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“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 673  OF 2014 (Arising out of SLP (C) No.18980 of 2013)

Executive Engineer, Road Development Division No.III, Panvel & Anr. … Appellants

Versus

Atlanta Limited … Respondent

J U D G M E N T

Jagdish Singh Khehar, J.

1. State of  Maharashtra,  through its  Public  Works  Department,  awarded a  

contract  dated  12.7.2000  to  the  respondent-Atlanta  Limited  (a  public  limited  

company)  for  the  construction  of  the  Mumbra  byepass.   On  11.5.2005,  a  

supplementary agreement for additional work was executed between the parties.  

It  would  be  relevant  to  mention,  that  the  Mumbra  byepass  falls  on  National  

highway  no.  4.   The  construction  envisaged  in  the  contract  awarded  to  the  

respondent-Atlanta Limited was, from kilometer  133/800 to kilometer  138/200.  

The  contract  under  reference  envisaged,  settlement  of  disputes  between the  

parties,  through arbitration.   Atlanta  Limited  raised  some  disputes  through a  

communication  dated  1.10.2009.   It  also  invoked  the  arbitration  clause  for  

resolution of the said disputes.  The State of Maharashtra as also Atlanta Limited

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nominated  their  respective  arbitrators,  who  in  turn,  appointed  the  presiding  

arbitrator.   On the  culmination  of  proceedings  before  the arbitral  tribunal,  an  

award  was  rendered  on  12.5.2012.   Almost  all  the  claims  raised  by  Atlanta  

Limited were granted.  In sum and substance, Atlanta Limited was awarded a  

sum of Rs.58,59,31,595/- along with the contracted rate of interest (of 20 per cent  

per annum), with effect from 1.10.2009.  Atlanta Limited was also awarded a sum  

of Rs.41,00,000/- towards costs.  All  the counter claims raised by the State of  

Maharashtra, before the arbitral tribunal, were simultaneously rejected.

2. On 7.8.2012, the State of Maharashtra moved Miscellaneous Application  

no. 229 of 2012 and Miscellaneous Application no. 230 of 2012 under Section 34  

of  the  Arbitration  and  Conciliation  Act,  1996  (hereinafter  referred  to  as  the  

‘Arbitration Act’)  before the District  Judge,  Thane.   The State of  Maharashtra  

through the aforesaid  Miscellaneous Applications sought quashing and setting  

aside of the arbitral award dated 12.5.2012.

3. On the same day, i.e., 7.8.2012, Atlanta Limited filed Arbitration Petition  

no.1158 of  2012 before  the High Court  of  Judicature at  Bombay (hereinafter  

referred to as the ‘High Court’), for the setting aside of some of the directions  

issued by the arbitral tribunal (in its award dated 12.5.2012).  Atlanta Limited also  

claimed further compensation, which according to the respondent, had wrongfully  

not been considered by the arbitral tribunal.

4. A perusal of the averments made in the foregoing two paragraphs reveal,  

that on the same day i.e., on 7.8.2012, the State of Maharashtra as also Atlanta

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Limited questioned the award of the arbitral tribunal dated 12.5.2012.  Whilst the  

State  of  Maharashtra  questioned  the same before  the  District  Judge,  Thane;  

Atlanta Limited raised its challenge before the High Court.  Since the same award  

dated  12.5.2012 was  subject  matter  of  challenge before  two different  courts,  

Atlanta Limited preferred Miscellaneous Civil  Application no. 162 of 2012 under  

Section  24  of  the  Code  of  Civil  Procedure,  1908  praying  for  transfer  of  

Miscellaneous Application no. 229 of 2012, as also, Miscellaneous Application  

No.230 of 2012  (both filed by the State of Maharashtra) before the District Court,  

Thane,  to  the  original  side  of  the  High  Court,  for  being  heard  along  with  

Arbitration  Petition  No.1158  of  2012.   The  aforestated  Miscellaneous  Civil  

Application No.162 of 2012 was allowed by the High Court on 15.3.2013.  The  

operative  part  of  the  order  passed  by  the  High  Court  is  being  extracted  

hereunder:

“32.  In the light of the above conclusion, the argument that this Court can  only direct consolidation of both Petitions  without passing any order with  regard  to  their  transfer,  need  not  be  considered  in  this  case.  Apart  therefrom,  once  I  find  that  the  Respondents  have  no  objection  to  consolidation of  the proceedings so as to avoid  conflicting decisions or  simultaneous trial/hearing, then, all the more, the powers to transfer needs  to be exercised in this case.  It is undisputed that the parties are common  to both matters. In both matters the same Award is under scrutiny. In such  circumstances, the argument that both Petitions need to be consolidated  but  before the District  Court  at  Thane cannot be accepted.  That  would  mean two Courts render decisions and more or less on the same issue and  may be at the same time. The arbitration petition filed by the Petitioners in  this Court is already placed before the Single Judge of this Court and is  now adjourned. It  would be proper if  the proceedings before the District  Court, Thane are brought and are heard along with the Petition filed by the  Petitioners in this Court.

33.  As a result of the above discussion, this application succeeds. It is  made absolute in terms of prayer clause (a) with no order as to costs.”

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The above determination by the High Court, vide its order dated 15.3.2013, is the  

subject matter of challenge through Special leave Petition (C) No.18980 of 2013.

