Orissa High Court
Constitution Of India vs Mahanadi Coalfields Limited & .... ... on 20 June, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 24-Jun-2025 16:53:36
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 12707 of 2024
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
M/S. GSCO (Gurmeet Singh and .... Petitioner(s)
Company)Infrastructure Pvt. Ltd.
-versus-
Mahanadi Coalfields Limited & .... Opposite Party (s)
Ors.
Advocates appeared in the case throughHybrid Mode:
For Petitioner(s) : Mr.Avijit Patnaik, Adv.
For Opposite Party (s) : Mr. Rakesh Sharma, Adv.
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-24.04.2025
DATE OF JUDGMENT:-20.06.2025
Dr. S.K. Panigrahi, J.
1. The present Writ Petition has been filed invoking the extraordinary jurisdiction of this Court under Article 226 and 227 of the Constitution assailing the legality and sustainability of the order dated 06.03.2024 passed by the Learned District and Sessions Judge, Sundargarh in Arbitration Case No. 05 of 2021. Vide the said order, the court below Page 1 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 dismissed the petitioner's application dated 27.09.2022 which had prayed for the dismissal of the Section 34 petition filed by Mahanadi Coalfields Limited (MCL) on the ground of territorial incompetence and bar of limitation.
2. The principal contention raised in the Writ Petition is that the Learned District Judge, Sundargarh lacked the jurisdiction to entertain the Section 34 application filed by MCL, in view of the overriding mandate of Section 42 of the Arbitration and Conciliation Act, 1996 read with the provisions of the Commercial Courts Act, 2015. The petitioner asserts that the Court at Cuttack, being the seat of arbitration and the court which appointed the Arbitrator under Section 11 of the A&C Act, alone has the requisite jurisdiction to entertain post-award challenges under Part I of the Act.
I. FACTUAL MATRIX OF THE CASE:
3. The brief facts of the caseare asfollows:
(i) The dispute arises out of a contract awarded to the petitioner pursuant to e-Tender Notice No. CL/SBP/GM/(CMC)/NIT- 088/2012/2986 dated 07.11.2012 for "Hiring of HEMM (Shovel, Drill, Dozer etc.) for transfer & transportation of materials in various strata including drilling, excavation, dumping, spreading, dozing and other allied works" at Kulda OCP, Basundhara-Garjanbahal Area under Mahanadi Coalfields Ltd. (MCL). The petitioner, M/s GSCO Infrastructure Pvt. Ltd., was the successful bidder, and the agreement was duly executed between the parties.
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Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36
(ii) The work was carried out and ultimately completed to the satisfaction of MCL. A Completion Certificate dated 03.07.2016 was issued by Opposite Party No.4 (Project Officer, Kulda OCP) acknowledging that the petitioner had completed the assigned scope of work on 29.06.2016.
(iii) Thereafter, disputes arose in relation to alleged wrongful deduction of amounts, withholding of security deposits, non-refund of performance guarantees, and imposition of penalties. Aggrieved thereby, the petitioner approached this Court in W.P.(C) Nos. 19909/2016, 473/2017, and 474/2017.
(iv) These were disposed of by a common order dated 25.03.2019, whereby this Court was pleased to appoint Hon'bleMr. Justice M.M. Das (Retd.) as the Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 to adjudicate all disputes.
(v) In pursuance of the said order, three connected arbitration proceedings, Arbitration Case Nos. 1, 2, and 3 of 2020, were initiated and conducted. The entire arbitration proceedings, including hearings, submissions, and evidence, were held at Cuttack, which was also the designated seat of arbitration.
(vi) After due adjudication, the learned Sole Arbitrator passed a common arbitral award dated 25.10.2021, allowing several claims of the present petitioner. The relevant extract of the operative part of the award is as follows:
a. MCL was directed to refund ₹3,35,72,511.85 to the claimant (present petitioner) towards various withheld dues.Page 3 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 b. MCL was further directed to return all Bank Guarantees deposited by the claimant, which had been withheld in violation of the contractual terms.
c. Interest at the rate of 12% per annum was awarded on the above amount from the date of award till actual payment.
