# EXECUTIVE ENGINEER, ROAD DEVELOPMENT DIVISION NO.Ill, PANVEL & ANR v. ATLANTA LIMITED

- **Citation:** [2014] 1 S.C.R. 507
- **Court:** Supreme Court of India
- **Decided:** 2014-01-16
- **Case number:** Civil Appeal No. 673 of 2014
- **Bench:** A.K. Patnaik, Jagdish Singh Khehar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/executive-engineer-road-development-division-no-ill-panvel-anr-v-atlanta-limited-29764
- **Pages:** 31

## Headnote

A
B
Arbitration and Conciliation Act, 1996: ss.2(1)(e), 42 -
Jurisdiction to determine the controversy emerging out of the
C
award of the arbitral tribunal - Division of litigation between
High Court exercising 'ordinary original civil jurisdiction' and
the 'Principal Civil Court of original jurisdiction' in a District -
Held: s.42 mandates, that the court wherein the first
application arising out of such a challenge is filed, shall alone
D
have the jurisdiction to adjudicate upon the dispute(s), which
are filed later in point of time - This 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
E
one court, even though jurisdiction to raise such disputes may
legitimately lie before two or more courts - s.42 is not of any
assistance in the instant case as the challenge was made in
different court on the same day - In view of facts and
circumstances of the case, reliance placed on ss. 15 and 16
F
CPC was a/so misplaced - By virtue of s.2(1)(e), if choice is
between the High Court (in exercise of its "ordinary original
civil jurisdiction'? on the one hand, and the "principal civil
court of original jurisdiction" in the District i.e. the District
Judge on the other, choice is made in favour of the High
G
Court - Code of Civil Procedure, 1908 - ss.15, 16.
,.
A contract was awarded on 12.07 .2007 by the
respondent-State to the respondent for the construction
507
H
508
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A of Mumbra Byepass. Dispute arose between the parties
and matter was referred to arbitration and an award was
passed on 12.5.2012.0n 7 .8.2012, the respondent as
also the appellant both questioned the award of the
arbitral tribunal. While the appellant questioned the same
8 before the District Judge, Thane, the respondent filed
Arbitration Petition before the High Court for setting aside
some of the directions issued by the arbitral tribunal in
its award dated 12.5.2012.
Since the same award was subject matter of
C challenge before the two different courts, the respondent
prayed for transfer of the applications filed by appellant
before the District Court to the original side of the High
Court for being heard along with its Arbitration Petition.
D
The High Court while noticing that the State-appellant
had not raised objection as to consolidation of the
proceedings so as to avoid conflicting decisions or
simultaneous trial held that since Arbitration Petition has
already been placed before the Single Judge, it is proper
E if proceedings before the District Court, Thane are
brought and are heard along with the Arbitration Petition.
The said order has been challenged in the instant appeal.
The appellants had placed reliance on Section 2(1 )(e) of
the Arbitration Act read with the provisions of Code of
F Civil Procedure to contend, that the District Judge,
Thane, alone would have the jurisdiction in the matter.
Disposing of the appeal, the Court
HELD: 1. The appellants had in the reply affidavit filed
G 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 instant controversy is
concerned, fall within the definition of the term "Court"
under Section 2(1)(e) of the Arbitration Act. The High
H Court in impugned expressly noticed that it was admitted
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 509
v. ATLANTA LTD.
by the rival parties that the High Court on the original
A
side, as also the District Judge, Thane, had the
jurisdiction in respect of the subject matter. It was,
therefore, not open to the appellants to canvass that the
High Court of Bombay in exercise of its "ordinary original
civil jurisdiction" could not adjudicate upon the instant
B
controversy, on account of lack of jurisdiction. [Paras 12
and 13] (525-C-D & G-H; 526-D]
Bharat Aluminium Company and Ors. vs. Kaiser
Aluminium Technical Service

## Text

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[2014] 1 S.C.R. 507
EXECUTIVE ENGINEER, ROAD DEVELOPMENT
DIVISION NO.Ill, PANVEL & ANR.
V.
ATLANTA LIMITED
(Civil Appeal No. 673 of 2014)
JANUARY 16, 2014
[A.K. PATNAIK AND JAGDISH SINGH KHEHAR, JJ.]
