TMI Blog1981 (9) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940 ('Act' for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with 'legalese' of unforeseeable complexity. This case amply demonstrates the same. A contract dated 4th April, 1972 for construction of a building was entered into between the appellant and the 1st respondent. Clause 47 of this contract incorporated an arbitration agreement between the parties. The differences and disputes having arisen between the parties to the contract, . the 1st respondent moved an application numbered as Suit No. 400 (A) of 1974 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion proceedings from the stage where it was left by the 2nd respondent. In other words the 1st respondent prayed in the petition that the pleadings before the former arbitrator as well as evidence recorded by him shall be treated as part of the proceedings before the 3rd respondent. After hearing both the parties, this Court made the following order. As it has some impact on the outcome of this petition, it is reproduced in extenso: "C.M.P. No. 1088/77: We have heard counsel on both sides. It is absolutely plain that the new arbitrator in tune with the spirit of the order passed by this Court should proceed with speed to conclude the arbitration proceedings. In the earlier directions by this Court it had been stated that the proceedings should commence within IS days and that the arbitrator "shall try to dispose of the same as expeditiously as possible." We direct the arbitrator, bearing in mind the concurrence of the counsel on both sides, that he shall conclude the proceedings within four months from today. A grievance is made that the arbitrator is calling for fresh pleadings which may perhaps be otiose since pleadings have already been filed by both sides before the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the award has to be filed in this Court in view of provisions contained in section 14 (2) read with section 31 (4) of the Act and for a direction that the award be collected from Delhi High Court and be filed before this Court and notice of the filing of the award be issued to the parties. In seeking this relief the 1st respondent contended in the petition that the reference was made to the arbitrator by this Court; that further directions were given by this Court and this Court has seisin of the matter and therefore this Court alone has jurisdiction to entertain the award in view of the provisions contained in section 31 (4) of the Act. During the pendency of this petition, by an order in C.M.P. No. 14078 of 1977, the 'proceedings before Delhi High Court were stayed. The appellant filed a counter-affidavit and contested the petition inter alia contending that Delhi High Court would be the Court within the meaning of section 14 (2) in which award ought to have been and has rightly been filed. It was contended that if the court withdrew the proceedings to itself, the appellant would be denied the valuable right of appeal under the letters patent and a further appeal to this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference, and the arbitration proceedings shall be made in that Court and in no other Court." The dictionary meaning of expression 'Court' in section 2 (c) has to be applied wherever that word occurs in the Act, but with this limitation that if there is anything repugnant in the subject or context, the dictionary meaning may not be applied to the expression 'Court.' Assuming that there is nothing repugnant in the subject or context the expression 'Court' in the Act would mean that civil court which would have jurisdiction to decide the question forming the subject-matter of the reference if the same had been the subject matter of a suit but does not include a Small Cause Court though it is a civil court except for the arbitration proceedings under section 21. Section 14 sub-section (2) provides for filing of the award in the court and in view of the definition of the expression 'Court' the arbitrator will have to file the aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the matter to which the reference relates. Incorporating the definition of the expression 'court' as set out in section 2 (c) in sub-section (1) of section 31 would mean that the award will have to be filed in that court in which the suit in respect of the dispute involved in the award would have been required to be filed. This is quite consistent with the provision contained in sub-section (2) of section 14. So far there is no difficulty. The scheme disclosed in sub-sections (2),(3) and (4) of section 31 clearly indicates that to the exclusion of all other courts only one court will have jurisdiction to deal with the proceedings incidental to the reference and the arbitration. Subsection (3) clearly points in this direction when it provides that all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the court where the award has been or may be filed and to no other court. Then comes sub- section (4). It opens with a non-obstante clause and is comprehensive in character. The non-obstante clause excludes anything anywhere contained in the whole Act or in any other law for the time being in force if it is cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession 'court' as used in section 14 (2) will have to be understood in this background. On a pure grammatical construction as well as taking harmonious and overall view of the various provisions contained in the Act it is crystal clear that ordinarily that court will have jurisdiction to deal with the questions arising under the Act, except the one in Chapter IV, in which a suit with regard to the dispute