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2002 DIGILAW 369 (CAL)

AMARESH CHOUDHURY v. GOPINATH KUNDU

2002-06-12

GIRISH CHANDRA GUPTA

body2002
GIRISH CHANDRA GUPTA, J. ( 1 ) THE Court:-This was an application under section 9 of the Arbitration and Conciliation Act, 1996 praying inter alia for appointment of a Receiver and an order of injunction in a dispute arising out of a partnership. When the application was moved an objection with regard to the territorial jurisdiction of this Court to receive, try and determine this application was raised whereupon the learned counsel appearing for the petitioner prayed for liberty to file a supplementary affidavit in order to bring on record that a part of the cause of action arose within the jurisdiction of this Court as also to include a prayer for leave under clause 12 of the letters patent. Such leave was granted. A supplementary affidavit filed affirmed by one Sri Amaresh Chaudhury on 23. 4. 2002. Even after filing of the supplementary affidavit the learned advocate appearing for the respondent pressed his point with regard to want of jurisdiction of this Court in entertaining this application. Accordingly, the parties were heard on the point of jurisdiction as a preliminary issue. ( 2 ) MR. Basu, learned counsel appearing for the petitioner has submitted that an application under section 11 for appointment of an Arbitrator, registered as AP 303 of 2001, made by the petitioner in this Court is pending. He therefore contended that by virtue of section 42 of the Arbitration and Conciliation Act, 1996 all subsequent applications are required to be made in this Court alone. It would be convenient to notice section 42 of the Act which provides as follows :section. 42. 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. ( 3 ) AN alternative submission of Mr. Basu was that a part of the cause of action arose within the ordinary Original Civil jurisdiction of this Court and therefore leave should be granted to make the application under section 9 of the Arbitration and Conciliation Act, 1996 in this Court. ( 3 ) AN alternative submission of Mr. Basu was that a part of the cause of action arose within the ordinary Original Civil jurisdiction of this Court and therefore leave should be granted to make the application under section 9 of the Arbitration and Conciliation Act, 1996 in this Court. The learned advocate appearing for the respondent has disputed both the submissions made by Mr. Bose. ( 4 ) INSOFAR as the first submission of Mr. Basu is concerned, section 42 has already been noticed above. It would appear that in order to take advantage of section 42 Mr. Basu has to show in no uncertain terms that an application under the first part of the 1996 Act, has been made in this Court. Mr. Basu contended that the application under section 11 was an application made to this Court. The question which arises for decision is ?whether an application under section 11 of the Arbitration and Conciliation Act, 1996 is an application made to Court?? ( 5 ) THE answer to this question is to some extent given by sub-section (6) of section 11 which provides that in the given circumstances a party may request the Chief Justice or any person or institution designated by him to take the necessary measure. . . . . . . . . . . for securing the appointment of an Arbitrator?. ( 6 ) THE authority to appoint an Arbitrator has been vested in the Chief Justice or his nominee. The Chief Justice is really speaking a person designation in the matter of appointing an Arbitrator. It has been held in Konkan Railways Corporation Ltd. v. Mehul Construction Co. , reported in (2000)7 SCC 201 with regard to the function performed by the Chief Justice as follows :the nature of the function performed by the Chief Justice being essentially to aid the Constitution of the Arbitral Tribunal immediately and the legislature having consciously chosen to confer the power on the Chief Justice and not a Court, it is apparent that the order passed by the Chief Justice or his nominee is an administrative order, as has been held by this Court in Ador Samia case [ (1998)8 SCC 572 ] and the observations of this Court in Sundaram Finance Ltd. case [ (1999)2 SCC 479 ] also are quite appropriate and neither of those decisions require any reconsideration. This being the position, even an order refusing to appoint an arbitrator will not be amenable to the jurisdiction of this Court under Article 136 of the Constitution. Needless to mention such an order refusing to appoint an arbitrator after deciding the contentious issues would be an act of nonperformance of duty and in view of what has been stated earlier the authority concerned could be directly by mandamus to perform its duty. ( 7 ) THE aforesaid case fell for reconsideration before a Constitution Bench in the Konkan Railways Corporation v. Rani Construction reported in AIR 2002 SC 778 wherein Their Lordships affirmed the said judgment. In