A
B
Arbitration and Conciliation Act, 1996: ss.2(1)(e), 42 -
Jurisdiction to determine the controversy emerging out of the
C
award of the arbitral tribunal - Division of litigation between
High Court exercising 'ordinary original civil jurisdiction' and
the 'Principal Civil Court of original jurisdiction' in a District -
Held: s.42 mandates, that the court wherein the first
application arising out of such a challenge is filed, shall alone
D
have the jurisdiction to adjudicate upon the dispute(s), which
are filed later in point of time - This 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
E
one court, even though jurisdiction to raise such disputes may
legitimately lie before two or more courts - s.42 is not of any
assistance in the instant case as the challenge was made in
different court on the same day - In view of facts and
circumstances of the case, reliance placed on ss. 15 and 16
F
CPC was a/so misplaced - By virtue of s.2(1)(e), if choice is
between the High Court (in exercise of its "ordinary original
civil jurisdiction'? on the one hand, and the "principal civil
court of original jurisdiction" in the District i.e. the District
Judge on the other, choice is made in favour of the High
G
Court - Code of Civil Procedure, 1908 - ss.15, 16.
,.
A contract was awarded on 12.07 .2007 by the
respondent-State to the respondent for the construction
507
H
508
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A of Mumbra Byepass. Dispute arose between the parties
and matter was referred to arbitration and an award was
passed on 12.5.2012.0n 7 .8.2012, the respondent as
also the appellant both questioned the award of the
arbitral tribunal. While the appellant questioned the same
8 before the District Judge, Thane, the respondent filed
Arbitration Petition before the High Court for setting aside
some of the directions issued by the arbitral tribunal in
its award dated 12.5.2012.
Since the same award was subject matter of
C challenge before the two different courts, the respondent
prayed for transfer of the applications filed by appellant
before the District Court to the original side of the High
Court for being heard along with its Arbitration Petition.
D
The High Court while noticing that the State-appellant
had not raised objection as to consolidation of the
proceedings so as to avoid conflicting decisions or
simultaneous trial held that since Arbitration Petition has
already been placed before the Single Judge, it is proper
E if proceedings before the District Court, Thane are
brought and are heard along with the Arbitration Petition.
The said order has been challenged in the instant appeal.
The appellants had placed reliance on Section 2(1 )(e) of
the Arbitration Act read with the provisions of Code of
F Civil Procedure to contend, that the District Judge,
Thane, alone would have the jurisdiction in the matter.
Disposing of the appeal, the Court
HELD: 1. The appellants had in the reply affidavit filed
G 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 instant controversy is
concerned, fall within the definition of the term "Court"
under Section 2(1)(e) of the Arbitration Act. The High
H Court in impugned expressly noticed that it was admitted
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 509
v. ATLANTA LTD.
by the rival parties that the High Court on the original
A
side, as also the District Judge, Thane, had the
jurisdiction in respect of the subject matter. It was,
therefore, not open to the appellants to canvass that the
High Court of Bombay in exercise of its "ordinary original
civil jurisdiction" could not adjudicate upon the instant
B
controversy, on account of lack of jurisdiction. [Paras 12
and 13] (525-C-D & G-H; 526-D]
Bharat Aluminium Company and Ors. vs. Kaiser
Aluminium Technical Services Inc and Ors. (2012) 9 SCC 559
C
- referred to.
2. In terms of the mandate of Section 15 of the Code
of Civil Procedure, the initiation of action within the
jurisdiction of Greater Mumbai had to be "in the Court of
lowest grade competent to try it". However, within the
D
area of jurisdiction of Principal District Judge, Greater
Mumbai, only the High Court of Bombay was exclusively
the competent Court (under its "ordinary original civil
jurisdiction") to adjudicate upon the matter. This
conclusion is imperative from the definition of the term
"Court" in Section 2(1)(e) of the Arbitration Act. Firstly, the
very inclusion of the High Court "in exercise of its
ordinary original civil jurisdiction, within the definition of
the term "Court", will be rendered nugatory, if the above
conclusion was not to be accepted. Because, the
"principal Civil Court of original jurisdiction in a district"
namely the District Judge concerned, being a court lower
E
F
in grade than the High Court, the District Judge
concerned would always exclude the High Court from
adjudicating upon the matter. Accordingly, the principle
G
enshrined in Section 15 of the Code of Civil Procedure
cannot be invoked whilst interpreting Section 2(1)(e) of
the Arbitration Act. Secondly, the provisions of the
Arbitration Act, leave no room for any doubt, that it is the
superior most court exercising original civil jurisdiction,
H
•
510
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A which had been chosen to adjudicate disputes arising
out of arbitration 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
B 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
c 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
0 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
E respondent had chosen to initiate proceedings within the
area of Greater Mumbai, it could have done so only
before the High Court of Bombay. There was no other
court within the jurisdiction of Greater Mumbai, where the
respondent could have raised their challenge.
