# M/S Zapdor-Ubc-Abnjv Delhi v. U.O.I. & Ors

- **Citation:** (2022) 9 ILRA 826
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-09-01
- **Case number:** Matters Under Article 227 No. 24693 of 2020
- **Bench:** Mrs. Sangeeta Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-zapdor-ubc-abnjv-delhi-v-u-o-i-ors-49279
- **Pages:** 36

## Headnote

Civil Law- Constitution of India,1952-
Article
227-

The
Arbitration
and
Conciliation Act, 1996- Section 34 -
Petitioners
Application
for
Return
of
Arbitration Application filed under Section
34 by the Railways against Award of the
Arbitral Tribunal- Petition under Article
227 of the Constitution is maintainable
against the order rejecting an application
for return of Application under Section 34
of the Act of 1996-Conduct of the parties
9 All. M/S Zapdor-Ubc-Abnjv Delhi Vs. U.O.I. & Ors.
827
which is very relevant for a decision to be
taken - Instead of any written agreement
or conditions in the Contract or even in
the correspondence between the parties,
specifying the seat of arbitration, the
Railways agreed to participate in the
arbitration proceedings at New Delhi
without any protest. The Railways hence
can be said to have waived their right to
object and by their conduct determined
the venue of arbitration at New Delhi to
be also the seat of the arbitration
proceedings-Failure
to
specifically
mention
a
Seat
of
Arbitration
and
participation in Arbitration proceedings at
New Delhi by the Railways without any
protest
shall
be
considered
as
determination of the Venue of arbitration
as
also
the
Seat,
giving
exclusive
jurisdiction to the Courts at New Delhi to
supervise
the
Arbitral
proceedings
including any attack on the Award-The
Commercial
Court
at
Lucknow
has
entertained the Section 34 Application
without jurisdiction. Such inherent lack of
jurisdiction makes the proceedings before
it also liable to be set aside.

It is the conduct of the parties to the arbitration
that is relevant for determining the venue as well
as the seat of arbitration and where one of the
parties waives off its right to object and protest
and participates in the arbitration proceedings then
the place ( New Delhi) where such arbitration
takes place shall be determined as the venue and
seat of arbitration hence, order passed by the
Lucknow Commercial Court will be without
jurisdiction , therefore petition under Article 227
shall be maintainable. (30, 95, 97, 98)

Petition Allowed. (E-3)

Case Law/Judgements relied upon:-

## Text

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826 INDIAN LAW REPORTS ALLAHABAD SERIES
the
corporate
debtor.
Section
34
proceeding is a proceeding against the
corporate debtor in a court of law
pertaining to a challenge to an Arbitral
Award and would be covered just as an
appellate proceeding in a decree from a
suit would be covered. This judgement does
not, therefore, state the law correctly..."

76. It is evident from the careful
consideration of the entire judgement
rendered in P Mohan Raj (supra) that the
observations made by the Supreme Court
were in the context of the facts of the case
where it had been argued before it by the
respondents that criminal proceedings as
well as quasi-criminal proceedings can go
on against the corporate debtor or its
directors as they do not strictly fall within
the definition of proceeding under Section
14 (1) of the Act. The court held that a
Section 138/141 proceedings under the
Negotiable Instruments Act is against the
corporate debtor is covered by Section 14
(1)(a) of the I&B Code. It however
clarified that in the case before it such
proceedings
under
the
Negotiable
Instruments Act could continue against the
company as well as the Appellants for the
reason that the Insolvency Resolution
Process did not involve a new management
taking over and the moratorium period had
come to an end.

77. This Court having considered all
the judgements cited by learned counsel for
the parties and also the impugned order of
the Tribunal finds that Article 227 of the
Constitution of India, the supervisory role
assigned to this Court is extremely limited.
The
Supreme
Court
has
repeatedly
emphasised
in
its
judgements
the
importance of keeping handsoff approach
where arbitration matters are concerned.
This Court finds that the learned Tribunal
has decided an application made to it by the
petitioner and the orders squarely falls
under the provisions of Section 16 of the
Act of 1966. Therefore, it cannot be said to
be an order patently lacking in jurisdiction
and therefore perverse and liable to be
interfered with by this Court under Article
227 of the Constitution.

78. This petition is dismissed as not
maintainable.

79. No order as to Costs.
----------
(2022) 9 ILRA 826
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 01.09.2022

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA, J.

