1) National Aluminium Co. Ltd. Vs. Pressteel & Fabrications (P) Ltd. And Anr. (2004) 1 SCC 540
2) Bharat Coking Coal Ltd. Vs. Annapurna Construction (2008) 6 SCC
732
3) Bharat Coking Coal Ltd. Vs. H.P. Biswas and Company (2008) 6 SCC 740
4) Garhwal Mandal Vikas Nigam Ltd. Vs. Krishna Travel Agency (2008) 6 SCC 741
5) Jindal Vijaynagar Steel (JSW Steel Ltd.) Vs. Jindal Praxair Oxygen Co. Ltd. (2006) 11 SCC 521
6) P. Anand Gajapathi Raju & Ors. v. P.V.G. Raju (Dead) & Ors., (2000) 4 SCC 539 at para 8
7) P. Kasilingam & Ors. v. P.S.G. College of Technology & Ors., (1995) Suppl. 2 SCC 348 at para 19
8) Executive Engineer, Road Development Division No. III, Panvel & Anr. v. Atlanta Limited, AIR 2014 SC 1093
9) Rodemadan India Ltd. v. International Trade Expo Centre Ltd., (2006) 11 SCC 651
10) S.B.P. and Co. v. Patel Engineering Ltd. & Anr., (2005) 8 SCC 618
1. This matter has come before a three Judge Bench by an order of reference of a Division Bench of this Hon’ble Court dated 7 th April, 2010. The referral order reads thus:
“In this appeal, the question that arises for decision is which Court will have the jurisdiction to entertain and decide an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter for short 'the Act').
2. The facts necessary to decide this matter are as follows:
In 1995-96 an Item Rate Tender was duly executed and signed between the respondent Associated Contractors and the concerned Superintending Engineer for execution of the work of excavation and lining of Teesta-Jaldhaka Main Canal from Chainage 3 Kms. to 3.625 Kms. in Police Station: Mal, District: Jalpaiguri, West Bengal. Para 25 of the said Item Rate Tender and Contract contained an arbitration clause.
3. The respondent herein filed an application under Section 9 of the Arbitration Act, 1996 for interim orders in the High Court of Calcutta. A learned Single Judge of the High Court of Calcutta, after granting leave under Clause 12 of the Letters Patent, passed an ad-interim ex-parte injunction order. This order was continued from time to time until it was confirmed by an order dated 10th December, 1998. Meanwhile, in an application under Section 11 of the Arbitration Act, Justice B.P. Banerjee (retired), was appointed as an Arbitrator to adjudicate upon the disputes between the parties. A Recalling Application filed by the State was dismissed on 20th January, 2000.
4. An appeal was filed against the order dated 10th December, 1998, confirming the ad-interim ex-parte injunction. On 5th July, 2000, delay in filing the appeal was condoned and on 20th July, 2000, the interim order was stayed by the Division Bench. The Arbitrator was, however, asked to complete the proceedings before him which would go on uninterrupted.
5. Meanwhile, several orders were passed by the High Court regarding remuneration of the Arbitrator and payment of the same. The arbitration proceedings culminated in an Award dated 30th June, 2004 by which the claimant was awarded a sum of Rs.2,76,97,205.00 with 10% interest from 1st July, 1998 till the date of the Award. If not paid within four months, the same would then attract interest at the rate of 18% per annum. Costs were also awarded in the sum of Rs.50,000/-. The counter claims of the respondent were rejected.
