Calcutta High Court (Appellete Side)
Mr. Rajdip Bhattacharjee .... For The vs Barun Sankar Chatterjee & Anr.) on 23 December, 2013
Author: Asim Kumar Ray
Bench: Asim Kumar Ray
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23.12.2013 C.O. No. 163 of 2008
Mr. Probal Mukherjee,
Mr. Rajat Dutta,
Mr. Rajdip Bhattacharjee .... For the petitioner
Mr. Saptangshu Basu,
Mr. Anirban Roy,
Mr. Pradyut Kr. Das,
Mr. Uttam Mandal,
Mr. Jayanta Sengupta ... for the opposite party
This revisonal application is directed against
the order dated 3rd January, 2008 passed in Misc. Case
No. 274 of 2006 by learned Additional District Judge, 11th
Court, Alipore thereby rejected the objection raised by
the petitioner challenging the maintainability of Misc.
Case arose out of a petition filed under Section 34 of the
Arbitration and Conciliation Act, 1996 by the opposite
party.
A dispute arose between the parties in course
of execution of the work in terms of the work order. The
National Arbitral Tribunal was approached for resolving
the dispute through arbitration. Shri M.P.Chakraborty
was appointed as sole arbitrator. The appointment of Shri
Chakraborty was challenged by the opposite party by
filing an application before the Hon'ble High Court at
Calcutta in its ordinary original civil jurisdiction which
was registered as A.P. No. 156 of 1998. The Hon'ble
Court by an order dated September 16, 1998 appointed
Mr. Tathagata Ray a retired engineer as arbitrator upon
the concurrence of the parties for resolving the dispute
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between the parties through arbitration proceeding
thereby setting aside the order by which Shri
M.P.Chakraborty was appointed as sole arbitrator. The
said matter was again taken up by the Hon'ble Court in
connection with an application being G.A. No. 156 of
1998 filed in connection with A.P. No. 156 of 1998. The
application was disposed of by an order dated November
17, 1998 by making certain clarifications but the
appointment of Mr. Tatagata Ray was not modified.
Pursuant to the order passed by this Court
Mr. Tathagata Ray, sole arbitrator entered into reference
and after hearing the parties passed an award dated June
16,2006 for a sum of Rs. 23,05,800/- . The opposite party
applied for setting aside the said award by filing an
application under Section 34 of the Arbitration and
Conciliation Act, 1996(hereinafter to be referred to
Act,1996) before the learned District Judge at Alipore
which was registered as Misc. Case No. 274 of 2004.
The petitioner raised an objection challenging the
maintainability of the said application stating that the
learned District Judge has no jurisdiction to entertain the
application in view of Section 42 of the Act, 1996. The
District Judge rejected the objection raised by the
petitioner by the order impugned, so this revisional
application.
Mr. Probal Mukherjee, learned advocate
appearing for the petitioner has contended that in view of
the provisions of Section 42 of the Act 1996, the learned
Court below has no jurisdiction to entertain the Misc.
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Case. He has contended that the opposite party filed an
application before the Hon'ble Court praying for
revocation of the authority of Shri M.P.Chakraborty,
preceding sole arbitrator and his removal from the office
of arbitrator. This Court by an order 16-9-1998 set aside
the order of appointment of Shri M.P.Chakraborty and
appointed Mr. Tathagata Ray as arbitrator. Therefore, it
has been contended that the learned Court below had no
jurisdiction to entertain the application under Section 34
of the Act 1996 filed by the opposite party. Such
application challenging the award under Section 34 of the
Act, 1996 should have been filed before this Court. Mr.
Mukherjee has relied on the following decisions :
1. AIR 2012 Cal 255 (Hindustan Petroleum
Corporation Ltd. -vs-Barun Sankar Chatterjee & Anr.) ,
2. AIR 2011 Cal 82 (Ranjita Apartment
Owners' Association & Ors. -vs- Prabir Kumar
Chakraborty),
3. AIR 2011 Cal 132 (Steel (Singapore)
Trading Pvty. Ltd. -vs- Bhushan Power & Steel Ltd.),
4. (2005) 1 WBLR (Cal) 932 (Associated
Contractors -vs- The State of West Bengal & Ors.)
