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Union Of India Represented By Chief Engineer, Madras Zone v. P.anantharam, Chief Engineer (mes), And Another

Union Of India Represented By Chief Engineer, Madras Zone
v.
P.anantharam, Chief Engineer (mes), And Another

(High Court Of Judicature At Madras)

Original Petition No. 329 Of 1988 | 12-03-1990


This petition is filed under Sec.l4(2) of the Arbitration Act to direct the arbitrator file the original award dated 27.4.1988 into the Court along with the entire papers documents and to pass a decree in terms of the award for Rs.2,83,117 together with at 18% per annum from the date of award till payment and for costs.

2. The petitioner and the second respondent were parties to the agreement No.CESA/AVADI/17 of 72-73 dated 28.9.1972. The first respondent was appointed Arbitrator under the relevant arbitration clause of the said agreement. This contract to the construction of technical accommodation for Vehicles Depot and Vehicles Workshop at Avadi. As per the agreement the works are to be executed at Avadi, within jurisdiction of the Sub Court, Poonamallee. The dispute related to this construction Avadi. After enquiry the arbitrator passed an award on 27.4.1988 for Rs.2,83,117. The was received by both parties from the arbitrator. In paragraph 7 of the petition the petitioner has stated as under: "The petitioner as well as the second respondent have permanent address in Madras Hence, this Court has jurisdiction for passing the decree in terms of the award passed 1st respondent." The filing of the award in this Court was questioned by the second respondent. They their counter that the claim of the petitioner is not maintainable on facts as well as The petitioner is not entitled to the reliefs prayed for. The petition filed in this Court maintainable. The arbitration reference relates to a matter not falling within the territorial jurisdiction of the Original Side of this Court. The petition is therefore not maintainable. prayed that this Court be pleased to dismiss the petition with the costs of second respondent both as not maintainable and as without jurisdiction.

3. The second respondent has raised several other points and contentions in the statement. As I am disposing of the matter only on the question of law in regard maintainability and jurisdiction of this Court to entertain this O.P. I am not adverting other issues raised by the second respondent. Those points are left open to be decided the appropriate forum at the appropriate stage. Hence I proceed to deal with only question of law in regard to maintainability of this petition in this court.

4. I have heard the arguments of Mr.C.Krishnan, learned counsel for the Union of India, Mr.T.R.Mani, learned Senior Advocate, on behalf of second respondent. According learned counsel for the second respondent, the original petition filed by the petitioner Original Side of this Court is not maintainable and this Court cannot receive the award according to the learned counsel, the arbitration reference relates to the matter not within the territorial jurisdiction of this Court. In support of his contention Mr.T.R.Mani, learned Senior Advocate, has invited my attention to the following three decisions:

Leading judgment on this point is reported in Venkatasamiappa v. Srinidhi Ltd., M.L.J. 709. A Division Bench of our High Court held as follows: "Held: The Court in Madras has no jurisdiction to receive the award and only the Bangalore has jurisdiction. In order to determine which is the Court having jurisdiction in the matter, you should all ascertain what the questions are, which form the subject-matter of the reference arbitration. You then proceed to ask; supposing these questions had arisen in a suit, the Court which would have jurisdiction to entertain the suit That Court would be not the Court at the place in which the agreement was entered into or where the resides, but the Court which would have jurisdiction in respect of the questions forming subject-matter of the reference. The question of residence would become relevant only should it arise out of or in connection with the subject-matter of the dispute and the reference. Merely because the three arbitrators happen to be residents of Madras, one is not presume an intention to submit to the jurisdiction of the Court in Madras."

5. The above is the leading case on the subject relating to the proper forum and jurisdiction under Sec.31(1) read with Sec.2(c) of the Arbitration Act, for petitions filed Sec.14(2) of the said Act for receiving the award and passing a decree in terms of the It has been held by a Bench of this Court that the place of execution of the agreement residence of the parties or the Arbitrators has no relevance and the Court which would jurisdiction in respect of the questions forming the subject-matter of the reference would have jurisdiction. Here, the dispute relates to a contract work to be executed which is outside the jurisdiction of the Original Side of the High Court and falls within jurisdiction of the Sub-Court at Poonamallee and in my opinion the Original therefore no jurisdiction to receive the award and pass a decree in terms of thereof.

