M/S RAVI RANJAN DEVELOPERS PVT. LTDversusADITYA KUMAR CHATTERJEE

                          [2022] 15 S.C.R. 1117                          1117


          M/s RAVI RANJAN DEVELOPERS PVT. LTD                            A
                                  v.
                 ADITYA KUMAR CHATTERJEE
               (Civil Appeal Nos. 2394-2395 of 2022)
                         MARCH 24, 2022                                  B
       [INDIRA BANERJEE AND A. S. BOPANNA, JJ.]
       Arbitration and Conciliation Act, 1996 – ss. 2(1)(e), 9, 11(6)
& 42 - Arbitration Agreement - Seat of Arbitration - Jurisdiction of
High Court - Appellant and respondent entered into a Development
                                                                         C
agreement for development of property situated at Muzaffarpur in
Bihar - The agreement contains Arbitration clause which provides
Kolkata as the place of Arbitral Tribunal - As the dispute arose,
respondent terminated the said Development Agreement -
Respondent moved an arbitration petition in the Calcutta High Court
u/s 11(6) of the Act for appointment of Arbitrator - The appellant       D
objected the territorial jurisdiction of the Calcutta High Court -
High Court allowed the Arbitration Petition and appointed a retired
judge as Sole Arbitrator - There was no finding by the High Court
with regard to its jurisdiction - On appeal, held: The Development
Agreement was admittedly executed and registered outside the
                                                                         E
jurisdiction of the Calcutta High Court – The suit pertains to
immovable property situated in Bihar - No part of the cause of action
had arisen within the territorial jurisdiction of the Calcutta High
Court - Section 11(6) of the Act has to be harmoniously read with
Section 2(1)(e) of the A&C Act - An application under Section 11(6)
of the Act for appointment of an Arbitrator/Arbitral Tribunal cannot     F
be moved in any High Court in India, irrespective of its territorial
jurisdiction - The parties cannot, by consent, confer jurisdiction
on a Court which inherently lacked jurisdiction - The parties never
agreed to submit to the jurisdiction of Calcutta High Court in respect
of disputes, nor did the parties agree upon Kolkata as the seat of
                                                                         G
arbitration – Parties to the arbitration agreement only agreed that
the sittings of the Arbitral Tribunal would be in Kolkata – Kolkata
was only the venue for sittings of the Arbitral Tribunal – Calcutta
High Court inherently lacks jurisdiction to entertain the application
of the Respondent under Section 11(6) of the Arbitration Act.
                                                                         H
                                1117
1118            SUPREME COURT REPORTS                    [2022] 15 S.C.R.


 A           Allowing the appeals, the Court
              HELD: 1.1 In the present case, no suit could have been
       filed in any Court over which the Calcutta High Court exercises
       jurisdiction, since as stated above, the suit admittedly pertains
       to immovable property situated at Muzaffarpur in Bihar, outside
 B     the territorial jurisdiction of the Calcutta High Court and
       admittedly, no part of the cause of action had arisen within the
       territorial jurisdiction of the Calcutta High Court. The Appellant
       who would be in the position of Defendantin a suit, neither resides
       nor carries on any business within the jurisdiction ofthe Calcutta
       High Court. [Para 25][1129-E-G]
 C
               1.2 Of course, under Section 11(6), an application for
       appointment of an Arbitrator necessarily has to be moved in the
       High Court, irrespective of whether the High Court has the
       jurisdiction to decide a suit in respect of the subject matter of
       arbitration and irrespective of whether the High Court at all has
 D     original jurisdiction to entertain and decide suits. As such, the
       definition of Court in Section 2(1)(e) of the A&C Act would not
       be applicable in the case of a High Court exercising jurisdiction
       under Section 11(6) of the A&C Act to appoint an Arbitrator/
       Arbitral Tribunal. At the same time, an application under Section
 E     11(6) of the A&C Act for appointment of an Arbitrator/Arbitral
       Tribunal cannot be moved in any High Court in India, irrespective
       of its territorial jurisdiction. Section 11(6) of the A&C Act has to
       be harmoniously read with Section 2(1)(e) of the A&C Act and
       construed to mean, a High Court which exercises
       superintendence/supervisory jurisdiction over a Court within the
 F     meaning of Section 2(1)(e) of the A&C Act. It could never have
       been the intention of Section 11(6) of the A&C Act that arbitration
       proceedings should be initiated in any High Court in India,
       irrespective of whether the Respondent resided or carried on
       business with in the jurisdiction of that High Court, and
 G     irrespective of whether any part of the cause of action arose within
       the jurisdiction of that Court, to put an opponent at a disadvantage
       and steal a march over the opponent. [Para 26-28][1129-G-H;
       1130-A-D]
             1.3. Section 42 cannot possibly have any application to an
 H     application under Section 11(6), which necessarily has to be made
   M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                        1119
                KUMAR CHATTERJEE

