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2019 DIGILAW 1876 (RAJ)

Indian Potash Limited v. Bohra Industries Ltd.

2019-07-03

PRATAP KRISHNA LOHRA

body2019
ORDER : Pratap Krishna Lohra, J. 1. Petitioner/Non-applicant, by the instant revision petition under Section 115 CPC, has laid challenge to order dated 05.04.2016 passed by Addl. District Judge No. 2, Udaipur (for short, 'learned Court below'). The learned Court below, by the impugned order, rejected petitioner's application under Order 7 Rule 11 CPC in a petition under Section 34 of the Arbitration & Conciliation Act, 1996 (for brevity, hereinafter referred to as 'Act'), for setting aside arbitral award, filed on behalf of non-petitioner/applicant. 2. Succinctly stated, facts of the case are that there existed business relations between rival parties and during subsistence of these relations a dispute cropped up. Considering the dispute arbitrable, on behalf of petitioner an application under Section 11 of the Act is preferred before High Court of Delhi. After hearing the application, Delhi High Court appointed Retd. Chief Justice of Punjab & Haryana High Court Shri Mukul Mudgal as sole arbitrator. Likewise, non-petitioner/applicant too made endeavour to agitate its cause before this Court for referring the dispute to the arbitrator. This Court, vide judgment/order dated 8th of August, 2012, disposed of non-petitioner's application under Section 11 of the Act. Order dated 08.08.2012 reads as under: "By the judgment dated 07.01.2011 in Arb. P. 24/2010 and I.A. 13666/2010 filed by M/s. Indian Potash Limited the Hon'ble High Court of Delhi appointed Mr. Justice Mukul Mudgal, retired Chief Justice, Punjab & Haryana High Court, as the sole Arbitrator to adjudicate the dispute arising out of Memorandum of Understanding (MoU) dated 10.9.2008. A Special Leave to Appeal (Civil) No. 5836/2011 then was filed by the present applicant before the Hon'ble Supreme Court seeking reference of several other MoUs too inter alia to the same arbitrator. The respondent has already agreed before the Hon'ble Supreme Court to get the dispute arising out of other MoUs dated 15.3.2001, 15.3.2002, 12.3.2003, 29.3.2004, 05.5.2005, 30.3.2006, 24.3.2007 and 10.9.2008 adjudicated by the arbitrator Hon'ble Mr. Justice Mukul Mudgal. Hon'ble Mr. Justice Mukul Mudgal, retired Chief Justice, Punjab & Haryana High Court, sole arbitrator appointed under the order dated 7.1.2011 in Arbitration Case No. 24/2010 & I.A. No. 13666/2010 is appointed as arbitrator to adjudicate all claims and counter claims of the parties arising out of all the MoUs referred above. Justice Mukul Mudgal. Hon'ble Mr. Justice Mukul Mudgal, retired Chief Justice, Punjab & Haryana High Court, sole arbitrator appointed under the order dated 7.1.2011 in Arbitration Case No. 24/2010 & I.A. No. 13666/2010 is appointed as arbitrator to adjudicate all claims and counter claims of the parties arising out of all the MoUs referred above. The fee of the learned arbitrator shall be paid in accordance with the schedule of fees prescribed under the Delhi High Court Arbitration Centre Rules. A copy of this order be communicated to the Arbitrator. Both the parties are directed to approach Hon'ble the Supreme Court to take corrective action accordingly. The arbitration application is disposed of." 3. As per agreed order dated 8th August, 2012, the sole arbitrator conducted arbitral proceedings at Delhi and followed all procedures/norms in adherence of Delhi High Court Arbitration Centre Rules. The sole arbitrator also charged his fee as per Delhi Rules. Upon conclusion of the proceedings, sole arbitrator passed award on 21.08.2015 whereby claim of the non-petitioner was repudiated and counter-claim of the petitioner is partly accepted. Feeling dismayed with the arbitral award dated 21st of August, 2015, non-petitioner Bohra Industries Ltd. approached District Judge, Udaipur for setting aside arbitral award by invoking Section 34 of the Act. Subsequently, the petition under Section 34 of the Act, submitted by the non-petitioner, was transferred for disposal to the learned Court below. 