# M/s Banaras Auto Traders & Anr v. M/s Reliance Web Stores Ltd. & Ors

- **Citation:** (2014) 3 ILRA 1309
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2014-11-12
- **Case number:** Civil Misc. Arbitration Petition No. 57 of 2007
- **Bench:** Suneet Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-banaras-auto-traders-anr-v-m-s-reliance-web-stores-ltd-ors-43127
- **Pages:** 4

## Headnote

Sri
R.D.
Khare,
Sri
Siddharth,
Sri
Siddharth Khare, Siddharth Singh
Arbitration & Conciliation Act 1996-Section
11(5)-Territorial jurisdiction-both parties
residing at Mumbai-as per section 16 of
franchisee agreement only Civil Court at
Mumbai-entrusted with jurisdiction-mere
filing
application
before
Civil
Court
Varanasi-not
confer
jurisdiction
of
Allahabad High Court-application rejected.
1310
 INDIAN LAW REPORTS ALLAHABAD SERIES
Held: Para-13
A perusal of the demand made by the
notice
dated
20.6.2007
send
by
applicants to the defendants is a useful
material for coming to the conclusion
that the dispute, as per the demand of
the applicants, relate to damages and
claims and not to immovable property.
In such a situation, under law, the suit
could have been filed at Mumbai where
the defendants resides, or where some
cause of action arose, i.e. in the State of
Uttar
Pradesh.
Hence,
the
relevant
clause
in
the
agreement
conferring
jurisdiction in the matter solely upon the
Courts at Mumbai cannot be said to be
illegal in view of the Supreme court
judgments noticed herein above.
Case Law discussed:
(2007) 7 SCC 125; (2006) 11 SCC 521; (2007)
1 SCC 467; (2000) 8 SCC 151; (2010) 1 SCC

