Calcutta High Court
Saltee Infrastructure Ltd vs M/S Shivam Industrial Parks And Estates ... on 8 December, 2025
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
RESERVED ON: 28.11.2025
DELIVERED ON: 08.12.2025
PRESENT:
HON'BLE JUSTICE GAURANG KANTH
APOT 259 OF 2025
IA NO: GA-COM 1 OF 2025, GA-COM 2 OF 2025
SALTEE INFRASTRUCTURE LTD
VERSUS
M/S SHIVAM INDUSTRIAL PARKS AND ESTATES LTD
Appearance:
Mr. Sakya Sen, Sr. Adv.
Mr. Amritam Mandal, Adv.
Ms. Swati Agarwal, Adv.
..... For the Petitioner.
Mr. Jishnu Chowdhury, Sr. Adv.
Ms. Ujjaini Chatterjee, Adv.
Mr. Nishant Kr. Saraf, Adv.
Ms. Neha Gupta, Adv. ...... For the Respondent.
JUDGMENT
Gaurang Kanth, J.:-
1. The Appellant has preferred the present Arbitration appeal under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996, challenging the interim award dated 16.05.2025 passed by the learned Sole Arbitrator in the arbitral proceedings arising between the parties.
2. The facts necessary for the adjudication of the present appeal are as follows:
3. The Respondent is the owner of land admeasuring 91.5 decimals (55 cottahs) situated at Municipal Holding No. 148, Block A, Gopalpur, Jagardanga Main Road, Rajarhat Six Lane Expressway, Kolkata. Under a 2 Development Agreement dated 07.04.2014, the Appellant was appointed as the developer, while the Respondent continued as the landowner. A registered Power of Attorney was also executed in favour of two representatives of the Appellant to facilitate implementation of the project.
4. In terms of the Development Agreement, the Respondent's obligation was limited to contributing the land, whereas the Appellant was solely responsible for undertaking and financing all activities relating to development, construction, and marketing.
5. On 20.03.2018, the Appellant obtained building sanction for two blocks (i) Basement + Ground + 7 floors and (ii) Ground + 5 floors. The first block (B+G+7) forming part of the "Saltee Splendora" project was completed in 2019, following which the second phase was commenced.
6. Pursuant to the agreed sharing ratio, the Appellant handed over 4 flats and 4 shops to the Respondent, which were duly accepted. An additional 7 flats were also offered; however, the Respondent declined acceptance, raising disputes regarding deductions towards marketing charges, other incidental charges, and 10% extra proceeds for the additional saleable area.
7. On 21.12.2022, the Respondent terminated the Development Agreement alleging delay in the completion of the project. The Appellant contends that such unilateral termination was legally impermissible, particularly as it had invested approximately Rs. 45 crores in the project, sold nearly 80% of the flats in Phase-I, repaid the construction loan, and returned the original title deeds to the Respondent on 14.03.2023. Owing to the disputes, the Respondent invoked the arbitration clause, and the disputes were accordingly referred to arbitration.3
8. Prior to commencement of arbitral proceedings, the Respondent filed Misc.
Case No. 32/2023 under Section 9 of the Arbitration and Conciliation Act, 1996 before the Rajarhat Commercial Court and secured an order directing that any prospective sale of flats/shops be executed with the Respondent as a confirming party, was entitled to 40% of the sale proceeds pending disposal of the application. After the commencement of the arbitration proceedings, the Arbitral Tribunal continued the said direction.
9. During the course of arbitration, both parties preferred applications under Section 17 of the Arbitration and Conciliation Act, 1996. By order dated 16.08.2023, the learned Arbitrator modified the earlier interim order and restrained the appellant from entering into fresh agreements for sale or creating third-party rights in respect of the remaining unsold flats.
10. In a subsequent applications filed by the Respondent, the Arbitral Tribunal by order dated 26.02.2024, directed both parties to maintain status quo, restrained the Appellant from creating any encumbrance over the title deeds, and directed the Appellant to deposit the admitted amount of Rs. 11,54,09,382/- in a nationalised bank, subject to the final outcome of the arbitral proceedings.
