Jammu & Kashmir High Court
Ramesh Chand Kathuria And Anr. vs M/S Trikuta Chemicals Pvt.Ltd.And Anr. on 31 March, 2015
Equivalent citations: AIR 2015 JAMMU AND KASHMIR 52
Bench: Mohammad Yaqoob Mir, B. S. Walia
HIGH COURT OF JAMMU AND KASHMIR
AT JAMMU
AA No. 12/2012, CMA No.10/2014
c/w
A.A. No.43/2013, A.A. No.37/2012, CONAA No.4/2014, RPAA No.3/2014,
CMA No.2/2014 A.A. No.3/2014, A.A. Nos.21/2006, 6/2006,13/2006,18/2006, 44/2006, 30/2008,
20/2009, A.A. No. 23/2010, CMA No.14/2010, A.A. No. 6/2011, CMA No.7/2011, A.A. Nos.26/2011,
4/2012, 5/2012, 7/2012, A.A. No.31/2012, CMA No. 15/2012, A.A. No. 23/2013, A.A. No. 24/2013, CMA
No.19/2013, A.A. No. 25/2013, CMA No.20/2013, A.A. No. 34/2013, CMA No.22/2013, A.A.Nos. 48/2013,
50/2013, A. A. No. 9/2014, CMA No.8/2014, A. A. No.8/2014, A. A. No.15/2014, CMA No. 12/2014, A. A.
No. 17/2014, A. A. No. 32/2014, CMA No. 23/2014, A. A. Nos.33/2014, 34/2014, A. A. No. 35/2014, CMA
No.26/2014, A. A. Nos. 4/2015, 5/2015, 8/2003, A. A. No. 13/2004, CMA No.46/2004, CMA No. 37/2004,
A. A. No. 19/2005, CMA No.47/2005, A. A. No. 32/2005, CMA No.41/2005, A. A. No. 39/2005, A. A.
No.19/2006, CMA No.22/2006, CMA No.18/2006, A.A. No. 30/2006, CMA No.19/2007, A. A. No.
28/2007, A. A. No. 9/2008, CMA No.6/2008, A. A. No. 20/2008, CMA No. 14/2008, A. A. No.32/2010 &
A. A. No. 33/2011, CMA No. 16/2011
Date of order:- 31.03.2015
Ramesh Chand Kathuria and anr. V. M/s Trikuta Chemicals Private Ltd. and anr
c/w connected matters.
Coram:
Hon'ble Mr. Justice N. Paul Vasanthakumar, Chief Justice
Hon'ble Mr. Justice Mohammad Yaqoob Mir, Judge
Hon'ble Mr. Justice B. S. Walia, Judge
Appearing Counsel:
For the petitioner(s) : Mr. Harish Malhotra, Sr. Advocate with
Mr. C. S. Azad, Adv.
Mr. Rohit Kapoor, Adv.
Mr. Surinder Singh, Adv.
Mr. B. S. Salathia, Sr. Advocate with
Mr. D. S. Chauhan, Adv
Mr. R. S. Thakur, Adv
Mr. Ashwani Thakur, Adv
Mrs. Aruna Thakur, Adv
Mr. D. C. Raina, Sr. Advocate with
Mr. Anil Verma, & Mr. Arun Kumar, Advs‟
Mr. B. S. Bali, Adv (AA Nos. 4 and 5 of 2012)
Mr. K. S. Johal, Sr. Advocate with
Mr. Aashray Choudhary,
Mrs. Sindhu Sharma, ASGI
Mr. Rameshwar Singh Jamwal, Advocate
Mr. Ravinder Kr. Gupta, CGSI.
For the respondent(s): Mr. Z. A. Shah, Sr. Advocate with
Mr. Vipin Gandotra, adv.
Mr. R. K. Gupta, Sr. Advocate with Mr. Prem Sadotra, Adv.
Mr. U. K. Jalali, Sr. Advocate with Mr. Anuj Sawhney, Adv.
Mrs. Sindu Sharma, ASGI Mr. W. S. Nargal, Adv.
Mr. M. K. Raina, Adv Mr. R. K. Kaul, Advocate Mr. Ravinder Kr. Gupta, CGSC (AA No.19/2006)
(i) Whether to be reported in Press, Journal/Media Yes
(ii) Whether to be reported in Journal/Digest Yes Per-Yaqoob, J:-
1. In between the parties in the case of Ramesh Chand Kathuria and anr. v/s Trikuta Chemicals Ltd and anr., disputes arose, as a result whereof application was filed under Section 11(6) of the J and K Arbitration and 2 Conciliation Act, 1997 for appointment of an arbitrator.