before a High Court, unless the earlier application was also made       A
in a High Court. In the instant case, the earlier application under
Section 9 was made in the District Court at Muzaffarpur and not
in the High Court of Judicature at Patna. An application under
Section 11(6) of the A&C Act for appointment of Arbitrator, could
not have been made in the District Court of Muzaffarpur.
                                                                        B
Therefore, Section 42 is not attracted. [Para 32][1131-C-D]
       1.4 It can never be an absolute general proposition of law,
that where an arbitration agreement says that the place of
arbitration is Faridabad/Delhi and proceedings under Part I of
the A&C Act are also validly initiated in Faridabad, the Court in
Faridabad would, notwithstanding Section 42 of the A&C Act,             C
lose its jurisdiction, just because arbitration is later conducted in
Delhi and Award is made in Delhi. This Court has perused the
Development Agreement. The contention of the Respondent in
the Affidavit in Opposition, that the parties to the arbitration
agreement had agreed to submit to the jurisdiction of Calcutta          D
High Court, is not correct. The parties to the arbitration
agreement only agreed that the sittings of the Arbitral Tribunal
would be in Kolkata. Kolkata was the venue for holding the
sittings of the Arbitral Tribunal. [Paras 42 & 43][1133-E-H]
      2. It is well settled that, when two or more Courts have          E
jurisdiction to adjudicate disputes arising out of an arbitration
agreement, the parties might, by agreement, decide to refer all
disputes to any one Court to the exclusion of all other Courts,
which might otherwise have had jurisdiction to decide the
disputes. The parties cannot, however, by consent, confer
jurisdiction on a Court which inherently lacked jurisdiction. In        F
this case, the parties, as observed above did not agree to refer
their disputes to the jurisdiction of the Courts in Kolkata. It was
not the intention of the parties that Kolkata should be the seat of
arbitration. Kolkata was only intended to be the venue for
arbitration sittings. Accordingly, the Respondent himself               G
approached the District Court at Muzaffarpur, and not a Court in
Kolkata for interim protection under Section 9 of the A&C Act.
The Respondent having himself invoked the jurisdiction of the
District Court at Muzaffarpur, is estopped from contending that

                                                                        H
1120           SUPREME COURT REPORTS                   [2022] 15 S.C.R.


 A     the parties had agreed to confer exclusive jurisdiction to the
       Calcutta High Court to the exclusion of other Courts. Neither of
       the parties to the agreement construed the arbitration clause to
       designate Kolkata as the seat of arbitration. We are constrained
       to hold that Calcutta High Court inherently lacks jurisdiction to
       entertain the application of the Respondent under Section 11(6)
 B
       of the Arbitration Act. The High Court should have decided the
       objection raised by the Appellant, to the jurisdiction of the
       Calcutta High Court, to entertain the application under Section
       11(6) of A&C Act, before appointing an Arbitrator. [Paras 47 &
       48][1135-B-F]
 C          Bharat Aluminium Company v. Kaiser Aluminium (2012)
            9 SCC 552 : [2012] 12 SCR 327 - followed.
            Kiran Singh and Ors. v. Chaman Paswan and
            Ors.[1955] SCR 117; Union of India v. Hardy
            Exploration and Production (India) Inc. (2019) 13 SCC
 D          472 : [2018] 13 SCR 379; Mankastu Impex Private
            Limited v. Airvisual Limited (2020) 5 SCC 399 : [2020]
            4 SCR 565 - relied on.
            Indus Mobile Distribution Private Limited v. Datawind
            Innovations Private Limited and Ors. (2017) 7 SCC 678
 E          : [2017] 4 SCR 744; Hindustan Construction Company
            Limited v. NHPC Limited and Anr. (2020) 4 SCC 310;
            BGS SGS Soma JV v. NHPC Limited (2020) 4 SCC 234
            : [2019] 17 SCR 742 - referred to.
                            Case Law Reference
 F
       [1955] SCR 117                relied on             Para 19
       [2017] 4 SCR 744              referred to           Para 35
       (2020) 4 SCC 310              referred to           Para 35
       [2019] 17 SCR 742             referred to           Para 35
 G
       [2012] 12 SCR 327             followed              Para 36
       [2018] 13 SCR 379             relied on             Para 44
       [2020] 4 SCR 565              relied on             Para 45

 H
    M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                             1121
                 KUMAR CHATTERJEE

      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.2394-                    A
2395 of 2022.
      From the Judgment and Order dated 13.08.2021 of the High Court
at Calcutta in A.P. No.46 of 2021/Order dated 04.10.2021 in R.V.W.
No.14 of 2021 in A.P. No.46 of 2021 and G.A. No.1 in R.V.W. No.14 of
2021 in Arb. P. No.46 of 2021.                                                B
      Ajit Kumar Sinha, Sr. Adv., Dr. Maurya Vijay Chandra, Abhishek
Ritabh Shukla, Naveen Soni, Prem Prakash, Advs. for the Appellant.
     Sanjay Ghosh, Sr. Adv., Rajiv Ranjan Mishra, Partho Ganguly,
Saurabh, Naman Jain, Narender Kumar Verma, Advs. for the
Respondent.                                                                   C
     The Judgment of the Court was delivered by
      INDIRA BANERJEE, J.
      Leave granted.
       2. These appeals are against an order dated 13th August 2021
passed by the Calcutta High Court, allowing the Arbitration Petition No.46/   D
2021 filed by the Respondent under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the ‘A&C Act’), for
appointment of an Arbitrator and also an order dated 4th October 2021
passed by the High Court, rejecting an application made by the Appellant
for review of the said order dated 13th August 2021, being R.V.W.O.           E
No.14/2021.
       3. The Appellant and the Respondent entered into a Development
Agreement dated 15th June 2015 for development of property situated
at Muzaffarpur in Bihar measuring about 12 Kaithas and 11 Dhurs, more
fully described in the said Development Agreement, outside the jurisdiction
                                                                              F
of Calcutta High Court. The said Development Agreement executed
and registered in Muzaffarpur in Bihar, contains an arbitration clause,
which is set out hereinbelow for convenience:
      “37. That in case of any dispute or difference between the
      parties arising out of and relating to this development
      agreement, the same shall be settled by reference of the                G
      disputes or differences to the Arbitrators appointed by both
      the parties and such Arbitration shall be conducted under
      the provisions of the Indian Arbitration and Conciliation Act,
      1996 as amended from time to time and the sitting of the said
      Arbitral Tribunal shall be at Kolkata.”                                 H
1122              SUPREME COURT REPORTS                        [2022] 15 S.C.R.