5. Leave granted.

6. The contention advanced at the hands of the learned counsel for the State  

of  Maharashtra,  while  assailing  the  impugned order  of  the  High  Court  dated  

15.3.2013 was, that it was improper for the High Court to transfer the proceedings  

initiated by the appellant through Miscellaneous Application No.229 of 2012 and  

Miscellaneous Application No.230 of 2012 under Section 34 of the Arbitration Act  

before the Court of the District Judge, Thane to the High Court.  In this behalf, the  

pointed submission of the learned counsel for the appellant was, that only the  

District Judge, Thane, had the jurisdiction to determine the controversy emerging  

out of the award of the arbitral tribunal dated 12.5.2012.  It was also submitted,  

that the proceedings initiated by Atlanta Limited through Arbitration Petition no.  

1158 of 2012, ought to have been transferred from the High Court to the District  

Judge, Thane.  In order to make good the aforesaid submission, learned counsel  

for the appellant placed reliance on the definition of the term “Court” expressed in  

Section 2(1)(e) of the Arbitration Act.  Section 2(1)(e) aforementioned is being  

reproduced hereunder :

“2 – Definitions— (1) In this Part, unless the context otherwise requires,—

(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

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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.”

Drawing the court’s pointed attention to the definition of the term “Court”, it was  

the  vehement  contention  of  the  learned  counsel  for  the  appellant,  that  to  

determine which court would have jurisdiction to decide the subject matter of an  

arbitral dispute, it was essential to find out the particular court which would have  

had jurisdiction in the matter, had the dispute been agitated through a civil  suit.  

According  to  learned  counsel,  the  latter  determination,  would  answer  the  

jurisdictional avenue of the arbitral dispute, in terms of Section 2(1)(e) extracted  

above.   In  this  behalf  it  was  submitted,  that  in  the  absence of  any express  

exclusion clause between the parties, on the subject matter under reference, in  

order to settle  the dispute inter-parties,  it  would have been imperative for the  

parties to raise their respective challenges only before the District Judge, Thane.

7. For the above submission, learned counsel also placed reliance on Section  

16 of the Code of Civil  Procedure.  Section 16, according to learned counsel,  

would be relevant to determine the jurisdictional court, if  the dispute had been  

agitated  through a  civil  suit.   Section  16  aforementioned  is  being  extracted  

hereunder:

“16. Suits to be instituted where subject-matter situate.—Subject to the  pecuniary or other limitations prescribed by any law, suits,--

(a) for the recovery of immovable property with or without rent or  profits,

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(b) for the partition of immovable property,

(c) for foreclosure, sale or redemption in the case of a mortgage of  or charge upon immovable property,

(d) for  the  determination  of  any  other  right  to  or  interest  in  immovable property,

(e) for compensation for wrong to immovable property,

(f) for the recovery of movable property actually under distraint or  attachment,

shall be instituted in the Court within the local limits of whose jurisdiction  the property is situate:

Provided that a suit to obtain relief respecting, or compensation for wrong  to, immovable properly held by or on behalf of the defendant may, where  the relief sought can be entirely obtained through hi s personal obedience,  be instituted either in the Court within the local limits of whose jurisdiction  the property  is  situate,  or  in  the Court  within  the local  limits  of  whose  jurisdiction  the defendant  actually  and voluntarily  resides,  or  carries  on  business, or personally works for gain.

Explanation .--In this section "property" means property situate in India.”

Relying on Section 16 extracted above, it was asserted by learned counsel, that  

the  original  agreement  between  the  parties  dated  12.7.2000,  and  the  

supplementary  agreement  dated  11.5.2005,  related  to  the construction of  the  

Mumbra byepass.  The said construction is from Kilometer 133/800 to Kilometer  

138/200.   The aforesaid  location of  construction,  according to  the undisputed  

position between the parties,  is  within Thane District,  and as such, within the  

territorial  jurisdiction of the Sessions Division, Thane.  Therefore, according to  

learned  counsel  for  the  appellant,  only  the  “principal  civil  court  of  original  

jurisdiction”  in  District  Thane  i.e.,  the  District  Judge,  Thane,  would  have  

jurisdiction in the matter.  It was also the submission of the learned counsel for

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the  appellant,  that  the  toll  stations  for  collecting  toll  constructed  by  the  

respondent-Atlanta  Limited,  are  also  located  at  the  venue  of  the  Mumbra  

byepass.  Thus viewed, according to the learned counsel for the appellant, the  

collection of toll (which inter alia constitutes the subject of dispute, between the  

parties) is also carried on by the respondents within District Thane, i.e., within the  

territorial  jurisdiction of the District Judge, Thane.  Based on Section 16 of the  

Code of Civil  Procedure, and more particularly of clause (d) thereof, it was the  

pointed submission of the learned counsel for the appellant, that only the District  

Judge, Thane has the jurisdiction to entertain an arbitral dispute, arising between  

the rival parties to the present appeal.

8. In order to further support his contention, that the District  Judge, Thane  

alone would have jurisdiction in the matter, learned counsel for the appellant, also  

placed emphatic reliance on Section 20 of the Code of Civil Procedure which is  

being reproduced hereunder:

“20. Other  suits  to  be  instituted  where  defendants  reside  or  cause of  action  arises.—Subject  to  the  limitations  aforesaid,  every  suit  shall  be  instituted in a Court within the local limits of whose jurisdiction --

(a) the defendant, or each of the defendants where there are more  than one, at the time of the commencement of the suit, actually  and voluntarily  resides,  or  carries  on business,  or  personally  works for gain; or

(b) any of the defendants, where there are more than one, at the  time of the commencement of the suit, actually and voluntarily  resides,  or carries  on business, or personally  works for  gain,  provided that in such case either the leave of the Court is given,  or the defendants who do not reside, or carry or business, or  personally  work  for  gain,  as  aforesaid,  acquiesce  in  such  institution ; or

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(c) the cause of action, wholly or in part, arises.

