JUDGMENT Arun Tandon, J.
1. Head Sir A.K. Mishra Advocate on behalf of the petitioner, Sri Prakash Padia on behalf of Respondent No. 1.
2. With the consent of the parties writ petition is being disposed of at the admission stage itself.
3. Indian Oil Corporation Limited entered into an agreement of Dealership for Petrol and High Speed Diesel Oil with Sri R.C. Dua Supplies for carry on the business in the name and style of M/S Dua Supplies and Traders for running of retail outlet of Indian Oil Corporation Ltd. for the outlets situated at Fatehabad Road as well as Jeoni Mandi, Agra. For the said purpose a written agreement was executed between the parties on 11th May, 2000 (Photo copy of the agreement has been produced before this Court by the parties). By mean of an order sated 8th April, 2004 on instruction of the Divisional Office of Indian Oil Corporation, the sale and supply of M/S Dua Supplies and Traders (hereinafter referred to Dealer) was suspended with immediate effect. By means of another letter dated 13th May, 2003, the petitioner Dealer was served with a show cause notice signed by Senior Divisional Retail Sale Manager calling upon the petitioner to submit his explanation within 7 days qua violation of Clause 37 of the agreement. The petitioner has submitted his reply to the notice.
4. The petitioner apprehending cancellation of his appointment as dealer filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 before the District Judge Agra, which was registered as Arbitration Case No. 565 of 2004. By means of the said application, the petitioner prayed for interim protection till the matter was referred for arbitration as per the agreement between the parties dated 11th May, 200 specifically Clause 69. On 22nd May, 2004 the learned District Judge issued notice on the said application and restrained the Corporation from canceling the dealership of the petitioner during this period. The corporation did not submit any reply despite notice as a result whereof the learned Additional District Judge (Court No. 1) Agra passed an order dated 31st May, 2004 directing on 28th July, 2004 and further modified the ex parte injunction order by further directing that the Corporation shall not interfere in the sale of the petroleum product by the petitioner and shall continue to supply said products to the petitioner dealer.
5. The Corporation filed its written statement in the aforesaid Arbitration Case No. 565 of 2004 and among other raised an issue that the suit as filed by the plaintiff was not maintained in view of the dealership agreement executed between the parties as the Civil Court at Delhi along had the jurisdiction to try the suit. It was also pointed out that the plaintiff dealer had not applied for disputed being referred to arbitration before approaching the Court. On merits the grant of temporary injunction was objected on the ground (i) that the petitioner was involved in adulteration, (ii) he had violated Clause 37 of agreement act.
6. The learned Additional District Judge by means of the judgment dated 15th October, 2004 rejected the application, being Case No. 565 of 2004, filed by the petitioner with the findings (a) injunction application under Section 9 of the Arbitration Act, before seeking arbitral proceeding, is legally not maintainable (b) that the Civil Court at Agra have not jurisdiction to try the suit in view of Clause 68 of the agreement (c) the petitioner has failed to make out any case of likelihood of irreparable loss and injury being caused to applicant. It is against this order dated 15th October, 2004 the Dealer M/S Dua Supplies and Traders have filed the present writ petition.
7. On behalf of the petitioner the aforesaid order passed by the learned Additional District Judge has been challenged on the ground (a) that an application under Section 9 of the Arbitration and Conciliation Act, 1996 is maintainable even before commencement of arbitration proceedings and in support thereof the petitioner has placed reliance upon the judgment of the Hon'ble Supreme Court reported in 1999(2) SSC 497, (b) Clause 68 of the Dealership Agreement cannot be read in a manner so as to confer jurisdiction on the Civil Court at New Delhi in the facts if the cause as no case of action has arisen within the territorial limit of Civil Court at Delhi, (c) the entire action taken by the Indian Oil Corporation is mala fide and as such the petitioner was legally entitled to grant of interim protection till the decision of the arbitration proceedings.