Same was allowed vide order dated 05.06.2009 and sole arbitrator was appointed to adjudicate the dispute. The Arbitral Tribunal made and published the award dated 27.01.2012. Both the parties were not satisfied.
2. Petitioner Shri Ramesh Chand Kathuria and anr filed petition under Section 34 of the J and K Arbitration and Conciliation Act, 1997 (hereinafter referred to as "the act" ) on 25.04.2012 before this court, whereas the other party i.e. M/s Trikuta Chemicals and anr filed the petition under Section 34 of the act before the Court of District Judge, Jammu.
3. A preliminary objection was raised before the court of District Judge to the effect that the arbitrator was appointed in terms of Section 11(6) by the High Court vide order dated 05.06.2009. Therefore, all subsequent applications arising out of the agreement and arbitral proceedings in view of Section 42 of the Act are to be made only to the High Court.
4. The objection was not accepted on the ground that the appointment of arbitrator by invoking powers under Section 11(6) of the Act is not an order passed by the „Court‟ within the meaning of Section 2(1)(e) of the Act, therefore, Section 42 of the Act will not apply.
5. It was also contended that an application under Section 34 of the Act is also pending before the 3 High Court against the same award, therefore, the application as presented shall also be submitted to the High Court. In opposition, it has been contended that an objection vis-à-vis jurisdiction of the High Court has been raised therein which is yet to be decided, therefore it would be premature to stop the proceedings, as such the learned Additional District Judge has declined to submit the papers to High Court but however has observed that respondents Ramesh chand Kathuria and anr shall be within their right to apply to the hon‟ble High Court so as to seek clubbing of both applications for joint disposal.
6. Before the High Court in the instant petition, it was submitted that the judgment of the Division Bench rendered in case Gh. Mohammad Dar V. State and ors (A.A. No.03/2011 decided on 10.07.2014) require re-look as there are reasons for doubting the correctness of the judgment which are:
(i) proviso added in the year 1997 to section 102 of the J and K Constitution, 1957 has not been noticed. Neither clause 10 of Letters Patent and Section 56(2) of the J&K Constitution Act of 1939 (1996 AD) has been noticed.
(ii) Hon‟ble the Apex Court in the case of Executive Engineers Road Development Division No.III Pambal and anr v. Atlanta Limited 2014(1) Supreme 195 has held that in case of concurrent 4 jurisdiction, the High Court‟s jurisdiction has to be preferred in view of Section 42 of the Act.
(iii) Whether in the face of proviso to Section 102 of J&K Constitution, 1957, clause 10 of Letters Patent and Section 56(2) of the J&K Constitution Act of 1939, the view taken by the Supreme Court in Atlanta Limited case (supra) would apply to application filed under Section 34 of the J&K Arbitration and Conciliation Act.
7. Hon‟ble the Chief Justice while sitting singly after noticing the afore-stated position has concluded as under:
"Keeping in view the afore-said, I am of the considered opinion that the judgment of the Division Bench in Ghulam Mohammad Dar‟s case requires a re-
look. Accordingly, the matter is referred to a Full Bench of three judges of this Court.
8. It is how the matter has come up before this full bench for determination. In view of the reference, 5 number of other petitions have been listed along with this petition.
"Whether the judgement of the Division Bench in Ghulam Mohammad Dar‟s case (surpa) requires relook?
9. It shall be advantageous first to notice the position of Ghulam Mohammad Dar‟s case. In the said case for settlement of the disputes in between the parties, an application bearing AA No.02/2004 under Section 11 of the Act had been filed on 20.11.2004. Hon‟ble the Acting Chief Justice vide order dated 15.05.2006 appointed the arbitrator as such application was disposed of.
10. The Arbitrator published the award on 30.11.2010. Both the parties were not satisfied.
State filed an application under Section 34 of the Act bearing AA No.22/2011 before the Court of Principal District Judge Srinagar on 20.12.2010. The other party Gh. Mohammad Dar on 25.02.2011also filed an application bearing no. 03/2011 under Section 34 of the Act for setting aside part of the award before the High Court. When it was brought to the notice of the Principal District Judge, Srinagar that Gh. Mohammad Dar has also challenged the award having filed application under Section 34 of the Act before the High Court, the learned District Judge vide order dated 02.08.2011 submitted the record of the application to the High Court. While 6 considering both the applications, Hon‟ble the chief Justice on 17.02.2014 referred the matter to the Division Bench for an authoritative pronouncement on the question of law viz. Whether an appeal would be competent before the District Judge or before the High Court?
