caselaws
Supreme Court of India
The State Of Jharkhand vs M/S Hindustan Construction Co. … on 22 September, 2017Author: S Nazeer
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURSIDCITON
CIVIL APPEAL NO. 1093 OF 2006
THE STATE OF JHARKHAND AND ORS. … APPELLANTS
VERSUS
M/S HINDUSTAN CONSTRUCTION CO. LTD. …RESPONDENT
JUDGMENT
S.ABDUL NAZEER, J.
1. By an order dated 10.01.2013, this Court had referred the matter for
adjudication to Hon’ble Justice S.B Sinha, retired Judge of this Court. Learned
Arbitrator was requested to conclude the arbitration proceedings expeditiously. It
was further observed that the award shall be filed before this Court. Learned
Arbitrator passed an award on 16.10.2015 and a copy of the award was sent to this
Court. Admittedly, the appellants have challenged the said award by filing a
petition under Section 34 of the Arbitration and Conciliation Act, 1996, before the
Civil Court. The respondents have filed an affidavit dated 16.06.2016 requesting
this Court to pronounce the judgment in terms of the award.
Signature Not Verified
Digitally signed by
2. Learned counsel for the respondents submits that since the Arbitrator was
DEEPAK MANSUKHANI
Date: 2017.09.23
12:37:14 IST
Reason:
directed to file his award in this Court, the application for making the award a rule
of the Court must be filed in this Court and that this Court alone has the
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jurisdiction to pronounce the judgment in terms of the award. In this connection,
he has relied on a three-Judge Bench judgment of this Court in Mcdermott
International INC. vs. Burn Standard Co. Ltd. and Others reported in 2005 (10)
SCC 353, and a two-Judge Bench judgment in State of Rajasthan vs. Nav Bharat
Construction Company (2), 2010 (2) SCC 182.
3. On the other hand, learned senior counsel appearing for the appellant
submits that right to appeal is a valuable right and unless there exists cogent
reasons, a litigant should not be deprived of the same. If this Court decides the
objections to the award, the parties will lose their right of appeal. It is further
submitted that while referring the matter to arbitration, this Court had not retained
control of the proceedings of the Arbitrator. In this connection he has relied on the
decisions of this Court in Bharat Coking Coal Limited vs. Annapurna
Construction (2008) 6 SCC 732 and State of West Bengal and Ors. vs. Associated
Contractors (2015) 1 SCC 32.
4. In Nav Bharat Construction Company (supra), this Court while following a
three-Judge Bench judgment in Mcdermott International INC (supra) has held
that since the Arbitrator was directed to file the award in this Court, an application
to make the award rule of the Court, has to be filed in this Court. It has been held
in paragraph 11 thus:
“From the judgment of this Court dated 4-10-2005, it has
been made clear by this Court in the operative part of the same, as
noted hereinearlier, that the award that would be passed by the
umpire must be filed in this Court and secondly, it was clarified in
the judgment itself that this was not a case of a new reference but a
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continuation of the earlier proceeding and thus the Act shall
continue to apply. In McDermott International Inc.4, the
three-Judge Bench decision of this Court clearly observed that
since the arbitrator was directed to file his award in this Court, the
objections as well as the entertainability of the application of the
appellant for making the award a rule of the court must be filed in
this Court alone and, therefore, this Court has the jurisdiction to
entertain the application of the appellant and also the objections
filed by the respondent.”
(Emphasis supplied)
5. In Bharat Coking Coal Limited (supra), this Court has held that the Court
ordinarily must reserve right of a party to prefer an appeal. A right to appeal is a
valuable right and unless there exists cogent reasons, a litigant should not be
deprived of the same. It was further held that jurisdiction cannot be assumed by
the Court even by consent of the parties. In Associated Contractors (supra) a
three-Judge Bench of this Court, after taking note of some of the previous
judgments of this Court, has held that the Supreme Court cannot be considered to
be a Court within the meaning of Section 2(1)(e) of the 1996 Act even if it retains
seisin over the arbitral proceedings. In this judgment, this Court has doubted the
view taken in State of M.P. vs. Saith and Skelton (P) Ltd. (1972) 1 SCC 702 and
Guru Nanak Foundation vs. Rattan Singh and Sons (1981) 4 SCC 634 that
where an Arbitrator was appointed by the Supreme Court itself and the Supreme
Court retains seisin over the arbitration proceedings, the Supreme Court would be
‘Court’ for the purpose of Section 2(c) of the 1940 Act. It has been observed thus:
“20………Secondly, under the 1940 Act, the expression “civil
court” has been held to be wide enough to include an appellate
court and, therefore would include the Supreme Court as was held
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in the two judgments aforementioned under the 1940 Act. Even
though this proposition itself is open to doubt, as the Supreme
Court exercising jurisdiction under Article 136 is not an ordinary
appellate court, suffice it to say that even this reason does not
obtain under the present definition, which speaks of either the
Principal Civil Court or the High Court exercising original
jurisdiction. Thirdly, if an application would have to be preferred
to the Supreme Court directly, the appeal that is available so far as
applications under Sections 9 and 34 are concerned, provided for
under Section 37 of the Act, would not be available. Any further
appeal to the Supreme Court under Article 136 would also not be
available. ……”
(Emphasis supplied)
6. We are of the view that there is a difference of opinion in relation to
entertainability of an application by this Court for making the award as Rule of the
Court. The matter is, therefore, referred to larger bench for decision of the
following question :
“Whether this Court can entertain an application for making the award
as Rule of the Court, even if it retains seisin over arbitral
proceedings?”
7. Registry is directed to place the matter before the Hon’ble Chief Justice of
India for appropriate orders.
……………………………J.
(J. CHELAMESWAR)
……………………………J.
New Delhi; (S. ABDUL NAZEER)
September 22, 2017
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