6. The same view is reiterated in a decision reported in Inder Chand v. Pooran Chand, 1959 Punjab 614, where it is held that in order to determine the question of jurisdiction the Court to entertain the applications under Secs.32 and 33 of the Arbitration Act, be ascertained: (1) what the questions are which form the subject-matter of the reference arbitration and (2) which Court would have competence to determine the supposing those questions had arisen in a suit. The above Madras Bench decision is.

7. The decision reported in Narasimham v. Ramdayal,A.I.R. 1966 AP. 134, [LQ/TelHC/1965/72] goes further and held that an award can be filed only in the Court in which the suit would regard to the subject-matter of reference, and an agreement between the parties to award in a different Court cannot be given effect to, as such an agreement is against statute and that the fact that the parties had acted upon such an agreement can avail since there can be no estoppel against statute. The above Madras ruling is relied.

8. Sec.31 of the Arbitration Act deals with the jurisdiction of the courts. Sec.31 (1) said Act provides that an award may be filed in any Court having jurisdiction in the matter which the reference relates. Sec.31 (3) of the said Act, indicates 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. On a reading of Sec.31 (1) and Sec.2(c) of the Arbitration Act, it is clear that in order decide which is the court which has jurisdiction in the matter to which a reference relates, what has to be ascertained is the Court within which the suit could have been instituted the claim which was raised in the reference. From the facts of this case, it is clear that part of the cause of action arose in Madras. The agreement related to the construction technical accommodation for Vehicles Depot and Vehicles Depot Workshop at Avadi. agreement was entered into between the petitioner and the second respondent. The works are to be executed at Avadi, within the jurisdiction of the Sub Court, Poonamallee. dispute with regard to the construction work is at Avadi.

9. It is to be seen that Sec.31(1) enjoins upon the arbitrator to file his award in the having jurisdiction in the matter. If he chooses any violation of provision of Sec.31(1) to the award in a court which has no territorial jurisdiction, then it cannot be argued that said court acquires territorial jurisdiction. It is now well established that by agreement parties jurisdiction cannot be conferred on courts which have no territorial, jurisdiction decide the matter.

10. Reference may usefully be made to the decision reported in Sushil Ansal v. Union India, A.I.R. 1980 Delhi 43, in which case also the contract had been awarded and executed outside . Delhi. The arbitrator, however, had been appointed in Delhi and he had given his Delhi, thereupon an application under Secs.14 and 17 had been filed in Delhi. Sultan J. however held that on a correct interpretation of Sec.2(c) read with Sec.31(1), Delhi Court would have no jurisdiction to entertain that petition. Hence the arbitration proceedings and the award was returned to the arbitrator with a direction that the same be filed court of competent jurisdiction.

11. Sec.2 of the Arbitration Act defines Court, to mean a Civil Court having jurisdiction decide the question forming the subject matter of the reference if the same had been subject matter of a suit. Therefore, a competent court within the meaning of Sec.31 Act must be a court which would have entertained a suit between the parties to which controversies were the same or are the subject matter of the arbitration.

12. Sub-sec(1) of Sec.31 provides for the filing of an award. The award can be filed in Court having jurisdiction in the matter to which the reference relates. The Court in Sec.31 is the Court as defined in Sec.2(c) of the Act. Sub-sec.(2) speaks of courts have jurisdiction to decide all questions regarding the validity, effect or existence award or an arbitration agreement and it provides that these questions shall be decided the Court in which the award has been or may be filed and by no other Court. When sec.(2) of Sec.31 talks of an award which has been filed in any Court, it refers back to sea(1) of Sec.31, and therefore, the filing of the award has to be in a Court jurisdiction in the matter in which the reference relates. In otherwords, if an award fact been filed in any Court which has no jurisdiction in the matter to which the reference relates such filing would not give jurisdiction to the Court under Sub-sec.(2) of Sec.31. sec.(4) provides that where in any reference any application under the Act has been made 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 mere filing application in any Court irrespective of whether such court has jurisdiction in the matter which the reference relates would not fix that court permanently with jurisdiction as Court in which all subsequent applications are to be filed.

