Holding

The Bombay High Court has original civil jurisdiction to entertain a Section 9 arbitration petition when the respondent has an office within its territorial limits, as determined by Clause 12 of the Letters Patent, unaffected by Section 20 of the CPC.

Summary

The appellant, JSW Steel, was setting up a steel plant in Bellary, Karnataka and entered into a pipeline supply agreement with the respondent, Jindal Praxair, which contained an arbitration clause specifying Bombay as the seat of arbitration. A dispute arose and the respondent filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 in the Bombay High Court, while the appellant filed a parallel arbitration petition in the Bellary District Court. The Bombay High Court held it had jurisdiction under Clause 12 of its Letters Patent because the respondent had an office in Mumbai, despite the cause of action arising in Bellary. The Supreme Court examined whether the Letters Patent or the CPC provisions governed jurisdiction, and held that Section 120 of the CPC excludes Sections 16, 17 and 20 for chartered high courts, making Clause 12 of the Letters Patent the sole test. Consequently, the Bombay High Court was deemed to have original civil jurisdiction to entertain the Section 9 petition. The appeal was dismissed, directing the Bombay High Court to proceed with the arbitration matter.

Issues considered

The proper test for determining the jurisdiction of a chartered high court to entertain an arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996.
Whether Section 20 of the Code of Civil Procedure, 1908 applies to the Bombay High Court despite Section 120 excluding it.
Whether the cause of action or the location of the respondent's principal office governs jurisdiction under the Letters Patent.
The applicability of the "uniformity rule" and the doctrine of per incuriam to earlier Supreme Court precedents.

Legislation cited

Arbitration Act, 1940s. 2(c)
Arbitration and Conciliation Act, 1996s. 2(e), s. 9
Code of Civil Procedure, 1908s. 120, s. 16, s. 17, s. 20
Constitution of Indias. Article 225

Subjects

ArbitrationSection 9 petitionJurisdictionLetters PatentOriginal civil jurisdictionChartered High CourtUniformity rulePer incuriamForum conveniens

Judgment

JINDAL VIJA YANAGAR STEEL (JSW STEEL LTD.) A
v.
JINDAL PRAXAIR OXYGEN COMPANY LTD.

AUGUST 29, 2006

[DR. AR. LAKSHMANAN AND LOKESHWAR SINGH PANTA, 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).
D
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
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 ofIndia* 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 contended that
a "Uniformity Rule" on jurisdiction should be applied to all courts in the
G country since the 1996 Act is a central statute.
Dismissing the appeal, the Court

HELD: 1. The Bombay High Court has jurisdiction to entertain petition
filed under Section 9 of the Arbitration and Conciliation Act, 1996. [588-Cl

H 2.1. An arbitration petition is required to be filed in a Court having
JINDAL vlJAYANAGAR STEEL (JSW STEEL LTD.)"· JINDAL PRAXAIR OXYGEN CO LTD. 58 J

jurisdiction. On a plain reading of the definition of "Court" under section A
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 ...... having jurisdiction to
decide the questions forming the subject matter of the arbitration if the same
had been the subject matter of a suit. 1593-H; 594-E, Fl
B
2.2. 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. 1594-G I

2.3. The Bombay High Court is a Chartered High Court under the C
Letters Patent exercising Original Civil Jurisdiction. For the purpose of
determining the Original Civil Jurisdiction of the Bombay High Court, Section
20 of the CPC 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 Bombay High Court. Under D
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 Bombay. [594-F; 596-B, Cl

3.1. It is ex facie clear from Section 20 CPC that a suit can be filed
where a part of the cause of action arises or where the principal office is E
located. 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.
[597-F; 599-CI
F
3.2. In Food Corporation's case, this Court pointed out that as per
Section 20, a suit can be filed where cause of action arises or where the
principal office is situate. The 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. [597-G; 598-DI G
4.1. 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 H
582 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A the jurisdiction of the Chartered High Court. 1599-FI
Sargilja Transport Service v. State Transport Appel/a/le Tribunal, MP.
Gwalior and Ors .. (198711SCC5, held inapplicable.