(vii) Despite receipt of the award, the respondent-MCL did not comply with the directions therein. Instead, on 24.11.2021, it filed three separate petitions under Section 34 of the A&C Act before the District Judge, Sundargarh, being Arbitration Case Nos. 05, 06, and 07 of 2021, seeking to set aside the said award.
(viii) In response, the present petitioner filed an application under Section 151 CPC dated 27.09.2022 before the same Court, raising a preliminary objection to the maintainability of the proceedings on two counts:
a. That the Section 34 petitions were barred by limitation under Section 34(3) of the Act, having been filed beyond the statutory period.
b. That the District Judge, Sundargarh lacked territorial jurisdiction to entertain the petitions, in view of Section 42 of the A&C Act and the seat of arbitration being at Cuttack.
(ix) By order dated 06.03.2024, the learned District Judge, Sundargarh rejected the petitioner's application and held that the Section 34 petitions were maintainable before it. Aggrieved thereby, the petitioner has approached this Court in the present writ petition. Page 4 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
4. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions:
(i) The primary argument canvassed by the petitioner is that the Court at Cuttack alone has jurisdiction to entertain any application under Part I of the A&C Act since the appointment of the arbitrator was made by this Court, the arbitration proceedings were conducted entirely at Cuttack, and the award was rendered from Cuttack. Therefore, in terms of Section 42 of the Act, no other Court can assume jurisdiction in respect of the said arbitration agreement.
(ii) It is further submitted that the Commercial Courts Act, 2015 mandates that commercial disputes of a specified value must be adjudicated exclusively by designated Commercial Courts. Section 10(3) read with the Government of Odisha's Notification dated 13.11.2020 establishes the Commercial Court at Sambalpur with jurisdiction over the Judgeships of Sambalpur, Bargarh, Deogarh, and Jharsuguda.
Notably, Sundargarh district is not included therein.
(iii) In the absence of any designated Commercial Court for Sundargarh and in light of the seat of arbitration being at Cuttack, it is contended that only the Commercial Court at Cuttack or Sambalpur (if jurisdictionally competent) could have entertained the Section 34 petition. It is further argued that since Section 11 proceedings were instituted and concluded at Cuttack and the award itself was delivered at Cuttack, the principle of exclusive jurisdiction under Section 42 squarely applies.
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(iv) Reliance is placed on authoritative precedents including BGS SGS Soma JV v. NHPC Ltd1., and State of West Bengal v. Associated Contractors2, to buttress the proposition that once a Court is approached under Part I of the Act, all future proceedings must be confined to that Court alone. The petitioner also invokes M.G. Mohanty v. State of Odisha3to establish that the Commercial Courts Act is not inconsistent with the Arbitration Act and does not dilute the application of Section 42.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
5. The Learned Counsel for the Opposite Parties earnestly made the following submissions in support of his contentions:
(i) The opposite parties, on the other hand, submit that the jurisdiction to entertain the Section 34 application rightly vests with the District Judge, Sundargarh. This is based on the specific contractual stipulation in Clause 40 of the General Terms and Conditions of Contract which stipulates that all disputes arising from the contract shall be subject to the jurisdiction of the District Court where the work is executed i.e. Sundargarh.
(ii) It is argued that the seat of arbitration or the place where the award was rendered is not determinative of jurisdiction under Section 34 when there exists a contractual clause conferring territorial jurisdiction. It is also asserted that Section 2(1)(e) of the A&C Act, which defines "Court", when read with Section 42, emphasizes that 1 (2020) 4 SCC 234.2
(2015) 1 SCC 32.3
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021. Page 6 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 the principal civil court of original jurisdiction within whose local limits the cause of action arises has jurisdiction, therefore, Sundargarh Court is competent.
(iii) The opposite parties further argue that Sundargarh not falling within the territorial jurisdiction of the notified Commercial Courts (as per the 2020 Notification) reinforces that the regular District Court at Sundargarh alone is empowered to entertain the Section 34 petition.