8. On the behalf of the respondent it is contended that the conduct of the petitioner was not fair inasmuch as he had not applied for arbitrator being appointed under Clause 69 of the agreement before filling an application under Section 9 for grant of interim protection and therefore the application itself was not maintainable. The proceedings initiated at Civil Court Agra are wholly without jurisdiction inasmuch as from the agreement, as entered into between the parties, Civil Court at New Delhi along had jurisdiction in the matter and even otherwise petitioner had not established before the court below that the Delhi Court did not have any jurisdiction in the matter, as no cause of action has arisen therein. So as to rely upon Section 20 of the Civil Procedure Code, lastly it is contented that the dealership of the petitioner has already been terminated vide order dated 29 November, 2004. On an application made by the petitioner an arbitrator has also been appointed, in accordance with Clause 69 of the agreement, of 13th January, 2005. The petitioner can approach the arbitrator itself for interim protection in accordance with the provision of Arbitration and Conciliation Act 1999.
9. I have heard counsel for the parties and have gone through the records of the writ petition.
10. This appeal had been filed under Section 37(A) of the Arbitration and Conciliation Act, 1996 against the order passed by the District Judge Agra in Arbitration Case No. 565 of 2004 dated 15th October, 2004 in proceeding under Section 9 of the Arbitration and Conciliation Act, 1996. Between the parties the following issues required adjunction:
Whether an application under Section 9 of the Arbitration and Conciliation Act can be filed even prior to the initiation of the arbitration proceeding.
(b) Whether in the facts of the case Civil Courts at New Delhi alone had jurisdiction to entertain the suit proceedings in view of Clause 68 of the dealership agreement.
(c) Whether the petitioner was entitled to interim protection under Section 9(e) of the Arbitration and Conciliation Act in the facts of the case.
For deciding the issue No. 1 it would be worthwhile to refer to Section 9(e) of the Arbitration and Conciliation Act, 1996 which read as follows:
"9. Interim measure etc. by Court - A party may, before of during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to a Court:-
(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely:-
(a)...........
(b) ...........
(c) ...........
(d) ...........
(e) such other interim measure of protection as may appear to the Court to be just and convenient."
12. From the aforesaid section it is apparently clear that the Competent Civil Court have been conferred a power to pass an order under Section 9 of the Arbitration Act in the same manner as it had for the said purpose, in relation to any other regular proceedings initiated before it. In the facts of the case it is not in dispute that the petitioner had not applied for appointment of an arbitrator in terms of the agreement before making an application under Section 9 of the Act. This the arbitral proceedings had not commences.
13. A plain reading of Section 9 would established that the Competent Civil Court has been conferred jurisdiction to pass interim orders even before arbitral proceedings commence, and before an arbitrator is appointed. The Hon'ble Supreme Court, in the judgment reported in 1999(2) SCC 479; Sundaram Finance Limited v. Nepc India Ltd., had the occasion to consider the difference in the language of Arbitration Act, 1940 viz-a viz Arbitration and Conciliation Act, 1996.
14. The Hon'ble Supreme Court has recorded its conclusion in paragraph 9 to the effect that Arbitration and conciliation Act, 1996 is very different from Arbitration Act, 1940 and therefore the provisions of 1996 Act should be interpreted and construed independently, in fact reference to 1940 Act may actually lead to misconstruction.
15. The Hon'ble Supreme Court, after referring to Section 21 of proceeding in paragraph 13 of its judgment, has held as follows:
"Under the 1996 Act, the court can pass interim orders under Section 9. Arbitral proceedings, as we have seen, commence only when the request to refer the dispute is received by the respondent as per Section 21 of the Act. The material words occurring in Section 9 are "before or during the arbitral proceedings". This clearly contemplates two stages when the court can pass interim orders, i.e., during the arbitral proceedings or before the arbitral proceedings. There is no reason as to why Section 9 of the 1996 Act should not be literally construed. Meaning has to be given to the word "before" occurring in the said section. The only interpretation that can be given is that that court can pass interim orders before the commencement of arbitral proceedings. Any other interpretation, like the one given by the High Court will have the effect of rendering the word "before" in Section 9 as redundant. This is clearly not permissible. Not only does the language warrants such an interpretation but it was necessary to have such as provision in the interest of justice. But for such a provision, no party would have a right to apply for interim measure before notice under Section 21 is received by the respondent. It is not unknown when it becomes difficult to serve the respondents. It was, therefore, necessary that provision was made in the Act which could enable a party to get interim relief urgently in order to protect its interest. Reading the section as a whole it appears to us that the court has jurisdiction to entertain an application under Section 9 either before arbitral proceeding of during arbitral proceedings or after the making of the arbitral award but before it is enforced in accordance with Section 36 of the Act."
