Chattisgarh High Court

M/S Ntpc Ltd vs M/S Pma Constructions Co on 18 November, 2022

                                  1

                                                                 AFR
           HIGH COURT OF CHHATTISGARH, BILASPUR
                      W.P(227) No.533 of 2022


M/s NTPC Ltd P.O. Ujwalnagar, Seepat, District Bilaspur (C.G.) -
495555. Also At Corporate Office, Ntpc Bhawan, Core 7, Scope
Complex, 7, Institutional Area, Lodhi Road, New Delhi - 110003
                                                  ---- Petitioner
                               Versus
M/s PMA Constructions Co. Plot No. 7, Bajaj Apartment, Flat No. 01,
Trimurti Nagar, Ring Road, Nagpur, Maharashtra 440022
                                                  ----Respondent

For the Petitioner: Shri Anup Majumdar, Advocate. For the Respondent: Shri Shivraj Singh, Advocate.

Hon'ble Shri Justice Deepak Kumar Tiwari Order on Board 18.11.2022

1. With the consent of learned Counsel for the parties, the matter

is heard finally.

2. This Petition has been filed challenging the order dated

07.07.2021 passed by the Commercial Court (District Level), Raipur

in MJC No.20/2020 whereby, the application preferred by the

Petitioner under Section 34 of the Arbitration and Conciliation Act,

1996 (for short 'the Act of 1996') against the award dated 16.09.2020

passed by the Arbitrator Mr. Amrendra Prasad Choudhary, Ex. CMD,

RINL at Delhi, has been dismissed by holding that the Commercial

Court is not vested with the territorial jurisdiction to consider the

Petition filed by the Petitioner and accordingly returned the original

Petition to the Petitioner for instituting the same before the Court

having jurisdiction.

2. Shri Majumdar, learned Counsel for the Petitioner submits that

it is not disputed that the contract has been signed at Bilaspur and as

per clause-2.0 of the condition of the contract, the work is to be

executed in the area required by NTPC-Sipat, District Bilaspur and

the earnest money has also been accepted which was payable at

Bilaspur, therefore, as per Section 2(e) of the Act of 1996, the subject

matter of the arbitration is in the area of Chhattisgarh. He further

submits that the seat of arbitration between the parties is clearly at

Bilaspur as all the contracts have been executed in the said area as

per the contract agreement, therefore, the Commercial Court, Nava

Raipur, Chhattisgarh clearly has jurisdiction for hearing the

application filed under Section 34 of the Act of 1996. He placed

reliance on the order passed by this Court in the matter of South

Eastern Coalfields Limited Vs. M/s Sri Balaji Metals & Minerals in

W.P.(227) No.393/2021 and other connected matters dated

17.11.2021.

3. On the other hand, Shri Singh submits that against the order

passed under Section 34 of the Act of 1996, the remedy lies only

under Section 37 of the said Act and the Writ Petition is not

maintainable.

4. In reply, Shri Majumdar submits that such question has come

up for consideration before the Hon'ble Supreme Court in the matter

of BGS SGS Soma JV vs. NHPC Limited reported in (2020) 4 SCC

234 and the relevant paragraphs i.e. 14, 16 & 20 are as under:-

"14. Interestingly, under the proviso to Section 13(1A) of the Commercial Courts Act, 2015, Order XLIII of the CPC is also mentioned. Order XLIII Rule(1)(a) reads as follows:

"1. Appeal from orders.- An appeal shall lie from the following orders under the provisions of Section 104, namely-

(a)an order under Rule 10 of Order VII returning a plaint to be presented to the proper Court except where the procedure specified in rule 10A of Order VII has been followed;"

This provision is conspicuous by its absence in Section 37 of the Arbitration Act, 1996, which alone can be looked at for the purpose of filing appeals against orders setting aside, or refusing to set aside awards under Section 34. Also, what is missed by the impugned judgment is the words "under Section 34". Thus, the refusal to set aside an arbitral award must be under Section 34, i.e., after the grounds set out in Section 34 have been applied to the arbitral award in question, and after the Court has turned down such grounds. Admittedly, on the facts of these cases, there was no adjudication under Section 34 of the Arbitration Act, 1996 - all that was done was that the Special Commercial Court at Gurugram allowed an application filed under Section 151 read with Order VII Rule 10 CPC, determining that the Special Commercial Court at Gurugram had no jurisdiction to proceed further with the Section 34 application, and therefore, such application would have to be returned to the competent court situate at New Delhi."