11. The Appellant challenged the said order dated 26.02.2024 by filing Misc.
Appeal (Commercial) No. 3/2024 under Section 37 of the Arbitration and Conciliation Act, 1996 before the Rajarhat Commercial Court, which was dismissed by order dated 08.07.2024.
12. On 02.03.2024, the Respondent filed another application under Section 17 alleging non-compliance with the order dated 26.02.2024. By order dated 24.04.2024, the Tribunal appointed Shri Sarbananda Sanyal, Advocate, as Receiver to take possession of the unsold flats and parking spaces, sell the 4 same, and distribute the proceeds in accordance with the Development Agreement. The Receiver was also empowered to execute supplementary agreements in the event of the Appellant's failure to do so.
13. On further applications filed by the Respondent, the Tribunal by order dated 24.04.2024 directed the Appellant to hand over the original title deeds to the Receiver and authorised the Receiver to take possession of 42 car-parking spaces. Pursuant to the supplementary agreements executed in favour of the Respondent, one flat and four shops were thereafter sold for Rs. 6,61,01,000/-.
14. In the meantime, the Tribunal recommended the initiation of contempt proceedings against the Appellant for non-compliance with the direction to deposit Rs. 11,54,09,382/-. Based on the recommendation, the Respondent instituted contempt proceedings before the Rajarhat Commercial Court, which are presently pending.
15. Having regard to the above developments, particularly the realisation of Rs. 6,61,01,000/- and the Receiver's possession of the unsold units, the Appellant sought modification of the order dated 26.02.2024 insofar as it directed deposit of Rs. 11,54,09,382/-. By the impugned order dated 16.05.2025, the Tribunal rejected the Appellant's application in entirety.
16. Aggrieved thereby, the Appellant has preferred the present Petition under Section 37(2) of the Arbitration and Conciliation Act, 1996 challenging the order dated 16.05.2025.
17. At the outset, learned counsel for the Respondent raised a preliminary objection regarding maintainability. This Court accordingly heard the parties extensively on the issue of jurisdiction and the present issue is regarding the maintainability of the present appeal.
5Submission on behalf of the Respondent
18. Mr. Jishnu Chowdhury, learned Senior Counsel for the Respondent, submits that the parties have already invoked the jurisdiction of the Rajarhat Commercial Court on two earlier occasions, first, prior to the commencement of the arbitral proceedings by filing an application under Section 9 of the Act, and thereafter, during the pendency of the arbitration, by preferring an appeal under Section 37(2) of the Act. He further points out that the contempt proceedings initiated by the Respondent against the Appellant are also pending before the same Court. According to him, in view of this repeated invocation of jurisdiction and by virtue of Section 42 of the Arbitration and Conciliation Act, 1996, the Rajarhat Commercial Court alone retains exclusive jurisdiction over all subsequent applications arising out of the arbitral proceedings. Consequently, it is contended that this Court lacks jurisdiction to entertain the present appeal.
19. Learned Senior Counsel further submits that the disputes between the parties arise out of a development agreement pertaining to immovable property situated within the territorial jurisdiction of the Rajarhat Commercial Court. Hence, the said Court constitutes the "Court" under Section 2(1)(e) of the Act, being the principal civil court of original jurisdiction competent to entertain all disputes concerning the subject property. It is contended that both parties had always understood and accepted that the Rajarhat Commercial Court would exercise exclusive jurisdiction as the Section 2 (1) (e) Court. The Appellant, having itself invoked the said jurisdiction under Section 37(2) of the Act on an earlier occasion, is now estopped from disputing the same. In support of this 6 submission, reliance is placed on the judgment of the Hon'ble Supreme Court in Sumer Builders Pvt. Ltd. v. Narendra Gorani, reported as (2016) 2 SCC 582 and the decision of this Court in New Age Realty Pvt. Ltd. v. Kartikeya Ancillaries Pvt. Ltd., reported as 2011 SCC OnLine Cal 1927, Omaxe Ltd. v. PVP Entertainment Ltd., 2016 SCC OnLine Del 5770.