 A            4. Differences and disputes arose in relation to the said
       Development Agreement, giving rise to various proceedings between
       the parties. On 24th April 2019, the Respondent terminated the said
       Development Agreement. The Appellant has not accepted the termination
       of the said Development Agreement.
 B           5. On 15th May 2019, the Appellant filed a petition before the
       Real Estate Regulatory Authority, (referred to in short as ‘RERA’) at
       Patna, which was registered as RERA Case No.56/377/2019. Soon
       thereafter, on 17th August 2019, the Respondent filed a petition under
       Section 9 of the A&C Act in the Court of the District Judge, Muzaffarpur
       seeking interim protection in respect of the property in question.
 C
             6. On 1st October 2019, the Respondent filed a complaint before
       the Muzaffarpur Municipal Corporation alleging that the building being
       constructed by the Appellant was in violation of the sanctioned building
       plan and seeking stoppage of construction. The Muzaffarpur Municipal
       Corporation dismissed the complaint on 22nd January 2020.
 D
              7. The Respondent appealed to the Bihar Building Municipal
       Tribunal. The appeal is stated to be pending. Soon thereafter, the
       Respondent sent notice to the Appellant invoking the arbitration clause
       under the Development Agreement. The notice was sent to the registered
       office of the Appellant at Patna in Bihar, outside the jurisdiction of the
 E     Calcutta High Court. In November, 2020, the Respondent moved an
       arbitration petition being A.P. No.2020 in the Calcutta High Court under
       Section 11 sub-section (6) of the A&C Act for appointment of Arbitrator.
       The application was, however, withdrawn for technical reasons.
              8. On 15th January 2021, the Respondent filed a second arbitration
 F     petition under Section 11 sub-section (6) of the A&C Act being A.P.
       No.46/2021 in the Calcutta High Court. The Appellant filed an Affidavit
       in Opposition questioning the territorial jurisdiction of the Calcutta High
       Court to decide the application under Section 11(6) of the Arbitration
       Act.
 G           9. In the Affidavit in Opposition, the Appellant contended :
             “a)    There is no valid or enforceable or existing Arbitration
                    clause between the parties for reference of the disputes
                    to Arbitration in terms of the said clause.
             b)     …
 H
M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                      1123
    KUMAR CHATTERJEE [INDIRA BANERJEE, J.]

 c)   This Hon’ble Court has no territorial jurisdiction to try    A
      entertain and determine the instant application as the
      agreement between the Petitioner and the Respondent
      has been executed and registered in the office of the
      District Registrar, Muzaffarpur, in the district of Bihar.
 d)   The subject matter of the agreement is for development       B
      and construction to be carried out of all that piece and
      parcel of land situated within the limits of Muzaffarpur
      Municipal Corporation, Bihar, outside the jurisdiction
      of this Hon’ble Court.
 e)   No part of the cause of action for filing the present        C
      application has arisen within the jurisdiction of this
      Hon’ble Court and by reasons whereof the this Hon’ble
      Court has no territorial jurisdiction to try entertain and
      determine the present application.
 f)   The building plan of the property in question has been       D
      duly sanctioned by the Muzaffarpur Municipal
      Corporation for construction of a property at
      Muzaffarpur. The disputes covered by the present
      reference relates to an immoveable construction of an
      immovable property in Muzaffarpur. This Hon’ble Court
      has no territorial jurisdiction to try entertain or          E
      determine the present application as this Hon’ble Court
      is not a court within the meaning of Section 2(i)(e) of
      the Arbitration and Conciliation Act, 1996. This Hon’ble
      Court is not the designated High Court for appointing
      an arbitrator in accordance with and in true scope and       F
      ambit of Section 11 of the Act of 1996.
 g)   …
 h)   The subject matter of the present application is sub-
      judice before the Real Estate Regulatory Authority,
      Muzaffarpur under RERA Case No.56/377/2019 and               G
      the same is pending adjudication and by reasons
      whereof this Hon’ble Court has no jurisdiction to try
      entertain or determine the present application.
 i)   It is submitted that mere place of sitting mentioned in
      an Arbitration agreement stating that the Arbitration        H
1124             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


