdiction forentertaining the application filed under Section 11(6) of theArbitration Act. The respondents have placed reliance on judgementof the Hon’ble Supreme court in the matter of BGS SGS Soma JV Vs.NHPC Limited reported in 2020(4) SCC 234.7.The said judgment states that when an arbitration agreementdesignates a particular place as venue for arbitration withoutspecifically naming any other place as seat of arbitration, the venue isactually at the juridical seat of arbitration. It is held that the Courtshaving territorial jurisdiction over the place of juridical seat will havethe jurisdiction to entertain proceedings with respect to arbitrationbetween the parties. The learned Advocate for the respondentstherefore submits that the application should be rejected for want ofNarwade 912-arb-08-2024+-8- territorial jurisdiction.8.Per contra, the learned Advocate for the applicant placesreliance on judgment of the Hon’ble Supreme Court in the matter ofRavi Ranjan Developers Pvt. Ltd. Vs. Aditya Kumar Chaterjee reportedin 2022 (5) Scale 372 to contend that the venue of arbitration isrelevant as seat of arbitration only in cases of internationalarbitrations and in case of domestic arbitration the said principle willnot apply. He further contends that the venue or seat of arbitration iswithin Maharashtra; all the parties are residents or have place ofbusiness within the State of Maharashtra; the subject properties arealso located within the state of Maharashtra; and the agreements arealso executed within Maharashtra and further that jurisdiction ofHigh Court extends through out the State of Maharashtra andtherefore the application filed before this Bench cannot be rejected forwant of territorial jurisdiction. It is his contention that because thesubsequent agreement i.e. the Deed of Assignment is executed atJalgaon, part of cause of action has arisen at Jalgaon and which fallsunder territorial jurisdiction of Bench at Aurangabad and accordinglyapplication is before this Bench. It is his contention that since thearbitration is a domestic arbitration the territorial jurisdiction shouldNarwade 912-arb-08-2024+-9- be determined on the basis of cause of action and the concept of seator venue of arbitration deciding the territorial jurisdiction of Courtswill not be applicable. 9.In the case at hand it is undisputed that the venue of arbitrationis at Nashik. Having regard to the judgment in the matter of BGS SGSSoma JV (supra), Nashik will also be the seat of arbitration for thepurpose of determining territorial jurisdiction of Courts. Therefore inview of the judgment of the Hon’ble Supreme Court in the aforesaidmatter of BGS SGS Soma JV (supra) the application ought to havebeen filed before the principal seat since Nashik falls under territorialjurisdiction of the principal seat of this Court.10.As regards the judgment in the matter of Ravi RanjanDevelopers Pvt. Ltd. (supra) relied upon by the learned Advocate forthe applicant, in the said matter application for appointment ofarbitrator was made at Kolkata which was the venue fixed forarbitration. The property was located at Mujaffarnagar in the State ofBihar. Application for appointment of Arbitrator under Section 11(6)was filed before the Calcutta High Court. The Hon’ble Supreme Courthas held that the Calcutta High Court will not have territorialNarwade 912-arb-08-2024+-10- jurisdiction to entertain the application since the property wassituated at Mujaffarnagar and the cause of action also arose there.Consequently, the order appointing Arbitrator passed by CalcuttaHigh Court was quashed. The Hon’ble Supreme Court has held thatalthough in case of domestic arbitration the High Court exercisingjurisdiction under Section 11 cannot be termed to be a Court underSection 2(1)(e) and consequently although Section 42 of theArbitration Act will not be applicable to an application under Section11, it does not mean that an application under Section 11 can be filedbefore any High Court. It is held that application under Section 11must be filed before the High Court of the State within whosejurisdiction the Court as defined under Section 2(1)(e) of the Act islocated. In that view of the matter, the order passed by the learnedCalcutta High Court appointing arbitrator was quashed by the Hon’bleSupreme Court.11.It needs to be mentioned that while holding that the Courts atKolkata will not have the jurisdiction, the Hon’ble Supreme Court