11. Appeal under Section 37(2) of the Act was also filed bearing AA No. 12/12 against the order dated 24.07.2012 passed by the Arbiter Tribunal under Section 17 of the Act before the District Judge.
12 Division Bench of this Court while referring to various provisions has opined that Section 8 of the Act provides for referring the parties in a pending matter to an arbitrator. Same can be done only when application is made by the party to Court, whereas in terms of Section 11(6) of the Act at the request of the party, the chief justice may appoint arbitrator for settlement of the dispute between the parties. Section 42 of the Act provides that where in respect of the arbitration agreement, any application under the part 1 is made in a court that court alone shall have jurisdiction over the arbitral proceedings. All subsequent applications arising 7 out of that agreement and arbitral proceedings shall be made in that court and no other court.
13. The Division Bench also opined that when a request is made to the Chief Justice for appointment of an arbitrator, it would not mean that the application has been made to the court, as section 11(6) of the Act has conferred power on Chief Justice as a singular entity and not as high court. The action taken by the chief justice under section 11(6) is not thus action taken and orders passed by the High Court. The application under Section 34 in terms of mandate contained in Section 42 is not to be filed only before High Court. Otherwise Section 2(1)(e) of the Act would be rendered superfluous and otiose, literally deleting expression "the District court of civil original jurisdiction".
14. In the facts and circumstances of the said case, it has been held as under:
"Para12. In view of the facts appearing and legal position obtaining in this case, it is held that District Court as defined in Section 2(e) read with Section 42 of the Act has jurisdiction to entertain an application under Section 34 of the Act and consequently the application filed by the appellant for seeking setting aside of the arbitral award is held to be competent and maintainable before the District Court."
It has also been held that application under section 34 of the Act can be filed before both the District Judge and the High Court.
8Para 15 of the judgement in this respect is quoted herein below:
"Para 15. In our State, the Application, u/s 34 of the Act of 1997 for seeking setting aside of the Award, can be filed both before the Court of District Judge in view of the definition clause 2(e) of the Act of 1997 and before High Court, which also exercises Civil Original Jurisdiction."
Finally the reference has been answered as under:
"Para 17. In view of our above referred discussion, the Reference is answered as under:
" In the State of Jammu and Kashmir, the jurisdiction, to entertain and decide an Application u/s 34 of the Jammu and Kashmir Arbitration and Conciliation Act 1997, when Arbitrator is appointed by the Chief Justice in terms of section 11(6), lies with both the District Judge as also with the High Court. A party, seeking to set aside the Award passed by the Arbitrator, can file Application u/s 34 of the Act of 1997 before the District Judge. Similarly an Appeal against the order of Arbitral Tribunal passed u/s 17 can be filed in terms of Section 37 before the District Judge. The Appeal before the District Judge is competent and maintainable."9
15. The perusal of the said judgement, reveals that the position of section 56(2) of the J&K Constitution Act of 1939 (1996 A.D.), the clause 10 of letters patent and proviso to Section 102 of the Constitution of J and K, 1957 has not been taken note of. The question is as to what is the effect?
16. Learned counsel for the petitioners highlighted that in the country some of the State, High Courts are also court of civil original jurisdiction. In the State of J and K, High Court is the court of civil original jurisdiction as is clear from the section 56(2) of the J&K Constitution Act of 1939, clause 10 of Letters Patent and also from Section 102 of the J&K Constitution, 1957.
17. The proviso to section 102 of the J&K Constitution, 1957 as added in the year 1997 does not provide for ouster of the civil original jurisdiction of the High Court but only provides that it does not exclude institution of original civil suits without limit as regards the value in the Principal Civil Court of original jurisdiction in the District. Therefore the law laid in the judgment titled Executive Engineers and anr v. Atlanta Limited 2014 (1) SC 195 hereinafter referred to as Atlanta judgement and also the law laid down by the three judge bench of Hon‟ble Apex Court in the judgment titled State of West Bengal and ors v. Associated Contractors reported in AIR 2015 SC 260 applies to the present case. They 10 further added that the proviso as added in the year 1997 to Section 102 of the State Constitution is not to be interpreted or construed in a manner which shall not be subordinate to the main section. A construction placed on proviso must have an effect of harmonizing it with the terms of the section. In this connection have placed reliance on the three judge Bench of the Hon‟ble Supreme Court reported in 1985 Legal Eagles SC 18 ( equivalent citation 1985 (1) SCC 591).
