Continental Engineering Corporation Limited vs Jaipur Metro Rail Corporation

Continental Engineering Corporation Limited, Having Its Address At No. 95 Dun Hua South Road Section 2 Taipei 106 Taiwan City And Having Registered Address At Flat No. 211 Pocket A/3 Sector 7 Rohini New Delhi 110085 And Project Site Office At Old Police Head Quarter Near Jaleb Chowk Infront Of City Palace Near Fro Office Badi Chouper Jaipur Rajasthan Through Its Power Attorney Holder (Dgm Contracts) Mr. Lilanand Chaudhary ----Petitioner Versus Jaipur Metro Rail Corporation, Khanji Bhawan Tilak Marg C- Scheme Jaipur 302005 ----Respondent

For Petitioner(s) : Mr. Anil Kher, Senior Advocate, Mr. Anant Kasliwal, Senior Advocate with Mr. Vaibhav Kasliwal and Mr. Shashank Kasliwal through VC For Respondent(s) : Mr. Rajendra Prasad, Senior Advocate with Mr. Sandeep Pathak and Ms. Vertika Mehra through VC

HON'BLE MR. JUSTICE PANKAJ BHANDARI

Order

ORDER RESERVED ON :: 27/01/2022

ORDER PRONOUNCED ON :: 02/03/2022

1. The applicant - Continental Engineering Corporation Limited

has preferred this arbitration application under Section 10(1) of

the Commercial Courts, Commercial Division and Commercial

Appellate Division of High Courts Act, 2015 (hereinafter referred

to as "the Commercial Courts Act") with the prayer that the

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application be allowed and the matter be adjudicated on merits in

the interest of justice.

2. It is contended by Mr. Anil Kher, Senior Advocate, appearing

with Mr. Anant Kasliwal, Senior Advocate and Mr. Vaibhav Kasliwal

appearing for the applicant that the award was passed on

20.12.2017. The applicant within 90 days filed an application

under Section 34 of the Arbitration and Conciliation Act, 1996

(hereinafter referred to as "the Act") before the Commercial Court

on 16.3.2018. The non-applicant raised objections to the

maintainability of application under Section 34 of the Act before

the Commercial Court on 22.10.2018. The Commercial Court vide

order dated 22.11.2018 has held that since it is an international

commercial dispute, the application is not maintainable before the

Commercial Court. The Commercial Court has returned the

application under Order 7 Rule 10 CPC for presentation before the

appropriate Court. It is contended that file was taken back from

the Commercial Court on 6.12.2018 and was filed before the High

Court on 10.12.2018. In the application filed by the applicant, the

Registry has pointed out certain defects and in view of those

defects, a fresh application was filed by the applicant on

14.2.2019.

3. It is contended by learned counsel for the applicant that

since the application under Section 34 of the Act has been

returned for presentation before the appropriate Court and the

same has been filed before the High Court, which has the

jurisdiction to deal with the application under Section 34 of the Act

when the matter pertains to an international commercial dispute,

the High Court should therefore now adjudicate the objections

raised under Section 34 of the Act.

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4. Counsel for the applicant has placed reliance on M.P. Steel

Corporation Versus Commissioner of Excise: (2015) 7 SCC 58;

Asif Ahmedally Porbunderwalla Versus Mrs. Daulat Akbarali

Porbunderwalla & Ors.: 2014 (2) Mh.L.J. 210; All India Reporter

Limited Versus Ramchandra Dhondo Datar: AIR 1961 Bom 292;

United Bank of India Versus Naresh kumar & Ors.: (1996) 6 SCC

660; Assam Ashok Hotel Corporation Ltd. Versus Northeast

Chamber of Commerce and Industry (NECCI) & Ors.: (2016) 4

Gauhati Law Reports 532 and International Continental

Caoutchoue Compagnie Versus Mehta & Co.: AIR 1927 Cal 758.

5. Mr. Rajendra Prasad, Senior Advocate, appearing with Mr.

Sandeep Pathak, has vehemently opposed the application. It is

contended that no application as such has been filed under

Section 34 of the Act before the High Court. It is contended that

under sub-clause (1) of Rule 4 of the Rajasthan Arbitration Rules,

2003 (hereinafter referred to as "the Rules") a signed application

has to be filed, verification of which is mandatory. It is also

contended that as per Rule 8 of the Rules, if the requirement is

not fulfilled, the Court may reject the same after affording

opportunity of hearing. It is further contended that as per Rule

125 of the Rajasthan High Court Rules, every application must

carry a heading depicting the name of the High Court. However,

the application under Section 34 of the Act, which was filed before

the Court below, has been annexed with the application under

Section 10(1) of the Commercial Courts Act. Thus, the

presentation itself is not in accordance with the Rajasthan High

Court Rules.