Explanation .--A corporation shall  be deemed to carry on business at its  sole or principal office in India or, in respect of any cause of action arising  at any place where it has also a subordinate office, at such place.

Illustrations

(a) A is a tradesman in Calcutta, B carries on business in Delhi. B , by  his agent in Calcutta, buys goods of A and requests A to deliver them to the  East  Indian  Railway  Company.  A  delivers  the  goods  accordingly  in  Calcutta. A may sue B for the price of the goods either in Calcutta, where  the cause of action has arisen or in Delhi, where B carries on business.

(b) A resides at Simla, B at Calcutta and C at Delhi, A, B and C being  together at Benaras, B and C make a joint promissory note payable on  demand, and deliver it  to A. A may sue B and C at Benaras, where the  cause of action arose. He may also sue them at Calcutta, where B resides,  or at Delhi, where C resides; but in each of these cases, if the non-resident  defendant objects, the suit cannot proceed without the leave of the Court.”

Relying on the above provision, it was asserted, that a reading of Section 20 of  

the Code of Civil  Procedure shows, that a preference has been postulated for  

certain provisions including Section 16 of the Code of Civil Procedure, which was  

evident from the opening words of Section 20 of the Code of Civil  Procedure,  

which clearly denoted, that the issue of jurisdiction expressed in Section 20 of the  

Code of Civil Procedure, would be subject to the overriding effect in the matter of  

jurisdiction,  expressed  in  the  provisions  preceding  Section  20  (i.e.  including  

Section 16).

9. Learned  counsel  for  the  respondent-Atlanta  Limited,  however,  strongly  

opposed the submissions advanced at the hands of the learned counsel for the  

appellant,  on the issue of  jurisdiction.   In this  behalf,  learned counsel  for  the  

respondent invited our attention to the reply affidavit filed on behalf of the State of

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Maharashtra, to Miscellaneous Civil Application No.162 of 2012 (filed by Atlanta  

Limited before the High Court), para 8 of the reply affidavit which was pointedly  

brought to our notice is being extracted hereunder :

“8.   In fact it is an admitted position and common ground that both; this  Hon’ble Court and the District Court at Thane have jurisdiction in respect of  the subject-matter in issue. Peculiarly  this Hon’ble Court falls  within the  definition of the term “Court” under Section 2(e) of the Arbitration Act by  virtue  of  being  a  High  Court  in  the  Mumbai  District  having  Original  Jurisdiction, and on the other hand the District Court at Thane being the  Principal Civil  Court of original jurisdiction in the Thane District also falls  within the same definition.”

(emphasis is ours)

In  view  of  the  stand  adopted  in  writing  by  the  appellants,  in  response  

Miscellaneous Civil  Application no. 162 of 2012, it  was sought to be asserted,  

that the appellants had no right to raise the issue of jurisdiction before this Court.

10. Despite  the  objection  noticed  in  the  aforegoing  paragraphs,  it  was  the  

vehement contention of  the learned counsel  for the respondent, that the High  

Court and not the District  Judge, Thane, had the jurisdiction to adjudicate the  

controversy raised by the rival parties with reference to the award of the arbitral   

tribunal dated 12.5.2012.  In order to make good the aforesaid submission, it was  

asserted,  that  the  contractual  agreement  dated  12.7.2000,  as  also,  the  

supplementary  agreement  dated  11.5.2005,  were  executed  at  Mumbai.  

Additionally, it was submitted that the parties had mutually agreed, that the seat  

of arbitration in case of any disputes arising between the parties, would be at  

Mumbai.  Relying on the aforesaid undisputed factual position, learned counsel

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for  the respondent invited  our attention to  the determination rendered by this  

Court  in  Bharat  Aluminium Company &  Ors.  vs.  Kaiser  Aluminium Technical  

Services  Inc  &  Ors.  (2012)  9  SCC  559,  and  made  pointed  reliance  to  the  

following observations recorded therein:

“96. xxx xxx xxx xxx

We are of the opinion, the term "subject matter of the arbitration" cannot be  confused with  "subject  matter  of  the suit".  The term "subject  matter"  in  Section 2(1)(e) is confined to Part I. It has a reference and connection with  the process of dispute resolution. Its purpose is to identify the courts having  supervisory control over the arbitration proceedings.  Hence, it refers to a  court  which  would  essentially  be  a  court  of  the  seat  of  the  arbitration  process. In our opinion, the provision in Section 2(1)(e) has to be construed  keeping in view the provisions in Section 20 which give recognition to party  autonomy. Accepting the narrow construction as projected by the Learned  Counsel for the Appellants would, in fact, render Section 20 nugatory. In  our view, the legislature has intentionally given jurisdiction to two courts i.e.  the court which would have jurisdiction where the cause of action is located  and the courts where the arbitration takes place. This was necessary as on  many occasions the agreement may provide for a seat of arbitration at a  place  which would be neutral  to  both the parties.  Therefore,  the courts  where the arbitration takes place would be required to exercise supervisory  control over the arbitral process. For example, if the arbitration is held in  Delhi,  where  neither  of  the  parties  are  from Delhi,  (Delhi  having  been  chosen as a neutral place as between a party from Mumbai and the other  from Kolkata) and the tribunal sitting in Delhi passes an interim order Under  Section 17 of the Arbitration Act, 1996, the appeal against such an interim  order under Section 37 must lie  to the Courts of Delhi being the Courts  having  supervisory  jurisdiction  over  the  arbitration  proceedings  and the  tribunal.  This would be irrespective of the fact that the obligations to be  performed under the contract were to be performed either at Mumbai or at  Kolkata,  and  only  arbitration  is  to  take  place  in  Delhi.  In  such  circumstances,  both  the  Courts  would  have  jurisdiction,  i.e.,  the  Court  within whose jurisdiction the subject matter of the suit is situated and the  courts within the jurisdiction of which the dispute resolution, i.e., arbitration  is located.