18. Learned senior advocate Mr. Z. A. Shah appearing for the respondents projected that Section 56 (2) of J&K Constitution Act, 1939 and Clause 10 of Letters Patent and the Section 102 of the State Constitution, 1956 declared the High Court of J and K to be the court of civil original jurisdiction and all the suits value of which was not less than Rs.10,000/- were instituted in the High Court. In the year 1997, proviso was added to Section 102 which in fact has excluded the High Court from being the court of civil original jurisdiction. Therefore, it is only the District Court which is the court of civil original jurisdiction as was the position obtaining in terms of Section 20 of the Civil Courts Act, Samvat 1977 (1920 AD). Therefore, in terms of Section 2(1)(e) of the Act, application under Section 34 for setting aside the arbitral award shall be competent only before the Court of District Judge, therefore, ouster of the jurisdiction of the High Court as court of civil original jurisdiction is implied 11 and in-built in proviso to Section 102 of the State Constitution, 1957.
19. For addressing the issue as to whether civil original jurisdiction of the High Court of J and K is ousted in view of proviso added in the year 1997 to Section 102 of the State Constitution of 1957, the revelant provisions shall be advantageous to be quoted.
Section 20 of the J and K Civil Courts Act, Samvat 1977 (1920 AD) reads as under:
" 20. Original Jurisdiction of District Judge in suits Except as otherwise provided by any enactment for the time being in force, the Court of the District Judge shall have jurisdiction in original civil suits without limit as regards the value.
Section 56(2) of the J and K Constitution Act of 1939 Samvat (1996 AD), reads as under:
"56(2). The High Court shall have jurisdiction to hear and determine any original civil suit or other proceeding of which the value is not less than rupees ten thousand and every such proceeding shall be instituted in the High Court."12
Clause 10 of the Letters patent in this context of controversy is relevant to be quoted.
Clause 10. Civil Original Jurisdiction of the High Court And we do hereby ordain that the said High Court of judicature shall have jurisdiction to hear and determine any suit or original proceeding of which the value is not less than rupees ten thousand where the said suit or original proceeding relates to any right, title or obligation rising in the towns of Srinagar and Jammu or anywhere else within our State and notwithstanding anything contained in any section of the code of civil procedure every suit or proceeding shall be instituted in the said High Court.
20. As per Section 20 of the Civil Courts Act, Samvat 1977 (1920 AD), Court of District Judge continued to be Court of civil original jurisdiction without limit as regards the value. The said position has undergone change in view of section 56(2) of the J&K Constitution Act, Samvat 1939 (1996 AD) and in view of clause 10 of Letters Patent as was granted by then ruler of the State (The Maharaja) Samvat 2000 (1943 AD). Therefore, only the suits of which valuation was less than Rs.10,000/- later upto Rs. 20,000/- were to be instituted before the Court of District Judge and above Rs.20,000/- were to be instituted in the High Court. However, after institution before the High Court, same could be transferred to the court of 13 District Judge under Section 24 of the Code of Civil Procedure. This was done so as to ensure that the complex matters of more importance and ticklish in character are retained by the High Court for trial.
21. The "position of the District Court" being court of "civil original jurisdiction" in terms of section 20 of the Civil Courts Act was maintained.
Said position has also been considered by the full bench of this Court in the case of Lala Tota Ram v. State 1995 AIR (J and K) 73 and 1975 KLJ 453.
In the said judgement, it has been held that the requirement of the institution of the civil suits of original jurisdiction of the value of Rs.20,000/- and above, in the High Court as enjoined by section 56(2) of the Constitution Act of 1996 and clause 10 of Letters Patent cannot by any stretch of imagination be taken to robe of the district court of its jurisdiction to try and determine civil original suits.
22. At that time, the contention was that in view of section 56(2) and clause 10 of Letters Patent, the civil original jurisdiction of the district court is ousted vis-à-vis suits of valuation of which is above Rs.10,000/-. Same contention was not accepted.
14
23. Section 157 of the Constitution of J and K 1957 provides repeal of the J and K Constitution Act 1939 but civil original jurisdiction of the High Court is saved by section 102 which reads as under:
Section 102: Saving of existing jurisdiction of the High Court Subject to the provisions of this Constitution and to the provisions of any law for the time being in force, the jurisdiction of and the law administered in the High Court and the respective powers of the Judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of the Court and of members thereof, sitting alone or in Division Courts, shall be the same as immediately before the commencement of this Constitution:
[Provided that nothing in this section shall be deemed to exclude institution of original civil suits without limit as regards the value in the principal civil court of original jurisdiction in the district]
24. The proviso has been added in the year 1997 prior thereto the jurisdiction of the court as it was existing has been saved. By dint of the proviso, only one position has been diluted i.e. prior to the proviso in terms of Section 56(2) and clause 10 of Letters Patent, the suits of which valuation was above Rs.10,000/-. Later on above Rs.20,000/- were to be instituted in the High Court. Therefore, suits of the valuation above Rs.10,000/Rs.20,000/- were not to be instituted before the District Courts. Now by the dint of the proviso, institution of the original civil suit without limit as regards the value in 15 the Principal Civil Court of original jurisdiction in the District has been included which earlier was excluded vis-à-vis suits having valuation of more than Rs.10,000/-. The proviso in its clear terms by no stretch of imagination would provide that the civil original jurisdiction of High Court is excluded.