16. In view of the said decision of the Hon'ble Supreme Court, it is settled that a party has a right to apply for interim protection even before notice under Section 21, for referring the dispute to arbitration, is received by the respondent. Thus in the facts of the case it cannot be said that the dealer had no right to approach the component civil court under Section 9 of the Arbitration Act for grant of interim protection before making a request for the dispute being referred to arbitrator under Section 69 of the Dealership Agreement.
17. However, it may be added that three there must be a manifest intention on the part of the application to take recourse to arbitral proceedings before he can move the civil court under Section 9 of the Act by means of an application for interim protection. The Hon'ble Supreme Court has clarified the aforesaid legal position in paragraph 19 of the aforesaid judgment. Relevant portion whereof reads as follows:
" In order to give full effect to the words "before of during arbitral proceeding" occurring in Section 9, it would not be necessary that a notice invoking the arbitration Clause must be issued to the opposite party before an application under Section 9 can be filed. The issuance of a notice may, in a given case, be sufficient to establish the manifest intention to have the dispute referred to an Arbitral Tribunal. But a situation may so demand that a party may choose to apply under Section 9 for an interim measure even before issuing a notice contemplated by Section 21 of the said Act. If an application is so made, the court will first have to be satisfied that there exists as valid arbitration agreement and the applicant intends to take the dispute to arbitration. Once it is so satisfied, the court will have the jurisdiction to pass orders under Section 9 giving such interim protection as the facts and circumstances warrant. While passing such and order and in order to ensure that effective steps are taken to commence the arbitral proceedings, the court while exercising jurisdiction under Section 9 can pass a conditional order to put the applicant to such terms as it may deem fit with a view to see that effective steps are taken by the applicant for commencing the arbitral proceedings...."
18. It is, therefore, the duty of the Court while exercising jurisdiction under Section 9 to pass an order granting interim protection in cases where notice under Section 21 of the Act has not been issued to the applicant to take effective steps for commencing the arbitral proceedings.
19. Issue No. 1 is decided accordingly by holding that the application under Section 9 of the Arbitration and Conciliation Act, 1996 is maintainable even if the notice under Section 21 for appointment of Arbitrator had not been moved by the applicant.
For the purposes of deciding the aforesaid issue, it would be relevant to refer to the paragraphs 1, 59 and 68 of the memorandum of agreement, which reads as follows:
"Para-1. The Corporation hereby appoints the Dealer as its Dealer for the retail sale or supply at the said premises of petrol/HSD/motor oil/grease and such other petroleum products as may hereafter by specified by the Corporation form time to time (all of which are hereinafter collectively referred to as "the products") in accordance with the terms and conditions hereunder appearing."
"Para-59. On the termination of this Agreement should there be any money due to the Corporation the Dealer undertakes to pay the same forthwith to the corporation at its office at New Delhi.
If the Corporation shall appropriate the cash or the cash proceeds of the approved securities deposited by the Dealer as security under Clause 52 hereof the extent of the amount due to it and if the amount thus appropriated shall be insufficient the cover the Dealer's indebtedness to the Corporation, the Dealer agrees to pay to Corporation at New Delhi any such balance immediately on demand thereof being made by the Corporation."
"Para-68. This Agreement has been made in New Delhi and all payments thereunder shall be due and made in New Delhi, unless otherwise directed by the Corporation. The Courts in the city of Delhi alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising this Agreement."
20. Form the aforesaid clauses it is apparently clear that the agreement between the parties has been made at New Delhi. However, counsel for the petitioner contends that the agreement in fact was executed at Agra and in support thereof he relies upon the stamp affixed below the name of person signing on behalf of the Corporation, whose designation has been mentioned as Chief Divisional Manager, Indian Oil Corporation Limited, Indian Oil Bhawan, 65/2, Sanjay Place, Agra, duly constituted attorney.