Matters Under Article 227 No. 24693 of 2020

M/S Zapdor-Ubc-Abnjv Delhi
 ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Anil Srivastava, Divyam Krishna, Utkarsh
Srivastava

Counsel for the Respondents:
Mrs. Suniti Sachan, Brijesh Kumar Shukla,
Pratyush Chaube

Civil Law- Constitution of India,1952-
Article
227-

The
Arbitration
and
Conciliation Act, 1996- Section 34 -
Petitioners
Application
for
Return
of
Arbitration Application filed under Section
34 by the Railways against Award of the
Arbitral Tribunal- Petition under Article
227 of the Constitution is maintainable
against the order rejecting an application
for return of Application under Section 34
of the Act of 1996-Conduct of the parties
9 All. M/S Zapdor-Ubc-Abnjv Delhi Vs. U.O.I. & Ors.
827
which is very relevant for a decision to be
taken - Instead of any written agreement
or conditions in the Contract or even in
the correspondence between the parties,
specifying the seat of arbitration, the
Railways agreed to participate in the
arbitration proceedings at New Delhi
without any protest. The Railways hence
can be said to have waived their right to
object and by their conduct determined
the venue of arbitration at New Delhi to
be also the seat of the arbitration
proceedings-Failure
to
specifically
mention
a
Seat
of
Arbitration
and
participation in Arbitration proceedings at
New Delhi by the Railways without any
protest
shall
be
considered
as
determination of the Venue of arbitration
as
also
the
Seat,
giving
exclusive
jurisdiction to the Courts at New Delhi to
supervise
the
Arbitral
proceedings
including any attack on the Award-The
Commercial
Court
at
Lucknow
has
entertained the Section 34 Application
without jurisdiction. Such inherent lack of
jurisdiction makes the proceedings before
it also liable to be set aside.

It is the conduct of the parties to the arbitration
that is relevant for determining the venue as well
as the seat of arbitration and where one of the
parties waives off its right to object and protest
and participates in the arbitration proceedings then
the place ( New Delhi) where such arbitration
takes place shall be determined as the venue and
seat of arbitration hence, order passed by the
Lucknow Commercial Court will be without
jurisdiction , therefore petition under Article 227
shall be maintainable. (30, 95, 97, 98)

Petition Allowed. (E-3)

Case Law/Judgements relied upon:-

1. Bhartiya Alluminium Co. Ltd. Vs Kaiser
Aluminium Technical Services 2012 (9) SCC 552

2. BGS SGS Soma JV Vs NHPC Ltd. 2004 (4)
SCC 234

3. QUIPPO Construction Equipment Ltd. Vs
Janardan Nirman Pvt. Ltd. (2020) SCC online SC
419
4. Om Prakash & ors. Vs Vijay Dwarka Dass
Verma 2020 SCC online Bom. 796

5. L&T Finance Vs Manoj Pathak (2020) SCC
online Bom. 177

6. TNGQ Projects Ltd. Vs Balaji Projects (2021)
SCC Online Madras 409

7. Chief Postmaster General & ors. Vs Living
Media India Ltd. 2012 (3) SCC 563

8. Mankastu Impex Pvt. Ltd. Vs Air Visual Ltd.
2020 (5) SCC 399

9. Hasmukh Prajapati Vs Jai Prakash Associates
Ltd. Matter under Article 227 of the Constitution
No. 6890 of 2021

10. Inox Renewables Ltd. Vs Jayesh Electricals
Ltd 2021 SCC Online SC 448

11. United Bank of India Vs Naresh Kumar &
ors. 1996 (6) SCC 660

12. Reliance Industries Ltd. Vs U.O.I 2014 (7)
SCC 603

13. Indus Mobile Distribution (Pvt) Ltd. Vs
DataWind Innovation (Pvt) Ltd. 2017 (7) SCC 678.

14. Fuerst Day Lawson Ltd. Vs Jindal Exports
Ltd. 2011 (8) SCC 333

15. U.O.I Vs McDonnell Douglas Corp. 1993 (2)
Lloyd's Report 48

16. U.O.I Vs Hardy Exploration and Production
(India) Inc 2019 (13) SCC 472

17. ManKastu Impex Pvt. Ltd. Vs Air Visual Ltd
2020 (5) SCC 399

18. Quippo Construction Equipment Ltd. Vs
Janardan Nirman Pvt. Ltd. 2020 SCC Online SC
419

19. Ravi Ranjan Developers Pvt. Ltd. versus
Aditya Kumar Chatterji 2022 SCConline Supreme
Court 568

20. Hindustan Construction Company Ltd. Vs
NHPC 2020 (4) SCC 234
828 INDIAN LAW REPORTS ALLAHABAD SERIES
21. Civil Appeal No.4130 of 2022: BBR (India)
Private Limited Vs SP Singla Constructions
(Private) Ltd.

(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)

1. Heard Sri Divyam Krishna and Sri
Utkarsh Srivastava for the Petitioners and Sri
Brajesh Kumar Shukla along with Pratyush
Chaubey for the Respondents. The Petitioners
have challenged the order passed by the
Learned District Judge/Commercial Court,
Lucknow dated 12.12.2019 rejecting the
Petitioners
Application
for
Return
of
Arbitration Application filled under Section
34 by the Railways against Award of the
Arbitral Tribunal dated 06.03.2019, and
allowing the Application for Condonation of
Delay moved by the Respondents.

