1981 (9) TMI 274 - SC - Companies Law

Whether the expression Court would comprehend appellate court in which the award can be filed? Held that - This Court is the Court having exclusive jurisdiction wherein the award dated November 11 1977 should be filed and we further direct the 1st respondent to approach the Registrar of the Delhi Court to collect the award alongwith the record of proceedings of the 3rd respondent in the reference made by this Court and the same be filed in this Court. We direct that on the receipt of the Award and the proceedings a notice of the filing of the award should be issued to the appellant and the 1st respondent and the further proceedings should be held. Petition allowed.

Issues Involved:
1. Jurisdiction of the court to entertain the award.
2. Filing of the award in the appropriate court.
3. Control and direction over arbitration proceedings.
4. Impact of previous court orders on jurisdiction.

Detailed Analysis:

1. Jurisdiction of the court to entertain the award:
The primary issue was determining which court had jurisdiction to entertain the arbitration award. The appellant contended that the Delhi High Court was the appropriate forum, while the respondent argued that the Supreme Court had jurisdiction due to its involvement in appointing the arbitrator and issuing subsequent directions.

The Court emphasized that Section 31(4) of the Arbitration Act, 1940, grants exclusive jurisdiction to the court where an application in any reference has been made, provided that court is competent to entertain it. This section overrides other provisions, ensuring that all subsequent applications related to the arbitration must be made to that court alone.

2. Filing of the award in the appropriate court:
The arbitrator initially approached the Supreme Court for filing the award but was advised by an officer to file it in the Delhi High Court. The respondent sought a declaration that the award should be filed in the Supreme Court, citing Sections 14(2) and 31(4) of the Act.

The Court clarified that the definition of "Court" in Section 2(c) must be applied unless repugnant to the context. The Court concluded that since the Supreme Court had appointed the arbitrator and issued directions regarding the arbitration proceedings, it retained jurisdiction over the matter. Consequently, the award should be filed in the Supreme Court.

3. Control and direction over arbitration proceedings:
The Supreme Court had previously appointed the third respondent as the sole arbitrator and directed the arbitration proceedings to commence within 15 days. Further directions were issued to ensure the proceedings were conducted expeditiously and concluded within four months.

The Court noted that its involvement did not cease with the disposal of the appeal. Subsequent applications and directions, including those regarding the conduct of arbitration proceedings, demonstrated that the Supreme Court retained control over the arbitration process.

4. Impact of previous court orders on jurisdiction:
The appellant argued that an application made to the Delhi High Court regarding a counter-claim indicated that the High Court had jurisdiction. However, the first respondent had challenged the High Court's jurisdiction, and the application was dismissed based on a compromise between the parties, not on jurisdictional grounds.

The Court emphasized that its previous orders, including the appointment of the arbitrator and directions for the arbitration proceedings, established its jurisdiction. The Supreme Court's control over the arbitration process was consistent with the decision in the State of Madhya Pradesh v. M/s Saith & Skelton (P) Ltd., where the Supreme Court retained jurisdiction over arbitration proceedings it had initiated.

Conclusion:
The Supreme Court allowed the petition, declaring that it had exclusive jurisdiction to entertain the award dated November 11, 1977. The Court directed the first respondent to collect the award and related records from the Delhi High Court and file them in the Supreme Court. Further proceedings would follow upon receipt of the award, with costs to be determined based on the final outcome. The petition was allowed, reinforcing the Supreme Court's jurisdiction over the arbitration proceedings and the filing of the award.

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