97.  The  definition  of  Section  2(1)(e)  includes  "subject  matter  of  the  arbitration"  to  give  jurisdiction  to  the courts  where  the arbitration  takes  place,  which otherwise  would not  exist.  On the other  hand, Section 47  which is in Part II of the Arbitration Act, 1996 dealing with enforcement of

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certain  foreign  awards  has  defined  the  term  "court"  as  a  court  having  jurisdiction over the subject-matter of the award. This has a clear reference  to a court  within whose jurisdiction the asset/person is  located,  against  which/whom the enforcement of the international arbitral award is sought.  The provisions contained in Section 2(1)(e) being purely jurisdictional  in  nature can have no relevance to the question whether Part  I  applies  to  arbitrations which take place outside India.

98. We now come to Section 20, which is as under:

“20. Place of arbitration—(1) The parties are free to agree on the  place of arbitration.

(2) Failing any agreement referred to in Sub-section (1), the place of  arbitration shall be determined by the arbitral tribunal having regard  to the circumstances of the case, including the convenience of the  parties.

(3) Notwithstanding Sub-section (1) or Sub-section (2), the arbitral  tribunal may, unless otherwise agreed by the parties, meet at any  place it considers appropriate for consultation among its members,  for  hearing witnesses,  experts  or  the parties,  or  for  inspection of  documents, good or other property."

A plain reading of  Section 20 leaves no room for doubt that where the  place of arbitration is in India, the parties are free to agree to any "place" or  "seat" within India, be it Delhi, Mumbai etc. In the absence of the parties'  agreement thereto, Section 20(2) authorizes the tribunal to determine the  place/seat of such arbitration. Section 20(3) enables the tribunal to meet at  any place for conducting hearings at  a place of convenience in matters  such as consultations among its members for hearing witnesses, experts or  the parties.”

(emphasis is ours)

11. We have heard learned counsel for the parties.

12. We have recorded hereinabove the foundation, on the basis whereof, the  

present controversy was adjudicated before the High Court.  As noticed above,  

the challenge to the impugned order passed by the High Court, is based on the  

question of jurisdiction.  While the learned counsel for the appellants has placed

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reliance on Section 2(1)(e) of the Arbitration Act read with the provisions of Code  

of Civil  Procedure to contend, that the District Judge, Thane, alone would have  

the jurisdiction in the matter; the contention raised on behalf of the respondent is,  

that the High Court alone in exercise of its “ordinary original civil jurisdiction”, has  

the jurisdiction to determine the controversy arising out of the impugned award  

dated 12.5.2012.

13. In our view, it  is not open to the appellants to advance such submission  

before this Court.  Firstly, because the appellants had in paragraph 8 of the reply  

affidavit filed before the High Court, clearly acknowledged the legal position, that  

both the High Court as also the District Judge, Thane, in so far as the present  

controversy  is  concerned,  fall  within  the  definition  of  the  term  “Court”  under  

Section 2(1)(e) of the Arbitration Act.  And secondly, because the impugned order  

passed by the High Court expressly notices in paragraph 10, that it was admitted  

by the rival parties before the High Court, that the High Court on the original side,  

as also the District Judge, Thane, had the jurisdiction in respect of the subject  

matter.  Relevant part of para 10 of the impugned judgment of the High Court is  

being extracted hereunder:-

“10. Mr.  Vashi,  learned  counsel  appearing  on  behalf  of  the  Petitioner  submitted  that  in  the Affidavit-in-Reply  which has been  filed in this petition, it is admitted by the Respondents that the place  of arbitration in terms of the arbitration clause in the contract was  Mumbai.  It is also admitted that both, this Court on the Original Side  and the District  Court  at Thane have jurisdiction in respect of the  subject matter in issue.”

(emphasis is ours)

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It was therefore not open to the appellants to canvass before this Court that the  

High Court of Bombay in exercise of its “ordinary original civil jurisdiction” could  

not adjudicate upon the present controversy, on account of lack of jurisdiction.  

We shall  therefore proceed in the first  instance, on the premise that both the  

courts referred to above had jurisdiction in the matter.  We shall independently  

record our reasons for the same, while dealing with the submissions advanced  

before us.   We  have chosen to do so,  because we are of  the view,  that  an  

important jurisdictional issue has been raised, which needs to be settled, one way  

or the other.  We shall therefore, decide the controversy on merits, irrespective of  

the position expressed by the appellant, on the issue of jurisdiction.