13. On a combined reading of Sec.2(c) and Sec31(1) of the Arbitration Act, it must be that the citus of cause of action alone was conferred with the jurisdiction of a court in of arbitration and since no part of the cause of action arose within the jurisdiction, of Original Side of our High Court, it could not entertain the present proceedings.

14. Sec.2(c) of the Act defines Court as meaning a Civil Court having jurisdiction to all 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 Sec.21, include a Small Cause Court. The jurisdiction of the Small Cause Court is under Sec.40 as well except as regards arbitrations in suits before it. It will be seen under Sec.31 of the Act, an award is to be filed in a Court which has jurisdiction in matter to which the reference relates and an award filed in a Court which has no jurisdiction in the matter cannot be entertained and the Court cannot pass any judgment or decree terms of the award. In order to decide the jurisdiction of the Court over the subject of the award, it is necessary to consider the reliefs granted by the award and determine whether the Court would have jurisdiction to try a regular suit between the parties in the relief is claimed and whether such relief could be granted by the Courts. In order determine the jurisdiction of the Court in a matter, one will have to ascertain what questions are and if the question that has arisen is one which the Court would jurisdiction to entertain, then that would be a competent Court to entertain the matter. Thus the Court pf competent jurisdiction under Sec.31 of the Act is not the Court at place in which the agreement was entered into or the parties reside, but the Court which exercise the jurisdiction provided the subject matter of the relief falls within its competence or jurisdiction.

15. Sec. 16 of the Code of Civil Procedure gives the necessary guidance for the purpose of ascertaining the jurisdiction of the Court and that for the determination of any right or interest in immovable property the suit instituted where the subject matter is situate.

16. In the instant case, the place of performance is at Avadi and the Court at alone would have jurisdiction to entertain the proceeding if the matter which is the matter of arbitration had arisen in a suit.

17. The only decision cited by the learned Counsel for the Union of India reported Machinery Corporation Ltd. v. M/s.Hope (India) Ltd, A.I.R 1983 Cal 492 [LQ/CalHC/1983/20] , is also not point. In the said case the arbitrator was appointed by the Supreme Court of India. the counsel appeared on behalf of the petitioner submitted that the Calcutta High no jurisdiction and strongly relied on Sec.31(4) of the Arbitration Act and submitted Supreme Court has exclusive jurisdiction in this matter. The Calcutta High Court the contention held that the said Court has no jurisdiction to entertain the award directed the awards to be taken off the record and be returned to the parties for same before appropriate forum. Hence the above decision is not applicable to the facts case and is distinguishable since it arises under Sec.31(4) of the Act.

18. I am inclined to take the view that this Court has no jurisdiction in the matter respondents must succeed on that ground.

19. In the result, I direct the original award and the documents etc. filed by the Arbitrator be taken off the record and be returned to Arbitrator for filing the same in the proper In this view of the matter, there will be no order as to costs.

Order accordingly.

Advocates List

C. Krishnan, for Petitioner. T.R. Mani, Senior Advocate, for T.M. Hariharan, for Respondents.

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

Bench List

HON'BLE MR. JUSTICE LAKSHMANAN

Eq Citation

(1991) 1 MLJ 286

LQ/MadHC/1990/184

HeadNote

A. Arbitration Act, 1940 - Ss.2(c), 31(1), (3) & (4) - Jurisdiction of court to entertain petition under S.14(2) - Proper forum and jurisdiction under S.31(1) r/w S.2(c) of the Act, for petitions filed under S.14(2) of the Act for receiving award and passing a decree in terms of the Act - Place of execution of agreement, residence of parties or arbitrators - Relevance - Held, place of cause of action alone conferred with jurisdiction of court in matter of arbitration - Since no part of cause of action arose within jurisdiction of Original Side of High Court, it could not entertain present proceedings - On a combined reading of Ss.2(c) and S.31(1) of the Act, it must be that citus of cause of action alone was conferred with jurisdiction of a court in matter of arbitration - In instant case, place of performance was at Avadi and court at alone would have jurisdiction to entertain proceedings if matter which was matter of arbitration had arisen in a suit - Civil Procedure Code, 1908, S.16