4. Upon receipt of notice from learned Court below on non-petitioner's petition aforesaid, the petitioner appeared to oppose it. In its endeavour to resist the petition under Section 34 of the Act, petitioner laid an application under Order 7 Rule 11 CPC, questioning learned Court below's jurisdiction. Joining issue with the petitioner, the non-petitioner contested the application. The learned Court below, after considering rival arguments, by the impugned order rejected the application of the petitioner. This sort of situation has prompted petitioner to assail the impugned order by invoking revisional jurisdiction of this Court. 5. Mr. Singhvi, learned Senior Advocate, and Mr. Manish Kaushik, espousing cause of the petitioner, have strenuously urged that impugned order is ex-facie outcome of exercising jurisdiction with illegality or material irregularity by the learned Court below. Mr. This sort of situation has prompted petitioner to assail the impugned order by invoking revisional jurisdiction of this Court. 5. Mr. Singhvi, learned Senior Advocate, and Mr. Manish Kaushik, espousing cause of the petitioner, have strenuously urged that impugned order is ex-facie outcome of exercising jurisdiction with illegality or material irregularity by the learned Court below. Mr. Kaushik would contend that the sole arbitrator conducted entire arbitral proceedings at Delhi as per procedure & norms of the Delhi High Court Arbitration Centre Rules, therefore, challenge to arbitral award before learned Court below is not tenable. Learned counsel submits that in the given situations, as per Section 20 of the Act, challenge to arbitral award is only sustainable before Delhi Courts. Mr. Kaushik has argued that when arbitrator was appointed by Delhi High Court and also paid fee as per Rules of Delhi High Court in this behalf, any Court out of Delhi cannot exercise jurisdiction under Section 34 of the Act. 6. Learned counsel for the petitioner, while assailing the impugned order, has vehemently argued that execution of last four MoUs between rival parties at New Delhi, coupled with the fact that arbitral proceedings were undertaken by the sole arbitrator at Delhi, is completely eschewed by the learned Court below. Learned counsel contends that rejection of application under Order 7 Rule 11 CPC by the learned Court below without considering the definition of "Court" envisaged under Section 2(e) (i) of the Act, has ex-facie rendered impugned order vulnerable. It is submitted by Mr. Kaushik, learned counsel for the petitioner, that interim relief granted to non-petitioner-applicant by the learned Court below while considering its application under Section 9 of the Act was challenged before this Court by preferring CMA No. 317/2010 and the Court was pleased to stay the order passed by learned Court below, precisely after recording satisfaction about lack of its jurisdiction. Elaborating his arguments in this behalf, learned counsel contends that the learned Court below has not at all cared to examine the vital question about its jurisdiction for the subject matter on the anvil of Section 42 of the Act, and therefore, per se it has exercised a jurisdiction not vested in it by law. 7. Learned Sr. Elaborating his arguments in this behalf, learned counsel contends that the learned Court below has not at all cared to examine the vital question about its jurisdiction for the subject matter on the anvil of Section 42 of the Act, and therefore, per se it has exercised a jurisdiction not vested in it by law. 7. Learned Sr. Counsel has strenuously urged that place of arbitration is crucial and as per sub-section (1) of Section 20, it is choice of the parties whereas sub-section (3) empowers arbitral Tribunal to decide place at its discretion. He, therefore, submits that learned Court below has seriously erred in harping on cause of action rather than arbitral award. Learned Sr. Counsel with full emphasis argued that Court while considering a petition under Section 34 of the Act cannot give undue credence to the cause of action for the simple reason that recourse by an aggrieved party is against the arbitral award. Buttressing his arguments in this behalf, learned counsel submits that approach of the learned Court below contextually does not sound prudent. As per submission of learned counsel, issue relating to territorial jurisdiction cannot be overstretched in arbitral proceedings and more significantly at the stage of considering application under Section 34 of the Act. 8. Learned Sr. Counsel Mr. Singhvi, while relying on Sections 34 read with 31(4) and 20 of the Act would urge that petition for setting aside arbitral award is confined to scrutinize from and contents of the arbitral award. Learned counsel also laid emphasis on Part I & Part II of the Act governing different provinces of the arbitral proceedings viz., domestic and international. Lastly, Mr. Kaushik has urged that jurisdiction under Section 34 of the Act is supervisory and therefore such jurisdiction can only be exercised by a Court within whose territorial jurisdiction arbitral proceedings are undertaken by sole arbitrator inasmuch as supervisory jurisdiction cannot be exercised by any other court having no territorial jurisdiction over arbitral proceedings. 