4.2. Neither the CPC nor its principles can be made applicable to the
B Letters Patent qua sections 16, 17 and 20 of ere. It is therefore not only
impermissible but also unnecessary to apply the ere or import the principles
of section 20 of the CPC into the Letters Patent. (600-DI

4.3. The Letters Patent and CPC operate in separate fields i.e. the
Letters Patent specifically conferring jurisdiction on Chartered High Courts
C and the CPC conferring jurisdiction on all other courts. 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. (600-F-G)

P.S. Sathappan (dead) by LRs. v. Andhra Bank Ltd and Ors., (2004111
D sec 672, referred to.
5. This Court in Food Corporation ofIndia case* followed the provision
of law i.e. Clause 12 of Letters Patent and Section 120 CPC which itself made
the provisions - Sections 16, 17 and 20 CPC inapplicable. The judgment of
this Court will not be referred for reconsideration by a subsequent coordinate
E 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. 1593-C-D)

F Food Corporation of India v. Evdomen Corporation,* [1999) 2 SCC
446 and Patel Roadways Limited, Bombay v. Prasad Trading Corporation**
11991) 4 sec 270, referred to.

6. 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
G 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 (De(hi and
H Jammu & Kashmir under their respective High Courts Acts) exercise
JINDAL VIJAYANAGAR STEEL(JSW STEEL LID) .c JINDAL PRAXAIR OXYGEN CO. Lm [LAKSHMANAN.l) 583

original civil jurisdiction. This issue is therefore not question of all India A
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).1601-C-EI
B
Globe Cogeneralion Power Ltd v. Sri. Hiranyakeshi, AIR (2005) Kar
94 and Kamal Pushp Enterprises v. Chairman Cum Managing Director, Gas
Authority of India Ltd., (Vol. 31DRJ651), held inapplicable.

Rameshwar and Ors. v. Jot Ram and Anr., 1197611 SCC 194 and Shri
Kishan v. Manojkumar, (199812 SCC 710, distinguished. C
Dayanand Prasad Sinha v. Hindustan Steel Works Construction Ltd.,
AIR (2001) CAL 71; Khaleel Ahnmedv. Hatti Gold Mines Co. Ltd., 1200013
SCC 755; Mayur (H.K.) Ltd. & Ors. v. Owners & Parties, Vessel M V. Fortune
Express & Ors., 120061 3 SCC 100; Sudhir G. Angur & Orsv. M Sanjeev & D
Ors., 1200611SCC141 and Fazlehussein v. Yusufully, AIR (1955) Born 55,
referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3773 of2006.

From the Final Order dated 2.3 .2006 of the High Court of Judicature at E
Bombay in Arbitration Petition No. 459/2004.

R.F. Nariman, T.K. Cooper, Mannu Nair, Margaret D Souza and Mark D
Souza (for Mis. Suresh A. Shroff & Co.) for the Appellant.

C.A. Sundaram, R.K. Krishnamurthi, Rahul Narichania, C. Muralidhara, F
Syed Naqvi, Smieetaa Inna, Asha Gopalan Nair and Rohini Musa for the
Respondent.

The Judgment of the Court was delivered by

DR. AR. LAKSHMANAN, J. Leave granted.
G
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 H
584 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A (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
B 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:

C 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
D 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.

E 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
F and the gaseous argon. Product Supply Agreement was entered into between
the respondent and Praxair India Private Limited (PIPL), a wholly-owned
subsidiary of Praxair Pacific Limited at Bangalore for supply ofliquid 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
G 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
H Board of Directors of both the parties in Bangalore. The interpretation of the
JINDAL \lJA YANAGAR STEEL (JSW STEEL LTD.)''· JINDAL PRAXAIR OXYGEN CO. LTD. [LAKSHMANAN. J] 585

obligations of parties under various provisions of the Settlement Agreement A
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 B
various issues/disputes including all power nonns, 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, C
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 D
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 E
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 (I) of
the three (3) dates, and a dispute resolution meeting will be held at F
I 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 G
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 H
586 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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 held in accordance with the Rules of the U.N. Commission
of International Trade Law (UNCITRAL) ("Rules") in effect on the
B 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 (I) 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
c 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
D 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
E 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,
F 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
G Article 17.2.

(iii) ·······
(iv) ..... .

