M/S. BHANDARI UDYOG LIMITED versus INDUSTRIAL FACILITATION COUNCIL AND ANR.

Citation: [2015] 2 S.C.R. 498 · Decided: 20-02-2015 · Supreme Court of India · Bench: M.Y. EQBAL · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2015] 2 S.C.R. 498 
A 
M/S. BHANDARI UDYOG LIMITED 
B 
c 
v. 
INDUSTRIAL FACILITATION COUNCIL AND ANR. 
(Civil Appeal No. 2077 of 2015) 
FEBRUARY 20, 2015 
[M.Y. EQBAL AND KURIA~ JOSEPH, JJ.] 
Arbitration and Conciliation Act, 1996: ss. 34, 42 
- Jurisdiction - Respondent No. 2 running a cotton 
spinning mill in Latur, Maharashtra purchased cotton 
from the appellant company running business at 
D Raichur in the State of Karnataka - Dispute between 
parties -
Application before Karnataka High Court 
u/s.11 - Appointment of arbitrator - Arbitration award 
-
Respondent no.2 challenged the award by filing 
application u/s.34 of the Act before the District Court 
E at Latur, 
Maharashtra -
Appellant opposed 
application on the ground that District Court at Latur 
lacked jurisdiction -
District Judge, Latur held that 
since respondent no. 2 resided at Latur, delivery of 
cotton bales was taken at Latur and place of 
F business of respondent no. 2 was at Latur, therefore, 
District Judge, Latur has jurisdiction to entertain the 
application u!s.34 of the Act -
High Court upheld 
the same -
Held: Pursuant to the order placed by 
respondent no.2, the cotton bales were dispatched 
G by the appellant from Raichur supported by all bills/ 
invoices specifically mentioning "subject to Raichur 
jurisdiction" - Admittedly, the arbitration proceeding 
was conducted within the jurisdiction of 
Raichur 
H 
498 
BHANDARI UDYOG LTD. v. INDUSTRIAL 
499 
FACILITATrON COUNCIL 
court, which has jurisdiction as per s.20, CPC and A 
is subordinate to the High Court of Karnataka which 
entertained s.11 application -
Therefore, the award 
cannot be challenged before a Court subordinate to 
the High Court of Bombay - Jurisdiction -
Code of 
Civil Procedure, 1908 - s.20. cannot be challenged B 
before a Court subordinate to the High Court of 
Bombay -
Jurisdic_tion -
Code of Civil· Procedure, 
1908 -
s.20. 
Allowing the appeal, the Court 
c 
HELD: 1. 
Pursuant to the order placed by 
respondent 
no.2, 
the 
cotton 
bales 
were 
dispatched by the appellant from Raichur 
supported by all bills/invoices specifically D 
mentioning that "subject to Raichur jurisdiction". 
Admittedly, the Arbitration proceeding was 
conducted within the jurisdiction of 
Raichur 
court, which has jurisdiction as per Section 20 
of the Code of Civil Procedure and is subordinate E 
to the High Court of Karnataka which entertained 
Section 11 Application. Hence, the Award cannot 
be challenged before a Court subordinate to the 
High Court of Bombay. 
Exercise of jurisdiction F 
by such court shall be against the provision of 
Section 42 of the Act. The District Court at Latur 
and High Court of Bombay committed error of 
law in entertaining the application under Section 
34 of the Act and dismissing the revision petition. G 
[Paras 8, 10, 11] [502-E,G; 504-A-E] 
State of West Bengal & Ors. v. Associated 
Contractors (2015) 1 SCC 32 - relied on. 
H 
500 
SUPREME COURT REPORTS 
[2015] 2 S.C.R. 
A 
Case Law Reference 
(2015) 1 sec 32 
relied on 
Para 9 
CIVIL APPELLATE JURISDICTION: Civil Appeal 
B No. 2077 of 2015 
From the Judgment and Order dated 21.11.2013 
of the High Court of Judicature at Bombay Bench at 
Aurangabad in Civil Revision Application No. 179 of 
c 2013 
D 
E 
Jayant Bhushan, Nirnimesh Dube, Ankur S. 
Kulkarni, Anand Srivastava, Shubham Jaiswal (for M/ 
s. Lex Regis Law Offices) for the Appellant. 
Shirish K. Deshpande for the Respondents. 
The Judgment of the Court was delivered by 
M.Y. EQBAL, J. 1. Leave granted. 
2. The short question that falls for consideration in 
this appeal is as to whether the Bombay High Court 
has correctly decided the jurisdiction of a Court to 
entertain application under Section 34 of the 
F Arbitration and Conciliation Act, 1996? 
3. The facts of the case lie in a narrow compass. 
4. The Appellant Company is running a small scale 
industry at Raichur in the State of Karnataka and is 
G engaged in the business of cotton ginning, pressing 
while extraction and in marketing the finished 
products. Whereas Respondent No.2 is running a 
cotton spinning mill at Latur in the State of 
H Maharashtra. Respondent no.2 purchased 750 bales 
BHANDARI UDYOG LTD. v. INDUSTRIAL 
501 
FACILITATION COUNCIL [M.Y. EQBAL, J.] 
of cotton from the appellant-company and made part A 
payment to the appellant. The balance amount was 
not paid which led to a dispute between the parties. 
5. It further appears that the appellant filed an 
application u
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