Allahabad High Court
U.P. State Highways Authority Lucknow ... vs M/S Sew Lsy Highways Pvt.Ltd. Hyderabad ... on 23 February, 2023
Author: Manish Mathur
Bench: Manish Mathur
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?Court No. - 21 Case :- MATTERS UNDER ARTICLE 227 No. - 1851 of 2020 Petitioner :- U.P. State Highways Authority Lucknow Thru Member Finance Respondent :- M/S Sew Lsy Highways Pvt.Ltd. Hyderabad And Another Counsel for Petitioner :- Subhash Vidyarthi,Prabhat,Pranjal Krishna Counsel for Respondent :- Pritish Kumar Hon'ble Manish Mathur,J.
Heard Mr. J.N. Mathur, learned Senior Counsel assisted by Mr. Satwik Mishra, Learned Counsel for the petitioner and Mr. Pritish Kumar assisted by Mr. Shantanu Gupta, learned Counsel for the respondents.
Petition under Article 227 of the Constitution of India has been filed challenging the judgment and order dated 19.11.2019 passed by the Commercial Court, Lucknow with a further prayer that the petitioner's application for registration of petition under Section 34 of the Arbitration and Conciliation Act, 1996 be allowed.
Learned Counsel for the petitioner submits that the petitioner as well as the opposite parties had entered into an arbitration agreement on 01.08.2011 in which vide clause 44.3, availability of arbitration was provided with regard to disputes arising out of the agreement. It is submitted that in pursuance of the aforesaid clause, the opposite party had invoked arbitration proceedings which culminated in passing of award dated 25.05.2018 by the Arbitral Tribunal. Against the aforesaid award, an application under Section 34 of the Act of 1996 was preferred on 16.08.2018 before the District Judge, Lucknow, which was admitted vide order dated 18.08.2018 registering the case as Arbitration Case No. 74 of 2018. It is submitted that prior to filing of the application under Section 34 of the Act of 1996, Commercial Courts were notified on 01.06.2018 under Section 3 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015.
Learned counsel for the petitioner submits that since the Commercial Courts notified were at the inception stage without adequate infrastructure, all appeals at that time were being preferred under Section 34 of the Act of 1996 before the District Judge, Lucknow and it was in terms thereof that petitioner's application under Section 34 of the Act was also filed before the District Judge.
It is submitted that after appearance of opposite parties in the aforesaid case, a preliminary objection regarding lack of jurisdiction was taken in view of notification and establishment of the Commercial Courts. In pursuance of the preliminary objections, the plaint was returned under Order 7 Rule 10 of the Code of Civil Procedure vide order dated 01.03.2019. It is submitted that the aforesaid order became final since no challenge thereto was ever made. Subsequently, a fresh application under Section 34 of the Act was preferred before the Commercial Court on 07.03.2019 taking the plea of Section 14 of the Limitation Act. Objections against the appeal were filed on 08.04.2019 whereafter vide order dated 19.11.2019, the plea of Section 14 of Limitation Act was rejected, consequently, the application under Section 34 of the Act of 1996 also stood rejected.
It is submitted that pursuant to the order dated 19.11.2019, the petitioner filed Arbitration Appeal No. 1 of 2020 under Section 37 of the Act of 1996 before this Court on 07.01.2020 where an objection regarding its maintainability was taken citing judgment rendered by Hon'ble Supreme Court in the case of BGS SGS Soma JV versus NHPC Limited reported in (2020) 4 SCC 234.
It is submitted that in pursuance of preliminary objections raised, an application for withdrawal of the arbitration appeal with liberty to file writ petition was filed which was allowed by means of order dated 20.01.2020 with the aforesaid liberty.
It is submitted that consequent to the liberty granted by this Court vide order dated 20.01.2020, present petition under Article 227 of the Constitution of India has been filed on 21.01.2020.
Mr. Pritish Kumar, learned Counsel appearing for the opposite parties has raised a preliminary objection regarding maintainability of present petition on the ground that in view of subsequent judgment rendered by Hon'ble Supreme Court in the case of Chintels India Limited versus Bhayana Builders Private Limited reported in (2021) 4 SCC 602, the earlier judgment in the case of BGS Soma (supra) has been impliedly overruled and it has now been held that an application under Section 37(1)(c) of the Arbitration Act, 1996 would be maintainable against an order refusing to condone delay in filing an application under Section 34 of the Arbitration Act, 1996 to set aside an award. As such, it is submitted that the present petition under Article 227 would not be maintainable since the effect of rejection of pleadings under Section 14 of the Limitation Act would have the consequent effect of rejecting the application under Section 34 of the Act of 1996 due to which only an application under Section 37 of the Act of 1996 would be maintainable.
Mr. J.N. Mathur, learned Senior Counsel does not dispute the fact that in view of subsequent judgment rendered by Hon'ble Supreme Court in the case of Chintels India Limited (supra), now only an application under Section 37 of the Act of 1996 is maintainable but submits that the present petition itself may be converted into one under Section 37 of the Act of 1996. He has placed reliance on judgment rendered by Supreme Court in the case of Municipal Corporation of Delhi versus R.P. Khaitan reported in (1999) 79 DLT 555.