## Text

3 All]. M/s Banaras Auto Traders & Anr. Vs. M/s Reliance Web Stores Ltd. & Ors.
1309
Section 15(2) states that a substitute
arbitrator shall be appointed according to
the rules applicable to the appointment of
arbitrator being replaced. Appointment of
retired Chief Justice by the High Court
under Section 11(6) was set aside and
directions was given that India Road
Congress be approached as per the agreed
procedure to appoint the arbitrator.
38.
The application is misconceived
and is not maintainable under paragraph 8
of the Scheme, paragraph 8 refers to
withdrawal of authority by the Chief Justice
on receipt of a complaint from either party
to the arbitration agreement or otherwise is
of opinion that the person or institution
designated by him under paragraph 3 has
neglected or refused to act or is incapable of
acting he may withdraw the authority given
by him to such person or institution and
dealing with the request himself or
designate another person or institution for
that purpose. Paragraph 3 provides that
upon receipt of a request under paragraph 2,
the Chief Justice may either deal with the
matter entrusted to him or designate any
other person or institution for that purpose;
and paragraph 2 provides where a request to
the Chief Justice under sub-section 4 or subsection 5 or sub-section 6 of Section 11
shall be made in writing and accompanied
by the documents mentioned therein. Thus
reading of paragraph 2, 3 and 8 would
clearly
demonstrate
that
the
powers
conferred under paragraph 8 has nothing to
do with the removal of an arbitrator or
appointment of a substitute arbitrator.
Paragraph 8 only confers power upon the
Chief Justice to withdraw the authority
given by him to the designate person or
institution for that purpose.
39. Having considered the law and
provisions of the Act, in the facts of the
present case where the subject matter of
the dispute was referred to arbitration and
the arbitration proceedings have been
closed. Similar application for referring
the very same claim under Section 11, in
my
opinion,
once
the
power
was
exercised under Section 11 and an
arbitrator was appointed, the proceedings
have been closed under Section 25, there
is no further power, considering the
nature of power under Section 11 read
with the Scheme, to once again refer the
same
disputes
to
arbitration,
under
Section 11. Therefore, in my opinion, the
second application is not maintainable
and is consequently dismissed. Interim
order is vacated.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.11.2014
BEFORE
THE HON'BLE SUNEET KUMAR, J.
Civil Misc. Arbitration Petition No. 57 of 2007
M/s Banaras Auto Traders & Anr.
Petitioners
Versus
M/s Reliance Web Stores Ltd. & Ors.
...Respondents
Counsel for the Petitioner:
Sri Udai Chandani
Counsel for the Respondents:
Sri
R.D.
Khare,
Sri
Siddharth,
Sri
Siddharth Khare, Siddharth Singh
Arbitration & Conciliation Act 1996-Section
11(5)-Territorial jurisdiction-both parties
residing at Mumbai-as per section 16 of
franchisee agreement only Civil Court at
Mumbai-entrusted with jurisdiction-mere
filing
application
before
Civil
Court
Varanasi-not
confer
jurisdiction
of
Allahabad High Court-application rejected.
1310
 INDIAN LAW REPORTS ALLAHABAD SERIES
Held: Para-13
A perusal of the demand made by the
notice
dated
20.6.2007
send
by
applicants to the defendants is a useful
material for coming to the conclusion
that the dispute, as per the demand of
the applicants, relate to damages and
claims and not to immovable property.
In such a situation, under law, the suit
could have been filed at Mumbai where
the defendants resides, or where some
cause of action arose, i.e. in the State of
Uttar
Pradesh.
Hence,
the
relevant
clause
in
the
agreement
conferring
jurisdiction in the matter solely upon the
Courts at Mumbai cannot be said to be
illegal in view of the Supreme court
judgments noticed herein above.
Case Law discussed:
(2007) 7 SCC 125; (2006) 11 SCC 521; (2007)
1 SCC 467; (2000) 8 SCC 151; (2010) 1 SCC
673.
(Delivered by Hon'ble Suneet Kumar, J.)
1. Heard Sri Udai Chandani, learned
counsel
for
the
applicant
and
Sri
Siddharth
Singh,
learned
counsel
appearing for the opposite parties.
2.
The application has been filed
under Section 11(5) of the Arbitration and
Conciliation Act. 1996 for settlement of
dispute as per the arbitration clause
contained in Section 16 of the Franchise
Agreement
dated
8.10.2004.
The
application is being opposed by the opposite
parties that in view of Section 16 of the
agreement the Courts of Mumbai will have
exclusive jurisdiction in respect of this
agreement, thus, this Court shall have no
jurisdiction to entertain the application.
3. Learned counsel for the applicant
submits
that
he
has
already
filed
Arbitration Case No. 50 of 2007, (M/s
Banaras Auto Traders and others vs. M/s
Reliance Web Stores Ltd. and others) before
the Court of District Judge, Varanasi for
injunction to restrain the opposite parties
from terminating the Franchise Agreement
dated 8.10.2004 further restraining the
opposite parties from interfering in the
functioning the petitioner as Franchise under
the said agreement. The opposite parties have
appeared in the arbitration case before the
District Judge, Varanasi and raised objection
regarding jurisdiction of the Court as the
parties had agreed that the Courts of Mumbai
shall have exclusive jurisdiction in the
matter. Learned counsel for the parties
submit that the arbitration case is still
pending before the Varanasi Court.
4. The submission of learned
counsel for the applicant is that section 42
of the Act inter alia provides that when an
application has been made in the Court,
that Court alone shall have jurisdiction
over the arbitral proceedings and all
subsequent applications arising out of that
agreement
and
the
subsequent
proceedings shall be made in that Court
and in no other Court.
5.
In support of his submission, the
learned counsel for the applicant has placed
reliance upon:- Adhunik Steels Ltd. vs.
Orrisa Manganese and Minerals (P) Ltd.
(2007) 7 SCC 125, Jindal Vijaynagar Steel
vs. Jindal Praxair Oxygen Co. Ltd. (2006)
11 SCC 521, Pandey & Co. Builders (P)
Ltd. vs. State of Bihar and another (2007) 1
SCC 467, Datar Switchgears Ltd. vs. Tara
Finance Ltd. and another (2000) 8 SCC
151, Bharat Sanchar Nigam Ltd. and
another vs. Dhanurdhar Champatiray (2010)
