Case Note & Summary
The case involves a Chamber Summons filed by Narendra Gorani (Applicant) seeking revocation of leave granted under Clause 12 of the Letters Patent to Sumer Builders Pvt. Ltd. (Petitioner) to file an Arbitration Petition in the Bombay High Court. The parties had entered into a development agreement on 28th February 2008 for land owned by the Applicant in Indore. The Petitioner was to develop a residential and commercial project on the land. The agreement was executed in Indore, the land was situated in Indore, and all performance was to take place in Indore. Subsequently, the parties entered into an unregistered and inadequately stamped Memorandum of Understanding (MOU) dated 8th June 2012. Disputes arose when the Petitioner failed to make payments, leading the Applicant to terminate the MOU and invoke arbitration. The Petitioner filed an Arbitration Petition in the Bombay High Court after obtaining leave under Clause 12. The Applicant sought revocation of that leave, arguing that no part of the cause of action arose within the territorial limits of the Bombay High Court. The court analyzed the concept of cause of action in arbitration matters and held that since the agreement was made in Indore, the land was in Indore, and all obligations were to be performed in Indore, no part of the cause of action arose in Bombay. The court revoked the leave granted to the Petitioner, allowing the Chamber Summons.
Headnote
A) Civil Procedure - Territorial Jurisdiction - Clause 12 Letters Patent - Leave to Sue - The court considered whether leave granted under Clause 12 of the Letters Patent to file an arbitration petition should be revoked when the land, agreement, and performance were all outside the court's territorial limits. Held that since no part of the cause of action arose within the jurisdiction, the leave was wrongly granted and must be revoked (Paras 1-10).
Issue of Consideration
Whether leave granted under Clause 12 of the Letters Patent to file an arbitration petition in Bombay High Court should be revoked when no part of the cause of action arose within its territorial limits.
Final Decision
Chamber Summons allowed. Leave granted under Clause 12 of the Letters Patent to file Arbitration Petition No.799 of 2013 is revoked.
Law Points
- Territorial jurisdiction
- Clause 12 Letters Patent
- Cause of action
- Arbitration agreement
- Leave to sue
Case Details
2013 LawText (BOM) (10) 86
Chamber Summons No.720 of 2013 in Arbitration Petition No.799 of 2013
Mr. F.E. Devitre, Mr. Dinyar Madon, Mr. Pradeep Sancheti, Ms. Yasmin Bhansali for Petitioner; Mr. Aspi Chinoy, Mr. Hamid Kadiani, Mr. Yashpal Jain for Respondent
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Nature of Litigation
Chamber Summons seeking revocation of leave granted under Clause 12 of the Letters Patent to file an arbitration petition.
Remedy Sought
Applicant sought revocation of leave granted to the Petitioner to file Arbitration Petition in Bombay High Court.
Filing Reason
Applicant contended that no part of cause of action arose within the territorial limits of the Bombay High Court.
Previous Decisions
Leave under Clause 12 of the Letters Patent was granted to the Petitioner to file the Arbitration Petition.
Issues
Whether leave granted under Clause 12 of the Letters Patent should be revoked when no part of the cause of action arose within the court's territorial jurisdiction.
Submissions/Arguments
Applicant argued that the development agreement was executed in Indore, the land was in Indore, and all performance was to take place in Indore, so no part of cause of action arose in Bombay.
Petitioner argued that the arbitration clause was broad and the court had jurisdiction.
Ratio Decidendi
For the purpose of granting leave under Clause 12 of the Letters Patent, the court must be satisfied that a part of the cause of action has arisen within its territorial limits. In arbitration matters, the cause of action arises where the underlying agreement is made, where the property is situated, and where the obligations are to be performed. Since all these elements were in Indore, no part of the cause of action arose in Bombay, and leave could not be granted.
Judgment Excerpts
Leave under clause 12 of the Letters Patent of this Court has been granted in the above arbitration Petition to the Petitioner to pursue the Petition in this Court. The Applicant has sought to revoke that leave.
The parties entered into an agreement for development of the land of the Applicant on 28th February, 2008.
Clause 13 of the development agreement is the arbitration clause.
Procedural History
The Petitioner filed Arbitration Petition No.799 of 2013 in the Bombay High Court after obtaining leave under Clause 12 of the Letters Patent. The Applicant filed Chamber Summons No.720 of 2013 seeking revocation of that leave. The court heard arguments and reserved judgment on 19th September 2013, pronouncing it on 10th October 2013.
Acts & Sections
- Letters Patent of the High Court of Bombay: Clause 12