Mr. Saptangshu Basu, learned senior advocate
appearing for the opposite party has contended that the
application filed before this Court (A.P.No. 156 of 1998 )
was nothing but an application under Section 11 of the
Act,1996 though the cause title of the application shows
that it was filed under Sections 5,12 and 13 of the Act,
1996. Sections 12 and 13 of the Act 1996 deals with the
grounds for challenge and challenge procedure
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respectively. He has contended that a party who intends to
challenge an appointment of arbitrator shall have to
make such challenge before the arbitrator but in the
instant case it was challenged before this Court. This
Court accepted the application and passed an order. The
said orders dated 16-9-1998 and 17-11-1998 was nothing
but an order passed on a petition under Section 11 of the
Act, 1996. The order passed by this Hon'ble Court under
Section 11 of the Act, 1996 is judicial in nature and not an
administrative order. The Court while passing the said
order is not to be treated as a Court in view of the
provision of Section 2 (e) of the Act, 1996.
Mr. Basu has submitted that the decision
reported in AIR 2011 Cal 82 is 'per inquirium' as
decision reported in (2006) 11 SCC 651 was not referred
to before the Hon'ble Court. He has relied on the
following decisions :
1. 2003 (2) CHN 35 (Macrotech India & Ors. -
vs-Uma Roy),
2. 2013 (3) CHN 160 (Hindustan Petroleum
Corporation Ltd. -vs- Barun Sankar Chatterjee ),
3. (2005) 8 SCC 618 (SBP &Co.-vs- Patel
Engineering Ltd. & Anr.),
4. (2006 ) 8 SCC 18 (Union of India -vs- Shring
Construction Co. (P) Ltd. ),
5. (2006) 11 SCC 651 (Rodemadan India Ltd. -
vs- International Trade Expo Centre Ltd.),
6. AIR 2011 CAL 158 (Texmaco Ltd. -vs-
Tirupati Buildestates Pvt. Ltd. (AIR 2011 CAL 158),
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I have gone through the revisional application,
annexure thereto, the order impugned, application being
A.P. No. 156 of 1998 , orders dated 16-9-1998 and 17-11-
1998, relevant provisions of the Arbitration and
Conciliation Act, 1996 and the decisions cited by the
learned advocates of the parties. I have taken stock of the
submission of the learned advocates of the parties and
considered the materials on record.
It is a matter of record that dispute arose
between the parties. The National Arbitral Tribunal was
apporached for resolving the dispute through arbitration.
Shri M.P.Chakraborty was appointed as sole arbitrator.
Shri Chakraborty thereafter issued notice entering
reference of the arbitration proceeding . The appointment
of Shri Chakraborty as preceding sole arbitrator was
challenged by filing an application before this Hon'ble
Court in its ordinary original civil jurisdiction which was
registered as A.P.No. 156 of 1998.
On perusal of the application it appears that
the opposite party stated in the application that Shri
M.P.Chakraborty, preceding sole arbitrator has assumed
jurisdiction and held its sitting at 7/B-C Rani Rasmoni
Road, Kolkata-700 013 within the jurisdiction of this
Hon'ble Court. There was a prayer that an order be passed
removing Shri M.P.Chakraborty from the office of the
arbitrator and revoking his authority to act further as an
arbitrator.
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Mr. Basu has contended that the application
praying for revocation of the authority of the sole
arbitrator Shri Chakraborty is practically an application
under Section 11 of the Arbitration and Conciliation Act
1996. Section 11 sub-section 6 runs as follows :
"11(6). Where , under an appointment
procedure agreed upon by the parties,--
(a) a party fails to act as required under that
procedure; or
(b) the parties, or the two appointed arbitrators, fail
to reach an agreement expected of them under
that procedure; or
(c) a person , including an institution , fails to
perform any function entrusted to him or it under
that procedure,
a party may request the Chief Justice
or any person or institution designated by him to take the
necessary measure, unless the agreement on the
appointment procedure provides other means for securing
the appointment."