(iv) Lastly, it is submitted that the arbitration clause does not override the explicit jurisdiction clause within the contract and that the mere conduct of arbitration proceedings at Cuttack or appointment of arbitrator by the High Court does not confer exclusive jurisdiction on the Commercial Court at Cuttack.
IV. ISSUES FOR CONSIDERATION: (i) Whether the District Judge, Sundargarh lacked territorial jurisdiction
to entertain the petitions under Section 34 of the Arbitration and Conciliation Act, 1996, in view of the seat of arbitration being at Cuttack and the prior invocation of jurisdiction by this Court under Section 11?
(ii) Whether the bar under Section 42 of the Arbitration and Conciliation Act, 1996 operates to oust the jurisdiction of any Court other than the one which was first approached under Part I of the Act, namely, the High Court of Orissa at Cuttack?
(iii) Whether in view of the Commercial Courts Act, 2015 and the Government of Odisha Notification dated 13.11.2020, which designates the jurisdiction of Commercial Courts over specific Page 7 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 Judgeships, the District Judge, Sundargarh could have exercised jurisdiction in respect of the arbitration award in question?
(iv) Whether the application under Section 34 filed before the District Judge, Sundargarh is hit by the bar of limitation under Section 34(3) of the A&C Act, in view of the undisputed receipt of the award by MCL and the timeline of filing?
V. COURT'S REASONING AND ANALYSIS:
6. Heard Learned Counsel for parties and perused the documents placed before this Court.
7. The first issue to be considered is whether the Learned District Judge, Sundargarh possessed the requisite territorial jurisdiction to entertain the petitions under Section 34 of the Arbitration and Conciliation Act, 1996, in view of the seat of arbitration being Cuttack and the prior invocation of jurisdiction by this Court in the Section 11 proceedings. It is by now trite that the concept of "seat" of arbitration is of seminal importance under the scheme of the Act.
8. This principle, first elucidated in the context of domestic arbitrations by the Constitution Bench in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services4and later in Indus Mobile Distribution (P) Ltd. v. Datawind Innovations (P) Ltd.5, marks a clear departure from the traditional Code of Civil Procedure approach that tied jurisdiction to where the cause of action arose. In arbitration law, once the seat is designated, it is treated as conferring exclusive jurisdiction 4 (2012) 9 SCC 552.
52017 (7) SCC 678.
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Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 on the courts at that location, irrespective of where the underlying dispute or cause of action arose. As the Supreme Court in Indus Mobile(Supra) clarified:
"19. The amended Act, does not, however, contain the aforesaid amendments, presumably because the BALCO judgment in no uncertain terms has referred to "place" as "juridical seat" for the purpose of Section 2(2) of the Act. It further made it clear that Section 20(1) and 20 (2) where the word "place" is used, refers to "juridical seat", whereas in Section 20 (3), the word "place" is equivalent to "venue". This being the settled law, it was found unnecessary to expressly incorporate what the Constitution Bench of the Supreme Court has already done by way of construction of the Act.
20. A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction - that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Section 16 to 21 of the CPC be attracted. In arbitration law however, as has been held above, the moment "seat" is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties."
9. Applying the above law to the facts of the present case, it stands undisputed that the entire arbitration proceedings, including the Page 9 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 hearing, recording of evidence, and passing of the award, were conducted at Cuttack. Furthermore, the appointment of the learned Sole Arbitrator was made by this Court exercising its jurisdiction under Section 11(6) of the Act. In such circumstances, Cuttack must be treated as the juridical seat of arbitration, and by necessary implication, the courts at Cuttack alone are vested with exclusive jurisdiction to entertain any application under Part I of the Act, including a petition under Section 34. Once parties expressly or impliedly chose Cuttack as the seat, the law assigns "exclusive jurisdiction" to the courts of that seat for all proceedings concerning arbitration.
10. The opposite party urged that Clause 40 of the contract confers territorial jurisdiction on courts at Sundargarh, since the contract was executed and the project located in Sundargarh. In the present case, Clause 40 of the contract cannot resurrect the jurisdiction of Sundargarh in face of the parties' arbitration having been anchored at Cuttack. It is noteworthy that Clause 40 is a standard forum selection clause for disputes under the contract; but once those disputes were referred to arbitration and a seat was chosen for that arbitration, the selection of seat supplants the general forum clause.
