Overview
The Calcutta High Court, in the present case, dealt with the petition filed under Section 34 of the Arbitration and Conciliation Act 1996 to set aside an ex parte arbitral award arising out of a 2018 Development Agreement.
The petition was filed by the legal heirs of the original landowner, who questioned the award on several grounds, including the absence of proof as to alleged cash payment, patent illegality, and the inability to perform the agreement, since the property remained the subject of a pending title dispute.
Before considering any of these objections, the Court was required to determine whether it had any territorial jurisdiction to entertain the petition. The case remains significant because the dispute is related to immovable property situated outside the territorial limits of the Calcutta High Court, raising question as to whether the challenge could be maintained before it at all.
Facts of the Case
The dispute arose from a Development Agreement executed in August 2018 between the late Tapan Konwer and the respondent for the development of approximately 258 square feet of land situated at Keyatala Lane, Kolkata. Under the agreement, the respondent claimed to have paid ?9.40 lakhs in cash and was entitled to develop the property on a 70:30 sharing basis.
The project, however, never moved forward because the property formed part of an undivided estate that was already the subject of a long-pending title suit. As a result, the necessary building plan could not be sanctioned.
After the death of Tapan Konwer in 2023, the respondent called upon his legal heirs to honour the agreement. The petitioners denied receiving the alleged cash payment and contended that the agreement itself had become incapable of performance due to the unresolved dispute relating to the property’s title.
The respondent thereafter initiated arbitration proceedings. Due to the financial difficulties, the petitioners did not participate in the proceedings. The Sole Arbitrator proceeded ex parte and directed the petitioners to refund the advance amount, pay damages with interest and bear the costs of the proceedings.
Aggrieved by the award, the petitioners approached the Calcutta High Court under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to have it set aside.
Legal Issues
Decision
The Calcutta High Court dismissed the petition as not maintainable for want of territorial jurisdiction.
The Court held that under Section 2(1)(e) of the Arbitration and Conciliation Act, the competent court is the one that would have jurisdiction if the dispute were to be decided as an ordinary civil suit. Since the Development Agreement related to immovable property situated within the jurisdiction of the Principal Civil Court at Alipore in South 24 Parganas, that court alone was competent to consider the challenge to the arbitral award.
The Court further clarified that territorial and pecuniary jurisdiction must exist together. A claim involving high monetary value does not, by itself, confer jurisdiction upon the High Court, where the necessary territorial connection is absent.
Having concluded that it lacked territorial jurisdiction, the Court declined to examine the petitioners’ objections on merits, observing that doing so could prejudice any future proceedings before the competent court.
Liberty was granted to the petitioners to approach the appropriate court at Alipore in accordance with the law.
Case Reference: - AP 48 of 2026 (SJB, Before Gaurang Kanth, J.)
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