Karnataka High Court
M/S S M Suparies Nut Merchants vs The Karnataka Bank Ltd on 27 August, 2010
Equivalent citations: AIR 2011 KARNATAKA 38, 2011 (1) AIR KANT HCR 640, (2011) 3 KANT LJ 133, (2011) 2 ARBILR 259, (2011) 3 KCCR 2300
Author: Aravind Kumar
Bench: Aravind Kumar
IN THE HIGH COURT OF KARNATAKA, BANGALORE
DATED THIS THE 27TH DAY OF AUGUST
BEFORE
THE I-ION'BLE MR. JUSTICE ARAVIND u 'V
MISCELLANEOUS FIRST APPEAL 1¥Io.:3'sA2i57 G3?' 2éc3"('ir:~3.>.(':;%.T_j
BETWEEN:
M/S. S.M. SUPARIES, NUT M.EI--"x'CHAN'I'S._
No.5, "A" BLOCK, Apmc _ "
SHIMOGA BY ITs'PRfoPRIETR1X~--... j » " ~ . _
SMT. ANNAPOORNA, ' . = "
WIFE OF RV. MoHAN,_ '
AGED ABo'cT..36 YEARS; .,
R/AT. AN_AG'gj)DIGE-- ViLL"AG}::,_ " "
SHEDAGARU-.PC)S'F,_ *1.RT;1%IA}LALL1TALUK,
SHIMGQA::_D;STRICTIff_- «_
' """ " 3 ...APPELI.ANT
{B§'x.sfi._ G. ve:§"1;a¢acfia:A,--~Adv.,)
A_1_'IE=._
._ KARNAT' 'BANK LTD .,
'I~iAvn\JG'«1Ts HEAD OFFICE AT
" THROUGH ITS
BRANCHfOF'FICE AT A.P.M.C.
f$;H51'MOGA, REPT. BY
A "-...ITS.__MA1\iAGER.
...RESPOND EN'IE'?'
" Sri. K.V. Shyama Prasad, AcIv.,}
Principal Civil Court of original jurisdiction
in a District and as such execution V.
was not maintainable. K H H
ii) Further, under sec.4:Ed,"mit"is
that where with Vrespectdt
agreement any v"Psart
has been made alone
shall have arbitral
procceediiigsiangifii applications
A and the
tttt be made in that
court and;'in"no' other Court.
.. VvO'n raisi1igV___i;'hoese queries, Registry noted that
V':Princi.paE_Dist.rict_Judge, Shimoga, has no jurisdiction to
adjudicdated tdhedefiiecution petition and accordingly, it was
' 'posted befor.ex the Court. By order dated 14.11.2000, the
iPri.ncCi'pal District Judge kept open the point regarding
0"»__"jurisdiction and ordered notice on judgment debtors.
M
On service of notice Judgment Debtors l and V-2-._haVe
appeared and contested the execution petitio_n_._"~ ~
4. 011 9.8.2001, Principal'District~«.:}j'..1ldge',has"»
issued sale notice. pursuant to which, 'iitw'o_"'prop'erties
were sold at spot. Court aucti-on/ sale »vas'l.con_'d--ucted on» '
3.8.2002.
5. On 19.1o.2ooe_,v--deb to be filed
under Order' 'ebyfjltlhe 18* judgment
debtor who is also the
wife l to set aside the sale
contending irregularities in the sale.
Theg.-said kapvpiichatlo-nlvleame to be resisted by the
. .,.._,dei:reeiel1ol'der. Trial Court after considering rival
its order dated 16.12.2002 dismissed
the-..appgvlicat~ion, which order is assailed in this appeal.