Consequently, the respondent by initiating proceedings
F under Section 34 of the Arbitration Act, before the original
side of the High Court of Bombay, had not violated the
mandate of Section 2(1)(e) of the Arbitration Act. Thus
viewed, reliance on Section 15 of the Code of Civil
Procedure was wholly irrelevant. [Para 18] [530-G-H; 531G A-G]
3. Reliance placed on Section 16 of the Code of Civil
Procedure, by the appellants, for the ouster the
jurisdiction of the High Court of Bombay is equally
H misplaced. The controversy between the parties did not
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL
511
v. ATLANTA LTD.
pertain to recovery of immoveable property, partition of A
immoveable property, foreclosure sale or redemption of
immoveable property, determination of any other right to
immoveable property, for determination of compensation
for wrong to immoveable property and/or for the recovery
of moveable property under distraint or attachment. It is
B
only in the said exigencies that Section 16 of the Code
of Civil Procedure could have been invoked. The
construction of the Mumbra byepass, would only entitle
the respondent to payments contemplated under the
contract dated 12.7.2007, and no more. Since none of the c
above exigencies contemplated in Section 16 prevailed
in the dispute between the rival parties, reliance on
Section 16 of the Code of Civil Procedure was clearly
misplaced. [Para 19] [531-G-H; 532-A-D]
4. Insofar as the jurisdiction within the District Thane,
D
is concerned, the "principal Civil Court of original
jurisdiction" is the court of the District Judge, Thane.
Consequently, within the territorial jurisdiction of District
Thane, in terms of Section 2(1)(e) of the Arbitration Act,
the challenge could have only been raised before the
E
"principal Civil Court of original jurisdiction" of the
district, namely, before the District Judge, Thane. There
was no other court within the jurisdiction of District
Thane, wherein the instant matters could have been
agitated. Therefore, the appellants having chosen to
F
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. [Para 20] [532-E-G]
G
5. A perusal of Section 42 of Arbitration Act reveals
a clear acknowledgment by the legislature, that the
jurisdiction for raising a challenge to the same arbitration
agreement, arbitral proceeding or arbitral award, could
H
512
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A most definitely arise 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
B dispute(s), which are filed later in point of time. This
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
c though jurisdiction to raise such disputes may
legitimately lie before two or more courts. Ordinarily
Section 42 of the Arbitration Act would be sufficient to
resolve such a controversy. For the determination of the
instant controversy, however, reliance is not placed on
0 Section 42 of the Arbitration Act, because the State of
Maharashtra had moved applications under Section 34 of
the Arbitration Act before the District Judge, Thane, on
the same day as the respondent had filed Arbitration
Petition before the High Court. Both the parties had
approached the courts on 7.8.2012. The answer to the
E jurisdictional question, arising out in the facts and
circumstances of this case, will therefore not emerge
from Section 42 of the Arbitration Act. There can be no
doubt, that adjudication of a controversy by different
courts, can easily give rise to different conclusions and
F determinations. Therefore, logic and common sense also
require, the determination of all such matters, by one
jurisdictional court alone. [Paras 22 to 24] [534-D-H; 535A-B and D-E]
G
6. 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
H Mumbai). Jurisdiction of the above two courts on the
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 513
v. ATLANTA LTD.
"ordinary original civil side" is over the area of Greater A
Mumbai. The 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 that
because of pecuniary dimensions, and/or any other
consideration(s), jurisdiction in the two alternatives B
mentioned above, would lie with the Principal District
Judge, Greater Mumbai. Under the scheme of the·
provisions of the Arbitration Act therefore, if the choice
is between the High Court (in exercise of its "ordinary
original civil jurisdiction") on the one hand, and the c
"principal civil court of original jurisdiction" in the District
i.e. the District Judge on the other; Sectior:i 2(1 )(e) of the
Arbitration Act has made the choice in favour of the High
Court. This in fact impliedly discloses a legislative intent.
