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Judgment
Biswanath Rath,J
This arbitration appeal involves a challenge to the order dated 5.11.2016 arising out of ARB(P) No.59 of 2015 passed by the District Judge, Khurda
at Bhubaneswar thereby dismissing the arbitration petition under Section 34 of the Arbitration and Conciliation Act, 1996 on the ground of lack of
territorial jurisdiction.
Short background involved in the case is that the respondent floated a tender in the daily Samaj inviting applications from the interested bidder to
participate for the items therein. The appellant-industry since has experience involving the work therein, participated in the bid by submitting its
application on 24.11.1995. Entering into communication and deliberation, the revised bid of the appellants was accepted consequent upon which letter
of intent bearing No.PPL/PC/312/417 dated 16.03.1996 was also issued. It is contended that the appellants were required to complete the work within
a period of three and half months including 15 days mobilization period from the date of issue of letter of intent. It was also indicated therein that the
appellants should be paid 15% of contract value as non-recoverable advance on submission of bank guarantee of equivalent amount of Rs.9,19,562/-
and submitting bank guarantee to the tune of 5% of the contract value i.e. Rs.3,00,000/- towards performance. Pleading further reveals that the
appellants in obedience to the term of letter of intent, on 12.4.1996 submitted the bank guarantee. Consequently, the appellants were under expectation
that the respondent would be releasing the non-recoverable advance to enable the appellants to procure the materials and proceeded for the execution
of the work. Finding non-cooperation of the respondent, appellants finding inconvenience in working out the work order, they ultimately issued notice
dated 12.10.1996 to the respondent to invoke arbitration clause containing the tender call notice for the purpose of repayment of loss suffered by the
appellants. In the meantime, the respondent chose to abandon the contractual obligation and consequently issued orders for cancellation of the
contract/letter of intent resultantly the appellants invoked the Arbitration Clause No.35 of the tender document. Consequently, the appellants vide letter
dated 21.4.1997 made a demand of Rs.51.30,000/- from the respondent. Again for non-co-operation of the respondent, the appellants moved an
application under Section 11 of the Arbitration and Conciliation Act, 1996 to the High Court of Orissa for appointment of an Arbitrator registered as
M.J.C.No.231 of 1997. This Court vide order dated 25.7.1997 pleased to appoint Justice V.Gopalswamy (Retd.) as Arbitrator. For the sad demise of
the Arbitrator appointed by the High Court there involved another order appointing Justice D.P.Mohapatra (Retd.) as Arbitrator. In the meantime, the
arbitration award was passed on 14.3.2015. The appellants being aggrieved by three claims vide claim Nos. 2, 3 and 7, challenged the award by filing
an application under Section 34 of the Arbitration and Conciliation Act, 1995 before the District Judge, Khurda at Bhubaneswar registered as ARB(P)
No. 59 of 2015 along with an application under Section 5 of the Limitation Act. In the arbitration proceeding indicated hereinabove, the respondent on
its appearance filed an application under Section 42 read with Section 2 (1) (e) of the Arbitration and Conciliation Act, 1996 challenging the
maintainability of the arbitration proceeding on the ground that the District Judge lacks jurisdiction on the premises of territorial jurisdiction involved
therein. In the meantime, in another development involving an application under section 34 of the Arbitration and Conciliation Act, 1996 filed by the
respondent before the District Judge, Cuttack, the appellants had been noticed to appear in the Arbitration Petition No.31 of 2015. On their
appearance, the appellants filed objection involving maintainability of the arbitration petitioner before the District Judge, Cuttack on the premises of
cause of action involving the Arbitration award having arisen either at Paradeep or at Bhubaneswar along with raising an application on the question
of limitation also. In the meantime, the District Judge, Khurda at Bhubaneswar considering the applications in maintainability of Arbitration Petition
No.59 of 2015 , dismissed the application of the appellants vide order dated 5.11.2016. Being aggrieved, the appellants have preferred the present
arbitration appeal.
Sri S.P.Mishra, learned senior counsel appearing for the appellants involving the challenge to the order passed by the District Judge, Khurda at
Bhubaneswar in ARB(P) No.59 of 2016, contended that question of rejection of the ARB(P) No.59 of 2015 on the ground of limitation contended that
the District Judge erred in arriving at a conclusion that the Arbitration & Conciliation Act being a special statute, the relief prescribed therein cannot
be easily ignored, overcome of varied without substantial and convincing reason satisfying that there is good reason for filing the arbitration petition
beyond 13 days. Sri Mishra, leaned senior counsel appearing for the appellants on the premises of decision of Hon’ble Apex Court as well as High
Courts attempted to distinguishing the term inordinate delay or a delay of short duration of few days and thus submitted that for the application being
filed with 13 days delay only, the delay in raising of appeal should have been appreciated and condoned. Sri Mishra, learned senior counsel further
contended that the District Judge has failed in appreciating that the delay was neither intentional nor deliberate. Sri Mishra further also contended that
for the District Judge holding the appeal not maintainable on the ground of limitation should not have entered into the question involving territorial
jurisdiction in filing the arbitration petition at Bhubaneswar. Challenging the impugned order on the premises of lack of territorial jurisdiction, Sri
Mishra, learned senior counsel taking this Court to the provision at Section 2 (i) (e) and Section 42 of the Arbitration and Conciliation Act, 1996
contended that for the court referring to Principal Civil Court and for the place involving the Head office of the respondent establishment at
Bhubaneswar, there was no difficulty in filing the arbitration petition before the District Judge, Khurda at Bhubaneswar. Referring to a judgment in the
case of Niranjan Soren v. Regional Manager, Hindustan Petroleum Corporation Ltd., 2001(I) OLR 131, Sri Mishra, learned senior counsel contended
that the District Judge has failed in appreciating the dispute involved on the question of territorial jurisdiction in failing to appreciate the provision
contained in Section 2(i) (e) of the Arbitration and Conciliation Act, 1996 as well as the decision of the Hon’ble Apex Court in the decision
referred to supra. Further, taking this Court to the series of judgment in case of Bharat Aluminium Company v. Kaiser Aluminium Technical Services
Inc., (2012) 9 SCC 552, Swastik Gases Private Limited v. Indian Oil Corporation Limited, (2013) 9 SCC 32, Reliance Industries Limited and another
v. Union of India, (2014) 7 SCC 603, State of West Bengal and others v. Associated Contractors, (2015) 1 SCC 32, B.E.Simoese Von Staraburg
Niedenthal and another v. Chhattisgarh Investment Limited, (2015) 12 SCC 225 and in the case of Indus Mobile Distribution Private Limited v.