21. According to the dealer, the agreement had not been made at Delhi. All the transactions with regards to dealership have been effected from the Regional Office of the Corporation at Agra and therefore the civil court at Delhi had no jurisdiction to entertain any suit proceedings in respect of the dispute, which have arisen in respect of the terms and conditions of the said agreement. Counsel for the petitioner has placed reliance upon the judgment of the Hon'ble Supreme Court reported in 1992 SC 1514; Patel Roadways Limited v. Prasad Trading Company, for the proposition that parties cannot confer jurisdiction on Court where Corporation has its Principal office, if the entire cause of action has arisen at a place where the subordinate office of the Corporation is situate. This legal position has been laid down by the Hon'ble Supreme Court with reference to the amendment incorporated by way of explanation to Section 20 of the C.P.C. vide Code of Civil Procedure Amendment Act, 1976. For ready reference paragraph 12 and 15 of the judgment of the Hon'ble Supreme Court are being quoted herein below:
"Para 12. We would also like to add that the interpretation sought to be placed by the appellant on the provision in question renders the explanation totally redundant. If the intention of he legislature was, as is said on their behalf, that a suit against a corporation could be instituted either at the place of its sole or principal office (whether or not the corporation carries on business at that place) or at any other place where the cause of action arises, the provisions of Clauses (a), (b) and (c) together with the first part of the Explanation would have completely achieved the purpose. Indeed the effect would have been wider. The suit could have been instituted at the place of the principal office because of the situation of such office (whether or not any actual business was carried on there). Alternatively a suit could have been instituted at the place (C) (irrespective of whether the corporation has a subordinate office in such place or not). This was, therefore, not the purpose of the explanation. The Explanation is really an explanation to Clause (a). It is in the nature of a clarification on the scope of Clause (a) viz, as to where the corporation can be said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a subordinate office of the corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in case of a corporation, for the purposes of Clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filling of a suit and not the principal office as well as these location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be placed where the corporation is deemed to be carrying on business, the disjunctive "or "will not be there. Instead, the second part of the explanation would have read" and, in respect of any cause of action arising at any place where it has a subordinate office, also at such place."
"Para 15. In this view of the matter, since in the instant two cases Clause ( c) is not attracted to confer jurisdiction on courts at Bombay and the appellant has admittedly its subordinate offices at the respective places where the goods in these two case were delivered to it for purposes of transport the courts at Bombay had no jurisdiction at all to entertain the suits filed by the respondents and the parties could not confer jurisdiction on the courts at Bombay by an agreement. Accord-ingle no exception can be taken to the findings in this behalf recorded by the trial Court and the High Court in these two cases.
22. Reliance has also been placed upon the judgment of the Hon'ble Supreme Court reported in 1983(4) SCC 707: Gajdhar Transport v. Triveni Engineering Works and Ors., wherein in paragraph 3 it has been held as flows:
" It is now settled law that it is not competent to the parties by agreement to invest a court with jurisdiction which it does not otherwise possess but if there are more than one forums where a suit can be filed, it is open to the parties to select a particular forum and exclude the other forums in regard to claims which one party may have against the other under a contract. Clause 17 of the contract of Carries could therefore, validly confer exclusive jurisdiction to entertain the suit filed by the respondents against the appellant. It is true and there we agree with the respondents that no part of the cause of action in the present case arose in the City of Jaipur, and therefore, the jurisdiction of the Court in Jaipur City could not be invoked on the ground that the cause of action or a part therof has arisen in Jaipur. But the jurisdiction of the court and here it could not be disputed that the appellant does carry on business in the City of Jaipur and if that be so, there can be no doubt that the Court in Jaipur City would have jurisdiction to entertain the suit filed by the respondents against the appellant. In that event, Clause 17 of the Contract of Carriage conferring exclusive jurisdiction on the Court in Jaipur city and excluding the jurisdiction of other courts would be valid and effective."
23. Reliance has also been placed upon the judgment of the Hon'ble Supreme Court reported in AIR 1971 SC 740; Kakam Singh v. Gammon (India) Ltd.