6. On 21st September, 2004, the State of West Bengal filed an
application under Section 34 of the 1996 Act to set aside the arbitral Award
before the Principal Civil Court of the learned District Judge at Jalpaiguri,
West Bengal. On 6th October, 2004, the learned District Judge at Jalpaiguri
issued notice to the other side directing the respondent to appear and file its
written objections on or before 4th January, 2004. On 10th December, 2004,
the respondent filed an application under Article 227 of the Constitution
challenging the jurisdiction of the court of the learned District Judge at Jalpaiguri. By the impugned judgment dated 11th April, 2005, a Single
Judge of the High Court of Calcutta allowed the petition under Article 227 holding:
“Accordingly, I hold that since the parties already had submitted to the jurisdiction of this Court in its Ordinary Original Civil jurisdiction in connection with different earlier proceedings arising out of the said contract, as indicated above, the jurisdiction of the court of the learned District Judge at Jalpaiguri to entertain the said application for setting aside of the award was excluded under Section 42 of the said Act. Thus, I find that this Court in its Ordinary Original Civil Jurisdiction is the only court which can entertain an application for setting aside the said award. The Revisional Application, thus, stands allowed. The impugned notice is, thus, quashed.”
7. In an S.L.P. filed against this order, Mr. Anip Sachthey, learned advocate for the State of West Bengal, argued that since the application itself made under Section 9 was without jurisdiction, Section 42 of the Arbitration Act would not be attracted. He argued that the reason the Division Bench stayed the interim order passed under Section 9 was because it was convinced prima facie that the High Court had no territorial jurisdiction in the matter.
8. Mr. P.K. Ghosh, learned senior advocate for the respondent, contended that Clause 12 leave had already been granted and a number of orders have been passed after the ad-interim ex-parte order dated 22nd July, 1998 by the learned Single Judge of the High Court. There is, in fact, no order of any court which has pronounced upon jurisdiction, and therefore, Section 42 would necessarily apply to the facts of the case.
25. Our conclusions therefore on Section 2(1)(e) and Section 42 of the Arbitration Act, 1996 are as follows:
(a) Section 2(1)(e) contains an exhaustive definition marking out only the Principal Civil Court of original jurisdiction in a district or a High Court having original civil jurisdiction in the State, and no other court as “court” for the purpose of Part-I of the Arbitration Act, 1996.
(b) The expression “with respect to an arbitration agreement” makes it clear that Section 42 will apply to all applications made whether before or during arbitral proceedings or after an Award is pronounced under Part-I of the 1996 Act.
(c) However, Section 42 only applies to applications made under Part-I if they are made to a court as defined. Since applications made under Section 8 are made to judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate not being court as defined, such applications would be outside Section 42.
(d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42.
(e) In no circumstances can the Supreme Court be “court” for the purposes of Section 2(1)(e), and whether the Supreme Court does or does not retain seisin after appointing an Arbitrator, applications will follow the first application made before either a High Court having original jurisdiction in the State or a Principal Civil court having original jurisdiction in the district as the case may be.
(f) Section 42 will apply to applications made after the arbitral proceedings have come to an end provided they are made under Part-I.
(g) If a first application is made to a court which is neither a Principal Court of original jurisdiction in a district or a High Court exercising original jurisdiction in a State, such application not being to a court as defined would be outside Section 42. Also, an application made to a court without subject matter jurisdiction would be outside Section 42.
