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2001 DIGILAW 75 (JK)

National Hydro-Electric Power Corp. Ltd. v. Karam Chand Thapar & Bros.

2001-03-30

T.S.DOABIA

body2001
1. An act or acts of parties cannot confer jurisdiction on a court which under the law can have no such jurisdiction. Such is the stand taken by M/S National HydroElectric Power Corporation Ltd., the petitioner herein. This stand is sought to be countered by the respond­ent company. 2. The circumstances under which this le­gal question has cropped up, be examined. 3. A tender for the execution of the work under the name and style of "construction of TRT-II outlet package at salal Hydroelectric Project (Stage-II)", was floated by the Chief Engineer (CC) of the National Hydroelectric Power Corporation Ltd. The office of the afore-mentioned official is said to be located at Nehru Place, New Delhi. The present address of the petitioner Corporation is said to be Sector 33-A, Faridabad in the State of Haryana. Respond­ent M/S Karam Chand Thapar and Bros (CS) Ltd. (hereinafter referred to as the Company), is said to have given a response to the Notice Inviting Tender above mentioned. The tender was accepted on 11th Jan, 90. Certain disputes arose. These were referred to the arbitrator. The arbitrator is said to have entered upon the ref­erence and made an award on 9th Sep. 2000. In terms of the award, the company requested the Corporation to honour the award with in­terest. However, this was not done. It is stated that the company preferred an application for the execution of the award. This was done in terms of Section 36 of the Arbitration and Con­ciliation Act of 1996 (hereinafter referred to as the Act). This application was filed in the High Court of Delhi. Warrants of attachment are said to have been issued. During these proceedings taken in the High Court of Delhi, it transpired that the Corporation had challenged the award by preferring an application in this court. On coming to know about this fact, the present ap­plication has been preferred by the Company. 4. It is stated by the counsel for the com­pany that; i) it is only the High Court of Delhi, which would have jurisdiction in the mat­ter. For making this submission, it is stated: a) that the Corporation had filed a petition under Section 16(6) and section 34 of the Central Act; b) that this application was regis­tered as OMP No. 172/99; c) that an application seeking in­terim order was also filed. For making this submission, it is stated: a) that the Corporation had filed a petition under Section 16(6) and section 34 of the Central Act; b) that this application was regis­tered as OMP No. 172/99; c) that an application seeking in­terim order was also filed. This was registered asIANo.5869/99; d) that the aforementioned applica­tions came up before the High Court of Delhi for admission/order on 28th may,99. Notice was issued to the company, however, no interim order was passed. 5. Thereafter proceedings took place in the High Court of Delhi. Orders passed on 15th Oct.99 and 20th Sep, 2000, have been quoted in this CMP filed by the company. These are being quoted below: - "15.10.99: ...Ld. counsel for the respondent No. 1 states that he has filed the reply. How­ever, same is not on file of this court. Coun­sel to pursue the matter with Registry and to get the same placed on the file of this case. Copy of reply supplied to the counsel for petitioners. Let rejoinder thereto, if any, be filed within 5 weeks from today. Ad­journed and put up on 10.02.2000." "20.09.2000: ....It is submitted by coun­sel for the petitioner that since after the fil­ing of the petition, the arbitrator has made and published his award, he, therefore, wants to withdraw the petition with liberty to challenge the award on the grounds as have been taken in the present petition as well. In view of the submissions made, the petition is dismissed as withdrawn". 6. On the basis of above, it is submitted by the respondent company that the Arbitration Application 2/2001 by which objections have been preferred to the award given by the arbi­trator is not maintainable, it is submitted that in terms of Section 42 of the Act, only High Court of Delhi would have the jurisdiction. It is submitted that once proceedings are initiated in a particular court, then, only that court would have jurisdiction over all arbitral proceedings. 7. It is submitted that once proceedings are initiated in a particular court, then, only that court would have jurisdiction over all arbitral proceedings. 7. Section 42 of the Act, on which much reliance has been placed by the company, is being reproduced below: "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, the 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." It is accordingly submitted that this court would have no jurisdiction to entertain an ap­plication whereby arbitral award has been ob­jected to. 8. The learned counsel for the Corporation submits to the contrary. It is submitted that notwithstanding the fact, the Corporation hav­ing filed an application in terms of Section 34 of the Act in the High Court of Delhi, the juris­diction of this court to take cognizance of arbitration application 2/2001, is not taken away, it is submitted: i) that the application which was preferred before the High Court of Delhi was not decided on merits; ii) that, as a matter of fact, the high Court of Delhi had no jurisdiction in the mat­ter; iii) that the filing of an application in a court which has no jurisdiction would not have those consequences which are sought to be spelled out by reading Section 42 of the Act. It is submitted that the claim of the company arises out of an incident and contractual obli­gation which took place and with regard to the property which is located in the district of Udhampur in the State of Jammu and Kashmir, and therefore, only the High Court of Jammu and Kashmir would have exclusive jurisdiction in the matter, for this, reliance is being placed on the definition of Court as occurring in Sec­tion 2(1)(e) of the Act. For facility of reference, this is being re­produced below: - €œCourt means the principal 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." 9. Thus, what is sought to be urged is that notwithstanding the filing of an application under section 34 of the Act, the present objections preferred to the award in this court have been preferred in accordance with the law and no objection can be taken to the filing of the same. In addition to the above arguments, it is also urged that with a view to confer jurisdiction on a court where first application is filed, it is nec­essary that such an application is filed with re­gard to the proceedings arising "in this part". It is submitted that the proceedings taken under Section 34 of the Act, would therefore, be not covered by what is said in Section 42 of the Act. 10. To deal with the last argument first as raised by the Corporation, it be seen that the Central Act consists of part I and part II. Part I deals with the matters falling under Section 1 to 43. Part I deals with the matters in terms of certain foreign awards. Therefore, the last ar­gument raised by the Corporation that an application preferred under Section 34 would not be under part I, is an argument which can­not be accepted. The other arguments raised be now examined. 