24. From the aforesaid judgments of the Hon'ble Supreme Court, it is well settled that the parties cannot, by an agreement, confer jurisdiction upon the Court, not possesses by it under the Code.
25. Thus, in the facts of the case it is to be seen as to whether Civil Courts at Delhi had any jurisdiction to entertain the suit, namely as to whether any cause of action has arisen which may lead to confer a jurisdiction upon the Civil Courts at Delhi to entertain the suit.
26. It is settled principle that the place where the agreement has been entered into between the parties is also a place where part of the cause of action arise, if the breach of terms and conditions of the agreement is alleged by one of the party to be agreement. Reference in that regard may be had to the judgment of the Hon'ble Supreme Court reported in A.I.R. 1989 SC 1239, wherein it has been clarified that in a suit, alleging breach of contract, jurisdiction to entertain and decide the suit can be at amongst other at :-
(a) place where the agreement was mad;
(b) place of performance of the agreement;
(c) where the defendant resides.
27. The place where the offer is accepted and its intimation results in a contract is ordinarily a pace where contract is made and therefore a suit can be filed within the territorial jurisdiction of the Court where the contract has been made. A suit is maintainable in a Civil Court having territorial jurisdiction with regards to place where the contract was made amongst other places like the place of performance of the agreement. In such circumstances, if the parties agree to vest jurisdiction by contract upon one of the courts only, it cannot be said to be opposed to public policy or in violation of Section 20 of the Civil Procedure Code. The legal position is well settled. It is, therefore, to be determined in the facts of the each case as to whether the jurisdiction conferred under the agreement between the parties to vest exclusive jurisdiction in one of the Courts competent to try the suit with regards to Section 20 C.P.C is legal or not.
28. Once the defendant has been taken a plea of ouster of the jurisdiction of the Civil Court at Agra, in view of Clause 68 of the agreement entered into between the parties, it was for the plaintiff to establish by cogent evidence that the agreement was not entered into at Delhi nor any part of the said agreement was performed at Delhi at any point of time. The plaintiff when faced with the plea of ouster of jurisdiction, in view of written clause of the agreement, must establish by cogent evidence that the said clause is legally not sustainable in view of the fact that it confers jurisdiction upon the Court, which is not so vested under Section 20 Civil Procedure Code. The existence of the agreement between the parties, being not in dispute, the plaintiff was duty bound to establish that the said clause runs contrary to the provisions of Section 20 Civil Procedure Code and therefore is unsustainable in the eyes of law inasmuch as no amount of consent of the parties can conferred a jurisdiction, not legally vested in a Court. Since the plaintiff had failed to lead any such evidence nor he has been otherwise able to demonstrate before this Court successfully that the agreement was not entered into between the parties at Delhi and no part of the contract was performed at Delhi, this Court is not inclined to interfere with the findings recorded by the trial courts in the facts of the present case that the suit could be tried by the Civil Court at Delhi alone.
29. From the facts, as has been noticed hereinabove, it is clear that an application under Section 9 of the Arbitration Act was filed by the plaintiff-petitioner at the time his supply were suspended and before a named arbitrator entered into arbitral proceedings. The issue as to whether the petitioner was entitled to interim protection till the dispute with regards to suspension of the supplies of the petitioner under the agreement was referred for arbitration has lost all its significance in view of subsequent development namely (a) termination of dealership of M/s Dua Supplies Traders vide order dated 29th Novermber, 2004 issued under signature of General Manager, U.P. Sales Office, Agra, enclosed as annexure- 1 to the second supplementary affidavit filed on behalf of the Indian Oil Corporation dated 10th December, 2004 (B) in view of the statement made at bar on behalf of the counsel for the corporation that on the application of the dealer a named arbitrator has been appointed for deciding the dispute with regards to the termination of the dealership of the petitioner on 13th January, 2005.
30. It is needless to point out that it is still open to the petitioner to seek appropriate protection under the provisions of the Arbitration and Conciliation Act, 1996 before the arbitrator.
31. In view of the aforesaid, the appeal is disposed of finally.