Therefore, _it makes no difference, if the "principal civil D
court of original jurisdiction", is in the same district over
which the High Court exercises original jurisdiction, or
some other district. In case an option is to be exercised
between a High Court (under its "ordinary original civil
· jurisdiction") on the one hand, and a District Court (as
"principal Civil Court of original jurisdiction") on the E
other, the choice under the Arbitration Act has to be
· exercised in favour of the High Court. Legislative choice
is clearly in favour of the High Court. The matters in hand
would have to be adjudicated upon by the High Court of
Bombay alone. [Para 25 and 26] [536-B-H; 537-A and C]
F
7.The order passed by the High Court requiring the
matters to be adjudicated on the "ordinary original civil
side" by the High Court of Bombay is upheld however the
reasons recorded by the High Court, for the conclusion, G
were different. The Arbitration Petition filed by the
respondent before the High Court of Judicature at
Bombay, and Applications filed by the appellants before
the District Judge, Thane, shall be heard and disposed
of by the High Court of Bombay. The District Judge, H
514
SUPREME COURT REPORTS
(2014] 1 S.C.R.
A Thane is directed to transfer the files of Miscellaneous
Applications to the High Court, for disposal in
accordance with law. [Para 27) [537-0-G]
B
Case law reference:
(2012) 9 sec 559
referred to
Para 10
CIVIL APP ELLA TE JURISDICTION : Civil Appeal No. 673
of 2014.
From the Judgment and Order dated 15.03.2013 the High
C Court of Judicature at Bombay in Miscellaneous Civil
Application No. 162 of 2012.
D
Uday U. Lalit, Vinay Navare, Styajeet Kumar Keshav
Ranjan, Ms. Abha R. Sharma for the Appellants.
Dushyant A. Dave, Chirag M. Shroff, Abhishek Singh,
Aniruddha Deshmukh for the Respondent.
The Judgment of the Court was delivered by
E
JAGDISH SINGH KHEHAR, J. 1. State of Maharashtra,
through its Public Works Department, 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
F 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,
G 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
H in turn, appointed the presiding arbitrator. On the culmination
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 515
v. ATLANTA LTD. [JAGDISH SINGH KHEHAR, J.]
of proceedings before the arbitral tribunal, an award was
A
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 1.10.2009. Atlanta Limited was also awarded a sum of
B
Rs.41,00,000/- towards costs. All the counter claims raised by
the State of Maharashtra, before the arbitral tribunal, were
simultaneously rejected.
2. On 7.8.2012, the State of Maharashtra moved
Miscellaneous Application no. 229 of 2012 and Miscellaneous
C
Application no. 230 of 2012 under Section 34 of the Arbitration
and Conciliation Act, 1996 (hereinafter referred to as the
'Arbitration Act') before the District Judge, Thane. The State
of Maharashtra through the aforesaid Miscellaneous
Applications sought quashing and setting aside of the arbitral
D
award dated 12.5.2012.
3. On the same day, i.e., 7.8.2012, Atlanta Limited filed
Arbitration Petition no.1158 of 2012 before the High Court of
Judicature at Bombay (hereinafter referred to as the 'High
E
Court'), for the setting aside of some of the directions issued
by the arbitral tribunal (in its award dated 12.5.2012). Atlanta
Limited also claimed further compensation, which according to
the respondent, had wrongfully not been considered by the
arbitral tribunal.
F
4. A perusal of the averments made in the foregoing two
paragraphs reveal, that on the same day i.e., on 7.8.2012, the
State of Maharashtra as also Atlanta Limited questioned the
award of the arbitral tribunal dated 12.5.2012. Whilst the State
of Maharashtra questioned the same before the District Judge,
G
Thane; Atlanta Limited raised its challenge before the High
Court. Since the same award dated 12.5.2012 was subject
matter of challenge before two different courts, Atlanta Limited
preferred Miscellaneous Civil Application no. 162 of 2012
under Section 24 of the Code of Civil Procedure, 1908 praying
H
516
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A for transfer of Miscellaneous Application no. 229 of 2012, as
also, Miscellaneous Application No.230 of 2012 (both filed by
the State of Maharashtra) before the District Court, Thane, to
the original side of the High Court, for being heard along with
Arbitration Petition No .1158 of 2012. The aforestated
B Miscellaneous Civil Application No.162 of 2012 was allowed
by the High Court on 15.3.2013. The operative part of the order
passed by the High Court is being extracted hereunder:
c
D
E
F
G
H
"32. In the light of the above conclusion, the argument that
this Court can only direct consolidation of both Petitions
without passing any order with regard to their transfer,
need not be considered in this case. Apart therefrom, 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 of 2013.