11. The petitioner rightly invokes Section 42 of the Act as an additional buttress to its case on jurisdiction. Section 42 begins with a broad non- obstante clause and mandates that once a party has approached a "Court" for any application under Part I of the Act, all subsequent applications arising out of that arbitration agreement shall be made in Page 10 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 that same Court and no other. This provision aims to prevent forum shopping and conflicting rulings by different courts in relation to the same arbitration.
12. In Associated Contractors (Supra) the Supreme Court applied Section 42 in exactly such a scenario. In that case, a Section 9 application had been made to the Calcutta High Court, and a later Section 34 was filed in a District Court in another jurisdiction. The Supreme Court held that by virtue of Section 42, the Calcutta High Court, being the court first approached, had exclusive jurisdiction to entertain the Section 34 petition; the District Court's assumption was held to be in error. The relevant excerpts are produced below:
"18...In case an application is made, as has been made in the present case, before a particular court, Section 42 will apply to preclude the making of all subsequent applications under Part-I to any court except the court to which an application has been made under Section 9 of the Act..
...
21. One other question that may arise is as to whether Section 42 applies after the arbitral proceedings come to an end. It has already been held by us that the expression "with respect to an arbitration agreement"are words of wide import and would take in all applications made before during or after the arbitral proceedings are over. In an earlier judgment, KumbhaMawji v. Dominion of India, (1953) SCR 878, the question which arose before the Supreme Court was whether the expression used in Section 31(4) of the 1940 Act "in any reference" would include matters that are after the arbitral proceedings are over and have culminated in an award. It was held that the words "in any reference" cannot be taken to mean "in Page 11 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 the course of a reference", but mean "in the matter of a reference" and that such phrase is wide enough and comprehensive enough to cover an application made after the arbitration is completed and the final Award is made.
(See Paras 891-893). As has been noticed above, the expression used in Section 42 is wider being "with respect to an arbitration agreement" and would certainly include such applications."
13. The abovementioned precedent squarely covers the present situation.
Here, the first application under Part I was the Section 11(6) petition before the Orissa High Court, for appointment of the arbitrator. That High Court at Cuttack, which is indeed a "Court" as defined in Section 2(1)(e) for this purpose, was thus the court initially seized of the arbitral dispute. By operation of Section 42, "that Court alone"
would have the jurisdiction over all subsequent applications arising from the same arbitration agreement. Consequently, the Section 34 petitions filed before the Sundargarh court are barred by Section 42, since the Orissa High Court had already been invoked in respect of the arbitration.
14. It is contended by the Opposite Party that Section 42 should not bar the Sundargarh court's jurisdiction. This argument is misconceived. The language of Section 42 is couched in mandatory terms and begins with a non-obstante clause: "Notwithstanding anything contained elsewhere in this Part...".It provides that once a Court has been approached under Part I of the Act, that Court alone shall have jurisdiction over all subsequent applications arising from the Page 12 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 arbitration agreement. The only caveat to this rule was provided in the BGS SGS Soma (Supra) wherein it was held as follows:
"Section 42 is meant to avoid conflicts in jurisdiction of Courts by placing the supervisory jurisdiction over all arbitral proceedings in connection with the arbitration in one Court exclusively. This is why the section begins with a non-obstante clause, and then goes on to state "...where with respect to an arbitration agreement any application under this Part has been made in a Court..." It is obvious that the application made under this part to a Court must be a Court which has jurisdiction to decide such application. The subsequent holdings of this Court, that where a seat is designated in an agreement, the Courts of the seat alone have jurisdiction, would re- quire that all applications under Part I be made only in the Court where the seat is located, and that Court alone then has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitral agreement. So read, Section 42 is not rendered in- effective or useless. Also, where it is found on the facts of a particular case that either no "seat" is designated by agreement, or the so- called "seat" is only a convenient "venue", then there may be several Courts where a part of the cause of action arises that may have jurisdiction. Again, an application under Section 9 of the Arbitration Act, 1996 may be preferred before a court in which part of the cause of action arises in a case where parties have not agreed on the "seat" of arbitration, and before such "seat"
may have been determined, on the facts of a particular case, by the Arbitral Tribunal under Section 20(2) of the Arbitration Act, 1996. In both these situations, the earliest application having been made to a Court in which a part of the cause of action arises would then be the exclusive Court under Section 42, which would have control over the arbitral proceedings. For all these reasons, Page 13 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 the law stated by the Bombay and Delhi High Courts in this regard is incorrect and is overruled."