 A                  will be held in Kolkata does not confer any jurisdiction
                    on this Hon’ble Court to try entertain and determine
                    the instant application. No part of the cause of action
                    has arisen within the jurisdiction of this Hon’ble Court
                    and by reasons whereof this Hon’ble Court has no
                    jurisdiction to try entertain and determine the present
 B
                    application.”
              10. The Respondent duly filed an Affidavit in Reply. In the Affidavit
       in Reply, the Respondent has merely denied that the Calcutta High Court
       lacks territorial jurisdiction to entertain or decide the application under
       Section 11(6) of the A&C Act. It is admitted that the Development
 C     Agreement is in respect of property situated at Muzaffarpur in Bihar,
       outside the jurisdiction of Calcutta High Court. It is also admitted that
       the Development Agreement was executed and registered in the State
       of Bihar, outside the jurisdiction of Calcutta High Court. It was contended
       that the Calcutta High Court exercises jurisdiction over the place agreed
 D     upon as the seat of arbitration, and would thus have jurisdiction to
       entertain the Arbitration proceedings. Paragraph 5-E of the Affidavit in
       Reply is set out hereinbelow for convenience :-
             “5-E It is submitted that though the agreement was executed
             outside the jurisdiction of this Hon’ble Court and the property
 E           in question is also located outside the Jurisdiction of this
             Hon’ble Court but as the Arbitration agreement contained in
             the said development agreement where parties have agreed
             to submit to the Jurisdiction of this Hon’ble Court thereby,
             fixing it at Kolkata, then this Hon’ble Court has jurisdiction
             to try and entertain the instant lis. It is submitted that where a
 F           seat is designated in an agreement, the courts of the seat alone
             have jurisdiction which would require that all applications
             arising out of the arbitral agreement needs to be filed in the
             Court having jurisdiction over the seat of Arbitration, and
             that Court also will have jurisdiction to try the Arbitration
 G           petition. The Hon’ble Courts of this country have made it
             clear that the moment a seat is designated by agreement
             between the parties, it is akin to an exclusive jurisdiction
             clause, which would then vest the courts at the ‘seat’ with
             exclusive jurisdiction for the purposes of regulating arbitral
             proceedings arising out of the agreement between the parties.
 H
    M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                            1125
        KUMAR CHATTERJEE [INDIRA BANERJEE, J.]

      Whenever there is the designation of a place of Arbitration in         A
      an arbitration clause as being the ‘venue’ of the Arbitration
      proceedings, the expression “Arbitration proceedings” would
      make it clear that the ‘venue’ is really the ‘seat’ of the arbitral
      proceedings, as the aforesaid expression does not include
      just one or more individual or particular hearing. In view of
                                                                             B
      the aforesaid development of law, there is no confusion with
      regard to what the seat of Arbitration and venue of Arbitration
      mean. There is no shadow of doubt that the Arbitration clause
      has to be read in a holistic manner so as to determine the
      jurisdiction of the Court. That apart, if there is mention of
      venue and something else is appended thereto, depending on             C
      the nature of the prescription, the Court can come to a
      conclusion that there is implied exclusion.”
       11. On 13th August 2021, the Calcutta High Court allowed the
Arbitration Petition and appointed a retired judge of the Calcutta High
Court as Sole Arbitrator. Mr. Ajit Kumar Sinha, learned Senior Counsel       D
appearing on behalf of the Appellant submitted that even though the
Appellant had opposed the application under Section 11(6) of the A&C
Act, objecting to the territorial jurisdiction of the Calcutta High Court,
the Calcutta High Court did not decide the objection. There is no finding
by the Calcutta High Court with regard to its jurisdiction. The order of
the High Court reads:-                                                       E

      “1. The present application has been filed under Section
      11(6)(a) of the Arbitration and Conciliation Act, 1996 for
      appointment of the arbitrator for settlement of the disputes
      between the parties.
                                                                             F
      2. At the time of hearing it was not disputed by the learned
      Counsel appearing for the parties that there is a valid
      arbitration clause in the development agreement.
      3. Learned counsel for both the parties have agreed to appoint
      ... to resolve the disputes sought to be raised by both the            G
      parties. Accordingly, ... is appointed as arbitrator to settle
      the disputes between the parties.
      4. The present application is accordingly disposed of.”
     12. Mr. Sinha submitted that Counsel appearing on behalf of the
Appellant in the Calcutta High Court gave consent without instructions       H
1126             SUPREME COURT REPORTS                            [2022] 15 S.C.R.


 A     from the Appellant. Be that as it may, the Calcutta High Court did not
       adjudicate the issue of territorial jurisdiction raised by the Appellant in its
       Affidavit in Opposition filed in the High Court.
             13. On or about 30th September 2021, the Appellant filed an
       application for review of the final order dated 13th August 2021. In the
 B     application for review, the Appellant took the following grounds:
              “I FOR THAT the order dated 13th August, 2021 discloses
              error apparent on the face of records and mistake inasmuch
              as the objections of the petitioner pertaining to the Hon’ble
              Court not having jurisdiction in the matter and the objections
 C            regarding non-arbitrability of the disputes involved, have not
              been considered by this Hon’ble Court.
              II. For THAT the order dated 13th August, 2021 discloses error
              apparent on the face of records, mistake inasmuch as the
              Hon’ble Court lacked jurisdiction to entertain the petitioner
 D            since the Hon’ble High Court at Patna had to be approached
              under section 11 of the Arbitration and Conciliation Act, 1996.
                                   xxx           xxx        xxx
              VII. FOR THAT the order dated 13th August, 2021 proceeding
              on concession of counsel which is contrary to the petitioners
 E            instructions discloses error apparent on the face of record.
              VIII. FOR THAT the petitioner has not instructed counsel to
              concede and has to the contrary instructed counsel to oppose
              the petition and therefore consent, if any, counsel is without
              jurisdiction and void and the order dated 13th August, 2021
 F            proceeding on the basis of the same, discloses error apparent
              on the face of record.
              IX. FOR THAT there has no consent given by the petitioner
              and the order dated 13th August, 2021 proceeding on the basis
              of the consent, discloses error apparent on the face of
 G            records.”
              14. By the order dated 4th October 2021, the High Court dismissed
       the review application, which is also impugned in this Court. The High
       Court held that consent given by learned Counsel could not be permitted
       to be withdrawn.
 H
       M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                            1127
           KUMAR CHATTERJEE [INDIRA BANERJEE, J.]