25. The contention of the learned senior counsel Mr. Z. A. Shah that there is implied exclusion of the civil original jurisdiction of the High Court is unacceptable. The exclusion of jurisdiction must be express not implied which position has also been set at rest by the full bench of this Court in the Lala Tota Ram‟s case 1975 KLJ 453.
Para 6 of the said judgment is relevant to be quoted:
"6: It would also be useful at this stage to recall that it is a well settled canon of construction of statutes that exclusion of jurisdiction of an existing competent Civil Court will not be taken for granted in the absence of express words in or necessary intendment of the statutory provisions to that effect. Reference in this connection be made to AIR 1965 Mad 149. Again in Prosunno Coomar Paul v. Koylash Chunder Pual, (1867) 8 Suth WR 428, at p. 436, Peacock C. J. said:
„ The jurisdiction of the ordinary courts of judicature is not to be taken away by putting a construction upon an Act of the Legislature which does not clearly say that it was the intention of the legislature to deprive such courts of their jurisdiction." It is also well recognized that 16 if there be any doubt about the ousting of jurisdiction of an existing court, the court would lean to such an interpretation which would maintain the existing jurisdiction. Reference in this connection may with advantage be made to a case reported as 56 Call WN 566; (AIR 1953 Cal
20)‟."
Para 4. It will be seen that the Jurisdiction exercised by the High Court in relation to the administration of justice immediately before the commencement of the Constitution of Jammu and Kashmir which came into force on January 26, 1957, was not only left intact but was specifically saved by Section 102 of the Constitution. Now the jurisdiction in relation to Civil Suits and original proceedings was before the coming into force of the Constitution of Jammu and Kashmir derived by the High Court from Section 56(2) of the Jammu and Kashmir Constitution Act, 1996, and clause 10 of the Letters Patent.
"Section 56(2) of the Constitution of J and K reads as:
56(2) The High Court shall have jurisdiction to hear and determine any original Civil suit or other proceeding of which the value is not less than rupees twenty thousand and every such suit or proceeding shall be instituted in the High Court."
26. In Atlanta case, 2014 (1) Supreme 195, The State of Maharashtra had filed application no.229/2012 and application no.230/2012 under section 34 of the Arbitration and Conciliation Act on 07.08.2012 for setting aside the award dated 12.05.2012 before the District Judge Thane, State of Maharashtra. On the same date, the Atlanta Limited also filed the petition no.1158/2012 before the High Court of judicature at Bombay. The High 17 Court has civil original jurisdiction whereas District Judge also has civil original jurisdiction in the district.
(a) Atlanta Limited preferred an application under Section 24 of the Code of Civil Procedure, 1908 praying for transfer of the application no.229/2012 from the District Court to the High Court for being heard along with arbitration petition no.1158/2012.
(b) One of the contentions raised therein was that since both the courts i.e. district judge as well as high court had civil original jurisdiction, therefore, the application for setting aside the arbitral award was required to be filed in the court inferior in grade as envisaged by section 15 of the Code of Civil Procedure. Same was rejected while interpreting section 2(1)(e) of the Arbitration and Conciliation Act.
(c) In the facts and circumstance, it was concluded that jurisdiction will vest with the High Court and not with the District Court because Section 2(1)(e) of the Act had made the choice in favour of the High Court.
Para 26 of Atlanta case is relevant to be quoted;
"Para 26: In the present controversy also, we must choose the jurisdiction of one of two courts i.e. either the "ordinary original civil jurisdiction" of the High Court of Bombay; or the "principal civil court of original jurisdiction" in District Thane i.e. the District Judge, Thane. In view of the 18 inferences drawn by us, based on the legislative intent emerging out of Section 2(1)(e) of the Arbitration Act, we are of the considered view, that legislative choice is clearly in favour of the High Court. We are, therefore of the view, that the matters in hand would have to be adjudicated upon by the High Court of Bombay alone."