6. It is also contended that even assuming for the sake of

argument that application under Section 34 of the Act is duly filed,

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the same has not been filed within the prescribed time. The award

was passed on 20.12.2017 and the application, which was filed

before the Commercial Court, was filed on 16.3.2018 and

thereafter, it was held by the Commercial Court that the

application under Section 34 of the Act is not maintainable before

the Commercial Court on 22.11.2018. The application before the

High Court was filed on 10.12.2018 and the present application

has been filed on 14.2.2019 after an inordinate delay. Attention of

this Court is drawn to sub-section (3) of Section 34 of the

Arbitration Act, which states that an application for setting aside

may not be made after three months have elapsed from the date

on which the party making that application had received the

arbitral award, or, if a request had been made under Section 33,

from the date on which that request had been disposed of by the

arbitral tribunal. Further, the proviso to sub-section (3) of Section

34 of the Arbitration Act provides that if the Court is satisfied that

the applicant was prevented by sufficient cause from making the

application within the said period of three months, it may

entertain the application within a further period of thirty days, but

not thereafter. It is argued that application has not been filed

within 120 days as provided and the Court is barred from

entertaining an application after 120 days.

7. It is contended that there is no application as such filed

under Section 34 of the Act. Further, application has not been

presented before the appropriate Officer of the High Court. It is

also contended that Section 5 of the Act does not apply. At the

most applicant can have the benefit of Section 14 of the Limitation

Act, but no application under Section 14 of the Limitation Act has

been filed with the application. It is argued by learned Senior

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Advocate that way back on 22.10.2018 itself it was informed to

the applicant that the application is not maintainable before the

Commercial Court. The applicant, however, pursued the

application under Section 34 before the Commercial Court, which

ultimately returned his application.

8. It is contended that the Commercial Court should have

rejected the application rather than returning it under Order 7

Rule 10 CPC as Order 7 Rule 10 CPC would not apply. It is also

contended that even if, for the sake of argument, it is considered

that Order 7 Rule 10 CPC applies and the application has been

returned for presentation before the appropriate Court, fresh

application ought to have been filed before the High Court in

accordance with the High Court Rules after duly signing and

verifying the application. It is also contended that the applicant

has not been diligent and the application is not bonafide and the

same deserves to be rejected.

9. Counsel has placed reliance on Simplex Infrastructure Ltd.

Versus Union of India: (2019) 2 SCC 455, Harshad Chimanlal

Modi Versus DLF Universal Ltd & Anr.: (2006) 1 SCC 364, Sri

Amar Chand Inani Versus The Union of India: (1973) 1 SCC 115;

Hanamanthappa Versus Chandrashekharappa: AIR 1997 SC

1307; Allahabad Bank Versus Shank's (Steel Fab Pvt.Ltd. & Ors.):

AIR 2008 Cal 96; Madhavrao Narayanrao Patwardhan Versus

State of Bombay: 1959 SCR 564; Ramji Pandey & Ors. Versus

Swaran Kali: (2010) 14 SCC 492; Rabindranath Samuel Dawson

Versus Sivakami & Ors.: AIR 1972 SCC 730; Firm Ramnath

Ramchandra Versus Firm Bhagatram & Co.: AIR 1960 Rajasthan

219; Govinda Menon Raman Menon & Ors. Versus Krishna Pillai

Kesava Pillai & Ors.: AIR 1955 Travancore-Cochin 51; Indira

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Gandhi National Open University Versus Sharad Das & Associates

Pvt. Ltd.: O.M.P. (COMM) 26/2019 and Salazar Luis Anthony

Marques (since Deceased) thr Lrs. Versus Mohd. Haroon

Japanwala & Ors.: (2015) 217 DLT 261.

10. I have considered the contentions and perused the material

available on record.

11. The application, which has been filed before the High Court is

an application under Section 10(1) of the Commercial Courts Act

read with Section 151 of CPC. Section 10(1) of the Commercial

Courts Act deals with the jurisdiction in respect of arbitration

matters. Sub-section (1) of Section 10 of the Commercial Courts

Act reads as under:

"10. Jurisdiction in respect of arbitration matters

--Where the subject-matter of an arbitration is a commercial dispute of a Specified Value and--

(1) If such arbitration is an international commercial arbitration, all applications or appeals arising out of such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 that have been filed in a High Court, shall be heard and disposed of by the Commercial Division where such Commercial Division has been constituted in such High Court."

12. Section 10 therefore, just deals with the jurisdiction in

respect of international commercial arbitration matters. The prayer

made for in the application under Section 10(1) of the Commercial

Courts Act reads as under:

"It is, therefore, most humbly prayed that this Hon'ble Court may allow this application and may kindly adjudicate and decide the matter on merits in the interest of justice."