* Heard the learned advocates appearing for the
W
7. Sri.Venkatacha1a learned Counsel appearing for
the appellant first J.Dr would contend that Principal
District Judge did not have the jurisdiction _
the execution petiton and the objection"rai-s:ewd"'by'--the W 2
office ought to have been uphe1d.;4in::'Viej'i2vdof.V
read with Section 42 of the':Arb.itrat1on and'jCo.I1«e,i1Viation
Act, 1996. He would . eirectitioritipetition
ought to have been to have been
returned for v.:th'e".Court having
jurisdiction; submission by
contendingctddsdection 2{e) would clearly
jurisdiction to entertain a
suit _ of originai'j.uris'diction would be the Court which
dd."-would :,,,'"be"i' ..entitd1e"d"dVto consider and adjudicate an
by the claimant for execution of a
dec.ree.__> iivould further contend that in the instant
: case ezzecution petition ought to have been fiied before
'Fri-nddcipal Civii Judge, (Sr.Dn] Shimoga since the said
~-idourt has the jurisdiction to try a original suit of this
nature. in support of his submission he relies---__upon
the judgment of the Hon'b1e Apex Court.«i.1_i
Coking Coal Ltd. Vs. M/s. Annapurna
case reported in AIR 2008 S';CQ"2Q2'--8 i
judgment of the Delhi High' Court
DELHI 14 [Virendra saigifii. I/V's.' M/s}. isfiijiciztizaitt
Jamnalal) and see}ts.._A_for_r'daiioufingi'-.of thtediatiapeal and
setting aside the order .ii,;4gi;;ecuting Court.
8. ._'_.':'31fi.i'I:Vi;;'3hyarnaprasad iearned
counseI.t._.cva_}5peariijig forjivthe~....resi)ondent decree holder
Would...Asupport'the'iordeifpassed by the executing Court
and conte.1idVsVvV'i'e:ading of Section 2(e} of the
Arbitra_tion A¢:;.t199e it would emerge that it is the
:'«Cixri_I Court of the District which has
j'L1ris'dictioi_1_ tsottry execution petition and when it is read
with .. reference to the word "District" the execution
A ioetit_ion presented in the instant case by the decree
hoider before the Principal District Judge, Shimoga
fir"
case referred to supra is inapplicable to the facts --of the
present case since dicta laid down by the
under Section me) of the Arbitration
would not have any application to p_the,«faVcts_ iofilthe
present case as the Words udsecdinin 10996» Act.4"--are--.V
different. He would also subinit thathdapplicationdd filed'
under Order 21 Ru1fe..V_fl90_.*it's'eif';was_p.not0Vrnaintainable
since it is filed by the J.Dr and as
such she did 'hare uanfdindependent right
over the as such he seeks for
rejectioniiv heard the learned
advocates" the parties following points
arise for .0
{ii the application filed under Order 21
it ». Riiie 90 is maintainabie'?
(ii) ' .:Whether the execution petition in
Ex. 1 7/ 2000
Principal District Judge. Shirnoga'?
was rnaintainable before
Q//'
[iii] Whether the order passed by the Principal
District: Judge in execution
dated 1s--12m200o is liable to be arrir;:1¢a't;i
reversed?
(iv) To what order'?
9. Retguestion No.1--,:In» so" far -as dc-ofi'tention"'
regarding the maintainability:ddc_:'of'V"-»tAthe ddappiication is
concerned same is tai§e.nfiip at first
instance itself this point will
have the points. Though Mr.
contention before this
Courtz"fo:r" the .»it is seen that at the first
instance v'surhen'a.pp1icat'ion Was filed by the first J.Dr it
wa's«V.oh"'betha1f of Vadddproprietary firm and was represented
Srnt.Ar1napoorna. in the said capacity
app1ic,a't'ior;' in question has been filed by her and not in
the cabacity of being Wife of second J.Dr. Even
dfidotherwise by reading of Order 21 Rule 90 it would
it " -"emerge that any person entitled to share in rateable
mi
distribution of assets would be entitled to object to the
sale of property and as such applicant. would be entitled
to seek for setting aside the sale. In the in'slta.IV:t_'__icVasje».,
firm being the Judgment Debtor it he -A
entitled to seek rateable dis,tribution--os»
proceeds in execution proceedingslgln view"oftl_1e
contention of Sri.Shyampras'ad .learned:l_'Couv{I1sel for
respondent cannot be"«acc_e1;§teciVan'd'L'itiis__hereby rejected.
