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JASGURPREET SINGH PURI, J. (ORAL) –

1. The present application has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) seeking appointment of an independent Arbitrator to adjudicate the disputes and differences which have arisen between the parties.

2. On the last date of hearing i.e. 30.01.2026, when the matter was taken up, the learned counsel for the applicant prayed for a short accommodation to prepare the case and to address arguments on the issue of territorial jurisdiction.

3. Today, the learned counsel for the applicant while arguing the matter submitted that this Court has territorial jurisdiction to entertain the application under Section 11 of the Act. In this regard, he referred to the Terms and Conditions and Declaration and Assurance of the letter of loan sanction which has been annexed vide Annexure A-4, which is a translated version of only one paragraph of the aforesaid Declaration and Assurance. He further submitted that the applicant has attached the vernacular of Annexure A-4, which contains the complete Terms and Conditions of the letter of loan sanction as well as the aforesaid Declaration and Assurance. However, there is no other document available with the applicant to show as to whether the parties have signed any agreement or not and as to whether the parties have accepted the said Terms and Conditions as well as the Declaration and Assurance or not but only the aforesaid Terms and Conditions and Declaration and Assurance have been filed along with the present arbitration case.

4. While referring to the aforesaid Declaration and Assurance, he submitted that it has been so provided in the aforesaid Declaration and Assurance that if any dispute arises due to the loan agreement, then it will be put up before the Sole Arbitrator appointed by the Company as per the provisions of the Arbitration and Conciliation Act, 1996 and Delhi will be the place for arbitration and jurisdiction with regard to investigate and consider this transaction under Arbitration will be Delhi. He referred to the judgments passed by Hon’ble Supreme Court in BGS SGS Soma JV versus NHPC Ltd . , (2020) 4 SCC 234 and M/s Ravi Ranjan Developers Pvt. Ltd. versus Aditya Kumar Chatterjee, 2022 SCC OnLine SC 568 to contend that Delhi is merely the venue provided in the agreement and this Court would still have jurisdiction to entertain an application under Section 11 of the Act since the parties are located in the State of Punjab and the aforesaid Terms and Conditions and Declaration and Assurance were issued from Bathinda, which is in the State of Punjab.

5. I have heard the learned counsel for the applicant.

6. Firstly, it is to be noted that translated version of Annexure A-4, i.e. Declaration and Assurance, contains only paragraph No.6 and is not a translation of the Terms and Conditions and Declaration and Assurance as a whole. Be that as it may, learned counsel for the applicant has made reference to the vernacular form, which according to him are the entire terms and conditions, which has been attached along with the present application. A perusal of the same would show that there is a seal of the respondent-Company but the column corresponding the signature of the borrower, is blank.

7. During the course of arguments, this Court noted that para No.6, which is the only translated para and which the applicant has attached as Annexure A-4 forms only a part of the purported agreement, has been wrongly translated. Therefore, it will be just and proper to clarify and understand as to what was the actual clause and what the applicant has translated on the basis of which the counsel has made submissions. The translated form of paragraph No.6, which the applicant has attached along with the present arbitration case as Annexure A-4, is reproduced as under:-

“6. In case the declaration made for ownership and purity of the Gold found to be false, then I will keep Muthoot Finance free from the responsibility and will keep free upto the limit of loss caused due to alleged false declaration and in this case, the repayment of loan interest amount and other taxes will be mandatory to be made immediately. If any dispute arises due to this Loan Agreement, then it will be put up before Sole Arbitrator appointed by the Company as per provisions of The Arbitration and Conciliation Act, 1996. Delhi will be the place for arbitration. The jurisdiction with regard to investigate and consider this transaction under Arbitration will be Delhi.”

(Emphasis Supplied)

8. However, the correct translation of the aforesaid paragraph No.6, is as follows:-

“6. If the confirmation/declaration made regarding the ownership and purity of the gold is found to be wrong, then I shall keep Muthoot Finance Limited Indemnified and held harmless to the extent of any loss incurred due to the said misdeclaration. In such a situation, the immediate repayment of the loan along with interest and other ancillary charges shall be mandatory. If any dispute arises in connection with this loan agreement, it shall be referred for hearing before a Sole Arbitrator appointed by the company in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The venue of arbitration shall be Delhi. Only the Courts of Delhi shall have the jurisdiction to hear and to inquire into the matters regarding this transaction under arbitration.”

