Madras High Court
M/S. Sabson (India) Pvt. Ltd., ... vs Neyveli Lignite Corporation Ltd. And ... on 29 July, 1991
Equivalent citations: AIR1992MAD282, (1991)IIMLJ211, AIR 1992 MADRAS 282, 1992 (2) ARBI LR 508, (1991) 2 MAD LJ 211, (1992) 2 ARBILR 508
ORDER
1. O.P. NO. 531 of 1987 was filed by Sabson (India) Pvt. Ltd., Bangalore against Neyveli Lignite Corporation and Mr. Justice V. V. Raghavan and Mr. M. G. Balasubramaniam (arbitrators) under Sections 14(2) and 17 of the Arbitration Act, 1940 to direct the arbitrators (respondents 2 and 3 above,) to file the award in this court and for passing a decree in terms of the award in favour of the petitioner with interest and costs.
2. The matter relates to the arbitration proceedings between the petitioner M/s. Sabson (India) Pvt. Ltd., Bangalore and Neyveli Liginite Corporation regarding certain disputes arising out of the agreement No. CE/TS/II/Civil/24/81-82 for the work of supplying, fabricating and erecting large diameter pipes for their circulating water system Group C for Second Thermal Power Station at Neyveli. Clause 84 of the General Conditions of Contract provides for arbi-tration which reads as follows:
"Any dispute or difference at any time arising between the parties as to the construction, meaning or effect of this agreement or as to any clause, matter or thing herein contained or as to the rights and liabilities of the parties hereto shall be, if possible settled amicably. However if this is not achieved, contrary to expectations the matter shall be settled in arbitration by two arbitrators one to be appointed by each party, who shall appoint an Umpire before entering upon the reference. The joint decision of the two arbitrators if they are able to agree upon such decision, otherwise the decision of the Umpire shall be final and binding on both the parties hereto. The proceedings of arbitrations shall be in accordance with the provisions of the Indian Arbitration Act, 1940 or any statutory modifications or re-enactment thereto or thereof for the time being in force. The venue of arbitration shall be Madras. Service under this Agreement shall notwithstanding the existence of any dispute, controversy or question, continue during arbitration proceedings and no payments due or payable by owner to the contractor shall be withheld on account of such arbitration proceedings, unless such payment is the direct subject matter or one of the subject matter thereof."
It is stated in Clause 84 that the venue of arbitration shall be at Madras. Accordingly the petitioner and the first respondent each nominated their arbitrators namely Mr. Justice V. V. Raghavan, retired Judge of this Court and Mr. M. G. Balasubramaniam I. A. S. (retired) and the arbitrators entered upon (sic). They also nominated Mr. Justice P. Ramakrishnan, ICS, (retired) as umpire in this matter. The petitioner filed their claim for Rs. 28,51,084/- under various heads and the first respondent denied the liability and preferred a counter claim. The arbitrators made and signed the award on 24-8-1987 and intimated the parties to the arbitration the making of their award. The intimation was received by the petitioner on 25-8-1987. The arbitrators disallowed the claims under certain heads and passed an award for Rs. 7,65,000.26 in favour of the petitioner providing for the payment of interest by the first respondent on the amounts so awarded. The petitioner therefore filed this petition for directing issue of notice to the respondents to file the award in this court and for passing a decree in terms of the award in their favour with interest. Mr. Justice P. K. Sethuraman ordered notice to the respondents 1 to 3 directing them to file award in this court on 7-3-1988. When the matter came before me for hearing on 10-7-1990, I passed the following order. As it has some impact on the outcome of this petition it is reproduced hereunder.
"In view of the Arbitrator filing his award in this court this original petition is ordered accordingly. However, liberty is given to the first respondent Neyveli Lignite Corporation Limited, to take appropriate proceedings in contesting the award already filed in accordance with law. Issue notice of the receipt of the award to parties. Mr. R. Krishnaswamy takes notice for Neyveti Lignite. Corporation."