(v) ....... "
H
JINDAL l'UAY ANAGAR STEEL (JSW STEEL LTD.)" JINDAL PRAXAIR O:\"iGEN CO.LTD. (LAKSHMANAN,l] 587

A meeting was held at Mumbai between the representatives of the A
parties on 04. I0.2004. 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, B
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 i11terests, filed Arbitration Petition No. 9 of
2005 before the Principal District Judge, Bellary on 06.02.2005 seeking C
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 with Section D
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 E
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 of2004. 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. F
The High Court, in para I6 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 G

..
-
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 behaif of the H
588 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A respondent that this Court has no jurisdiction to entertain the petition
filed under Section 9 of the Arbitration & Conciliation Act, I996."

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
subrn itted that:
B
(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

c
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
D the Act, only a court having jurisdiction to decide the questions
forming the subject-matter of the arbitration ifthe 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
E 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
F be a "Court" as defined under S.:ction 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
G the jurisdiction to entertain disputes arising from the PSA and
the Settlement Agreement since the 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
H
~
JINDAL VUAYANAGARSTEEL(JSWSTEEL LID.)". JINDAL PRAXAIR OXYGEN CO. LTD. [LAKSHMANAN,J.] 589

deciding factor in determining jurisdiction under Section 2(1)(e) A
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(l)(e) of the
Act.· B
It is also contended that the judgment of this Court in Food Corporation
of India v. 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 C
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 D
situated in Bellary, Karnataka;

(c) the registered office of the respondent is situated in Bellary,
Kamataka;

(d) the action threatened by the respondent to limit the supply of E
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
(t) 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 G
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.

H
590 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A 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(I)(e) of the Act and that the High Court by claiming
B 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
C 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-int~rpreted 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
D 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
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,
E 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
p 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(l)(a) of the Act.
G
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.

H
HNDAL VIJAYAN AGAR STEEL (JSW STEEL LTD.)'•. nNDAL PRAXAIR OXYGEN CO. LTD (LAKSHMANAN. J.] 591

According to Mr. Sundaram, the Bombay High Court has jurisdiction to A
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 B
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 C
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, D
in part, within the local limits of the ordinary original jurisdiction of
the said High CoYrt, 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." E
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 F
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 G
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 the Bombay High Court.

It is submitted that by Section 120 of the CPC, various sections of the H
592 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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.
B Sundaram submitted further that the jurisdiction of a Court under Section
2(l)(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.
c 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
D 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
v. Evdomen Corporation (supra) has, without reference to the squarely
E applicable and binding precedent in the Patel Roadways Limited, Bombay v.
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 ..
F 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
G further submit that a three-Judge Ben\:h of this Court in the case of Patel
Roadways Limited (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
H only at the place at which the cause of action arose, provided that it had a
TINDAL VUAY ANAGAR STEEL(JSW STEEL LID.)>·. JINDAL PRAXAIR OXYGEN CO.LTD. [LAKSHMANAN,l] 593

subordinate office at that place, failing which, it would be deemed to be A
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:
B

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. Jn the instant case, this Court in Food Corporation of India case C
(supra) followed the provision of law i.e. Clause 12 of Letters Patent and
Section 120 CPC which itself made the provisions 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 D
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:
E
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. F
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 G
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 ~rbitration petition is required to be filed in a Court
having jurisdiction. The definition of the "Court" under the 1996 Act is as
follows:- H
594 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A "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;"
B
(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
C 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 include a Small
Cause Court;"

The definition of "Court" in the two sections is, therefore, pari materia
D 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:-
E
(i) a principal Civil Court of original jurisdiction in district.
(ii) a High Court in exercise of its original civil jurisdictionhaving
jurisdiction to decide the questions forming the subject matter of
the arbitration if the same had been the subject matter of a suit.
F 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 respectiv~ Letters Patent which
G 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,
H apply to the High Court in exercise of its original civil jurisdiction, it is settled
nNDAL l'IJAYANAGAR STEEL(JSW STEEL LTD.)"· JINDAL PRAXAIR OXYGEN CO. LTD [LAKSHMANAN. J.) 595

law that the principles of the CPC should nevertheless be applied, as far as. A
' #.
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 v. State Transport Appellate Tribunal, MP. Gwalior & Ors., (1987]
I 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 B
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 C
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 detennination 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: D
" ... .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 E
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 cc.urt of appropriate
jurisdiction in which to proceed against a non-corporate defendant. It is
submitted that in the absence of any reason to believe th.at there was any F
intention to apply different tests in the CPC and the Letters Patent to detennine
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 G
120 ofCPC, 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 H
596 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A civil jurisdiction- (I) The following provisions shall not apply to the
High Court in the exercise of its original civil jurisdiction, namely,
sections 16, 17 and 20."