Datawind Innovations Private Limited and others, (2017) 7 SCC 678s, Sri Mishra, learned senior counsel prayed this Court for interfering in the
impugned order and setting aside the same on both count.
Sri G.Rath, learned senior counsel appearing for the respondent on the other hand while supporting the view of the District Judge involving the
impugned order and vehemently objecting the submission of Sri Mishra, learned senior counsel for the appellants taking this Court to the provision at
Article 35 of the Tender Call Notice. 1195 involved herein contended that since the tender call notice was issued from Paradeep involving the work in
the Paradeep Plant at Paradeep, though venue of arbitration as per Article 35 is fixed at Bhubaneswar but for the provision at Section 3 (i) (e) of the
Act. 1996, further, taking this Court to a decision in the case of Bharat Aluminium Company. v. Kaiser Aluminium Technical Services Inc.,(2012) 9
SCC 552, more particularly, referring to paragraph-96, 97,98 and 99 therein pleaded that for the support of the decision further based on the provision
of law indicated hereinabove, there is no infirmity in the holding of the District Judge involving the impugned order. Similarly, taking this Court to
another decision involving the case of Enercon (India) Limited and others v Enercon Gmbh and another, (2014) 5 SCC -1 deal with provision at
Sections 20(1) and 20 (3) of the Indian Arbitration Act, 1996, more particularly, taking this Court to the decision of the Hon’ble Apex Court
(supra) in paragraphs-106 and 107 contended that this decision also supports the view of the District Judge on the question of territorial jurisdiction.
Taking into another decision in the case of Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and others, (2017) 7
SCC 678, discussion on the seat and venue and referring to the Article 35 of the Tender Notice involved herein, Sri Rath, learned senior counsel
contended that following the decision of Constitution Bench (supra), since the arbitration proceeding was undertaken at Cuttack, the court having
supervision and control of the said arbitration proceeding can only entertain the section 34 application. For the above submission, Sri Rath, learned
senior counsel justifying the decision of the district Judge prayed this Court for dismissal of the arbitration appeal.
Considering the rival contentions of the parties, before proceeding to discuss in detail, this Court from the submission of the respective senior
counsels observes the impugned order involved two issues such a consideration of an application for condonation of delay of 13 days in filing the
ARB(P) No.59 of 2015 at the same time the proceeding also involved a question on the territorial jurisdiction involving maintainability of the
proceeding before the district Judge, Khurda at Bhubaneswar.
Proceeding to consider the case in the light of the above issues involved therein, this Court finds, there is no dispute that the arbitration award and
the proceeding before the District Judge, Khurda at Bhubaneswar involved a tender call notice dated 1.11.1995 and the parties are bound by the
conditions involved in the tender call notice dated 1. 11.1995 as well as by the conditions involving the letter of intent involved therein. There is also no
dispute that the arbitration award involved a dispute involving tender call notice dated 1.11.1995 and the letter of intent involved therein. It is in the
circumstance, this Court finds Article 35 (iii) of the tender call notice dated 1.11.1995 in dispute reads as follows:
“The venue of all arbitration shall be Bhubaneswarâ€
This Court entering into the issue of territorial jurisdiction as the decision on refusal to condone delay shall be dependent on the answer on the point
of territorial jurisdiction while observing that for the notice inviting tender involving work at Paradeep under the jurisdiction of Jagatsinghpur district
court, the seat of the Arbitrator by the disposal of M.J.C. No.231 of 1997 indicating the Arbitrator undergoing his sitting at Cuttack and the venue of
all Arbitrators shall be at Bhubaneswar as per Article 35 of the tender notice, this Court finds there involves three venues in the meantime. Looking to
the provision at Section 2 (1) (e) of Act, 1996, this Court finds the provision reads as follows:
“Section 2(1)(e) of the Arbitration Act, 1996:
“2. Definitions (1) In this Part, unless the context otherwise requires â€
(a) â€" (d) * * *            Â
(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 subject matter of the arbitration if the same had been the subject matter 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.â€
Keeping in view the condition in the contract and the provision of law, it is at this stage, taking into account the decision in the case of Bharat
Aluminium Company. v. Kaiser Aluminium Technical Services Inc.,(2012) 9 SCC 552, this Court finds at paragraph-96 of the said judgment, the
Hon’ble Apex Court at paragraph-96 therein held as follows:
“96. Section 2(1) (e) of the Arbitration Act, 1996 reads as under:
“2. Definitions (1) In this Part, unless the context otherwise requires (a)- (d) *** *** ***
(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 subject matter of the arbitration if the same had been the subject matter 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.â€
We are of the opinion, the term “subject matter of the arbitration†cannot be confused with “subject matter of the suitâ€. The term “subject matter†in
Section 2(1) (e) is confined to Part I. It has a 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. 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 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 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, 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 of the fact that the obligations to be
performed under the 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 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.â€
B) In the case of Enercon (India) Limited and others v Enercon Gmbh and another, (2014) 5 SCC -1 in deciding place of seat of arbitrator vide Issue
No.iv, Hon’ble Apex Court in paragraphs 97, 98 and 99 held as follows:
“97. This now clears the decks for the crucial question, i.e., is the ‘seat’ of arbitration in London or in India. This is necessarily so as the location of the seat
will determine the Courts that will have exclusive jurisdiction to oversee the arbitration proceedings. Therefore, understandably, much debate has been generated
before us on the question whether the use of the phrase “venue shall be in London†actually refers to designation of the seat of arbitration in London.