14. During the course of hearing before us, learned counsel for the appellant  

had highlighted for  our consideration,  the factual/legal  controversy  which was  

agitated by the rival parties before the High Court.  In this behalf it was further  

pointed out, firstly, that the respondent’s case before the High Court was, that  

since the arbitral  tribunal had its seat at Mumbai, and the works contract was  

executed  at  Mumbai,  the  original  side  of  the  High  Court  of  Bombay  was  

competent to entertain the controversy.  On the other hand, the appellants before  

the High Court  had pointed out,  that  since the works contract  relating  to  the  

construction and maintenance of the Mumbra byepass on the Mumbai-Pune road  

(located on national  highway no. 4),  and the toll  collection site  were situated  

within Thane District, the District Judge, Thane, was the “more suitable” court for  

determining  the  controversies  raised  by  the  rival  parties.   Secondly,  it  was  

pointed out, that before the High Court an application under Section 24 of the

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Code of Civil Procedure was filed in the matter pending before the High Court, for  

transfer of proceedings filed by the respondents.  It was submitted, that through  

the above application, it was not open to the High Court to have transferred the  

proceedings pending before the District Judge, Thane.  It was further pointed out,  

that before the High Court the appellants had orally submitted, that if  the High  

Court was inclined to invoke its jurisdiction under Section 24 of the Code of Civil   

Procedure, the proceedings filed by the respondent before the High Court should  

have been transferred to the District Judge, Thane, and not the other way around.  

According to the learned counsel, the instant submission has been duly noticed in  

the impugned judgment.  Lastly, it was contended, that Section 24 of the Code of  

Civil  Procedure could not be invoked in a petition filed under Section 34 of the  

Arbitration Act, and therefore, Section 24 of the Code of Civil Procedure ought not  

to have been relied upon by the High Court for transferring the proceedings from  

the Court of District Judge, Thane, to the High Court of Bombay.   

15. The following submissions were advanced before us.  Firstly, considering  

clause (c) of the operative part of the award, according to learned counsel it was  

clear,  that enforcement of such a clause in the award was site-specific,  since  

Mumbra byepass is located on the Mumbai-Pune road (on national highway no.  

4)  and falls  in  Thane District,  the District  Judge,  Thane,  ought to be “natural  

choice” for consideration of the issues advanced by the appellants, as also the  

respondent.  Secondly, according to the learned counsel for the appellants, the  

definition of the term “Court” expressed in Section 2(1)(e) of the Arbitration Act  

uses the expression “subject matter” and not “cause of action”.  While “cause of

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action” can be referable to places where the works contract is executed, or where  

arbitration proceedings were conducted; the term “subject matter” used in Section  

2(1)(e) of the Arbitration Act is only referable to the subject matter of the works  

contract, with respect to which the dispute is raised (with respect to which, there  

was  a  direction  for  extension  of  the  concession  period,  under  the  award).  

Accordingly  it  was  submitted,  that  although  the  High  Court  may  also  have  

jurisdiction, the District Court Thane is “more natural”, “more suitable” and “more  

appropriate” for the adjudication of the claims, raised by the rival parties.  Thirdly  

it was contended, that the original side of the High Court of Bombay, vis-à-vis, the  

District Judge, Thane, is a “superior” Court.  According to the learned counsel for  

the appellants, even if it is acknowledged that the “ordinary original civil side” of  

the High Court of Bombay as also the “principal Civil Court of original jurisdiction”  

for the District Thane i.e., the District Judge, Thane, both have jurisdiction in the  

matter,  there  were  many attributes  on the basis  of  which it  could  be  clearly  

established, that the original side of the High Court of Bombay, is superior to the  

Court of the District Judge, Thane.  In this behalf it was sought to be pointed out,  

that the High Court could take cognizance of contempt of its own orders, and  

furthermore, a judgment delivered by the original side of a High Court operated  

as a binding precedent.  It was submitted, that the District Court, Thane, does not  

have any such attributes.  In the above view of the matter it was submitted, that  

reliance  could  be  placed  on  Section  15  of  the  Code  of  Civil  Procedure,  to  

determine which of the two courts should adjudicate upon the matter.  Section 15  

is being extracted hereunder:-

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“15. Court in which suits to be instituted-  

Every  suit  shall  be  instituted  in  the  Court  of  the  lowest  grade  competent to try it.”

Based on Section 15 extracted above it was submitted, that in case jurisdiction  

could be exercised by two Courts, it was imperative to choose the Court of the  

lowest grade competent to try the suit.  Accordingly, it was contended, that from  

amongst the original  side of the High Court of Bombay and the District  Court,  

Thane, in terms of the mandate of Section 15 of the Code of Civil Procedure, the  

District Court, Thane, being the Court lower in grade than the original side of the  

High  Court  of  Bombay,  ought  to  have  been  chosen  to  adjudicate  upon  the  

matters.  It was also pointed out, that the choice of District Court, Thane, would  

even otherwise be beneficial  to the rival parties on account of the fact, that the  

determination by the said Court,  would be open for re-examination before the  

High Court of Bombay, which exercises supervisory jurisdiction over it.   

16. Additionally, it  was contended, that the choice would fall  in favour of the  

District Judge, Thane, even on account of the likely expeditious disposal of the  

matter by the District Judge, Thane, in comparison with the “original side of the  

High Court of Bombay”.  In this behalf it was submitted, that there were only 42  

petitions filed under Section 34 of the Arbitration Act before the District Judge,  

Thane,  during the entire  year  2012,  whereas,  there were  1317 petitions filed  

under Section 34 before the High Court of Bombay, under its “ordinary original  

civil jurisdiction”, during the year 2012.    Referring to the preceding three years,  

namely,  2009, 2010 and 2011 it  was submitted, whereas a very few petitions

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were  filed  under  Section  34  of  the  Arbitration  Act  before  the  District  Judge,  

Thane, as many as, 1033, 1443 and 1081 petitions respectively (were filed under  

Section 34 of the Arbitration Act) were filed during the three years before the High  

