Summary
A larger Bench held that the Supreme Court cannot assume original jurisdiction over objections to an arbitration award merely because it appointed the arbitrator, retained control or directed filing of the award before it. Under the1940Act, the competent statutory court must decide post-award proceedings, preserving the legislatively conferred appeal. Contrary precedents were overruled.
Issues
- Whether retention of control over arbitration enables the Supreme Court to entertain an application making the award a rule of court.
- How statutory court jurisdiction and the vested right of appeal constrain that approach.
Provisions considered
- Section2(c), Arbitration Act, 1940The statutory definition identifies the civil court competent to decide the reference’s subject matter as a suit; superior-court control cannot by itself confer original award jurisdiction. (¶¶ 45, 49–51, 57–58)
- Section14(2), Arbitration Act, 1940The direction to file an award must operate within the statutory allocation of jurisdiction; it does not make the Supreme Court the original court for award objections. (¶¶ 46, 51, 57–58)
- Section31(4), Arbitration Act, 1940Exclusive jurisdiction belongs to the competent court first approached in the matter of a reference. Its purpose is certainty and avoidance of conflicting proceedings, not displacement of statutory jurisdiction by supervisory control. (¶¶ 47–49, 58)
Held
- Appointment of an arbitrator, procedural directions or retention of control does not confer on the Supreme Court original jurisdiction to decide objections or make an award a rule of court. Jurisdiction must come from law; it cannot shift merely because a superior court intervenes. (¶¶ 43–51, 57–58)
- The section31 framework centralizes proceedings in a competent statutory court. Applications in the matter of a reference may precede arbitration or follow the award; the first competent application determines jurisdiction. A1940Act section34 stay application is not itself such an application. (¶¶ 28–32, 47–49, 58)
- The statutory right of appeal is substantive and vested. Allowing all arguments before the Supreme Court as an original forum cannot substitute for, or extinguish, the appeal provided by section39. (¶ 52–57)
- State of Madhya Pradesh v Saith and Skelton and Guru Nanak Foundation v Rattan Singh and Sons were overruled, as were other judgments stating law on their basis. The Court agreed with Associated Contractors’ exclusion of the Supreme Court from the1996Act definition of court. (¶¶ 33, 59)
- The merits of the award objections remained for the Civil Court; no further reference to an appropriate Supreme Court Bench was needed. (¶ 60–61)
Result
Appeal disposed of without costs. Civil Court to decide objections on their merits. If the State’s objections were not on record, both parties were given liberty to file their respective objections within30days.