We find much substance in the submissions of Mr. Nariman that there are very strong indicators to suggest that the parties always understood that the seat of
arbitration would be in India and London would only be the “venue†to hold the proceedings of arbitration. We find force in the submission made by learned
senior counsel for the Appellants that the facts of the present case would make the ratio of law laid down in Naviera Amazonica Peruana S.A. (supra) applicable in the
present case. Applying the closest and the intimate connection to arbitration, it would be seen that the parties had agreed that the provisions of Indian Arbitration
Act, 1996 would apply to the arbitration proceedings. By making such a choice, the parties have made the curial law provisions contained in Chapters III, IV, V and VI
of the Indian Arbitration Act, 1996 applicable. Even Dr. Singhvi had submitted that Chapters III, IV, V and VI would apply if the seat of arbitration is in India. By
choosing that Part I of the Indian Arbitration Act, 1996 would apply, the parties have made a choice that the seat of arbitration would be in India. Section 2 of the
Indian Arbitration Act, 1996 provides that Part I “shall apply where the place of arbitration is in Indiaâ€. In Balco, it has been categorically held that Part I of the
Indian Arbitration Act, 1996, will have no application, if the seat of arbitration is not in India. In the present case, London is mentioned only as a “venue†of
arbitration which, in our opinion, in the facts of this case can not be read as the “seat†of arbitration.
We are fortified in taking the aforesaid view since all the three laws applicable in arbitration proceedings are Indian laws. The law governing the Contract, the law
governing the arbitration agreement and the law of arbitration/Curial law are all stated to be Indian. In such circumstances, the observation in Naviera Amazonica
Peruana S.A. (supra) would become fully applicable. In this case, the Court of Appeal in England considered the agreement which contained a clause providing for
the jurisdiction of the courts in Lima, Peru in the event of judicial dispute; and at the same time contained a clause providing that the arbitration would be governed
by the English law and the procedural law of arbitration shall be the English law. The Court of Appeal summarised the state of the jurisprudence on this topic.
Thereafter, the conclusions which arose from the material were summarised as follows:
“All contracts which provide for arbitration and contain a foreign element may involve three potentially relevant systems of law: (1) the law governing the
substantive contract; (2) the law governing the agreement to arbitrate and the performance of that agreement; (3) the law governing the conduct of the arbitration. In
the majority of cases all three will be the same. But (1) will often be different from (2) and (3). And occasionally, but rarely, (2) may also differ from (3).â€
It was observed that the problem about all these formulations, including the third, is that they elide the distinction between the legal localisation of arbitration on the
one hand and the appropriate or convenient geographical locality for hearings of the arbitration on the other hand.â€
Going through the above judgment, this Court finds Hon’ble Apex Court differentiating seat of arbitrator and venue of arbitrator held seat of
arbitrator is of relevance. This view of the Hon’ble Apex Court is taken taking into account the Constitution Bench decision of Hon’ble Apex
Court in (2012) 9 SCC 552. Both these Judges of course dealing with cases involving work in India but involving International agreement clearly
observing application of provision in the Arbitration and Conciliation Act, 1996.
C) In the case of Swastik Gases Private Limited v. Indian Oil Corporation Limited, (2013) 9 SCC 32 in the first paragraph itself the Hon’ble Apex
Court discussed the question involved therein. In paragraph-5, Hon’ble Apex Court discussed the contest by the parties.
In paragraphs 31, 32, 33 and 34 Hon’ble Justice R.M.Lodha while concurring the view of High Court observing that Calcutta High Court has the
only authority. Hon’ble Jusice  M.B.Lakur in paragraphs-35, 36 and 37 concurred the view of Hon’ble Justice R.M.Lodha which reads as
follows:
MADAN B. LOKUR, J. (concurring)â€" Leave granted. While I agree with the conclusion arrived at by my learned Brother Lodha, J. this judgment has been penned
down to raise the question â€" Is it really necessary for this Court to repeatedly affirm the legal position ad nauseam? I believe the law on the subject is well settled
and it is to nobody's advantage if the same law is affirmed many times over.
The clause in the agreement that is sought to be interpreted reads as follows:
“The agreement shall be subject to jurisdiction of the Courts at Kolkata.â€
In my opinion, the very existence of the exclusion of jurisdiction clause in the agreement would be rendered meaningless were it not given its natural and plain
meaning. The use of words like “onlyâ€, “exclusivelyâ€, “alone†and so on are not necessary to convey the intention of the parties in an exclusion of
jurisdiction clause of an agreement. Therefore, I agree with the conclusion that jurisdiction in the subject-matter of the proceedings vested, by agreement, only in the
courts in Kolkata.â€
This Court here observes this is a case dealing with jurisdiction of High Court in exercising power under Section 11 of the Act, 1996.
D) Again in the case of Reliance Industries Limited and another v. Union of India, (2014) 7 SCC 603 however involving an international agreement
governed by the laws of England may not be very much material for the case at hand. But however finding the observation of Hon’ble Apex
Court at paragraphs, 45, 46 and 47 has some relevance. This Court takes here note of the observation of Hon’ble Apex Court in paragraphs-45,
46, 47, 49 and 57:
“45. In our opinion, it is too late in the day to contend that the seat of arbitration is not analogous to an exclusive jurisdiction clause. This view of ours will find
support from numerous judgments of this Court. Once the parties had consciously agreed that the juridical seat of the arbitration would be London and that the
arbitration agreement will be governed by the laws of England, it was no longer open to them to contend that the provisions of Part I of the Arbitration Act would
also be applicable to the arbitration agreement. This Court in Videocon Industries Ltd.[(2011) 6 SCC 161 : (2011) 3 SCC (Civ) 257] has clearly held as follows: (SCC p.