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 517
v. ATLANTA LTD. [JAGDISH SINGH KHEHAR, J.]
5. Leave granted.
A
6. The contention advanced,at the hands of the learned
counsel for the State of Maharashtra; while assailing the
impugned order of the High Court dated 15.3.2013 was, that it
was improper for the High Court to transfer the proceedings
8
initiated by the appellant through Miscellaneous Application
No.229 of 2012 and Miscellaneous Application No.230 of 2012
under Section 34 of the Arbitration Act before the Court of the
District Judge, Thane to the High Court. In this behalf, the
pointed submission of the learned counsel for the appellant was,
C
that only the District Judge, Thane, had the jurisdiction to
determine the controversy emerging out of the award of the
arbitral tribunal dated 12.5.2012. It was also submitted, that the
proceedings initiated by Atlanta Limited through Arbitration
Petition no. 1158 of 2012, ought to have been transferred from
the High Court to the District Judge, Thane. In order to make
D
good the aforesaid submission, learned counsel for the
appellant placed reliance on the definition of the term "Court"
expressed in Section 2(1 )(e) of the Arbitration Act. Section
2(1)(e) aforementioned is being reproduced hereunder:
"2 - Definitions- (1) In this Part, unless the context
otherwise requires,-
E
F
(e) "Court" means the principal Civil Court of original
jurisdiction in a district, and includes the High Court in
exercise of its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subjectmatter of the arbitration if the same had been the subjectmatter of a suit, but does not include any civil court of a
grade inferior to such principal Civil Court, or any Court of
Small Causes."
G
Drawing the court's pointed attention to the definition of the
term "Court", it was the vehement contention of the learned
counsel for the appellant, that to determine which court would
have jurisdiction to decide the subject matter of an arbitral
H
518
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A dispute, it was essential to find out the particular court which
would have had jurisdiction in the matter, had the dispute been
agitated through a civil suit. According to learned counsel, the
latter determination, would answer the jurisdictional avenue of
the arbitral dispute, in terms of Section 2(1 )(e) extracted above.
B In this behalf it was submitted, that in the absence of any
express exclusion clause between the parties, on the subject
matter under reference, in order to settle the dispute interparties, it would have been imperative for the parties to raise
their respective challenges only before the District Judge,
c 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
D 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
E
prescribed by any law, suits,-
F
G
H
(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 wreng to immovable property,
(f)
for the recovery of movable property actually under
distraint or attachment,
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 519
v. ATLANTA LTD. [JAGDISH SINGH KHEHAR, JJ
shall be instituted in the Court within the local limits of
A
whose jurisdiction the property is situate:
Provided that a suit to obtain relief respecting, or
compensation for wrong to, immovable properly held by or
on behalf of the defendant may, where the relief sought can
B
be entirely obtained through hi s personal obedience, be
instituted either in the Court within the local limits of whose
jurisdiction the property is situate, or in the Court within the
local limits of whose jurisdiction the defendant actually and
voluntarily resides, or carries on business, or personally
C
works for gain.
Explanation .-In this section "property" means property
situate in India."
Relying on Section 16 extracted above, it was asserted
D
by learned counsel, that the original agreement between the
parties dated 12.7.2000, and the supplementary agreement
dated 11.5.2005, related to the construction of the Mumbra
byepass. The said construction is from Kilometer 133/800 to
Kilometer 138/200. The aforesaid location of construction,
according to the undisputed position between the parties, is
within Thane District, and as such, within the territorial
jurisdiction of the Sessions Division, Thane. Therefore,
according to learned counsel for the appellant, only the
"principal civil court of original jurisdiction" in District Thane i.e.,
E
F
the District Judge, Thane, would have jurisdiction in the matter.