9. For authenticating their arguments, learned counsels have placed reliance on following legal precedents: (1) Bharat Aluminium Co. Vs. Kaiser Aluminium [ (2012) 12 S.C.R. 327 ] (2) M/s. Bhandari Udyog Ltd. V/s. Industrial Facilitation Council & Anr. (Civil Appeal No. 2077 of 2015 - decided on 20.02.2015 by Hon'ble Supreme Court) (3) Nivaran Solutions & Ors. V/s. Aura Thia Spa Services Pvt. Ltd. & Ors. Vs. Kaiser Aluminium [ (2012) 12 S.C.R. 327 ] (2) M/s. Bhandari Udyog Ltd. V/s. Industrial Facilitation Council & Anr. (Civil Appeal No. 2077 of 2015 - decided on 20.02.2015 by Hon'ble Supreme Court) (3) Nivaran Solutions & Ors. V/s. Aura Thia Spa Services Pvt. Ltd. & Ors. [2016 (4) Bom CR 356] (4) Punj Lloyd Vs. GVK Power (Goindwal Sahib) Ltd. [2015 VIII AD (Delhi) 79] (5) Kantilal Chhaganlal Securities Pvt. Ltd. V/s. Shilpa Pareek [Appeal No. 90 of 2013 -Decided on 22.07.2013 by Bombay High Court] (6) Haywood Hospitality (India) Pvt. Ltd. V/s. Rajasthali Resorts & Studios Ltd. [2016 LawSuit (Del) 3761] (7) Konkola Copper Mines (PLC) V/s. Stewarts and Lloyds of India Ltd. [2013(4) Arb. LR 19 (Bombay) (DB)] (8) NHPC Ltd. V/s. Hindustan Construction Company Ltd. [221 (2015) Delhi Law Times 256 (DB) : [ AIR 2017 SC 2105 ]. 10. E.converso, Mr. Vikas Balia, learned counsel for the respondent, submits that there is no sustainable ground available to the petitioner for impeaching the impugned order. Learned counsel would urge that revisional jurisdiction of this Court is not akin to appellate jurisdiction and therefore sans any illegality or material irregularity in exercise of jurisdiction by the learned Court below, the impugned order cannot be subjected to judicial review in exercise of revisional jurisdiction. Mr. Balia has strenuously urged that 'seat of the arbitration' or 'venue of the arbitration' have different connotations under the Act, and therefore, much significance is attached to the seat of the arbitration in deciding territorial jurisdiction. Elaborating his submissions in this behalf, learned counsel contends that the learned Court below while nixing the application of the petitioner has rightly given credence to the seat of the arbitration so as to render the impugned order unassailable in exercise of revisional jurisdiction. 11. Alternatively, Mr. Balia has argued that there were multiple agreements between the rival parties entered into from time to time is sufficient to draw an inference about non-conferment of exclusive jurisdiction of the Delhi Courts. He, therefore, submits that by no stretch of imagination it is a case of total lack of territorial jurisdiction of Udaipur Court. Relying on Section 42 of the Act with the aid of some of the agreements entered into between the rival parties, Mr. Balia contends that issue relating to jurisdiction of a Court has direct nexus with the arbitration agreement. Mr. Relying on Section 42 of the Act with the aid of some of the agreements entered into between the rival parties, Mr. Balia contends that issue relating to jurisdiction of a Court has direct nexus with the arbitration agreement. Mr. Balia further submits that application under Section 34 of the Act at the behest of respondent was submitted prior to laying of execution by the petitioner. 12. Relying on MoUs dated 15th of March, 2001 & 31st of March, 2001, showing jurisdiction of the Courts at Jaipur and other two subsequent agreements showing jurisdiction of Udaipur Courts, learned counsel contends that solely on the basis of venue of arbitration at Delhi, it would be imprudent to conclude exclusive jurisdiction of Delhi Courts on the strength of Section 42 of the Act. Mr. Balia submits that neither Delhi High Court nor this Court while deciding applications of the rival parties under Section 11 of the Act, has decided venue or seat of the sole arbitrator and on this crucial issue order dated 28th of February 2013 passed by the Supreme Court is also not clear and explicit inasmuch as SLP was decided in accordance with the orders passed by both the High Courts. 