178, para 33)
“33. In the present case also, the parties had agreed that notwithstanding Article 33.1, the arbitration agreement contained in Article 34 shall be governed by laws
of England. This necessarily implies that the parties had agreed to exclude the provisions of Part I of the Act. As a corollary to the above conclusion, we hold that the
Delhi High Court did not have the jurisdiction to entertain the petition filed by the respondents under Section 9 of the Act and the mere fact that the appellant had
earlier filed similar petitions was not sufficient to clothe that High Court with the jurisdiction to entertain the petition filed by the respondents.â€
In coming to the aforesaid conclusion this Court interpreted similar if not identical provisions contained in the arbitration agreement. The provision with regard to
proper law of the contract and the arbitration agreement was as follows: (Videocon Industries Ltd. case [(2011) 6 SCC 161 : (2011) 3 SCC (Civ) 257] , SCC p. 164, para 3)
“3. For the sake of convenience, the relevant clauses of Articles 33, 34 and 35 of the PSC are extracted below:
‘33.1. Indian law to govern.â€"Subject to the provisions of Article 34.12, this contract shall be governed and interpreted in accordance with the laws of India.
33.2. Laws of India not to be contravened.â€"Subject to Article 17.1 nothing in this contract shall entitle the contractor to exercise the rights, privileges and powers
conferred upon it by this contract in a manner which will contravene the laws of India.
***
34.3. Unresolved disputes.â€"Subject to the provisions of this contract, the parties agree that any matter, unresolved dispute, difference or claim which cannot be
agreed or settled amicably within twenty-one (21) days may be submitted to a sole expert (where Article 34.2 applies) or otherwise to an Arbitral Tribunal for final
decision as hereinafter provided.
***
34.12. Venue and law of arbitration agreement.â€" The venue of sole expert, conciliation or arbitration proceedings pursuant to this article, unless the parties
otherwise agree, shall be Kuala Lumpur, Malaysia, and shall be conducted in the English language. Insofar as practicable, the parties shall continue to implement the
terms of this contract notwithstanding the initiation of arbitral proceedings and any pending claim or dispute. Notwithstanding the provisions of Article 33.1, the
arbitration agreement contained in this Article 34 shall be governed by the laws of England.
***
35.2. Amendment.â€"This contract shall not be amended, modified, varied or supplemented in any respect except by an instrument in writing signed by all the parties,
which shall state the date upon which the amendment or modification shall become effective.’â€
We are of the opinion that in the impugned judgment the High Court has erred in not applying the ratio of law laid down in Videocon Industries Ltd. [(2011) 6 SCC
161 : (2011) 3 SCC (Civ) 257] in the present case. The first issue raised in Videocon Industries Ltd. [(2011) 6 SCC 161 : (2011) 3 SCC (Civ) 257] was as to whether the
seat of arbitration was London or Kuala Lumpur. The second issue was with regard to the courts that would have supervisory jurisdiction over the arbitration
proceedings. Firstly, the plea of Videocon Industries Ltd. [(2011) 6 SCC 161 : (2011) 3 SCC (Civ) 257] was that the seat could not have been changed from Kuala
Lumpur to London only on agreement of the parties without there being a corresponding amendment in the PSC. This plea was accepted. It was held that seat of
arbitration cannot be changed by mere agreement of parties. In para 21 of the judgment, it was observed as follows: (SCC p. 170)
“21. Though, it may appear repetitive, we deem it necessary to mention that as per the terms of agreement, the seat of arbitration was Kuala Lumpur. If the parties
wanted to amend Article 34.12, they could have done so only by a written instrument which was required to be signed by all of them. Admittedly, neither was there
any agreement between the parties to the PSC to shift the juridical seat of arbitration from Kuala Lumpur to London nor was any written instrument signed by them
for amending Article 34.12. Therefore, the mere fact that the parties to the particular arbitration had agreed for shifting of the seat of arbitration to London cannot be
interpreted as anything except physical change of the venue of arbitration from Kuala Lumpur to London.â€
In the present appeal, this Court is also considering the issue as to whether the petition under Section 34 of the Arbitration Act, 1996 filed by the Union of India in
Delhi would be maintainable. The parties have made the necessary amendment in the PSCs to provide that the juridical seat of arbitration shall be London. It is also
provided that the arbitration agreement will be governed by the laws of England. Therefore, the ratio in Videocon Industries Ltd. [(2011) 6 SCC 161 : (2011) 3 SCC (Civ)
257] would be relevant and binding in the present appeal.
In our opinion, these observations in Sulamerica case [(2013) 1 WLR 102 : 2012 EWCA Civ 638 : 2012 WL 14764] are fully applicable to the facts and circumstances
of this case. The conclusion reached by the High Court would lead to the chaotic situation where the parties would be left rushing between India and England for
redressal of their grievances. The provisions of Part I of the Arbitration Act, 1996 (Indian) are necessarily excluded; being wholly inconsistent with the arbitration
agreement which provides “that arbitration agreement shall be governed by English lawâ€. Thus the remedy for the respondent to challenge any award rendered in
the arbitration proceedings would lie under the relevant provisions contained in the Arbitration Act, 1996 of England and Wales. Whether or not such an application
would now be entertained by the courts in England is not for us to examine, it would have to be examined by the court of competent jurisdiction in England.â€
E) In the case of State of West Bengal and others v. Associated Contractors, (2015) 1 SCC 32 in paragraphs 22 to 25 the Hon’ble Apex Court
held as follows:
“22. One more question that may arise under Section 42 is whether Section 42 would apply in cases where an application made in a court is found to be without
jurisdiction. Under Section 31(4) of the old Act, it has been held in F.C.I. v. A.M. Ahmed & Co. [(2001) 10 SCC 532] , SCC at p. 532, para 6 and Neycer India Ltd. v.
GMB Ceramics Ltd. [(2002) 9 SCC 489] , SCC at pp. 490-91, para 3 that Section 31(4) of the 1940 Act would not be applicable if it were found that an application was to
be made before a court which had no jurisdiction. In Jatinder Nath v. Chopra Land Developers (P) Ltd. [(2007) 11 SCC 453], SCC at p. 460, para 9 and Rajasthan SEB v.
