Arbitration Case No. 05 of 2021 · Orissa High Court
Case Details
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 12707 of 2024 (In the matter of an application under Articles 226 and 227 of the Constitution of India, 1950). M/S. GSCO (Gurmeet Singh and Company)Infrastructure Pvt. Ltd. …. Petitioner(s) -versus- Mahanadi Coalfields Limited & Ors. …. Opposite Party (s) Advocates appeared in the case throughHybrid Mode: For Petitioner(s) For Opposite Party (s) : : Mr.Avijit Patnaik, Adv. Mr. Rakesh Sharma, Adv. CORAM: DR. JUSTICE S.K. PANIGRAHI DATE OF HEARING:-24.04.2025 DATE OF JUDGMENT:-20.06.2025 Dr. S.K. Panigrahi, J. 1. The present Writ Petition has been filed invoking the extraordinary jurisdiction of this Court under Article 226 and 227 of the Constitution assailing the legality and sustainability of the order dated 06.03.2024 passed by the Learned District and Sessions Judge, Sundargarh in Arbitration Case No. 05 of 2021. Vide the said order, the court below Page 1 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 dismissed the petitioner’s application dated 27.09.2022 which had prayed for the dismissal of the Section 34 petition filed by Mahanadi Coalfields Limited (MCL) on the ground of territorial incompetence and bar of limitation. 2. The principal contention raised in the Writ Petition is that the Learned District Judge, Sundargarh lacked the jurisdiction to entertain the Section 34 application filed by MCL, in view of the overriding mandate of Section 42 of the Arbitration and Conciliation Act, 1996 read with the provisions of the Commercial Courts Act, 2015. The petitioner asserts that the Court at Cuttack, being the seat of arbitration and the court which appointed the Arbitrator under Section 11 of the A&C Act, alone has the requisite jurisdiction to entertain post-award challenges under Part I of the Act. I. FACTUAL MATRIX OF THE CASE:
Facts
3. The brief facts of the caseare asfollows: (i) The dispute arises out of a contract awarded to the petitioner pursuant to e-Tender Notice No. CL/SBP/GM/(CMC)/NIT- 088/2012/2986 dated 07.11.2012 for “Hiring of HEMM (Shovel, Drill, Dozer etc.) for transfer & transportation of materials in various strata including drilling, excavation, dumping, spreading, dozing and other allied works” at Kulda OCP, Basundhara-Garjanbahal Area under Mahanadi Coalfields Ltd. (MCL). The petitioner, M/s GSCO Infrastructure Pvt. Ltd., was the successful bidder, and the agreement was duly executed between the parties. Page 2 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 (ii) The work was carried out and ultimately completed to the satisfaction of MCL. A Completion Certificate dated 03.07.2016 was issued by Opposite Party No.4 (Project Officer, Kulda OCP) acknowledging that the petitioner had completed the assigned scope of work on 29.06.2016. (iii) Thereafter, disputes arose in relation to alleged wrongful deduction of amounts, withholding of security deposits, non-refund of performance guarantees, and imposition of penalties. Aggrieved thereby, the petitioner approached this Court in W.P.(C) Nos. 19909/2016, 473/2017, and 474/2017. (iv) These were disposed of by a common order dated 25.03.2019,
Legal Reasoning
petitioner has approached this Court in the present writ petition. Page 4 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 II. SUBMISSIONS ON BEHALF OF THE PETITIONER: 4. (i) Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions: The primary argument canvassed by the petitioner is that the Court at Cuttack alone has jurisdiction to entertain any application under Part I of the A&C Act since the appointment of the arbitrator was made by this Court, the arbitration proceedings were conducted entirely at Cuttack, and the award was rendered from Cuttack. Therefore, in terms of Section 42 of the Act, no other Court can assume jurisdiction in respect of the said arbitration agreement. (ii) It is further submitted that the Commercial Courts Act, 2015 mandates that commercial disputes of a specified value must be adjudicated exclusively by designated Commercial Courts. Section 10(3) read with the Government of Odisha’s Notification dated 13.11.2020 establishes the Commercial Court at Sambalpur with jurisdiction over the Judgeships of Sambalpur, Bargarh, Deogarh, and