In response to the aforesaid plea, learned Counsel appearing for the opposite parties submits that since an appeal from an order passed by the Commercial Court in terms of the Act of 2015 is required to be preferred under Section 13 of the said Act, which is a special statute indicating special procedure and forum of filing appeal, the present petition under Article 227 of the Constitution of India cannot be converted into one under Section 37 of the Act of 1996. He, in turn, has placed reliance on judgments rendered by Supreme Court in the case of Raj Shri Agarwal @ Ram Shri Agarwal and Another versus Sudheer Mohan and Others bearing Civil Appeal No. 7266 of 2022 as well as in the case of Colonel Anil Kak (Retired) versus Municipal Corporation, Indore and Others reported in AIR 2007 Supreme Court 1130.
It is submitted that in all the aforesaid decisions of Hon'ble Supreme Court, permission to convert of petition under Article 227 of the Constitution of India were only in case of one under Section 115 of the Code of Civil Procedure whereas in the present case, a special enactment such as the Commercial Courts Act, 2015 is in place providing a separate and distinct procedure and forum under Section 13.
Considering submissions advanced by learned counsel for the parties and upon perusal of material on record, it is evident that there is no dispute with the aspect that in terms of recent judgment by Hon'ble Supreme Court in the case of Chintels India Limited (supra), now only an application under Section 37 of the Act of 1996 would be maintainable in the present case. Learned Counsel for the opposite parties also does not dispute the aforesaid proposition but only objects to conversion of this petition into one under Section 37 of the Act of 1996.
Section 13(1-A) of the Commercial Courts Act of 2015 provides for an appeal against the judgment or order of a Commercial Court at the level of District Judge exercising original civil jurisdiction or commercial division of a High Court to the Commercial Appellate Division of that High Court within a prescribed time.
Section 2(1)(aa) indicates a Commercial Appellate Division to mean the Commercial Appellate Division in a High Court constituted under Section 5(1), which in turn pertains to constitution of Commercial Appellate Division and prescribes that the Chief Justice of concerned High Court shall by order constitute Commercial Appellate Division having one or more Division Benches for the exercise of jurisdiction conferred upon it by the Act.
Considering the provisions of Section 13 of the Act of 2015, it is evident that an application under Section 13 of the Act of 2015 would lie before a Division Bench of the High Court. Section 37 of the Arbitration and Conciliation Act, 1996 provides for an appeal against orders passed from original decrees of the court as indicated therein.
It is admitted between the parties that in view of Section 2(1)(e) of the Act of 1996, the definition of 'Court' includes the principal civil court of original jurisdiction in a district and included the High Court in exercise of its ordinary original civil jurisdiction. It is submitted that the aforesaid provision has been interpreted by Hon'ble Supreme Court to mean that an application under Section 34 of the Act of 1996 was maintainable earlier before the Court of District Judge and under Section 37 of the Act of 1996 was maintainable before the High Court. It is admitted that in pursuance thereof, an appeal under Section 37 of the Act of 1996 is maintainable before the High Court.
In view of aforesaid consideration of Section 13 of the Act of 2015 as well as Sections 34 and 37 of the Act of 1996, it is evident and undisputed that an appeal preferred under Section 37 of the Act of 1996 even though read with Section 13 of the Act of 2015 would lie before a Division Bench of the High Court.
Hon'ble Supreme Court in the case of Municipal Corporation of Delhi (supra) has clearly held that a High Court is entitled to convert any proceeding instituted before it in one manner to be that of another provided a proper call has been made out and in the interest of justice. It has also been held that powers exercised by the High Court under Articles 226 and 227 of the Constitution are extraordinary and discretionary powers which are so wide as to envelop not only all aspects of the matter but orders can be passed in such nature as the High Court thinks fit and that its jurisdiction under the aforesaid clauses are not curtailed to meet questions of parameters.
In the case of Colonel Anil Kak (supra), the Hon'ble Supreme Court has approved conversion of revisional proceedings to a proceeding under Article 227 of the Constitution of India. Similarly, in the case of Raj Shri Agarwal (supra), a distinction between entertainability and maintainability has been indicated and it has been held that the High Court has powers to convert a petition under Article 227 of the Constitution of India into a revision under Section 115 of the Code of Civil Procedure.
No doubt all the judgments cited at the bar pertained to conversion of petitions under Article 227 of the Constitution of India into those of revision under Section 115 of the Code or vice-versa but the proposition of law as enunciated in all the judgments is that the proceedings even after conversion should remain before the same forum and in the interest of justice where a proper cause has been made out.
Upon applicability of aforesaid judgments in the present case, it is evident that even after conversion of the present petition under Article 227 of the Constitution of India, the forum even under Section 37 of the Act of 1996 read with Section 13 of the Act of 2015 will remain the High Court. It is also material to indicate that pleadings in the present petition have already been exchanged between the parties and, therefore in the considered opinion of this Court, a just cause is clearly evident particularly once the earlier appeal under Section 37 of the Act of 1996 was withdrawn with liberty to file the present petition under Article 227 on the ground that it was not maintainable as an appeal but during the course of present proceedings, in view of the changed law as per Chintels India Limited (supra), now only an appeal under Section 37 of the Act of 1996 is maintainable.
In view of aforesaid and exercising inherent power under Article 227 of the Constitution of India, the present petition under Article 227 of the Constitution is permitted to be converted into one as appeal under Section 37 of the Act of 1996.
Office is directed to allot appeal number to the present petition and to place it before the appropriate court, after following procedure.
Order Date :- 23.2.2023/Mohd. Sharif