J.D. KAPOOR, J.

(1) RESPONDENT no. 3 has at the threshold challenged the territorial jurisdiction of this court to entertain the petition under Section 34 of Arbitration and conciliation Act, 1996 (in short the "act) as accordinq to Mr. Atul Setalvad, learned senior counsel for respondent no. 1 neither of the parties is either living in Delhi or works for gains in Delhi nor was the agreement between the parties executed in Delhi nor was the contract to be performed at Delhi. It is contended by Mr. Setalvad that apart from this, arbitration agreement that is embodied in the consent Terms between the parties was also filed in mumbai High Court and merely because the learned sole arbitrator Honble Mr. Justice A. M. Ahmadi, Retd. Chief justice of India chose to hold the proceedings at Delhi and made the award at Delhi would not provide territorial jurisdiction to this court.

(2). The facts germane for determining the contentious question of jurisdiction need to be recapitulated in brief. An agreement dated 4. 4. 1991 was entered into between petitioner no. 2 and respondent no. 1 at Mumbai for sale of shares of petitioner nos. 7 and 8 and the properties of Engineering Division. Disputes and differences arose between the parties which were referred to the sole arbitration of Mr. Justice A. M. Ahmadi. Proceedings culminated in award dated 31. 8. 1999. Same was challenged by the petitioners before this court. Prior to the said challenge by the petitioners, respondent no. 1 had already filed application under Section 9 of thebefore Mumbai high Court. However, parties entered into compromise and consent Terms were signed by both the parties and filed in mumbai High Court. In view of consent terms, application under Section 34 of thefiled by the petitioners in this court was withdrawn as one of the Consent Terms was that petitioner shall withdraw petition under Section 34 of thefiled in this court. "another term of consent terms was arbitration clause whereby parties were given liberty to refer the disputes arising from the consent terms to the sole arbitration of Mr. Justice A. M. Ahmadi. However, inspite of consent terms, disputes arose and the petitioner referred the disputes to Mr. Justice A. M. Ahmadi for fresh arbitration. Mr. Justice A. M. Ahmadi made the award on 30. 10. 2001. The said award has beep again challenged by the petitioners by way of instant petition.

(3). As per this award, petitioners were required to pay respondent no. 1 approximately sum of Rs. 11 crorea and respondent no. 1 was required to pay sum of Rs. 1. 8 crores to the petitioners. As per Consent Terms, sum of Rs. 11 crores were set of to Rs. 6 crore upon petitioners transferring certain properties to respondent no. 1, some of which are in Delhi. Consent Terms did not provide for payment of Rs. 1. 8 crores by respondent no. 1 to the petitioners. When the petitioners claimed Rs. 1. 8 crore from sum of Rs. 6 crores, respondent no. 1 refused to set off the said amount and this gave rise to the disputes for arbitration. The claims made by the petitioners are as follows:-

a) Claim for an amount of Rs. 1,08,80,676. 00 (Rupees One Crore Eight Lakhs Eighty thousand Six Hundred and Seventy Six along with interest, on the basis that the said amount was awarded in favour of the petitioners by the learned Arbitrator by his award dated 31/08/1999; and b) Claim for an amount of Rs. 1,92,33,011. 00 (Rupees One Crore Ninety Two Lakhs Thirty three Thousand and Eleven) or such other amount towards Superannuation fund, which respondent no. 1 had failed to transfer in favour of the Petitioners, along with interest @ 24% per annum.

(4). The learned Arbitrator by his award dated 31. 10. 2001 dismissed the claim of the petitioners for an amount of Rs. 1,08,80,676. 00 (Rupees One Crore Eight Lakhs eighty Thousand Six Hundred and Seventy Six) whereas second claim was settled in the course of arbitration proceedings. Rejection of claim of the petitioners has been assailed through this petition.

(5). According to Mr. Setalwad, Section 2 (e) of the act debars the jurisdiction of this court for deciding the questions forming the subject matter or arbitration.

(6). Section 2 (e) of thedefines the court where parties to arbitration agreement or any action against the award can initiate their remedy as under:-

(e) "court" means the principal Civil 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 civil of a grade inferior to such principal civil Court, or any Court of Small causes. "

(7). Mr. Setalwad has also placed reliance upon section 42 of therelating to jurisdiction. According to this section 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 that agreement and the arbitral proceedings shall be made in that court and in no other court.

(8). It is contended by Mr. Setalwad that not only application under Section 9 of thewas filed in Mumbai high Court by respondent no. 1 but also Consent Terms arrived at between the parties were placed before Mumbai high Court and merely because sole Arbitrator was stationed at Delhi and chose to conduct the proceedings at delhi would not provide jurisdiction to Delhi Courts particularly when subject matter of arbitration was ascertained as subject matter of suit and further none of the parties are residents of Delhi nor have they registered offices at Delhi nor any part of cause of action had arisen at Delhi.

(9). In support of the contention that merely because the Arbitrator chooses to hold proceedings in a place where no suit could be instituted the place chosen by the arbitrator would not confer territorial jurisdiction on the court of that place, Mr. Setalwad placed reliance upon judgment of this court in M/s. Gulati Cpnstruction Co. Jhansi Vs, Betwa River Board and another AIR 1984 DELHI 299 where contract was awarded to the petitioner on a tender enquiry having been floated bv respondent from jhansi. The tender was submitted by the petitioner at jhansi and it was at that place that the tender was accepted. The contract: was also concluded at Jhansi, the place where the acceptance of tender Look place though work was carried out in District Guna (M. P.). The sole arbitrator held the arbitration proceedings in Delhi and made and signed his award at New Delhi. Thereupon objections under Section 30 and 34 of this Old Act (wherein section 2 (i) defined the court as defined by section 2 (e)of the new Act) were filed in this court by the respondent.

