2021 INSC 0268
1 	
Reportable  	
 
IN THE SUPREME COURT OF INDIA  
CIVIL APPELLATE JURISDICTION  
 	
Civil Appeal No 1051 of 2021	 	
(Arising out of SLP(C) No 5750 of 2017)  
 
 
Chief General Manager (IPC)   
M P Power Trading Co Ltd & Anr         .... Appellant(s)  
  Versus 
 
Narmada Equipments  Pvt Ltd        ....Respondent(s)  
 	
 
 	
J U D G M E N T   	
 
 
 	
Dr Dhananjaya Y Chandrachud, J  	
 
1  Leave granted.  
2  This appeal arises from a judgment and order of a learned Single Judge of the High 
Court of Madhya Pradesh dated 30 November 2016  where it appointed an 
Arbitrator in the dispute between the parties,  in an application	
1 filed  by the 
respondent  under Section 11(6) of the Arbitration and Conciliation Act 1996	
2. 
3  The genesis of the matter is from when the  Madhya Pradesh Electricity Board	
3, 
entered into a Power Purchase Agreement	
4  on 20 May 1999 with the respondent . 	
 
1   “AC No 1 of 2015”  
2   “1996 Act”  
3   “Board”  
4   “ PP A”

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12 Section 174 of the 2003 Act provides overriding effect to the 2003 Act 
notwithstanding anything inconsistent contained in any other law for the time being 
in force or in any instrument having effect by virtue of any law other than the 
2003Act itself.   Section 174 provides  thus : 	
“ 174. Act to have overriding effect.  —  Save as otherwise 
provided in Section 173, the provisions of this Act shall 
have effect notwithstanding anything inconsistent 
therewith contained in any other law for the time being 
in force or in any instrument having effect by virtue of 
any law other than this Act.”  	
13 We refer now to the second argument raised on behalf of the respondent, that the 
appellant cannot raise an objection relying on Section 86(1)(f) of the 2003 Act in the 
second app lication filed by it under Section 11(6) of the 1996 Act, when it had not 
raised the same objection in the first application under Section 11(6) of the 1996 Act 
or before the Arbitrators so appointed.   It is pertinent to note that this argument was 
rejected by the Single Judge of the High Court in the  impugned  judgment and 
order dated 30 November 2016 in the following terms”  	
“9. I will be failing in my duty if the basic objection raised 
by Shri Manoj Dubey about maintainability of this 
application is not dealt with. Merely because in earlier 
round of litigation, the objection of maintainability was 
not taken, it will not preclude the other side to raise such 
objection if it goes to the root of the matter. This is trite 
law that jurisdiction cannot be assumed  by consent of 
the parties. If a statute does not provide jurisdiction to 
entertain an application/petition, the petition cannot 
be entertained for any reason whatsoever. Thus, I am 
not inclined to hold that since for the reason that in the 
earlier round o f litigation i.e. A.C. No.76/2011 parties 
reached to a consensus for appointment of Arbitrators, 
this application is also maintainable. I deem it proper to 
examine whether because of operation of Section 174 
of the Act of 2003, the present application unde r the 
Act of 1996 is not maintainable.”

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14 A similar issue was  raised before a three -Judge bench of this Court in  Hindustan Zinc 
Limited  (supra), where an arbitrator was appointed by the State Electricity 
Commission under Section 86(1)(f) of the 2003 Act with the consent of the parties.  
Subsequently, the arbitral a ward  was challenged under Section 34 of the 1996 Act 
before a Commercial Co urt, and the Commercial Court’s decision was challenged 
in an appeal under Section 37 of the 1996 Act  where it was held that the State 
Electricity Commission had no jurisdiction to appoint the arbitrator since Section 
86(1)(f) refers to disputes only betwe en licensees and generating companies, and 
not licensees and consumers.  When the matter reached this Court, the contention 
was that the objection to  jurisdiction could not have been raised in a proceeding 
under Section 37 of the 1 996 Act once the parties  had  consented to arbitration 
earlier.  Speaking for the Court , Justice Rohinton F Nariman held that if there is 
inherent lack of jurisdiction, the plea can be taken at any stage and also in 
collateral proceedings. He highlighted the well -established princ iple that a decree 
passed by a court without subject matter jurisdiction is a nullity, and that its invalidity 
could be set up whenever and wherever it is sought to be enforced or relied upon. 
Such a defect of jurisdiction cannot be cured even by the conse nt of the parties. 
The above dictum would apply to the present case.  
 
15  In the above view of the matter, the order of the High Court appointing an 
arbitrator under Section 11(6)  of the 1996 Act  is unsustainable.  We accordingly 
allow the appeal and set asi de the impugned judgment and order of the High 
Court dated 30 November 2016 in   AC No 1 of 2015.  However, this will not come in 
the way of the respondent in taking  recourse to such remedies as are available in 
law.    However, we have expressed   no    opinion either on the merits or the

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objections of the appellant which, when urged, would be considered by the 
appropriate forum.  There shall be no order as to costs.	
 	
16 Pending application, if any, stands disposed of.	 	
    	 	
 ……….. ………...…...….......……………….. ......J.	 	
[Dr Dhananjaya Y Chandrachud]	 	
 
 
 
 
…..…………. …....…........……………….…........J.
 	
[M R Shah]	 	
 
 
 
 
…………....…..…....…........……………….…........J.	
 	
[Sanjiv Khanna]	 	
 
 
 
 
New Delhi;   
March 23, 2021 
- S-