3. On 30-7-1990, the Neyveli Lignite Corporation represented by its Secretary, the first respondent in O.P. No. 531/87 filed O.P. 337/90 under Section 33 r/w Section 30 of the Arbitration Act, 1940 against the petitioner in O.P. 531/87 and the arbitrator Mr. M. G. Balasubramaniam. It is useful to re-produce paras 6 and 7 of O.P. 337/90 filed by the Neyveli Lignite Corporation in this court:
"This petition is filed by the petitioner without prejudice to their right to object to the jurisdiction of this Hon'ble Court in receiving the award filed by the arbitrator. A few facts relating to the present proceedings have to be stated. The arbitrators sent a copy of the award on 28-8-1987 to the petitioner and the petitioner did not receive any notice of the Award by the Joint Arbitrators. Meanwhile the petitioner herein has filed a petition under Section 14(2) read with Ss. 33 and 30 of the Arbitration Act on the file of the Subordinate Judge, Cuddalore and the said petition has been numbered as O.P. 43/89 and the said petition is pending adjudication. The petitioner states that the only cause of action for the present petition including the calling of tenders, enquiries, submission of tender by the first respondent execution of agreement for performance of the work and the disputes arising out of it being arising within the jurisdiction of the Cuddalore Civil Court and no part of action has arisen within the meaning of Section 2(c) of the Arbitration Act to invest jurisdiction of this Hon'ble Court. The petition filed by the first respon-. dent under Section 14(2) of the Act directing the arbitrator to file the award into court in O.P. 53) of 1987 is without jurisdiction. This Hon'ble Court originally directed notice in that to the Arbitrators. The matter was posted for orders on 10-7-1990, after notice to the petitioner. The petitioner objected to the jurisdiction of this Hon'ble Court to entertain the petition and this court by its order dated 10-7-1990 allowed the petitioner herein to raise the question of jurisdiction in the proceedings to be taken under Section 33 of the Act. During the course of those proceedings it was brought to the notice of the petitioner that the award has been filed by the arbitrators on 7-3-1988 into this Hon'ble Court. Though no notice has been received from this Hon'ble Court to avoid any technical objection later, this petition is filed from the date of knowledge of the filing of the award by the Arbitrators namely 10-7-1990. The petitioner states that this Hon'ble court has no jurisdiction to enquire into the matter and this has to be tried as a preliminary issue in regard to any further steps that can be taken together by the first respondent to the Award.
7. The petitioner therefore states that the first respondent having entered appearance and conducting the proceedings in O.P. No. 43/89 cannot validly press into service his petition O.P. No. 531/87 which had become infructuous by reason of the award having been filed into court. Without prejudice to the abovesaid contentions the petitioner raises the following grounds for setting aside the Arbitration Award on the ground of misconduct."
4. Thus, according to the Neyveli Lignite Corporation, this court has no jurisdiction to entertain this O.P. since the petitioner (N.L.C.) has filed a petition under S. 14(2) r/w Ss. 33 and 30 of the Arbitration Act on the file of Sub-Court Cuddalore in O.P. No. 43/1989 and that the said petition is pending adjudication, that the cause of action for the present petition including the calling of tenders, enquiries, submission of tender by the first respondent, execution of agreement for performance of the work and (he disputes arising out of it having arisen within the jurisdiction of the Cuddalore Civil Court, the petition filed by the first respondent under S. 14(2) of the Act directing the arbitrators to file the award in thia court in O.P. 531/87 is without jurisdiction. In fact while passing the order on 10-7-1990, in O.P. 531/87 this court has allowed the petitioner Neyveli Lignite Corporation to raise the question of jurisdiction in the proceedings to be taken under Section 33 of the Act. Accordingly the question of jurisdiction of this Court to enquire into this matter was tried as a preliminary issue at the request and consent of both the parties. Hence I proceed to deal with on the question of law in regard to the maintainability of the petition in this court. It is also stated by Neyveli Lignite Corporation that O.P. 337/90 is filed by them without prejudice to the rights of agitating the jurisdiction of this court in receiving the award filed by the arbitrator.
