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Union of India (Uoi) Vs. Rup Kishore and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 1875 of 1965
Judge
Reported inAIR1967All504
ActsArbitration Act, 1940 - Sections 31, 31(4) and 41; Code of Civil Procedure (CPC) , 1908 - Sections 24
AppellantUnion of India (Uoi)
RespondentRup Kishore and anr.
Appellant AdvocateD. Sanyal, Adv.
Respondent AdvocateK.C. Agarwal, Adv.
DispositionApplication dismissed
Excerpt:
arbitration - meaning of - 'that court' - sections 31(4) and 41 of arbitration act, 1940 and section 24 of code of civil procedure, 1908 - under section 31(4) applications regarding proceedings to be made to court where award has been made or may be filed - no other court competent - section 31 or 41 does not manifestly bars application of section 24 - any proceeding transferred under section 24 held to be valid transfer - court falls in the ambit of 'that court' of section 31 (4). - .....against the award. the high court tookthe view that the award ought tohave been filed before the civiljudge of gorakhpur. it was, thereforeordered that the award and objections be referred to the civil judge for disposal. the civiljudge dismissed both sets of objections, anddirected that a decree in terms of the award beprepared. against that order, an appeal wasfiled in the high court under section 39 of thearbitration act. the appeal was allowed, andthe decree of the lower court was set aside itwill be noticed that in shukrullah's case, air1947 all. 304 the high court appointed thearbitrator, and the award was filed in thehigh court. yet. it was the civil judge, whoproceeded to dispose of objections against theaward it was held that that procedure wasnot permitted by section 31 of.....
Judgment:
ORDER

V.G. Oak, J.

1. The question for consideration in this Civil Revision is whether a certain civil court in district Moradabad is competent to dispose of an objection against an award. The question arises under the following circumstances

2. Rup Kishore is a contractor of district Moradabad. There were certain disputes between Rup Kishore on one side and the Union of India and the Deputy Chief Engineer, Northern Railway, on the other side. On 1-6-1963 Rup Kishore applied to the court of the Civil Judge Moradabad for referring the dispute to arbitration under Section 20 of the Arbitration Act (hereinafter referred to as the Act). In pursuance of that application, the learned Civil Judge made a reference to arbitration. Later the case was transferred from the file of the Civil Judge, Moradabad to the file of the Judge, Small Cause Court. Moradabad, who had powers of an Additional Civil Judge. The Arbitrator gave his award on 14-5-1966. The award was submitted to court. On 5-7-1065 the Union of India filed an objection against the award. On 4-8-1965, the case was transferred from the file of the Judge, Small Cause Court, Moradabad to the file of the Additional Civil Judge, Moradabad. On 30-9-1965 the Union of India filed a preliminary objection that the court had no jurisdiction in the matter. That preliminary objection was rejected by the Additional Civil Judge, Moradabad on 12-10-1965. The present civil revision by Union of India is directed against that order, dated 12-10-1965.

3. Mr. Sanyal appearing for the applicant points out that, whereas the award was tiled in the court of the Judge. Small Cause Court, and the objection dated 5-7-1965 against the award was filed in the same court, it is the Additional Civil Judge, Moradabad who is now trying to dispose of that objection. It was urged for the applicant that this procedure is prohibited by Section 31 of the Act.

4. Section 31 of the Act deals with jurisdiction. Section 31 states:--

'(1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter of which the reference relates.

(2) Notwithstanding anything contained in any other law for the lime being in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be filed and by no other Court.

(3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been or may he filed, and to no other Court.

(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court.'

5. Relying on Sub-section (4) of Section 31 of the Act, Mr. Sanyal contended that the Objection having been filed in the court of the Judge, Small Cause Court, that court alone has jurisdiction over the arbitration proceedings. On the other hand, the lower court has relied on Section 24. C.P.C Section 41 of the Act states:--

'Subject to the provisions of this Act and of rules made thereunder (a) the provisions of the Code of Civil Procedure, 1908 shall apply to all proceedings before the Court.

