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TMI Blog2014 (1) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... lants would, in fact, render Section 20 nugatory - Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process - both the Courts would have jurisdiction, i.e., the Court within whose jurisdiction the subject matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution, i.e., arbitration is located. It is not open to the appellants to advance such submission before this Court. Firstly, because the appellants had in paragraph 8 of the reply affidavit filed before the High Court, clearly acknowledged the legal position, that both the High Court as also the District Judge, Thane, in so far as the present controversy is concerned, fall within the definition of the term Court under Section 2(1)(e) of the Arbitration Act. And secondly, because the impugned order passed by the High Court expressly notices in paragraph 10, that it was admitted by the rival parties before the High Court, that the High Court on the original side, as also the District Judge, Thane, had the jurisdiction in respect of the subject matter. A perusal of Section 42 of Arbitration Act reveals a cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment, awarded a contract dated 12.7.2000 to the respondent-Atlanta Limited (a public limited company) for the construction of the Mumbra byepass. On 11.5.2005, a supplementary agreement for additional work was executed between the parties. It would be relevant to mention, that the Mumbra byepass falls on National highway no. 4. The construction envisaged in the contract awarded to the respondent-Atlanta Limited was, from kilometer 133/800 to kilometer 138/200. The contract under reference envisaged, settlement of disputes between the parties, through arbitration. Atlanta Limited raised some disputes through a communication dated 1.10.2009. It also invoked the arbitration clause for resolution of the said disputes. The State of Maharashtra as also Atlanta Limited nominated their respective arbitrators, who in turn, appointed the presiding arbitrator. On the culmination of proceedings before the arbitral tribunal, an award was rendered on 12.5.2012. Almost all the claims raised by Atlanta Limited were granted. In sum and substance, Atlanta Limited was awarded a sum of Rs.58,59,31,595/- along with the contracted rate of interest (of 20 per cent per annum), with effect from 1.10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , once I find that the Respondents have no objection to consolidation of the proceedings so as to avoid conflicting decisions or simultaneous trial/hearing, then, all the more, the powers to transfer needs to be exercised in this case. It is undisputed that the parties are common to both matters. In both matters the same Award is under scrutiny. In such circumstances, the argument that both Petitions need to be consolidated but before the District Court at Thane cannot be accepted. That would mean two Courts render decisions and more or less on the same issue and may be at the same time. The arbitration petition filed by the Petitioners in this Court is already placed before the Single Judge of this Court and is now adjourned. It would be proper if the proceedings before the District Court, Thane are brought and are heard along with the Petition filed by the Petitioners in this Court. 33. As a result of the above discussion, this application succeeds. It is made absolute in terms of prayer clause (a) with no order as to costs. The above determination by the High Court, vide its order dated 15.3.2013, is the subject matter of challenge through Special leave Petition (C) No.18980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er reference, in order to settle the dispute inter-parties, it would have been imperative for the parties to raise their respective challenges only before the District Judge, Thane. 7. For the above submission, learned counsel also placed reliance on Section 16 of the Code of Civil Procedure. Section 16, according to learned counsel, would be relevant to determine the jurisdictional court, if the dispute had been agitated through a civil suit. Section 16 aforementioned is being extracted hereunder: 16. Suits to be instituted where subject-matter situate. Subject to the pecuniary or other limitations prescribed by any law, suits,-- (a) for the recovery of immovable property with or without rent or profits, (b) for the partition of immovable property, (c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, (d) for the determination of any other right to or interest in immovable property, (e) for compensation for wrong to immovable property, (f) for the recovery of movable property actually under distraint or attachment, shall be instituted in the Court within the local limits of whose jurisdiction the property is situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. Other suits to be instituted where defendants reside or cause of action arises. Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction -- (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry or business, or personally work for gain, as aforesaid, acquiesce in such institution ; or (c) the cause of action, wholly or in part, arises. Explanation .