Jaswant Lal Chug And Bros. vs N.C.E.R.T. And Anr.
2003 Latest Caselaw 718 Del

JUDGMENT

B.A. Khan, J.

1. This appeal raises an interesting issue viz., whether this Court was incompetent to decide appellant's objections filed under Sections 30/33 of the Arbitration Act for setting aside the award when the value of the subject matter was less that Rs. 4. lacs.

2. Learned Trial Judge has held so and transferred the proceedings to the District Court on the ground that since pecuniary jurisdiction of District Court was raised from Rs. 1 lac to Rs. 5 lacs by amendment in the Punjab Courts Act, this Court had lost the jurisdiction to deal with the matter.

3. It all started with appellant filing a petition (S. No. 2686-A/90) under Section 20 of the Arbitration Act in this Court. In this, reference was made to the sole Arbitrator (Secretary of respondent No. 1) by order dated 27.11.1995. An award was passed on 26.11.1997. Appellant thereafter applied for filing of the award in this Court which was done. Appellant then filed objections to this award under Sections 30/33 of the Old Arbitration Act (IA No. 8835/98). When the matter came up for consideration, learned Trial Judge is said to have suo motu taken notice of the non-maintainability of these proceedings before him leading to the passing of the impugned order transferring the proceedings to District Court.

4. Learned Counsel for appellant says that the learned Trial Judge had transferred the proceedings in disregard of the provisions of Section 31(4) of the Old Arbitration Act and also the Supreme Court judgment in Kumbha Mauji v. Union of India, , on the issue. It is submitted by him that under Section 31(4) only that Court had the exclusive jurisdiction over the arbitration proceedings where any application in any reference was made. Since the reference was made by this Court and subsequent applications were also filed here, therefore, this Court alone was competent to deal with the proceedings arising out of the Award dated 26.11.1997. Reliance in this regard is placed on the Supreme Court judgment (supra).

5. Respondents' Counsel concedes this position fairly. He has not put forth any alternative proposition to suggest that High Court was divested of its jurisdiction to adjudicate upon the claim merely because pecuniary jurisdiction of the District Court was enhanced to Rs. 5 lacs.

6. We have examined the impugned order and it appears to us that learned Trial Judge had misconstrued the legal position on the issue. He seems to have overlooked the import of Section 31(4) of the Old Arbitration Act in the matter.

7. The relevant provision reads :

"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."

8. Section 31(4) starts with a non obstante clause to override anything contained in any other law for the time being in force while laying down that where in any reference any application under this Act was made in a Court competent to entertain it, that Court alone would have the jurisdiction on the arbitration proceedings and that all applications arising out of that reference and the arbitration proceedings shall be made in that Court alone and in no other Court. The mandate of provision is clear and unequivocal. It vests exclusive jurisdiction in the Court in which an application in any reference under the Arbitration Act is made. Whether such application was made during the reference or before it is immaterial for our purposes in the factual context of the present case. While dealing with that aspect supreme could held in Kumbha Mauji's case :

"In the contest of Section 31, Sub-section (4), it is reasonable to think that the phrase "in any reference" means "in the matter of a reference". The word "reference" having been defined in the Act as "reference to arbitration" "the phrase" "in a reference" would mean "in the matter of a reference to arbitration". The phrase "in a reference" is, therefore, comprehensive enough to cover also an application first made after the arbitration is completed and a final award is made and in our opinion that is the correct construction thereof in the context. We are, therefore, of the opinion that Section 31(4) would vest exclusive jurisdiction in the Court in which an application for the filing of an award has been first made under Section 14 of the Act."

9. These observation of the Supreme Court, though in a wider context, fortify the interpretation which is required to be placed on provisions of Section 31(4) and whereby no Court other than the one in which applications in a reference have been filed retains the jurisdiction.

10. There is no dispute that application for reference in the present case was made in this Court which was a Court of competent jurisdiction at the relevant time and even now. The application for filing the Award was also made in this Court and so were the objections/applications under Sections 30/33 filed in this Court. Therefore, this Court alone had the jurisdiction to entertain and try these applications under various provisions of the Arbitration Act. No other Court could assume this jurisdiction in view of the bar imposed by Section 31(4). Nor could the proceedings be transferred to any other Court in view of this even though that Court had been vested with a higher pecuniary jurisdiction subsequently. Conversely even if . pecuniary jurisdiction of District Court had gone up to Rs. 5 lacs that by itself could not result in transfer of any proceedings pending in this Court under various provisions of the Arbitration Act more because of the embargo created by provisions of Section 31(4) of the Act which required all applications to be filed in the Court which had made the reference for arbitration.

11. We accordingly hold that this Court was not rendered incompetent to deal with arbitration proceedings of less than Rs. 5 lacs value consequent upon the enhancement of pecuniary jurisdiction of District Court up to Rs. 5 lacs. Nor could such proceedings be transferred to District Court in the face of provision of Section 31(4) of the Old Arbitration Act.

12. This appeal accordingly succeeds and is allowed. Impugned order dated 18.2.2003 passed in IA 8835/98 and S. No. 2686-A/97 is set aside. Registry isdirected to retrieve the records of S. No. 2686-A/97 from the Court of Shri S.M. Chopra, A.D.J., Delhi for being posted before the appropriate Court on 27.9.2003.