5. 1 have heard Mr. T.S. Rangarajan, . learned counsel for M/s. Sabson (India) Ltd., the first respondent in O.P. No. 337/90 and Mr. R. Krishnaswami on behalf of the Neyveli Lignite Corporation, the petitioner in O.P. 337/90. Mr. T.S. Rangarajan has submitted that para 84 of the contract agreement enterted into between the parties regarding arbitration provides that the venue of the arbitration shall be at Madras and that Mr. Justice V.V. Raghavan, retired judge of this court was the arbitrator nominated by the respondents and Mr. M. G. Balasubra-maniam was the arbitrator nominated by the Neyveli Lignite Corporation, and Mr. Justice P. Ramakrishnan, ICS a retired judge of this court was nominated as umpire and that the arbitrators held their sittings and enquiries at Madras and made their award dated 24-8-1987 and intimated the same on 5-8-1987. According to the learned counsel the venue of the arbitration being at Madras, as per clause 84, the first respondent in O.P. 337/90 filed O.P. 531/87 in this court praying for the filing of the award into court and for passing a decree thereby and the other reliefs. The arbitrators have also filed on 7-3-1988 all the records relating to the arbitration proceed-
ings under O.P. 531/87 in this court. It is further contended by Mr. Rangarajan that the arbitration agreement specifically provides that the venue of arbitration shall be at Madras and having acted upon it, the petitioner Neyveli Lignite Corporation cannot now contend that the venue for filing award should be a different only namely the Sub-Court at Cadalore. It is further contended that where two places have jurisdiction and when the award has been filed in a particular court, there is no question of insisting that the other court has jurisdiction. It is further contended that the petitioner after learning that the award has been filed in this court by the order dated 7-3-198S pursuant to the directing of this court in O.P. No. 531/87 filed O.P. No. 43/89 at Sub-Court. Cuddalore which is being contested by the respondent herein by filing their counter therein stating that pursuant to O.P. 531/87 filed by them in this court, the award has been filed by them in this court and proceedings would have to go on only before this court and therefore the appearance of this respondent and filing counter therein setting up the case would make O.P. 531/87 in this court infructuous.
6. Mr. R. Krishnaswamy in his reply to the above argument of Mr. T. S. Rangarajan has invited my attention to clause 18 of the general conditions under "Notice inviting tenders'. The said clause 18 is reproduced herein.
"The Civil Court having ordinary original civil jurisdiction over Neyveli shall alone have exclusive jurisdiction in regard to all claims in respect of this contract of whatever nature."
7. The above clause in my opinion will go to show that the parties having agreed and restricted to the form of action now cannot go behind that clause. There is force in the contention of the learned counsel for the Neyveli Lignite Corporation. In any event the parties having accepted to the exclusive jurisdiction of the Civil Court having jurisdiction over Neyveli cannot be now aksed to ignore that clause. The agreement as stated has a specific clause with regard to exclusive jurisdiction to the Civil Court over Neyveli viz., at Cuddalore.
8. Mr. T. S. Rangarajan in support of his contention relied on Kumbha Mawji v. Dominion of India, and also relied on S. 31(4) of the Act. To appreciate the contention raised by Mr. T. S. Rangarajan in a proper perspective, it is useful to extract Sections 2(c) and 31 of the Act and also to refer to the decision in Kumbha Mawji's case , which also refers to Section 31 of sub-clause 4 of the Act.
Sections 2(c) and 31 of the Act read as follows:
SECTION 2(c) ""Court" means a Civil Court having jurisdiction to decide the question -- forming the subject matter of the reference if the same has been the subject matter of a suit but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court.
SECTION 31 Jurisdiction (1) Subject to the provisions of this Act, an award may be filed in any Court haying 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 the term shall be decided by the Court in which the award under rhe 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 atbitralion 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.
9. According to the learned counsel, where an application has been filed in a Court with reference to arbitration matter that Court alone have jurisdiction to proceed with any subsequent matters arising in arbitration. Therefore, applying the tests laid down in Kumbha Mawji's case, , where an application for filing the award has been taken, out, that Court alone will deal with subsequent matters and not any other Court. Since the award has been filed by the arbitrators in this Court as early as 1988, pursuant to the order of this Court, which is the competent Court, according to Mr. Rangarajan, in Original Petition No. 531 of 1987 any subsequent application or proceedings could be filed in this Court only.