27. In the said Atlanta judgment, it has been made clear that when an application under Section 34 of the Act was filed for setting aside arbitral award in the District Court as well as in the High Court, section 42 of the Act mandates that the court wherein first application arising out of such challenge is filed shall alone have the jurisdiction to adjudicate upon the disputes.
Para 22 of the Atlanta judgement is as under:
22. The first issue which needs to be examined is, whether a challenge to an arbitration award (or arbitral agreement, or arbitral proceeding), wherein jurisdiction lies with more than one court, can be permitted to proceed simultaneously in two different courts. For the above determination, it is necessary to make a reference to Section 42 of the Arbitration Act. The aforesaid provision accordingly is being extracted hereunder:
"42. Jurisdiction- Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court."19
A perusal of Section 42 of Arbitration Act reveals a clear acknowledgement by the legislature, that the jurisdiction for raising a challenge to the same arbitration agreement, arbitral proceeding or arbitral award, could most definitely arise in more than one court simultaneously. To remedy such a situation Section 42 of the Arbitration Act mandates, that the court wherein the first application arising out of such a challenge is filed, shall alone have the jurisdiction to adjudicate upon the dispute(s), which are filed later in point of time. The above legislative intent must also be understood as mandating, that disputes arising out of the same arbitration agreement, arbitral proceeding or arbitral award, would not be adjudicated upon by more than one court, even though jurisdiction to raise such disputes may legitimately lie before two or more courts."
28. In the judgement State of West Bengal and ors v. Associated Contractors AIR 2015 SC 260, three judge bench of the hon‟ble Apex Court in para 15 while noticing the position of the law laid down in Atlanta‟s case has observed as under:
"in the circumstances it was decided that the "Court" for the purpose of section 42 would be the High Court and not the District Court‟.
It is also relevant to notice the following portion from the said para 15.
„Secondly, the provisions of Arbitration and Conciliation Act leave no room for any doubt that it 20 is superior most court exercising original jurisdiction which has been chosen to adjudicate disputes arising out of arbitration agreements. We respectfully concur with the reasoning contained in this judgment."
29. While summing up, what demonstratively will emerge is that the J and K Arbitration and Conciliation Act 1997 has an in-built mechanism for resolution of the disputes, it is in that context the provisions of the Act are to be interpreted purposely so as to advance its intent.
30. Arbitration is one of the recognised modes of effective alternate disputes resolution. It is departure from adversarial litigative process which is time consuming. The J & K Arbitration and Conciliation Act, 1997 has replaced the J & K Arbitration Act Svt. 2002 (1945 A.D.). That was done so as to advance the object of less expensive and speedy mode of resolution of the disputes. Procedure as was prescribed by the repealed act was also noticed to be time consuming and in a way equivalent to the adversarial mode of litigation. That is why need arose for bringing in a legislation so as to make the mode of settlement of disputes by arbitration mode inexpensive and speedier in its operation.
31. Applications under Section 9 and Section 34 of the Act are to be filed in the Court. The Court for the 21 purpose of the said sections and section 42 of the Act means the court as defined by the Act.
Section 2(1)(e) of the Act is relevant to be quoted:
Section 2(1)(e): "Court" means the Principal Court of original jurisdiction in a district and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court or any Court of Causes"
Section 42 of the Act reads as under:
Section 42. Jurisdiction "Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court."
32. The plain language employed would suggest that where with respect to an arbitration agreement, any application under the Part 1 of the Act has been made in a Court that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other.
33. The word „Court‟ as occurs in Section 42 of the Act means the Court as defined under Section 2(1)(e) of the 22 Act i.e. the principal court of civil original jurisdiction in a district and includes the High Court in exercise of its ordinary original civil jurisdiction.
34. Applications under the various provisions of the Act such as an application under section 11, application under Section 8 of the Act before the judicial authority and any interim measure made under Section 17, at the request of any of the party by the arbitral tribunal does not clothe such authorities with the jurisdiction of court. Said authorities do not fall within the ambit of the „court‟ as defined under Section 2(1)(e) of the Act. Therefore, provisions of section 42 are not attracted so as to hold that the said authorities shall have the exclusive jurisdiction to subsequent proceedings or application under section 34 of the Act.
35. Under section 8 of the Act, when any judicial authority or the court other than the court as defined under section 2(1)(e) [ principal court of original jurisdiction and high court of original civil jurisdiction] refers the parties to the arbitration. The said judicial authority or the court shall have no subsequent power or jurisdiction to deal with the matters arising out of agreement and the arbitral proceedings. For example, if a matter is pending before sub judge/court of munsiff or any other court or judicial authority, same does not constitute the Court within the meaning of section 2(1)(e) of 23 the Act so as to have exclusive jurisdiction vis-à-vis all applications arising out of the agreement or arbitral proceedings as ordained by the Section 42 of the Act.