2. The facts as mentioned in the petition
briefly
are
that
on
30.10.2015
the
Respondents floated a Tender Notice entitled
"Design, Supply, Erection, Testing and
Commissioning of 25 KV, 50 Hz Single
Phase, Electrification works including OHE
And TSS composite Electrical Works
(hereinafter referred to as the Tender Paper
ELCORE) The Petitioner's bid was adjudged
viable and a Letter of Acceptance awarding
the contract for a total value of more than
Rs.30 crores 27 lakhs was issued by the Chief
Electrical
Engineer/P&D
Central
Organisation for Railway Electrification
(CORE) at Allahabad 19.04.2016. An
Agreement was executed on 14.7.2016
between the Petitioner and Chief Project
Director Railway Electrification Lucknow, as
the contract was to be operated for the
composite electrification works in Jafrabad -
Akbar Pur - Tanda Section under the
supervision
and
control
of
Divisional
Headquarters at Lucknow.

3. The contract was terminated by the
Respondents because of slow progress as
only 8 % of the work was completed in
seven and a half months as opposed to
hundred percent target for fifteen months.

4. The Petitioner invoked the
Arbitration clause and Arbitral Tribunal
was
constituted
through
letter
dated
01.12.2017 comprising of Three senior
officers of the Railways. The entire arbitral
proceedings were conducted in New Delhi
at the CORE office. The Arbitral Tribunal
rendered an Award of more than three crore
rupees along with interest at the rate of
10% in favour of the Petitioner which was
signed and delivered at New Delhi on 6
March 2019. Arbitration Application No.
925 of 2019 was filed on 30 August 2019
under Section 34 of the Arbitration and
Conciliation Act 1996 (hereinafter referred
to as "the 1996 Act") by the Respondents
against the Arbitral Award before the
Commercial Court at Lucknow along with
an Application for Condonation of Delay
duly
supported
by
an
affidavit.
Subsequently the Petitioner preferred an
Execution
petition/Enforcement
Application under Section 36 of the 1996
Act before the High Court at Delhi on
17.09.2019.
The
Petitioner
filed
an
Application for Return of Arbitration
Application on 19.11.2019. It also moved
an Application containing objections to the
Application for Condonation of Delay in
the Section 34 Application. A Reply to
both the Applications was filed by the
Respondents on 04.12.2019. The Learned
Commercial Court by its order dated
12.12.2019
rejected
the
Petitioner's
Application for Return of Arbitration
Application, and allowed the Application
for Condonation of Delay moved by the
Respondents by a composite order.
9 All. M/S Zapdor-Ubc-Abnjv Delhi Vs. U.O.I. & Ors.
829

5. It is the case of the Petitioners that
such order has been passed by the
Commercial Court at Lucknow exercising a
jurisdiction not vested in it by law, causing
grave injustice to the Petitioner and no
Appeal under Section 37 of the Act of 1996
lies against the impugned order so far as
return of plaint (Arbitation Application)
under Section 34 of the Act read with
Order VII Rule 10 CPC is concerned.
Hence, a petition under Article 227 of the
Constitution of India has been filed before
this Court. It is the case of the Petitioners
that Clause 4.0 of the Letter of Acceptance
dated 19.04.2016 specifically mentioned
"the contract shall be governed by the terms
and conditions given in the Tender Paper
Number ELCORE/OHE and TSS/group
199 with ANC slip number 1".

The agreement executed between
the parties after Letter of Acceptance also
referred to the said Tender Paper as
governing the contract. The Tender Paper
ELCORE contains the subclause 1.2 .54
which provides under subclause (k) the
"Venue for Arbitration shall be the place
from which the Letter of Acceptance of
Tender is issued or such other place as the
purchaser at his discretion may determine."

6. The learned counsel for the
Petitioners
argued
that
the
arbitral
proceedings were held exclusively at New
Delhi and the Arbitral Award was signed
and delivered at New Delhi hence the
Commercial Court at Lucknow lacked
territorial jurisdiction to entertain the
Application under Section 34 of the Act of
1996.
The
supervisory
territorial
jurisdiction for the purposes of Section 34
cannot be determined on the basis of
location of cause of action. As per clause
1.2 .54 (K) the place of Arbitration can be
either at Prayagraj where the Letter of
Acceptance was issued or at New Delhi
where the Arbitration was actually held and
Award delivered. In so far as Section 34 of
the Act of 1996 is concerned no part of
cause of action arose within the territorial
jurisdiction of the Commercial Court at
Lucknow. The Learned Commercial Court
has relied upon General Conditions of
Contract and Clause 64 (i) (iii) (d) which
provides- "The place of Arbitration "would
be within the geographical limits of the
Division of the Railway where the cause of
action arose, or the headquarters of the
concerned, or any other place with the
written consent of both the parties."