10. In my opinion, Mr. Rangarajan is not correct in his above submission. Section 31 of the Act prescribes the territorial jurisdiction of the court in respect of the arbitration and then confers exclusive jurisdiction on such Court in respect of the arbitration agreement and the award. Section 31(2) read with S. 2(c) of the Act provides for the jurisdiction of the Court to decide all questions regarding validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them. Only that Court in which an award under the agreement has been or may be filed is competent to decide all such questions and no other Court. (Underling is mine). Under sub-cl. (I) of S. 31 of the Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. A court which has no jurisdiction in the matter, to which the reference relates (as in the present case), an award cannot be filed in that Court and subsequently that Court will not have jurisdiction to decide the question as enumerated in Section 31(2) of the Act. Let me now analyse the provisions coniained in sub-cls. (1),(2), (3) and (4) of S. 31 which clearly indicate that to the exclusion of all other Courts only one Court will have jurisdiction to deal with the proceedings incidental to the reference and the arbitration. Sub-section (2) clearly points out in this direction when it provides that 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. Then comes sub-section (4). It opens with a non obstante clause and is comprehensive in character. The non obstante clauses exclude anything contained in the whole Act or in any other law for the time being in force if it is contrary to or inconsistent with the substantive provision contained in sub-sec. (4). To that extent it carves out an exception to the general question of jurisdiction of the Court in which award may be filed elsewhere provided in the Act in respect of the proceedings referred to in sub-section (4) will have an overriding effect in relation to the filing of the award, if the conditions therein prescribed are satisfied. If those conditions are satisfied the Court other than the one envisaged in Section 14(2) or Section 31(1) will be the Court in which award will have to be filed. That is the effect of the non-obstantc clause in sub-sect ion (4) of Section 31 of the Act. Thus, sub-section (4) of Section 31 envisages exclusive jurisdiction in the Court, to which an application has been made in any reference and which that Court is competent to entertain as the Court having jurisdiction over the arbitration proceedings and all subsequent applications arising out of reference and the arbitration proceedings shall have to be made in that court and in no other Court. Thus, sub-section (4) not only confers exclusive jurisdiction on the Court to which an application is made in any reference but simultaneously ousts the jurisdiction of any other Court which may as well have jurisdiction in this behalf. In the present case this Court is not competent to have entertained the application in original petit ion No. 531 of 1987 or to have received the award of the arbitrators and hence Section 31(4) of the Act will not apply. The next argument of Mr. Rangarajan is also not tenable for the following reasons:
An objection was raised by the Neyveli Lignite Corporation in this case that this Court has no territorial jurisdiction to decide the disputes between them, as no part of the cause of action arose within the territorial jurisdiction of this Court and as such this Court has no jurisdiction to hear this matter.
On the other hand, the contention raised on . bahalf of the contractor is that the proceedings were taken place in Madras, that the award was made at Madras and the same has been challenged in this Court and that it is only this Court which has territorial jurisdiction, to try the present case. As per the definition provided in Section 2(c) of the Act, only a Civil Court will have jurisdiction to decide the matter in which a civil suit with regard to the matter which was referred to arbitration could be filed. Under Section 31(1) it is provided that an award would be filed in any Court having jurisdiction in the matter to which the reference relates. A reading of Sections 31(1) and 2(c) of the Act will go to show that in order to decide which is the Court which has jurisdiction in the matter to which a reference relates, what has to be ascertained is the Court within which the suit could have been instituted for the claim which was raised in the reference. From the facts of the present case, it is doubtless clear that no part of cause of action arose in Madras. In the calling of tender, enquiries submitted by the contractor, execution of the agreement for the purpose of the work and the disputes having arisen within the jurisdiction of the city Court at Cuddalore, no part of the cause of action has arisen within the meaning of Section 2(c) of the Act. Merely because under Cl. 84 of the contract agreement, the arbitrators held their sittings and enquiries at Madras and made their award at Madras on 24-8-1987 and intimated the same on 24-8-1987 and filed the award on 7-3-1988 with all the records relating to the arbitration proceedings in O.P. No. 531 of 1987 in this court, it would not be sufficient to grant territorial jurisdiction to this Court to try the present proceedings. It is relevant to notice that notice by the contractors in O.P. No. 531 of 1987 was taken to Neyveli Lignite Corporation to their Madras Office and that the same was returned by them stating that the same might be sent to their Neyveli address and in fact notice was taken to Neyveli address by the contractor in June, 1989. Furthermore, the factum of the arbitration proceedings having been conducted at Madras and