       15. The question before this Court is, whether the Calcutta High         A
Court at all had jurisdiction to entertain the application filed by the
Respondent and appoint an Arbitrator. Mr. Sanjay Ghosh, learned Senior
Counsel appearing on behalf of the Respondent, argued with force, that
the initial order of appointment of Arbitrator was passed by the Court by
consent. The Appellant appeared in the arbitration proceedings. In other
                                                                                B
words, the Appellant acquiesced to the reference of the disputes to the
Arbitrator appointed by the High Court.
       16. The Appellant did not accept the order of the Calcutta High
Court. After the High Court appointed the Arbitrator, the Appellant filed
a review application, taking objection to the jurisdiction of the High Court,   C
which was rejected. On the same day i.e. 4th October 2021, the Arbitrator
passed an interim order restraining the Appellant from creating any third
party interest in the property.
       17. The minutes of the proceedings before the learned Arbitrator
appointed by the Calcutta High Court does not indicate that the Appellant       D
willingly submitted to arbitration by the learned Arbitrator. The Appellant
only agreed to the fees of the Arbitrator appointed by the High Court.
This Court cannot be oblivious to practical realities, such as
embarrassment of Counsel to oppose the fees of an Arbitrator who
happens to be a former Judge of the High Court.
                                                                                E
      18. Mr. Sinha rightly argued that an order without jurisdiction can
be questioned at any time at any stage irrespective of any consent that
may have been given by the Counsel, which the Appellant asserts, was
without instructions of the Appellant.
       19. In Kiran Singh and Ors. v. Chaman Paswan and Ors.1, a                F
four Judge Bench of this Court held that it is a fundamental principle,
well-established, that a decree passed by a Court without jurisdiction is
a nullity, and that its invalidity could be set up whenever and wherever it
is sought to be enforced or relied upon, even at the stage of execution
and even in collateral proceedings. A defect of jurisdiction, whether it is
                                                                                G
pecuniary or territorial, or whether it is in respect of the subject matter
of the action, strikes at the very authority of the Court to pass any decree,
and such a defect cannot be cured even by consent of the parties.
1
    (1955) SCR 117 : AIR 1954 SC 340
                                                                                H
1128             SUPREME COURT REPORTS                         [2022] 15 S.C.R.


 A            20. The question in this case is, whether the Calcutta High Court
       had territorial jurisdiction to pass the impugned orders. The answer to
       the question has to be in the negative for the reason that the Development
       Agreement was admittedly executed and registered outside the jurisdiction
       of the High Court of Calcutta, the agreement pertains to development of
       property located in Muzaffarpur outside jurisdiction of the Calcutta High
 B
       Court. The Appellant has its registered office in Patna outside the
       jurisdiction of Calcutta High Court. The Appellant has no establishment
       and does not carry on any business within the jurisdiction of the Calcutta
       High Court. As admitted by the Respondent, no part of the cause of
       action had arisen within the jurisdiction of Calcutta High Court.
 C
              21. Mr. Sinha referred to the definition of Court in Section 2(1)(e)
       of the A&C Act, set out hereinbelow for convenience:
             “2. Definitions.—(1) In this Part, unless the context otherwise
             requires,
 D           —
             (a) to (d)             …
             (e) “Court” means— (i) in the case of an arbitration other
             than international commercial arbitration, the principal Civil
 E           Court of original jurisdiction in a district, and includes the
             High Court in exercise of its ordinary original civil
             jurisdiction, having jurisdiction to decide the questions
             forming the subject-matter of the arbitration if the same had
             been the subject-matter of a suit, but does not include any
 F           Civil Court of a grade inferior to such principal Civil Court,
             or any Court of Small Causes; (ii) in the case of international
             commercial arbitration, the High Court in exercise of its
             ordinary original civil jurisdiction, having jurisdiction to
             decide the questions forming the subject-matter of the
             arbitration if the same had been the subject- matter of a suit,
 G           and in other cases, a High Court having jurisdiction to hear
             appeals from decrees of courts subordinate to that High
             Court;
             22. As argued by Mr. Sinha, the word ‘Court’ has been defined, in
       case of an arbitration other than international commercial arbitration, to
 H
    M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                                 1129
        KUMAR CHATTERJEE [INDIRA BANERJEE, J.]