(Emphasis Supplied)

9. It was the argument of the learned counsel for the applicant that even if the venue is provided to be at Delhi but since the loan was granted in the State of Punjab, this Court would have jurisdiction and the venue cannot be construed to be the seat of arbitration. On a query being raised to learned counsel for the applicant as to why the last sentence of the aforesaid translated version of Annexure A-4 was wrongly translated, to which he submitted that the translation was done to the best of his ability. However, a perusal of the actual translation of the last sentence, as reproduced above, would show that not only the venue of arbitration shall be at Delhi but also it has been so provided that only the Courts of Delhi shall have the jurisdiction to hear and to inquire into the matters regarding this transaction under arbitration.

10. In this way, not only the venue has been provided to be at Delhi but even the Courts of Delhi have been granted jurisdiction by the aforesaid clause.

11. Hon’ble Supreme Court in BGS SGS Soma JV’s case (Supra) laid down the “test for determining the seat” of arbitration and clarified that when an arbitration clause designates a particular place as the “venue” of the arbitration proceedings, the term “arbitration proceedings” indicates that the “venue” should be treated as the “seat” of arbitration, unless there is evidence to the contrary i.e. contrary indicia. In the present case, not only is there no such contrary indicia, but the venue is rather supported by the concluding sentence of paragraph No.6, which specifies that the Courts of Delhi shall have the jurisdiction to hear and inquire into the matters regarding this transaction under arbitration. The relevant portion of the judgment passed by Hon’ble Supreme Court in BGS SGS Soma JV’s case (Supra) is reproduced as under:-

“82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in 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, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as "tribunals are to meet or have witnesses, experts or the parties" where only hearings are to take place in the "venue", which may lead to the conclusion, other things being equal, that the venue so stated is not the "seat" of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings "shall be held" at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a "venue" and not the "seat" of the arbitral proceedings, would then conclusively show that such a clause designates a "seat" of the arbitral proceedings. In an International context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that "the venue", so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the "stated venue", which then becomes the "seat" for the purposes of arbitration.”

12. So far as the reference made to the later judgment of Hon’ble Supreme Court in M/s Ravi Ranjan Developers Pvt. Ltd.’s case (Supra) by the learned counsel for the applicant is concerned, the same would not be applicable to the present case and would be distinguishable in view of the fact that in that case, the "arbitration clause" specified that the sitting of the arbitral tribunal shall be held in Kolkata. In the said decision the respondent himself approached the District Court at Muzaffarpur, and not a Court in Kolkata for interim protection under Section 9 of the Act. The Hon’ble Supreme Court held that 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. It was further held that neither of the parties to the agreement construed the arbitration clause to designate Kolkata as the seat of arbitration. Therefore, the petition under Section 11 of Act, was held to be not maintainable before the Calcutta High Court. Therefore, the facts of the aforesaid judgment of Hon’ble Supreme Court, as referred to by the learned counsel for the applicant, are totally distinguishable.

13. In view of the aforesaid facts and circumstances, this Court is of the considered view that it does not have territorial jurisdiction to entertain the present arbitration case under Section 11 of the Act and therefore, the same is hereby dismissed.

14. Considering the aforesaid fact, whereby the applicant has made a wrong translation of the agreement and has not translated and annexed the entire agreement, this Court deems it fit and proper to impose costs upon the applicant, which are assessed as Rs.5,000/- (Rupees Five Thousand). The applicant shall deposit the aforesaid costs with the High Court Legal Services Committee, within a period of two months from today and thereafter, furnish the receipt of such deposit to the Registry of the Court. In case the aforesaid costs are not deposited by the applicant within the stipulated period, then this Court will further proceed in accordance with law, including recovery of the same as arrears of land revenue and if the receipt of the aforesaid costs is not furnished by the applicant to the Registry of the Court within two months, then the Registry shall list this case for compliance purposes after two months.

Application dismissed.

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