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2005 DIGILAW 439 (CAL)

MSTC LIMITED v. EXPORTERS OF W. A.

2005-07-13

ALOKE CHAKRABARTI, SAILENDRA PRASAD TALUKDAR

body2005
CHAKRABARTI, J. ( 1 ) FACTS in brief are that application was filed under sections 30 and 33 of the Arbitration Act, 1940 by MSTC Limited which was registered as Misc. Case No. 27 of 2000 in connection with Title Suit no. 71 of 2000 in the Court of learned Civil Judge (Senior Division) 4th court, Alipore. The Misc. Case was renumbered as Misc. Case No. 35 of 2001. ( 2 ) THE petitioner MSTC Ltd. invited tender for supply of stainless and alloy steel melting scrap with specific shape and size and the opposite party Nos. 1 and 2 being the two claimants participated in the tender and their tender was accepted by the petitioner. When disputes and differences arose between the parties, the same were referred to the joint Arbitrators. The matter was decided in the arbitration proceeding and an award was passed and published on 23rd March, 1999. MSTC Ltd. challenged the award. When MSTC's case was dismissed on contest, the present appeal was filed. ( 3 ) HEARD Mr. Jayanta Mitra, learned Counsel for the appellant who first argued the question of jurisdiction of the Alipore Court in entertaining and deciding the proceeding as the respondents at an earlier stage filed application under Section 20 of the Arbitration Act, 1940 in Delhi Court as a result whereof applying the provisions of Section 31 (4) ,of the said Act the Delhi Court and only Delhi Court has the jurisdiction wherein any subsequent application can be filed. ( 4 ) MR. Mitra, learned Counsel appearing for the appellant referred to the said application under Section 20 showing that the same was filed in the High Court of Delhi and the said Court by its order dated 25th August, 1994 disposed of the said application under Section 20 appointing learned arbitrators and referring the disputes for arbitration to the said learned arbitrators. ( 5 ) MR. ( 5 ) MR. Mitra, learned Counsel appearing for the appellant relied on the various judgment for showing that law is settled that parties are obliged to file all applications regarding the conduct of the arbitration proceedings or otherwise arising out of such proceedings in one Court and the Court in which the first application relating to the matter to filed, is vested with exclusive jurisdiction irrespective of the fact whether the question arises during pendency of the arbitration or after the arbitration is completed or before arbitration is commenced. Such judgments include the case of kumbha Mawji v. Dominion of India reported in AIR 1953 SC 313 , Ferro alloys Corporation Ltd. v. A. K. Ghosh reported in AIR 1960 Cal 421 , Union of India v. Surjeet Singh Atwal reported in AIR 1970 SC 189 . The State of madhya Pradesh v. M/s. Saith and Skelton (P) Ltd. reported in AIR 1972 sc 1507 , Ramkripal Sharma v. Union of India reported in AIR 1986 Cal 80 and M/s. Guru Nanak Foundation v. M/s. Rattan Singh reported in 1981 (4) SCC 634 . ( 6 ) THOUGH the learned Counsel for the appellant advanced his argument on merit also apart from raising the jurisdictional question as above, but we have taken for consideration the question of jurisdiction first and in case it is held in favour of the respondent, the merit of the appeal will be considered. ( 7 ) MR. Roy Chowdhury, learned Counsel for the respondent contended that question of jurisdiction of Alipore Court in respect of application under sections 30 and 33 of the Arbitration Act has been raised by the appellant for the first time in the present appeal. As the said objection was not even taken in the application under Section 30 read with Section 33 of the Act. The impugned judgment was also shown by Mr. Roychowdhury for the respondent and stress was given on the word 'mainly' used while considering the contentions of the petitioner for indicating that question of jurisdiction was not even raised before the learned Judge. Mr. The impugned judgment was also shown by Mr. Roychowdhury for the respondent and stress was given on the word 'mainly' used while considering the contentions of the petitioner for indicating that question of jurisdiction was not even raised before the learned Judge. Mr. Roy Chowdhury argued that question of jurisdiction has to be taken at the earliest point of time and such question having not been raised even in the application itself which was filed long after the amendment of the Code of Civil Procedure, the impact of the said law also disentitles the appellant to raise such objection in present appeal. ( 8 ) MR. Roy Chowdhury, learned Counsel for the respondent refers the Section 41 of the Arbitration Act, 1940 to show that there is no provision contained therein indicating the time when such jurisdictional question is to be raised and it is contended that therefore, the provisions of Code of civil Procedure is to be followed. In this connection he refers to section 21 of the Code for contending that such objection is to be taken at the earliest stage. ( 9 ) MR. Roy Chowdhury contends that ground (d) in the