15. In the present case, the Section 11 application was not only first in point of time but was also filed before this Court at Cuttack, which undisputedly has jurisdiction as the seat of arbitration. Therefore, the objection to the applicability of Section 42 is untenable. The Court accordingly finds that the District Judge, Sundargarh ought to have declined to entertain the Section 34 petitions on this ground alone, instead of rejecting the petitioner's objection.
16. The Opposite Party's reliance on Section 2(1)(e) of the Act (the definition of "Court") and the traditional notions of cause of action is also misplaced. Post-BALCO, the law is settled that the phrase "subject-matter of the arbitration" in Section 2(1)(e) does not refer to the subject-matter of the underlying dispute (as a civil suit would), but to the subject-matter of the arbitration proceedings, which is intrinsically connected to the location of the arbitration (the seat). In the BALCO (Supra) case, the Constitution Bench cautioned the following:
"96...The term 'subject matter' in Section 2(1)(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration...the legislature has intentionally given jurisdiction to two courts i.e. the court where the cause of action is located, and the courts where the arbitration takes place....where the arbitration is held at a neutral venue chosen by the parties, the courts at the seat would exercise supervisory Page 14 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 jurisdiction, irrespective of where the obligations under the contract were performed."
17. In line with this, the Supreme Court in Indus Mobile (Supra) reiterated that in arbitration law, the seat is the center of gravity, and the Civil Procedure Code's cause-of-action based jurisdiction has a limited role once the seat is designated. The Opposite Party's argument that Sundargarh courts have jurisdiction because the contract was executed or performed there is a relic of the pre-BALCO era. While multiple courts could theoretically have jurisdiction if no seat was specified (based on where the cause of action arose), that principle yields once the seat is agreed or determined. Here, since Cuttack is the seat, the "court having jurisdiction" under Section 2(1)(e) is the court at Cuttack, and not Sundargarh, regardless of where the work was executed or the contract signed.
18. Moreover, even if one were to momentarily consider the cause-of-
action paradigm: the record indicates that significant aspects of the arbitration, including the signing of terms of reference, conduct of hearings, and ultimately the issuance of the award, took place at Cuttack. These factors further tether the jurisdiction to Cuttack if cause of action were relevant. But, as discussed, the legal position post-BALCO is that it is the seat that is determinative. The Orissa High Court at Cuttack, and by extension the District Court, Cuttack, are the courts vested with jurisdiction to supervise this arbitration. The District Judge, Sundargarh, in proceeding to entertain the Section 34 petitions, acted beyond his jurisdictional competence. His decision to Page 15 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 reject the petitioner's objection on this point cannot withstand the scrutiny of the aforementioned settled legal principles.
19. An ancillary issue raised by the petitioner pertains to the Commercial Courts Act, 2015 and the State Government Notification dated 13.11.2020 issued thereunder. The petitioner submits that the State of Odisha has, by this Notification, designated certain courts for entertaining "commercial disputes" (which include arbitration matters of a specified value), and that Sundargarh is not a notified venue for a Commercial Court with jurisdiction over the subject dispute. Without delving into the granular details of the Notification, this Court notes that the arbitration award in question arises from a commercial contract and, given the value, the challenge thereto should indeed be heard by a designated Commercial Court as per the 2015 Act.
