Himachal Pradesh High Court
Surat Singh vs State Of Himachal Pradesh And Anr. on 26 May, 2003
Equivalent citations: 2003(3)ARBLR606(HP)
Author: Arun Kumar Goel
Bench: Arun Kumar Goel
JUDGMENT V.K. Gupta, C.J.
1. This reference in terms of Section 113 read with Order 46, Rule 1 of the Code of Civil Procedure has been made to this Court by the learned Senior Sub Judge, Shimla. The facts leading to the making of this reference are that with respect to an Arbitration agreement relating to the construction of Shimla bye pass (Phase-III) Section Parimahal to Dhalli Portion etc. etc. disputes had arisen between Shri Surat Singh, claimant/objector and the State of Himachal Pradesh and Executive Engineer, Shimla Division No. 1, HP PWD, Shimla which were referred to the Arbitration of Superintending Engineer (Arbitration) Solan, H.P. P.W.D. The Arbitrator passed his Award on 08.09.1998 whereby he Awarded a sum of Rs. 6,746 with interest at the rate of 12% per annum from 01.08.1995 in favour of petitioner Shri Surat Singh.
2. Feeling aggrieved of the passing of the aforesaid Award, the petitoner filed an application for setting aside the aforesaid Award in terms of Section 34 of the Arbitration and Conciliation Act, 1996 (1996 Act, for short). The said application for setting aside the Award was filed in this Court.
3. When the aforesaid application being OMP (M) No. 58 of 1998 came up for consideration in this Court, this Court (R.L. Khurana, J.) noticing that the claim of the petitioner was to the extent of Rs. 1,13,000 and the counterclaim of the respondents-State was Rs. 31,690, the High Court did not have the pecuniary jurisdiction to deal with the setting aside application. The Court further found that the pecuniary jurisdiction to deal with such a matter vested with Senior Sub Judge, Shimla, and accordingly the aforesaid setting aside Application was directed to be returned to the petitioner for being presented in the Court of Senior Sub Judge, Shimla. When the matter came up before the learned Senior Sub Judge, Shimla, he entertained a doubt with respect to his jurisdiction to deal with any application for setting aside an arbitral Award under Section 34 of 1996 Act, as in his view, relying upon the definition of the expression "Court" as occurring in Section 2(e) of 1996 Act, it was only the "principal Civil Court of original jurisdiction" in a District which had the jurisdiction to deal with a matter like a setting aside Application and that his being a Court of Senior Sub Judge, did not have the jurisdiction to deal with such a matter. Reference was also made to Section 2(4} of the Code of Civil Procedure to buttress his view that his Court perhaps did not have the jurisdiction to entertain the setting aside application.
4. At our request Mr. Rajiv Sharma, learned Senior Advocate and Mr. N.K. Thakur, Advocate have rendered valuable assistance to us in deciding the issue involved in this reference and in deposing of the reference.
Section 2(e) of 1996 Act defines a Court to mean :
" "Court" means the principal Civil 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 Small Causes."
5. As per Section 9 of the Himachal Pradesh Courts Act, 1976, the Court of the District Judge is deemed to be the District Court, or principal Civil Court of original jurisdiction in a district. Section 9 reads thus :
"(9) District Court to be principal Civil Court of original jurisdiction.--The Court of the District Judge shall be deemed to be the District Court or principal Civil Court of original jurisdiction in the district."
6. 1996 Act is a piece of Legislation, which was in substitution and replacement of the earlier law on Arbitration, being the Arbitration Act, 1940. Actually, Section 85 of 1996 Act expressly and specifically repealed the Arbitration Act, 1940 subject to the stipulations contained therein (with which we are not concerned in this case). The Arbitration Act, 1940 insofar as the determination of the issue involved in this reference is concerned is relevant for our purpose only to notice the distinguishing distinction between the definition of the "Court" as occurring in the two Acts. In contra distinguishing the definition of "Court" as occurring in Section 2(e) of 1996 Act, in Section 2(c) of the Arbitration Act, 1940, the "Court" had been defined as under :
" "Court" means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit but does not, except for the purpose of Arbitration proceedings under Section 21 include a Small Cause Court".
7. A comparative look at the two provisions, one occurring in 1996 Act and the other in the Arbitration Act, 1940 insofar as the definition of the term "Court" is concerned, would manifestly and very very clearly demonstrate that whereas in the Arbitration Act, 1940 the "Court" was defined to mean any Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference as if the same had been the subject-matter of a suit, under 1996 Act the meaning of the expression "Court" was narrowed down and confined to be principal Civil Court of the original jurisdiction in a district. As noticed earlier, under Section 9 of the H.P. Courts Act, 1976, the "Court" of a District Judge alone is a principal Civil Court of original jurisdiction in a district. This is in sharp contrast to the definition as was occurring in the Arbitration Act, 1940 wherein any Civil Court, with reference to its pecuniary and territorial limits, would have the jurisdiction to entertain any matter arising out of, or relating to any issue covered by 1940 Act as if it was the subject-matter of a civil suit. In elaboration of this point, we may refer to Section 15, CPC occuring in Part-I of the Code of Civil Procedure relating to the subject matter of the jurisdiction of the "Courts", whereby it has been clearly stipulated that every suit shall be instituted in the "Court" of the lowest grade competent to try it. Not only Section 15, even subsequent Sections in Part-I of the Code of Civil Procedure, such as Sections 16 to 20, being closely inter-linked with each other would have the direct bearing to the substance and applicability of Section 2(c) of Arbitration Act, 1940 to clearly spell out the Legislative intent behind Section 2(c) of that Act so as to convey that any Civil Court having territorial jurisdiction as well as having pecuniary jurisdiction would be competent to decide any question forming a subject-matter of the reference arising under the aforesaid Act as if such subject-matter related to a suit. In clear departure from the aforesaid definition, under the 1996 Act the Legislature clearly circumscribed and specifically narrowed down the definition of the "Court" only to mean the "Court of principal civil original jurisdiction in a district" and it is only a Court of District Judge in a district which is such a "Court" of principal civil original jurisdiction (In this case, we are not concerned with the inclusive definition as occurring in Section 2(e) of 1996 Act relating to the jurisdiction of the High Court also being a Court of ordinary original civil jurisdiction).
8. On the basis of the aforesaid discussion, therefore, what clearly emerges is that irrespective of the valuation of the subject-matter of a reference or any application filed under Part I of 1996 Act, including an Application filed under Section 34 of the Act ; no Court other than the Court of a District Judge would have the jurisdiction to decide such a reference or such an application. In other words, therefore, the Court of Senior Sub Judge, would not have the jurisdiction to decide such a reference or such an application.
9. In view of what we have said above, the reference accordingly is answered in the manner indicated hereinabove with the result that the application/objections, for setting aside the arbitral Award in question in terms of Section 34 of 1996 Act shall stand transferred to the Court of District Judge, Shimla, for its disposaal in accordance with law. Because all the parties have not appeared before us during the consideration of this reference, we direct the learned District Judge to ensure that before it proceeds to consider the application/objections, it shall summon all the parties.
10. The reference is answered accordingly. Let a copy of this order be sent to the learned Senior Sub Judge, Shimla, for his information.
11. Before parting we wish to place on record our deep sense of appreciation for the valuable assistance rendered to us by Shri Rajiv Sharma, Senior Advocate and Shri N.K. Thakur, Advocate, in the disposal of this reference.