application contains such objection but the same having not been pressed at the time of hearing, the same cannot be allowed to be raised here. Mr. Roy chowdhury, learned Counsel for the respondent relied on the judgment in the case of Premchand v. Fort Gloster Jute Manufacturing Co. Ltd. reported in 64 CWN 103 for contending that a point once abandoned cannot be allowed to be taken at the appellate stage. Reliance was also placed on the judgment in the case of Satya Narayan Shah v. Star Co. Ltd. reported in AIR 1984 Cal 399 . ( 10 ) MR. Roy Chowdhury, learned Counsel for the respondent contended that in any event even if the contention of the respondent is not accepted and the Alipore Court is held to be not having jurisdiction, the plaint may be directed to be sent to appropriate Court under Rule 10 Order 7 of the Code of Civil Procedure. ( 11 ) CONSIDERING the above contentions of the respective parties, we find that the law relevant for consideration is as contained in Section 31 of the Arbitration Act, 1940 and the same is set out hereinbelow :-"31. ( 11 ) CONSIDERING the above contentions of the respective parties, we find that the law relevant for consideration is as contained in Section 31 of the Arbitration Act, 1940 and the same is set out hereinbelow :-"31. Jurisdiction- (1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. (2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. (3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court. (4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court. " ( 12 ) IN this connection law as settled in the case of Kumbha Mawji (supra) is also relevant and the relevant observation made in the said judgment is as follows :-"the necessity for clothing a single Court with effective and exclusive jurisdiction, and to bring about by the combined operation of these three provisions the avoidance of conflict and scramble 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. " ( 13 ) THE following observation of the Court in the case of Ferro Alloys corporation Ltd. (supra) is also relevant :-"i am apt to think that once an application is made with reference to an arbitration agreement in one Court, no matter whether before or after filing of the award, that Court will have the exclusive jurisdiction to deal with all matters in connection with the reference including filing the award and passing judgment in terms of the award. " ( 14 ) THEREFORE law, as provided in sub-section 4 of Section 31 having been explained by the Courts as indicated hereinabove, leads to the conclusion that only one Court will be having jurisdiction and in the present case the earlier application having been filed in Delhi Court in connection with this proceeding, the Alipore Court cannot have jurisdiction. ( 15 ) IN the case of Surjeet Singh Atwal (supra) it was held that application under Section 8 and under Section 20, though clearly are applications anterior to the reference, lead to a reference and are undoubtedly applications "in the matter of a reference" and may fall within the purview of Section 31 (4) of the Act. ( 16 ) WITH regard to the contention that the objection was not raised earlier, it appears that objection was taken in the application under Sections 30 and 33 of the Act. The observations in the judgment on the said application, relied on by the learned Counsel for the respondent, do not clearly indicate that the said objection was not raised at the time of hearing. It appears a written note of argument was enclosed to the application itself but points taken therein were not discussed in the judgment. Therefore, mere absence of reference to said objection does not indicate that the same was not argued. In the present appeal also the said objection was raised as a ground. In any event an objection as regards jurisdiction can be raised at any stage of the proceeding. ( 17 ) WITH regard to the judgment in the case of Premchand (64 CWN103) (supra) it appears that abandonment of a point was recorded therein and in such circumstances the party so abandoning the point, was not subsequently allowed to raise the point. ( 17 ) WITH regard to the judgment in the case of Premchand (64 CWN103) (supra) it appears that abandonment of a point was recorded therein and in such circumstances the party so abandoning the point, was not subsequently allowed to raise the point. This judgment does not apply in the present case as admittedly there was no case of abandonment of the point of jurisdiction. In above view of the findings as we hold that the Alipore Court was not having jurisdiction so far as the application under Section 30 read with section 33 of the Arbitration Act is concerned, the impugned order is set aside and the appeal is allowed. The application filed under Sections 30 and 33 of the Arbitration Act, 1940 in Misc. Case No. 35 of 2001 be transferred to the appropriate Court in Delhi if the respondent files within four weeks an application for the said purpose. In case no such application is filed within said time, the plaint may be returned to the respondent so that it may be filed in appropriate Court.