^F^ i:':.i '/•- HIGH COURT OP CHHATTISGARH AT BILASPUR Arb. Apueal No.25 of 2QQ8 APPELLANT: APPLICANT Chhattisgarh State Ware Housing Corporation, Raipur (CG), through its Managuig Director. Versus RESPOND^NT: NON-APPLICANT M/s ShyamlelAgrawal, Enguieers arid Builders, ''Anasid^ Station Road, RaigarU, TehsU & District Raigarh (CG) (Appeal under Section 37 (l)(b) ofthe Arbitration aad Concilla.tion Act, 1996) . Pi'esent: ShriB.D. Guni, counsel for fhe appellan.1 Shri Auaiid Kuraai' Tiwari, counsel for tiie respondeiit, . ^ DivisiotLBench: Hon'ble Shri Dhirendra Nishra 85 Hon'ble Stei D.R. Deshmufeh, JJ. PRALORDER (20-1-2009) t The followiag oral order bfthe Court was passed by Dhirendra Mislira, J. 1. With tJie consent of tlie parties, the xaatter was heard finaUy at the adiriission stage itself 2. The iiistant appeal is directed against tiie ordex'dated 17-7-2008 passed by fhe leanied District vJudge, Raigarh whereby the appUcation prefeired by tlie appetlant under Section 34 of fiie Arbitratiou aiid ConciUation Act, 1996 (hereinafter refeiTed to a.s 'the Act 19963) has been rejected on fhe ground that suice the arbitrator was appoiated by flie High Court under Sectiou 11 oftheAct, 1996, all subsequent applications arisiiig out ofthe agreement shaU also lie m. tbe High Coui't, ia. view oftbe provisions contaiiied under Sectiou 42 of flie Act 1996 aad fb.e Court of District Judge has no jurisdiction to entertaiii application. /-- 3. Learaed counsel for tlie appellaiit submitted tliat the ixiipugned order has been passed on fhe basis of erroneous hiterpretation of Section 42 of tiie Act, 1996. Section 42 is appMeable to fhe peudiag arbitration proceeditig. Once &ial award is made by tlie arbitrator, the same caa be set aside only by Bialciag an. application under Section 34 of fhe Act, 1996 to the Court as defiiied under Section 2 (e). ReMaiice is placed in. the matters of Natioaial Alumiaiiim C6» Ltd^ Versus Pressteel & Fabricatiox&s (P) Ltd. aiid aaother1 ajid Uxiioti ofliidia Versus SIarlng Coiistaructiosi Co. (P) Ltd,2, 4. Shri Auaiid Kuraar Tiwad, learaed counsel appearing for fhe respondent fairly siibnxitted that the inipugued order is pateutly inegal aiid is based on erroneoiis iaterpretation of, Section 42 of the Act, 1996. 5. We have heard leai-ned counsel for tiie parties. 6. The only question for our considera.tioxi is whether leam.ed District Judge wa.s legally justified in. rejectJBg the application under Sectioii \ • . .' • ' • . , . • • 34 oii the ground ofjurisdiction? Chapter VII ofthe Act, 1996 deals with recourse agaiast aii arbitral award. Section 34 provides for the provisions for setti.Bg aside arbitral award. Sub-section (1) ofSection 34 inaiidates tliat recourse tb a Coiirt agaiast aii arbitral award niay be niade oxily by an appMcation for setting aside such award in accordaixce with sub-section (2) aad su^-section (3). Sub-section (2)(a) provides that aii arbitral award uioy be set aside by fhe Court w'hen a party inaidiig appMca.tion fuiiiishes' .proof of tlie: facts e^iiimerated bi paragraphs (i) to (v) aad the Court records a findiQ.g as descriJ:)ed ia. sub-secfion (2)(b). 7. The Court is dellned ia Section 2 (e) as uuder:- ^Courf' nieans the prmcipal Civil Court of onginal jiirisdiction in a distarict, aad iacludes tiie High Court inexercise ofits ordiaary origio.al civil jiuisdiction, haviag Jurisdiction to decide the questions foraiin.g fhe subject-matter of the arbitration if fhe sajne had been flie subject- c^ 1 (2004) 1 Supreme Court Cases 540 2 (2006) 8 Supreme CourtCases 18 <^ '^ ^, matter of a suit, but does not iaclude any civil court of a grade uifenor to such priacipal Civil Court, or aiiy Court ofSmall Causes." 8. Froni bare readiag of the detmition of fhe Court ia the Act, it is evident that "Courf ineaas the prmcipal Civil Court of original jurisdiction aad fhe saoie also uicludes the High Court ia exercise of its ordiD.ary origiaal civil jiirisdiction. There is no dispute fhat iti the iiistaat case arbitt'ator was appouited by fhe High Court which does not exercise its ordinary onginal civU jurisdiction, haviag jurisdiction to decide fhe qiiestions formiag the subject-m.atter of the arbitration. In our considercd opiaion, jurisdiction as contemplated under section 42 oftlieAct, 1996 refers to arbitral proceediags aiid all subsequent appUcations aiising out of fhat agreeraent durmg arbitral proceediags, The jurisdiction of fhe Court in the raatters of application for setting aside award under Section'34icaiinot be excluded by reference to Section 42 offheAct, 1996. 