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Aruna Oswal v/s Gen Y Commodities Private Limited & Others

    CS.(COMM). Nos. 1206, 1208 of 2018 & IAs No. 14937, 14938, 14963 of 2018, 4482, 4956, 5316 & 13229, 3333, 4481, 4958, 5317 & 4957 of 2019
    Decided On, 25 February 2020
    At, High Court of Delhi
    By, THE HONOURABLE MR. JUSTICE RAJIV SAHAI ENDLAW
    For the Plaintiff: Sandeep Sethi, Sr. Advocate, Mukti Chaudhary, Tejaswini, Rishab Tuli, Sanjiv Kakra, Bharat Arora, Advocates. For the Defendants: D1, Sudhir Nandrajog, Sr. Advocate, Ateev Mathur, Vaibhav Arora, Jagriti Ahuja, D2, Aditya Kumar, Arpit Gupta, D3, Mayank Mishra, Pallavi Kumar, Lavleen Goyal, D4, Mayank Mishra, Pallavi Kumar, Advocates.


Judgment Text

1. The applications of the defendant No. 1 under Order VII Rules 10 & 11 of the Code of Civil Procedure, 1908 (CPC) and under Section 8 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), in both the suits are for consideration.

2. I have requested the Senior Counsel for the defendant No. 1 to address first on the applications under Section 8 of the Arbitration Act, being of the view that if the parties are referred to arbitration, the need to consider the applications under Order VII Rules 10&11 of the CPC, would not arise. However, the Senior Counsel for the defendant No. 1 contends that if this Court does not have territorial jurisdiction to entertain the suit, an order under Section 8 of the Arbitration Act referring the parties to arbitration can also be not made and the plaint has to be rejected/returned for filing in the appropriate Court and as and when filed, it will be open to the defendant No. 1 to take up the plea of Section 8 of the Arbitration Act.

3. Without testing the merits of the aforesaid contention, the Senior Counsel for the defendant No. 1 has been heard on the applications under Order VII Rules 10 & 11 of the CPC.

4. The Senior Counsel for the defendant No. 1, arguing with reference to CS(COMM) No. 1206/2018, has drawn attention to paragraph 26 of the plaint dated 12th November, 2018, where the plaintiff has pleaded as under:

“26. The FDRs created from the trading account of AO Security is lying with the Defendant No. 2 Parliament Street Branch, New Delhi within the jurisdiction of this Hon'ble Court. Hence this Hon'ble Court has territorial jurisdiction to try present suit. The Defendant No. 1 has its offices within the jurisdiction of this Hon'ble Court and hence this Hon'ble Court has the territorial jurisdiction to entertain and try the present suit. That the plaintiff has not filed any other petition either in this Court or any other High Court or Hon'ble Supreme Court of India.”

5. Finding IA No. 13229/2019 in CS(COMM) No. 1206/2018, of the plaintiff for amendment of the plaint to be also pending consideration and it being the settled view that an application for amendment has to be heard first, I have enquired from the Counsel for the plaintiff about the amendment sought.

6. The Counsel for the plaintiff states that the amendment sought is to correct the mistakes in the plaint.

7. The Senior Counsel for the defendant No. 1, under instructions states that the defendant No. 1 has no objection to the amendment sought.

8. The Counsel for Axis Bank Limited, the Counsel for Bank of India and the Counsel for Pankaj Oswal also have no objection to the amendment sought. None appears for any of the other defendants.

9. IA No. 13229/2019 in CS(COMM) No. 1206/2018 is allowed and disposed of.

10. The Senior Counsel for the defendant No. 1, while arguing the applications under Order VII Rules 10 & 11 has taken me through the prayer paragraph of the existing plaint in CS(COMM) No. 1206/2018 and has contended that all the reliefs claimed are against defendant No. 1 only and not against any of the other defendants. It is argued that once the reliefs claimed are against defendant No. 1, the mere fact that the Fixed Deposit Receipts (FDRs) in the name of the defendant No. 1 are deposited with the defendant No. 2 Bank of India, Parliament Street, New Delhi would not confer territorial jurisdiction on this Court as the defendant No. 1 can have such FDRs in banks at any place.

11. It is also argued by the Senior Counsel for the defendant No. 1 that the husband of the plaintiff had a trading account with the defendant No. 1, a member of the Multi Commodity Exchange of India Limited (MCX) and all transactions between the husband of the plaintiff and the defendant No. 1 were also not in Delhi but in Gurgaon and Ghaziabad. It is contended that the stamp duty payable on the said transaction in Gurgaon and Ghaziabad is less than in Delhi and the plaintiff may be examined under Order X of the CPC to confirm whether the stamp duty on the transaction had been paid at the rates prevalent in Delhi or the rates in Gurgaon or Ghaziabad. It is also argued that there is no plea of any trading activity constituting the cause of action against the defendant No. 1, being at Delhi and else there is nothing in the plaint to disclose the cause of action at Delhi.