7. It has been argued that the Learned
Commercial
Court
has
erroneously
interpreted paragraph 96 of the judgement
rendered by the Constitution Bench in
Bhartiya Alluminium Company Ltd. vs
Kaiser Aluminium Technical Services
2012 (9) SCC 552; to say that supervisory
territorial jurisdiction for the purpose of
Section 34 accrues to Courts situated both
at the place of Arbitration, as well as where
the cause of action has occurred. In other
words, the jurisdiction is concurrent and
not exclusively restricted to those courts
located in place of Arbitration agreed to by
the parties. Such an interpretation of
paragraph 96 of BALCO (supra) is against
a long line of judgements rendered by the
Supreme Court and by various High Courts
interpreting paragraph 96 to hold that
supervisory jurisdiction under Section 34 is
not concurrent and must be restricted to
Courts in the location selected by the
parties as place of Arbitration exclusively,
irrespective of where the cause of action
arose.

8. The Learned counsel for the
Petitioner
has
placed
reliance
upon
paragraphs 20, 45, 54, 57, 58, 82, 97 and 98
830 INDIAN LAW REPORTS ALLAHABAD SERIES
of the judgement rendered by the Supreme
Court in BGS SGS Soma JV versus NHPC
Ltd, 2004 (4) SCC 234; and has also placed
reliance upon paragraph 19, 22 and 31 of
judgement rendered by the Supreme Court
in QUIPPO Construction Equipment Ltd
versus Janardan Nirman Private Limited
(2020) SCC online SC 419; and Om
Prakash and others versus Vijay Dwarka
Dass Verma 2020 SCC online Bombay
796, L&T Finance Vs. Manoj Pathak
(2020) SCC online Bombay 177 and
TNGQ Projects Ltd. Vs. Balaji Projects
(2021) SCC Online Madras 409.

9. It has been argued by the learned
counsel for the Petitioner that the clauses of
contract are determinative of the seat of
Arbitration. The seat of Arbitration alone
would be important for determination of
the place where Section 34 Application
would lie. He has also argued that where
the clauses of contract leave it open for the
parties to choose, and the contract did not
specifically mention some place, even then
the conduct of the parties would determine
the seat of Arbitration. It has been argued
that the parties when they entered into the
contract had referred to two clauses, the
first clause in the Tender Document itself
i.e. clause 1.2 .54 (K) related to the Venue
of Arbitration being either at Allahabad or
at a place determined by the purchaser, and
the second clause ie, clause number
64.1.(iii)(d) which refers to 3 possibilities,
the last one being determined by a written
agreement between the parties. Since there
was no written agreement between the
parties, then the conduct of the parties
would be relevant for a determination of
the seat of Arbitration.

10. It has been argued for the
petitioners that the judgement rendered by
the Constitution Bench in BALCO having
been interpreted by subsequent Benches of
the Supreme Court later on, it was not open
to the Learned Commercial Court to give
its own interpretation to paragraph 96
thereof. Also ,the Tender Paper ELCORE
clearly mentioned the parties intention to
exclude any clause which is similar or
identical to clause 64 (i)(iii)(d) of the
General Conditions of Contract which has
been
relied
upon
by
the
Learned
Commercial Court in holding that cause of
action arose both at New Delhi and at
Lucknow. Even if a part of cause of action
did arise in Lucknow due to the execution
of the project at Lucknow, that in itself is
legally insufficient to confer upon the
Learned Commercial Court at Lucknow
any supervisory jurisdiction under Section
34 of the Act of 1996.

11. The learned counsel for the
Petitioner has also drawn attention of this
Court to the affidavit filed along with the
Application for Condonation of Delay by
the Respondents wherein the delay in
approaching
the
Learned
Commercial
Court under Section 34 of the Act of 1996
has been explained as time having been
taken
in
"collecting
documents
and
completing the formalities". It has been
argued that government departments cannot
take the defence of bureaucratic setup in
their offices to get delay condoned. The
Petitioner had relied upon judgement
rendered by the Supreme Court in the case
of Chief Postmaster General and others
versus Living Media India Ltd 2012 (3)
SCC 563, but such argument has been
arbitrarily rejected by the Commercial
Court on the ground that in the case relied
on by the Petitioner the delay was more
than 427 days but in the case of the
Respondents they had approached the
Commercial Court with the delay of 26
days only.
9 All. M/S Zapdor-Ubc-Abnjv Delhi Vs. U.O.I. & Ors.
831

12. Sri Brajesh Kumar Shukla
appearing for the Respondents has raised a
preliminary
objection
as
to
the
maintainability of the petition filed on
behalf of a Joint Venture by the Director of
only one of the companies constituting it. It
has been argued that the Deponent of the
affidavit filed in support of the petition is
one Mr Amresh Anand, who is the Director
of only one of the companies which forms
part of the Joint Venture. He has not been
authorised by other members of the JointVenture for filing any petition before the
High Court. He was authorised only to deal
with matters relating to the bid offer and
the completion of proceedings of tender
and correspondence related thereto. The
learned counsel for the Respondent has
argued that Amresh Anand may have had
the competence to have entered into
contract as per the Authority letter given to
him by all the partners of the Joint Venture,
but this Authority ended with the signing of
the Contract and was limited to the same
only. There is no separate Authority Letter
issued to Amresh Anand by the other two
partners of the Joint Venture to file this
Petition on their behalf. Mr Amresh Anand
may be authorised only to sign the
Application and to negotiate with the
Railways for the contract but he could not
file the petition on behalf of the other two
partners of the Joint-Venture.