13. Questioning the conduct of the petitioner, it is argued by learned counsel Mr. Balia that the petitioner suppressed some of the material facts in its petition under Section 11 of the Act before Delhi High Court by simply referring to last four agreements while skipping the earlier agreements. Further buttressing his arguments in this behalf, learned counsel contended that the averments made in the revision petition are also false. Learned counsel has also argued that the averments made in the application submitted on behalf of respondent under Section 115 CPC before this Court are not refuted and therefore as per ratio of Balco judgment the learned Court below has rightly thwarted application of the respondent under Order 7 Rule 11 CPC by relying on seat of the arbitration as well as accrual of cause of action. Learned counsel has also argued that Section 20(3) of the Act simply refers to venue of the arbitration and not the seat of the arbitration. 14. It is also submitted by learned counsel Mr. Balia that law pertaining to territorial jurisdiction is trite inasmuch as same cannot be construed as inherent lack of jurisdiction. Learned counsel has also argued that Section 20(3) of the Act simply refers to venue of the arbitration and not the seat of the arbitration. 14. It is also submitted by learned counsel Mr. Balia that law pertaining to territorial jurisdiction is trite inasmuch as same cannot be construed as inherent lack of jurisdiction. Learned counsel has further submitted that Balco judgment is to be applied prospectively. Lastly, Mr. Balia would contend that upon purposeful construction of Section 42 of the Act and by applying rigor of Section 9 CPC, it would be rather difficult to comprehend that the learned Court below lacks territorial jurisdiction to entertain petition of the respondent under Section 34 of the Act. In support of his various contentions, learned counsel Mr. Balia has placed reliance on following legal precedents: (1) Bharat Aluminum Co. Vs. Kaiser Aluminum Technical Services Inc. [ 2016 4 SCC 126 ]. (2) Indus Mobile Distribution Pvt. Ltd. Vs. Datawind Innovations Pvt. Ltd. & Anr. [ (2017) 7 SCC 678 ] (3) Sciemed Overseas Limited Vs. BOC India Limited & Ors. [ (2016) 3 SCC 70 ] (4) State of West Bengal & Ors. Vs. Associated Contractors [ (2015) 1 SCC 32 ] (5) M/s. Bhandari Udyog Ltd. V/s. Industrial Facilitation Council & Anr. [ (2015) 14 SCC 515 ] (6) Union of India Vs. Reliance Industries Limited & Anr. [ (2015) 10 SCC 213 ] (7) Bhatia International Vs. Bulk Trading S.A. & Anr. [ (2002) 4 SCC 105 ]. Arguments advanced by the contesting parties are considered with the aid of available material and the lis involved is also analyzed on the touchstone of relevant provisions enshrined under the Act as well as legal precedents cited at Bar. 15. The controversy in its entirety rests on the award of the arbitral Tribunal, which is questioned before the learned Court below by the non-petitioner/respondent under Section 34 of the Act. With a view to thrash out real issue, on which rival parties have locked horns, it would be apposite to take into account some significant events of the past including initiation of proceedings by both the parties for appointment of arbitrator. From the checkered history, it has come to the fore that business relations between both the parties are subsisting since the year 2001 or even prior to that. From the checkered history, it has come to the fore that business relations between both the parties are subsisting since the year 2001 or even prior to that. The business relations remained streamlined for a considerable period and that facilitated execution of MoU between them but subsequently some turbulence in the business relationship cropped-up and the settlement of dispute became illusive. It so happened that after execution of the last MoU dated 10.09.2008, both the parties felt of being wronged due to omissions and commissions of the other party. When the efforts made for reconciliation proved abortive and in the estimation of petitioner an arbitrable dispute emerged out, at its behest an application under Section 11 was submitted before Delhi High Court for appointment of the arbitrator. After notice to the respondent, matter is decided by the Delhi High Court appointing Justice Mukul Mudgal, former Chief Justice of Punjab & Haryana High Court, as sole arbitrator. 