We are to see as to whether the
application presented before the Hon'ble Court by the
opposite party which was registered as A.P.No. 156 of
1998 is coming within the ambit of Section 11 or not. A
party may request the Chief Justice or any person or
institution designated by him to take the necessary
measure, unless the agreement on the appointment
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procedure provides other means for securing the
appointment. There was no such request in the case in
hand. There was a prayer for revocation of the authority
of the sole arbitrator M.P.Chakraborty who was
appointed and has admittedly held his sitting at 7/B-C
Rani Rasmoni Road, Kolkata-700 013. The quoting of
Sections 5/12/13 in place of Sec. 11 of the Act, 1996 in
the cause title of the application praying for revocation of
authority of Shri Chakraborty is not a relevant factor. The
intention coming out from the averment of the
application presented before this Court in its ordinary
original civil jurisdiction by the opposite party praying
for removal of Shri M.P.Chakraborty and by revoking his
authority to act further as an arbitrator. The spirit of
Section 11 of the Act is in no-way adhere to in the
application praying for removal of the earlier arbitrator.
Section 11 of the Act lays down the
procedure to request Hon'ble the Chief Justice or any
person or any institution designated by him to make
necessary measure regarding the appointment of
arbitrator. But it does not reflect any procedure to remove
an arbitrator who was already appointed and started
action by issuing notice entering reference of the
arbitration proceeding.
The opposite party moved this Hon'ble Court
for setting aside the order of General Manager appointing
Shri M.P.Chakraborty as an arbitrator. The Court by an
order dated 16-9-98 set aside the appointment of Shri
M.P.Chakrabroty and on the proposal of the petitioner
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who was respondent in A.P.No. 156 of 1998 Mr.
Tathagata Ray, a retired engineer was appointed as arbitrator. Learned advocate appearing for the opposite party raised no objection for appointment of Mr. Tathagata Ray. The Court directed the General Manager of Power Grid Corporation to appoint Mr. Tathagata Roy, a retired engineer as arbitrator to adjudicate upon the dispute that have arisen between the parties. On 17th November, 1998 a further order was passed by this Hon'ble Court directing the General Manager of petitioner-corporation Power Grid Corporation of India Ltd. to comply with the order dated 16th September, 1998 within a week from the date of communication of the said order. The order was complied with. Shri Tathagata Ray on entering reference of the arbitration proceeding as arbitrator passed the award.
The opposite party challenged the said award /application for setting aside the arbitral award before the learned Court of Additional District Judge, 11th Court at Alipore which was registered as Misc. Case No. 274 of 2006 .
The petitioner as respondent to the above said Misc. Case No. 274 of 2006 filed an application stating that the learned Court below had no jurisdiction to entertain the application under Section 34 of the Act,1996 for setting aside the award in view of the provisions laid down in Section 42 of the Act, 1996.
Section 42 be placed hereunder.
9"42. Jurisdiction.- Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court , that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court."
The aforesaid provision starts with non- obstante clause which exclude the other provisions relating to jurisdiction contained elsewhere in this part or any other law for the time being inforce . Section 42 is included in part- 1 of the said Act, as the said part contains Section 2 to 43. Thus, the provisions relating to jurisdiction to entertain an application for setting aside the award as contained in Section 34 becomes ineffective in view of non-obstante clause in Section 42 of the said Act. Section 42 of the Act made it abundantly clear that all subsequent application arising out of the arbitral agreement and arbitral proceeding be filed in that Court.
This Hon'ble Court had the occasion to entertain an application in its ordinary original jurisdiction at the instance of the opposite party for the removal of the previous arbitrator by revoking his authority. Mr. Tathagata Ray was appointed subsequently. Therefore, Tathagata Ray has substituted Shri M. P.Chakraborty.
10Considering the facts and circumstances, points of law and the action of the parties, I find reason to express that Section 42 of the Arbitration and Concilliation Act, 1996 is coming into play in this matter and as a result the order passed by the learned Court below is an exercise of the jurisdiction not vested in that Court .
The order impugned is set aside.
The revisional application is allowed.
Urgent xerox certified copy of this order, if applied for, be given to the learned advocate of the parties on usual undertaking.
( Asim Kumar Ray, J. )