It was also the submission of the learned counsel for the
appellant, that the toll stations for collecting toll constructed by
the respondent-Atlanta Limited, are also located at the venue
of the Mumbra byepass. Thus viewed, according to the learned . ~
counsel for the appellant, the collection of toll (which inter alia
\:I
constitutes the subject of dispute, between the parties) is also
carried on by the respondents within District Thane, i.e., within
the territorial jurisdiction of the District Judge, Thane. Based
on Section 16 of the Code of Civil Procedure, and more
particularly of clause (d) thereof, it was the pointed-submission
H
520
SUPREME COURT REPORTS
[2014] 1 S.C.R.
A of the learned counsel for the appellant, that only the District
Judge, Thane has the jurisdiction to entertain an arbitral dispute,
arising between the rival parties to the present' appeal.
8. In order to further support his contention, that the District
Judge, Thane alone would have jurisdiction in the matter,
B learned counsel for the appellant, also placed emphatic reliance
on Section 20 of the Code of Civil Procedure which is being
reproduced hereunder:
"20. Other suits to be instituted where defendants reside
c
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 -
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(a)
the defendant, or each of the defendants where
there are more than one, at l .~ 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
G 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
H
(a) A is a tradesman in Calcutta, B carries on business in
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 521
v. ATLANTA LTD. [JAGDISH SINGH KHEHAR, J.]
Delhi. 8 , by his agent in Calcutta, buys goods of A and
A
requests A to deliver them to the East Indian Railway
Company. A delivers the goods accordingly in Calcutta.
A may sue 8 for the price of the goods either in Calcutta,
where the cause of action has arisen or in Delhi, where 8
carries on business.
B
(b) A resides at Simla, 8 at Calcutta and C at Delhi, A, B
and C being together at Benaras, B and C make a joint
promissory note payable on demand, and deliver it to A.
A may sue 8 and C at Benaras, where the cause of action
C
arose. He may also sue them at Calcutta, where B resides,
or at Delhi, where C resides; but in each of these cases,
if the non-resident defendant objects, the suit cannot
proceed without the leave of the Court."
Relying on the above provision, it was asserted, that a
D
reading of Section 20 of the Code of Civil Procedure shows,
that a preference has been postulated for certain provisions
including Section 16 of the Code of Civil Procedure, which was
evident from the opening words of Section 20 of the Code of
Civil Procedure, which clearly denoted, that the issue of
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jurisdiction expressed in Section 20 of the Code of Civil
Procedure, would be subject to the overriding effect in the
matter of jurisdiction, expressed in the provisions preceding
Section 20 (i.e. including Section 16).
F
9. Learned counsel for the respondent-Atlanta Limited,
however, strongly opposed the submissions advanced at the
hands of the learned counsel for the appellant, on the issue of
jurisdiction. In this behalf, learned counsel for the respondent
invited our attention to the reply affidavit filed on behalf of the
G
State of Maharashtra, to Miscellaneous Civil Application No.162
of 2012 (filed.by Atlanta Limited before the High Court), para
8 of the reply affidavit which was pointedly brought to our notice
is being extracted hereunder :
"8. In fact it is an admitted position and common ground
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B
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[2014] 1 S.C.R.
that both; this Hon'ble Court and the District Court at Thane
have jurisdiction in respect of the subject-matter in issue.
Peculiarly this Hon'ble Court falls within the definition of the
term "Court" under Section 2(e) of the Arbitration Act by
virtue of being a High Court in the Mumbai District having
Original Jurisdiction. and on the other hand the District
Court at Thane being the Principal Civil Court of original
jurisdiction in the Thane District also falls within the same
definition."
(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 C011rt.
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
E 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
F 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
G Company & Ors. vs. Kaiser Aluminium Technical Services Inc
& Ors. (2012) 9 sec 559, and made pointed reliance to the
following observations recorded therein:
"96. xxx xxxxxxxxx
H
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL
523
v. ATLANTA LTD. [JAGDISH SINGH KHEHAR, J.)
We are of the opinion, the term "subject matter of the
A
arbitration" cannot be confused with "subject matter of the
suif'. The term "subject matter" in Section 2(1 )(e) is
confined to Part I. It has ~ 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 process.
B
In our opinion. the provision in Section 2(1)(e) has to be
construed keeping in view the provisions in Section 20
which give recognition to party autonomy. Accepting the c
narrow construction as projected by the Learned Counsel
for the Appellants would, in fact. render Section 20
nugatory. In our view. the legislature has intentionally given
jurisdiction to two courts i.e. the court which would have
jurisdiction where the cause of action is located and the
D
courts where the arbitration takes place. This was
necessary as on many occasions the agreement may
provide for a seat of arbitration at a place which would be
neutral to both the parties. Therefore. the courts where the
arbitration takes place would be required to exercise
supervisory control over the arbitral process. For example.