12. Though the Senior Counsel for the defendant No. 1 has also sought to take me through the Account Opening Form filled by the husband of the plaintiff and filed by the defendant No. 1 along with the applications under Order VII Rules 10 & 11 of the CPC, but agrees that for considering an application under Order VII Rules 10 & 11 of the CPC, the defences of the defendants are not to be seen and it is only the plaint and the documents filed therewith that are relevant.

13. The plaintiff has instituted these suits for recovery of monies from the defendant No. 1, stated to have been due from the defendant No. 1 to the husband of the plaintiff who has died leaving the plaintiff and the children, also impleaded as defendants, as only heirs. It is also the pleaded case of the plaintiff that the defendant No. 1 has admitted liability and the plaintiff at pages 8 & 9 of Part-III A file in CS(COMM) No. 1206/2018 has filed documents showing the acknowledgement of the defendant No. 1 of the credit balance in the account of the late husband of the plaintiff.

14. I have thus enquired from the Senior Counsel for the defendant No. 1, whether not this Court would have territorial jurisdiction on the principle of "debtor must seek the creditor". The plaintiff, as per the title in the plaint, is a resident of Tilak Marg, New Delhi and which is not controverted and in my view, on the said principle of "debtor must seek the creditor" i.e. the debtor must seek the creditor and pay at the place the creditor is stationed, as enunciated in Union Bank of India v. Milkfood Ltd., MANU/DE/2018/2012 (DB); Yash Chhabra v. Maya Jain, 2015 SCC OnLine Del 10124 (DB); Shradha Wassan v. Anil Goel, 2009 SCC OnLine Del 1285; IUP Jindal Metals & Alloys v. Conee Chains Private Limited, 2013 SCC OnLine Del 1454; DAP Buildcon v. BB Lal Agarwal, 2016 SCC OnLine Del 6377; Cypress Fincap Private Limited v. Vyogiswami Financial Consultants, 265 (2019) DLT 383; Satyapal v. Slick Auto Accessories Private Limited, 2014 (DLT SOFT) 500=2014 SCC OnLine Del 998 and LN Gupta v. Tara Mani, 24 (1983) DLT 184 the Court within whose jurisdiction the plaintiff is residing would have territorial jurisdiction.

15. The aforesaid position in law is not controverted.

16. Thus the need to call upon the Senior Counsel for the plaintiff in CS(COMM) No. 1206/2018 to address on the application under Order 7 Rules 10 & 11 of the CPC has not arisen.

17. IA No. 4956/2019 in CS(COMM) No. 1206/2018 and IA No. 4957/2019 in CS(COMM) No. 1208/2018 are dismissed.

18. The Senior Counsel for the defendant No. 1, with reference to IA No. 4482/2019 in CS(COMM) No. 1206/2018 and IA No. 4481/2019 in CS(COMM) No. 1208/2018, both under Section 8 of the Arbitration Act has contended that the disputes between the defendant No. 1 as a member of MCX and its customers are governed by the arbitration under the Bye-Laws of MCX and the extract whereof is handed over in the Court.

19. During the course of hearing, the Senior Counsel for the defendant No. 1 has also contended that the defendant No. 1, though at the time of institution of the suits was a member of the MCX, has ceased to be so.

20. I have enquired from the Senior Counsel for the defendant No. 1, whether the Bye-Laws of MCX permit arbitration thereunder, of disputes between an ex-member and its customers, pertaining to the time when he was a member, inasmuch as if it is not so and when the remedy of arbitration is not available today, no purpose would be served by referring the parties to arbitration. Section 8 of the Arbitration Act also requires the Court, before referring the parties to arbitration, satisfy itself that valid arbitration agreement exists. If the arbitration agreement has ceased to exist, no order of referring the parties to arbitration can be made.

21. The Senior Counsel for the defendant No. 1 seeks time to exa

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mine the aforesaid aspect. 22. Attention of the Senior Counsel for the defendant No. 1 has also been drawn to the recent dicta dated 19th February, 2020 of this Court in in CS(COMM) 735/2018 titled SSIPL Lifestyle Private Limited v. Vama Apparels (India) Private Limited, 267 (2020) DLT 467, interpreting the language of Section 8 of the Arbitration Act "not later than the date of submitting his first statement on the substance of the dispute", as not permitting a Section 8 application to be filed beyond the date of filing the written statement as per the CPC. 23. The Counsel for the plaintiff in CS(COMM) No. 1208/2018 has also invited attention to the order dated 6th March, 2019 and 24th May, 2019 directing personal presence. 24. The parties directed to remain present to remain personally present on the next date of hearing. 25. List on 22nd April, 2020. Ordered accordingly.
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