Thus for the purpose of determining the Original Civil Jurisdiction of
the Bombay High Court, Section 20 of the CPC 1908 has bt>en ~pecifically
B 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
C 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:

D (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.
E
(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.

F 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 ofIndia case (supra), the Bombay High Court
would have jurisdiction to entertain and try the Section 9 petition. However,
G 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:
H
JINDAL VUAYANAGAR STEEL(JSW STEEL LTD.).c JINDAL PRAXAIR OXYGEN CO. LTD. (LAKSHMANAN,J.J 597

..J. (i) an action can be filed in a Court where a subordinate office of A
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. B
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- C
(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 D
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 E
(c) the cause of action, wholly or in part, arises

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."
F
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. G
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 H
598 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A 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
B 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.

C 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 Co1poration case (supra) is erroneous and
contrary to the judgment of the Supreme Court in the Patel Roadways case
(supra) is that it erroneously interprets the explanation to section 20of the
CPC, 1908. As stated above, even assuming without admitting that the appellant
D 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
E 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
p 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:
G
(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 section 141
H of the CPC, 1908 did not apply to writ petitions, the principles would
JINDAL \lJAYANAGAR STEEL(JSW STEEL LTD)'•. JINDAL PRAXAIR OXYGEN CO. LTD. [LAKSHMANAN, J] 599

be applicable. A
(ii) that a "Unifonnity 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 B
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 exclu9es 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 C
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] I SCC 5 cannot apply for the following
reasons:-

(i) The principles of CPC were made applicable to Writ Petitions on D
the premise that these wou Id 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 E
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 F
unnecessary and in fact futile to refer to another legislation such
as the CPC (which is not applicable) to detennine 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 G
down the territorial of the Court exercising Writ Jurisdiction.

Thus the judgment of this Court in Sarguja Transport case cannot be
applied ih the facts of the present case.

Our attention was drawn to the decision of a Constitution Bench of this H
600 SUPREME COURT REPORTS (2006) SUPP. 5 S.C.R.

A Court in the case of P.S. Sathappan (dead) by LRs. v. Andhra Bank Ltd. and
Ors., (2004] 11 SCC 672 in para 32 this Court has held has follows:-

" ... To submit that a Letters Patent is a subordinate piece of legislation
is not to understand the true nature of a Letters Patent. As has been
held in Vinita Khanolkar case and Sharda Devi case a Letters Patent
B is the Charter of the High Court. As held in Shah Babula/ 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
c a general law the special law 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."

D 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 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
E 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
F following reasons:
(0 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.
G (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
H is no conflict whatsoever between relevant provisions of the Letters Patent
JINDAL VUAYANAGAR SlHL (JSW STEEL LTD.)"· JINDAL PRAXAIR OXYGEN CO .. LTD. [LAKSHMANAN.J] 60 I

and the CPC in the instant case. It is submitted that clause 12 of Letters Patent A
and Section 20 of CPC are in pari materia and set 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 B
(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 C
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 D
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 E
(governed by the Letters Patent).

The appellant further cited:

(i) Globe Cogeneration Power Ltd. v. Sri. Hiranyakeshi, AIR (2005)
Kam 94 (Kamataka High Court) F
(iI) Kamal Pushp Enterprises v. 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 G
on the basis of where the subject matter of arbitration is situated.