E
if the arbitration is held in Delhi, where neither of the
parties are from Delhi. (Delhi having been chosen as a
neutral place as between a party from Mumbai and the
other from Kolkata) and the tribunal sitting in Delhi passes
an interim order Under Section 17 of the Arbitration Act.
1996. the appeal against such an interim order under
Section 37 must lie to the Courts of Delhi being the Courts
having supervisory jurisdiction over the arbitration
proceedings and the tribunal. This would be irrespective
F
of the fact that the obligations to be performed under the
G
contract were to be performed either at Mumbai or at
Kolkata. and only arbitration is to take place in Delhi. In
such circumstances. both the Courts would have
jurisdiction. i.e .. the Court within whose iurisdiction the
subject matter of the suit is situated and the courts within
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524
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B
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SUPREME COURT REPORTS
[2014] 1 S.C.R.
the jurisdiction of which the dispute resolution. i.e ..
arbitration is located.
97. The definition of Section 2(1 )(e) includes "subject
matter of the arbitration" to give 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 "courf' 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 considers appropriate for
consultation among its members, for hearing witnesses,
experts or the parties, or for inspection of documents, good
or other property."
A plain reading of Section 20 leaves no room for doubt
that where the place of arbitration is in India, the parties
are free to agree to any "place" or "seat" within India, be it
Delhi, Mumbai etc. In the absence of the parties'
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 525
v. ATLANTA LTD. [JAGDISH SINGH KHEHAR, J.]
agreement thereto, Section 20(2) authorizes the tribunal
A
to determine the place/seat of such arbitration. Section
20(3) enables the tribunal to meet at any place for
conducting hearings at a place of convenience in matters
such as consultations among its members for hearing
witnesses, experts or the parties."
B
(emphasis is ours)
11. We have heard learned counsel for the parties.
12. we: have recorded hereinabove the foundation, on the
C
basis whereof, the present controversy was adjudicated before
the High Court. As noticed above, the challenge to the
impugned order passed by the High Court, is based on the
question of jurisdiction. While the learned counsel for the
appellants has placed reliance on Section 2(1 )(e) of the
D
Arbitration Act read with the provisions of Code of Civil
Procedure to contend, that the District Judge, Thane, alone
would have the jurisdiction in the matter; the contention raised
on behalf of the respondent is, that the High Court alone in
exercise of its "ordinary original civil jurisdiction", has the
E
jurisdiction to determine the controversy arising out of the
impugned award dated 12.5.2012.
13. In our view, 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
F
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
G
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. Relevant part of para
10 of the impugned judgment of the High Court is being
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SUPREME COURT REPORTS
[2014] 1 S.C.R.
A extracted hereunder:-
B
c
"10. Mr. Vashi, learned counsel 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
D 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
E 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 the issue of jurisdiction.
F
14. During the course of hearing before us, learned
counsel for the appellant had highlighted for our consideration,
the factual/legal controversy which was agitated by the rival
parties before the High Court. In this behalf it was further pointed
out, firstly, that the respondent's case before the High Court
G was, that since the arbitral tribunal had its seat at Mumbai, and
the works contract was executed at Mumbai, the original side
of the High Court of Bombay was competent to entertain the
controversy. On the other hand, the appellants before the High
Court had pointed out, that since the works contract relating to
H the construction and maintenance of the Mumbra byepass on
EXE. ENGR., ROAD DEV. DIVISION NO.Ill, PANVEL 527
v. ATLANTA LTD. [JAGDISH SINGH KHEHAR, J.]
the Mumbai-Pune road (located on national highway no. 4), and
A
the toll collection site were situated within Thane District, the
District Judge, Thane, was the "more suitable" court for
determining the controversies raised by the rival parties.
Secondly, it was pointed out, that before the High Court an
application under Section 24 ofthe Code of Civil Procedure
B
was filed in the matter pending before the High Court, for
transfer of proceedings filed by the respondents. It was
submitted, that through the above application, it was not open
to the High Court to have transferred the proceedings pending
before the District Judge, Thane.