13. The learned counsel for the
Respondent has also argued that this
petition is not maintainable under Article
227 of the Constitution as the learned
Commercial Court has passed an order
under the provisions of Section 34 of the
Act of 1996 against which remedy of
appeal under Section 37 of the Act is
available in case the order of admission of
Application under Section 34 of the Act is
treated to be of such nature as to give
finality to the the rights of the parties under
litigation. The Act of 1996 is a special act
and a complete code in itself and no
petition
under
Article
227
of
the
Constitution
is
maintainable
against
interlocutory orders.

14. With regard to the delay in
approaching the Commercial Court the
learned counsel for the Respondent has
placed reliance upon Sub-Section (3) of
Section 34 and the proviso thereof, which
is that an Application may be filed even
after three months from the date of receipt
of the Award but within 30 days thereafter,
subject to satisfaction of the Court
regarding the reason for delay. The Award
was received by Speed Post on 03.05.2019
and the Application under the Section 34
should have been filed ideally within three
months that is latest by 03.08.2019,
however, due to delay in collecting of
documents
and
completing
necessary
formalities it could only be filed on 28th of
August, causing a delay of 26 days in
approaching the Commercial Court. The
learned Commercial Court has considered
the delay and also the judgement rendered
by the Supreme Court in the case of Chief
Post Master General (supra) and found
that it was not a case of huge delay but only
a case of slight delay which could be
condoned looking into the facts and
circumstances of the case.

15. On the merits of the case, Sri
Pratiyush Chaube for the Respondents has
pointed out from various clauses of the
Agreement (a complete copy of which has
been filed along with the Supplementary
Affidavit) that in this case the purchaser is
the President of India and he alone has
been empowered to determine the seat of
Arbitration. He has determined the seat of
Arbitration
at
the
place
where
the
832 INDIAN LAW REPORTS ALLAHABAD SERIES
Headquarter of the Division of Railways is
situated which has to supervise the work.
The Learned counsel for the Respondent
has referred to Tender Paper ELCORE and
Clause 17 of the Preamble which says that
the "Indian Railways Standard General
Conditions of Contract- July 2014" with
addendum and corrigendum slips issued by
the Railway Board" shall be applicable to
the contract which may be obtained by the
tenderer /contractor on payment from the
Divisional Railway Manager's Office of the
concerned Railway. In case of any
difference between the provisions of
General Conditions of Contract and any
conditions
contained
in
the
tender
documents, the provisions of General
Conditions of Contract will prevail.

16. The learned counsel for the
Respondent has also referred to Chapter 2
of the Tender Paper ELCORE Which
contains the conditions of contract. It
specifies that conditions of contract shall be
governed not only by the Preamble to the
Tender Paper, but also the instructions to
tenderers and conditions of tendering as
included in Part I of Chapter I and
Conditions of Contract as included in
Chapter II and also other specifications and
conditions contained in following Chapters
of the Tender Paper ELCORE.

The Learned counsel for the
Respondent has referred to paragraph
1.2.54 (k) which provides that the Venue
for Arbitration shall be the place from
which the Letter of Acceptance of Tender
is issued, or such other place as the
purchaser at his discretion may determine;
and has also referred to Clause 64 (i) (iii)
(d) which refers to place of Arbitration as
being within the geographical limits of the
Division of the Railways where the cause
of action arose, or the Headquarters of the
concerned Railway, or any other place with
the written consent of both the parties. It
has been argued that since there was no
written consent of both the parties to
Arbitration being held at New Delhi and
the Arbitral Tribunal held the proceedings
at New Delhi only for convenience sake it
cannot be said that New Delhi was agreed
upon by the parties as being the place of
Arbitration. Hence the preceding phrases
relating to geographical limits of the
Division of the Railway where the cause of
action arose, or the Headquarters for the
concerned Railway should be treated as
determinative of the place of Arbitration.
Both these phrases relate to Lucknow, and
therefore the place of Arbitration should be
treated as Lucknow, conferring supervisory
jurisdiction under Section 34 of the Act of
1996 upon the Commercial Court at
Lucknow.