Question No.1.~is hel.d--V--in[ffavoAur" appellant and against ._ :i=.0.= and 3: These two questions being are being taken up for considercztion "tog_e_ther_ In order to consider rival ' e.oi1-t.e11tions.Araised by the learned Advocates it would be neclessarydito..5'extract relevant provisions of law pressed into service namely Section 2[e) and Section 42 of the A Arljitration and Conciliation Act, 1996 and Section 2(c) of the Arbitration Act, 1940 which reads as under:
M 1} Section 2(e) of 1996, Act
"2.Definitions._[i) in this Part. un1ess~.r:'j'«.._l"'- the context otherwise requires._
(a) to (d) xxxxx [e] "Court" means the prin_cipa.;l' Civil Court of original Ajurisdictionlinv -.1 "
district. an'd__v"'--i1z1cludves Court in exereise of its"
origina1'*»~ .'CiVil. having jurisdietion it the V e ilqiiestiolns' g V a sub} ect- of :5-,,rl:l}itration if the the subject-
tttt " 'V alulsiiit, but does not ' civil Court of a grade " _ such principal Civil V _ "or any Court of Small Caiises; "
1. .5ea¢:tiésn:r;g of 1996, Act ' Jurisdiction.WNotwithstanding anytP1i'ng contained elsewhere in this Part or inxany other law for the time being in force, it llflwhere with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone 4/ shall have jurisdiction over the arbitralh proceedings and all subsequent applicati0nusl.__u"e_ arising out of that agreement arbitral proceedings shall be made Court and in no other Courftfl.
Section 2(c) of 1940, Act "2. I)efinitions.'M;;.Ii:'i'*..lthis VAct,_"~_1,1ii-lvelss it there is a1'1yihl}'1,f_;§ 1*t%pugr1érr1t ii1VLthelsubjCQt} or cor1text.W {a) to {lo} V xxX.x>g_ H _ 9 V _ [cl 'l'g,f1C<>i.i:i'i'_"i .:i:he'a1is'.j_'~.aC 'fcivsi Court to decide the ____ M ii' " the subject
-- the reference if the been the subject-
" ._m211:vtieli~~°:of a suit, but does not the of under for purpose arl.)i.i1'a.ti.on proceedings Section 21 include a Small Cause Court. "
C. if. The cont.e.11i.io11 of Sri.\/enkatachaia that words f_'Prir1cipal Civil Court" referred to in 1996 Act. is to be ~~v-"read in conjuriction with the sueceeciing words in the Q"
same section wherein it has been stated that Civil Court which has the jurisdicflon to decide the subjeejtVrn2_it'ter of a suit, would mean a Court which ..A't&'o111d'vt:"h2fiv--*.9 "Original Jurisdiction" to tryv~a"'s11Ait -'uitn course if there was no arbitration d§spute'a_rid,Vit _ Court of original jL11"isdictio;fiV.eDwhteh. be"
entitled to adjudicate" app'licnati'o'n_._is to be considered in the background "of the Horrble Supreme in Coal Ltd's case referred the learned counsel for the 22 which reads as underf' " V V C C C4 for the foregoing reasons as iaIso--A.theVChirtctir1g precedents are of the opinion Court has no _jartsdiotion to entertain xtitese"lajaplications. The Registry, therefore, is dmitéa to send the records to the Court of C' C-CV1,strict Judge. Dhanbad who in turn is directed to transfer the case to a court having appropriate jurisdzlction. The court concerned is requested to dispose of the objection filed by the appellant ea/' herein as expeditiously as possible and not later than three months jrom the date of receipt'e',_.Q,'i". records".