Universal Petro Chemicals Ltd. [(2009) 3 SCC 107 : (2009) 1 SCC (Civ) 770] , SCC at p. 116, paras 33 to 36 and Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. [(2013) 9
SCC 32 : (2013) 4 SCC (Civ) 157] , SCC at pp. 47-48, para 32, it was held that where the agreement between the parties restricted jurisdiction to only one particular
court, that court alone would have jurisdiction as neither Section 31(4) nor Section 42 contains a non obstante clause wiping out a contrary agreement between the
parties. It has thus been held that applications preferred to courts outside the exclusive court agreed to by parties would also be without jurisdiction.
Even under Section 42 itself, a Designated Judge has held in HBM Print Ltd.v. Scantrans India (P) Ltd. [(2009) 17 SCC 338 : (2011) 2 SCC (Civ) 394] , that where the
Chief Justice has no jurisdiction under Section 11, Section 42 will not apply. This is quite apart from the fact that Section 42, as has been held above, will not apply to
Section 11 applications at all.
If an application were to be preferred to a court which is not a Principal Civil Court of original jurisdiction in a district or a High Court exercising original
jurisdiction to decide questions forming the subject matter of an arbitration if the same had been the subject matter of a suit, then obviously such application would
be outside the four corners of Section
If, for example, an application were to be filed in a court inferior to a Principal Civil Court, or to a High Court which has no original jurisdiction, or if an application
were to be made to a court which has no subject-matter jurisdiction, such application would be outside Section 42 and would not debar subsequent applications from
being filed in a court other than such court.
Our conclusions therefore on Section 2(1)(e) and Section 42 of the Arbitration Act, 1996 are as follows:
(a) Section 2(1)(e) contains an exhaustive definition marking out only the Principal Civil Court of Original Jurisdiction in a district or a High Court having original civil
jurisdiction in the State, and no other court as “court†for the purpose of Part I of the Arbitration Act, 1996.
(b) The expression “with respect to an arbitration agreement†makes it clear that Section 42 will apply to all applications made whether before or during arbitral
proceedings or after an award is pronounced under Part I of the 1996 Act.
(c) However, Section 42 only applies to applications made under Part I if they are made to a court as defined. Since applications made under Section 8 are made to
judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate
not being court as defined, such applications would be outside Section 42.
(d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42.
(e) In no circumstances can the Supreme Court be “court†for the purposes of Section 2(1)(e), and whether the Supreme Court does or does not retain seisin after
appointing an arbitrator, applications will follow the first application made before either a High Court having original jurisdiction in the State or a Principal Civil Court
having original jurisdiction in the district, as the case may be.
(f) Section 42 will apply to applications made after the arbitral proceedings have come to an end provided they are made under Part I.
(g) If a first application is made to a court which is neither a Principal Court of Original Jurisdiction in a district or a High Court exercising original jurisdiction in a
State, such application not being to a court as defined would be outside Section 42. Also, an application made to a court without subject-matter jurisdiction would be
outside Section 42.
The reference is answered accordingly.â€
F) In the case of B.E.Simoese Von Staraburg Niedenthal and another v. Chhattisgarh Investment Limited, (2015) 12 SCC 225, paragraphs 10, 12 and
15 very much applicable to the case.
In Swastik Gases (P) Ltd. [Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32 : (2013) 4 SCC (Civ) 157] , in the lead judgment, one of us (R.M. Lodha,
J., as he then was) referred to the earlier decisions of this Court in Hakam Singh v. Gammon (India) Ltd. [Hakam Singh v. Gammon (India) Ltd., (1971) 1 SCC 286] ;
Globe Transport Corpn. v. Triveni Engg. Works [Globe Transport Corpn. v. Triveni Engg. Works, (1983) 4 SCC 707] ; Angile Insulations v. Davy Ashmore India Ltd.
[Angile Insulations v. Davy Ashmore India Ltd., (1995) 4 SCC 153] ; New Moga Transport Co. v. United India Insurance Co. Ltd. [New Moga Transport Co. v. United
India Insurance Co. Ltd., (2004) 4 SCC 677] ; Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mal Baradia [Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mal Baradia, (2005) 10
SCC 704] ; Rajasthan SEB v. Universal Petrol Chemicals Ltd. [Rajasthan SEB v. Universal Petrol Chemicals Ltd., (2009) 3 SCC 107 : (2009) 1 SCC (Civ) 770] ; Balaji Coke
Industry (P) Ltd. v. Maa Bhagwati Coke Gujarat (P) Ltd. [Balaji Coke Industry (P) Ltd. v. Maa Bhagwati Coke Gujarat (P) Ltd., (2009) 9 SCC 403 : (2009) 3 SCC (Civ)
770] ; A.V.M. Sales Corpn. v. Anuradha Chemicals (P) Ltd.[A.V.M. Sales Corpn. v. Anuradha Chemicals (P) Ltd., (2012) 2 SCC 315 : (2012) 1 SCC (Civ) 809] and culled
out the legal position in para 32 of the Report as under: [Swastik Gases (P) Ltd. case [Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32 : (2013) 4 SCC
(Civ) 157] , SCC pp. 47-48]
“32. 0 It is a fact that whilst providing for jurisdiction clause in the agreement the words like ‘alone’, ‘only’, ‘exclusive’ or ‘exclusive
jurisdiction’ have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the partiesâ€"by having Clause
18 in the agreementâ€"is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction.
It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is
nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to
the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts
at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other
courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor is it against the public policy. It does not
offend Section 28 of the Contract Act in any manner.â€
Madan B. Lokur, J., while writing a separate judgment, concurred with the above legal position.
In light of the legal position exposited in Swastik Gases (P) Ltd. [Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32 : (2013) 4 SCC (Civ) 157] and
Associated Contractors [State of W.B. v. Associated Contractors, (2015) 1 SCC 32 : (2015) 1 SCC (Civ) 1] and having regard to Clause 13 of the agreement, as noted
above, the jurisdiction of the District Judge, Raipur is ousted and, therefore, he cannot be said to have any jurisdiction in dealing with the matter. The only competent
court of jurisdiction is the court at Goa.