20. The third submission advanced on behalf of the Respondent is that the Appellant, having failed to secure any favourable orders from the Rajarhat Commercial Court, has now approached this Court in an attempt at forum shopping. Such conduct, it is argued, ought to be strongly deprecated.
21. It is further submitted that once parties voluntarily submit to the jurisdiction of a particular Court, they cannot thereafter, merely because they are dissatisfied with the outcome, seek recourse to another forum. The very objective of arbitration is to enable parties to determine, by mutual agreement or by their conduct, the procedural framework and the court of supervisory jurisdiction. Having unequivocally subjected themselves to the jurisdiction of the Rajarhat Commercial Court, the Appellant cannot now seek to invoke the jurisdiction of this Court.
22. With these submissions, learned Senior Counsel concludes by contending that this Court lacks jurisdiction to entertain the present proceedings, and that the Rajarhat Commercial Court alone is competent to adjudicate the matter. Accordingly, he prays for dismissal of the present appeal. Submission on behalf of the Appellant
23. Mr. Sakya Sen, learned Senior Counsel appearing for the Appellant, contends that this Court possesses jurisdiction to entertain the present proceedings by virtue of Clauses 12.1 and 12.3 of the Development Agreement dated 07.04.2014, which expressly confer jurisdiction on the 7 courts at Kolkata. It is further contended that the Arbitration Clause stipulates Kolkata as the place of arbitration and, therefore, the courts at Kolkata exercise both territorial as well as pecuniary jurisdiction. Learned Senior Counsel argues that, in arbitral matters, parties are entitled to select a neutral seat of arbitration, and it is well-settled that the courts at the seat of arbitration exercise exclusive supervisory jurisdiction over the arbitral proceedings. In such circumstances, the principles embodied in the Code of Civil Procedure are of no relevance, and the situs of the immovable property does not determine jurisdiction. The court at the seat of arbitration is, in law, the "Court" within the meaning of Section 2(1)(e) of the Arbitration and Conciliation Act, 1996.
24. It is emphasised that the parties, by mutual agreement, designated Kolkata as the seat of arbitration and conferred exclusive jurisdiction upon the courts at Kolkata. Accordingly, the mere fact that the subject immovable property is situated within the territorial jurisdiction of the Rajarhat Commercial Court does not dilute or override the exclusive supervisory jurisdiction of the courts at Kolkata. Given the pecuniary limits, the present petition lies only before this Court.
25. Learned Senior Counsel further submits that the Rajarhat Commercial Court inherently lacks jurisdiction over the subject matter. Hence, the earlier invocation of its jurisdiction by either party cannot confer competence upon that court which the statute does not provide. Now that the Appellant has approached the correct forum, it would be legally impermissible to relegate the Appellant to a Court devoid of jurisdiction.
26. In support of these submissions, reliance is placed upon Brahmani River Pellets Ltd. v. Kamachi Industries Ltd., reported as (2020) 5 SCC 462; 8 Swastik Gases (P) Ltd. v. Indian Oil Corporation Ltd., reported as (2013) 9 SCC 32; Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd., reported as (2017) 7 SCC 678; and the decision of the Coordinate Bench of this Court in Lakshman Prasad Aggarwal v. Neogrowth Pvt. Ltd., APOT 15 of 2025.
27. With respect to Section 42 of the Act, learned Senior Counsel relies upon the judgment of the Hon'ble Supreme Court in Pandey & Co. Builders (P) Ltd. v. State of Bihar, reported as (2007) 1 SCC 467, as well as Lakshman Prasad Aggarwal (supra), to submit that Section 42 applies only to "applications" under Part I of the Act and not to appeals. As the present proceeding is an appeal, Section 42 stands excluded.
