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Garhwal Mandal Vikas Nigam Ltd v. Krishna Travel Agency

Garhwal Mandal Vikas Nigam Ltd
v.
Krishna Travel Agency

(Supreme Court Of India)

Interlocutory Application No. 1 And 2 In Slp (C) No. 18344 Of 2004 | 24-01-2007


1. These applications have been filed by the respondent applicant, namely, M/s Krishna Travel Agency in a matter disposed of by this Court on 17-12-2004 for the following directions:

(i) to withdraw the objections and reply thereto filed by the parties c being Suit No. 232 of 2005 against the award dated 27-10-2005 in the Court of learned District Judge, Dehradun and to decide the objections and in alternative;

(ii) direct the learned District Judge, Dehradun to decide the objections being Suit No. 232 of 2005 within a period of 3 months from the date of the order.

2. In order to dispose of these IAs Nos. 1 and 2, it may be relevant to refer to a few facts. A dispute arose between the applicant and the Garhwal Mandal Vikas Nigam Ltd. with regard to conducting tours and certain payments being not made. Therefore, the matter was taken by M/s Krishna Travel Agency, the respondent applicant before a competent court. Ultimately, the matter reached this Court and this Court by the order dated 17-12-2004 appointed Shri V.A. Mohta, Senior Advocate, as arbitrator in the special leave petition with the consent of both the parties. Shri Mohta gave the award on 27-10-2005. That award was filed before the District Judge, Dehradun and an application under Section 34 of the Arbitration and Conciliation Act, 1996 was filed for setting aside that award. The matter is pending before the District Judge, Dehradun and during its pendency, these applications have been filed by M/s Krishna Travel Agency for certain directions in which the aforesaid prayers are made.

3. We have heard the learned counsel for the parties and perused the record. Learned counsel for the applicant M/s Krishna Travel Agency submits that the award should have been filed before this Court, as appointment of the was made by this Court. Therefore, this Court has jurisdiction to entertain the award and not the District Judge, Dehradun. And secondly, learned counsel submitted that in case, the first prayer is not acceded to, then an appropriate direction may be given to the District Judge, Dehradun to dispose of the proceeding including the objections filed by the applicant under Section 34, expeditiously.

4. Learned counsel for the respondent applicant has submitted that since the arbitrator has been appointed by this Court, this Court alone has the jurisdiction to dispose of the objections filed by the respondent applicant. In this connection, the learned counsel for the respondent applicant has invited our attention to the decision of this Court in State of M.R v. Saith and Skelton (P) Ltd. (1972) 1 SCC 702 [LQ/SC/1972/66] ). In this case, this Court appointed the arbitrator and it was observed by this Court: (SCC p. 709, para 18)

"18. ... In the absence of any other court having been invested with such jurisdiction by the order, the only conclusion that is possible is that such a request must be made only to the court which passed that order, namely, this Court"


5. Learned counsel emphasised that the definition of the "court" as given in the of 1940 and that in Section 2(1)(e) of the 1996 Act are in pari materia and therefore in view of the decision given by this Court in State of M.P. (1972) 1 SCC 702 [LQ/SC/1972/66] this Court alone has the jurisdiction to entertain the objections. In another case Guru Nanak Foundation v. Rattan Singh (1981) 4 SCC 634 , [LQ/SC/1981/396] SCC para 20, it was observed: (SCC p. 643)

"20.... In view of the fact that a reference was made by this Court to the 3rd respondent and that this Court gave further direction about the manner and method of conducting the arbitration proceedings and fixed the time for completion of arbitration proceedings, this Court alone would have jurisdiction to entertain the award"


6. On the basis of the observations in these two authorities, learned counsel submitted that since the appointment of Shri Mohta was by this Court, therefore, this Court alone would have jurisdiction to entertain the award and to decide the objections.

7. As against this, learned counsel for the respondent applicant has invited our attention to the decision in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd. (2004) 1 SCC 540 [LQ/SC/2003/1304] In this judgment, both these decisions were considered by Their Lordships and after reference to both these decisions by this Court and a reference to the 1996 Act, Their Lordships observed: (SCC p. 545, para 9)

"9. ... In regard to the forum before which the application for modification or setting aside the award is concerned, we find no difficulty in coming to the conclusion that in view of the provisions of Section 34 read with Section 2(1)(e) of the 1996 Act it is not this Court which has the jurisdiction to entertain an application for modification of the award and it could only be the Principal Civil Court of Original Jurisdiction as contemplated under Section 2(1)(e) of the Act, therefore, in our opinion, this application is not maintainable before this Court"