--A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. Illustrations (a) A is a tradesman in Calcutta, B carries on business in Delhi. B , by his a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emphasis is ours) In view of the stand adopted in writing by the appellants, in response Miscellaneous Civil Application no. 162 of 2012, it was sought to be asserted, that the appellants had no right to raise the issue of jurisdiction before this Court. 10. Despite the objection noticed in the aforegoing paragraphs, it was the vehement contention of the learned counsel for the respondent, that the High Court and not the District Judge, Thane, had the jurisdiction to adjudicate the controversy raised by the rival parties with reference to the award of the arbitral tribunal dated 12.5.2012. In order to make good the aforesaid submission, it was asserted, that the contractual agreement dated 12.7.2000, as also, the supplementary agreement dated 11.5.2005, were executed at Mumbai. Additionally, it was submitted that the parties had mutually agreed, that the seat of arbitration in case of any disputes arising between the parties, would be at Mumbai. Relying on the aforesaid undisputed factual position, learned counsel for the respondent invited our attention to the determination rendered by this Court in Bharat Aluminium Company Ors. vs. Kaiser Aluminium Technical Services Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve jurisdiction to the courts where the arbitration takes place, which otherwise would not exist. On the other hand, Section 47 which is in Part II of the Arbitration Act, 1996 dealing with enforcement of certain foreign awards has defined the term "court" as a court having jurisdiction over the subject-matter of the award. This has a clear reference to a court within whose jurisdiction the asset/person is located, against which/whom the enforcement of the international arbitral award is sought. The provisions contained in Section 2(1)(e) being purely jurisdictional in nature can have no relevance to the question whether Part I applies to arbitrations which take place outside India. 98. We now come to Section 20, which is as under: 20. Place of arbitration (1) The parties are free to agree on the place of arbitration. (2) Failing any agreement referred to in Sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding Sub-section (1) or Sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel appearing on behalf of the Petitioner submitted that in the Affidavit-in-Reply which has been filed in this petition, it is admitted by the Respondents that the place of arbitration in terms of the arbitration clause in the contract was Mumbai. It is also admitted that both, this Court on the Original Side and the District Court at Thane have jurisdiction in respect of the subject matter in issue. (emphasis is ours) It was therefore not open to the appellants to canvass before this Court that the High Court of Bombay in exercise of its ordinary original civil jurisdiction could not adjudicate upon the present controversy, on account of lack of jurisdiction. We shall therefore proceed in the first instance, on the premise that both the courts referred to above had jurisdiction in the matter. We shall independently record our reasons for the same, while dealing with the submissions advanced before us. We have chosen to do so, because we are of the view, that an important jurisdictional issue has been raised, which needs to be settled, one way or the other. We shall therefore, decide the controversy on merits, irrespective of the position expressed by the appellant, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -specific, since Mumbra byepass is located on the Mumbai-Pune road (on national highway no. 4) and falls in Thane District, the District Judge, Thane, ought to be natural choice for consideration of the issues advanced by the appellants, as also the respondent. Secondly, according to the learned counsel for the appellants, the definition of the term Court expressed in Section 2(1)(e) of the Arbitration Act uses the expression subject matter and not cause of action . While cause of action can be referable to places where the works contract is executed, or where arbitration proceedings were conducted; the term subject matter used in Section 2(1)(e) of the Arbitration Act is only referable to the subject matter of the works contract, with respect to which the dispute is raised (with respect to which, there was a direction for extension of the concession period, under the award). Accordingly it was submitted, that although the High Court may also have jurisdiction, the District Court Thane is more natural , more suitable and more appropriate for the adjudication of the claims, raised by the rival parties. Thirdly it was contended, that the original side of the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf it was submitted, that there were only 42 petitions filed under Section 34 of the Arbitration Act before the District Judge, Thane, during the entire year 2012, whereas, there were 1317 petitions filed under Section 34 before the High Court of Bombay, under its ordinary original civil jurisdiction , during the year 2012. Referring to the preceding three years, namely, 2009, 2010 and 2011 it was submitted, whereas a very few petitions were filed under Section 34 of the Arbitration Act before the District Judge, Thane, as many as, 1033, 1443 and 1081 petitions respectively (were filed under Section 34 of the Arbitration Act) were filed during the three years before the High Court of Bombay. Based on the above factual position it was submitted, that it could be expected