award being filed here, is also not relevant for the purpose of deciding as to which is the Court of competent jurisdiction. In order to decide as to which Court has competent jurisdiction to entertain such petitions, reference has got to be made, as already mentioned to Section 2(c) read with Section 31(1) of the Act. Merely because the arbitrators choose to hold that proceedings at Madras, where admittedly no suit could be instituted and choose to make the award at Madras, it would not give this Court the territorial jurisdiction to decide the matter arising under the Act. It is no doubt that Sections 31(2) and 31(3) state that it is the Court in which the award has been filed, which will have jurisdiction to decide the matter. In my opinion, if an award has been filed in a Court which has no jurisdiction (Madras in the present case), the provisions of sub-sections (2) and (3) of S. 31 would have no application. It has to be seen that Section 31(1) enjoins upon the arbitrator to file his award in the Court having jurisdiction in the matter. If he chooses, in violation of the provisions of Section 31(1) to file the award at Madras, which has no territorial jurisdiction, then it cannot be argued that the Original Side of this Court acquires territorial jurisdiction. It is now well established that by agreement of the parties jurisdiction cannot be conferred on Courts which have no territorial jurisdiction to decide the matter, whereas in the present case the parties have clearly agreed that under Clause 18 of the general conditions under notice inviting tenders, the Civil Court having ordinary original civil jurisdiction over Neyveli shall alone have exclusive jurisdiction in regard to all claims in respect of this contract of whatever nature.
11. In order to determine which is the Court having jurisdiction in the matter, one should first of all ascertain what the questions are, which form the subject matter of the reference to arbitration. On a combined reading of S. 2(c) and S. 31(1) of the Act, it must be held that the citus of cause of action alone was conferred with the jurisdiction of a court in the matter of arbitratin and since no part of the cause of action arose within the jurisdiction of the Original Side of ourt High Court, it could not entertain the present proceedings.
12. Section 2(c) of the Act defines 'Court' as meaning a Civil Court having jurisdiction to decide all questions forming the subject-matter of the reference if the same had been the subject matter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court. The jurisdiction of the Small Cause Court is barred under S. 40 as well except as regards arbitrations in suits before it. It will be seen that under Section 31 of the Act, an award is to be filed a Court which has jurisdiction in the matter to which the reference relates and an award filed in a Court which has no jurisdiction in the matter cannot be entertained and the Court cannot pass any judgment or decree in terms of the award. In order to decide the jurisdiction of the Court over the subject-matter of the award, it is necessary to consider the reliefs grnated by the award and determine wheher the Court would have jurisdction to try a regular suit between the parties in which the relief is claimed and whether such relief could be granted by the Court. In order to determine the jurisdiction of the Court in matter, one will have to ascertain what the questions are and if the question that has arisen is one which the Court would have jurisdiction to entertain, then that would be'a competent court to entertain the matter. Thus, the Court of competent jurisdiction under S. 31 of the Act is not the Court at the place in which the agreement was entered into or the parties reside, but the Court which will exercise the jurisdiction provided the subject matter of the relief falls within the competence or jurisdiction. Sec. 16 of the Code of Civil Procedure gives the necessary guidance for the purpose of ascertaining the jurisdiction of the Court and provides that for the determination of any right or interest in immovable property the suit is to be instituted where the subject-matter is situate.
13. The moot question to be decided in this case is as to whether this Court has the competence to entertain an application under S. 14(2) of the Act. No doubt parties have agreed under the general conditions of contract that the venue of arbitration shall be at Madras. The parties select the venue of arbitration only to suit their 'convenience'. Merely because the venue of arbitration is at Madras it does not clothe this Court with jurisdiction to entertain the application under the Act.
14. In the case of Union of India v. P, Anantharaman (1991 (1) MLJ 286 : 1991 TNLJ 69), after elobarate discussion, it has been held by me that the citus of cause of action would alone confer jurisdiction on Court in matters of arbitration. The venue of arbitration proceedings depends upon the volition of parties and their convenience. It is open to the parties to select a place far away from the place where the contract was executed because such place would be easily accessible and convenient. Therefore, if no cause of action has arisen in the place, where, the parties choose to hold the arbitration proceedings, the Court within whose jurisdiction the arbitration proceedings are conducted will not be a competent court for the purpose of the provisions of the Act. It is beyond dispute that the petitioner in Original Petition No, 531 of 1987 (M/s. Sabson (India) Pvt. Ltd.), placed reliance on clause 84, where the parties agreed upon the venue of arbitration to contend that this Court has the competence to entertain the application under S. 14(2) of the Act.
