Calcutta High Court
Shiva Carriers vs Royal Projects Ltd. And Ors. on 12 March, 1999
Equivalent citations: AIR1999CAL138, AIR 2000 CALCUTTA 138, (2000) 2 ARBILR 20
Author: K.J. Sengupta
Bench: K.J. Sengupta
ORDER K.J. Sengupta, J.
1. This application has been taken out without mentioning any section of Arbitration and Conciliation Act, 1996 but claiming following reliefs.
"(a) Declaration that the petitioner is the sole and absolute owner of the said two vehicles bearing police registration AS-25-0 130 and AS 25-0160 Engine Nos. 697 D23K937 17343 and 697D23K937 17327 Chasis Nos. 360 324K93702498 and 360324K93702476 respectively.
(b) Declaration that all payments payable by the petitioner under the Agreement dated November 28, 1993 have been paid and that the respondent No. 1 is not entitled to any amount or further amounts from the petitioner.
(c) Declaration that the purported reference before the respondent No. 3 is null and void and of no effect.
(d) Declaration that the respondent No. 3 is not the Arbitrator and not appointed as the Arbitrator by the petitioner and has no mandate.
(e) Alternatively a fit and independent person be appointed as the arbitrator in place and stead of the respondent No. 3 to adjudicate the disputes between the parties.
(f) injunction restraining the respondents and/or their men and/or agents and/or servants and/or each of them from proceeding further with the purported reference or from taking any steps or further steps with regard thereto.
(g) Injunction restraining the respondents from giving any effect or further effect to the letters dated June 18, 1998 and July 30, 1998 issued by the respondent No. 3 in any manner whatsoever.
(h) Injunction restraining the respondents and/or their men and/or agents and/or servants and/or each of them from disturbing the possession and/or the user of the said vehicles by the petitioner and/or from taking possession of the same in any manner whatsoever.
(i) Ad-interim orders in terms of prayers above.
(j) Costs of and incidental to this application be paid by the respondents.
(k) Such further relief or reliefs as to this Hon'ble Court may deem fit and proper."
2. Admittedly this application has been made in connection with and in relation to arbitration agreement entered into by and between the petitioner as Financier on the one hand and the respondent No. 1 as a principal debtor and the respondent No. 2 as the guarantor on the other hand.
3. Mr. Bachawat, the learned Advocate, has argued in support of this application and urged which is summarized hereunder.
4. The disputes in connection with and in relation to the hire purchase agreement amongst the parties cannot be decided and/ or adjudicated by arbitration and the same has to be decided by way of suit. Moreover, there cannot be any dispute since all the claims in terms of the agreement, the respondent No. .1 has been paid off. Besides, the arbitrator has no mandate. The named arbitrator ought to have disclosed his incapacity under the law in writing before he assumed the office of arbitrator since such disclosure is mandatory under Section 12 of the said Act.
5. There are other grounds strongly urged by Mr. Bachawat to maintain this application and has argued the reliefs claimed, the sum and substance of which is for replacement of the respondent No. 3 being the named arbitrator. He argues that the maintainability of this application owing to lack of pecuniary jurisdiction of this Court is of no substance as the subject-matter of the application being the value of the vehicle and the amounts payable under the agreement are in excess of Rs. 10 lakhs.
6. Only respondent who is contesting this application is respondent No. 1 who is being represented by Mr. Malay Ghosh, the learned Advocate, Mr. Ghosh in answer to argument of Mr. Bachawat has submitted that the reliefs claimed in the petition are not required to be adjudicated by this Court as the same can be taken care of at the first instance by the learned arbitrator. He argues the machinery provided in Sections 13 and 16, of the aforesaid Act are exhaustive and sufficient for this purpose. The petitioner, according to Mr. Ghosh, cannot bypass the same.
7. Mr. Ghosh argues the pecuniary jurisdiction cannot be more than Rs. 10 lakhs as this application has been taken out in relation to and in connection with the arbitration proceedings initiated by Mr. Ghosh's client and the value whereof as mentioned in the statement of the claim in aggregate does not exceed Rs. 10 lakhs. So, this Court according to Mr. Ghosh, lacks pecuniary jurisdiction.
8. Mr. Ghosh further argues that his client has already taken out an application under Section 9 of the aforesaid Act for interim relief in the learned City Civil Court at Calcutta in July, 1998. This application has been taken out under the same Act subsequently in or about August, 1998. So, he argues this Court should not proceed with this as the learned City Civil Court has got exclusive jurisdiction by virtue of Section 42 of the aforesaid Act.
9. I have considered the submissions of Mr. Bachawat and Mr. Ghosh. Before I embark upon an enquiry as to sustainability of the merit of this application and further maintainability. I am to ascertain whether this Court can entertain this application in view of the provision of Section 42 of the said Act, as admittedly one of the parties in the arbitration agreement has already initiated proceedings under Section 9 of the aforesaid Act. So, it is imperative for me to reproduce the provision of Section 42 of the said Act which is set out 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 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."
10. It would appear from the aforesaid section that it starts with non obstante clause and according to me this provision is a mandatory and this operates as an ouster of jurisdiction of all other Courts. It is settled law any provision starting with non obstante clause and the words employed in the Sec-tion ".....that Court alone shall have jurisdiction.....and in no other Court", cannot be construed otherwise than a mandatory one.
11. It is an admitted position the petitioner herein having regard to the reliefs claimed and the averment made in the petition has approached this Court in connection with and/or in relation to the arbitration agreement and the arbitral proceedings.
12. In the petition the petitioner's con-tention and claims admittedly relate to the jurisdiction and/or authority of the respondrl ent No. 3 being the named arbitrator in the arbitration agreement and further relate to the arbitral proceedings which has been commenced by the named Arbitrator by issuing a notice. Admittedly the respondent No. 1 has initiated a proceedings under Section 9 of the aforesaid Act for interim relief. Having regard to the nature of the relief claimed in the petition this application cannot be termed and so also admitted by Mr. Bachawat otherwise than under the provisions of Sections 12, 13, 14 and 15 of the said Act. The defence made out in this application by the respondent No. 1 relying on provisions of Sections 13 and 16 of the said Act. All the aforesaid sections relied on by both the parties are covered by Chapter-II of the said Act. Section 42 of the said Act is part of Chapter-II and which also overlaps the aforesaid all the sections.
13. Therefore, I am of the view the present application is absolutely hit by the provision of Section 42 of the aforesaid Act as it has been rightly argued by Mr. Ghosh. So, I hold that this Court has no jurisdiction and in other words jurisdiction of this Court has been ousted by operation of Section 42 of the aforesaid Act in view of initiation of the proceedings under Section 9 of the said Act by the respondent No. 1.
14. Therefore, this application cannot be entertained as such this application is rejected without any order as to costs. The interim order already granted stands vacated. This application has been dismissed holding this Court does not have any jurisdiction any longer lor the reasons as stated. Therefore, the petitioner would be at liberty to approach before the learned City Civil Court where the proceedings under Section 9 of the aforesaid Act has already been commenced.