12. Sri.Venkatacha1a would contend---t.h:atvHonfbie"
Supreme Court having found that arbiitraticoittiawardpnot.' being sustainable remitted the Vtmattepr the District Judge, Dhanload ativyiit and a further direction Judge to transfer the precpordsx' proper only mean that iufisdiction to try a suit. He wou1N,,S\u-P_rni§ by the Hon'b1e Supreme Court, app1jI.._ed~.,_to'~.--the facts of the present case the on-ixyiconcisxsioniwaeeording to him which can be drawn is "Civil Judge {Sr.Dn} Shimoga is the Court original jurisdiction to try a suit with unlimited jurisdiction which has to try the execution in question and no other court. As such he subniits that execution petiton ought to have been filed W before the said Court. liameiy Principai Civii Judge (SI'.D}.'1] and not the Principal District Judge, Shinioéa,
13. This Court in the case of Haiti an occasion to consider the issiieregarcling. jiuvrisaietiovnn of the Courts to try petition filed 1996 Act and While iriter'i0retingVh 'tIrie'~.1:§'3*o{2'1iVeioriVs. of"
Arbitration and Co.iic:i.1_iati_on to the following effect:
"A reclsiing Sections 34 and 2&3} So)" intakes'. it clear that an has to be filed in the:iojlorigiriatjurisdiction in a dielriet include any Civil Court 'C of a inferior to such Principal Civil V' C. or Court of Small Causes. 3 C. Section 2(0) of the Act, 1940 and A and 14 of the Act, Supreme Court . guru Nanak Foundation Vs. M/s 'Rattan singh and Sons, observed that in the absence of an arbitration agreement if a dispute was required to be resolved by initiating proceedings in a Civil Court that 6?' 16 Court which will hauejurisdiction to entertain___ the suit alone would have jurisdiction entertain the aurard and the arbitration-«.'i'rji: view of Section 14(2) would have to file award in that Court."
And in conclusion it was heidto lfollowingg effectV:'=--4 "Learned Dis i J udge. C r considering Section 14,«of Ciour"ts~A'2:3ict has neither (2) of Section 14anor the Civil Courts Whatever, that o those sections to say that the had no jurisdiction to enteritatini But the question that _--would" case is as to whether in given'"c'ir:>-urnstances of the case, District Cotr;rt.:at__Raichitr' could have entertained the jor execution and ordered for attochsrrient of mo ueables. "
{tis noticed that contention now put forward by *i.Mr.Ktenkatacha1a is on the basis of the judgment of the W Hon'bie Supreme Court rendered in Bharat Coking Coal Limited referred to supra. In the said judgrn«e'11tf--.it"-is noticed that judgment and award that ' passed was under Arbiti-ation Ac.t.,~~~i.94i0 it it Section 2{e) of 1996, Act was referreiciiii time Arbitration Act, 1996V»Aet:.,had.'Co_meuintoilforieej. Iris' the said case Hon'b],e_.Suprer:ie=Cot1rt has...aiso taken note of the fact of Seetiori been interpreted by the Apex Co. Ltd's case and at judgment it has been held to the aim.