36. If the matter is referred by the court of sub- judge/munsiff or any other judicial authority except the court (court of principal original jurisdiction or high court of original jurisdiction), those courts and authorities do not constitute the Court under section 2(1)(e). Therefore, subsequently proceedings which include challenge to the arbitral award under Section 34 of the Act shall lie before the Court of principal civil original jurisdiction or the High Court of original jurisdiction not before the judicial authority or the Court who are not the Courts within the meaning of Section 2(1)(e) of the Act.
37. Similarly, if an arbitral tribunal makes any interim measure in respect of subject matter of the dispute, under section 17 of the Act, same order by the tribunal is outside the scope of section 42 of the Act as not being the Court. When a request/application is made to hon‟ble the Chief Justice under section 11 or any person or institution designated by him, same application is not presented before the Hon‟ble Chief Justice or any person or institution designated by him before the High Court, so again provisions of section 42 will not be attracted. Therefore, all subsequent proceedings which include application to challenge the award will lie before the principal court of original jurisdiction or the High Court of original jurisdiction. 24
38. Proviso to section 102 of the Constitution of J and K, 1957 as added in the year 1997 was not incorporated with any intent to exclude the original civil jurisdiction of the High Court. The wording employed in the proviso clearly demonstrates the intent of the legislature. Said Section for proper appreciation is reproduced hereinbelow:
102. Saving of existing jurisdiction of the High Court Subject to the provisions of this Constitution and to the provisions of any law for the time being in force, the jurisdiction of and the law administered in the High Court and the respective powers of the Judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of the Court and of members thereof, sitting alone or in Division Courts, shall be the same as immediately before the commencement of this Constitution:
[Provided that nothing in this section shall be deemed to exclude institution of original civil suits without limit as regards the value in the principal civil court of original jurisdiction in the district].
39. Proviso provides that nothing in this section shall be deemed to exclude institution of the original civil jurisdiction without limit as regards the value in the principal civil court of original jurisdiction in the district. In terms of section 56(2) of the Constitution of 1939 ( AD 1996) suits were to be instituted before the High Court, having valuation above Rs.10,000/- . Jurisdiction of the High Court has been saved by clear wording employed in 25 Section 102 of the Constitution of J and K 1956, but by the proviso, institution of the civil suits without any limit as regards the value before the principal civil court of original jurisdiction has been included that is why the proviso provides that nothing in this section shall be deemed to exclude the institution of original civil suits before the Civil Court of original jurisdiction. The proviso in fact provides for inclusion and does not in any manner provides for exclusion of the original civil jurisdiction of the High Court. The inclusion and exclusion clause has to be specific, as in the proviso specifically institution of the civil suits of original jurisdiction without limit in the principal courts has been included in the background of earlier position, i.e. section 56(2) of the constitution of 1939, therefore, to say that High Court‟s original civil jurisdiction is excluded, is totally beyond comprehension. Neither same was intent, nor same has been visualised.
40. Plain reading of section 102 of J&K Constitution, 1957 along with its proviso when read harmoniously leaves no scope to say that the high court‟s civil original jurisdiction in any manner is excluded.
41. Under section 11(9) of the Act, the Chief Justice has made the scheme knows as "Scheme for Appointment of Arbitrators by Chief Justice of the High Court of J and K. 2002" notified vide notification no. 154 26 dated 24.10.2002. Clause 3 of the said scheme quoted hereunder:
3. Authority to deal with the request.
Upon receipt of a request under paragraph (2), the Chief Justice may either deal with the matter or entrust to any other person or institution for that purpose where the value of the subject-
matter exceeds Rs.10 Lakh and the Chief Justice hereby designates the Principal District Judge of a District within whose territorial jurisdiction cause of action arises or as agreed by the parties in the agreement where the value of the subject-matter does not exceed Rs. 10 Lakh.
The scheme is made by the Chief Justice not in the capacity of a Court, but as chief justice persona designata which also amply makes it clear that power under section 11 of the Act exercisable by the chief justice or any person or institution designated by him do not constitute Court within the meaning of Section 2(1)(e) of the Act so as to attract the applicability of section 42 vis-à-vis jurisdiction of the Court.
The plain language employed in Section 42 of the Act would suggest that where with respect to an arbitration agreement, application under part I has been made in a court within the meaning of Section 2(1)(e) of the Act that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of the agreement.