16. Although Delhi High Court passed judgment/order in presence of the respondent, but the non-petitioner/respondent also approached this Court by invoking Section 11 of the Act and this Court decided the same while concurring with the judgment/order passed by Delhi High Court. Later on, Supreme Court, on 28th of February, 2013, while disposing of Special Leave to Appeal (Civil) No. 5836/2011, filed by respondent, passed following order: "I.A. No. 3 of 2012, has been filed in S.L.P. (C) No. 5836 of 2011, for passing appropriate orders to confirm the appointment of Hon'ble Mr. Justice Mukul Mudgal, a former Chief Justice of Punjab & Haryana High Court, as the sole Arbitrator, to adjudicate all the claims and disputes arising out of different Memorandums of Understanding indicated in prayer (i) of the interlocutory application. It appears that by an order dated 7th of January, 2011, the Delhi High Court appointed the Hon'ble Judge to decide the dispute with regard to the Memorandum of Understanding dated 10th September, 2008. Thereafter, an application was also made before the Rajasthan High Court, wherein on 8th August, 2012, an order was passed on consent of the parties, by which it was noted that the Delhi High Court had appointed Justice Mukul Mudgal, to adjudicate the dispute arising out of Memorandum of Understanding dated 10th of September, 2008. Thereafter, an application was also made before the Rajasthan High Court, wherein on 8th August, 2012, an order was passed on consent of the parties, by which it was noted that the Delhi High Court had appointed Justice Mukul Mudgal, to adjudicate the dispute arising out of Memorandum of Understanding dated 10th of September, 2008. The Rajasthan High Court thereupon appointed Justice Mukul Mudgal to also decide the disputes with regard to other Memorandums of Understanding dated 15.03.2001, 15.03.2002, 12.03.2002, 29.03.2004, 05.05.2005, 30.03.2006, 24.03.2007 and 10.09.2008. The same is the subject matter of challenge in S.L.P. (C) No. 5836 of 2011. Now that the parties have agreed to the appointment of Justice Mukul Mudgal, to decide all the disputes arising out of all the Memorandums of Understanding, nothing further remains to be decided in the present petition and the same is, accordingly, disposed of in terms of the orders of the Rajasthan High Court and the Delhi High Court." 17. A bare perusal of the order passed by Supreme Court makes it abundantly clear that parties were in agreement to the extent of appointment of Justice Mukul Mudgal as sole arbitrator. The sole arbitrator conducted arbitral proceedings at Delhi and paid his fee prescribed under the Delhi High Court Arbitration Centre Rules. The arbitral proceedings were conducted at Delhi by the sole arbitrator by resorting to sub-sec. (3) of Section 20 of the Act. It is noteworthy that before Delhi High Court, at the behest of respondent, an objection was raised about territorial jurisdiction to entertain an application under Section 11 of the Act but the said objection did not find favour of the Court. There remains no quarrel that out of the total eight MoUs entered into between the parties, last four MoUs were signed at New Delhi. That apart, the letter dated 8th of May 2008 addressed to the petitioner by the non-petitioner/respondent is also showing its address as 1205, Vikram Tower, 16, Rajendra Place, New Delhi. Therefore, contention of the learned counsel for the respondent to make a distinction between seat and venue/place of arbitration, precisely to buttress the territorial jurisdiction of the Udaipur Court, appears to be attractive but in substance not convincing. 18. Therefore, contention of the learned counsel for the respondent to make a distinction between seat and venue/place of arbitration, precisely to buttress the territorial jurisdiction of the Udaipur Court, appears to be attractive but in substance not convincing. 