2010 Supreme(P&H) 2423
PUNJAB & HARYANA HIGH COURT
Rakesh Kumar Jain, J.
M/s.Gupta Rice Mill (P) Ltd.
Versus
Punjab State Co-operative Supply And Marketing Federation Ltd.
First Appeal from the Order No. 2283 of 2008,
Decided On : AUGUST 25, 2010
The main legal point established in the judgment is that the question of jurisdiction of the Arbitrator must be raised before the Arbitrator in terms of Section 16 of the Arbitration and Conciliation Act, 1996, and cannot be raised for the first time in the proceedings under Section 34 of the Act or in the appeal under Section 37 of the Act.
Headnote:
Jurisdiction - Arbitration and Conciliation Act, 1996 - Section 16, Section 34 - The judgment discusses the question of whether objection about jurisdiction of the Arbitrator could be raised for the first time in the petition under Section 34 of the Arbitration and Conciliation Act, 1996. The court analyzed the provisions of Section 16 and Section 34 of the Act and held that if the question of jurisdiction of the Arbitrator is not raised before him in terms of Section 16 of the Act, it cannot be raised for the first time either in the proceedings under Section 34 of the Act or in the appeal under Section 37 of the Act.
Fact of the Case:
A dispute arose between the Punjab State Co-operative Supply and Marketing Federation Ltd. and M/s Gupta Rice Mill (P) Ltd. The matter was referred to the Arbitrator, who allowed a claim in favor of the Federation. The miller filed objection under Section 34 of the Act before the Court, challenging the jurisdiction of the Arbitrator.
Finding of the Court:
The court held that if the question of jurisdiction of the Arbitrator is not raised before him in terms of Section 16 of the Act, it cannot be raised for the first time either in the proceedings under Section 34 of the Act or in the appeal under Section 37 of the Act.
Issues: The main issue was whether objection about jurisdiction of the Arbitrator could be raised for the first time in the petition under Section 34 of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court analyzed the provisions of Section 16 and Section 34 of the Act and held that if the question of jurisdiction of the Arbitrator is not raised before him in terms of Section 16 of the Act, it cannot be raised for the first time either in the proceedings under Section 34 of the Act or in the appeal under Section 37 of the Act.
Final Decision: All the appeals were dismissed, however, without any order as to costs.
Rakesh Kumar Jain, J.
1. This order shall dispose of 3 appeals bearing FAO No.2283 of 2008 titled as M/s Gupta Rice Mill (P) Ltd. v. The Punjab State Co-operative Supply and Marketing Federation Ltd and another, FAO No 1445 of 2008 titled as M/s New Kisan Rice Mill v. Punjab State Ware Housing Corporation and another, and FAO No.3006 of 2008 titled as M/s Sant Sunder Dass Rice and General Mills v. The Punjab State Warehousing Corporation Ltd. and another. All the aforesaid appeals are being disposed of together by this common order as the question of law involved in these appeals is the same i.e. "whether objection about jurisdiction of the Arbitrator could be raised for the first time in the petition under Section 34 of the Arbitration and Conciliation Act, 1996 [for short "the Act"] if it is not taken before the Arbitrator." The facts, however, are. extracted from FAO No.2283 of 2008 M/s. Gupta Rice Mill (P) Ltd. v. The Punjab State Co-operative Supply and Marketing Federation Ltd. and another.
2. A dispute arose between the Punjab State Co-operative Supply and Marketing Federation Ltd. and M/s Gupta Rice Mill (P) Ltd. on account of non-fulfillment of terms and conditions of the agreement dated 29.09.1999. The matter was referred to the Arbitrator at the instance of the Punjab State Co-operative Supply and Marketing Federation Ltd. The Arbitrator, vide his award dated 18.06.2003, allowed a claim of Rs.32,82,976/- with interest at bank rate from 01.01.2002 onwards till its realization. The miller filed objection under Section 34 of the Act before the Court, wherein jurisdiction of the Arbitrator was challenged on the ground that he had also decided the issues which were within the purview of Managing Director of the Corporation as provided in the agreement. The objection filed under Section 34 of the Act, however, was dismissed by the learned District Judge, Ferozepur on 19.04.2006.
3. Aggrieved against the arbitral award and the impugned order of the Court, present appeal has been preferred by the Miller in which it is sought to be argued that the Arbitrator has travelled beyond his jurisdiction in deciding the questions for which already an authority is provided in the agreement. Learned counsel for the appellant has relied upon a decision of this Court in the case of M/s Shree Krishna Rice Mills v. The Punjab State Co-operative Supply and Marketing Federation Ltd., (2003-3)135 P.L.R. 341 to contend that the Arbitrator had no jurisdiction to decide the excepted matters.
4. In reply, learned counsel for the respondents has submitted that the objection with regard to jurisdiction of the Arbitrator could have been raised only before him in terms of Section 16 of the Act and cannot be taken for the first time either in the objection filed under Section 34 of the Act or in the appeal filed under Section 37 of the Act. In support of the contention raised, learned counsel for the respondents has relied upon a decision of the Division Bench of Delhi High Court in the case of S.N. Malhotra and Sons v. Airport Authority of India and others 2008(4) A.D. (Delhi) 424. In rebuttal, learned counsel for the appellant has submitted that the question of jurisdiction goes to the root of the case and it can be raised at any stage of the litigation.
5. I have heard both learned counsel for the parties and perused the record with their able assistance.
6. The question involved in this appeal has already been framed in the beginning of the judgment. Before adverting to the contention of learned counsel for the parties, it would be relevant to refer to provisions of Section 4, 5, 16 and 34 of the Act, which are reproduced as under:-
"4. Waiver of right to object.- A party who knows that - (a) any provision of this Part from which the parties may derogate, or
(b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such noncompliance without undue