Resources Inc. & Anr Vs. Essar Steels Ltd.  Insc 551 (11 May 2007)
O R D E R I.A. NO. 2 IN ARBITRATION PETITION NO. 19 OF 2000 S.B. SINHA, J.
1. An application has been filed by the appellants invoking jurisdiction of
this Court purported to be under Section 14 of the Arbitration and Conciliation
Act, 1996 (for short "the 1996 Act") for terminating the mandate of
the Sole Arbitrator for appointment of Substitute Arbitrator as also for
withdrawal of his Authority in terms of Article 8 of the Appointment of
Arbitrators by the Chief Justice of India Scheme, 1996.
2. Indisputably, disputes and differences had arisen between the parties.
There existed an arbitration agreement. An application under Section 11(5)
of the 1996 Act was filed being Arbitration Petition No. 19/2000. By an Order
dated 27.9.2000, Shri B.J. Divan, former Chief Justice of the Gujarat High
Court was appointed as sole arbitrator.
3. In its Order dated 27.9.2000, this Court directed that the sole
arbitrator would determine the question as to whether there existed a valid
agreement between the parties and consequently had jurisdiction to conduct the
proceedings for arbitration or not. An application was filed by the respondent
before the learned Arbitrator on or about 20.8.2001. He passed an interim award
opining that he had jurisdiction to proceed further in the arbitration
proceedings and determine the disputes between the parties.
4. Indisputably, no final Award has yet been passed by the learned
5. Whereas, allegations have been made in the application that the learned
Arbitrator had unnecessarily been delaying the arbitral proceedings and had not
been taking any initiative to dispose of the same, the respondents contend that
the proceedings before the learned Arbitrator have been going on without any
6. The question, however, which falls for consideration is as to whether
this petition is maintainable before this Court. An application under sub-
section (5) and sub-section (6) of Section 11 of the 1996 Act was maintainable
before the Chief Justice of this Court. The learned Judge, as a designate of
the Chief Justice of India, passed the Order dated 29.9.2000 appointing the
learned Arbitrator. It was a judicial order.
7. Sub-section (2) of Section 14 of the 1996 Act reads as under:-
"Section 14(2) If a controversy remains concerning any of the grounds
referred to in clause (a) of sub- section (1), a party may, unless otherwise
agreed by the parties, apply to the court to decide on the termination of the
8. Application in terms of sub-Section (2) of Section 14, thus, lies before
a 'Court' within the meaning of the 1996 Act.
9. It is only thus the 'Court', within the meaning of the provisions of the
said Act which can entertain such an application raised by the parties herein
and determine the dispute therein on merit.
10. Unlike the 1940 Act, "Court" has been defined in Section
2(1)(e) to mean;
"2(1)(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"
11. As a "Court" has been defined in 1996 Act itself, an
application under Section 14(2) would be maintainable only before the Principal
Civil Court which may include a High Court having jurisdiction but not this
12. This Court in passing its Order dated 27.9.2000, as noticed
hereinbefore, did not and could not retain any jurisdiction in itself as could
be done in suitable cases under the 1940 Act. It even did not determine the
validity or otherwise of the Arbitration Agreement. It allowed the parties to
take recourse to their remedies before the learned Arbitrator. When the said
Order was passed, this Court was considered to have only an administrative
power, but the same has since been held to be a judicial power in SBP & Co.
v Patel Engineering Ltd. and Another [(2005) 8 SCC 618]. The said
jurisdiction, however, does not extend to Section 14 of the Act.
13. The definition of 'court' indisputably would be subject to the context
in which it is used. It may also include the appellate courts. Once the
legislature has defined a term in the interpretation clause, it is not
necessary for it to use the same expression in other provisions of the Act. It
is well- settled that meaning assigned to a term as defined in the
interpretation clause unless the context otherwise requires should be given the
14. It is also well-settled that in the absence of any context indicating a
contrary intention, the same meaning would be attached to the word used in the
later as is given to them in the earlier statute. It is trite that the words or
expression used in a statute before and after amendment should be given the
same meaning. It is a settled law that when the legislature uses the same words
in a similar connection, it is to be presumed that in the absence of any
context indicating a contrary intention, the same meaning should attach to the
words. [See Lenhon v. Gobson & Howes Ltd., (1919) AC 709 at 711, Craies on
Statute Law, Seventh Edition, page 141 and G.P. Singh's Principles of Statutory
Interpretation, Tenth edition, page 278]
15. In Venkata Subamma and another v. Ramayya and others [AIR 1932 PC 92],
it is stated that an Act should be interpreted having regard to its history,
and the meaning given to a word cannot be read in a different way than what was
interpreted in the earlier repealed section.