28. It is further contended that the allegation of forum shopping is misconceived. Forum shopping arises only where two or more courts have concurrent jurisdiction and a party selectively approaches different courts for identical reliefs. As the courts at Kolkata alone possess exclusive supervisory jurisdiction as the court of the seat of arbitration, the allegation of forum shopping is wholly untenable.
29. On these grounds, it is submitted that this Court has the requisite jurisdiction to entertain and adjudicate the present appeal. Legal Analysis
30. This Court has considered the rival submissions advanced by learned counsel for both sides and has carefully perused the pleadings, documents, and materials placed on record.
31. The principal issue for determination is whether, on the facts of the present case, jurisdiction to entertain the instant proceedings vests in this Court or in the Commercial Court at Rajarhat.
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32. To answer this question the Court will, in a step by step and structured manner, examine the relevant statutory provisions, consider the rival authorities relied upon by the parties, and apply the law to the facts of the case.
Section 2(1)(e) Jurisdiction: Court of the Property Vs Court of the Arbitral Seat
33. Section 2(1)(e) defines the term "Court" in respect of domestic arbitration as "the principal Civil Court of original jurisdiction" which is "competent to decide the questions forming the subject-matter of the arbitration" had such dispute been the subject of a civil suit. While on a plain textual reading this appears to favour the jurisdiction of the court where the subject matter of the dispute (including immovable property) is located, the Supreme Court has repeatedly clarified that this definition cannot be mechanically applied in isolation and must be read harmoniously with the scheme of the Act, particularly the principles governing the seat of arbitration.
34. The jurisprudential turning point in this regard is the doctrine of seat as the source of exclusive supervisory jurisdiction, recognised by the Supreme Court in a consistent line of authorities culminating in Indus Mobile Distribution (P) Ltd. (Supra). The Court therein held that once parties designate a seat of arbitration, the courts at that seat obtain exclusive jurisdiction for all purposes relating to supervision of the arbitral process, irrespective of where the cause of action may arise or where the subject matter of the dispute may be situated.
35. In Indus Mobile (supra), the Supreme Court held that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. The courts at the seat of arbitration alone will have supervisory control over the arbitral 10 proceedings. This principle marks a clear shift from a purely cause of action- based jurisdiction to a seat centric jurisdiction that flows from party autonomy and the structure of the Act.
36. The Supreme Court followed the same principle in Brahmani River Pellets Ltd. (supra), where it was reiterated that specifying a place of arbitration confers exclusive jurisdiction on the courts at that place and precludes other courts, even those having jurisdiction under the CPC, from entertaining proceedings under the Act. The Court emphasised that allowing multiple courts to exercise jurisdiction merely because part of the cause of action arose elsewhere would defeat the objective of efficiency and predictability in arbitral supervision.
37. The decision in Swastik Gases (P) Ltd. (Supra), also reinforces this understanding. The Supreme Court held that where parties select a particular court's jurisdiction through a clear agreement, such choice must ordinarily be respected. Even in the absence of the expression "exclusive jurisdiction," the intention to confer such exclusivity can be inferred from the structure of the clause and the parties' autonomy to restrict jurisdiction to a particular forum.
38. The Respondent places reliance on Sumer Builders Pvt. Ltd. (supra), and the decision of this Court in New Age Realty Pvt. Ltd. (supra), to contend that where the dispute concerns rights in immovable property, jurisdiction is attracted to the court where such property is situated. These decisions, however, must be read in their correct factual and doctrinal context. Both Sumer Builders (supra) and New Age Realty (supra) arose in factual circumstances where the arbitration clause did not designate a seat of arbitration, or where the clause was ambiguous, and the only determinable 11 connecting factor was the location of the immovable property. In the absence of a clearly designated seat, the courts in those cases relied on traditional principles of subject-matter jurisdiction. Neither decision involved, nor adjudicated upon, a situation where the parties expressly designated a juridical seat distinct from the location of the immovable property.