mean the principal Civil Court of original jurisdiction in a district and         A
would include the High Court in exercise of its ordinary original 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, but it
does not include any Civil Court of a grade inferior to such principal Civil
Court or any Court of small causes.
                                                                                  B
        23. Subject to the pecuniary or other limitations prescribed by any
law, suits for recovery of immovable property or determination of any
other right to or interest in an immovable property or compensation for
wrong to immovable property, is to be instituted in the Court, within the
local limits of whose jurisdiction, the property is situated. Certain specific    C
suits relating to immovable property can be instituted either in the Court
within the limits of whose jurisdiction the property is situated, or in the
Court within the local limits of whose jurisdiction the Defendant actually
or voluntarily resides or carries on business.
       24. All other suits are to be instituted in a Court, within the local      D
limits of whose jurisdiction the Defendant voluntarily resides or carries
on business. Where there is more than one Defendant, a suit may be
instituted in the Court within whose jurisdiction any of the Defendants
voluntarily resides or carries on business. A suit may also be instituted in
a Court within whose jurisdiction the cause of action arises either wholly
or in part.                                                                       E

       25. In the present case, no suit could have been filed in any Court
over which the Calcutta High Court exercises jurisdiction, since as stated
above, the suit admittedly pertains to immovable property situated at
Muzaffarpur in Bihar, outside the territorial jurisdiction of the Calcutta
High Court and admittedly, no part of the cause of action had arisen              F
within the territorial jurisdiction of the Calcutta High Court. The Appellant
who would be in the position of Defendant in a suit, neither resides nor
carries on any business within the jurisdiction of the Calcutta High Court.
       26. Of course, under Section 11(6), an application for appointment
                                                                                  G
of an Arbitrator necessarily has to be moved in the High Court,
irrespective of whether the High Court has the jurisdiction to decide a
suit in respect of the subject matter of arbitration and irrespective of
whether the High Court at all has original jurisdiction to entertain and
decide suits. As such, the definition of Court in Section 2(1)(e) of the
                                                                                  H
1130             SUPREME COURT REPORTS                            [2022] 15 S.C.R.


 A     A&C Act would not be applicable in the case of a High Court exercising
       jurisdiction under Section 11(6) of the A&C Act to appoint an Arbitrator/
       Arbitral Tribunal.
             27. At the same time, an application under Section 11(6) of the
       A&C Act for appointment of an Arbitrator/Arbitral Tribunal cannot be
 B     moved in any High Court in India, irrespective of its territorial jurisdiction.
       Section 11(6) of the A&C Act has to be harmoniously read with Section
       2(1)(e) of the A&C Act and construed to mean, a High Court which
       exercises superintendence/supervisory jurisdiction over a Court within
       the meaning of Section 2(1)(e) of the A&C Act.
 C           28. It could never have been the intention of Section 11(6) of the
       A&C Act that arbitration proceedings should be initiated in any High
       Court in India, irrespective of whether the Respondent resided or carried
       on business within the jurisdiction of that High Court, and irrespective of
       whether any part of the cause of action arose within the jurisdiction of
 D     that Court, to put an opponent at a disadvantage and steal a march over
       the opponent.
             29. Mr. Sinha also relied on Section 42 of the A&C Act set out
       hereinbelow:
              “42. Jurisdiction.— Notwithstanding anything contained
 E
              elsewhere in this Part or in any other law for the time being
              in force, where with respect to an arbitration agreement any
              application under this Part has been made in a Court, that
              Court alone shall have jurisdiction over the arbitral
              proceedings and all subsequent applications arising out of
 F            that agreement and the arbitral proceedings shall be made in
              that Court and in no other Court.”
              30. Mr. Sinha emphasized on Section 42 of the A&C Act to argue
       that an earlier application for interim protection having been moved at
       the District Court at Muzaffarpur, the Respondent could not have invoked
 G     the jurisdiction of the Calcutta High Court.
              31. There could be no doubt, as argued by Mr. Sinha, that Section
       42 of the A&C Act is mandatory. The Section has obviously been enacted
       to prevent the parties from being dragged into proceedings in different
       Courts, when more than one Court has jurisdiction. Where with respect
 H
    M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                              1131
        KUMAR CHATTERJEE [INDIRA BANERJEE, J.]

to any arbitration agreement, any application under Part I of the A&C          A
Act has been made in a Court, that Court alone would have jurisdiction
over the arbitral proceedings and all subsequent applications arising out
of that agreement, and the arbitral proceedings, would have to be made
in that Court and in no other Court, unless, of course, the Court in which
the first application had been instituted, inherently lacked jurisdiction to
                                                                               B
entertain that application. The Section which starts with a non obstante
clause, is binding irrespective of any other law for the time being in
force, and irrespective of any other provision in Part I of the A&C Act.
       32. However, Section 42 cannot possibly have any application to
an application under Section 11(6), which necessarily has to be made           C
before a High Court, unless the earlier application was also made in a
High Court. In the instant case, the earlier application under Section 9
was made in the District Court at Muzaffarpur and not in the High Court
of Judicature at Patna. An application under Section 11(6) of the A&C
Act for appointment of Arbitrator, could not have been made in the District
Court of Muzaffarpur. Therefore, Section 42 is not attracted.                  D

