1 2026:CGHC:25833-DB AFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBA No. 21 of 2020 M/s Grim Tech Projects (I) Pvt. Ltd., Through Its Director Mr. Sanjeev Kr. Agarwal 111, Royal Trade Centre ( R T C ), Opposite Star Bazar, Adajan - Hazira Road, Surat - 395009 ( Gujarat ), District : Surat, Gujarat --- Appellant versus M/s Chhattisgarh State Power Transmission Co. Ltd. (Csptcl) Through The Chief Engineer ( Civil Trans ) Shed No. 5, Danganiya, Raipur Chhattisgarh., District : Raipur, Chhattisgarh --- Respondent(s) (Cause title is taken from CIS system) For Appellant : Mr. Rajeev Shrivastava, Sr. Advocate with Mr. Kaif Rizvi and Mr. Bipin Prabhat, Advocates For Respondent : Mr. K.R. Nair with Ms. Veena Nair, Advocate Division Bench Hon'ble Shri Parth Prateem Sahu, Judge Hon'ble Shri Sachin Singh Rajput, Judge Order On Board (23.06.2026) Per Parth Prateem Sahu, Judge 1. This arbitration appeal is filed under Section 13 (1) of the Commercial Courts Act, 2015 (Hereinafter referred to as ‘the Act of 2015’) read with Section 37 of the Arbitration and Conciliation Act,1996 (Hereinafter referred to as ‘the Act of 1996’) questioning the legality and sustainability of the order dated 10.12.2019, passed by the Commercial Court (District Level), Nava Raipur, Atal Nagar, District – Raipur in M.J.C. No.9 of 2018, whereby the Commercial Court has BALRAM PRASAD DEWANGAN Digitally signed by BALRAM PRASAD DEWANGAN 2 allowed the application/petition filed under Section 34 of the Act of 1996 read with Section 10 (3) of the Act of 2015. 2. Facts relevant for disposal of this appeal are that Chhattisgarh State Power Transmission Company Limited invited a tender for work namely “Construction of Pile foundations for 4 nos 220 KV DCDS Transmission Line Towers at Location Number 24/1, 24/2, 24/3, 24/4 on Raigarh to Saraipali Transmission Line in Mahanadi River. Appellant submitted its bid and became successful. Letter of intent (LOI) was issued on 25.10.2012. Work order was issued on 07.03.2013. Respondent failed to complete the work within stipulated time line, accordingly, contract was terminated by respondent on 03.05.2013. Raising dispute between the parties, appellant invoked arbitration clause as per agreement to which an Arbitral Tribunal was constituted. Appellant submitted claim and respondent submitted counter claim before the Arbitral Tribunal so constituted. After adjudication of the dispute, Arbitral Tribunal passed an award dated 08.04.2018 in favour of appellant and categorically rejected the counter claim of respondent. Additional award was passed on 12.05.2018 in continuation to award dated 08.04.2018. Dissatisfied with the award passed by Arbitral Tribunal, respondent has challenged both the award by filing an application U/s. 34 of the Act of 1996 read with Section 10 (3) of the Act of 2015. Respondent has raised the ground of jurisdiction of the Arbitral Tribunal to adjudicate the dispute raised along with other grounds. The Commercial Court has taken up the proceedings under Section 34 of the Act of 1996 to consider the issue/grounds raised with regard to jurisdiction of Arbitral Tribunal to adjudicate the dispute between the parties. Upon hearing both the 3 parties and referring to the provision U/s. 2 (1) (i) of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 (Hereinafter referred to as “the Adhiniyam, 1983”) i.e. definition of work contract and Section 20 of the Adhiniyam, 1993 recorded a finding that the contract between the parties falls within the ambit of “work contract”, therefore, jurisdiction to adjudicate the dispute only rests exclusively with Arbitral Tribunal constituted under the Adhiniyam, 1983 and not elsewhere and accordingly set-aside the award dated 08.04.2018 and additional award dated 12.05.2018. This appeal is filed against the said order of Commercial Court. 3. Learned counsel for appellant would submit that it is not in dispute that contract awarded to appellant would fall within the ambit of work contract. He submits that dispute is raised by appellant after termination of work contract. Appellant has proposed one Arbitrator and one Arbitrator was proposed by respondent and both the Arbitrators have nominated the third Arbitrator and accordingly, Arbitral Tribunal was constituted. During the proceedings before the Arbitral Tribunal so constituted, respondent has not raised any objection as provided under Section 16 (2) of the Act of 1996 that Arbitral Tribunal does not have jurisdiction, till passing of the award. Respondent for the first time has raised an objection on the jurisdiction of Arbitral Tribunal so constituted only at the stage of filing an application U/s. 34 of the Act of 1996 read with Section 10 (3) of the Act of 2015. He submits that if the respondent has not raised the objection of jurisdiction of the Arbitral Tribunal so constituted by the parties within time at appropriate stage, entire award passed by the Arbitral Tribunal cannot