Madras High Court
P.Kandasamy vs Neyveli Lignite Corporation Ltd on 8 June, 2007
Equivalent citations: AIR 2007 (NOC) 2395 (MAD.), 2008 AIHC (NOC) 168 (MAD.)
Author: S.Palanivelu
Bench: S.Palanivelu
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :: 08-06-2007 CORAM THE HONOURABLE MR.JUSTICE S.PALANIVELU C.R.P.NPD.No.1425 OF 2005 P.Kandasamy ... Petitioner -vs- 1. Neyveli Lignite Corporation Ltd., Neyveli, rep. by its Deputy General Manager/ Fertilizer Factory, Neyveli-607 801. 2. Shri S.Sankaran ...Respondents Respondent No.2 is not necessary and hence given up. Revision against the Arb.O.P.No.28 of 2005, pending on the file of Principal Subordinate Judge, Vridhachalam. For petitioner : Mr.Anantharaju for respondent : Mr.N.A.K.Sharma O R D E R
With consent of both the counsel, the Civil Revision Petition itself has been taken up for final disposal.
2. This Civil Revision Petition is preferred by the petitioner, to declare the Arbitration O.P.No.28 of 2005, pending on the file of Principal Sub-Court, Vridhachalam, as non-est in law and void ab initio.
3. The factual background of the matter is as follows :
(i) The petitioner was a Contractor under the respondent Corporation and he executed five works during the year 1998. There was a fire accident on 05.05.1998 in the Additional Cooling Tower of the Fertilizer Factory of the respondent. The respondent informed the petitioner that he was responsible for the said inferno, due to his negligence, and he had to compensate the Corporation to the extent of Rs.6,49,425/- as damages. All the Units of the Corporation were directed not to honour the bills of the petitioner. The petitioner filed a writ petition before this Court and this Court, by a common order, dated 03.04.2003, in W.P.Nos.18504 of 1998, 12825 of 1999 and 328 of 2000, directed the parties to refer the matter to arbitration. Thereafter, an Arbitrator was appointed and on 10.09.2004, an award was passed by the said Arbitrator for a sum of Rs.3,65,431/-, directing the respondent herein to pay the said amount to the petitioner, towards damages.
(ii) Aggrieved over the said award, the respondent filed the Arbitration O.P.No.28 of 2005 under Section 34 of the Arbitration and Conciliation Act,1996, on the file of the Principal Sub-Court, Vridhachalam, to set aside the award, dated 10.09.2004, passed by the Arbitrator.
(iii) Then, the petitioner filed A.S.No.130 of 2004 on the file of Principal District Judge at Cuddalore for reimbursement of damages. The petitioner also moved this Court for stay of further proceedings in the Arbitration O.P.on the file of Sub-Court, Vridhachalam, and stay was also granted in C.M.P.No.11494 of 2005 in this C.R.P.
(iv) Consequently, the respondent filed two applications one in I.A.No.260 of 2005 under Section 10 read with Section 151 of C.P.C. to stay the appeal proceedings in A.S.No.130 of 2004, pending disposal of the present C.R.P., and the other in I.A.No.261 of 2005, praying for dismissing the appeal A.S.No.130 of 2004, on the file of Principal District Court, Cuddalore..
(v) The learned Principal District Judge, after hearing both sides, passed a common order on 05.12.2005 in both the interlocutory applications, holding that both the applications shall be kept pending till the disposal of the C.R.P.on the file of High Court, Madras.
4. The bottom line contention of the learned counsel for the petitioner is that the Principal Sub-Court, Vridhachalam, lacks jurisdiction to entertain any application under the provisions of the Arbitration and Conciliation Act, 1996, and the proceedings before the said Court are non-est in the eye of law.
5. On the contrary, learned counsel for the respondent would contend that the Sub-Court has to be construed as a Court of "Original Civil Jurisdiction", as adumbrated in Section 2 (1) (e) of the Act and hence, the said Court is competent to try the matter.
6. In this context, it is profitable to refer to Section 2 (1) (e) of the Arbitration and Conciliation Act, which reads thus :
"2 (1) (e). "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."
7. In support of his contention, learned counsel for the respondent placed reliance upon a decision of the Hon'ble Supreme Court in M/s.Pandey & Co. Builders Pvt.Ltd. v. State of Bihar & Anr., reported in AIR 2007 SUPREME COURT 465, wherein, it is held as follows :
"The definition of 'Court' means the Principal Civil Court of original jurisdiction in a district and includes the High Court which exercises the original civil jurisdiction. If a High Court does not exercise the original Civil Jurisdiction, it would not be a 'Court' within the meaning of the said provision."