Jharsuguda. Notably, Sundargarh district is not included therein. (iii) In the absence of any designated Commercial Court for Sundargarh and in light of the seat of arbitration being at Cuttack, it is contended that only the Commercial Court at Cuttack or Sambalpur (if jurisdictionally competent) could have entertained the Section 34 petition. It is further argued that since Section 11 proceedings were instituted and concluded at Cuttack and the award itself was delivered at Cuttack, the principle of exclusive jurisdiction under Section 42 squarely applies. Page 5 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 (iv) Reliance is placed on authoritative precedents including BGS SGS Soma JV v. NHPC Ltd1., and State of West Bengal v. Associated Contractors2, to buttress the proposition that once a Court is approached under Part I of the Act, all future proceedings must be confined to that Court alone. The petitioner also invokes M.G. Mohanty v. State of Odisha3to establish that the Commercial Courts Act is not inconsistent with the Arbitration Act and does not dilute the application of Section 42. III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES: 5. (i) The Learned Counsel for the Opposite Parties earnestly made the following submissions in support of his contentions: The opposite parties, on the other hand, submit that the jurisdiction to entertain the Section 34 application rightly vests with the District Judge, Sundargarh. This is based on the specific contractual stipulation in Clause 40 of the General Terms and Conditions of Contract which stipulates that all disputes arising from the contract shall be subject to the jurisdiction of the District Court where the work is executed i.e. Sundargarh. (ii) It is argued that the seat of arbitration or the place where the award was rendered is not determinative of jurisdiction under Section 34 when there exists a contractual clause conferring territorial jurisdiction. It is also asserted that Section 2(1)(e) of the A&C Act, which defines “Court”, when read with Section 42, emphasizes that
Arguments
whereby this Court was pleased to appoint Hon’bleMr. Justice M.M. Das (Retd.) as the Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 to adjudicate all disputes. (v) In pursuance of the said order, three connected arbitration proceedings, Arbitration Case Nos. 1, 2, and 3 of 2020, were initiated and conducted. The entire arbitration proceedings, including hearings, submissions, and evidence, were held at Cuttack, which was also the designated seat of arbitration. (vi) After due adjudication, the learned Sole Arbitrator passed a common arbitral award dated 25.10.2021, allowing several claims of the present petitioner. The relevant extract of the operative part of the award is as follows: a. MCL was directed to refund ₹3,35,72,511.85 to the claimant (present petitioner) towards various withheld dues. Page 3 of 19 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Jun-2025 16:53:36 b. MCL was further directed to return all Bank Guarantees deposited by the claimant, which had been withheld in violation of the contractual terms. c. Interest at the rate of 12% per annum was awarded on the above amount from the date of award till actual payment. (vii) Despite receipt of the award, the respondent-MCL did not comply with the directions therein. Instead, on 24.11.2021, it filed three separate petitions under Section 34 of the A&C Act before the District Judge, Sundargarh, being Arbitration Case Nos. 05, 06, and 07 of 2021, seeking to set aside the said award. (viii) In response, the present petitioner filed an application under Section 151 CPC dated 27.09.2022 before the same Court, raising a preliminary objection to the maintainability of the proceedings on two counts: a. That the Section 34 petitions were barred by limitation under Section 34(3) of the Act, having been filed beyond the statutory period. b. That the District Judge, Sundargarh lacked territorial jurisdiction to entertain the petitions, in view of Section 42 of the A&C Act and the seat of arbitration being at Cuttack. (ix) By order dated 06.03.2024, the learned District Judge, Sundargarh rejected the petitioner’s application and held that the Section 34 petitions were maintainable before it. Aggrieved thereby, the