11. There can be no dispute with the propo­sition that once a valid application has been preferred in a court under part I of the Central Act, then only that court would have jurisdic­tion over all arbitratral proceedings. The other arguments raised be now examined. 11. There can be no dispute with the propo­sition that once a valid application has been preferred in a court under part I of the Central Act, then only that court would have jurisdic­tion over all arbitratral proceedings. "The ne­cessity for clothing a single court with effec­tive and exclusive jurisdiction, and to bring about by the combined operation of these pro­visions, the avoidance of conflict and scrabble is equally essential whether the question arises during the pendency of the arbitration or after the arbitration is completed or before the arbi­tration is commenced." Such was the view ex­pressed by the Supreme Court in the case of Kumbha Mawji vs. Dominion of India, AIR 1953 SC 313. Therefore, where an application under part I has been made in a court, then that court alone shall have jurisdiction over the pro­ceedings and subsequent applications arising our of that agreement and arbitral proceedings are supposed to be made in that court and no oilier court. Where two courts had concurrent jurisdiction and an application under Section 14(2) of the Act of 1940. requesting the court to direct the arbitrator to file the award was filed in one of the court, the view expressed was that only that court would have jurisdiction to deal with the later application. See Raman Lamba vs. D.M.Harish, AIR 1991 Bom 311 and also Glob Paper Mills Ltd. vs. Printpak Machines Ltd. AIR 1985 Cal 52. The above situation though puts an academic end to the controversy raised in this petition, the question would still arise as to whether an application which was preferred by the corporation in the high Court of Delhi could at all be filed or not. For that, full respect would have to be given to the term court, as occurring in the Central Act as also in the State Act. As the definition of the said term under the Central Act has already been noticed above, the definition of the term court under the State Act is being noticed below:-" court, means a civil court having jurisdiction to decide the 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 under Section 21, in­clude a small cause court." 12. In mis regard, it would be apt to mention that parties by contract cannot confer jurisdic­tion on a court which has no jurisdiction and again the parties by agreement cannot oust the jurisdiction of the courts. Both these proposi­tions can be spelled out by perusing the deci­sions reported as Hakam Singh v. Gammon (In­dia) Ltd. AIR 1971 SC 740, South East asia Shipping co. Ltd. v. Nav Bharat Enterprises Pvt. ltd., (1996) 3 SCC 443, Indain Drugs 7 Phar-maceuticals Ltd. v.Indo-swiss Synthetic Germ Mfg. Co. Ltd. AIR 1996 SC 543. 13. In determining as to which court would have jurisdiction, if whole of die immovable property regarding which the dispute is, soutside the jurisdiction of a court, then the court would have no jurisdiction in the matter. See assandas Pursumal vs. Alidas Madhavadas AIR 1934 Sind 183. again, the choice of an arbitrator to hold the proceedings at a place and to make or to publish an award would not give the court of that place the territorial jurisdiction to decide an issue arising out of Arbitration Act., see Gulati Construction Co. vs. Betwa River Board, AIR 1984 Del 299. See also Sabson (India) Pvt Ltd vs. Niyveli Lignite Corp. Ltd., AIR 1992 Madras 282. In the present case, the dispute is with regard to execution of works at a place which is located within the district of Udhampur in the State of Jammu and Kashmir. If this be the position, then for the purpose of Section 2(1)(e), the court would mean the principal civil court of original jurisdiction in the district, and would include the High Court also, and therefore, the High Court of Jammu and Kashmir would have exclusive jurisdiction in the matter. The filing of application under section 34 of the Act would be of no conse­quence. The application so filed was never decided on merit. The question as to whether the high Court of Delhi had the jurisdiction or not, never came to be decided. Therefore, this aspect of the matter has been considered on first principles and also by taking into consid­eration the judicial precedents dealing with the subject. In this regard, reference be made to a decision of the Supreme Court in the case of P.Anand Gajapathi Raju and others v. P.V.G. Raju and others, (2000) 4 SCC 539. Therefore, this aspect of the matter has been considered on first principles and also by taking into consid­eration the judicial precedents dealing with the subject. In this regard, reference be made to a decision of the Supreme Court in the case of P.Anand Gajapathi Raju and others v. P.V.G. Raju and others, (2000) 4 SCC 539. In the above case, it was observed that "the court to which the party shall have recourse to chal­lenge the award would be the court as defined in clause (e) of Section 2 of the new Act and not the court to which an application under sec­tion 8 of the new Act is made. An application before a court under Section 8 merely brings to the courts notice that the subject matter of the action before it is the subject matter of an arbi­tration agreement. This would not be such an application as contemplated under Section 42 of the Act as the court trying the action may or may not have had jurisdiction to try the suit to start with or be the competent court within the meaning of section 2(e) of the new Act." The ratio of aforementioned decision do apply to, the facts of this case. As no proceedings could at all be initiated in the High Court of Delhi in terms of Section 2(1 )(e) of the Act, and there­fore, filing of any application and its conse­quence disposal, which was obviously not on merits; will not lead to attracting section 42 of the Act to the facts of this case. The Civil Mis­cellaneous Petition in hand, preferred by the Company is therefore, rejected. The respond­ent company is left free to take further steps in the arbitration application 2/2002. CMP 17/2002 shall stand dismissed.