(10). The preliminary objection was taken that this court has no territorial jurisdiction to decide the disputes between the parties. It was held that in order to decide which is the Court that has jurisdiction In the matter to which a reference relates, what has to be ascertained is the Court within whose jurisdiction the suit could have been instituted for the claim which was raised in the reference. Merely because the arbitrator chose to hold the proceedings in a place where admittedly no suit could be instituted and chose to make and publish an award at that place it would not give the Courts of that place territorial jurisdiction to decide the matters arising under the Arbitration Act.

(11). On the contrary Mr. Rana Mukherjee, learped counsel for the petitioners contended that merely because an application under Section 9 of thewas filed by the respondent at Mumbai would not provide either jurisdiction to Mumbai courts or preclude the petitioner under Section 42 of theto move the instant petition. Mr. Mukherjee tried to draw support from P. Anand Gajapathi Raju and others Vs. P. V. G. Raju (Dead) and others (2000) 4 SCC 539 [LQ/SC/2000/582] wherein it was held that mere filing of application under section 8 of thewould not provide jurisdiction to the court. In the aforesaid case, the petitioner took the plea that application under Section 8 was within the meaning of application referred in Section 42 of thebut it was held that Section 8 is not such an application which comes within the ambit of Section 42 and therefore mere filing of such an application would not provide jurisdiction to the court.

(12). It is needless to say that application under section 8 is merely an application seeking stay of civil suit where parties had agreed for deciding their disputes by way of arbitration. The reference of application under section 42 of theis with regard to the arbitration agreement and arbitral proceedings. For instance, application under Section 9 of thecan be termed as an application under Section 42 of the Adt. Application under Section 8 is not a substantive application whereby a party can claim any relief either in terms of arbitration agreement or seek remedy against the arbitral proceedings or the award whereas application under Section 9 or for that purpose. Section 34 or under any other provision where parties seek some remedy either against the terms of arbitration agreement or arbitral proceedings or the award are the applications which come within definition and ambit of Section 42 of the. Thus ratio of aforesaid authority is not applicable in the instant case and reliance is misplaced.

(13). It is beyond the pale of controversy that the determining criteria for jurisdiction of a court is as to within whose jurisdiction suit is to be instituted for the claim which is raised in the reference. The venue of arbitration proceedings is immaterial. The Arbitrator may choose place for arbitration which is more convenient for efficacious and expedient disposal of reference. Thus, choice of venue by the Arbitrator is not the governing or determining criteria.

(14). In the face of aforesaid principle also learned counsel for the petitioner has tried to ipvoke jurisdiction of this court on the ground that some of the properties under first arbitration award and the Consept terms are situated in Delhi and these properties were part of discussion of the dirst award as well as Consent Terms.

(15). For that purpose, Consent Terns have to be taken into consideration in entirety. One of the terms of consent Terms pertains to the transfer of valuable properties in Delhi by way of adjusting the claim awarded in favour of respondent no. 1. The relevant clauses are as under:-

4 (a) Rs. 6,00,00,000. 00 (Rupees Six Crores) in the aggregate shall be paid by the respondent Group (read petitioner) to RIL. strictly as set out in Schedule annexed hereto. (b) Declared and confirmed that RIL have all along been and continue to be in juridical possession of the following offices and Godowns (hereafter called the said offices and Godowns) of which HMP engineers Ltd. has been in permitted occupation. 5. The Respondent Group Declare and undertake t this Honble Court that they have not created, or purported to create or permitted the creation of r permitted the use of (and further that they will not hereafter create or purport to create or permit the creation of) any right, title or interest or any type whatsoever in, to or relating to the whole or any part of the said Offices and/or Godowns as set out in Clause 4 (b) or permit the use thereof to any third party and have not done or omitted to do and will not hereafter do any act which would in any manner jeopardise or adversely affect rils right, title and interest therein or relating thereto. 6. On or before 31/07/2000 (time being of the essence) the Respondent Group will ensure that HMP Engineers Ltd. shall entirely remove themselves and all their belongings and all persons claiming under or through the Respondent Group from all the aforesaid 11 Offices and Godowns and the Respondent Group shall give to RIL vacant, peaceful and exclusive occupation of the same together with fittings and fixtures thereof.

(16). It is vehemently contended by Mr. Mukherjee that in view of Consent Terms and aforesaid clauses, this court has jurisdiction inasmuch as though the aforesaid properties were not subject matter of reference but the petitioner was entitled to recover possession of these properties from respondent no. 1 on failure of respondent no. 1 to adjust Rs. 1. 8 crores and therefore jurisdiction of this court has been rightly invoked.

(17). I am afraid this argument is self-defeating as terms of reference in second arbitration were regarding the claim to set off money against money. There was no alternative or return of any property. The disputes before the Arbitrator were altogether different and did not involve the properties in question. Properties were subject matter of discussion and not of reference. Moreover these properties were not transferred by way of sale. There was only permissive occupation.

(18). There is no doubt if the petitioner was to institute a suit for recovery, it has to be instituted at mumbai. Unless and until, the properties were the subject matter of reference, the Consent Terms did not provide jurisdiction to this court and to the petitioner for challenging the award. It is apparent that these properties can by no stretch of imagination become subject matter of the suit to be instituted by the petitioner. Subject matter of arbitration was claims of set off. It would be circumventing the reference and the subject matter of arbitration if the aforesaid properties are deemed to be subject matter of arbitration or reference merely because one of the Consent Terms said that transfer of properties of the petitioner would reduce the claim of the respondent against the petitioner.

(19). For the aforesaid reasons, I find that this court has no territorial jurisdiction. As a consequence petition is returned to the petitioners for presenting it before the court of competent jurisdiction. The entire record pertaining to the petitioner be returned to the petitioner.