       33. In the Affidavit in Reply filed in the High Court, the Respondent
contended that the parties to the Arbitration Agreement had agreed to
submit to the jurisdiction of Calcutta High Court. The Arbitration
Agreement entered into by the parties clearly states that the seat and/or
the place of the Arbitral Tribunal shall be Kolkata.                           E

       34. Mr. Sanjay Ghosh, learned Senior Counsel appearing on behalf
of the Respondents submitted that the Calcutta High Court had the
territorial jurisdiction to entertain the application under Section 11(6) of
the A&C Act as the seat of arbitration was Kolkata.
                                                                               F
       35. In support of his argument that the Calcutta High Court had
exclusive jurisdiction to entertain and decide the application under Section
11(6) filed by the Respondent, Mr. Ghosh cited Indus Mobile Distribution
Private Limited v. Datawind Innovations Private Limited and Ors.2,
Hindustan Construction Company Limited v. NHPC Limited and
                                                                               G
Anr.3 and BGS SGS Soma JV v. NHPC Limited4 and argued that
once a seat of arbitration is designated, the clause designating the seat
2
  (2017) 7 SCC 678
3
  (2020) 4 SCC 310
4
  (2020) 4 SCC 234
                                                                               H
1132               SUPREME COURT REPORTS                       [2022] 15 S.C.R.


 A     of arbitration becomes an exclusive jurisdiction clause, as a result of
       which, only the Courts within whose territorial limits, the seat is located
       would have jurisdiction to the exclusion of all other Courts.
              36. In Indus Mobile Distribution Private Limited (supra), this
       Court referred to and relied upon the dictum of a Constitution Bench of
 B     this Court in Bharat Aluminium Company v. Kaiser Aluminium 5 and
       held that once the seat of arbitration had been fixed, that would be in the
       nature of an exclusive jurisdiction clause, binding the parties to specific
       Courts which alone could exercise supervisory powers over the
       arbitration. In Bharat Aluminium Company (supra) what was in issue
 C     before the Constitution Bench was the meaning of the expression “place
       of arbitration” in the context of Section 2(2) of the A&C Act, which as
       amended by Act 33 of 2019 is set out hereinbelow:
                “(2) This Part shall apply where the place of arbitration is in
                India.
 D              3[Provided that subject to an agreement to the contrary, the
                provisions of Sections 9, 27 and 4[clause (b)] of sub-section
                (1) and sub-section (3) of Section 37 shall also apply to
                international commercial arbitration, even if the place of
                arbitration is outside India, and an arbitral award made or
 E              to be made in such place is enforceable and recognised under
                the provisions of Part II of this Act.]”
              37. The question before the Constitution Bench was whether of
       Part-I of the A&C Act applied to arbitrations, where the place of
       arbitration was outside India.
 F
              38. As observed by the Constitution Bench, Section 2(2) of the
       A&C Act places a threshold limitation on the applicability of Part-I,
       where the place of arbitration is not in India. The Constitution Bench in
       effect and substance drew a distinction between venue and place of
       arbitration, as contemplated in Section 20 and held that only if the
 G     agreement of the parties was construed to provide for seat/place of
       arbitration in India, would Part-I of the 1996 Act be applicable. If the
       seat/place were outside India, Part-I would not apply, even though the
       venue of a few sittings may have been in India, or the cause of action
       may have arisen in India.
       5
 H         (2012) 9 SCC 552
    M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                               1133
        KUMAR CHATTERJEE [INDIRA BANERJEE, J.]

       39. The judgment of this Court in BGS SGS Soma JV (supra)                A
cited by Mr. Sanjay Ghosh, was also rendered in the context of Section
2(2) of the A&C Act and the applicability of Part I of the A&C Act to an
international commercial arbitration, where the seat of arbitration was
not in India.
                                                                                B
       40. In Hindustan Construction Company Limited (supra), this
Court held that once the seat of arbitration is designated, the same
operates as an exclusive jurisdiction clause and only Courts within whose
jurisdiction the seat was located, would have jurisdiction to the exclusion
of all other Courts. In the facts and circumstances of that case this
Court found that Courts at New Delhi alone would have jurisdiction for          C
the purpose of challenge to the Award.

      41. It is well settled that a judgment is a precedent for the issue of
law that is raised and decided. The judgment has to be construed in the
backdrop of the facts and circumstances in which the judgment has
                                                                                D
been rendered. Words, phrases and sentences in a judgment, cannot be
read out of context. Nor is a judgment to be read and interpreted in the
manner of a statute. It is only the law as interpreted by in an earlier
judgment, which constitutes a binding precedent, and not everything that
the Judges say.
                                                                                E
       42. It can never be an absolute general proposition of law, that
where an arbitration agreement says that the place of arbitration is
Faridabad/Delhi and proceedings under Part I of the A&C Act are also
validly initiated in Faridabad, the Court in Faridabad would,
notwithstanding Section 42 of the A&C Act, lose its jurisdiction, just          F
because arbitration is later conducted in Delhi and Award is made in
Delhi.

       43. This Court has perused the Development Agreement. The
contention of the Respondent in the Affidavit in Opposition, that the
parties to the arbitration agreement had agreed to submit to the jurisdiction   G
of Calcutta High Court, is not correct. The parties to the arbitration
agreement only agreed that the sittings of the Arbitral Tribunal would be
in Kolkata. Kolkata was the venue for holding the sittings of the Arbitral
Tribunal.
                                                                                H
1134               SUPREME COURT REPORTS                       [2022] 15 S.C.R.