17. The learned counsel for the
Respondent has referred to Clause 7.0 of
the Preamble of the Tender Paper ELCORE
which directs performance Guarantee to be
submitted by the contractor amounting to
5% of the contract value to the Chief
Project Director, Railway Electrification
Lucknow after the issuance of Letter of
Acceptance but before signing of the
Agreement in terms of Clause 19 of the
Preamble. Reference has also been made to
clause 11 of the Preamble which states that
the contract will be operated by the Chief
Project Director, Railway Electrification,
Lucknow. The agreement had been signed
and delivered at Lucknow for and behalf of
the Respondents on 14.07.2016. The cause
of action arose at Lucknow and since the
contract was operated at Lucknow as the
project
of
electrification
had
to
be
conducted
under
the
Divisional
Headquarters
with
supervision
and
Lucknow was the place of correspondence.
After the Award of contract a major part of
9 All. M/S Zapdor-Ubc-Abnjv Delhi Vs. U.O.I. & Ors.
833
cause
of
action
arose
at
Lucknow.
Reference has been made to clause 15 of
the Preamble where all correspondence has
to be undertaken after award of contract
with the Chief Project Director, Railway
Electrification, Lucknow in respect to
matters relating to particular design,
working and drawing, matters relating to
basic design and drawing for fitting,
components equipment and prototype test,
and matters relating to progressing of
fieldwork, scheduling of quantities and
submission of bills. Under clause 1.1.2
which relates to Interpretation of Contract
Agreement, "Purchaser" has been defined
as the President of India acting through his
accredited officers or anyone of them
including the General Manager in charge of
Railways Electrification and also the Chief
Project Director. It has been argued that
Section 31 sub-clause (4) and Section 20 of
the Act of 1996 would be in applicable as
no written consent was ever given to
change the place of Arbitration by any of
the parties.

18. The learned counsel for the has
also placed reliance upon judgement
rendered by the Supreme Court in the case
of Mankastu Impex Private Limited versus
Air Visual Ltd 2020 (5) SCC 399; and has
read out paragraphs 10 to 13, 17 to 20, and
24 to 26 of the judgement and has also read
out the impugned order passed by the
Commercial Court.

19. The learned counsel for the
Respondent has also placed reliance upon
judgement rendered by Coordinate Bench
of this Court in Hasmukh Prajapati versus
Jai Prakash Associates Limited in a
Petition
under
Article
227
of
the
Constitution No. 6890 of 2021, decided on
17.02.2022, where a distinction has been
drawn between seat of Arbitration and
venue of Arbitration. It has been argued
that the venue of Arbitration may have
been in New Delhi, in the case of the
Petitioner, however the seat of Arbitration
would only be determined on the basis of
Clause 64 (1)(iii)(d) of the General
Conditions of Contract.

20. It has also been informed to this
Court that subsequent to the filing of the
Application under Section 34 of the Act of
1996 before the Commercial Court at
Lucknow the Petitioner preferred an
Execution
petition/Enforcement
Application under Section 36 of the Act on
17.09.2019 before the Delhi High Court.
The Delhi High Court while issuing notice
to the Respondents has directed them to
deposit the entire awarded amount with upto-date interest before the Registrar General
of the High Court of Delhi by its order
dated 18.09.2019, passed ex parte. Further,
the High Court of Delhi was pleased to
release 50% of the deposited amount under
the Arbitral Award to the Petitioner by its
order dated 24.12.2019 subject to the
outcome of the Objections filed by the
judgement debtor. The decree holder had to
submit a personal bond executed by all its
Directors and supported by a Board
Resolution that in the event of the decree
holder being directed to refund the amount
by the Court in the Objections under
Section
34
of
the
Arbitration
and
Conciliation Act, the decree holder shall
refund the amount along with interest at
such rate as directed by the Court within
eight weeks of the order, irrespective of the
right to challenge the order passed in
proceedings under Section 34 of the 1996
Act. The balance 50% of the amount had to
be kept in fixed deposit till further orders.
In compliance of the order passed by the
Delhi High Court on 24.12.2019, 50% of
the amount was released against the
834 INDIAN LAW REPORTS ALLAHABAD SERIES
personal bond of the Directors only. The
Petitioner has filed an Application stating
that it is not in a position to furnish bank
guarantee to secure the judgement debtor
against the payment of any funds. Further,
after
hearing
on
several
dates
and
entertaining the Application under Section
34 of the Act of 1996, the Learned
Commercial Court at Lucknow has been
pleased
to
stay
the
operation
and
implementation
of
the
Award
dated
6.03.2019 by its order dated 09.02.2021.
Subsequently the Petitioner has filed a
further Application for seeking release of
the remaining 50% of the amount before
the Delhi High Court on which the Delhi
High Court has been pleased to issue notice
to the Respondents by its order dated
05.11.2020. After having approached Delhi
High Court in this manner, the Petitioner
has approached this Court in this petition
under Article 227 only on 08.12.2020, after
a lapse of almost one year from the date of
the impugned order, 12.12.2019.