that such a View has V_ _been'~ tfake";--1 this Court in National A__Iu1r1ini1j1:1,V_ _____ Co. Ltd. Vs. Pressteel & Fa.bri:e'a.tions (P) Ltd. and Another [[2004}1 Statiligr In regard to the forum before which the appiication for modification or setting aside the award is concerned, we find no difficulty in coming to the eonc}usion_ that in \fi€'."W of the provisions W' of Section 34 read with Section 2 {e} of the 1996 Act. it is not this Court which the jurisdiction to entertain_....._lj application for modification of and it could only be court of original jui'is:?:lict..ior,l1"~. conternpiated under Secti_on 2 the:
Act, therefore. ii*i=:T"our it application xi? 1\.ot"" lrniailntainahllev...before this Court." 7
14. By rcadiviig cg-fl Act it would emerge that defined to mean and in a district. It is also Section 2{e) it excludes certain couiftsl. The exclusioii clause excludes any Civil . it l*Co'urt i--n--feri.or to Principal Civil Court or any Court I oi.._iSrria,ll«._.Ca_i3~se.s to exercise jurisdiction or to entertain the«.._pet_iti0;oF'or application under the Act. The exclusion iysyyspecific. Thus, a conjoint reading of inclusion and it 'exclusion clauses of Section 2(e) it would emerge that l ~~}-egislature in its wisdom have thought necessary to vest W the jurisdiction to decide the questions forming the subject matter of a suit under the Ai'bitratioIfi~_.b'and Conciliation Act, 1996 with the "Principal of a "District" and by excluding__any_ 4oth_ei"llCivi} Court K"
a grade inferior to such l3rinci"pal7.'_AC'i\/ill"C'o:.:rtA Court of Small Causes. vv'ord~'Y§5rin'c;ipa1Civil'-C' Court" is examinedvvith Voreference to Juristliiction of "District Court" as' d_efined' ::'uric§l:eruL"Karnataka Civil Courts Act _reads V' "Secéti__§_1{g of the District ,Co11rt's_.":' .°{::l_l._ Dis.tri_ct Courts shall be 'Principal Civil Court of olrigirial vvithin the local limitation . .. of this juri.s'dic':ion.
{2} Suljjectio the provisions of the Code of ..Cixril..iVl3rocedure 1908 [Central Act 5 of 1908). 'iAti'r'i'sdictio'n of a District Court shall extend to all original suits and proceedings of " 'icivil nature.
C it vifould emerge that District Courts are deemed to be _.v___§'Principal Civil Court of original jurisdiction and as such 4"
20
"Principal District Judge" of the District alone will have jurisdiction to decide the questions subject matter of a suit and no other Court.__;'_""'* « f C'
15. Thus, when these two:'Selct'ions,na«rne'ly Section 2[e) of Arbitration and Conciliation Section 14 of the Kamataka"'Civi_l Courts read inil conjunction it would: 'meanC"'""_P"rinc\ipa1 District Judge"
of that particular Distri'ct Principal Civil Court of orig_;'ina;1r,ijurisdiction"within.tile local limits of its jurisdiction vl3eiV}e1'*'1titled to decide the questijons _the"~-«subject matter of Arbitration. Hence, einto"_.-vvords Principal Civil Court to 'and ilrieluclepithe Principal Civil Judge [Sr.Dn.] ' _WOuic1be'o_tiose for two reasons:
' --. Unlike in section 2(0) of 1940. Act where the word "District" is used same does not find a place in 1996, Act.
M 21
(b) While reading the exclusion clause in comparison of two enactments _xnam'ely 1940, Act and 1996, Act the difference which is 'to~-be found -is in it 1940 Act only thendiiiiotirtllvof were excludecl..§Ovl1ereas._ Act '' any Pi'inc'ipal Civil Court purpose of Thus, 'original jurisdiction in a District only the Principal Districtqudge and not the Principal Civil Judge _(Sr4."D.n)'»~or other Court having original gurisdictiovtiiwhichis inferior in grade to such "Principal 'Civil View of the same question No.2 has to be'«.he1_'d' .against the appellant and in favour of the ..respondent by holding execution petition filed before C "'._l?'riricipal District Judge, Shimoga was rnaintainable and C V' " "it is to be held that order passed by the executing Court M in Ex.No.i'7/2000 dated 16-12-2002 does not _suffer from any infirmity whatsoever and deser\res'*V.f_o.2"i'.)f3 affirmed.
16. Rezguestion No.4. In '.giex%.'r of "discuéfsjo'13:s made herein above following order oassedf
(i) Appeai is }u1"efebyr _ {ii} Ordéfi-2' aessed Vv.e2s§ecutin Court in dgxfiméoi?/éooo;dgui1i£a12~2o02 ksfmreby _kio'ofir1£12ed.4V"'~~._ _ -
(iii]x' 4. ord__ei~ costs.
' .....
d».sbb/so?