 A            44. In Union of India v. Hardy Exploration and Production
       (India) Inc.6 a three Judge Bench of this Court held that the sittings at
       various places are relatable to venue. It cannot be equated with the seat
       of arbitration or place of arbitration, which has a different connotation.
              45. In Mankastu Impex Private Limited v. Airvisual Limited7
 B     a three Judge Bench of which one of us (Hon. A.S. Bopanna, J) was a
       member, held:
                “19. The seat of arbitration is a vital aspect of any arbitration
                proceedings. Significance of the seat of arbitration is that it
                determines the applicable law when deciding the arbitration
 C              proceedings and arbitration procedure as well as judicial
                review over the arbitration award. The situs is not just about
                where an institution is based or where the hearings will be
                held. But it is all about which court would have the supervisory
                power over the arbitration proceedings. In Enercon (India)
 D              Ltd. v. Enercon GmbH [Enercon (India) Ltd. v. Enercon GmbH,
                (2014) 5 SCC 1 : (2014) 3 SCC (Civ) 59] , the Supreme Court
                held that : (SCC pp. 43 & 46, paras 97 & 107)
                   “[T]he location of the seat will determine the courts that
                   will have exclusive jurisdiction to oversee the arbitration
 E                 proceedings. It was further held that the seat normally
                   carries with it the choice of that country’s arbitration/curial
                   law.”
                20. It is well settled that “seat of arbitration” and “venue of
                arbitration” cannot be used interchangeably. It has also been
 F              established that mere expression “place of arbitration” cannot
                be the basis to determine the intention of the parties that they
                have intended that place as the “seat” of arbitration. The
                intention of the parties as to the “seat” should be determined
                from other clauses in the agreement and the conduct of the
                parties.”
 G
              46. In this case, the Development Agreement provided that the
       sittings of the Arbitral Tribunal would be conducted in Kolkata. As
       observed above, the parties never agreed to submit to the jurisdiction of
       6
           (2019) 13 SCC 472
       7
 H         (2020) 5 SCC 399
    M/s RAVI RANJAN DEVELOPERS PVT. LTD v. ADITYA                                1135
        KUMAR CHATTERJEE [INDIRA BANERJEE, J.]

Calcutta High Court in respect of disputes, nor did the parties agree            A
upon Kolkata as the seat of arbitration. Kolkata was only the venue for
sittings of the Arbitral Tribunal.
       47. It is well settled that, when two or more Courts have jurisdiction
to adjudicate disputes arising out of an arbitration agreement, the parties
might, by agreement, decide to refer all disputes to any one Court to the        B
exclusion of all other Courts, which might otherwise have had jurisdiction
to decide the disputes. The parties cannot, however, by consent, confer
jurisdiction on a Court which inherently lacked jurisdiction, as argued by
Mr. Sinha.
       48. In this case, the parties, as observed above did not agree to         C
refer their disputes to the jurisdiction of the Courts in Kolkata. It was not
the intention of the parties that Kolkata should be the seat of arbitration.
Kolkata was only intended to be the venue for arbitration sittings.
Accordingly, the Respondent himself approached the District Court at
Muzaffarpur, and not a Court in Kolkata for interim protection under             D
Section 9 of the A&C Act. The Respondent having himself invoked the
jurisdiction of the District Court at Muzaffarpur, is estopped from
contending that the parties had agreed to confer exclusive jurisdiction to
the Calcutta High Court to the exclusion of other Courts. Neither of the
parties to the agreement construed the arbitration clause to designate
Kolkata as the seat of arbitration. We are constrained to hold that              E
Calcutta High Court inherently lacks jurisdiction to entertain the application
of the Respondent under Section 11(6) of the Arbitration Act. The High
Court should have decided the objection raised by the Appellant, to the
jurisdiction of the Calcutta High Court, to entertain the application under
Section 11(6) of A&C Act, before appointing an Arbitrator.                       F
       49. These appeals are therefore, allowed and the impugned orders
of appointment of Arbitrator and dismissal of the review application are
set aside. The appointment of the learned Arbitrator is set aside on the
ground that the order of his appointment is without jurisdiction and in
view of the objection to his appointment raised by the Appellant. It is          G
made absolutely clear that this order is not to be construed as any
aspersion on the learned Arbitrator appointed by the Calcutta High Court,
or the manner in which he has conducted the proceedings so far.
     50. Since the meetings of the Arbitral Tribunal are to be held in
Kolkata, this Court deems it appropriate to appoint Justice Bhaskar              H
1136              SUPREME COURT REPORTS                      [2022] 15 S.C.R.


 A     Bhattacharya, Former Chief Justice of the High Court of Gujarat as
       Sole Arbitrator, to decide the disputes between the parties. The parties
       have consented to the appointment of Justice Bhaskar Bhattarcharya.
              51. The status quo with regard to the property in question shall
       be maintained for a period of 15 days from today to enable the respective
 B     parties to approach the learned Arbitrator under Section 17 of the A&C
       Act, for interim relief in accordance with law.


       Ankit Gyan                                                 Appeals allowed.
       (Assisted by : Rahul Rathi, LCRA)
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