16. Such a question does not arise herein. The learned counsel appearing on
behalf of the appellants placed strong reliance on a decision of this Court in
Guru Nanak Foundation v. Rattan Singh and Sons [(1981) 4 SCC 634].
Guru Nanak Foundation (supra) was based on State of Madhya Pradesh v Saith
and Skelton (P) Ltd. [(1972) 1 SCC 702]. The said decision has been distinguished
in later judgments inter alia on the premise that therein the court had
retained its jurisdiction. [See National Aluminium Co. Ltd. v.
Pressteel & Fabrications (P) Ltd. and Another (2004) 1 SCC 540] In Saith
and Skelton (P) Ltd. (supra), it was held:
"Therefore the expression "Court" will have to be understood
as defined in Section 2( c ) of the Act, only if there is nothing repugnant in
the subject or context. It is in that light that the expression
"Court" occurring in Section 14(2) of the Act will have to be
understood and interpreted.
It was this Court that appointed Shri V.S. Desai, on January 29, 1971, by
consent of parties as an arbitrator and to make his Award. It will be seen that
no further directions were given in the said order which will indicate that
this Court had not divested itself of its jurisdiction to deal with the Award
or matters arising out of the Award. In fact the indications are to the
contrary. The direction in the order, dated January 29, 1971, is that the
arbitrator is "to make his Award". Surely the law contemplates
further steps to be taken after the Award has been made, and quite naturally
the forum for taking the further action is only this Court. There was also
direction to the effect that the parties are at liberty to apply for extension
of time for making the Award. In the absence of any other court having been
invested with such jurisdiction by the order, the only conclusion that is
possible is that such a request must be made only to the court which passed
that order, namely, this Court.
19. That this Court retained complete control over the arbitration
proceedings is made clear by its orders, dated February 1, 1971 and April 30,
On the former date, after hearing counsel for both the parties, this Court
gave direction that the record of the arbitration proceedings be called for and
delivered to the Sole Arbitrator Mr V.S. Desai.
On the latter date, again, after hearing the counsel, this Court extended
the time for making the Award by four months and further permitted the
arbitrator to hold the arbitration proceedings at Bombay. The nature of the
order passed on January 29, 1971, and the subsequent proceedings, referred to
above, clearly show that this Court retained full control over the arbitration
17. Jurisdiction under Section 11(6) of the 1996 Act is used for a different
purpose. The Chief Justice or his designate exercises a limited jurisdiction.
It is not as broad as Sub-section (4) of Section 20 of the 1940 Act. When an
arbitrator is nominated under the 1996 Act, the court does not retain any
jurisdiction with it. It becomes functus officio subject of course to exercise
of jurisdiction in terms of constitutional provisions or Supreme Court Rules.
18. The said decisions, therefore, have no application in the instant case.
19. Reliance placed on Yashwith Constructions (P) Ltd. v. Simplex Concrete
Piles India Ltd. and Another [(2006) 6 SCC 204] is also misplaced.
Therein, this Court merely held that the court can exercise its jurisdiction
to nominate an arbitrator only when there is a failure on the part of the party
to arbitration agreement to perform his part in terms of Section 15(2) of the
1996 Act. The said decision again has no application in the instant case.
20. This application cannot also be treated to be one for recall of the
order dated 27.08.2000 as the application has been filed under Section 14 of
the 1996 Act for termination of the mandate of the sole arbitrator. A different
cause of action therefor, has arisen, wherefor remedy of the appellants only is
to move an appropriate court and not this Court.
21. In Pandey & Co. Builders (P) Ltd. v State of Bihar and Another
[(2007) 1 SCC 467], it has been held that as Patna High Court does not exercise
any original civil jurisdiction, despite the fact that nomination of an
arbitrator was made by a learned judge of the said Court acting as nominee of
Chief Justice of the High Court, only the Principal Civil Court of original
jurisdiction in a district would have the requisite jurisdiction to entertain
an appeal from an Award of an Arbitral Tribunal under Section 37 of the Act.
22. In that view of the matter, this application must be dismissed as being
not maintainable. It is directed accordingly. However, in the facts and
circumstances of this case, there shall be no order as to costs.
Pages: 1 2