CALCUTTA HIGH COURT
Tapen Sen, Indrajit Chatterjee, JJ.
M/s. National Highway Authority of India - Appellant
Versus
M/s. B. Seenaiah & Company (Projects) Ltd. - Respondent
F.M.A. No. 254 of 2012
Decided On : 13-03-2015
ARBITRATION AND CONCILIATION ACT, 1996 - SECTION 2(E) - SECTION 34 - JURISDICTION - ADDITIONAL DISTRICT JUDGE - COURT - The principal Civil Court of original jurisdiction in a district, as defined under Section 2(e) of the Arbitration and Conciliation Act, 1996 (Arbitration Act), is the only court competent to handle applications under Section 34 of the Act, which deals with the setting aside of arbitral awards. An Additional District Judge is not a principal Civil Court and, therefore, lacks the authority to adjudicate on such applications.
Fact of the Case:
The appellants filed an appeal challenging the order passed by the Additional District Judge, 4th Court, dismissing their application under Section 34 of the Arbitration Act to set aside an arbitral award. The appellants contended that the Additional District Judge lacked the jurisdiction to hear the application, as only the principal Civil Court of original jurisdiction, i.e., the District Judge, could exercise such jurisdiction under Section 34 of the Arbitration Act.
Finding of the Court:
The court held that the Additional District Judge did not have the jurisdiction to entertain the application under Section 34 of the Arbitration Act. The court reasoned that the definition of "Court" under Section 2(e) of the Arbitration Act specifically excluded any Civil Court of a grade inferior to the principal Civil Court, and an Additional District Judge was not the principal Civil Court. The court further held that the District Judge could not delegate his power to set aside an arbitral award to a court of a lower grade, as such delegation would be contrary to the well-established principle of "delegatus non potest delegare."
Issues: 1. Whether an Additional District Judge has the jurisdiction to entertain an application under Section 34 of the Arbitration Act to set aside an arbitral award. 2. Whether the District Judge can delegate his power to set aside an arbitral award to a court of a lower grade.
Ratio Decidendi: 1. The definition of "Court" under Section 2(e) of the Arbitration Act specifically excludes any Civil Court of a grade inferior to the principal Civil Court, and an Additional District Judge is not the principal Civil Court. 2. The District Judge cannot delegate his power to set aside an arbitral award to a court of a lower grade, as such delegation would be contrary to the well-established principle of "delegatus non potest delegare."
Final Decision: The court allowed the appeal, set aside the impugned order, and remanded the matter to the District Judge for fresh consideration.
Tapen Sen, J.
This appeal is directed against the Order/Judgment dated 26.4.2011 passed in Misc. Case No. 50 of 2008 by the learned 4th Additional District Judge, Paschim Midnapore whereby and whereunder, while dealing with an application under Section 34 of The Arbitration and Conciliation Act, 1996, he was pleased to dismiss the said Misc. Case holding inter-alia that the arbitral award was not fit to be interfered with.
2. At this stage we would like to point out that during the course of his submissions, Mr. Jaydip Kar, learned Senior Advocate appearing for the appellants, raised a preliminary issue with regard to the authority and the jurisdiction of the learned Additional District Judge in having proceeded with the matter under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to for the sake of brevity as the Arbitration Act). His submission was based on serious points of law and therefore, we thought it appropriate to decide such preliminary issue first and then, subject to our decision, either proceed with the matter on merits and if, we found that there was lack of inherent jurisdiction with the said Additional District Judge, then to pass appropriate orders as may be deemed fit and proper by us. Consequently, intensive arguments were raised on behalf of the appellants and equally intensively replied to by Mr. Jayanta Kumar Mitra, learned Senior Advocate appearing for the respondents. We will now therefore, deal with this preliminary issue.
3. The question that has been posed for our consideration is as to whether, under the provisions of Section 34 of the Arbitration Act, the reference to the learned Additional District Judge could at all have been made or whether, the same could only have been made before a "Court" as defined under Section 2(e) of the said Arbitration Act?
4. In short, Mr. Jaydip Kar has submitted that an application for setting aside an arbitration award can only be made before a "Court", as defined under Section 2(e) and not before an Additional District Judge. According to him, "Court" as defined under Section 2(e) of the Arbitration Act defines "Court" as being the principal Civil Court of original jurisdiction in a district but does not include any Civil Court of a grade inferior to such principal Civil Court.
5. The definition of Section 2(e), for the convenience of all, is reproduced below:-
"2. Definitions.-
(1) In this Part, unless the context otherwise requires,-
(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;"
6. Similarly, Section 34, for the convenience of all is reproduced below:-
"34. Application for setting aside arbitral award.-
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration
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