This judgment was followed subsequently in State of Goa v. Western Builders (2006) 6 SCC 239 [LQ/SC/2006/560] to which one of us (Hon'ble Mr Justice A.K. Mathur) was a party, it was observed: (SCC pp. 247-48, para 21)

"21. In National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd. (Supra) unilateral appointment of the arbitrator under the Arbitration Act, 1940 was challenged. This Court in the said appeal after hearing the parties appointed a sole arbitrator. Before the sole arbitrator both the parties by consent agreed that the proceedings should be governed by the provisions of the Arbitration and Conciliation Act, 1996. The arbitrator proceeded on that basis and gave a final award. That final award was challenged. The question arose whether the proceeding shall be governed by the 1940 Act or by the 1996 Act And which is the appropriate court. The dispute prolonged for nearly 16 years. This Court dismissed the appeal and held that in the present case proceedings should go on under the provisions of the Act, 1996 though the dispute arose prior to coming into force of the Act, 1996, the appropriate forum for challenging the award under Section 34 was the Principal Civil Court of Original Jurisdiction as contemplated under Section 2(1)(e) of the Act, 1996."


8. Apart from these four cases, which have been brought to our notice, the position of law is very clear that in case the argument of learned counsel is accepted, that would mean that in every case where this Court passes an order, be it on appeal from the order passed by the High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996, this Court will become a Principal Civil Court of Original Jurisdiction. If the argument is further taken d to its logical conclusion that would mean that the parties will have to approach this Court by making an application under Section 34 i.e. for setting aside the award. The expression "court" used in Section 34 of thewill also have to be understood ignoring the definition of "court" in the.

9. There is another facet of the problem. The party will be deprived of the right to file an appeal under Section 37(1)(b) of the Arbitration and Conciliation Act. This means that a valuable right of appeal will be lost. Therefore, in the scheme of things, the submission of the learned counsel cannot be accepted. Taking this argument to a further logical conclusion, when the appointment is made by the High Court under Section 11(6) of the Arbitration and Conciliation Act, then in that case, in every appointment made by the High Court in exercise of its power under Section 11(6), the High Court will become the Principal Civil Court of Original Jurisdiction, as defined in Section 2(1)(e) of the 1996 Act. That is certainly not the intention of the legislature. Once an arbitrator is appointed then the appropriate forum for filing the award and for challenging the same, will be the Principal Civil Court of Original Jurisdiction. Thus, the parties will have the right to move under Section 34 of the 1996 Act and to appeal under Section 37 of the 1996 Act. Therefore, in the scheme of things, if appointment is made by the High Court or by this Court, the Principal Civil Court of Original Jurisdiction remains the same as contemplated under Section 2(1)(e) of the 1996 Act.

10. We further reiterate that the view taken by this Court in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd. (Supra) and State of Goa v. Western Builders (Supra) is the correct approach and we reaffirm the view that in case any appointment of arbitrator is made by the High Court under Section 11(6), the Principal Civil Court of Original Jurisdiction remains the District Court and not the High Court. And likewise, if an appointment of the arbitrator is made by this Court, in that case also, the objection can only be filed before the Principal Civil Court of Original Jurisdiction as defined in Section 2(1)(e) of the 1996 Act. Thus, in this view of the matter, we hold that the plea raised by learned counsel for the petitioner that this Court should entertain the award given by the arbitrator appointed by this Court and all objections to it should be disposed of by this Court is unacceptable and consequently, the prayer made in the application is rejected.

11. Learned counsel has next submitted that since the matter is old and pending before the Principal Civil Court of Original Jurisdiction i.e. the District Judge, Dehradun, that court may be directed to expedite the disposal of the application. This submission of the learned counsel to expedite the matter has merit as the matter has become an old one, as it has come up to this Court a second time. Therefore, it is directed that the District Judge, Dehradun, who is seized of this matter shall hear and dispose of the matter expeditiously, preferably within a period of six months from the date of receipt of a copy of this order.

12. The applications are accordingly disposed of.

Advocates List

For the Petitioner L.N. Rao, Senior Advocate, Dinesh Kr. Garg, Advocate. For the Respondents S.B. Upadhyay, Senior Advocate, D.K. Goswami, Anil Kr. Jha, Advocates.

For Petitioner
  • Shekhar Naphade
  • Mahesh Agrawal
  • Tarun Dua
For Respondent
  • S. Vani
  • B. Sunita Rao
  • Sushil Kumar Pathak

Bench List

HON'BLE MR. JUSTICE A.K. MATHUR

HON'BLE MR. JUSTICE P.K. BALASUBRAMANYAN

Eq Citation

2007 (SUPPL.) ARBLR 1

(2008) 6 SCC 741

2008 (3) RAJ 609

2008 (13) SCALE 273

LQ/SC/2007/93

HeadNote