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High Court Of Calcutta
KALYAN JYOTI SENGUPTA
SHIVA CARRIERS - Appellant
Versus
ROYAL PROJECTS LTD. - Respondent
A. P. 375 Of 1998
Decided On : 03/12/1999
ARBITRATION - JURISDICTION - SECTION 42 - EXCLUSIVE JURISDICTION OF COURT WHERE APPLICATION UNDER ARBITRATION ACT MADE - COURT CANNOT ENTERTAIN APPLICATION RELATING TO ARBITRATION AGREEMENT OR PROCEEDINGS ONCE APPLICATION MADE IN ANOTHER COURT.
Fact of the Case:
Petitioner filed an application seeking various reliefs, including a declaration that he is the sole owner of two vehicles, that all payments under the hire purchase agreement have been made, and that the purported reference to arbitration is null and void. The respondent, who initiated arbitration proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, argued that the Court lacked jurisdiction due to the exclusive jurisdiction of the City Civil Court under Section 42 of the Act.
Finding of the Court:
The Court held that it lacked jurisdiction to entertain the application under Section 42 of the Arbitration and Conciliation Act, 1996, as the respondent had already initiated arbitration proceedings under Section 9 of the Act in the City Civil Court. The Court noted that Section 42 provides that once an application under the Act is made in a Court, that Court alone has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitration agreement.
Issues: 1. Whether the Court has jurisdiction to entertain an application relating to an arbitration agreement or proceedings once an application under the Arbitration and Conciliation Act, 1996 has been made in another Court? 2. Whether Section 42 of the Arbitration and Conciliation Act, 1996 ousts the jurisdiction of all other Courts in such cases?
Ratio Decidendi: The Court held that Section 42 of the Arbitration and Conciliation Act, 1996 is a mandatory provision that operates as an ouster of jurisdiction of all other Courts. The Court noted that the petitioner's claims and contentions in the application related to the jurisdiction and authority of the arbitrator and the arbitral proceedings, which fall within the scope of Chapter-II of the Act, where Section 42 is located. Therefore, the Court concluded that it lacked jurisdiction to entertain the application.
Final Decision: The Court dismissed the application, holding that it lacked jurisdiction due to the exclusive jurisdiction of the City Civil Court under Section 42 of the Arbitration and Conciliation Act, 1996. The Court also vacated the interim order granted earlier and directed the petitioner to approach the City Civil Court, where the arbitration proceedings had already commenced.
( 1 ) THIS application has been taken out without mentioning any section of Arbitration and Conciliation Act, 1996 but claiming following reliefs. " (A) Declaration that the petitioner is the sole and absolute owner of the said two vehicles bearing police registration AS-25-0 130 and AS-25-0160 Engine Nos. 697 D23k937 17343 and 697d23k937 17327 Chasis Nos. 360 324k93702498 and 360324k93702476 respectively. (b) Declaration that all payments payable by the petitioner under the Agreement dated November 28, 1993 have been paid and that the respondent No. 1 is not entitled to any amount or further amounts from the petitioner. (c) Declaration that the purported reference before the respondent No. 3 is null and void and of no effect. (d) Declaration that the respondent No. 3 is not the Arbitrator and not appointed as the Arbitrator by the petitioner and has no mandate. (e) Alternatively a fit and independent person be appointed as the arbitrator in place and stead of the respondent No. 3 to adjudicate the disputes between the parties. (f) injunction restraining the respondents and/or their men and/or agents and/or servants and/or each of them from proceeding further with the purported reference or from taking any steps or further steps with regard thereto. (g) Injunction restraining the respondents from giving any effect or further effect to the letters dated June 18, 1998 and July 30, 1998 issued by the respondent No. 3 in any manner whatsoever. (h) Injunction restraining the respondents and/or their men and/or agents and/or servants and/or each of them from disturbing the possession and/or the user of the said vehicles by the petitioner and/or from taking possession of the same in any manner whatsoever. (i) Ad-interim orders in terms of prayers above. (j) Costs of and incidental to this application be paid by the respondents. (k) Such further relief or reliefs as to this Hon'ble Court may deem fit and proper. "
( 2 ) ADMITTEDLY this application has been made in connection with and in relation to arbitration agreement entered into by and between the petitioner as Financier on the one hand and the respondent No. 1 as a principal debtor and the respondent No. 2 as the guarantor on the other hand.
( 3 ) MR. Bachawat, the learned Advocate, has argued in support of this application and urged which is summarized hereunder.
( 4 ) THE disputes in connection with and in relation to the hire purchase agreement amongst the parties cannot be decided and/or adjudicated by arbitration and the same has to be decided by way of suit. Moreover, there cannot be any dispute since all the claims in terms of the agreement, the respondent No. 1 has been paid off. Besides, the arbitrator has no mandate. The named arbitrator ought to have disclosed his incapacity under the law in writing before he assumed the office of arbitrator since such disclosure is mandatory under Section 12 of the said Act.
( 5 ) THERE are other grounds strongly urged by Mr. Bachawat to maintain this application and has argued the reliefs claimed, the sum and substance of which is for replacement ofthe respondent No. 3 being the named arbitrator. He argues that the maintainability of this application owing to lack of pecuniary jurisdiction of this Court is of no substance as the subject-matter of the application being the value of the vehicle and the amounts payable under the agreement are in excess of Rs. 10 lakhs.
( 6 ) ONLY respondent who is contesting this application is respondent No. 1 who is being represented by Mr. Malay Ghosh, the learned Advocate, Mr. Ghosh in answer to argument of Mr. Bachawat has submitted that the reliefs claimed in the petition are not required to be adjudicated by this Court as the same can be taken care of at the first instance by the learned arbitrator. He argues the machinery provided in Sections 13 and 16, of the aforesaid Act are exhaustive and sufficient for this purpose. The petitioner, according to Mr. Ghosh, canno
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