21. In rejoinder the learned counsel
for the Petitioner has reiterated his earlier
arguments and said that it is no doubt true
that General Conditions of Contract
would prevail over Tender Document
ordinarily, however, in this case there is
the phrase "with the written consent of
both the parties". The counsel for the
Petitioner argued that in this case the
Tender document is the written consent,
and
would
override
the
General
Conditions of Contract. The learned
counsel for the Petitioner has placed
reliance upon several judgements to say
that even though the cause of action or
part of cause of action may have arisen at
Lucknow that would not determine the
seat of Arbitration and has referred to the
importance of the determination of the
seat of Arbitration as discussed by the
Supreme Court in the judgement rendered
in BGSSGS Soma (supra). The Learned
counsel for the Petitioner has argued that
in this case the conduct of the parties
would give rise to the presumption that it
is a separate contract condition to hold
Arbitration at Delhi, that was agreed
upon between the parties, and the
subsequent condition so created by
implication would override the written
consent given in the contract. It has also
been argued that the judgement rendered
in Mankastu Impex (supra) would not
apply as it related to international
Arbitration, whereas the controversy
before this Court has been raised with
respect to an Arbitration that has been
held in India between the parties and is
governed by Part I of the Act of 1996.

22. It has also been argued by the
learned counsel for the Petitioner that
where there is a conflict between written
agreement among the parties and the
conduct of the parties, the conduct of the
parties
would
prevail.
The
learned
counsel for the Petitioner has referred to
judgement rendered by the Supreme
Court in Inox Renewables Ltd versus
Jayesh Electricals Ltd 2021 SCC Online
SC 448, and has relied upon paragraphs
11, 16 and 17 of the judgement.

23. With regard to the argument of the
Learned counsel for the Respondent that
this petition under Article 227 is not
maintainable having been filed through
Director
of
one
of
the
companies
constituting the Joint Venture, it has been
argued that the contract was awarded to a
Joint-Venture partnership between three
companies. The deponent of the affidavit in
this petition is the Director of Zapdor /
Under Order XXX Rule 2 C.P.C. and Order
XXIX Rule 1 C.P.C., Amresh Anand is
9 All. M/S Zapdor-Ubc-Abnjv Delhi Vs. U.O.I. & Ors.
835
competent to file the Application/petition
before this Court.

24. After hearing the parties at length,
this Court finds that there are four issues
which must be considered by this Court to
decide this petition.

a) Whether this petition under
Article 227 is maintainable ?

b) Whether Cause of Action or
subject matter of the Suit would determine
the Court which could exercise supervisory
jurisdiction to decide the Section 34
petition?

c) Whether it would be the
'Venue' or the 'Seat' of Arbitral proceedings
which would determine the Court which
can exercise supervisory jurisdiction over
the Arbitral proceedings ?

d) Whether in the absence of a
specific mention in the contract agreement
regarding 'Seat' of Arbitration, the conduct
of parties would determine the 'Seat' and
therefore act as an exclusionary clause for
Courts at all other places to exercise
supervisory control over the Arbitral
proceedings ?

25. With regard to the first issue of
maintainability of the petition on behalf of
the J.V. Company filed only by one
Director of one company, this Court finds
that with regard to the question of
maintainability of the petition on behalf of
the Joint Venture company/ consortium; it
has been argued by the learned counsel for
the Petitioner that three Companies had
come together to make a bid for the
contract
relating to electrification of
Jafarabad-Akbarpur-Tanda Section. The
Director of Zapdor Mr Amresh Anand had
been authorised by the Directors of all three
Companies to enter into correspondence for
the Award of Contract and also to do all
that was needful with regard to arbitration
proceedings. Mr Amresh Anand had been
authorised by all to place their case before
the Arbitrator. No objection was raised by
the Railways with regard to the appearance
of Mr Amresh Anand before the Arbitrator
for pursuing the case of the Joint Venture.
Now a challenge is being raised for the first
time regarding the capacity of Mr Amresh
Anand to file the petition. The learned
counsel for the Petitioner has placed
reliance upon judgement rendered by the
Supreme Court in the case of United Bank
of India versus Naresh Kumar and others
1996 (6) SCC 660, where the appellant
Bank had instituted a Suit for recovery of
loan advanced to the Respondent together
with interest thereon. The Suit having been
filed in the name of the appellant bank, full
amount of Court fees had been paid. The
trial of the Suit also proceeded. Although
the Trial Court found the Appellant Bank
had indeed advanced money to the
Respondent and its claim was justified, it
rejected the claim of the bank only on the
ground that the plaint was not duly signed
and verified by a competent person. The
First Appeal and Second Appeal were also
dismissed. The Bank approached the
Supreme Court.