In our view, neither of the two judgments above is applicable and in any
event can be distinguished for the following reasons:-

(a) (i) The judgment of the Kamataka High Court in the Globe H
602 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A Congeneration case (supra) was one where the litigant had
initiated the proceedings in the City Civil 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)
ofCPC.
B
(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.
c (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
D then was) who rendered this judgment was a party to the Bench
of this Court in the FC! 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
E 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.
F
(d) This Court in the FCJ case which arose while interpreting section
2(c) of the Arbitration Act (which is inpari 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
G 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 v. Hindustan Steel Works Construction Ltd., AIR
(2001) CAL 71 to contend that where there is a conflict between the place of
H residence and of carrying business and the place where the cause of action
JINDAL VUAYANAGAR STEEL(JSW STEEL LTO.) o·. JINDAL PRAXAIR OXYGEN CO. LID. [LAKSHMANAN, J.] 603
~ ,j

has arisen, the Court must apply the test of forum convenience and accept A
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 B
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 v. 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
c
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 an arbitration was D
filed.

CAUSE OF ACTION:

Mr. Nariman, learned senior counsel submitted that the Bombay High
Court has correctly come to the conclusion that no cause of action in relation E
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
F
are situated in Bellary, the concerned products are supplied and payment in
respect of them is made at Bellar/, 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.
G
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
H
604 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.
~'

A 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
B 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
c 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
D 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
E 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
F
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
G 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. ,.
H
JINDAL VIJAYANAG~R STEEL (JSW STEEL LID.)''· JINDAL PRAXAIR OXYGEN CO. LID. [LAKSHMANAN,J] 605
.;.....;

We considered the above argument of Mr. Nariman. Our answer to the A
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 B
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) c
(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.
D
(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
E
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 F
Mumbai. It may be noted that in Mayur (H.K) Ltd. & Ors. v.
Owners & Parties, Vessel M. V. Fortune Express & Ors., [2006]
3 SCC I 00 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 tht: verve centre G
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
H
606 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.
1.- -
A 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
B jurisdiction to try the suit when it com.es 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. v. M Sanjeev & Ors., [2006) I
sec 141 para II).
c (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 v. Yusufully, AIR (1955) Born 55, para 2 has held
that:
D
"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 circums!ances as they existed at the date of the
institution of the suit but must proceed to decide the dispute on the
E footing that if the suit had been filed 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 tlte limits of the jurisdiction of
the Court. Normally, a Court must have regard to circumstances
existing as at the date when the issue ofjurisdiction is tried and must
F 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.
G
...-
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 ..
H
JINDAL \1JAYANAGAR STEEL(JSW STEEL LTD.)"· JINDAL PRAXAIR OXYGEN CO. LTD. [LAKSHMANAN,J.] 607

-.,1 competent to hear a matter) should the matter be heard and decided by such A
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 B
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 c
the time of commencement of the suit as the relevant time to determine
jurisdiction of the Court. It states that:

" .. .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 D
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
E
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 F
Rameshwar and Ors. v. Jot Ram and Anr., [1976] l SCC 194 and Shri Kishan
v. 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 G
the Bombay High Court with the requisite jurisdiction. It is therefore submitted
that the B~mbay High Court erred in assuming jurisdiction based on the
. •. subsequent change in the appellant's registered office.

''lo. H
608 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A 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 compelement the arbitral
B 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
C 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
D 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)
E
(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.
...
F (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 ate 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
G arbitration.

(t) 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
H
JINDAL VJJAYANAGAR STEEL (JSW STEEL LTD.)''- JINDAL PRAXAIR OXYGEN CO. LTD. [LAKSHMANAN. J] 609

jurisdiction at Bellary, Karnataka with an ultimate objective of challenging the A
Award before the Civil Court at Bellary rather than the Bombay High Court.

The appellant has relied upon two judgments, namely,

(i) Rameshwar & Ors. v. Jot Ram & Anr., [1976] l SCC 194
(i)
B
Shri Kishan v. Manojkumar, [I 998] 2 SCC 7 I0 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 C
facts of the case and are clearly distinguishable.

In the Rameshwar & Ors. v. 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 D
applications were made. This was a mater under the Punjab Security of Land
Tenures Act, I953. The said judgment did not consider the subsequent
events vis-a-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.
E
In Shri Kishan v. 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 filed before F
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 G
territorial Court.

The said two judgments are therefore, clearly distinguishable. It is
submitted that the judgment of Bombay High Court in case of Fazlehussein
v. Yusufal/y (supra) clearly applies to the facts of the present case. H
610 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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 rejecte'd by this Court and we do so
B 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.

D.G. Appeal dismissed.