18. If the order passed by this Court on respondent's petition under Section 11 of the Act is properly construed, then undoubtedly it is not possible to draw an inference that Court has acceded to the plea of the respondent. The Supreme Court has also neither altered nor diluted the judgment/order of the Delhi High Court. In such circumstances, euphonious plea of the respondent per se lacks legal foothold. At this juncture, it would be appropriate to emphasize that non-petitioner/respondent moved a petition under Section 11 of the Act before this Court after signing last MoU dated 10th of September 2008 at New Delhi. Moreover, last four MoUs were executed by the respondent at New Delhi and invoking Section 11 of the Act before Delhi High Court for appointment of arbitrator by petitioner was prior in time with a plea of accrual of cause of action within its jurisdiction. Before Delhi High Court, respondent is represented by its counsel and thereafter judgment/order is passed appointing Mr. Justice Mukul Mudgal, retired Chief Justice, Punjab & Haryana High Court, as the sole Arbitrator. 19. The cause espoused by the respondent before this Court for appointment of arbitrator, is examined after passing of the judgment/order by the Delhi High Court. This Court, while considering prayer of the respondent has simply concurred with the judgment/order passed by Delhi High Court but for clarifying that sole arbitrator shall adjudicate all the claims and counterclaims of the parties. So, it is rather difficult to comprehend that this Court in its judgment/order dated 8th of August, 2012 has recorded its affirmation regarding territorial jurisdiction of the subordinate courts of Rajasthan. In this behalf, it would also be appropriate to refer to the order passed by Supreme Court dated 28th of February, 2013, wherein Supreme Court has declined to interfere in the matter and disposed of SLP after considering judgment passed by Delhi as well as Rajasthan High Court. In this behalf, it would also be appropriate to refer to the order passed by Supreme Court dated 28th of February, 2013, wherein Supreme Court has declined to interfere in the matter and disposed of SLP after considering judgment passed by Delhi as well as Rajasthan High Court. Sub-section (11) of Section 11 of the Act is also clear in this behalf, which reads as under: "(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different High Courts or their designates, the High Court or its designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request." 20. The Seven Judges Bench of Supreme Court in the matter of S.B.P. & Co. Vs. Patel Engineering Ltd. & Ors. [ (2005) 8 SCC 618 ], while examining relative scope of Ss. 11(6) and 8 of the Act, per majority held that power exercised by the Chief Justice of High Court or CJI under Section 11(6) of the Act is not an administrative power but it is a judicial power. Overruling its earlier decision in Konkan Railway Corporation Ltd. & Anr. v. Rani Construction Pvt. Ltd. [(2000) 2 SCC 388], the Court finally culled out following conclusions: "We, therefore, sum up our conclusions as follows: (i) The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11(6) of the Act is not an administrative power. It is a judicial power. (ii) The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another judge of that court and by the Chief Justice of India to another judge of the Supreme Court. (iii) In case of designation of a judge of the High Court or of the Supreme Court, the power that is exercised by the designated, judge would be that of the Chief Justice as conferred by the statute. (iv) The Chief Justice or the designated judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. (iv) The Chief Justice or the designated judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. These will be, his own jurisdiction, to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate. (v) Designation of a district judge as the authority under Section 11(6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act. (vi) Once the matter reaches the arbitral tribunal or the sole arbitrator, the High Court would not interfere with orders passed by the arbitrator or the arbitral tribunal during the course of the arbitration proceedings and the parties could approach the court only in terms of Section 37 of the Act or in terms of Section 34 of the Act. (vii) Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court. (viii) There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act. (ix) In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act. (x) Since all were guided by the decision of this Court in Konkan Railway Corporation Ltd. & Anr. (ix) In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act. (x) Since all were guided by the decision of this Court in Konkan Railway