2014 (10) TMI 437 - SC - Indian Laws

Exclusive Courts for Section 34 Applications: Clarification on Jurisdiction

State of West Bengal & Others Versus Associated Contractors

The court clarified that only the Principal Civil Court or the High Court with original jurisdiction can entertain applications under Section 34 of the ... Jurisdiction of Court - application under Section 34 of the Arbitration and Conciliation Act, 1996 - Held that:- 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, the definition is exhaustive and recognizes only one of two possible courts that could be “court” for the purpose of Section 2(1)(e). Secondly, under the 1940 Act, the expression “civil court” has been held to be wide enough to include an appellate court and, therefore would include the Supreme Court as was held in the two judgments aforementioned under the 1940 Act. Even though this proposition itself is open to doubt, as the Supreme Court exercising jurisdiction under Article 136 is not an ordinary Appellate Court, suffice it to say that even this reason does not obtain under the present definition, which speaks of either the Principal Civil Court or the High Court exercising original jurisdiction. Thirdly, if an application would have to be preferred to the Supreme Court directly, the appeal that is available so far as applications under Sections 9 and 34 are concerned, provided for under Section 37 of the Act, would not be available. Under Section 2(1)(e), the competent Court is fixed as the Principal Civil Court exercising original jurisdiction or a High Court exercising original civil jurisdiction, and no other court. For all these reasons, we hold that the decisions under the 1940 Act would not obtain under the 1996 Act, and the Supreme Court cannot be “court” for the purposes of Section 42. Whether Section 42 applies after the arbitral proceedings come to an end - Held that:- If an application were to be preferred to a Court which is not a Principal Civil Court of original jurisdiction in a district, or a High Court exercising original jurisdiction to decide questions forming the subject matter of an arbitration if the same had been the subject matter of a suit, then obviously such application would be outside the four corners of Section 42. If, for example, an application were to be filed in a court inferior to a Principal Civil Court, or to a High Court which has no original jurisdiction, or if an application were to be made to a court which has no subject matter jurisdiction, such application would be outside Section 42 and would not debar subsequent applications from being filed in a court other than such court. Nothing has been shown as to how the High Court of Calcutta does not possess jurisdiction. It has been mentioned above that leave under Clause 12 has been granted. In the circumstances of the present case, therefore, the judgment dated 11th April, 2005 passed by the High Court of Calcutta is correct and does not need any interference. Issues Involved:1. Jurisdiction to entertain and decide an application under Section 34 of the Arbitration and Conciliation Act, 1996.2. Interpretation of Section 2(1)(e) and Section 42 of the Arbitration and Conciliation Act, 1996.3. Applicability of Section 42 to applications made to courts without jurisdiction.4. Whether the Supreme Court can be considered a 'court' under Section 2(1)(e) of the Act.5. Applicability of Section 42 after the arbitral proceedings have concluded.Detailed Analysis:1. Jurisdiction to entertain and decide an application under Section 34 of the Arbitration and Conciliation Act, 1996:The primary issue was determining which court has jurisdiction to entertain an application under Section 34 of the Arbitration and Conciliation Act, 1996. The appellants argued that only the Principal Civil Court, as defined in Section 2(e) of the Act, could entertain such an application. Conversely, the respondent contended that since the Calcutta High Court had passed an interim order under Section 9 of the Act, it alone had jurisdiction under Section 42 of the Act.2. Interpretation of Section 2(1)(e) and Section 42 of the Arbitration and Conciliation Act, 1996:Section 2(1)(e) defines 'court' as the Principal Civil Court of original jurisdiction in a district or the High Court in its ordinary original civil jurisdiction. Section 42 states that once an application under the Act is made to a particular court, that court alone shall have jurisdiction over subsequent applications. The Court clarified that Section 42 applies to all applications under Part-I of the Act, whether made before, during, or after the arbitral proceedings. However, it only applies to applications made to a 'court' as defined.3. Applicability of Section 42 to applications made to courts without jurisdiction:The Court held that if an application is made to a court that does not have jurisdiction (i.e., not a Principal Civil Court or a High Court with original jurisdiction), such an application would be outside the purview of Section 42. This means subsequent applications can be made to the appropriate court.4. Whether the Supreme Court can be considered a 'court' under Section 2(1)(e) of the Act:The Court concluded that the Supreme Court could not be considered a 'court' under Section 2(1)(e) of the Act. The reasons included the exhaustive nature of the definition, which only includes the Principal Civil Court of original jurisdiction or the High Court exercising original jurisdiction. Additionally, the Supreme Court's role in appointing arbitrators does not make it a 'court' under the Act.5. Applicability of Section 42 after the arbitral proceedings have concluded:The Court held that Section 42 applies even after the arbitral proceedings have concluded, provided the applications are made under Part-I of the Act. This interpretation aligns with the broad wording of 'with respect to an arbitration agreement' in Section 42.Conclusion:The Court concluded that Section 2(1)(e) provides an exhaustive definition of 'court,' which includes only the Principal Civil Court of original jurisdiction in a district or the High Court in its ordinary original civil jurisdiction. Section 42 applies to all applications under Part-I of the Act made to such courts. Applications made to courts without jurisdiction or to the Supreme Court do not fall under Section 42. The judgment of the Calcutta High Court was upheld, confirming its jurisdiction to entertain the application under Section 34 of the Act. The appeals were dismissed.