The Allahabad High Court has dismissed an application while observed that the application under Section 34 of the Act of 1996 challenging the arbitral award passed by the sole arbitrator is only maintainable before the Principal Civil Court of original jurisdiction.
A single-judge bench of Justice Rohit Ranjan Agarwal passed this order while hearing a petition filed by Mahendra Singh and another.
This is an application under Section 34 of the Arbitration & Conciliation Act, 1996 laying challenge to the award dated 26.03.2022 passed by J.P. Narayan, Additional District & Sessions Judge (Rtd.), sole Arbitrator.
The Stamp Reporter has made a report that the application under Section 34 of the Act of 1996 is not maintainable in view of the order passed in Civil Misc Arbitration Application.
P.K. Srivastva, the counsel for the applicants, while addressing on the maintainability of the application under Section 34 of the Act of 1996, submitted that the word “Court” used in Section 34 read with Section 2 (1) (e) (i) means the Principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction.
According to the counsel, both the Principal Civil Court and the High Court have jurisdiction to entertain the application under Section 34 of the Act of 1996.
The Court said the sole question which has to be adjudicated is in regard to maintainability of the application under Section 34 of the Act of 1996 before this Court against the arbitral award passed by the sole Arbitrator.
The Court observed that,
From the conjoint reading of both the provisions, it is clear that the word ‘Court’ used in Section 34 has been defined under the definition clause 2 (1) (e) (i) and it 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 arbitration if the same had been the subject matter of suit.
The law in regard to the maintainability of the application under Section 34 of the Act of 1996 against an arbitral award has already been settled by the various judgments of the Apex Court and the matter is no more res integra.
The Court held,
In Hindustan Cooper Limited Vs Nicco Corporation Limited, 2009 (6) SCC 69, the Apex Court while dealing with the said issue held that the application under Section 34 of the Act of 1996 is to be filed before a Court which is a Principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary civil jurisdiction, having jurisdiction to decide the question forming the subject matter of the arbitration. It was a case where application under Section 34 of the Act of 1996 was preferred before Jharkhand High Court which was not a Court having ordinary original civil jurisdiction, and the Apex Court found that the challenge being made directly to the High Court was not permissible under Section 34 and it remitted the matter filed under Section 34 to the Civil Court competent to hear and decide the same.
A coordinate Bench of this Court in case of P.T.C Techno Private Limited Vs Samsung India Electronics Private Limited, Civil Misc. Arbitration Application, decided on 26.02.2019 held that Allahabad High Court does not exercise ordinary original civil jurisdiction, hence the application under Section 34 was not maintainable before the Court.
The judgment in Atlanta Limited (Supra) relied on by the the applicants’ counsel is of no help to him as Bombay High Court exercises ordinary original civil jurisdiction and, thus, Apex Court held that in view of Section 2 (1) (e) (i) it was empowered to entertain the application under Section 34 being a Court.
“The said ratio is not applicable in the present case as Allahabad High Court does not exercise ordinary original civil jurisdiction and, thus, would not come within the ambit of Court as provided under Section 34 read with Section 2 (1) (e) (i) of the Act of 1996.
The application moved by the applicants under Section 34 of the Act of 1996 challenging the arbitral award passed by the sole Arbitrator is only maintainable before the Principal Civil Court of original jurisdiction and not this Court.
In view of the law laid down by the Apex Court in case of Atlanta Limited (Supra) and Associated Contractors (Supra), the application under Section 34 of the Act of 1996 is not maintainable,” the Court further observed while dismissing the application.