Mr. Sanyal conceded that certain provisions of the Code of Civil Procedure are applicable to proceedings under the Arbitration Act. But he contended that, in view of the restrictions placed by Section 31 of the Act. Section 24, C.P.C. is not applicable

6. In Shukrullah v. Mst. Ruhmat Bibi AIR 1947 All. 304 there were three connectedsuits before the Civil Judge of Gorakhpur. Inthose suits he passed three separate orders.Against those stay orders, appeals were filedin the High Court. During the pendency of thethree appeals before the High Court, parties arrived at a compromise, and the court decidedthat the dispute should he referred to arbitration. In due course, the arbitrator gave anaward. Both parties filed objections in the HighCourt against the award. The High Court tookthe view that the award ought tohave been filed before the CivilJudge of Gorakhpur. It was, thereforeordered that the award and objections be referred to the Civil Judge for disposal. The CivilJudge dismissed both sets of objections, anddirected that a decree in terms of the award beprepared. Against that order, an appeal wasfiled in the High Court under Section 39 of theArbitration Act. The appeal was allowed, andthe decree of the lower Court was set aside Itwill be noticed that in Shukrullah's case, AIR1947 All. 304 the High Court appointed thearbitrator, and the award was filed in theHigh Court. Yet. it was the Civil Judge, whoproceeded to dispose of objections against theaward It was held that that procedure wasnot permitted by Section 31 of the Act. In thepresent case, we are not dealing with a situationwhere two different courts are dealing withany arbitration matter. At present there is onlyone court, namely the Additional Civil Judge,Moradabad, which is dealing with the entirequestion of arbitration.

7. In Ferro Alloys Corporation Ltd. v. A.K. Ghosh : AIR1960Cal421 one party moved an application before a subordinate Judge for leave to revoke the authority to an arbitrator under Section 5 of the Arbitration Act. Later an award was filed in the High Court. The High Court delivered judgment on that award. Subsequently, an application was moved for vacating the judgment upon the award. The application was allowed on the ground that the High Court had no jurisdiction to pass judgment on an award, in view of the proceedings pending before the subordinate Judge under Section 5 of the Act. It will be seen that in that case also two different courts were engaged in dealing with arbitration proceedings. That procedure is prohibited by Section 31 of the Act.

8. In Kumbha Mawji v. Dominion of India : [1953]4SCR878 there was an application under Section 14 of the Arbitration Act before the subordinate Judge of Gauhati. Later the arbitrator filed his award before Calcutta High Court. It was held by a Division Bench of Calcutta High Court that the High Court could not take action on the award That decision Was upheld in appeal by the Supreme Court It was held that Section 31(4) would vest exclusive jurisdiction in the court in which application for filing of award has been made under Section 14 of the Act. It was observed on p. 317:

'the necessity for clothing a single court with effective and exclusive jurisdiction, and to bring about by the combined operation of these three provisions the avoidance of conflict and scramble is equally essential whether the question arises during the pendency of the arbitration or after the arbitration is completed or before the arbitration is commenced.'

9. That appears to be the idea underlying Section 31 of the Act. Sub-section (4) of Section 31 requires that a single court should deal with arbitration proceedings at different stages. If the strict interpretation suggested by Mr. Sanyal is accepted, serious difficulties would arise in practice. Suppose, an additional court dealing with a case under the Act is abolished; or the Presiding Officer of a certain court becomes personally disqualified on account of bias or some other reason. It would be impossible to conclude the proceedings under the Act. I do not think that the Legislature intended that Section 31(4) should have such a curious result. Such a result can be avoided by giving a liberal interpretation to Sub-section (4) of Section 31 of the Act. On this liberal interpretation, the expression 'that court' would include any court to which proceedings have been validly transferred under the provisions of Section 24, C.P.C. There is no clear indication either in Section 31 or Section 41 of the Act that Section 24, C.P.C. should not apply to proceedings under the Act. I am, therefore, of the opinion that Section 24, C.P.C. does apply to proceedings under the Act. The order of the District Judge, Moradabad transferring the proceedings from the file of the Judge, Small Cause Court to the file of the Additional Civil Judge. Moradabad was valid. It follows that, as the matter stands today, the Additional Civil Judge, Moradabad has jurisdiction to dispose of the applicant's objection, dated, 6-7- 1965. The order dated 12-10-1965 is correct.

10. The application is dismissed with costs to respondent No. 1.


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