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GENERAL MANAGER, B.C. RAILWAY VERSUS SRI RAMA ENGINEERING CONSTRUCTIONS, HYDERABAD

    Original Petition 2 Of 2000

    Decided On, 24 July 2001

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE CHIEF JUSTICE MR. S.B. SINHA & THE HONOURABLE MR. JUSTICE V.V.S. RAO

    For the Appearing Parties: Gouri Shankar Sanghi, M.R.K. Chaudhary, M. Srinivas Rao, Advocates.



Judgment Text

S.B. SINHA, C.J.


( 1 ) WHETHER the High Court would be the appropriate Court for entertaining an application under Section 34 of the arbitration and Conciliation Act, 1996 (for the sake of brevity hereinafter referred to as 'the said Act') where an arbitrator has been appointed by the Chief Justice of this Court in terms of sub-section (6) of Section 11 of the said Act, is the question which falls for consideration in this petition.


( 2 ) THE first respondent herein, as regards the several disputes and differences by and between it and the petitioners, invoked the arbitration clause culminating in filing an application before this Court under section 11 of the said Act. The said application was marked as Arbitration application No. 32 of 1998. The learned chief Justice appointed the 2nd and 3rd respondents herein as joint arbitrators by an order dated 21-8-1998 observing that they would be at liberty to appoint an umpire in the event they deem fit having due regard to the views of the parties as may be obtained at the first sitting of the arbitrator. The learned arbitrators submitted an award dated 30-6-1999. The petitioners herein have filed this petition under Section 34 of the said Act. An objection has been raised by the 1st respondent herein as regards maintainability of the said petition before this Court.


( 3 ) MR. Gouri Shankar Sanghi, the learned counsel appearing on behalf of the petitioners, inter alia submitted that having regard to the scheme framed by this Court the jurisdiction to appoint an arbitrator having been sub-divided, this Court alone had the jurisdiction to appoint an arbitrator. In other words, contends the learned counsel, pecuniary jurisdiction of the courts would be the determining factor for filing an application under Section 34 of the act.


( 4 ) THE learned Counsel in support of his aforementioned contention has strongly relied upon a decision of the Apex Court in m/s. Guru Nanak Foundation v. M/s. Rattan singh and Sons.


( 5 ) MR. M. R. K. Choudhary, the learned senior Counsel appearing on behalf of the respondents on the other hand would submit that having regard to the definition of 'court' as contained in Section 2 (e) of the act, no application in terms of Section 34 of the said Act can be filed before this Court. It was submitted that Section 42 of the Act will have no application in the instant case inasmuch as the applicability of the said provision must be kept confined to the arbitral proceedings and as an award is not a part of the arbitral proceedings, and award being not a petition, the learned counsel would urge that an award is not a part of the arbitral proceedings. The learned counsel would contend that the scheme of the new Act being completely different from that of the 1940 Act, the decisions rendered thereunder will have no application in the facts of the case. Having regard to the history of legislation of the said Act, there cannot be any doubt whatsoever that the scheme of the new Act is much more comprehensive than the 1940 act. By reason of the provisions of the said act, the right of the Courts to intervene had been reduced. Whereas Sections 8,9,10,12, 20 read with Section 4 of the 1940 Act provided for the circumstances in which the court could intervene between the arbitral proceedings, and during the arbitral proceedings. Furthermore, the Court could revoke the authority of an arbitrator or umpire under Section 5, give opinions on questions of law if special case is stated under Section 13 (b), enlarge the time for making award under Section 28, stay a legal proceedings that pertain to an arbitration agreement under Section 34, pass an interim order under Sections 18 and 41 and issue process for appearing before arbitrator. Even after passing of an award it could exercise its jurisdiction under Sections 14, 15,16,17,19,33 read with 30 thereof. Apart from Section 5 of the 1940 Act the Court's power to intervene was contained in section 9 for making interim orders, Section 11 for appointment of arbitrator, Section 14 for taking decision on termination of mandate of the arbitrator, Section 17 for rendering assistance in taking evidence in arbitration proceedings and Sections 30 and 33 for setting aside the award.


( 6 ) THE most important feature of the new act is that whereas under the 1940 Act upon considering the objections as regards the validity or otherwise of the award or the jurisdiction of the arbitrator as contained in sections 30 and 33 of the 1940 Act, an award was not only required to be made a rule of the Court but a decree was to be passed thereupon; in terms of the provisions of the said Act the award itself is enforceable as a decree. Section 35 of the said Act states that award shall be final and binding on the parties and persons claiming under them respectively. Section 36 states that where the time for making an application having been made had been rejected the award shall be enforceable in the same manner as if it were a decree of the Court. Section 34 specifies limited grounds-whereupon an application for setting aside arbitral award can be made.


( 7 ) THE law as it stands to-day does not provide a judicial power in the matter of appointment of an arbitrator. Sub-section (6) of Section 11 enables a party to request the Chief Justice or any person or institution designated by him to take necessary measure unless the agreement on the appointment of arbitrator provides other means for securing the appointment. The scope of Section 11 of the Act has recently been considered by us in Union of india v. Vengamamba Engineering Co. , Juputi, krishna Dist. Sub-section (6) of Section 11 confers power upon the Chief Justice and not upon the Court. Court has been defined in Section 2 (1) (e) to mean: the Principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such Principal Civil Court, or any Court of Small Causes.


( 8 ) AS the said provision uses both the words "means and includes", the same must be held to be exhaustive.


( 9 ) UNDER the old Act an application was required to be filed before the Court under section 20 whereas under the new Act only a request is to be made to the Chief Justice. We may notice a learned Single Judge of this Court in Chief Engineer (Construction) v. M. V. V. Satyanarayana took the same view and we endorse the same


( 10 ) CHIEF Justice is not a Court within the meaning of the aforementioned provision. This Court does not have any ordinary original civil jurisdiction.


( 11 ) SECTION 42 of the said Act reads thus:jurisdiction:- Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other Court.


( 12 ) ALTHOUGH a non-obstante clause has been provided thereunder, an application under Section 11 having not been made to a court, and in any event, questioning an award being not a part of the arbitral proceedings the said provision will have no application. Section 34 categorically states that for the purpose of setting aside an arbitral award, recourse to the Court may be made in terms thereof. It is now a well settled principle of law that unless the context otherwise requires a statutory definition should be carried into effect while interpreting the other provisions of the statute.


( 13 ) THE decision of the Apex Court in m/s. Guru Nanak Foundation (supra) was under the old Act. Section 31 (4) of 1940 Act in the said decision was construed holding that where arbitrator has been appointed by the Supreme Court,

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it would have jurisdiction to entertain the award and it could not be filed before the High Court. Having regard to the fact that the arbitrator is now appointed by the Chief Justice or by the person or body nominated by him in an administrative capacity and not in a judicial capacity, the said decision cannot be said to have any application whatsoever. In vijayalakshmamma v. B. T. Shankar the Apex court has pointed out that the Courts may not add or alter provisions of statute by reading into them what was never intended by the legislature or may have been deliberately avoided by it. ( 14 ) FOR the reasons aforementioned, we are of the opinion that the High Court is not the proper forum where an application under Section 34 of the Act would be maintainable. The Registry is directed to return the petition to the petitioner herein for its presentation before the concerned principal civil Court.
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