IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9439 OF 2010 [Arising out of SLP(C) Nos.9724 of 2010]

STATE OF ORISSA .......APPELLANT  

Versus

DURGA CHARAN ROUTRAY .....RESPONDENT

O R D E R

Leave granted.  Heard.

2. The appellant entrusted the construction of  

Earth Dam of Kuanaria Irrigation Project (balance work) to  

the respondent.  The contract was entered at Puri.  The  

work was executed in Puri District. Certain disputes arose  

and they were referred to arbitration.  The Arbitrator made  

an Award dated 7.3.2003 for Rs.34.81 lakhs and interest.

3. The  appellant  filed  an  application  under  

Section 34 of the Arbitration & Conciliation Act, 1996,  

('Act' for short) on 25.6.2003 in the Court of District  

Judge, Khurda at Bhubaneswar.  Learned District Judge, by  

order  dated  21.6.2004,  held  that  the  Court  at  Khurda  

District did not have jurisdiction and directed the return  

of the application to the appellant for being presented to  

proper Court. The appellant filed an appeal against the  

said order dated 21.6.2004.

.....2.

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4. In the meanwhile, the respondent had levied  

execution in respect of the award. In the said execution  

proceedings,  the  executing  Court  made  an  order  dated  

3.4.2004  directing  the  appellant  to  deposit  the  award  

amount and permitted the respondent to withdraw the amount  

by furnishing security.  That order was also challenged by  

the appellant by filing an appeal.   

5. Both  the  appeals,  that  is  appeal  against  

order dated 21.6.2004 passed by the District Judge, Khurda  

and the appeal against the order dated 3.4.2004 passed by  

the Executing Court, were heard and dismissed by a common  

order dated 23.12.2009 by the Orissa High Court which is  

under challenge in this appeal by special leave.

6. Having regard to Section 36 of the Act, the  

respondent  ought  not  to  have  made  an  application  for  

execution  before  the  expiry  of  the  time  for  making  an  

application to set aside the arbitral award under Section  

34 of the Act.  Therefore, we are of the view that the  

Executing Court ought not to have directed the award amount  

to be deposited by the appellant or permitted it to be  

withdrawn by the respondent against security. On the facts  

and circumstances,  we  are  of  the  view that interest of

......3.

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justice would be served if the said order is amended by  

directing the appellant to deposit the said amount in the  

District Court, Puri.  The direction for withdrawal by the  

respondent is set aside.

7. The direction for return of the application  

under Section 34 of the Act, for presentation to the proper  

Court, does not suffer from any infirmity, as the appellant  

is not in a position to show that any part of the cause of  

action  arose  within  the  jurisdiction  of  District  Judge,  

Khurda.

8. We,  therefore  dispose  of  the  appeal  as  

follows:

(i) We dismiss the appeal arising from the order dated  

21.6.2004.  and  permit  the  appellant  to  take  back  the  

application from the District Court, Khurda and re-present  

the application under Section 34 of the Act, before the  

District Court, Puri within two weeks from today;  

(ii) We set aside the order of the High Court affirming  

the order dated 3.4.2004 of the Executing Court. We, however,  

direct the entire amount to be deposited in the District

Court, Puri  which  shall  be  kept in fixed deposit with a

.....4.

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nationalised Bank pending hearing of the application under  

Section 34 of the Act;

(iii) We request the District Judge, Puri to decide the  

application under Section 34 of the Act expeditiously.

  ......................J.             (  R.V.  

RAVEENDRAN )

New Delhi;    ......................J. October 25, 2010.               ( A.K. PATNAIK )