2) Bharat Coking Coal Ltd. Vs. Annapurna Construction (2008) 6 SCC
732
3) Bharat Coking Coal Ltd. Vs. H.P. Biswas and Company (2008) 6 SCC 740
4) Garhwal Mandal Vikas Nigam Ltd. Vs. Krishna Travel Agency (2008) 6 SCC 741
5) Jindal Vijaynagar Steel (JSW Steel Ltd.) Vs. Jindal Praxair Oxygen Co. Ltd. (2006) 11 SCC 521
6) P. Anand Gajapathi Raju & Ors. v. P.V.G. Raju (Dead) & Ors., (2000) 4 SCC 539 at para 8
7) P. Kasilingam & Ors. v. P.S.G. College of Technology & Ors., (1995) Suppl. 2 SCC 348 at para 19
8) Executive Engineer, Road Development Division No. III, Panvel & Anr. v. Atlanta Limited, AIR 2014 SC 1093
9) Rodemadan India Ltd. v. International Trade Expo Centre Ltd., (2006) 11 SCC 651
10) S.B.P. and Co. v. Patel Engineering Ltd. & Anr., (2005) 8 SCC 618
11) Pandey & Co. Builders (P) Ltd. v. State of Bihar & Anr., (2007) 1 SCC 467 at Paras 9, 23-26
12) State of Madhya Pradesh v. Saith and Skelton (P) Ltd., (1972) 1 SCC 702 13) Guru Nanak Foundation v. Rattan Singh & Sons, (1981) 4 SCC 634
14) JSW Steel Ltd. vs. Jindal Praxair Oxygen Co.Ltd., (2006) 11 SCC 521 at para 59
15) Kumbha Mawji v. Dominion of India, (1953) SCR 878
16) Managing Director & Anr. v. A.M. Ahmed & Co., through MD & Anr., (2001) 10 SCC 532 at para 6
17) Neycer India Ltd. v. GNB Ceramics Ltd., (2002) 9 SCC 489 at para 3
18) Jatinder Nath v. Chopra Land Developers Pvt. Ltd., (2007) 11 SCC 453 at para 9
19) Rajasthan State Electrical Board v. Universal Petrol Chemical Limited, (2009) 3 SCC 107 at paras 33 to 36
20) Swastik Gases (P) Ltd. v. Indian Oil Corporation, 2013 (9) SCC 32 at para 32
12) State of Madhya Pradesh v. Saith and Skelton (P) Ltd., (1972) 1 SCC 702 13) Guru Nanak Foundation v. Rattan Singh & Sons, (1981) 4 SCC 634
14) JSW Steel Ltd. vs. Jindal Praxair Oxygen Co.Ltd., (2006) 11 SCC 521 at para 59
15) Kumbha Mawji v. Dominion of India, (1953) SCR 878
16) Managing Director & Anr. v. A.M. Ahmed & Co., through MD & Anr., (2001) 10 SCC 532 at para 6
17) Neycer India Ltd. v. GNB Ceramics Ltd., (2002) 9 SCC 489 at para 3
18) Jatinder Nath v. Chopra Land Developers Pvt. Ltd., (2007) 11 SCC 453 at para 9
19) Rajasthan State Electrical Board v. Universal Petrol Chemical Limited, (2009) 3 SCC 107 at paras 33 to 36
20) Swastik Gases (P) Ltd. v. Indian Oil Corporation, 2013 (9) SCC 32 at para 32
21) HBM Print Ltd. v. Scantrans India (Pvt.) Ltd., (2009) 17 SCC 338
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6691 OF 2005
State of West Bengal & Ors.
Versus
Associated Contractors
WITH
CIVIL APPEAL NO. 4808 OF 2013
J U D G M E N T
R.F. Nariman, J.
“In this appeal, the question that arises for decision is which Court will have the jurisdiction to entertain and decide an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter for short 'the Act').
2. The facts necessary to decide this matter are as follows:
In 1995-96 an Item Rate Tender was duly executed and signed between the respondent Associated Contractors and the concerned Superintending Engineer for execution of the work of excavation and lining of Teesta-Jaldhaka Main Canal from Chainage 3 Kms. to 3.625 Kms. in Police Station: Mal, District: Jalpaiguri, West Bengal. Para 25 of the said Item Rate Tender and Contract contained an arbitration clause.
3. The respondent herein filed an application under Section 9 of the Arbitration Act, 1996 for interim orders in the High Court of Calcutta. A learned Single Judge of the High Court of Calcutta, after granting leave under Clause 12 of the Letters Patent, passed an ad-interim ex-parte injunction order. This order was continued from time to time until it was confirmed by an order dated 10th December, 1998. Meanwhile, in an application under Section 11 of the Arbitration Act, Justice B.P. Banerjee (retired), was appointed as an Arbitrator to adjudicate upon the disputes between the parties. A Recalling Application filed by the State was dismissed on 20th January, 2000.
4. An appeal was filed against the order dated 10th December, 1998, confirming the ad-interim ex-parte injunction. On 5th July, 2000, delay in filing the appeal was condoned and on 20th July, 2000, the interim order was stayed by the Division Bench. The Arbitrator was, however, asked to complete the proceedings before him which would go on uninterrupted.