39. Thus, the ratio of Sumer Builders (supra) and New Age Realty (supra) cannot override the later and authoritative pronouncements of the Supreme Court which firmly hold that the designation of a seat is determinative of supervisory jurisdiction, independent of where the property is located. The latest jurisprudence recognises that modern arbitration law treats the seat as the anchor of jurisdiction.
40. When viewed through this doctrinal evolution, the true import of Section 2(1)(e) becomes clear. The "competence" of a court to decide the subject matter of arbitration is not defined narrowly by reference only to CPC principles such as situs of immovable property. Competence must be understood contextually, with reference to the juridical structure of the Arbitration Act and the supervisory jurisdiction attached to the seat selected by the parties. Thus, in an arbitration where the seat is expressly designated, the court at the seat is the court "competent" to decide questions relating to the arbitral proceedings within the meaning of Section 2(1)(e).
41. To hold otherwise, namely, that the court within whose territorial jurisdiction the immovable property is situated must exercise jurisdiction irrespective of the parties' choice of seat, would undermine the supremacy accorded to party autonomy, dilute the doctrine of supervisory control of the seat court, and resurrect the very CPC-based territorial conflicts that the modern arbitration regime was designed to eliminate.
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42. Accordingly, applying the recent and binding authorities of the Supreme Court, this Court is of the view that where the parties have expressly designated a seat of arbitration, the courts at that seat constitute the "Court" under Section 2(1)(e) for all proceedings under Part-I, irrespective of the fact that the subject matter may concern immovable property located elsewhere. Determination of the Proper Jurisdictional Court: Rajarhat Commercial Court or the Calcutta High Court
43. In the present matter, the dispute is relating to a development agreement dated 07.04.2014 executed by the parties for the development of a multi storied building at Municipal Holding No. 148, Block A, Gopalpur, Jagardanga Main Road, Rajarhat Six Lane Expressway, Kolkata. The said premises fall within the territorial jurisdiction of the commercial Courts at Rajarhat.
44. It is an admitted and undisputed position that on two earlier occasions, first, at the instance of the Respondent by way of an application under Section 9 of the Arbitration and Conciliation Act, 1996, and subsequently, at the instance of the Appellant by preferring an appeal under Section 37(2), the Commercial Court at Rajarhat has exercised jurisdiction in matters arising out of the same arbitration agreement and the same arbitral proceedings.
45. In order to determine the jurisdictional issue, it is necessary to examine the relevant clauses of the Development Agreement governing the parties contractual arrangement.
Clause 12.1 "The place of arbitration shall be at Kolkata."
Clause 12.3 "In the event that the parties cannot resolve or settle a dispute through any of the means described above, the Court having territorial jurisdiction over the said premises and the High 13 Court at Kolkata shall have the jurisdiction to entertain and determine all actions, suits and proceedings arising out of these premises between the parties thereto."
46. Clause 12.1, which provides that "the place of arbitration shall be at Kolkata," operates as a forum selection clause for all disputes arising out of the agreement. Clause 12.3, which further states that "the Court having territorial jurisdiction over the said premises and the High Court at Kolkata shall have the jurisdiction," cannot be read as creating coordinate or concurrent supervisory jurisdiction for arbitration matters; rather, it merely preserves the jurisdiction of local civil courts for non-arbitral disputes relating to the premises, while all arbitration related proceedings remain tethered to the designated seat Kolkata and therefore fall exclusively within the jurisdiction of the Calcutta High Court under Section 2(1)(e) of the Act. When harmoniously construed, the clauses indicate that although disputes concerning the immovable property may be litigated before the court within whose territorial jurisdiction the property is situated, all actions "arising out of arbitration" are intended to lie solely before the Calcutta High Court as the court of the seat. A conjoint reading of Clauses 12.1 and 12.3 thus evinces a clear intention of the parties to designate Kolkata as the juridical seat of arbitration, thereby conferring exclusive supervisory jurisdiction on the Calcutta High Court over all arbitration proceedings. Applicability of Section 42 to Appeals Arising out of Arbitration Proceedings
47. Section 42 of the Arbitration and Conciliation Act, 1996 provides:
"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 14 the arbitral proceedings shall be made in that Court and in no other Court."