Corporation Ltd. & Anr. v. Rani Construction Pvt. Ltd. and orders under Section 11(6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of arbitrators or arbitral tribunals thus far made, are to be treated as valid, all objections being left to be decided under Section 16 of the Act. As and from this date, the position as adopted in this judgment will govern even pending applications under Section 11(6) of the Act. (xi) Where District Judges had been designated by the Chief Justice of the High Court under Section 11(6) of the Act, the appointment orders thus far made by them will be treated as valid; but applications if any pending before them as on this date will stand transferred, to be dealt with by the Chief Justice of the concerned High Court or a Judge of that court designated by the Chief Justice. (xii) The decision in Konkan Railway Corporation Ltd. & Anr. v. Rani Construction Pvt. Ltd. is overruled." 21. Therefore, once Delhi High Court has appointed sole arbitrator to resolve the dispute between parties by exercising its judicial power under Section 11(6) of the Act and that judgment/order is not reversed by the Supreme Court in SLP, any concurrent observation made by this Court in order dated 08.08.2012 cannot ipso facto confer jurisdiction on the subordinate Courts of Rajasthan to exercise power under Section 34 of the Act. In overall scenario, it is rather difficult to comprehend other eventuality, i.e. conferment of jurisdiction of the Courts subordinate to this Court for entertaining application under Section 34 of the Act. The factum of interim order dated 15.04.2010 passed by this Court in S.B. Civil Misc. Appeal No. 317/2010 while admitting the appeal too cannot be completely overlooked by the Court. True it is that admitting appeal and passing interim order may not constitute adjudication but then it does indicate prima facie satisfaction of the Court pertaining to lack of territorial jurisdiction of the learned Court below. Appeal No. 317/2010 while admitting the appeal too cannot be completely overlooked by the Court. True it is that admitting appeal and passing interim order may not constitute adjudication but then it does indicate prima facie satisfaction of the Court pertaining to lack of territorial jurisdiction of the learned Court below. Participation of the respondent in arbitral proceedings conducted by the Tribunal at New Delhi without any demure is yet another significant circumstance to tone down the ambitious plea of respondent that learned Court below is clothed with territorial jurisdiction to entertain its application under Section 34 of the Act. 22. In case of Bharat Aluminium Company (supra), Supreme Court, while considering the question of jurisdiction, laid emphasis on the place where arbitration is held so as to exercise supervisory control over the arbitral process. The Court held: "We are of the opinion, the term "subject matter of the arbitration" cannot be confused with "subject matter of the suit". The term "subject matter" in Section 2(1)(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the Learned Counsel for the Appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. For example, if the arbitration is held in Delhi, where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order Under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the Courts of Delhi being the Courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi. In such circumstances, both the Courts would have jurisdiction, i.e., the Court within whose jurisdiction the subject matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution, i.e., arbitration is located." 23. The subsequent judgment of the Supreme Court, in Reliance Industries Limited & Anr. (supra), cited by the respondent for construing ratio decidendi of Balco judgment prospectively, cannot render any assistance to the respondent in the backdrop of certain undisputed facts and sequence of events. Moreover, Constitution Bench judgment in Balco's case has clarified its prospective application while interpreting Section 2(2) of the Act that Part I of the Act shall apply to all the arbitrations which takes place within India and same has no application vis-à-vis International Commercial Arbitration. Thus, the Court also concluded that Section 2(2) of the Act is not in conflict with any of the provisions of Part I or in Part II of the Act, while holding that application for interim relief under Section 9 of the Act shall not be maintainable in a foreign seated international commercial arbitration. 