be annulled only on the ground of jurisdiction of Arbitral 4 Tribunal. He contended that respondent submitted itself before Arbitral Tribunal. It is contended that issue with regard to validity of the award passed by the Arbitral Tribunal not having jurisdiction, when objection under Section 16 (2) is not raised at appropriate stage of proceedings before the Arbitration Tribunal, by the party, came up consideration before the Hon’ble Supreme Court in case of Madhya Pradesh Rural Road Development Authority & Anr. Vs. L.G. Chaudhary Engineers and Contractors in reference along with other connected appeals, reported in (2018) 10 SCC 826, wherein the Hon’ble Supreme Court has held that if no objection to the jurisdiction of Arbitral Tribunal was taken at relevant stage, award not to be annulled only on that ground. 4. Learned counsel for respondent vehemently opposes the submission of learned counsel for appellant and would submit that work awarded to appellant is work contract within definition as provided under Section 2 (1) (i) of the Adhiniyam, 1983 then dispute is to be raised before the Tribunal constituted under Adhiniyam,1983. He submits that other Arbitral Tribunal constituted and considering the dispute is not having jurisdiction, therefore, learned Commercial Court has rightly set-aside the award being without jurisdiction. There is no error in that regard. Referring to the decision of Hon’ble Supreme Court in case of Lion Engineering Consultants Vs. State of Madhya Pradesh and Others, reported in (2018) 16 SCC 758, it is argued that objection to the jurisdiction of Tribunal can be raised at any stage even in a proceedings under Section 34 of the Act of 1996. He also raised a ground/objection that appeal is barred by limitation. He submits that period prescribed under the Commercial Court Act for filing of appeal 5 is 60 days under Section 13 of the Act of 2015, whereas the appeal is filed beyond period of limitation as prescribed under the Act of 2015, therefore, this appeal is to be dismissed as barred by limitation. 5. We have heard learned counsel for the parties. 6. Challenge to the impugned order passed by the learned Commercial Court of setting-aside the award dated 08.04.2018 and additional award dated 12.05.2018 on the ground that Arbitral Tribunal so constituted by the parties was not having jurisdiction is concerned, it is not in dispute that the contract awarded to the appellant falls within the definition of works contract as defined under Section 2 (1) (i) of the Adhiniyam, 1983. It is also not in dispute that dispute arising from work contract is to be raised before the Tribunal constituted under the Adhiniyam, 1983. The question which arises for consideration in this case is about the validity of the award passed by the Tribunal constituted by the parties, submitted their claim counter claim and objections and, till the conclusion of proceedings and passing of award, objection with regard to the jurisdiction of Arbitral Tribunal was not raised by the respondent in terms of Section 16 (2) of the Act of 1996. The Commercial Court though has taken into consideration the decision of Hon’ble Supreme Court in case of M.P. Rural Road Development Authority & Anr. Vs. L.G. Chaudhary Engineers and Contractors, reported in (2018) 10 SCC 826 (in the judgment citation is 2018 SCC OnLine SC 407), however, failed to take note of the relevant paragraphs i.e. para-17 & 19, which reads as under :- “17. We do not express any opinion on the applicability of the State Act where award has already been made. In such cases if no objection to the jurisdiction of the 6 arbitration was taken at relevant stage, the award may not be annulled only on that ground. * * * CA No. 2616 arising out of SLP (C) No. 35641 of 2011 19. Leave granted. In view of the order [ Set out in paras 15 to 18, above.] passed in CA No. 2751 of 2018 arising out of SLP (C) No. 16615 of 2012, no objection having been raised by the respondents in terms of Section 16(2) of the Arbitration and Conciliation Act, 1996 at appropriate stage within the time stipulated, the award could not have been annulled.” 7. Hon’ble Supreme Court has considered the opinion of one of the Hon’ble Judge Ganguly J. in its decision in case of M.P. Rural Road Development Authority Vs. L.G. Chaudhary Engineers and Contractors, (2012) 3 SCC 495, which was also observed in para-8 of the reference case of L.G. Choudhary Engineers and Contractors (2018) 10 SCC 826. 8. Hon’ble Supreme Court has taken note of the situation of passing of award by the Arbitral Tribunal not having jurisdiction in absence of any objection raised by parties in categorical terms and held that if objection is not raised in terms of Section 16 (2) of the Act of 1996 at appropriate stage within stipulated time, award could not have been annulled. This dictum of Larger Bench of Hon’ble Supreme Court in case of L.G. Chaudhary Engineers & Contractors (supra) escaped consideration of learned Commercial Court. 