this judgment with regard to the function of the Chief Justice Their Lordships observed as follows :as we see it, the only function of the Chief Justice or his designate under section 11 is to fill the gap left by a party to the arbitration agreement or by the two arbitrators appointed by the parties and nominate an arbitrator. This is to enable the Arbitral Tribunal to be expeditiously constituted and the arbitration proceedings to commence. The function has been left to the Chief Justice or his designate advisedly, with a view to ensure that the nomination of the arbitrator is made by a person occupying high judicial office or this designate, who would take due care to see that a competent, independent and impartial arbitrator is nominated. ( 8 ) THEIR Lordships elsewhere in the said judgment seeking to make a distinction between UNICITRAL Model Laws and Rules and the Act of 1996 observed as follows :. . . . . . . . . . . . . . . THAT the Model Law was only taken into account in the drafting of the said Act is, therefore patent. The Act and the model law are not identically drafted. Under section 11 the appointment of an arbitrator, in the event of a party to the arbitration agreement failing to carry out his obligation to appoint an arbitrator, is to be made by ?the Chief Justice or any person or institution designated by him?; under clause 11 of the model law it is to be made by a Court. Under section 11 the appointment of an arbitrator, in the event of a party to the arbitration agreement failing to carry out his obligation to appoint an arbitrator, is to be made by ?the Chief Justice or any person or institution designated by him?; under clause 11 of the model law it is to be made by a Court. Section 34 of the Act is altogether different from clause 34 of the model law and judgments and literature thereon are, therefore, not a guide to the interpretation of the Act and especially of section 11 thereof. ( 9 ) THE question which has fallen for determination has really been answered by Their Lordships and the answer is that it is a request or at best an application to the Chief Justice in his administrative capacity and not an application to the Court. ( 10 ) ONCE it is held that an application under section 11 of the 1996 Act is not an application made to the Court, the submission that this Court would have jurisdiction to entertain the application made under section 9 of the Act on the basis of section 42 thereof is wholly without merit and deserves to be rejected. ( 11 ) THE correct position in my view is that applications pertaining to arbitration under the 1996 Act, except an application under section 11, are entertainable by the principle Civil Courts of Original jurisdiction. The appropriate question to ask is which Court would have jurisdiction to receive, try and determine the matter, had it been a subject matter of a suit? Whereas an application under section 11 can only be made to the Chief Justice. Therefore, the question of jurisdiction in respect of each application under the Act, except one under section 11, has to be decided with reference to sections 16 to 20 of the Code of Civil Procedure and clause 12 of the letters patent. I may only hasten to add that principle Civil Courts of Original jurisdiction will also include ordinary Original Civil jurisdiction of this Court. ( 12 ) NOW, the only question is ?can leave be granted under clause 12 of the Letters Patent to the petitioner to institute this application under section 9 in this Court?? This question has to be answered on the basis of the averments made in the pleadings by the petitioner. ( 12 ) NOW, the only question is ?can leave be granted under clause 12 of the Letters Patent to the petitioner to institute this application under section 9 in this Court?? This question has to be answered on the basis of the averments made in the pleadings by the petitioner. ( 13 ) THE disputes in this case are with regard to dissolution of a partnership carried on at 12a, B. T. Road, Calcutta and 154, B. T. Road, Dunlop Bridge, Calcutta both outside the jurisdiction of this Court. Leave under clause 12 of the Letter Patent has been prayed for on the ground that a part of the realisable debts due to the firm is within the jurisdiction of this Court; the firm has filed sales tax and income tax returns within the jurisdiction of this Court; the zonal office of the banker of the firm is within the jurisdiction of this Court and several letters were written by the petitioner from within the jurisdiction of this Court. These, in my view, for not form a part of the cause of action and therefore leave under clause 12 of the Letters Patent cannot be granted. ( 14 ) THE preliminary objection therefore succeeds. The application is dismissed. However, it will be open to the petitioner to apply for appropriate remedy before a Court of competent jurisdiction. In the facts of this case, there will be no order as to costs. Application dismissed