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

                         [2022] 6 S.C.R. 785                              785


GENERAL MANAGER EAST COAST RAILWAY RAIL SADAN                             A
                   & ANR.
                                  v.
            HINDUSTAN CONSTRUCTION CO. LTD.
                   (Civil Appeal No. 4747 of 2022)                        B
                           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 –
                                                                          C
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       D
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         E
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
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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       G
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.                                                             H
                                 785
786            SUPREME COURT REPORTS                          [2022] 6 S.C.R.


A           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
B
      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
C
            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
D     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.
E          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
F     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
G     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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  GENERAL MANAGER EAST COAST RAILWAY RAIL SADAN v.                              787
         HINDUSTAN CONSTRUCTION CO. LTD.

proceedings were initiated by the appellants by appointing an arbitrator        A
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         B
dated 01.09.2020 the respondent questioned the validity of arbitral tribunal.
Thereafter the respondent filed the Arbitration Petition No.10 of 2021
before the High Court of Orissa at Cuttack under Section 11(6) of the
Act seeking appointment of an Arbitrator. The said application was
opposed by the appellants relying upon Section 42 of the Arbitration Act
                                                                                C
and it was the case on behalf of the appellants that in view of Section 42
of the Arbitration Act, the application under Section 11(6) of the Act
shall lie before the High Court of Andhra Pradesh at Amaravati as the
respondent itself earlier filed Section 9 application before the Court at
Vishakhapatnam. It was also submitted on behalf of the appellants that
procedure dated 16.11.2016 upon which reliance has been placed by the           D
respondent was superseded by GCC issued by Railway Board in
November, 2018. Despite the above jurisdictional issue raised and without
addressing on the jurisdiction of the Orissa High Court, by the impugned
judgment and order the High Court of Orissa at Cuttack has appointed
the Arbitrator solely by observing that since the appellant, East Coast         E
Railways in principle, is not opposing the appointment of an Arbitrator
there is little purpose served in relegating the respondent (original
petitioner) to the appropriate High Court as that will only delay the
adjudication of the disputes.
      5. Feeling aggrieved and dissatisfied with the impugned judgment          F
and order passed by the High Court of Orissa at Cuttack, the original
respondent – General Manager – East Coast Railway has preferred the
present appeal.
       6. We have heard Shri K.M. Natraj, learned ASG appearing on
behalf of the appellants and Shri Amit Dubey, learned Counsel appearing         G
on behalf of the respondent. We have gone through the impugned
judgment and order passed by the High Court. A specific objection was
raised by the appellant herein before the High Court on the entertainability
and/or maintainability of the application under Section 11(6) of the
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788             SUPREME COURT REPORTS                             [2022] 6 S.C.R.


A     Arbitration Act before the Orissa High Court. Reliance was placed on
      Section 42 of the Arbitration Act and it was submitted on behalf of the
      appellants that as the respondent - claimant had initiated proceedings
      under Section 9 of the Arbitration Act in the Court at Vishakhapatnam,
      only the High Court of Andhra Pradesh at Amaravati would have
B     jurisdiction to entertain the application under Section 11(6) of the Act.
      Without deciding the said issue which goes to the root of the jurisdiction
      of the High Court of Orissa at Cuttack, the said High Court by the
      impugned order has entertained the application under Section 11(6) of
      the Act and has appointed the sole arbitrator by observing that since the
      appellants – East Coast Railway, in principle, has not opposed the
C
      appointment of an arbitrator, there is little purpose served in relegating
      the original petitioner to the concerned High Court as that will only delay
      the adjudication of the disputes. The appellants might not have opposed
      the appointment of an arbitrator (though the fresh appointment of an
      Arbitrator was also opposed by the appellants herein) by that itself it will
D     not confer the jurisdiction upon the High Court if otherwise, the High
      Court had no jurisdiction.
            7. Heavy reliance is/was placed on Section 42 of the Arbitration
      and Conciliation Act, 1996 which reads as under:

E            “42. Jurisdiction. - Notwithstanding anything contained elsewhere
             in this Part or in any other law for the time being in force, where
             with respect to an arbitration agreement any application under
             this Part has been made in a Court, that Court alone shall have
             jurisdiction over the arbitral proceedings and all subsequent
             applications arising out of that, agreement and the arbitral
F
             proceeding shall be made in that Court and in no other Court.”
             7.1 It is not in dispute that before filing an application under Section
      11(6) of the Act before the High Court of Orissa at Cuttack, the
      respondent – claimant moved an application before the Court at
G     Visakhapatnam under Section 9 of the Arbitration Act. In that view of
      the matter considering Section 42 of the Arbitration Act, the High Court
      of Andhra Pradesh at Amravati alone would have jurisdiction to decide
      the subsequent applications arising out of the Contract Agreement and
      the further arbitral proceedings shall have to be made in the High court
      of Andhra Pradesh at Amaravati alone and in no other court. In that
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   GENERAL MANAGER EAST COAST RAILWAY RAIL SADAN v.                            789
     HINDUSTAN CONSTRUCTION CO. LTD. [M.R. SHAH, J.]

view of the matter the High Court of Orissa at Cuttack has committed a         A
serious error in entertaining the application under Section 11(6) of the
Act before it and appointing the sole arbitrator.
       8. In view of the above and for the reason stated above, the present
Appeal Succeeds. The impugned judgment and order passed by the High
Court of Orissa at Cuttack in Arbitration Petition No.10 of 2021 and           B
appointing the sole arbitrator is hereby quashed and set aside solely on
the ground that the High Court of Orissa at Cuttack would have no
jurisdiction to entertain the application under Section 11(6) of the Act
with respect to the contract agreement for which the respondent claimant
earlier initiated the arbitration proceedings under Section 9 of the           C
Arbitration Act in the Court at Vishakhapatnam. Present Appeal is
accordingly Allowed. However, it is observed that it will be open for the
respondent claimant to submit/move an application under Section 11(6)
of the Act before the competent High Court having jurisdiction namely
the High Court of Andhra Pradesh at Amaravati and if such an application       D
is made before the High Court of Andhra Pradesh at Amaravati within a
period of four weeks from today, the same be dealt with and considered
in accordance with law and on its own merits at the earliest.
       The Present Appeal is Allowed to the aforesaid extent. However,
in the facts and circumstances of the case, there shall be no order as to      E
costs.


Bibhuti Bhushan Bose                                         Appeal allowed.

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