9. It appears that learned Commercial Court considering the decision in case of Lion Engineering Consultants (supra), wherein Hon’ble Supreme Court has observed that “we do not see any bar to plea of 7 jurisdiction being raised by way of an objection under Section 34 of the Act even if no such objection was raised under Section 16 of the Act of 1996. This observation of Hon’ble Supreme Court is in the case where interim order of proceedings under Section 34 of the Act of 1996 was put to challenge whereby the amendment sought of raising objection in terms of Section 16 (2) of the Act of 1996 in proceedings under Section 34 of the Act of 1996 was rejected and in the said decision liberty was granted to raise an objection. In case of Lion Engineering Consultants (supra), Hon’ble Supreme Court has only decided as to whether in proceedings under Section 34 of the Act of 1996 objection with regard to jurisdiction of Arbitral Tribunal can be raised or not, is answered. 10. In case of L.G. Chaudhary Engineers and Contractors (in reference case), Hon’ble Supreme Court in categorical terms ruled that no objection having been raised by respondent in terms of Section 16 (2) of the Act of 1996 at appropriate stage within time stipulated, the award could not have been annulled. 11. The Hon’ble Supreme Court in case of Sweta Construction Vs. Chhattisgarh State Power Generation Company Limited, reported in (2024) 4 SCC 722 while reiterating the decision in case of L.G. Chaudhary Engineers and Contractors (in reference case), has observed as under :- “18. We are also of the view that in particular facts of the present case, the position is even more gross because when the appellant claimed arbitration, the respondent accepted invocation of arbitration, suggested a panel of arbitrators, the appellant chose one of the arbitrators out of the two suggested and the 8 arbitrator was so appointed as the sole arbitrator. Thus, the arbitration proceedings commenced in pursuance to the acts of the respondent and it cannot be permitted to get away to say that the whole process was gone through because of some misconception or inappropriate legal advice. Arbitration by consent is always possible. The mode and manner of conduct of arbitration is possible and how those arbitration proceedings would be governed is also a matter of consent. If at all there were any rights of the respondent to have claimed arbitration under the 1983 Adhiniyam, that right was never exercised or waived. The respondent cannot be permitted to approbate and reprobate and that too in arbitration proceedings and that too in dispute or resolution through the method of arbitration defeating the very purpose of an alternative dispute resolution to arbitration as an expeditious remedy.” 12. In the said case, Hon’ble Supreme Court allowed the case of contractor and set-aside the judgment of Commercial Court as well as the order passed by the Division Bench dated 07.02.2019 and remitted back the case to the Commercial Court to determine the case on merits of the controversy dehors the issue of jurisdiction in accordance with the principles under Section 34 of the Act of 1996.. 13. The issue with regard to validity of award passed by the Arbitrator in works contract in absence of any objection raised by way of filing an application U/s. 16 (2) of the Act of 1996 again came up for consideration before the Hon’ble Supreme Court in case of Gayatri Project Limited Vs. Madhya Pradesh Road Development Corporation Limited, reported in (2025) 10 SCC 750. The Hon’ble Supreme Court has formulated the question as under :- 9 “Can an award passed under the 1996 Act be annulled on the ground of lack of jurisdiction where no plea of applicability of the M.P. Act,1993 was raised before the Arbitral Tribunal?” 14. The Hon'ble Supreme Court, in paragraphs 66.2, 66.3, 66.5, 66.6, and 68 of the said judgment, answered the aforesaid question as follows:- “66.2. Where the arbitration proceedings are still underway, but statement of defence has already been filed i.e. the relevant stage for raising an issue of jurisdiction is already crossed, there it would not be open for the parties to raise an objection of lack of jurisdiction in view of the applicability of the M.P. Act, 1983. Furthermore, in such scenarios since the arbitration proceedings have already commenced and made substantial progress, it would not be appropriate to transfer such proceedings to the M.P. State Arbitration Tribunal under the M.P. Act, 1983, and the better course of action would be to let the arbitration proceedings conclude. 66.3. As per L.G. Chaudhary (2) [M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors, (2018) 10 SCC 826 : (2019) 1 SCC (Civ) 97] where the arbitration proceedings have concluded and an award has been passed, and if no objection to the jurisdiction in view of the applicability of the M.P. Act, 1983 was taken at the relevant stage then such an award cannot be annulled only on the ground of lack of jurisdiction. 