GENERAL MANAGER EAST COAST RAILWAY RAIL SADAN & ANR. versus HINDUSTAN CONSTRUCTION CO. LTD.

Citation: [2022] 6 S.C.R. 785 · Decided: 22-07-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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GENERAL MANAGER EAST COAST RAILWAY RAIL SADAN
& ANR.
v.
HINDUSTAN CONSTRUCTION CO. LTD.
(Civil Appeal No. 4747 of 2022)
JULY 22, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Arbitration and Conciliation Act, 1996 – ss.42 and 11(6) –
Jurisdiction over arbitral proceedings – Competent High Court –
Dispute between appellant and respondent – Respondent filed
application before High Court of Orissa u/s.11(6) seeking
appointment of arbitrator – Specific objection raised by appellant
on entertainability and/or maintainability of the application
u/s.11(6) – Placing reliance on s.42, the appellant submitted that as
respondent-claimant had initiated proceedings u/s.9 in the Court at
Vishakhapatnam, only the High Court of Andhra Pradesh at
Amaravati would have jurisdiction to entertain the application
u/s.11(6) – Without deciding the said issue which went to the root of
the jurisdiction of the High Court of Orissa, the said High Court
entertained the application u/s.11(6) and appointed an arbitrator
observing that since the appellants, in principle, had not opposed
the appointment of an arbitrator, little purpose would be served in
relegating the respondent to the concerned High Court as that will
only delay the adjudication of the disputes – Held: The appellants
might not have opposed the appointment of an arbitrator (though
the fresh appointment of an Arbitrator was also opposed by the
appellants) by that itself it will not confer the jurisdiction upon the
High Court if otherwise, the High Court had no jurisdiction – Before
filing an application u/s.11(6) before the High Court of Orissa, the
respondent had moved an application before the Court at
Visakhapatnam u/s.9 – In that view of the matter, the High Court of
Orissa committed a serious error in entertaining application u/s.11(6)
and appointing arbitrator – However, respondent-claimant may
submit/move an application u/s.11(6) before the competent High
Court having jurisdiction namely the High Court of Andhra Pradesh
at Amaravati.
[2022] 6 S.C.R. 785
785
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SUPREME COURT REPORTS
[2022] 6 S.C.R.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4747
of 2022.
From the Judgment and Order dated 03.12.2021 of the High Court
of Orissa at Cuttack in Arbitration Petition No.10 of 2021.
K. M. Nataraj, ASG, Vivek Gupta, Ms. Kanu Agrawal, Shailesh
Madiyal, Ms. Deepabali Dutta, Anuj Srinivas Udupa, Amrish Kumar,
Advs. for the Appellants.
Amit Dubey, Adv. for the Respondent.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court of Orissa at Cuttack in Arbitration
Petition No.10 of 2021 by which the High Court in exercise of powers
under Section 11(6) of the Arbitration and Conciliation Act, 1996
(hereinafter referred to as ‘the Act’) has appointed an Arbitrator to
adjudicate the dispute between the parties, the original informant –
General Manager, East Coast Railway Rail Sadan and Anr., have
preferred the present appeal.
2. As such the dispute in the present appeal is in a very narrow
compass.
3. The dispute arose between the appellant and the respondent
with respect to the contract/agreement dated 29.11.2018. That the
respondent herein - original claimant initiated the proceedings under
Section 9 of the Arbitration Act before the learned Additional District
Judge, Visakhapatnam seeking interim injunction against the encashment
of Performance Bank Guarantee and forfeiture of security deposit. The
said application came to be allowed by the learned Additional District
Judge vide order dated 06.11.2019 restraining the appellants herein from
forfeiting security deposit for period of six months except on the special
circumstances.
4. That thereafter the respondent vide letter dated 01.12.2019
requested the appellant to constitute the Arbitral Tribunal raising five
claims. It appears that in terms of the Arbitration Agreement, arbitration
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proceedings were initiated by the appellants by appointing an arbitrator
to adjudicate the dispute between the parties. That the Arbitrator issued
notices calling upon the parties to submit their respective claims. The
respondent herein sought time vide letter dated 02.04.2020 for filing the
claim in view of Covid-19 Pandemic. The Arbitrator adjourned the
proceedings to 03.04.2020. Instead of submitting the claim, vide letter
dated 01.09.2020 the respondent questioned the validity of arbitral tribunal.
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