26. The Supreme Court observed that
procedural defects which do not go to the
root of the matter should not be permitted
to defeat a just cause. It also observed in
paragraph 10 as follows -

"10. It cannot be disputed that a
Company like the appellant can sue and be
sued in its own name. Under Order VI Rule
14 of the Code of Civil Procedure, pleading
is required to be signed by the party and its
counsel if any. As a Company is a juristic
entity it is obvious that some person has to
sign the pleadings on behalf of the company.
836 INDIAN LAW REPORTS ALLAHABAD SERIES
Order XXIX Rule 1 of the Code of Civil
Procedure, therefore, provides that in a Suit
by or against a Corporation, the Secretary or
any Director or other principal officer of the
Corporation who is able to depose to the
facts of the case might sign and verify on
behalf of the Company. Reading Order VI
Rule 14 together with Order XXIX Rule 1 of
the Code of Civil Procedure it would appear
that even in the absence of any formal letter
of authority or power of attorney having been
executed, a person referred to in Rule 1 of
Order XXIX can, by virtue of the office which
he holds, sign and verify the pleadings on
behalf of the corporation. In addition there to
under Order XXIX Rule (1) of the Code of
Civil Procedure, as a Company is a juristic
entity, it can duly authorise any person to
sign the plaint or the written statement on its
behalf , and this would be regarded as
sufficient compliance with the provisions of
Order VI Rule 14 of the Code of Civil
Procedure. A person may be expressly
authorised to sign the pleadings on behalf of
the Company, for example by the Board of
Directors passing a Resolution to that effect,
or by the power of attorney executed in
favour of any individual. In the absence
thereof, and in cases where the pleadings
have been signed by one of its officers, a
corporation can ratify the said action of its
officer in signing the pleadings. Such
ratification can be express or implied. The
Court can, on the basis of the evidence on
record, and after taking all circumstances of
the case, specially with regard to the conduct
of the trial, come to the conclusion that the
corporation had ratified the act of signing of
the pleadings by its officer..."

This Court is of the opinion that
considering the facts and circumstances of
the case as pleaded and the substantial
questions of law that arise, the petitioner
cannot be nonsuited on technical grounds
alone.

27. With regard to the issue of
maintainability of this petition under
Article 227 of the Constitution, this Court
is bound by the observations of the
Supreme Court in Soma JV (supra) where
the project site was located in the States of
Assam and Arunachal Pradesh and the
agreement was signed at Faridabad. With
regard
to
dispute
resolution
through
Arbitration, the parties agreed that it shall
be settled finally in accordance with the
provisions of the 1996 Act and the
Arbitration proceedings shall be held at
New Delhi/Faridabad, India.

On 16.05.2011 the notice of
Arbitration was issued to the Petitioner in
regard to payment of compensation for
losses suffered due to delays. The Arbitral
Tribunal was constituted which held 71
sittings at New Delhi and then delivered a
unanimous Award again at New Delhi, by
which the claims of the Petitioner were
allowed together with simple interest at the
rate of 14% per annum till the date of
actual payment. The Responden being
aggrieved filed an Application under
Section 34 before the Court of District and
Sessions Judge, Faridabad Haryana. The
Petitioner filed an Application under
Section 151 read with Order VII Rule 10 of
the C.P.C. and Section 2 (1) (e) (i) of the
1996 Act seeking a Return of the petition
under Section 34 for presentation before
the appropriate Court at New Delhi, and/or
the District Judge at Dhemaji Assam. The
Special Commercial Court Gurugram,
allowed the Application of the Petitioner to
return
the
Section
34
petition
for
presentation before the proper Court having
jurisdiction in New Delhi. The Respondent
filed an appeal under Section 37 of the
1996 Act before the Punjab and Haryana
High Court which held the appeal to be
maintainable and also that Delhi was only a
convenient
"venue"
where
arbitral
9 All. M/S Zapdor-Ubc-Abnjv Delhi Vs. U.O.I. & Ors.
837
proceedings were held and not the "seat"
of arbitral proceedings at Faridabad would
have jurisdiction on the basis of cause of
action having arisen in part in Faridabad.
The Petitioner challenged such order before
the Supreme Court.

28. It was argued that an order which
allowed an Application under order VII
Rule 10 CPC cannot amount to an order
refusing to set aside an arbitral Award
under Section 34 of the 1996 Act. it was
also argued that even if both New Delhi
and Faridabad had jurisdiction on the basis
of part of cause of action arising at New
Delhi and at Faridabad, the ratio laid down
in the Constitution Bench decision in the
case of BALCO (supra) would apply as
understood by two subsequent decisions of
the Supreme Court in Reliance Industries
Ltd versus Union of India 2014 (7) SCC
603; and in Indus Mobile Distribution
(Private
)Limited
versus
DataWind
Innovation (Private )Limited 2017 (7)
SCC 678. It was also argued by the learned
counsel for the Petitioners that the place of
Arbitration as determined in accordance
with Section 20 of the 1996 Act was New
Delhi therefore this being the seat as
determined by the Tribunal in the case,
challenge under Section 34 of the 1996 Act
could only be made in the courts at New
Delhi.

On the other hand the Additional
Solicitor General supported the judgement
under appeal saying that an order passed
under Order VII Rule 10 C.P.C. would
amount to refusal to set aside an Award and
therefore appeal would be maintainable.
Moreover the Arbitration clause only
referred to the convenient venue and the
fact that the sittings were held at New
Delhi would not make New Delhi the seat
of Arbitration under Section 20 (1) of the
Act 1996.