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 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURSIDCITON

CIVIL APPEAL NO. 1093 OF 2006

THE STATE OF JHARKHAND AND ORS.         … APPELLANTS  

VERSUS

M/S HINDUSTAN CONSTRUCTION CO. LTD.         …RESPONDENT

J U D G M E N T

  S.ABDUL NAZEER, J.

1. By  an  order  dated  10.01.2013,  this  Court  had  referred  the  matter  for

adjudication to Hon’ble Justice S.B Sinha, retired Judge of this Court.  Learned

Arbitrator was requested to conclude the arbitration proceedings expeditiously.  It

was further  observed that  the award shall  be  filed  before this  Court.   Learned

Arbitrator passed an award on 16.10.2015 and a copy of the award was sent to this

Court.   Admittedly, the  appellants  have  challenged  the  said  award  by  filing  a

petition under Section 34 of the Arbitration and Conciliation Act, 1996, before the

Civil Court.  The respondents have filed an affidavit dated 16.06.2016 requesting

this Court to pronounce the judgment in terms of the award.  

2. Learned counsel for the respondents submits that since the Arbitrator was

directed to file his award in this Court, the application for making the award a rule

of  the  Court  must  be  filed  in  this  Court  and  that  this  Court  alone  has  the

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jurisdiction to pronounce the judgment in terms of the award.  In this connection,

he  has  relied  on  a  three-Judge  Bench  judgment  of  this  Court  in  Mcdermott

International INC. vs. Burn Standard Co. Ltd. and Others reported in 2005 (10)

SCC 353, and a two-Judge Bench judgment in State of Rajasthan vs. Nav Bharat

Construction Company (2), 2010 (2) SCC 182.

3. On  the  other  hand,  learned  senior  counsel  appearing  for  the  appellant

submits  that  right  to  appeal  is  a  valuable  right  and  unless  there  exists  cogent

reasons, a litigant should not be deprived of the same.  If this Court decides the

objections to the award, the parties will lose their right of appeal.   It is further

submitted that while referring the matter to arbitration, this Court had not retained

control of the proceedings of the Arbitrator. In this connection he has relied on the

decisions  of  this  Court  in  Bharat  Coking  Coal  Limited  vs.  Annapurna

Construction (2008) 6 SCC 732 and State of West Bengal and Ors. vs. Associated

Contractors (2015) 1 SCC 32.  

4. In Nav Bharat Construction Company (supra), this Court while following a

three-Judge Bench judgment  in  Mcdermott  International  INC (supra)  has held

that since the Arbitrator was directed to file the award in this Court, an application

to make the award rule of the Court, has to be filed in this Court.  It has been held

in paragraph 11 thus:

“From the judgment of this Court dated 4-10-2005, it has been made clear by this Court in the operative part of the same, as noted  hereinearlier, that  the  award that  would be passed by the umpire must be filed in this Court and secondly, it was clarified in the judgment itself that this was not a case of a new reference but a

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continuation  of  the  earlier  proceeding  and  thus  the  Act  shall continue  to  apply.  In  McDermott  International  Inc  .  4  ,  the three-Judge  Bench  decision  of  this  Court  clearly  observed  that since the arbitrator was directed to file his award in this Court, the objections as well as the entertainability of the application of the appellant for making the award a rule of the court must be filed in this Court alone and, therefore, this Court has the jurisdiction to entertain the application of the appellant and also the objections filed by the respondent.”  

            (Emphasis supplied)

5. In Bharat Coking Coal Limited (supra), this Court has held that the Court

ordinarily must reserve right of a party to prefer an appeal. A right to appeal is a

valuable  right  and  unless  there  exists  cogent  reasons,  a  litigant  should  not  be

deprived of the same.  It was further held that jurisdiction cannot be assumed by

the  Court  even  by consent  of  the  parties.  In  Associated  Contractors  (supra)  a

three-Judge  Bench  of  this  Court,  after  taking  note  of  some  of  the  previous

judgments of this Court, has held that the Supreme Court cannot be considered to

be a Court within the meaning of Section 2(1)(e) of the 1996 Act even if it retains

seisin over the arbitral proceedings.  In this judgment, this Court has doubted the

view taken in State of M.P. vs. Saith and Skelton (P) Ltd. (1972) 1 SCC 702 and

Guru Nanak Foundation vs.  Rattan Singh and Sons (1981)  4 SCC 634 that

where an Arbitrator was appointed by the Supreme Court itself and the Supreme

Court retains seisin over the arbitration proceedings, the Supreme Court would be

‘Court’ for the purpose of Section 2(c) of the 1940 Act. It has been observed thus:

“20………Secondly,  under  the  1940  Act,  the  expression  “civil court” has been held to be wide enough to include an appellate court and, therefore would include the Supreme Court as was held

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in the two judgments aforementioned under the 1940 Act.  Even though  this  proposition  itself  is  open to  doubt,  as  the  Supreme Court exercising jurisdiction under Article 136 is not an ordinary appellate  court,  suffice  it  to  say that  even this  reason does  not obtain  under  the  present  definition,  which  speaks  of  either  the Principal  Civil  Court  or  the  High  Court  exercising  original jurisdiction. Thirdly, if an application would have to be preferred to the Supreme Court directly, the appeal that is available so far as applications under Sections 9 and 34 are concerned, provided for under Section 37 of the Act, would not be available. Any further appeal to the Supreme Court under Article 136 would also not be available. ……”

(Emphasis supplied)

6. We  are  of  the  view  that  there  is  a  difference  of  opinion  in  relation  to

entertainability of an application by this Court for making the award as Rule of the

Court.   The  matter  is,  therefore,  referred  to  larger  bench  for  decision  of  the

following question :

“Whether this Court can entertain an application for making the award

as  Rule  of  the  Court,  even  if  it  retains  seisin  over  arbitral

proceedings?”  

7. Registry is directed to place the matter before the Hon’ble Chief Justice of

India for appropriate orders.

……………………………J. (J. CHELAMESWAR)

……………………………J. New Delhi; (S. ABDUL NAZEER) September 22, 2017