15. As held by the Supreme Court, sub-s. (1) of S. 31 determines the jurisdiction of the Court in which the award can be tiled and sub-sees. (2), (3) and (4) of the said section were intended to make that Section 'effective' in the following three different ways:
1. By vesting in One Court the authority to deal with all questions regarding the validity, effect or existence of an award or an arbitration agreement;
2. By casting on the persons concerned the obligation to file all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings in the court;
3. By vesting exclusive jurisdiction in one court in which the first application relating to the matter was filed.
It is only the Court which has got the competence to entertain an application under the Act will have the exclusive jurisdiction under sub-sec. (4) of Section 31. Therefore, the prerequisite or the essential condition for the application of S. 31(4) of the Act is that the Court which entertain condition for the application of S. 31(4) of the Act is that the Court which enertains the first application should be a competent Court to entertain the same. From trie mere fact that Original Petition No. 531 of 1987 was filed in this Court, it could not be said that this Court has exclusive jurisdiction and that the subseqeunt application made by Neyveli Lignite Corporation before Cuddalore Court is not maintainable. I have already taken the view that this court has no competence to have entertained Original Petition No, 531 of 1987 because no part of the cause of action has arisen within the Original Side of this court and the place or venue of arbitration will not give rise to any cause of action. In this view of the matter, it has to be held that Original Petition No. 531 of 1987 would not have been entertained by this Court in view of the reasons given above.
16. Mr. Rangarajan placed strong reliance on the judgment of the Highest Court on the land reported in Kumbha Mawji's case . In that case, the appellant (Khumbha Mawji) entered into an agreement with the respondent, (the Dominion of India) (as it then was) to manufacture and supply to the Bengal Assam Railway, stone boulders and ballast from Chutiapara quarry. The agreement was entered into at Calcutta, though the work was to be carried out in Assam. Difference arose between parties and the matter was referred to two arbitrators and on their disagreement, the matter was referred to an umpire, who made two awards in favour of Kumbha Mawji, the appellant therein. The respondent, Dominion of India filed an application under S. 14(2) of the Act before the Court of the Subordinate Judge, Gauhati in Assam, where the work was to be carried out, praying that the umpire may be directed to file both the awards in Court. Notice was issued to the umpire to file the award into that Court and on receipt of the copies of the award, the Subordinate Judge of Gauhati in Assam made an order, directing the applicant to file a copy of the award, on 3-9-1949. On the said date, the respondent, Dominion of India filed the award. Further notices and filing of objections in the Court of the Subordinate Judge, Gauhati were ordered. In the meanwhile on 17-8-1949, the respondent Dominion of India made its first application in the Gauhati Court. The appellant's Solicitors, sent a letter to the Registrar of the High Court, Original Side, Calcutta enclosing therewith two original awards and requesting the High Court to direct the office to file the said awards and to issue notices in respect thereof expeditiously. The Deputy Registrar informed the Solicitors that the award has been filed and asked the Solicitors to take out from the Court and serve on the parties concerned the statutory notice fixing a date for judgment upon the side award by the commercial Judge of the Court. Notice was thereupon issued to both parties, which was served on the respondent, Dominion of India on 2-9-1949. Thus, it is seen in respect of these awards, proceedings were initited purporting to be. under S. 14(2) of the Act, Simultaneously both in the Court of the Subordinate Judge of Gauhati in Assam as well as on the Original Side of the High Court at Calcutta. The appellant, Khumbha Mawji in answer to the notice issued by the Gauhati Court on 3-9-1949 issued by the Gauhati Subordinate Court appeared before the Court and obtained adjournments from time to time. In the meanwhile, the respondent, Dominion of India, after receiving the notice issued to them by Calcutta High Court, filed an affidavit stating their objections to the jurisdiction of Calcutta High Court and to the validity of the awards. The matter was taken for consideration by the Commercial Judge of Calcutta High Court, who overruled the objections of the respondent before the Supreme Court and passed