5. Meanwhile, several orders were passed by the High Court regarding remuneration of the Arbitrator and payment of the same. The arbitration proceedings culminated in an Award dated 30th June, 2004 by which the claimant was awarded a sum of Rs.2,76,97,205.00 with 10% interest from 1st July, 1998 till the date of the Award. If not paid within four months, the same would then attract interest at the rate of 18% per annum. Costs were also awarded in the sum of Rs.50,000/-. The counter claims of the respondent were rejected.
6. On 21st September, 2004, the State of West Bengal filed an
application under Section 34 of the 1996 Act to set aside the arbitral Award
before the Principal Civil Court of the learned District Judge at Jalpaiguri,
West Bengal. On 6th October, 2004, the learned District Judge at Jalpaiguri
issued notice to the other side directing the respondent to appear and file its
written objections on or before 4th January, 2004. On 10th December, 2004,
the respondent filed an application under Article 227 of the Constitution
challenging the jurisdiction of the court of the learned District Judge at Jalpaiguri. By the impugned judgment dated 11th April, 2005, a Single
Judge of the High Court of Calcutta allowed the petition under Article 227 holding:
“Accordingly, I hold that since the parties already had submitted to the jurisdiction of this Court in its Ordinary Original Civil jurisdiction in connection with different earlier proceedings arising out of the said contract, as indicated above, the jurisdiction of the court of the learned District Judge at Jalpaiguri to entertain the said application for setting aside of the award was excluded under Section 42 of the said Act. Thus, I find that this Court in its Ordinary Original Civil Jurisdiction is the only court which can entertain an application for setting aside the said award. The Revisional Application, thus, stands allowed. The impugned notice is, thus, quashed.”
7. In an S.L.P. filed against this order, Mr. Anip Sachthey, learned advocate for the State of West Bengal, argued that since the application itself made under Section 9 was without jurisdiction, Section 42 of the Arbitration Act would not be attracted. He argued that the reason the Division Bench stayed the interim order passed under Section 9 was because it was convinced prima facie that the High Court had no territorial jurisdiction in the matter.
8. Mr. P.K. Ghosh, learned senior advocate for the respondent, contended that Clause 12 leave had already been granted and a number of orders have been passed after the ad-interim ex-parte order dated 22nd July, 1998 by the learned Single Judge of the High Court. There is, in fact, no order of any court which has pronounced upon jurisdiction, and therefore, Section 42 would necessarily apply to the facts of the case.
25. Our conclusions therefore on Section 2(1)(e) and Section 42 of the Arbitration Act, 1996 are as follows:
(a) Section 2(1)(e) contains an exhaustive definition marking out only the Principal Civil Court of original jurisdiction in a district or a High Court having original civil jurisdiction in the State, and no other court as “court” for the purpose of Part-I of the Arbitration Act, 1996.
(b) The expression “with respect to an arbitration agreement” makes it clear that Section 42 will apply to all applications made whether before or during arbitral proceedings or after an Award is pronounced under Part-I of the 1996 Act.
(c) However, Section 42 only applies to applications made under Part-I if they are made to a court as defined. Since applications made under Section 8 are made to judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate not being court as defined, such applications would be outside Section 42.
(d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42.
(e) In no circumstances can the Supreme Court be “court” for the purposes of Section 2(1)(e), and whether the Supreme Court does or does not retain seisin after appointing an Arbitrator, applications will follow the first application made before either a High Court having original jurisdiction in the State or a Principal Civil court having original jurisdiction in the district as the case may be.
(f) Section 42 will apply to applications made after the arbitral proceedings have come to an end provided they are made under Part-I.
(g) If a first application is made to a court which is neither a Principal Court of original jurisdiction in a district or a High Court exercising original jurisdiction in a State, such application not being to a court as defined would be outside Section 42. Also, an application made to a court without subject matter jurisdiction would be outside Section 42.
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