State Of Uttarakhand & Another vs M/s Hillways Construction Company

Sudhanshu Dhulia, J

This appeal from order has been filed by the State Government under Section 37 of the Arbitration and Conciliation Act, 1996 (from hereinafter referred to as "Act") challenging the order dated 12.09.2018 passed by the learned District Judge, Pauri Garhwal which is the Principal Civil Court.

Brief facts of the case are that a contract was executed between M/s Hillways Construction Company and the State Authorities for the construction of a bridge which had to link two districts i.e. Tehri Garhwal and Pauri Garhwal. Meanwhile, certain dispute arose between the parties and ultimately the matter was referred for arbitration. The learned Arbitrator vide order dated 28/30.05.2018 gave an award in favour of the construction company. Against the said award of the learned Arbitrator, the contractor filed an appeal under Section 34 of the Act before the District Judge, Pauri Garhwal, on which the State Government filed its objection saying that the court at Pauri Garhwal is not the court where an application for setting aside the award can be made under Section 34 of the Act as the appropriate court which has the jurisdiction in the matter would be the court at Tehri Garhwal.

There is no dispute regarding the fact that the part of the project was in District Tehri Garhwal and the remaining in District Pauri Garhwal as the bridge links the two districts. Therefore, definitely a part of cause of action arose in the territory of Pauri Garhwal. It is also not the position that of the two courts i.e. at Tehri Garhwal and Pauri Garhwal, the parties had agreed to go only to the Court at Tehri Garhwal.

Learned State Counsel has relied upon clause 31.3 of the contract. The relevant portion of the same reads as under:-

"31.3. All dispute between the parties to the contract arising out of an relating to the contract shall after written notice by either to the contract to the other party, be referred to arbitration as above. Unless the parties otherwise agree, such reference shall not take place until after the completion or abandonment of the works of the determination of the contract. The venue of arbitration shall be a place or places as may be fixed by the arbitrator in his/their sole discretion. Any suit or application for the enforcement of this arbitration clause shall be filed in the competent court within District and no other court of any other districts of the Uttarakhand or outside Uttarakhand shall have any jurisdiction in the matter. The award of the arbitrator shall be, final, conclusive and binding on both the parties to the contract."

The above provision states that any application for the enforcement of this arbitration clause shall be filed in the competent court within District and no other court of any other districts of the Uttarakhand or outside Uttarakhand shall have any jurisdiction in the matter.

Surely if the learned Arbitrator holds arbitration at a place outside Districts Pauri Garhwal or Tehri Garhwal, this would not give jurisdiction to that place. The competent courts here would be both the courts at Tehri Garhwal as well in Pauri Garhwal.

Both the objections raised by the State before the learned District Judge, Pauri Garhwal i.e. pecuniary jurisdiction as well as on the territorial jurisdiction have been rejected.

In my view the objections have rightly been rejected by the learned District Judge, Pauri Garhwal as the part of cause of action also arose in the territory of District Pauri Garhwal.

Now the appeal has been filed by the State under Section 37 of the Act. Section 37 of the Act reads as under:-

"37. Appealable orders.-(1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:-

[(a) refusing to refer the parties to arbitration under section 8;

(b) granting or refusing to grant any measure under section 9;

(c) setting aside or refusing to set aside an arbitral award under section 34.]

(2) An appeal shall also lie to a court from an order of the arbitral tribunal-

(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

(b) granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."

The appellant before this Court is only challenging the order dated 12.09.2018, whereby the objections as to the territorial jurisdiction have been dismissed. This, however, is not a ground for the appeal under Section 37 of the Act.

The appeal is totally misconceived and it is hereby dismissed.

The matter is already pending before the learned District Judge, Pauri Garhwal. Let the matter be decided as expeditiously as possible.