SLPs (Civil) Nos. 7836 and 8011 of 2011
Leave granted. For the reasons stated [Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., Set out in paras 1 to 14, above.] by us while allowing Civil Appeal No. 8933
of 2014 [arising out of SLP (Civil) No. 7589 of 2011], B.E. Simoese Von Staraburg Niedenthal v. Chhattisgarh Investment Ltd., these civil appeals are also allowed and
the impugned order is set aside.â€
G) In the case of Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and others, (2017) 7 SCC 678, paragraphs 9, 11,
12, 13, 19 and 20 are quoted hereunder:
“9. The concept of juridical seat has been evolved by the courts in England and has now been firmly embedded in our jurisprudence. Thus, the Constitution
Bench in BALCO v. Kaiser Aluminium Technical Services Inc. [BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810] has
adverted to “seat†in some detail. Para 96 is instructive and states as under: (SCC pp. 605-06)
“96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under:
‘2. Definitions.â€"(1) In this Part, unless the context otherwise requires â€
(a)-(d) ***
(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 subject-matter of the arbitration if the same had been the subject-matter 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;’
We are of the opinion, the term “subject-matter of the arbitration†cannot be confused with “subject-matter of the suitâ€. The term “subject-matter†in
Section 2(1)(e) is confined to Part I. It has a 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. 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 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 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, 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 of the fact that the obligations to be
performed under the 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 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.â€(emphasis in original)
In an instructive passage, this Court stated that an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause as follows: (Bharat
Aluminium case [BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810] , SCC p. 621, para 123)
“123. Thus, it is clear that the regulation of conduct of arbitration and challenge to an award would have to be done by the courts of the country in which the
arbitration is being conducted. Such a court is then the supervisory court possessed of the power to annul the award. This is in keeping with the scheme of the
international instruments, such as the Geneva Convention and the New York Convention as well as the UNCITRAL Model Law. It also recognises the territorial
principle which gives effect to the sovereign right of a country to regulate, through its national courts, an adjudicatory duty being performed in its own country. By
way of a comparative example, we may reiterate the observations made by the Court of Appeal, England in C v. D [C v. D, 2008 Bus LR 843 : 2007 EWCA Civ 1282]
wherein it is observed that: (Bus LR p. 851G, para 17)
‘17. It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award.’
In the aforesaid case, the Court of Appeal had approved the observations made in A v. B [A v. B, (2007) 1 All ER (Comm) 591 : (2007) 1 Lloyd's Rep 237] wherein it is
observed that:
‘0 an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy B as to the validity of an existing interim or
final award is agreed to be made only in the courts of the place designated as the seat of arbitration.’†(emphasis in original)
The Constitution Bench's statement of the law was further expanded in Enercon (India) Ltd. v. Enercon GmbH [Enercon (India) Ltd. v. Enercon GmbH, (2014) 5
SCC 1 : (2014) 3 SCC (Civ) 59] . After referring to various English authorities in great detail, this Court held, following the Constitution Bench, as follows: (SCC p. 58,
para 134)
“134. It is accepted by most of the experts in the law relating to international arbitration that in almost all the national laws, arbitrations are anchored to the
seat/place/situs of arbitration. Redfern and Hunter on International Arbitration(5th Edn., Oxford University Press, Oxford/New York 2009), in Para 3.54 concludes that
“the seat of the arbitration is thus intended to be its centre of gravityâ€. In BALCO [BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012)
4 SCC (Civ) 810] (BALCO v. Kaiser Aluminium Technical Services Inc.) it is further noticed that this does not mean that all proceedings of the arbitration are to be
held at the seat of arbitration. The arbitrators are at liberty to hold meetings at a place which is of convenience to all concerned. This may become necessary as
arbitrators often come from different countries. Therefore, it may be convenient to hold all or some of the meetings of the arbitration in a location other than where the
seat of arbitration is located. In BALCO [BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810] , the relevant passage from
Redfern and Hunter has been quoted which is as under: (SCC p. 598, para 75)
‘75. 0 “The preceding discussion has been on the basis that there is only one “place†of arbitration. This will be the place chosen by or on behalf of the
parties; and it will be designated in the arbitration agreement or the terms of reference or the minutes of proceedings or in some other way as the place or “seatâ€
of the arbitration. This does not mean, however, that the Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration. International commercial
arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an Arbitral
Tribunal to hold meetingsâ€"or even hearingsâ€"in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the
parties or their witnesses.0 It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country â€" for instance, for the
purpose of taking evidence.0 In such circumstances each move of the Arbitral Tribunal does not of itself mean that the seat of arbitration changes. The seat of
arbitration remains the place initially agreed by or on behalf of the parties.†[Naviera case [Naviera Amazonica Peruana S.A. v. Compania Internacional De Seguros
Del Peru, (1988) 1 Lloyd's Rep 116 (CA)] (Naviera Amazonica Peruana S.A. v. Compania Internacional De Seguros Del Peru), Lloyd's Rep p. 121]’ These
observations have also been noticed in Union of India v. McDonnell Douglas Corpn. [Union of India v. McDonnell Douglas Corpn., (1993) 2 Lloyd's Rep 48] â€
(emphasis in original)
This Court reiterated that once the seat of arbitration has been fixed, it would be in the nature of an exclusive jurisdiction clause as to the courts which exercise
supervisory powers over the arbitration. (See para 138.)
A conspectus of all the aforesaid provisions shows that the moment the seat is designated, it is akin to an exclusive jurisdiction clause. On the facts of the present
case, it is clear that the seat of arbitration is Mumbai and Clause 19 further makes it clear that jurisdiction exclusively vests in the Mumbai courts. Under the Law of
Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to “seat†is a concept by which a neutral venue can be chosen by
the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction â€" that is, no part of the cause of action may have arisen at the
neutral venue and neither would any of the provisions of Sections 16 to 21 of CPC be attracted. In arbitration law however, as has been held above, the moment
“seat†is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings
arising out of the agreement between the parties.