Court of Bombay.  Based on the above factual position it was submitted, that it  

could be expected that the District Judge, Thane, would dispose of the matters  

under reference within a short period of about five years, whereas it was likely  

that  the disposal  of  the said  matters  will  take  more  than two decades if  the  

matters are required to be adjudicated by the original side of the High Court of  

Bombay.  On the instant aspect of the matter also, referring to available data it  

was submitted, that it takes more than 20 years for a suit to be heard and decided  

by  the  High  Court  of  Bombay  under  its  “ordinary  original  civil  jurisdiction”,  

whereas, it  does not take more than 5 years for a suit filed before the District  

Judge, Thane, to be disposed of.  Accordingly it was contended, that keeping in  

view the burden of litigation, the “natural choice” for adjudication of the matters  

under reference ought to be the District Judge, Thane, rather than the High Court  

of Bombay.   

17. Besides the above submissions, no other contention was advanced before  

us.   

18. We  shall  first  endeavour  to  address  the  submissions  advanced  at  the  

hands of the learned counsel for the appellants, with reference to Section 15 of  

the Code of Civil Procedure.  In terms of the mandate of Section 15 of the Code  

of Civil Procedure, the initiation of action within the jurisdiction of Greater Mumbai

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had to be “in the Court of lowest grade competent to try it”.  We are, however,  

satisfied, that within the area of jurisdiction of Principal  District Judge, Greater  

Mumbai,  only the High Court of Bombay was exclusively  the competent Court  

(under its “ordinary original civil jurisdiction”) to adjudicate upon the matter.  The  

above conclusion is imperative from the definition of the term “Court” in Section  

2(1)(e)  of the Arbitration Act.  Firstly,  the very inclusion of  the High Court “in  

exercise of its ordinary original civil  jurisdiction, within the definition of the term  

“Court”,  will  be  rendered  nugatory,  if  the  above  conclusion  was  not  to  be  

accepted.  Because, the “principal Civil Court of original jurisdiction in a district”  

namely the District Judge concerned, being a court lower in grade than the High  

Court, the District Judge concerned would always exclude the High Court from  

adjudicating upon the matter.  The submission advanced by the learned counsel  

for the appellant cannot therefore be accepted, also to ensure the inclusion of “the  

High Court in exercise of its ordinary original  civil  jurisdiction” is given its due  

meaning.  Accordingly, the principle enshrined in Section 15 of the Code of Civil  

Procedure cannot be invoked whilst interpreting Section 2(1)(e) of the Arbitration  

Act.  Secondly, the provisions of the Arbitration Act, leave no room for any doubt,  

that it  is the superior most court exercising original civil  jurisdiction, which had  

been chosen to adjudicate disputes arising out of arbitration agreements, arbitral  

proceedings and arbitral awards.  Undoubtedly, a “principal Civil Court of original  

jurisdiction  in  a  district”,  is  the  superior  most  court  exercising  original  civil   

jurisdiction  in  the district  over  which its  jurisdiction  extends.   It  is  clear,  that  

Section 2(1)(e) of the Arbitration Act having vested jurisdiction in the “principal

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Civil  Court  of  original  jurisdiction  in  a  district”,  did  not  rest  the  choice  of  

jurisdiction on courts subordinate to that of the District Judge.  Likewise, “the High  

Court in exercise of its ordinary original jurisdiction”, is the superior most court  

exercising original civil jurisdiction, within the ambit of its original civil jurisdiction.  

On the same analogy and for the same reasons, the choice of jurisdiction, will  

clearly  fall  in  the realm  of  the High Court,  wherever  a  High Court  exercises  

“ordinary  original  civil  jurisdiction”.   Under  the  Arbitration  Act,  therefore,  the  

legislature  has  clearly  expressed  a  legislative  intent,  different  from  the  one  

expressed in Section 15 of the Code of Civil  Procedure.  The respondent had  

chosen to initiate proceedings within the area of Greater Mumbai, it could have  

done so only before the High Court of Bombay.  There was no other court within  

the jurisdiction of Greater Mumbai, where the respondent could have raised their  

challenge.   Consequently,  we  have  no  hesitation  in  concluding,  that  the  

respondent  by  initiating  proceedings  under  Section  34  of  the  Arbitration  Act,  

before  the  original  side  of  the  High  Court  of  Bombay,  had  not  violated  the  

mandate of  Section 2(1)(e)  of  the Arbitration  Act.   Thus viewed,  we find  the  

submission advanced at the hands of the learned counsel for the appellants, by  

placing reliance on Section 15 of the Code of Civil Procedure, wholly irrelevant.

19. Reliance placed  on Section 16  of  the Code of  Civil  Procedure,  by  the  

learned counsel for the appellants, for the ouster the jurisdiction of the High Court  

of Bombay is equally misplaced.  All that needs to be stated while dealing with  

the aforesaid contention is,  that the controversy between the parties does not  

pertain to recovery of  immoveable  property,  partition of  immoveable  property,

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foreclosure  sale  or  redemption of  immoveable  property,  determination of  any  

other right to immoveable property, for determination of compensation for wrong  

to  immoveable  property  and/or  for  the  recovery  of  moveable  property  under  

distraint or attachment.  It is only in the aforesaid exigencies that Section 16 of  

the Code of Civil  Procedure could have been invoked.  The construction of the  

Mumbra byepass, would only entitle Atlanta Limited to payments contemplated  

under the contract  dated 12.7.2007,  and no more.   A brief  description of  the  

reliefs sought by the rival parties, in the separate proceedings initiated by them,  

does not indicate that either of the parties were claiming any right to or interest in  

any immovable property.  Since none of the above exigencies contemplated in  

Section 16 prevail in the dispute between the rival parties, reliance on Section 16  

of the Code of Civil Procedure is clearly misplaced.