Judgments on the two awards. On appeal by the respondents, Dominion of India to the Division Bench, the learned Judges reversed the Judgment of the learned single Judge and held that there had been no proper application under S. 14(2) of the Act before Calcutta High Court and consequently that Court had no jurisdiction to deal with the matter. It is seen from the Judgment of the Supreme Court that the Division Bench of Calcutta High Court reversed the Judgment of the learned single Judge on limited grounds. Hence appeals were filed before the Supreme Court and three questions were raised for consideration by the Supreme Court. The third question raised before the Supreme Court, with which we are concerned was whether sub-sec. (4) of S. 31 of the Act applies only where the first application under the Act was made during the course of pendency of a reference to arbitration or also to a case like the present one, where such first application was made after the completion of the arbitration and on the making of an award. The Supreme Court held that sub-sec. (4) of S. 31 was not meant to be confined to applications made during the pendency of an arbitration and that 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 an arbitration or after the arbitration is completed or before the arbitration is commenced. The Supreme Court has also considered the phrase 'in any reference' and the words 'reference' and 'reference to arbitration' etc., and held that the phrase 'in a reference' is comprehensive enough to cover also an application first made after the arbitration is completed and a final award is made. The Supreme Court was therefore of the opinion that Section 31(4) of the Act would vest exclusive jurisdiction in the Court in which an application for the filing of an award has been made under Section 14 of the Act. The Supreme Court held that the application by the respondent Union of India was made before the Gauhati Court on 10-8-1949 and the move by the appellant before the Calcutta High Court was on 17-8-1949 and on these facts and on the view of the interpretation of S. 31(4) of the Act, the Supreme Court held that the Gauhati Court only had got the jurisdiction and not the Calcutta High Court as regards the present dispute.
17. Kumbha Mawji's case was a case, where two Courts had competence to entertain applications under the Act, viz., in the city of Calcutta, where the agreement was entered into and at Gauhati in Assam, where the work was to be carried out. That is not so in the present case for the reasons mentioned supra. In my opinion the respondent cannot derive any sustenance to his argument through that case cited supra. Hence, 1 am of the opinion that the argument raised on behalf of Neyveli Lignite Corporation that this Court has no jurisdiction under Section 14(2) ofthe Act andSection 17 of the Act is well founded.
18. The decisions cited by Mr. R. Krishnaswamy learned counsel appearing for the respondents are considered as under:
The decisions reported in Venkatasami-appa v. Srinidhi Ltd., (1950) I MLJ 709); Sushil Ansal v. Union of India (AIR 1980 Delhi 43) have already been dealt with by me in extenso in my Judgment in Union of India's case ((1991) 1 MLJ 286): 1991 TNLJ1 69).
In the decision reported in Virendra Saigal v. Sumatilal Jamnalal , the Delhi High Court held as follows at page 15:
"Section 2 of the Artbitration Act defines 'Court' means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject matter of a suit. Therefore, a competent Court within the meaning of S. 31 of the Act must be a Court which could have entertained a suit between the parties in which the controversies were the same- as are the subject matter of the arbitration."
In the decision reported in M/s. Gulati Construction Co. v. Betwa River Board , the Delhi High Court held as follows at page 300:
"In order to decide as to which Court has jurisdiction to entertain petitions under Section 14, reference has to be made to S. 2(c) read with S. 31(1). Merely because the arbitrator chooses to hold the proceedings in a place, where admittedly no suit could be instituted, and chooses to make and publish an award at that place, it would not give the Courts of that place territorial jurisdiction to decide the matters arising under the Act.
In an award has been filed in a Court which has no jurisdiction, the provisions of S. 31(2) and (3) would have no application. If an arbitrator chooses, in violation of the provisions of S. 31(1) to file the award in a Court which has no territorial jurisdiction, then it cannot be argued that the said Court acquires territorial jurisdiction. It is now well established that by agreement of parties jurisdicton cannot be conferred on Courts which have no territorial jurisdiction to decide the matter."