48. The expression "Court" in Section 42 is not used in a generic or open ended sense. It must be understood with reference to the definition contained in Section 2(1)(e), which identifies the judicial forum competent to entertain matters relating to the arbitration agreement, arbitral proceedings, and arbitral award.
49. At its core, Section 42 is a forum-fixing provision. Parliament introduced this mechanism to ensure that once Part-I of the Act is invoked before a jurisdictionally competent court, that court becomes the exclusive supervisory forum for all future applications arising from the same arbitration. The provision seeks to cure two identified mischiefs, (i) multiplicity of proceedings in different courts leading to parallel and conflicting interlocutory orders; and (ii) forum shopping by parties seeking tactical advantage.
50. The statutory design underlying Section 42 is that all proceedings under Part-I must travel under the umbrella of a single supervisory court once the initial application is filed. Legislative materials, judicial precedents, and authoritative commentaries consistently adopt a purposive construction of Section 42 in order to uphold this design. Any interpretation permitting splintered jurisdiction would defeat the very rationale for introducing Section
42.
51. Before examining the effect of Section 42 on the present matter, it is necessary to consider the scope of Pandey & Co. Builders (P) Ltd. (supra), relied upon by the Appellant to argue that Section 42 does not extend to appeals under Section 37.
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52. A close reading of Pandey & Co. Builders (supra) reveals that the Hon'ble Supreme Court was considering Section 42 in a narrow statutory context, namely, whether an application under Section 11, as it then stood, would attract the bar under Section 42. It is a settled position, reiterated across several Hon'ble Supreme Court decisions, that proceedings under Sections 8 and 11 do not fall within the sweep of Section 42 because such proceedings are not preferred before the "Court" as defined under Section 2(1)(e). The inquiry in Pandey & Co. Builders (supra) was therefore confined to determining whether Section 11 proceedings attract Section 42.
53. Crucially, the Hon'ble Supreme Court in Pandey & Co. Builders (supra) was not examining whether remedies under Section 37(1) or Section 37(2), which are inherently tied to orders passed under Part-I, constitute "applications" within the meaning of Section 42. The judgment contains no analysis of the nature of Section 37 proceedings, their position within the Part-I framework, or their interaction with the forum fixing mandate of Section 42.
54. The observation in paragraph 26 of Pandey & Co. Builders (supra) to the effect that Section 42 applies only to "applications" and not to "appeals" is therefore clearly obiter dicta. It was made in passing, without examining the architecture of Part-I or the practical consequences of excluding Section 37 appeals from the reach of Section 42.
55. Furthermore, the reasoning in Pandey & Co. Builders (supra) predates and does not account for subsequent authoritative pronouncements of the Hon'ble Supreme Court emphasising that Section 42 must be construed to avoid jurisdictional fragmentation and to ensure that a single supervisory court retains control over the arbitral process. Excluding Section 37 appeals 16 from the ambit of Section 42 would directly undermine these objectives and reintroduce the very mischief that Parliament sought to prevent.
56. To elevate the passing observation in Pandey & Co. Builders (supra) to a binding proposition that Section 42 excludes appeals under Section 37 would therefore enlarge the scope of an obiter, create statutory inconsistency, and produce outcomes that defy the purpose of the Act. By merely filing appeals in different fora, parties could circumvent the forum locking rule under Section 42 and engage in deliberate forum shopping.
57. There is an additional and significant reason why Section 42 must apply to appeals under Section 37(2), the internal structure of Section 37 itself.
58. Section 37 contains two distinct components, each with its own jurisdictional logic. Section 37(1) pertains to appeals arising from orders passed by a Court under Part-I, such as under Sections 9 or 34. For these appeals, Parliament uses the expression 'the Court authorised by law to hear appeals from original decrees of the Court passing the order'
59. This formulation recognises that when the originating order is passed by a civil court, the appeal must follow the appellate hierarchy under the CPC. Section 37(1) is thus anchored in the procedural framework of the CPC.