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42. The "court" as defined under the Act would not take into its sweep the application filed under section 11 or order passed under section 17 of the Act by the arbitral Tribunal, therefore, subsequent proceedings are not to be launched before the said authorities as being excluded by section 42 of the Act in view of not being the court. In order to simplify; (A) if an application under Section 9 of the Act is filed before the District Court and an order is passed subsequent thereto, all applications arising out of arbitral proceedings in terms of section 42 of the Act shall have to be made in that court and no other court. (B) Likewise in case, order is passed by the High Court, then all applications would lie in the High Court.
43. It is concluded that:
(i) High Court of Jammu and Kashmir being court of civil original jurisdiction and the District Courts in the District is the principal civil courts of original jurisdiction, so both are the courts within the meaning of section 2(1)(e) of the Act.
(ii) When against the arbitral award, on grievances, both the parties file applications under Section 34 of the Act for setting aside the award, on the same date, before the District Court as well as High Court, then the case is to be heard by the High Court.
(iii) In case against the arbitral award, parties have filed the applications under section 34 of the Act for 28 setting aside the award in both High Court and District Court on different dates, in that eventuality, the court before which first application was filed shall have the jurisdiction to decide the matter, as has been held in para 22 of the Atlanta judgment (supra).
(iv) Applications under various provisions of the Act which include Section 8, Section 11 and interim measure under Section 17 dealt with by the authorities are not the courts within the meaning of section 2(1)(e) of the Act, therefore, section 42 of the Act is not attracted.
(v) A request for appointment of arbitrator in terms of Section 11 of the Act has to be made to Hon‟ble the Chief Justice or any person or institution as shall be designated for the purpose. In this connection, Hon‟ble two Judges respectively for Jammu and Srinagar Wing have been designated. So the application under section 11 of the Act are to be considered by the designated Judges and any such application has not to be treated disposed of by the court within the meaning of section 2(1)(e) read with Section 42 of the Act.
(vi) Against the interim measure made by the arbitral tribunal, appeal is permissible under section 37(2) of the Act which can be filed both before the High Court as well as District Court which are the courts within the meaning of section 2(1)(e) of the Act.
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(vii) Suitor is a dominus litis. When two forums are available to him, he has a choice of instituting the suit in either of the forums. As already concluded that both High Court being court of civil original jurisdiction and District Court being court of civil original jurisdiction in the district, therefore, application for setting aside the award under section 34 of the Act can lie in either of the Courts. So if only one party is aggrieved, he has a choice to file the application under section 34 of the Act either in High Court or in the District Court. But in case application under section 9 is filed in either of the Court then subsequent applications including application under section 34 of the Act for setting aside the award has necessarily to be filed in the same court and in none other court. There the principle of dominus litis becomes irrelevant.
(viii) Again where both the parties are aggrieved, both have a choice to file application for setting aside the award under section 34 of the Act in either of the courts, but again the position of them being dominus litis becomes irrelevant because as already concluded in case on the same date, application by one party in High Court and by another party in the District Court then choice for jurisdiction has to be the High Court, provided earlier an application under section 9 of the Act is not 30 filed in either of the Courts, otherwise the application under section 34 of the Act has to be filed in the court where earlier application under section 9 of the Act for interim relief was filed.
44. While viewing the judgment rendered in Gh. Mohammad Dar‟s case on the touchstone of the law as laid down in Atlanta Judgement and in the context of the position of jurisdiction of the High Court being court of civil original jurisdiction and while viewing the same in the context of section 56(2) of the J and K Constitution Act 1939, clause 10 of Letters Patent and the proviso to Section 102 of the J and K Constitution 1957, the civil original jurisdiction of the High Court is not excluded. Therefore, the view taken by the Division Bench that both the District Court in the District as well as High Court have the jurisdiction as being the courts within the ambit of section 2(1)(e) of the Act is correct.
45. After thoughtful consideration, for the reasons and facts and the position of law as stated hereinabove, the view taken and the law laid down in Gh. Mohammad Dar‟s case does not require re-look except to the extent supplemented above. Reference accordingly answered. 31
Mode and method of institution and then the jurisdiction shall be governed in accordance with the conclusions as drawn hereinabove at Para 43. Reference accordingly answered.
Registry to take steps for dealing and listing of the connected matters in accordance with the conclusions as drawn hereinabove at Para 43.
(B. S. Walia) (Mohammad Yaqoob Mir) (N. Paul Vasanthakumar)
Judge Judge Chief Justice
Jammu.
31.03.2015
Raj Kumar