It is well settled that where more than one court has jurisdiction, it is open for the parties to exclude all other courts. For an exhaustive analysis of the case law, see
Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd. [Swastik Gases (P) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 SCC 32 :
(2013) 4 SCC (Civ) 157] This was followed in a recent judgment in B.E. Simoese Von Staraburg Niedenthal v. Chhattisgarh Investment Ltd. [B.E. Simoese Von
Staraburg Niedenthal v. Chhattisgarh Investment Ltd., (2015) 12 SCC 225 : (2016) 1 SCC (Civ) 427] Having regard to the above, it is clear that Mumbai courts alone
have jurisdiction to the exclusion of all other courts in the country, as the juridical seat of arbitration is at Mumbai. This being the case, the impugned judgment
[Datawind Innovations (P) Ltd. v. Indus Mobile Distribution (P) Ltd., 2016 SCC OnLine Del 3744] is set aside. The injunction confirmed by the impugned judgment
will continue for a period of four weeks from the date of pronouncement of this judgment, so that the respondents may take necessary steps under Section 9 in the
Mumbai Court. The appeals are disposed of accordingly.â€
Relying the principle enunciated by Hon’ble Apex Court in the case of B.E.Simoese Von Staraburg Niedenthal and another v. Chhattisgarh
Investment Limited, (2015) 12 SCC 225 and in the case of Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited
and others, (2017) 7 SCC 678 and taking into account the clear clause contained in clause- 35 of the tender notice involved herein, this Court finds for
the admitted position of the matter, even though the parties have agreed to a condition at Article 35 (iii) that the venue of all arbitration shall be at
Bhubaneswar but by the conduct of the parties, the parties pursuant to the order of this Court in M.J.C. No.231 of 1997, on their consent allowed the
seat of arbitration to be taking place at Cuttack. This Court again here observes that there should not be any confusion with regard to the sitting of the
arbitrator vis-Ã -vis court having jurisdiction to decide under Section 34 application. Looking to the provision at Section 2 (1) (e), 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 subject matter of the arbitration if the same had been the subject matter 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. For the background involved herein and for the clause contained in Article 35, the
parties having allowed the sitting of the arbitration proceeding at Cuttack on their consent thereby invoking abandonment of clause contained in the
contract and the working place involving the work order, and getting an arbitration sitting at Cuttack obtaining an order from the High Court is all as a
temporary major and in this circumstance cannot take away the seat of arbitrator or court of jurisdiction consequent upon passing of award in terms of
Article 35 therein, the District Judge, Khurda at Bhubaneswar is competent to take up the Section 34 proceeding and thus the District Judge failed in
appreciating this aspect of the matter and thus the impugned judgment so far it relates to jurisdiction aspect is concerned is bad in law.
Now coming to decide on the question of limitation as decided by the District Judge, from the pleadings of the parties it appears, the arbitration
award was passed on 14.3.2015. The parties being aggrieved with issues involving Issue Nos. 2, 3 and 7 challenged the award by filing application
under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge, Khurda at Bhubaneswar on 29.6.2015 bearing ARB(P) No.
59 of 2015 of course with an application for condonation of delay in filing the appeal on the grounds stated therein that Managing Director of the
appellant company Prabin Kumar Batra travelled abroad from 6.6.2015 to 10.6.2015 due to business commitments and after his return, he fell ill and
was advised bed rest by the doctor for about two weeks resulting 13 days delay in filing the arbitration proceeding. Considering the reason assigned in
the delay application, coming to the provision involving the limitation involving the condonation of delay before the District Judge involving Section 34
proceeding, this Court finds the provision at Sub-Section (3) of Section 34 of the Act reads as follows:
“(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the
arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may
entertain the application within a further period of thirty days, but not thereafter.â€
This provision makes it clear that in the first stage Section 34 application cannot be made after three months elapsed from the date on which the party
making that application had received the arbitration award. It be made clear here that there was no involvement of application of Section 33 to the
case at hand. In the case at hand, since the Section-34, arbitration proceeding is made after three months, this Court taking into consideration the
advantage of copy period from the date of the copy of the award and in the second instance in the event of any delay in filing arbitration proceeding
under Section 34 of the Act beyond three months, it may entertain the application within a further period of 30 days but not thereafter but however
subject to satisfaction of the court undertaking such process, which means there is a grace of 30 days beyond the lapse of three months and one is
required to satisfy the ground of delay to the court undertaking such process. Therefore, the provision makes it clear that Section 34 proceeding should
have been made within 3 months involved therein + 30 days provided the party applying the condonation of delay satisfies the reason of delay. It is
here observed that the award was passed on 14.3.2015. Therefore, three months involved part of March a month having 31 days, full in April involving
30 days, full month in May again a month of 31 days and a part of June a month of course having 30 days. It is also observed here that for the statute
providing 3 (three) months, the month will be going as per British Calendar for the involvement of month March and May. So party here has the
advantage of 2 days and again 30 days subject to satisfaction of the District Judge. For the settled position of law, this Court here takes support of a
decision of the Hon’ble Apex Court in the case of State of Himachal Pradesh and another v. Himachal Techno Engineers and another, (2010) 12
Supreme Court Cases 210 where the Hon’ble Apex Court in paragraphs- 5, 10, 12, 13, 14, 15, 18 and 19 held as follows:
“5. Having regard to the proviso to section 34(3) of the Act, the provisions of section 5 of the Limitation Act, 1963 will not apply in regard to petitions under
section 34 of the Act. While section 5 of the Limitation Act does not place any outer limit in regard to the period of delay that could be condoned, the proviso to sub-
section (3) of section 34 of the Act places a limit on the period of condonable delay by using the words ""may entertain the application within a further period of thirty
days but not thereafter."" Therefore, if a petition is filed beyond the prescribed period of three months, the court has the discretion to condone the delay only to an
extent of thirty days, provided sufficient cause is shown. Where a petition is filed beyond three months plus thirty days, even if sufficient cause is made out, the
delay cannot be condoned.