hasrepeatedly stated that Kolkata was only the venue for sittings of theArbitral Tribunal and not the decided seat of arbitration. The Hon’bleSupreme Court has referred to earlier judgments distinguishing a seatNarwade 912-arb-08-2024+-11- of arbitration from venue of seatings of arbitration Tribunal. The ratioof the judgment is that since Kolkata was merely a venue at whichsittings of arbitral tribunal were to be held and not the seat ofarbitration, the High Court of Calcutta did not have the jurisdiction toappoint arbitrator under Section 11(6) of the Act.12.While holding that Section 11(6) is required to be readharmoniously with Section 2(1)(e) of the Act, the Hon’ble SupremeCourt has also dealt with the term, ‘subject matter or arbitration’ as itappears in Section 2(1)(e) of the Act. It has also considered earlierjudgments which hold that subject matter of arbitration cannot beconfused with subject matter of suit. Thus the ratio of the judgment inthe matter of Ravi Ranjan Developers Pvt. Ltd. (supra) appears to bethat in case of domestic arbitration Section 11(6) application can befiled either before the High Court within whose territorial jurisdictionfactors relevant for determination of jurisdiction of a Civil Court forfiling of Civil Suit are to be found or before High Court within whosejurisdiction the seat of arbitration is located. It needs to beemphasized that seat should not be confused with venue as per thesaid judgement.Narwade 912-arb-08-2024+-12- 13.It needs to be mentioned that the Ravi Ranjan Developers Pvt.Ltd. (supra) distinguishes BGS SGS Soma JV (supra) and othersjudgments of the Hon’ble Supreme Court dealing with territorialjurisdiction in cases arising out of international arbitration.14.In this context, it will be appropriate to refer to judgement ofthe Hon;ble Supreme Court in the matter of Brahmani River PelletsLimited Vs. Kamachi Industries Limited reported in 2020 5 SCC 462which also deals with a domestic arbitration. The venue of arbitrationis considered to be seat recognizing Shashoua principles. In the saidcase Bhubaneshwar was decided as venue for arbitration between theparties. Application under Section 11(6) of the Act for seekingappointment of arbitrator was filed before the Madras High Court.The Madras High Court appointed arbitrator rejecting objection toterritorial jurisdiction observing that designation of a place as seat ofarbitration by the parties does not oust jurisdiction of others Courtsother than the ones having territorial jurisdiction over the seat ofarbitration. Following Shashoua principle the Hon’ble Supreme Courthas treated Bhubaneshwar which was referred to as venue ofarbitration as the seat of arbitration and accordingly it is held that theintention of parties was to exclude the jurisdiction of all other Courts.Narwade 912-arb-08-2024+-13- The appointment of Arbitrator by the Madras High Court wasaccordingly set aside. This judgment in the matter of Brahmani RiverPellets Limited (supra) which is prior in point of time is not broughtto the notice of the Hon’ble Supreme Court in the matter ofRaviranjam Developers. In the judgment in the case ofBrahmani RiverPellets Limited (supra) which is prior in point of time, the venue ofarbitration is treated as seat of arbitration and it is held that theCourts having territorial jurisdiction over the venue will be Courts ofexclusive jurisdiction. In the subsequent judgment of Ravi RanjanDevelopers Pvt. Ltd. (supra), it is held that venue cannot be relevantto determine jurisdiction under Section 11(6) of the Act. Two viewscannot be reconciled. Having regard to the law laid down in thematter of Sundeep Kumar Bafna Vs. State of Maharashtra and Anr.reported in 2014 16 SCC 623 the judgment prior in point of time willhave to be followed.15.As regards the contention of the learned Advocate for theapplicants that the application can be entertained at AurangabadBench since the jurisdiction of Bombay High Court extends all thoughout the State of Maharashtra, the said contention is liable to berejected in view of Chapter 31 Rule 2 of the Bombay High CourtNarwade 912-arb-08-2024+-14- Bombay side Rules. In that view of the matter, the preliminaryobjection raised by the respondents needs to be upheld. 16.The applications are rejected for want of territorial jurisdictionwith liberty to the applicant to file appropriate application before theprincipal seat at Bombay. [ROHIT W. JOSHI, J.]Narwade