9, \We are fortified in. ourview by fhe judgm.ent ia fhe niatter ofNatioBal Aliiminiiam Co. Ltd^ (Supra) whereiii arbitrator was appoiated by the Hon^ble Suprenie Court. The question - apart fromi other questions - befoi-e the Hon5l5le Supreine Court was whefher an appUcation under Sectiou 34 for settmg aside an award pa&Sed by the arbitrator appointed by fhe Suprenie Court is inaiiitainable before fhe Prmcipal Civil Court of origiaal jurisdiction as defined under Section 2 (e) or appUcation would Ue before the Supreaae Court? Answering fhe above question, fhe Hon^ble Siipreme Courtheld ia para-9 thus:- w9.The next questiou to be considered by us in tliis appUcation is whefher tlie dispute havuig adsen prior to fhe comiag into force of fhe 1996 Act aiid fhe proceedirigs haviag contmued iinder the provisions of fhe 1996 Act, would fhe provisions of fhe 1940 Act still be applicable for miakm.g an appUcation for fhe mLodification of the award, aad if so, before which coiirt, First part of fhis issue need not detain us because of Uie admitted fact tliat by consent of fhe parties provisions of tlie 1996 Act have been 3iiade MH —I. appUcable to the proceediags, which is in. conformity with Section 85(2}(a) of 1996 Act, hence, it is futile to contend fhat for ihe purpose of challenge to fhe award the 1940 Act will apply. Hence, we reject fhis contention. In regard to the foruni before which fhe application for niodifica.tion or settiiig aside the award is coucenied, we fiad no difficulty in coiaio.g to fhe conclusion that io. view of fhe provisions of Section 34 read witii Section 2(e) oftfae 1996 Act it is not this Court which has fhe jurisdiction to entertaia aa appUcation for inodification of the award aiid it could only be ftie piiacipal civil court of original junsdiction as conteniplated under Section 2(e) of fhe Act, therefore, in. our opiaiou, fhis appUcation is uot xnabitaiaable before fhis Court/' !0}In the matter of Uaioa of India (Supra) also the arbitrator was appoiated by the Hi^h Court, The petitioner under a bona fide beUef that award of such an arbitrator could be challenged before High Coiirt only, filed writ petitiori before fhe High Court. The writ petition was disniissed as not niaintauiable on fhe groiind that fhe award could be chaUenged under Section 34 by tlliiig objectious before District Judge and fhereafter party concenied filhig. aa objection under Section 34 before District Judge along witli aii appUcation for condonation of delay. The appUcation was rejected by the District Judge as weU as by fhe High Coiirt on ftie ground of limitation, However, the Hon'ble Supreme Court allowmg tlie appeal remanded tlie case to fhe Distdct Judge witii a direction to decide whefher appUcation for settmg aside tlie award under Section 34 of fhe Act filed by tiie appellaat could be considered to be within a period of liinitation ie. allter deducting fhe period spent by fhe appeUaiit in prosecutiag tlie remedy before High Court. 11.0n the basis of aforesaid discussion, we are of the opinion that irrespective of tlie Court by which dispute was referred to the arbitrator for adjudication, fhe foruni for filiag appUcation under ~\A/'< Section 34 oftlie Act, 1996 for setting aside award is a Court defined under Sectiou 2(e) of the Act, fheretbre, learaed Distdct Judge, Raigarh had jiirisdiction to decide fhe appMcation uiider Section 34 preferred by the appeUaiit for settiiig aside the award passed by the aAitt'ator, 12. For fhe aforesaid reasons, tlie order impxigned is contraiy to law, the sazae deserves fo be set aside aad it is accorduigly set aside. The iixatter is reniitted to fhe learaed District Judge, Raigarh for decidiiig the appeal ou raerits, ui accordaace with law. iS.The parties shall appear before tlie Court ofleamed District iJudge on 20th February, 2009. 14.Th.ere shaU be no oiders as to costs. SdA DhirendraMishra Judge Sd/- Dilip RaosaheB Deshmukh Judge Barve ^) ;J.