1 SCC 673.
6. In rebuttal, learned counsel for the
opposite parties would submit that this
Court will not have jurisdiction, as no
3 All]. M/s Banaras Auto Traders & Anr. Vs. M/s Reliance Web Stores Ltd. & Ors.
1311
property is involved, further, the contract
itself provides that the Courts at Mumbai
shall
have
jurisdiction,
which
is
permissible as per section 20 of the Act.
Learned counsel for the opposite parties,
in support of his submission has placed
reliance upon Balaji Coke Industries Pvt.
Ltd. Ms. Maa Bhagwati Coke Guj Pvt.
Ltd., 2009 (9) SCC 403 and order passed
in
Arbitration
and
Conciliation
Application No. 20 of 2008 (M/s Ujhani
Fuel Point and others vs. M.S. Reliance
Industries Limited) and NKC Projects
Pvt.
Ltd.
and
another
vs.
Utility
Energytech & Engineering Pvt. Ltd. and
another 2009 (4) ALJ 18 (DB).
7. Rival submissions fall for
consideration.
8. The "Court" is defined under
section 2(e), means principal Civil Court
of original jurisdiction in the District, and
includes the High Court in exercise of its
ordinary
civil
jurisdiction,
having
jurisdiction to decide the questions
forming the subject matter of the
arbitration, if the same had been the
subject matter of the suit.
9. Section 19 of the contract reads as
follows:-
Section 19: Dispute Resolution and
Jurisdiction
"If any dispute arises in respect of
this Agreement, the parties shall endeavor
to settle the dispute by direct negotiations
in good faith. If such negotiations do not
settle the dispute, the parties agree to
submit
the
matter
to
settlement
proceedings under the rules of the
Arbitration and Conciliation Act, 1996,
(the 'Act') as applicable for the time being
in force. The place of the Arbitration will
be Mumbai and the language of the
proceedings will be English. The arbitral
award shall be in writing and shall be
final
and
binding
on
the
parties.
Judgement upon the award may be
entered in any Court having jurisdiction
thereof; provided, however, that this
clause shall not be construed to limit
Reliance from brining any action in any
Court of competent jurisdiction for
injunctive or other provisional relief as
Reliance deems to be necessary or
appropriate
to
protect
its
System,
Proprietary Rights, trade marks, trade
names, service marks, logotypes, insignia,
trade dress and designs, or to enjoin or
restrain
Franchisee
from
otherwise
causing immediate and irreparable harm
to Reliance.
Subject to the above, the Courts of
Mumbai shall have exclusive jurisdiction
in respect of this Agreement."
10. It is evident from the arbitration
clause that the Courts of Mumbai have
exclusive jurisdiction. Mere filing of an
application under section 9 of the Act
before the Court at Varanasi would not
confer jurisdiction upon this Court to
entertain the application under Section
11(5) for appointment of an Arbitrator.
11. The Supreme Court in Jindal
Vijaynagar Steel (JSW Steel Ltd) vs.
Jindal Praxair Oxygen Co. Ltd. (2006) 11
SCC 521 held that once the parties have
chosen a particular place to be the place
for arbitration and proceedings connected
thereto for resolve of dispute, the said
place alone shall have jurisdiction.
12. The Supreme Court in the case
of Balaji Coke Industry Pvt. Ltd. Vs. Ms
1312
 INDIAN LAW REPORTS ALLAHABAD SERIES
Maa Bhagwati Coke Guj Pvt. Ltd., 2009
(9) SCC 403, where Clause 14 of the
agreement, which was a High Seas Sale
Agreement, provided that the sale contract
would be subject to Kolkata jurisdiction.
The venue of the arbitration was also agreed
to be Kolkata, West Bengal. After
discussing several earlier judgments on the
issue, the Apex Court held that the parties
had knowingly and voluntarily agreed for
Kolkata jurisdiction and even if the Courts
in Gujarat also had jurisdiction, the
agreement to have the disputes decided in
Kolkata by an Arbitrator was valid and the
respondent-Company had wrongly chosen
to file an application under Section 9 of the
Act before a Court in Gujrat and the same
was in violation of the agreement. The
Apex
Court
relied
upon
an
earlier
judgement in the case of A.B.C. Laminart
(P) Ltd. Vs. A.P. Agencies, 1989 (2) SCC
173 to approve a legal proposition that so
long as the parties to a contract do not oust
the jurisdiction of all the Courts, which
would otherwise have jurisdiction to decide
the cause of action under the law, it could
not be said that the parties had by their
contract ousted the jurisdiction of the Court.
To similar effect is a judgment of this Court
rendered by a Division Bench in the case of
NKC Projects Pvt. Ltd. and Anr. Vs. Utility
Energytech & Engineers Pvt. Ltd. & Anr.,
2009 (4) ALJ 18 (DB).
13. A perusal of the demand made
by the notice dated 20.6.2007 send by
applicants to the defendants is a useful
material for coming to the conclusion that
the dispute, as per the demand of the
applicants, relate to damages and claims
and not to immovable property. In such a
situation, under law, the suit could have
been filed at Mumbai where the defendants
resides, or where some cause of action
arose, i.e. in the State of Uttar Pradesh.
Hence, the relevant clause in the agreement
conferring jurisdiction in the matter solely
upon the Courts at Mumbai cannot be said
to be illegal in view of the Supreme court
judgments noticed herein above.
14.
In view of the aforesaid
discussions, it is held that this application
under Section 11 of the Act has been
wrongly
filed
before
this
Court
at
Allahabad. The proper Court for filing such
application would be at Mumbai. In that
view of the matter, this application is
dismissed, but with liberty to the applicants
that they may prefer similar application
before the competent Court at Mumbai.
--------
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.11.2014
BEFORE
THE HON'BLE PRADEEP KUMAR SINGH
BAGHEL, J.
Civil Revision No. 143 of 2013
Awadh Bihari Tripathi
...Revisionist
Versus
Smt. Shanti Devi Shukla
...Respondent
Counsel for the Revisionist:
Sri Radha Kant Ojha, Sri Satyendra
Chandra Tripathi
Counsel for the Respondents:
Sri B.K. Srivastava, Sri C. K. Singh, Sri
Dhiraj Srivastava
(A) Provincial Small Causes Court Act1887-Section 25-jurisdiction of Revisional
Court-held-very
limited-no illegality or
perversity committed by Court below-no
interference required-revision dismissed.
Held: Para-18
The revisional jurisdiction of this Court
under Section 25 of the Provincial Small