24. In M/s. Bhandari Udyog Limited (supra), yet again, Supreme Court laid emphasis on the place of conducting arbitral proceedings for determining jurisdiction of the courts where challenge to arbitral award can be laid. 24. In M/s. Bhandari Udyog Limited (supra), yet again, Supreme Court laid emphasis on the place of conducting arbitral proceedings for determining jurisdiction of the courts where challenge to arbitral award can be laid. The Court held: "Indisputably, the Arbitration proceeding has been conducted within the jurisdiction of Raichur court, which has jurisdiction as per Section 20 of the Code of Civil Procedure and is subordinate to the High Court of Karnataka which entertained Section 11 Application. Hence, the Award cannot be challenged before a subordinate to the High Court of Bombay. Exercise of jurisdiction by such court shall be against the provision of Section 42 of the Act. We, after giving our anxious consideration to the matter, are of the view that the District Court at Latur and High Court of Bombay have committed error of law in entertaining the application under Section 34 of the Act and dismissing the revision petition." 25. In Associated Contractors (supra), on which the learned counsel for respondent has placed reliance, Supreme Court has not detracted from the decision in Balco (supra) inasmuch as Balco judgment is rendered by a Larger Bench. In fact, the Court has observed in clear and unequivocal terms that in respect of application under Section 34 for setting aside arbitral award, Section 42 of the Act shall be applicable. The Court held: "(b) The expression "with respect to an arbitration agreement" makes it clear that Section 42 will apply to all applications made whether before or during arbitral proceedings or after an Award is pronounced under Part-I of the 1996 Act. (c) However, Section 42 only applies to applications made under Part-I if they are made to a court as defined. Since applications made under Section 8 are made to judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate not being court as defined, such applications would be outside Section 42. (d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42." 26. (d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42." 26. Joining issue with the petitioner, learned counsel for the non-petitioner/respondent persistently laid emphasis on the conduct of the petitioner by referring to the judgment of the Supreme Court in Sciemed Overseas Limited (supra), but in my view the said judgment is clearly distinguishable. In the present matter, neither petitioner is guilty of perjury nor any Court including the Supreme Court has found its conduct dubious much less castigating it of misprision. Moreover, after conclusion of arbitral proceedings and passing of award by the arbitral Tribunal, it would be imprudent to entertain such a plea of the non-petitioner/respondent. From the order dated 28th of February 2013, passed by the Supreme Court also it is clear and explicit that both the parties have agreed for appointment of Justice Mukul Mudgal as sole arbitrator. The Court has further clarified that now nothing remains to be decided in the matter. Therefore, this contention of the learned counsel for non-petitioner/respondent also merits rejection. 27. In view of foregoing discussion, in my opinion, learned Court below while passing the impugned order has acted in exercise of its jurisdiction illegally or material irregularity. That apart, the learned Court below has also failed to exercise a jurisdiction so vested in it by law while passing the impugned order, rendering the same vulnerable even within the four corners of limited scope of judicial review under Section 115 CPC. Consequently, the impugned order passed by the learned Court below cannot be sustained and merits annulment. The upshot of the above discussion is that the instant petition is allowed and impugned order dated 05.04.2016 passed by learned Court below is quashed and set aside. The petition under Section 34 of the Act filed by the respondent before learned Court below is hereby rejected as not maintainable. However, it is made clear that the non-petitioner/respondent shall be at liberty to avail appropriate remedy before the competent court against arbitral award in accordance with law.