66.4 x x x 66.5 Any award passed by an Arbitral Tribunal under the 1996 Act, where otherwise the M.P. Act, 1983 was applicable, such an award must be executed in terms of the M.P. Act, 1983 and the relevant provisions thereunder. 10 66.6 Where the objection based on applicability of the M.P. Act, 1983 had been raised in the written statement or statement of defence, but the parties never took steps towards challenging the jurisdiction of the Arbitral Tribunal under Section 16 of the 1996 Act or where such plea of jurisdiction was turned down in view of the position of law that was prevailing prior to L.G. Chaudhary (2) [M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors, (2018) 10 SCC 826 : (2019) 1 SCC (Civ) 97] i.e. such challenge to the jurisdiction was decided prior to the date of pronouncement of L.G. Chaudhary (2) [M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors, (2018) 10 SCC 826 : (2019) 1 SCC (Civ) 97] , then even in such cases, as per the decision of this Court in Modern Builders [Modern Builders v. State of M.P., (2024) 10 SCC 637 : (2024) 4 SCC (Civ) 639] , the award should not be disturbed or set aside only on the ground of lack of jurisdiction. 68. Thus, the present case is squarely covered by the decision of this Court in L.G. Chaudhary (2) [M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors, (2018) 10 SCC 826 : (2019) 1 SCC (Civ) 97] , more particularly the observations made in paras 6 to 9 thereunder, and as such once the award had been passed and no objection as to the jurisdiction of the Arbitral Tribunal had been taken at the relevant stage, then the award could not have been annulled by the High Court only on the ground of lack of jurisdiction. 15. In the case at hand also when dispute is raised and application is submitted respondent appointed one arbitrator, appellant appointed one arbitrator and both arbitrator nominated third arbitrator to constitute Arbitral Tribunal. Respondent had never raised any objection to the 11 jurisdiction of the Arbitral Tribunal so constituted with the act of the resopndent. No application is submitted in terms of Section 16 (2) of the Act of 1996 raising objection and award was passed. The objection of jurisdiction of the Arbitral Tribunal for the first time was raised in application U/s. 34 of the Act of 1996. 16. In the present facts of the case we are of the considered view that the issue involved in this case of challenge to the jurisdiction of the Arbitral Tribunal, is squarely covered with the decision of Hon’ble Supreme Court in above referred cases, and therefore, the decision of learned Commercial Court of annulling the award only on the finding that Arbitral Tribunal was not having the jurisdiction to adjudicate the dispute is not sustainable. 17. So far as the ground of limitation as raised by learned counsel for respondent is concerned, from the calculation as made by respondent from the date of order passed by the Commercial Court till the date of filing of appeal, the period as computed is 62 days and on that basis it is argued that appeal is barred by limitation as it is filed beyond the period of 60 days as provided under Section 13 of the Act of 2015. While computing the period of limitation after receipt of appeal, Registry has computed the period and computed that period taken by appellant is 62 days for filing of appeal and further deducting two days of February i.e. 08.02.2022 and 09.02.2022 closed Saturday and Sunday being the holiday, computed that appeal is filed in sixty days. When this calculation is shown to counsel for respondent that though two days which is falling just before the date of filing, to be the non- working Saturday and Sunday being Holiday, he submits that he has 12 not taken note of the said fact and have not disputed the calculation made by the Registry. In the aforementioned facts of the case, submission made by learned counsel for respondent with regard to limitation is not sustainable. Accordingly, it is repelled. 18. For the foregoing discussions and the decision of Hon’ble Supreme Court we are of the considered view that the impugned order dated 10.12.2019, passed by the Commercial Court allowing application under Section 34 of the Act of 1996 and setting aside the award dated 08.04.2018 and additional award dated 12.05.2018 only on the ground of jurisdiction, is not sustainable and accordingly the impugned order dated 10.12.2019 (Annexure P-1) is hereby set-aside. 19. The case is remitted back to the Commercial Court to decide the case on merits on other ground raised in the application U/s. 34 of the Act of 1996 read with Section 10 (3) of the Act of 2015 in accordance with law except the ground of jurisdiction. 20. Accordingly, this arbitration appeal is allowed to the extent indicated here-in-above. Sd/- Sd/- (Parth Prateem Sahu) (Sachin Singh Rajput) Judge Judge Balram