20. Even if arguendo Sundargarh's District Judge were otherwise competent, the absence of a Commercial Court designation for Sundargarh at the relevant time would pose an additional legal impediment to the maintainability of the Section 34 petitions there. In other words, the proper forum under the Commercial Courts regime would lie elsewhere. This reinforces the conclusion that the petitions were filed in the wrong forum. However, since the core jurisdictional invalidity has already been established on the basis of the seat and Section 42, the Court need not rest its decision on the Commercial Courts Act aspect alone. It is noted here only to highlight that the Page 16 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 petitioners' objection to jurisdiction finds support from multiple angles, statutory and factual.
21. Aside from jurisdiction, the petitioner also contends that the Opposite Party's challenges under Section 34 were barred by limitation under Section 34(3) of the Act. The arbitral award was passed and received by the parties long before the filing of the petitions in Sundargarh, and on the petitioner's calculation, the filing exceeded the period of three months (and even the condonable grace period of 30 days) from the date of receipt of the award. On this aspect, the legal position is clear and inflexible: an application to set aside an award must be made within three months from the date on which the party received the arbitral award, and a further delay of only up to 30 days can be condoned for sufficient cause, but not thereafter. The Supreme Court outlined this principle in the case of M/s. Simplex Infrastructure Ltd. v. Union of India6. The relevant excerpts are produced below:
"13. A plain reading of sub-section (3) along with the proviso to Section 34 of the 1996 Act, shows that the application for setting aside the award on the grounds mentioned in sub-section (2) of Section 34 could be made within three months and the period can only be extended for a further period of thirty days on showing sufficient cause and not thereafter. The use of the words "but not thereafter" in the proviso makes it clear that the extension cannot be beyond thirty days. Even if the benefit of Section 14 of the Limitation Act is given to the respondent, there will still be a delay of 131 days in filing the application. That is beyond the strict timelines prescribed in sub-section (3) read along with the proviso 6 2019 (2) SCC 455.Page 17 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 to Section 34 of the 1996 Act. The delay of 131 days cannot be condoned. To do so, as the High Court did, is to breach a clear statutory mandate."
22. In the present case, the District Judge, Sundargarh appears to have taken a lenient view of the delay, perhaps under the impression that filing in a wrong forum or other logistical issues could excuse the time overrun. However, even if the petitions in Sundargarh were treated as initially filed in the wrong court, the time spent there could at best be sought to be excluded under Section 14 of the Limitation Act on a refiling in the correct court, but such refiling never happened within the permissible window. The Opposite Party chose to persist in the wrong court and by the time this issue is being adjudicated, the delay far exceeds what is condonable. Therefore, quite apart from the lack of jurisdiction, the Section 34 petitions are plainly time-barred. The District Judge's refusal to reject the petitions on the ground of limitation was a material illegality, as it amounted to entertaining a time-barred challenge contrary to the statute.
VI. CONCLUSION:
23. For the foregoing reasons, this Court finds that the learned District Judge, Sundargarh lacked jurisdiction to entertain the Opposite Party's Section 34 petitions, owing to the arbitration's seat being at Cuttack and the mandate of Section 42 of the Act which tied all subsequent proceedings to the court first approached. The attempted reliance on a contract clause for Sundargarh and on cause-of-action factors is unavailing in light of settled law giving primacy to the seat Page 18 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 of arbitration. Moreover, the petitions were filed beyond the period of limitation prescribed under Section 34(3) and therefore could not have been entertained on that ground as well.
24. Accordingly, the impugned order of the learned District Judge, Sundargarh, which rejected the petitioner's objections and assumed jurisdiction, is unsustainable in law. It is hereby quashed. The Section 34 petitions filed by the Opposite Party before the learned District Judge, Sundargarh are held to be not maintainable for want of jurisdiction and are liable to be dismissed as time-barred.
25. The Writ Petition is allowed with the above findings, leaving the parties to pursue any remedy available in the proper forum at Cuttack, subject of course to limitation.
26. Accordingly, the Writ Petition is allowed.
27. Interim order, if any, passed earlier stands vacated.
(Dr.S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the 20th June, 2025/ Page 19 of 19