involved in the arbitration would be required to be filed under the provisions of the Code of Civil Procedure. However, where an application is made in any reference to a court competent to entertain it, that court alone will have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall have to be made in that Court alone and in no other court. In this case an application was made to Delhi High Court under section 20 of the Act for a direction to file the arbitration agreement in the court. As provided in sub- section (2) of section 20, the proceeding was numbered as a suit. The suit ended in an order of reference to the arbitrator, the 2nd respondent. A subsequent application was made to De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as seized of the matter. There is no substance in this contention because the 1st respondent had challenged the jurisdiction of Delhi High Court to entertain the same and ultimately the application filed by the appellant was dismissed, albeit upon a compromise between the parties enlarging the jurisdiction of the arbitrator by consent. But the petition having been dismissed and the contention having been taken as to jurisdiction, it cannot b.- said that Delhi High Court had control over the arbitration proceedings. In the light of this uncontroverted evidence in view of the provision contained in sub-section (4) of section 31 the arbitrator will have to file the award in this Court and he rightly approached this Court upon a notice being given by the 1st respondent for filing the award in this Court. Curiously, an officer of this Court took it into his head to advise the arbitrator to file the Award in Delhi High Court without obtaining any direction of the Court. We must record our displeasure about this usurpation of jurisdiction of the Court by an officer of this Court. We say no more. In view of the fact that a reference was made by this Court to the 3rd respondent and that thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment and decree according to the award. The State filed a petition praying for an order declining to take the award on its file or in any event to set aside or modify the same. On behalf of the State it was, inter alia, contended that the Supreme Court is not the court contemplated by section 14 (2) read with section 2 (c) of the Act where the award can be filed. Negativing this contention this Court held as under: "According to Mr. Shroff the Award should have been filed, not in this Court, but in the Court of the Additional District Judge, Mandsaur, as that is the Court which will have jurisdiction to entertain the suit regarding the subject matter of the reference. We are not inclined to accept this contention of Mr. Shroff. It should be noted that the opening words of section 2 are "In this Act, unless there is anything repugnant in the subject or context". Therefore the expression "Court" will have to be understood as defined in section 2 (c) of the Act, only if there is nothing repugnant in the subject or context. It is in that light that the expression "Court" occurring in section 14 (2) of the Act will have to be understood and interpreted. It was this Court that appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted January 29, 1971, and the further proceedings, as pointed out earlier, indicate the retention of full control by this Court over the arbitration proceedings". The reasoning therein will mutatis mutandis apply to the facts which are more or less identical in the case before us. Therefore, both on principle and on authority this Court alone will have jurisdiction for the filing of the award. Mr. Narula contended that the decision of this Court in Kumbha Mawji v. Union of India (1) will indicate that section 31 (4) is not confined to applications made after the reference is made or during the pendency of the reference but may take within its sweep an application made earlier to the reference being made. And that if such an application is made that court alone will have jurisdiction to entertain subsequent applications. Proceeding from this basis Mr. Narula contended that the initial application under section 20 for filing the arbitration agreement was made to Delhi High Court and, therefore, all subsequent applications will have to be made to that court alone. In Kumbha Mawji's case a contention was raised before this Court that section 31 (4) is merely confined to applications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (4) of section 31 a construction as canvassed for on behalf of the 1st respondent it would deprive the appellant of its valuable right to prefer an appeal under the Letters Patent and approach this Court under Article 136 of the Constitution. If this Court has jurisdiction to entertain the award and this Court in view of section 31 (4) alone has jurisdiction for entertaining the award meaning that the award has to be filed in this Court alone and no other, the same cannot be defeated by a specious plea that the right of appeal would be denied. In an identical situation in M/s. Saith Skelton (P) Ltd. case, this Court held that the award has to be filed in this Court alone which would certainly negative an opportunity to appeal because this is the final court. Conceding as held by this Court in Garikapattl Veeraya v. N. Subbiah Choudhury, (2) that the right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences, by the view A we are taking such a right is not denied or defeated because the highest court to which one can come by way of appeal will entertain all contentions that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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