In the decision reported in Kumud v. Fertilizer Corporation of India Ltd., , the Calcutta High Court held as under:
"The contention of the petitioner that the ouster clause in the present case indicated that the parties contemplated that if any suit would have to be filed in connection with the contracts, that should be filed in an appropriate court at Gorakhpur and that that clause would have nothing to do with the arbitration proceeding cannot be accepted. For the purpose of filing an application under the Arbitration Act, if one has to ascertain whether a particular Court has jurisdiction in (he matter or not, it has to be found out whether a suit could have been filed in that Court on the same cause of action. If the Court is competent to entertain the suit then that court will also be competent Court to entertain the application under the Arbitration Act. Applying this test it is clear that the appropriate Court at Gorakhpur should be the competent Court to entertain the present application under the Arbitration Act. Application returned to the petitioner for filing in the proper Court."
In the decision in Electrical Mfg. Co. v. Crompton Engg. Co., , a Division Bench of our High Court, consisting of K. Veeraswami, C.J., and Raghavan, J. held that the place of execution of the agreement at Madras was inconsequential and the proper test was that of the subject-matter of the arbitration, which did not fall within the jurisdiciton of the Madras High Court.
19. In my considered opinion S. 31(4) of the Act though has an overriding effect is not an omnipotent Section to confer jurisdiction to any Court which does not have any competence to entertain applications in relation to arbitration. The law makers also could not have intended such a situation. Section 31(4) of the Act only envisages a situation where a first application has been made to a competent Court, Hence, if the court to which the first application has been made is not a competent court, such a Court will not have jurisdiction to entertain all subsequent applications in the matter since the essential prequisite of S. 31(4) of the Act is not satisifed.
20. In the resuli, Original Petition No. 531 of 1987 is dismissed as not maintainable in this Court. In view of my opinion that this Court has no jurisdiction to have entertained the application filed under Sec. 14(2) of the Act, Original Petition No. 337 of 1990 filed under Sections 33 and 30 of the Act by the Neyveli Lignite Corporation is also dismissed as not maintainable in this Court. It is stated that the Neyveli Lignite Corporation has filed a petition under Section 14(2) read with Sections 33 and 30 of the Act on the file of the Sub Court, Cuddalore and that the said petition has also been numbered as Original Petition No. 43 of 1989 and that the said petition is pending adjudication. II is also stated that the respondents in Original Petition No. 337 of 1990 (M/s. Sabson (India) Pvt. Ltd.) have also entered appearance and contesting the proceedings in that Courl. The Original Side of this Court is directed forthwith to despatch the original award and other connected records and the proceedings filed in this Court by the arbitrators to the Sub Court, Cuddalore to enable the said Court to proceed with the matter. I direct the Sub Court, Cuddalore on receipt of the award and the proceedings to issue a notice of hearing to both parties and the further proceedings to be held subsequently expcditiously. It is seen from this case that the agreement was entered into between the parties in the year 198! and that the award was passed by the arbitrators as early as on 24-8-1987. Since the matter is pending for a very long time unnecessarily in this Court, the Sub Court at Cuddalore is directed to dispose of the Original Petition No. 43 of 1989 and other connected proceedings filed by the contractor and the NLC within three months from the date of receipt of the original award and other connected records from this court and send a report of such compliance to this Court. The Sub Court shall give proper and sufficient opportunity to both parties and hear their grievance and pass orders on merits in accordance with law. As I am inclined to take the view that this Court has no jurisdiction in the matter, the Neyveli Lignite Corporation must succeed in their effort, and I direct the original award and the documents etc., filed by the arbitrators to be taken off the record from this Court and forwarded to the Sub Court at Cuddalore forthwith. Likewise, the office is also direced to return the original petitions filed by the respective petitioners (O.P. Nos. 531 of 1987 and 337 of 1990) along with the records counter, reply affidavits etc. filed by them to the respective parties to enable them to file the same in the proper Court. Time for representation of both the original petitions is one month from today.
21. Thus, the preliminary issue raised by both parties is answered in favour of Neyveli Lignite Corporation (Petitioner in O. P. No. 337 of 1990) and against M/s. Sabson (India) Pvt. Ltd. (petitioner in O.P. No. 531 of 1987). However, there will be no costs in both the original petitions.
22. Order accordingly.