Jurisdiction Of A Court Under A Statute Can't Be Allowed To Shift Because Of A Superior Court's Interference In A Different Manner: SC Constitution Bench [Read Judgment]

This court may make a reference to an arbitrator on consent but to hold it as a legal principle that it can also entertain objections as the original court will invite a fundamental fallacy pertaining to jurisdiction, the bench said.

The constitution bench of the Supreme Court has observed that the jurisdiction of a court conferred under a statute cannot be allowed to shift or become flexible because of a superior court’s interference in the matter in a different manner.

The bench, headed by Chief Justice of India Dipak Misra, overruled the decisions in State of Madhya Pradesh vs. Saith and Skelton (P) Ltd and Guru Nanak Foundation vs Rattan Singh and Sons, wherein it has been held that when an arbitrator is appointed by the Supreme Court and further directions are issued, it retains seisin over the arbitration proceedings and in such circumstances, the Supreme Court is the only court for the purposes of Section 2(c) of the Act.

“When arbitrator is not appointed under the Act and the matter is challenged before the High Court or, for that matter, the Supreme Court and, eventually, an arbitrator is appointed and 71 some directions are issued, it will be inappropriate and inapposite to say that the superior court has the jurisdiction to deal with the objections filed under Sections 30 and 33 of the Act,” the bench said, answering the reference to it by a division bench in The State of Jharkhand vs M/s Hindustan Construction Co Ltd. The bench said the court that has jurisdiction to entertain the first application is determinative by the fact as to which court has the jurisdiction and retains the jurisdiction.

“This Court may make a reference to an arbitrator on consent but to hold it as a legal principle that it can also entertain objections as the original court will invite a fundamental fallacy pertaining to jurisdiction,” it added, stating that the court cannot curtail the right of a litigant to prefer an appeal by stating that the doors are open to this court and to consider it as if it is an original court.

Original jurisdiction in this Court has to be vested in law. Unless it is so vested and the Court assumes, the court really scuttles the forum that has been provided by the legislature to a litigant, the bench said.

Solely because a superior court appoints the arbitrator or issues directions or has retained some control over the arbitrator by requiring him to file the award in this Court, it cannot be regarded as a court of first instance as that would go contrary to the definition of the term ‘court’ as used in the dictionary clause as well as in Section 31(4), it said.