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2010 Supreme(Ker) 690

High Court of Kerala
THE HONOURABLE MR. JUSTICE THOMAS P. JOSEPH
M/S. Reshmi Constructions Builders and Contractor
Versus
N.T.P.C Limited, N.T.P.C Bhavan, Scope Complex, New Delhi, Represented by its Chairman and Managing Director & Another
OP(C).No. 930 of 2010 (O)
Decided on : 03-12-2010

Advocates Appeared:For the Petitioner:P.J. Vivek Varghese, Varughese M Easo, P.G. Gopalakrishnan Unnithan, Maneesha Kumar, Advocates. For the Respondents:K. Anand, Advocates.

Headnote:

Arbitration and Conciliation Act, 1996 -Section. 34 -Kerala Civil Courts Act, 1957 - Section. 7( 2) - Whether an Additional District Judge has jurisdiction to decide an application under S.34 of the Arbitration and Conciliation Act, 1996 - Whether such a proceeding could be instituted before an Additional District Judge empowered to receive proceedings under S.7(2) of The Kerala Civil Courts Act, 1957 and The Kerala Small Cause Courts Act, 1957 - Held, whether petitioner should have been saddled with the liability to pay cost. Learned counsel for respondent has given me a copy of the cost memo which states that the cost payable is Rs.4025/-. No doubt, awarding of cost is a matter within the 'discretion' of the Court concerned. 'Discretion' is the power to administer justice regulated according to the known rules of law - Maintainability of the proceeding was challenged raising a legal question which required consideration. There is nothing to think that in raising that objection petitioner has proceeded against respondent in an obstinate or inequitable manner so that it was necessary to award cost. As such, I am inclined to hold that the discretion to award cost has not been exercised in the proper manner - Petition is allowed

Judgment :

The questions urged for a decision in this petition are: (i) Whether an Additional District Judge has jurisdiction to decide an application under Sec. 34 of the Arbitration and Conciliation Act, 1996 (for short, “the Arbitration Act”)? (ii) Whether such a proceeding could be instituted before an Additional District Judge empowered to receive proceedings under Sec. 7(2) of The Kerala Civil Courts and Small Cause Courts Act, 1957 (for short, “the Act”)?.

2. Short facts necessary for decision of the said questions are: There was a work contract between petitioner and respondent. In the course of the work, dispute arose between them which was referred to the Arbitrator who passed award on 01-07-2009. Arbitrator passed award in favour of petitioner with an interest holiday of three months if the amount awarded was paid within three months from the date of award. Respondent filed O.P(Arb.). No. 43 of 2009 in the court of learned Additional District Judge-I, Mavelikkara under Sec.34 of the Arbitration Act praying to set aside the award on various grounds set forth in that petition. Petitioner raised a preliminary objection regarding jurisdiction of learned Additional District Judge-I, Mavelikkara to entertain and decide the said application and filed I.A.No.1124 of 2009 (Ext.P2) for the said purpose. That application was resisted by the respondent contending that the said court has jurisdiction to entertain and decide the application. Learned Additional District Judge vide Ext.P3, order dated October 19, 2010 rejected contention of petitioner, found that the said court has jurisdiction to entertain and decide the application and dismissed I.A.No.1124 of 2009 with cost to the respondent. That order is under challenge. Learned Senior Advocate appearing for petitioner contended that in view of the definition of “court” given in Sec.2(e) of the Arbitration Act, application under Sec.34 of the Arbitration Act could have been filed only in the Principal Civil Court of original jurisdiction which is the court of the Principal District Judge, Alappuzha and hence the Additional District Judge-I, Mavelikkara could not entertain or decide the application. It is also contended that at any rate court below was not justified in imposing cost on petitioner for raising a legal question regarding jurisdiction. Learned counsel for respondent contended that court of Additional District Judge-I, Mavelikkara having being invested with power to receive proceedings under Sec.7(2) of the Act, it was within the power and jurisdiction of that court to receive the application on file and decide the same.

3. Sec. 34 of the Arbitration Act enables “the Court” to set aside an arbitral award on any of the grounds mentioned therein. In view of use of article “the” before the expression “Court” “the court” referred to in Sec. 34 must be the ‘court’ as defined in Sec. 2(e) of the Arbitration Act. “Court” is defined in Sec. 2(e) of the Arbitration Act as under: “‘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.” (Emphasis supplied)

4. Argument advanced by learned Senior Advocate is that “court” as defined in Sec. 2(e) is the Principal Civil Court of original jurisdiction which can be court of Principal District Judge and hence question of application under Sec. 34 being filed before the Additional District Court notwithstanding Sec. 7(2) of the Act does not arise. Learned Senior Advocate has referred to me the decision in Sulekha Clay Mines Vs. Union of India (2000 (1) KLT 691) where, a learned Judge of this court held that in view of the definition in Sec. 2(e) of the Arbitration Act, Rule 2(






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