MAMMAN Vs. PREMIER MORARJI CHEMICALS CO LTD

JUDGEMENT

(1.) THIS petition is filed under S. 439 read with S. 433 (e)and 434 of the Companies Act. The claim made by the petitioner was disputed by the respondent. At the time of arguments, counsel for both parties, agreed that the question at issue between the parties is one to be settled by reference to arbitration and the only question that should be decided by the Arbitrators is "what is the amount that is due and payable to the petitioner by the respondent?" THIS court recorded the agreement arrived at in the matter; and also specifically referred to the arbitrators to decide the dispute between the parties in accordance with the provisions of the Arbitration Act. THIS was so done by order dated 28th March, 1983. In pursuance to the same, the arbitrators, M/s. K. C. John and Abraham Joseph mentioned in the aforesaid order of this Court filed the Award in this court. The Award is dated 28-10-1983. An amount of Rs. 4,19,300/- has been held to be due and payable by the respondent to the petitioner. The Award filed by the Arbitrators dated 28-10-1983 came up for orders on 2-1-1984. The respondent company stated that the Award should have been filed in the Sub Court and not in this court. They pleaded for time to file their objections. Accordingly, the respondent has filed objections dated 15-1-1984. Counsel for the respondent urged two points. (1) The award should have been filed either in the court at Trivandrum or at Alleppey and this court ( Company Court ) will have no jurisdiction to pass a decree in terms of the Award. (2) Even if it is held that the Award was properly filed in this court and a decree can be passed by this court, the Arbitrators acted illegally in awarding interest of Rs. 63,115. 40 for the period from 1-5-1981 to 28-10-1983 at 10 per cent. Counsel contended that the Arbitrators have no jurisdiction to award any interest in the absence of agreement between the parties for payment therefore Petitioner's counsel contended that on a total and fair understanding of the judgment of this court dated 28-3-1983, it is evident that the matter was referred to the Arbitrators by this court and the award can be filed only in this court. THIS court has alone jurisdiction to pass a decree. It is also submitted that the award of interest by the Arbitrators is legal and valid.

(2.) I heard counsel for both parties. S. 31 of the arbitration Act (Act 10 of 1940) is to the following effect: "31. Jurisdiction. (1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. (2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. (3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the court where the award has been, or may be, filed, and to no other Court. (4) Notwithstanding anything contained elsewhere in this act or in any other law for the time being in force, where in any reference any application under, this Act has been made in a court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court. " In this case, this court by its 'judgment dated 28th march, 1983 referred the dispute between the parties, to named arbitrators, to decide the question "as to what is the amount that is due and payable to the petitioner by the respondent". But for such reference, the arbitrators would not have any jurisdiction to pass the award. It is common ground that the matter was referred to the named arbitrators by consent of all parties, by this court in deciding Company Petition No. 36 of 1982. There is no case that this court was incompetent to refer the dispute to the arbitrators for adjudication in the petition filed by the petitioner under S. 439 read with S. 433 (e) and 434 of the Companies Act. The jurisdiction was never mooted or questioned. The parties went further and agreed to refer the dispute to the named arbitrators and for a decision by such arbitrators in accordance with the provisions of the arbitration Act. On these premises, there is no doubt that the reference to arbitration arose out of or as a sequel to the demand made by the parties and this court, competent to entertain the same made the reference. In such circumstances, the award filed or submitted by the arbitrators in this court is competent and proper. This court alone will have the jurisdiction over the arbitration proceedings and all subsequent applications (inclusive of the passing of the judgment in terms of the award) arising out of that reference. No other court will have jurisdiction to entertain or deal with the matter. That this is the content and scope of S. 31 (4) of the Arbitration Act, is evident from the decision of the Supreme Court in M/s. Guru Nanak Foundation v. Mis. Rattan Singh & Sons (AIR. 1981 SC. 2075 ). At page 2079 the Supreme court held as follows: "section 31 of the Act provides the forum in which an award may be filed. Sub-section (1) of S. 31 provides that an award may be filed in any court having jurisdiction in the matter to which the reference relates. Incorporating the definition of the expression 'court' as set out in S. 2 (c) in sub-section (1) of S. 31 would mean that the award will have to be filed in that court in which the suit in respect of the dispute involved in the award would have been required to be filed. This is quite consistent with the provision contained in sub-section (2)of S. 14. So far there is no difficulty. The scheme disclosed in sub-sections (2), (3) and (4) of S. 31 clearly indicates that to the exclusion of all other courts only one court will have jurisdiction to deal with the proceedings incidental to the reference and the arbitration. Sub-section (3) clearly points in this direction when it provides that all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the court where the award has been or may be filed and to no other court. Then comes sub-section (4 ). It opens with a non obstante clause and is comprehensive in character. The non obstante clause excludes anything anywhere contained in the whole Act or in any other law for the time being in force if it is contrary to or inconsistent with the substantive provision contained in subsection (4 ). To that extent it carves out an exception to the general question of jurisdiction of the court in which award may be filed elsewhere provided in the Act in respect of the proceedings. referred to in sub-section (4 ). The provision contained in sub-section (4) will have an overriding effect in relation to the filing of the award if the conditions therein prescribed are satisfied. If those conditions are satisfied the court other than the one envisaged in S. 14 (2) or S. 31 (1) will be the court in which award will have to be filed. This is the effect of the non obstante clause in sub-section (4) of s. 31. Sub-section (4) thus invests exclusive jurisdiction in the court, to which an application has been made in any reference and which that court is competent to entertain as the court having jurisdiction over the arbitration proceedings and all subsequent applications arising out of reference and the arbitration proceedings shall have to be made in that court and in no other court. Thus sub-section (4) not only confers exclusive jurisdiction on the court to which an application is made in any reference but simultaneously ousts the jurisdiction of any other court which may as well have jurisdiction in this behalf. To illustrate the point, if an award was required to be filed under S 14 (2) read with S. 31 (1) in any particular court as being the court in which a suit touching the subject-matter of award would have been required to be filed, but if any application in the reference under the Act has been filed in some other court which was competent to entertain that application, then to the exclusion of the first mentioned court the latter court alone, in view of the overriding effect of the provision contained in S. 31 (4), will have jurisdiction to entertain the award and the award will have to be filed in that court alone and no other court will have jurisdiction to entertain the same. (emphasis supplied) On a pure grammatical construction as well as taking harmonious and overall view of the various provisions contained in the Act it is crystal clear that ordinarily that court will Have jurisdiction to deal with the questions arising under the Act, except the one in Chapter IV, in which a suit with regard to the dispute involved in the arbitration would be required to be filed under the provisions of the Civil P. C. However, where an application is made in any reference to a court competent to entertain it, that court alone will have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall have to be made in that court alone and in no other court. " (emphasis supplied) In the light of the above, the first point urged by counsel for the respondent is devoid of force. It is repelled. I hold that the award has been properly filed in this court.