XXXX

"16. Shri Chowdhury also referred to another Delhi High Court judgment reported as Hamanprit Singh Sidhu v. Arcadia Shares & Stock Brokers (P) Ltd.,(2016) 234 DLT 30, in which a learned Single Judge of the Delhi High Court allowed an application for condonation of delay in filing a

Section 34 petition. The Division Bench, in holding that an appeal against such an order would not be maintainable under Section 37 of the Arbitration Act, 1996, read with the Commercial Courts Act, 2015 held:

"10. Coming to Section 37(1), it is evident that an appeal can lie from only the orders specified in clauses (a), (b),

(c). in other words, an appeal under Section 37 would only be maintainable against (a) an order refusing to refer the parties to arbitration under Section 8 oF the A&C Act; (b) an order granting or refusing to grant any measure under Section 9 of the A&C Act; or (c) an order setting aside or refusing to set aside an arbitral award under Section 34 of the A&C Act. The impugned order is clearly not relatable to Section 8 or 9 of the A&C Act. It was sought to be contended by the learned counsel for the appellant that the present appeal would fall within Section 37(1)

(c) which relates to an order "setting aside" or "refusing to set aside" an arbitral award under Section 34. We are unable to accept this proposition. By virtue of the impugned order, the arbitral award dated 10-09-2013 has not been set aside. Nor has the court, at this stage, refused to set aside the said arbitral award under Section 34 of the A&C Act. In fact, the appellant in whose favour the award has been made, would only be aggrieved if the award were to have been set aside in whole or in part. That has not happened. What the learned single Judge has done is to have condoned the delay in re-filing of the petition under Section 34. This has not, in any way, impacted the award."

"20. It is clear, therefore, that the appeals filed in the present case do not fall within Section 37 of the Arbitration Act,1996 and are not maintainable."

5. Considering the principles laid down in the judgments

discussed above, it is vivid that as no order has been passed under

Section 34 of the Act of 1996 either setting aside or refusing to set

aside an arbitral award therefore, the objection raised by the

Respondent is not acceptable that an Appeal shall lie under Section

37 of the Act of 1996, therefore, it is held that against the impugned

order, Writ Petition (227) is maintainable.

6. Indisputably, the subject matter of the arbitration lies in the

jurisdiction of Chhattisgarh and the contract has also been executed

within the territory of Chhattisgarh.

7. In this respect, Hon'ble Supreme Court in the matter of BGS

SGS Soma JV vs. NHPC Limited (supra) has observed in para-82

thus:-

"82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the "venue" of the arbitration proceedings, the expression "arbitration proceedings" would make it clear that the "venue" is really the "seat" of the arbitral proceedings, as the aforesaid expression does not include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as "tribunals are to meet or have witnesses, experts or the parties" where only hearings are to take place in the "venue", which may lead to the conclusion, other things being equal, that the venue so stated is not the "seat" of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings "shall be held" at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a "venue" and not the

"seat" of the arbitral proceedings, would then conclusively show that such a clause designates a "seat" of the arbitral proceedings. In an International context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that "the venue", so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the "stated venue", which then becomes the "seat" for the purposes of arbitration."

8. Hence, this Court is of the considered view that the learned

Commercial Court has misconstrued about the seat of jurisdiction as

the same is clearly situated at Chhattisgarh and the application is

liable to be entertained before the Commercial Court, Raipur.

9. For the foregoing reasons, the order impugned is quashed and

it is directed that the Commercial Court, Raipur shall decide the

application filed under Section 34 of the Act of 1996 in accordance

with law.