that the District Judge, Thane, would dispose of the matters under reference within a short period of about five years, whereas it was likely that the disposal of the said matters will take more than two decades if the matters are required to be adjudicated by the original side of the High Court of Bombay. On the instant aspect of the matter also, referring to available data it was submitted, that it takes more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreements, arbitral proceedings and arbitral awards. Undoubtedly, a principal Civil Court of original jurisdiction in a district , is the superior most court exercising original civil jurisdiction in the district over which its jurisdiction extends. It is clear, that Section 2(1)(e) of the Arbitration Act having vested jurisdiction in the principal Civil Court of original jurisdiction in a district , did not rest the choice of jurisdiction on courts subordinate to that of the District Judge. Likewise, the High Court in exercise of its ordinary original jurisdiction , is the superior most court exercising original civil jurisdiction, within the ambit of its original civil jurisdiction. On the same analogy and for the same reasons, the choice of jurisdiction, will clearly fall in the realm of the High Court, wherever a High Court exercises ordinary original civil jurisdiction . Under the Arbitration Act, therefore, the legislature has clearly expressed a legislative intent, different from the one expressed in Section 15 of the Code of Civil Procedure. The respondent had chosen to initiate proceedings within the area of Greater Mumbai, it could have done so only before the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e jurisdiction of District Thane, wherein the instant matters could have been agitated. Therefore, the appellants having chosen to initiate the proceedings before the District Judge, Thane, i.e., in respect of a cause of action falling in the territorial jurisdiction of the District Thane, they too must be deemed to have chosen the rightful court i.e., the District Judge, Thane. 21. Shorn of the aforesaid determination, our only understanding of the submission advanced at the hands of the learned counsel for the appellants would be, that as a matter of natural choice , as a matter of suitable choice , as also, as a matter of more appropriate choice , the controversies raised by the rival parties ought to be collectively determined by the District Court, Thane, and not by the High Court of Bombay (in exercise of its ordinary original civil jurisdiction ). In order to supplement the aforesaid contention, learned counsel for the appellant had depicted the quantum of filing of similar petitions before the High Court, as also, before the District Court Thane, and the time likely to be taken for the disposal of such matters by the Courts under reference. There is no statutory provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rise in more than one court simultaneously. To remedy such a situation Section 42 of the Arbitration Act mandates, that the court wherein the first application arising out of such a challenge is filed, shall alone have the jurisdiction to adjudicate upon the dispute(s), which are filed later in point of time. The above legislative intent must also be understood as mandating, that disputes arising out of the same arbitration agreement, arbitral proceeding or arbitral award, would not be adjudicated upon by more than one court, even though jurisdiction to raise such disputes may legitimately lie before two or more courts. 23. Ordinarily Section 42 of the Arbitration Act would be sufficient to resolve such a controversy. For the determination of the present controversy, however, reliance cannot be placed on Section 42 of the Arbitration Act, because the State of Maharashtra had moved Miscellaneous Civil Application No. 229 and Miscellaneous Civil Application No 230 of 2012 under Section 34 of the Arbitration Act before the District Judge, Thane, on the same day as Atlanta Limited had filed Arbitration Petition No. 1158 of 2012 before the High Court. In this behalf it may be mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defines the term Court . We shall endeavour to determine this issue, by examining how litigation is divided between a High Court exercising ordinary original civil jurisdiction , and the principal civil court of original jurisdiction in a district. What needs to be kept in mind is, that the High Court of Bombay is vested with ordinary original civil jurisdiction over the same area, over which jurisdiction is also exercised by the principal Civil Court of original jurisdiction for the District of Greater Mumbai (i.e. the Principal District Judge, Greater Mumbai). Jurisdiction of the above two courts on the ordinary original civil side is over the area of Greater Mumbai. Whilst examining the submissions advanced by the learned counsel for the appellant under Section 15 of the Code of Civil Procedure, we have already concluded, that in the above situation, jurisdiction will vest with the High Court and not with the District Judge. The aforesaid choice of jurisdiction has been expressed in Section 2(1)(e) of the Arbitration Act, without any fetters whatsoever. It is not the case of the appellants before us, that because of pecuniary dimensions, and/or any other consideration( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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