When the award is delivered or deposited or left in the office of a party on a non working day, the date of such physical delivery is not the date of `receipt' of the
award by that party. The fact that the beldar or a watchman was present on a holiday or non-working day and had received the copy of the award cannot be
considered as `receipt of the award' by the party concerned, for the purposes of section 31(5)of the Act. Necessarily the date of receipt will have to be the next
working day.
Section 12 of Limitation Act, 1963 provides for exclusion of time in legal proceedings. Sub-section (1) thereof provides that in computing the period of limitation
for any application, the day from which such period is to be reckoned, shall be excluded. The applicability of Section 12 of Limitation Act, 1963 to petitions under
Section 34 of the Act is not excluded by the provisions of the Act.
Section (9) of General Clauses Act, 1897 provides that in any Central Act, when the word `from' is used to refer to commencement of time, the first of the days in
the period of time shall be excluded. Therefore the period of ""three months from the date on which the party making that application had received the arbitral award
shall be computed from 13.11.2007.
Re : Question (ii)
The High Court has held that `three months' mentioned in section 34(3) of the Act refers to a period of 90 days. This is erroneous. A `month' does not refer to a
period of thirty days, but refers to the actual period of a calendar month. If the month is April, June, September or November, the period of the month will be thirty
days. If the month is January, March, May, July, August, October or December, the period of the month will be thirty one days. If the month is February, the period
will be twenty nine days or twenty eight days depending upon whether it is a leap year or not.
Sub-section (3) of Section 34 of the Act and the proviso thereto significantly, do not express the periods of time mentioned therein in the same units. Sub-section
(3) uses the words `three months' while prescribing the period of limitation and the proviso uses the words `thirty days' while referring to the outside limit of
condonable delay. The legislature had the choice of describing the periods of time in the same units, that is to describe the periods as `three months' and `one month'
respectively or by describing the periods as `ninety days' and `thirty days' respectively. It did not do so. Therefore, the legislature did not intend that the period of
three months used in sub-section (3) to be equated to 90 days, nor intended that the period of thirty days to be taken as one month.
Therefore when the period prescribed is three months (as contrasted from 90 days) from a specified date, the said period would expire in the third month on the
date corresponding to the date upon which the period starts. As a result, depending upon the months, it may mean 90 days or 91 days or 92 days or 89 days.
Re: Question (iii)
As the award was received by the Executive Engineer on 12. 11.2007, for the purpose of calculating the three months period, the said date shall have to be
excluded having regard to Section 12(1) of Limitation Act, 1963 and Section 9 of General Clauses Act, 1897. Consequently, the three months should be calculated from
11.2007 and would expire on 12.2.2008. Thirty days from 12. 2.2008 under the proviso should be calculated from 13.2.2008 and, having regard to the number of days
in February, would expire on 13.3.2008. Therefore the petition filed on 11.3.2008 was well in time and was not barred by limitation.
In the above settled position of law and the discussions of this Court, this Court here finds Section 34 proceeding was filed on 29.6.2015. So 92
days in the three months period there in filing appeal expired on 14th of June and the further 30 days expired on 14th July. For the filing of arbitration
petition on 29.6.2015, this Court prima facie finds the application was filed within 30 days of grace period applying provision under Section 33 (4) of
the Act. It is at this stage, it is seen that if the appellant brought the reason of delay in filing the arbitration petition under bonafide reason of delay as it
was admittedly beyond three months period? From the pleading of the petitioner in the memorandum of appeal, the submission made during the course
of argument and the discussions made by the district Judge in considering the question of limitation, this Court finds the appellant has taken the ground
of Managing Director going abroad involving the period from 6.6.2015 to 10.6.2015 due to business commitments and further falling sick and advised
bed rest for two weeks getting delay in filing the Arbitration Case under Section 34 of the Act, 1996. The District Judge while dismissing the
proceeding under Section 34 of the Act on the ground of territorial jurisdiction, rejected the request for condonation of delay on the premises that the
application for condonation of delay did not contain substantial and convincing reason for there being no document or scrap of paper in support of such
contentions and thus failing to inspire evidence on the court. This Court finds scope of condonation of delay in the District Judge beyond three months
up to 30 days period even assuming that there was no document supporting the condonation of delay but for no objection to the plea of the respondent
in the matter of condonation of delay and further section 34 proceeding involving a financial stake between the parties, this Court finds delay of few
days should have been condoned compensating the difficulty faced by the opposite party therein the respondent herein appropriately.
In the process, this Court in disagreement with the reason on the question of limitation given by the District Judge and referring to a recent
decision of the Hon’ble Apex Court in the case of restricting filing of proceeding under section 34 of the Arbitration and Conciliation Act beyond
30 days applying proviso at Sub-Section 3 of Section 34 of the Act in the case of Haryana State Cooperative Labour and Construction Federation
Limited and another v. Unique Cooperative Labour and Construction Cooperative Society Limited and others, (2018) 14 SCC 248 , paragraph 131 and
the decision involving State of Himachal Pradesh and another (supra) condone the delay subject to appellants compensating the respondent herein, the
opposite party therein on payment of cost of Rs.10,000/- (Rupees ten thousand) to be paid to the opposite party therein by way of deposit in the court
below within a period of ten days from the date of pronouncement of the judgment.
For the interference of this Court on both the issues involved herein and deciding the case in favour of the appellants, this Court sets aside the
impugned order dated 5.11.2016 passed in ARB(P) No.59 of 2015 providing opportunity of hearing to the parties concerned. Parties are directed to
appear before the District Judge, Khurda at Bhubaneswar along with certified copy of this judgment and take steps accordingly.
In the result, the ARBA succeeds. However, for the reasons herein above, with cost of Rs.10,000/- (Rupees ten thousand).
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