60. In contrast, Section 37(2) pertains to appeals from orders passed not by any Court, but by the arbitral tribunal itself, orders under Sections 16 and 17. Here, Parliament simply provides that 'an appeal shall lie to the Court against the following orders of the Arbitral Tribunal..." The word "Court" in Section 37(2), used without qualification, must necessarily refer to the definition in Section 2(1)(e). It cannot be read as referring to an appellate forum under the CPC, for the arbitral tribunal is not situated within the CPC 17 hierarchy. Appeals under Section 37(2) therefore lie exclusively to the Section 2(1)(e) court.
61. Once this deliberate distinction is appreciated, the interaction between Section 37(2) and Section 42 becomes clear. A Section 37(2) appeal, being directed to the Section 2(1)(e) court, is a continuation of the chain of Part-I remedies. It forms an intrinsic part of the supervisory jurisdiction envisaged under Sections 9, 14, 34 and allied provisions. It therefore qualifies as a proceeding falling within the broad expression "application under this Part"
in Section 42.
62. To hold that Section 42 applies to Section 34 petitions but not to appeals under Section 37(2) would create an untenable and illogical bifurcation. A party would be compelled to approach the Section 42 court for challenging a final award, yet be permitted to approach any court of convenience when challenging interim orders under Sections 16 or 17. This would result in precisely the fragmentation, multiplicity, and potential for conflicting orders that Section 42 was enacted to prohibit.
63. Such an interpretation would also be inconsistent with the Hon'ble Supreme Court's repeated reaffirmation that once jurisdiction under Part I is invoked, there must be a single supervisory court for the entire arbitral process.
64. Accordingly, when Section 37(2) is read harmoniously with Section 2(1)(e) and Section 42, the legislative intent becomes unequivocal, all challenges to orders of the arbitral tribunal, whether under Sections 16 or 17, must lie before the same Section 2(1)(e) court fixed by Section 42.
65. Consequently, Section 42 must necessarily apply to proceedings under Section 37(2). Any contrary interpretation would distort the statutory scheme and render the forum locking effect of Section 42 meaningless. 18
66. If appeals under Section 37 were held to fall outside Section 42, parties could effectively dismantle the provision by procedural manoeuvring: appeals could be filed in different courts, conflicting orders could proliferate, particularly in urgent Section 9 scenarios and the first court approached under Part-I would lose its supervisory coherence. Parliament cannot be presumed to have intended such a loophole. Courts have consistently rejected constructions that lead to absurdity or enable forum shopping. In this light, Pandey & Co. Builders (supra) cannot be regarded as laying down a reliable or preferred view in contemporary arbitration jurisprudence.
67. This position is reinforced by State of West Bengal Vs Associated Contractors reported as 2015 (1) SCC 32, wherein the Hon'ble Supreme Court held that Section 42 operates as a meaningful, not merely symbolic, forum locking mechanism. The objective is not merely to identify the first court approached, but to ensure that the arbitral process remains under the exclusive oversight of a single Court. A splintered jurisdiction would be incompatible with the purposive approach adopted by the Supreme Court across a consistent line of authorities. While party autonomy, especially in relation to the choice of seat, must be respected, Section 42 ensures that once Part-I is invoked, the arbitral proceedings follow a unified judicial trajectory.
68. For all the aforesaid reasons, this Court is of the considered view that Pandey & Co. Builders (supra) cannot be treated as binding authority for the proposition that Section 42 excludes appeals under Section 37(1) or 37(2). The passing reference in paragraph 26 is clearly obiter and must be confined to its narrow context, namely, the exclusion of Section 11 19 proceedings from the ambit of Section 42. The decision does not advance the Appellant's case.
