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TMI Blog2014 (10) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... Vikas Nigam Ltd. Vs. Krishna Travel Agency (2008) 6 SCC 741 in support of his submission that it is only the Principal Civil Court, as defined in Section 2(e) of the Act, which can entertain and decide an application under Section 34 of the Act for setting aside the Award. 3. Mr. Pradip Ghosh, learned senior counsel appearing for the respondent on the other hand submitted that in the present case the Calcutta High Court exercising jurisdiction under Clause 12 of the Letters Patent had passed an interim order under Section 9 of the Act before commencement of the arbitration proceedings and by virtue of Section 42 of the Act, it is only the Calcutta High Court which will have jurisdiction to entertain and decide an application under Section 34 of the Act for setting aside the Award. In support of his submission, he relied upon judgment of this Court in the case of Jindal Vijaynagar Steel (JSW Steel Ltd.) Vs. Jindal Praxair Oxygen Co. Ltd. (2006) 11 SCC 521. 4. We have perused the decisions cited by learned counsel for the parties, which are all decisions of two Judges Bench. In our opinion, the law has to be clarified beyond doubt as to which Court will have the jurisdiction to ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Jalpaigu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the 1940 Act. Section 42 had its genesis in Section 31(4) of the 1940 Act. These sections of the 1940 Act read as follows: "2(c) "Court" means a Civil Court having jurisdiction to decide the questions forming the subject- matter of the reference if the same had been the subject- matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court; 31(4) Notwithstanding anything contained elsewhere in this Act or in any other law for 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." 11. It will be noticed that Section 42 is in almost the same terms as its predecessor Section except that the words "in any reference" are substituted with the wider expression "with respect to an arbitration agreement". It will also be noticed that the expression "has been made in a court competent to entertain it", is no longer there in Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction. Section 2(1)(e) further goes on to say that a court would not include any civil court of a grade inferior to such Principal Civil Court, or a Small Causes Court. 14. It will be noticed that the definition is an exhaustive one as it uses the expression "means and includes". It is settled law that such definitions are meant to be exhaustive in nature - See P. Kasilingam & Ors. v. P.S.G. College of Technology & Ors., (1995) Suppl. 2 SCC 348 at para 19. 15. A recent judgment of this Hon'ble Court reported in Executive Engineer, Road Development Division No. III, Panvel & Anr. v. Atlanta Limited, AIR 2014 SC 1093 has taken the view that Section 2(1)(e) contains a scheme different from that contained in Section 15 of the Code of Civil Procedure. Section 15 requires all suits to be filed in the lowest grade of court. This Hon'ble Court has construed Section 2(1)(e) and said that where a High Court exercises ordinary original civil jurisdiction over a district, the High Court will have preference to the Principal Civil Court of original jurisdiction in that district. In that case, one of the parties moved an application under Section 34 before the District Judge, Thane. On the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal jurisdiction is normally the District Court. The High Courts in India exercising ordinary original civil jurisdiction are not too many. So in most of the States the concerned court would be the District Court. Obviously, the Parliament did not want to confer the power on the District Court, to entertain a request for appointing an arbitrator or for constituting an arbitral tribunal under Section 11 of the Act. It has to be noted that under Section 9 of the Act, the District Court or the High Court exercising original jurisdiction, has the power to make interim orders prior to, during or even post arbitration. It has also the power to entertain a challenge to the award that may ultimately be made. The framers of the statute must certainly be taken to have been conscious of the definition of 'court' in the Act. It is easily possible to contemplate that they did not want the power under Section 11 to be conferred on the District Court or the High Court exercising original jurisdiction. The intention apparently was to confer the power on the highest judicial authority in the State and in the country, on Chief Justices of High Courts and on the Chief Justice of India. Such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said view was reiterated somewhat differently in Pandey & Co. Builders (P) Ltd. v. State of Bihar & Anr., (2007) 1 SCC 467 at Paras 9, 23-26. 17. That the Chief Justice does not represent the High Court or Supreme Court as the case may be is also clear from Section 11(10): "The Chief Justice may make such scheme as he may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section(5) or sub-section (6) to him." The scheme referred to in this sub-section is a scheme by which the Chief Justice may provide for the procedure to be followed in cases dealt with by him under Section 11. This again shows that it is not the High Court or the Supreme Court rules that are to be followed but a separate set of rules made by the Chief Justice for the purposes of Section 11. Sub-section 12 of Section 11 reads as follows: "(a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration, the reference to ''Chief Justice'' in those subsections shall be construed as a reference to the ''Chief Justice of India''. (b) Where the matters referred to in sub-sections (4), (5), (6), (7), ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eel & Fabrications (P) Ltd. & Anr., (2004) 1 SCC 540, Bharat Coking Coal Limited v. Annapurna Construction, (2008) 6 SCC 732 and Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency, (2008) 6 SCC 741. The first of these judgments was a judgment under the 1996 Act wherein it was held that when the Supreme Court appoints an Arbitrator but does not retain seisin over the proceedings, the Supreme Court will not be "court" within the meaning of Section 2(1)(e) of the Act. Similar is the position in the third judgment, the Garhwal case. Even under the 1940 Act, in Bharat Coking Coal, the same distinction was made and it was held that as the Supreme Court did not retain seisin over the proceedings after appointing an Arbitrator, the Supreme Court would not be "court" within the meaning of the Arbitration Act, 1940. 20. As noted above, the definition of "court" in Section 2(1)(e) is materially different from its predecessor contained in Section 2(c) of the 1940 Act. There are a variety of reasons as to why the Supreme Court cannot possibly be considered to be "court" within the meaning of Section 2(1)(e) even if it retains seisin over the arbitral proceedings. Firstly, as noted above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 42 applies after the arbitral proceedings come to an end. It has already been held by us that the expression "with respect to an arbitration agreement" are words of wide import and would take in all applications made before during or after the arbitral proceedings are over. In an earlier judgment, Kumbha Mawji v. Dominion of India, (1953) SCR 878, the question which arose before the Supreme Court was whether the expression used in Section 31(4) of the 1940 Act "in any reference" would include matters that are after the arbitral proceedings are over and have culminated in an award. It was held that the words "in any reference" cannot be taken to mean "in the course of a reference", but mean "in the matter of a reference" and that such phrase is wide enough and comprehensive enough to cover an application made after the arbitration is completed and the final Award is made. (See Paras 891- 893). As has been noticed above, the expression used in Section 42 is wider being "with respect to an arbitration agreement" and would certainly include such applications. 22. One more question that may arise under Section 42 is whether Section 42 would apply in cases where an application m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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