20. Insofar  as  the  jurisdiction  within  the  District  Thane,  is  concerned,  the  

“principal  Civil  Court  of  original  jurisdiction”  is  the court  of  the District  Judge,  

Thane.  Consequently, within the territorial jurisdiction of District Thane, in terms  

of  Section 2(1)(e)  of  the Arbitration  Act,  the challenge could  have only  been  

raised  before  the  “principal  Civil  Court  of  original  jurisdiction”  of  the  district,  

namely, before the District Judge, Thane.  There was no other court within the  

jurisdiction  of  District  Thane,  wherein  the  instant  matters  could  have  been  

agitated.  Therefore,  the  appellants  having  chosen  to  initiate  the  proceedings  

before the District Judge, Thane, i.e., in respect of a cause of action falling in the

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territorial  jurisdiction of  the District  Thane, they too must be deemed to have  

chosen the rightful court i.e., the District Judge, Thane.

21. Shorn  of  the  aforesaid  determination,  our  only  understanding  of  the  

submission  advanced at  the hands of  the learned counsel  for  the appellants  

would be, that as a matter of “natural choice”, as a matter of “suitable choice”, as  

also, as a matter of “more appropriate choice”, the controversies raised by the  

rival parties ought to be collectively determined by the District Court, Thane, and  

not  by  the  High  Court  of  Bombay  (in  exercise  of  its  “ordinary  original  civil  

jurisdiction”).  In order to supplement the aforesaid contention, learned counsel  

for the appellant had depicted the quantum of filing of similar petitions before the  

High Court, as also, before the District Court Thane, and the time likely to be  

taken for the disposal of such matters by the Courts under reference.  There is no  

statutory provision to our knowledge, wherein the determination of jurisdiction, is  

based on such considerations.  No such provision was brought to our notice by  

learned counsel.   The question of  jurisdiction,  is  a pure question of  law,  and  

needs to be adjudicated only on the basis of statutory provisions.  In view of the  

deliberations recorded hereinabove,  it  may not be wrong to observe,  that the  

submissions advanced at the behest of the learned counsel for the appellants on  

the  issue  of  jurisdiction,  are  submissions  without  reference  to  any  principles  

known to law.  To the credit  of the learned counsel for the appellants, it  may  

however be observed, that the above considerations may constitute a relevant  

basis for transfer of proceedings from one court to the other.  Before the above  

considerations can be examined, there would be one pre-condition, namely, that

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the above considerations could be applied for transfer of a case, where statutory  

provisions  (express  or  implied)  do  not  provide  for  the  exercise  of  a  definite  

choice.   As  a  matter  of  expressing  ourselves  clearly,  it  may  be  stated,  that  

inference of legislative intent from statutory provisions, would exclude from the  

realm of  consideration,  submissions of  the nature relied  upon by the learned  

counsel for the appellant.

22. The first issue which needs to be examined is, whether a challenge to an  

arbitration  award  (or  arbitral  agreement,  or  arbitral  proceeding),  wherein  

jurisdiction  lies  with  more  than  one  court,  can  be  permitted  to  proceed  

simultaneously  in  two  different  courts.    For  the  above  determination, it  is  

necessary to make a reference to Section 42 of the Arbitration Act.  The aforesaid  

provision accordingly is being extracted hereunder:

“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 proceedings shall be made in  that Court and in no other Court.”

A perusal of Section 42 of Arbitration Act reveals a clear acknowledgment by the  

legislature,  that the jurisdiction for  raising a challenge to the same arbitration  

agreement, arbitral  proceeding or arbitral  award, could most definitely arise in  

more than one court simultaneously.  To remedy such a situation Section 42 of  

the Arbitration Act mandates, that the court wherein the first application arising

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out of such a challenge is filed, shall  alone have the jurisdiction to adjudicate  

upon the dispute(s), which are filed later in point of time.  The above legislative  

intent must also be understood as mandating, that disputes arising out of the  

same arbitration agreement, arbitral proceeding or arbitral award, would not be  

adjudicated upon by more than one court, even though jurisdiction to raise such  

disputes may legitimately lie before two or more courts.   

23. Ordinarily Section 42 of the Arbitration Act would be sufficient to resolve  

such a controversy.   For the determination of the present controversy, however,  

reliance cannot be placed on Section 42 of the Arbitration Act, because the State  

of  Maharashtra  had  moved  Miscellaneous  Civil  Application  No.  229  and  

Miscellaneous  Civil  Application  No  230  of  2012  under  Section  34  of  the  

Arbitration Act  before the District  Judge,  Thane, on the same day as Atlanta  

Limited had filed Arbitration Petition No. 1158 of 2012 before the High Court.  In  

this behalf it may be mentioned, that both the parties had approached the courts  

referred to hereinabove on 7.8.2012.  The answer to the jurisdictional question,  

arising out in the facts and circumstances of this case, will therefore not emerge  

from Section 42 of the Arbitration Act.    All the same it is imperative for us to give  

effect to the legislative intent recorded under Section 42 aforementioned, namely,  

that  all  disputes  arising  out  of  a  common  arbitration  agreement,  arbitral  

proceeding or arbitral award, would lie only before one court.