Factual Finding qua the present matter
69. Having regard to the settled legal position delineated above, it becomes evident that, in the present matter, the parties have expressly chosen Kolkata as the seat of arbitration. Since the seat of Arbitration is in Kolkata, and disputes in question fall squarely within both the territorial and pecuniary jurisdiction of this Court, this Court is the Court for all purposes of Section 2(1)(e) of the Arbitration and Conciliation Act, 1996.
70. Now, the next issue to be determined is the effect of Section 42 of the Arbitration and Conciliation Act, 1996 in the factual matrix of the present case. The Respondent argues that the earlier applications filed by the parties before the Rajarhat Commercial Court attract the forum locking mandate of Section 42, thereby divesting this Court of jurisdiction. The question, therefore, is whether such filings trigger Section 42, notwithstanding the fact that the Rajarhat Commercial Court is not the supervisory Court under Section 2(1)(e).
71. Section 42 does not create jurisdiction. It only regulates jurisdiction among courts that are already competent. It serves as a forum fixing mechanism, not a jurisdiction conferring one. Therefore, unless the first application is filed before a Court competent under Section 2(1)(e), Section 42 cannot be invoked.
72. As held herein above, by virtue of the seat being Kolkata, it is this Court that constitutes the "Court" under Section 2(1)(e). It is equally clear that the Rajarhat Commercial Court does not and cannot constitute the supervisory Court under Section 2(1)(e), since the seat of arbitration is not located within 20 its jurisdiction. Therefore, the mere fact that two applications under Part-I were filed before that Court cannot, by itself, alter or displace the supervisory jurisdiction that flows from the seat. Non obstante clause as contained in Section 42 cannot confer jurisdiction where jurisdiction does not exist; it merely gives overriding effect to the substantive provision within which it appears.
73. Acceptance of the Respondents' contention would result in jurisdiction being created by accident, mistake, or strategic mischief, depending upon where a party chooses to file an application, an interpretation wholly inconsistent with the legislative architecture of the Act. The supervisory jurisdiction of the seat based court would become vulnerable to ouster merely because a party filed a proceeding before a court lacking jurisdiction. Such an interpretation would dismantle the very seat based framework affirmed by the Hon'ble Supreme Court.
74. Applying this interpretation to the facts at hand, the filings before the Rajarhat Commercial Court being before a court lacking supervisory jurisdiction in view of the seat at Kolkata, do not qualify as filings "in a Court" under Section 42. They are juridically irrelevant for the purposes of Section 42.
75. A reliance on Omaxe (supra) by the learned counsel for the Respondent is misplaced. That decision proceeds on the assumption that the first application was filed before a court which was otherwise competent under Section 2(1)(e). Omaxe (supra) merely holds that once a party approaches a court having lawful jurisdiction, Section 42 is attracted. In the present case, the Rajarhat Commercial Court was never the Section 2(1)(e) court, the seat of arbitration being Kolkata. A filing before a court lacking supervisory 21 competence cannot trigger Section 42. The principle in Omaxe (supra) therefore has no application to the facts of this case.
76. As a result, Section 42 was never triggered in the present matter by the parties' earlier applications. The jurisdiction of this Court, founded upon the seat, remains undisturbed.
77. In view of the above analysis, the prior applications filed before the Rajarhat Commercial Court do not attract Section 42, and the jurisdiction of this Court, arising from the chosen seat of arbitration at Kolkata, remains exclusive and unimpaired.
CONCLUSION
78. In view of the foregoing discussion and for the reasons recorded hereinabove, this Court arrives at the following conclusions:
(i) The jurisdictional court competent to entertain and determine the present proceedings, within the meaning of Section 2(1)(e) of the Arbitration and Conciliation Act, 1996, is this Court;
(ii) Section 42 of the Act applies with full rigour to appeals preferred under Section 37(2), such appeals being a continuation of proceedings arising out of applications made under Part-I of the Act;
and
(iii) Consequently, the present appeal is maintainable before this Court.
The preliminary objections as to jurisdiction are, therefore, rejected.
79. Let the matter be listed for further consideration after two weeks.
(GAURANG KANTH, J.) Sakil Amed P.A.