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13. As far as facts of the case are concerned, it is not disputed

that the award was passed on 20.12.2017. The application under

Section 34 of the Act was filed before the Commercial Court on

16.3.2018. The non-applicant raised objections to the

maintainability of application under Section 34 before the

Commercial Court on 22.10.2018. The Commercial Court vide

order dated 22.11.2018 held that the application is not

maintainable, however, it directed that the application be returned

under Order 7 Rule 10 CPC for presentation before the proper

Court. Though the order passed by the Commercial Court is not

under challenge before this Court, however, from plain reading of

Order 7 Rule 10 CPC, it is apparent that it applies to plaint and not

to application. Rule 11 of the Rajasthan Arbitration Rules, 2003

reads as under:

"11. (1) Save as otherwise expressly provided in this Act or these rules, the following provisions of the Code of Civil Procedure, 1908 and as amended by C.P.C. (Amendment) Act, 1999 and 2002 shall apply to the proceedings before a Court in so far as they may be applicable thereto, namely,

(i) Sections 28, 31, 35, 35-A, 35-B, 107, 133, 135, 148-A, 151 & 152 and

(ii) Orders III, V, VI, IX, XIII, XIV, XVI to XIX, XXIV, XLI and XLII (2) (a) For the purpose of facilitating application of the provisions referred to under sub-rule (1) the Court may construe them with such alterations not affecting the substance as may be necessary or proper to adopt to the matters before it; and

(b) The Court may for sufficient reasons proceed otherwise than in accordance with the said provisions if

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it is satisfied that interest of the parties shall not thereby be prejudiced."

14. There is no mention of Order 7 CPC in the Rajasthan

Arbitration Rules, 2003. This Court is of the firm view that Order 7

Rule 10 of CPC could not have been applied by the Commercial

Court and the Court should have just rejected the application as

not maintainable before the Commercial Court. However, even

treating the order having been passed under Order 7 Rule 10 CPC,

the applicant ought to have complied with the provisions under

Order 7 Rule 10-A CPC and the Rajasthan Arbitration Rules, 2003.

As per sub-section (1) of Section 4 of the Rajasthan Arbitration

Rules, 2003, every application under Sections 9, 14, 27, 34, 39

and 43 of the Act shall be made in writing duly signed and verified

by the applicant.

15. It is pertinent to note that there is no endorsement about the

return under Order 7 Rule 10 CPC. Rule 125 of the Rajasthan High

Court Rules has not been complied with, as the application under

Section 34 of the Arbitration Act, which is filed before the Court

does not carry the heading and the application under Section 34 of

the Arbitration Act, which was filed before the District Court, is

filed by the applicant as an annexure.

16. The application under Section 34 of the Arbitration Act has

not been filed before the High Court, though, return of application

under Section 34 of the Act does not fall within the purview of

Order 7 Rule 10 CPC but even assuming that application was

returned for presentation before the proper Court, the said

application, which was returned, ought to have been filed before

the proper Officer of the High Court. Annexing the application filed

before the District Court under Section 34 with the application

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under Section 10(1) of the Commercial Courts Act cannot be

treated as filing of the application under Section 34 of the Act

before the High Court.

17. In Amar Chand Inani (supra), the Apex Court has held that

presentation afresh is mandatory. In Simplex Infrastructure Ltd.

(supra) and Harshad Chimanlal Modi (supra), it is held by the

Apex Court that even if Order 7 Rule 10 applies, fresh application

has to be filed. This Court is of the considered view that as soon

as an objection was raised by the non-applicant about the

jurisdiction of the Commercial Court, the applicant should have

withdrawn the application from the Commercial Court and should

have preferred a fresh petition before the High Court after moving

an application under Section 14 of the Limitation Act for condoning

the delay for proceedings before the wrong Court. As per proviso

to sub-section (3) Section 34, an application for setting aside may

not be made after three months have elapsed from the date on

which the party making that application had received the arbitral

award. Proviso to sub-section (3) of Section 34 further provides

that if the Court is not satisfied that the applicant was prevented

by sufficient cause from making the application within the said

period of three months, it may entertain the application within a

further period of thirty days, but not thereafter.

18. The award was passed on 20.12.2017 and the application

was filed before the Commercial Court on 16.3.2018 i.e. after 86

days of passing of the award. It was observed by the Commercial

Court that an application under Section 34 of the Act is not

maintainable before the Commercial Court vide order dated

22.11.2018. Application under Section 10(1) of the Commercial

Courts Act was filed before the High Court on 10.12.2018. The

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applicant did not pursue or remove the defects pointed out by the

Registry and finally, filed the application on 14.2.2019.

19. No application for extension of time was filed by the

applicant. This Court is therefore of the considered view that there

is no presentation as such of any application under Section 34 of

the Act before the High Court. This Court is also of the considered

view that no application under Section 10(1) of the Commercial

Courts Act is required to be filed as Section 10(1) only deals with

the jurisdiction in respect of arbitration matters. Proper course for

the applicant was to file a fresh arbitration application or present

the arbitration application, which was returned before the proper

Officer of the Court. No application under Section 34 of the Act

has been filed in accordance with the Rajasthan Arbitration Rules,

thus this Court is of the considered view that applicant is not

entitled to any relief.

20. There being no application under Section 34 of the Act having

been presented before a proper Officer of the Court, there being

no application for condonation of delay, there being no relief

claimed in the application under Section 10(1) with regard to the

arbitration application, the present arbitration application

therefore deserves to be and is accordingly dismissed. No orders

as to cost.

(PANKAJ BHANDARI),J

SUNIL SOLANKI/PS

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