24. The very fact that the appellants before this Court, have chosen to initiate  

proceedings against  the arbitral  award before “principal  Civil  Court  of  original

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jurisdiction in a district” i.e., before the District Judge, Thane, and the respondent  

before this Court, has raised a challenge to the same arbitral award before the  

“ordinary original civil  side” of the High Court of Bombay, clearly demonstrates,  

that the underlying principle contained in Section 42 of the Arbitration Act would  

stand breached, if two different courts would adjudicate upon disputes arising out  

of  the  same  arbitral  award.   There  can be  no  doubt,  that  adjudication  of  a  

controversy by different courts, can easily give rise to different conclusions and  

determinations.   Therefore,  logic  and  common  sense  also  require,  the  

determination of all such matters, by one jurisdictional court alone.  In the present  

case, the complication in the matter has arisen only because, the proceedings  

initiated  by  the appellants  before the District  Judge,  Thane,  and proceedings  

initiated by the respondent on the “ordinary original civil side” of the High Court of  

Bombay, were filed on the same day (i.e. on 7.8.2012).  Therefore, Section 42 of  

the Arbitration Act, cannot be of any assistance in the matter in hand.   

25. All the same, it is imperative for us to determine, which of the above two  

courts which have been approached by the rival parties, should be the one, to  

adjudicate upon the disputes raised.  For an answer to the controversy in hand,  

recourse ought to be made first of all to the provisions of the Arbitration Act.  On  

the failure to reach a positive conclusion, other principles of law, may have to be  

relied upon.  Having given out thoughtful consideration to the issue in hand, we  

are of the view, that the rightful answer can be determined from Section 2(1)(e) of  

the  Arbitration  Act,  which  defines  the  term  “Court”.   We  shall  endeavour  to  

determine this issue, by examining how litigation is divided between a High Court

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exercising  “ordinary  original  civil  jurisdiction”,  and the  “principal  civil  court  of  

original jurisdiction” in a district.  What needs to be kept in mind is, that the High  

Court of Bombay is vested with “ordinary original civil jurisdiction” over the same  

area,  over which jurisdiction is  also  exercised by the “principal  Civil  Court  of  

original jurisdiction” for the District of Greater Mumbai (i.e. the Principal District  

Judge, Greater Mumbai).  Jurisdiction of the above two courts on the “ordinary  

original  civil  side”  is  over the area of Greater Mumbai.   Whilst  examining the  

submissions advanced by the learned counsel for the appellant under Section 15  

of the Code of Civil  Procedure, we have already concluded, that in the above  

situation, jurisdiction will vest with the High Court and not with the District Judge.  

The aforesaid choice of jurisdiction has been expressed in Section 2(1)(e) of the  

Arbitration Act, without any fetters whatsoever.  It is not the case of the appellants  

before  us,  that  because  of  pecuniary  dimensions,  and/or  any  other  

consideration(s), jurisdiction in the two alternatives mentioned above, would lie  

with  the  Principal  District  Judge,  Greater  Mumbai.  Under  the  scheme  of  the  

provisions of the Arbitration Act therefore, if the choice is between the High Court  

(in exercise of its “ordinary original civil  jurisdiction”) on the one hand, and the  

“principal civil court of original jurisdiction” in the District i.e. the District Judge on  

the other; Section 2(1)(e) of the Arbitration Act has made the choice in favour of  

the High Court.  This in fact impliedly discloses a legislative intent.  To our mind  

therefore,  it  makes  no  difference,  if  the  “principal  civil  court  of  original  

jurisdiction”, is in the same district over which the High Court exercises original   

jurisdiction, or some other district.  In case an option is to be exercised between a

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High Court (under its “ordinary original civil jurisdiction”) on the one hand, and a  

District Court (as “principal Civil  Court of original jurisdiction”) on the other, the  

choice under the Arbitration Act has to be exercised in favour of the High Court.  

26. In the present controversy also, we must choose the jurisdiction of one of  

two courts i.e. either the “ordinary original civil  jurisdiction” of the High Court of  

Bombay; or the “principal civil  court of original jurisdiction” in District Thane i.e.  

the District Judge, Thane.  In view of the inferences drawn by us, based on the  

legislative intent emerging out of Section 2(1)(e) of the Arbitration Act, we are of  

the considered view, that legislative choice is clearly in favour of the High Court.  

We  are,  therefore  of  the  view,  that  the  matters  in  hand  would  have  to  be  

adjudicated upon by the High Court of Bombay alone.

27. In view of the conclusions drawn by us above, we uphold the order passed  

by the High Court requiring the matters to be adjudicated on the “ordinary original  

civil  side”  by the High Court  of  Bombay.   The reasons recorded by the High  

Court, for the above conclusion, were different.  The reasons for our consideration  

have already been notice above.  In view of the above, we dispose of the instant  

appeal,  with a direction that Arbitration Petition No. 1158 of 2012 filed by the  

Atlanta Limited (the respondent herein) before the High Court of Judicature at  

Bombay,  and Miscellaneous  Application  No.  229  of  2012  and Miscellaneous  

Application No. 230 of  2012 filed by the appellants before the District  Judge,  

Thane,  shall  be  heard  and disposed  of  by  the  High  Court  of  Bombay.   We  

accordingly  hereby  direct  the  District  Judge,  Thane,  to  transfer  the  files  of

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Miscellaneous Application No. 229 of 2012 and Miscellaneous Application No.  

230 of 2012 to the High Court, for disposal in accordance with law.

…..…………………………….J.       (A.K. Patnaik)

…..…………………………….J.       (Jagdish Singh Khehar)

New Delhi; January 16, 2014.