8. The learned counsel also cited a Division Bench decision of this Court in M/s.Sundaram Finance Ltd. v. M.K.Kurian & Anr., reported in AIR 2006 MADRAS 218. The operative portions of the said decision are culled out as under :
"5.... See Ramamirtham v. Rama Film Service, AIR 1951 Madras 93 (FB). It is thus clear that as far as the City of Chennai is concerned, the words "principal civil Court of original jurisdiction", as defined in Section 2 1 (e) of the Act, would mean the High Court exercising jurisdiction on the original side and not the City Civil Court....
8.Therefore, the view taken by the learned single Judge that the City Civil Court should be regarded as the principal Court of Civil jurisdiction under Section 2 1 (e) of the Act in matters involving value of less than Rs.10 lakhs is clearly erroneous and cannot be sustained."
9. A perusal of the above said decisions would make it clear that they are not at all helpful to the respondent's case, since, in both the decisions, the original Civil jurisdiction exercisable by High Court has been dealt with.
10. Per contra, learned counsel for the petitioner cited a Division Bench decision of the Madurai Bench of Madras High Court in The State of Tamil Nadu v. R.Sundaram, reported in 2006 (1) CTC 178, which throws much light on the subject. The relevant portions of the said decision are as follows:
"13.By examining the matter from any angle, it is thus apparent that the Court in which application under Section 34 of the Arbitration and Conciliation Act can be filed is the principal Civil Court of original jurisdiction in a district. Moreover, as per the definition clause contained in the Arbitration and Conciliation Act, any Civil Court of a grade inferior to the principal Civil Court is specifically excluded. In view of the specific provision contained in Section 2 (1) (e) of the Act read with Section 2 (4) of the Code of Civil Procedure, it must be taken that the expression "Court" as contained in Sections 34 and 36 of the Act is the principal Civil court of original jurisdiction in a district, that is to say, the District Court or the District Judge.
14.The view expressed above by us, apparent from the plain language contained in the Arbitration and Conciliation Act and even the Code of Civil Procedure, receives considerable support from the decisions of several High Courts."
11. In the above said decision, after considering and referring to a catena of decisions of this High Court and various other High Courts, it has been concluded that the District Judge of a District Court alone is the competent authority, to exercise the original Civil jurisdiction in a district, as contemplated in Section 2 (1) (e) of the Act and not a Subordinate Judge. It is also opined that the clear language indicated in the Arbitration and Conciliation Act as well as the Code of Civil Procedure leaves no room for any doubt that only a Principal District Court of a district, namely, a Court of District Judge has jurisdiction in such matters and not a Subordinate Judge.
12. In view of the factual and legal backgrounds of this case, I am of the view that the Principal District Court, Cuddalore, alone is competent to deal with the matter.
13. The next question that arises for consideration is, as to the further course of proceedings to be conducted.
14. Legally, the Sub-Court is not competent to try the proceedings under the Arbitration and Conciliation Act. It was represented before this Court that the matter may be transferred to Principal District Court, Cuddalore, from Sub-Court, Vridhachalam. Merely because a proceeding is instituted before a wrong forum, it cannot be said that the said forum has to reject the same, for lack of jurisdiction.
15. In Geo. Miller & Co.Ltd. v. Union Bank of India, reported in 1997 (III) AD (Delhi) 586, the Delhi High Court has held as under :
"17. In the result, it is held that this Court has no jurisdiction to try and decide the present petition filed by the petitioner under Section 41 of the Arbitration Act. In view of the above decision reached by me, it is not necessary to consider the other issues raised before me. Accordingly, I direct return of the petition to the petitioner to file the same in an appropriate Court in Lucknow in terms of clause 7.24.2 of the contract agreement. The registry may take immediate steps to return the petition of the petitioner to file the same in an appropriate Court. The petition stands disposed of in the above terms but without any cost."
16. In the case on hand, neither of the parties brought to the notice of this Court as to whether there was any written agreement between them while referring the matter to arbitrator and, if so, whether there are any clauses with regard to the jurisdiction of the Courts, in case any dispute arises between them.
17. Therefore, in view of decision in Geo. Miller & Co.Ltd. v. Union Bank of India and also in the absence of this Court being put to any notice regarding the agreement between the parties, this Court is left with no other option except to direct the learned Principal Subordinate Judge, Vridhachalam, to return the Arbitration O.P.No.28 of 2005, pending on his file, to the respondent herein, who is the petitioner in the said O.P., for presenting it before the Principal District Court, Cuddalore, and the ends of justice will be met, if it is ordered as such.
18. Accordingly, a direction is hereby issued to the learned Principal Subordinate Judge, Vridhachalam, to return the Arbitration O.P.No.28 of 2005, pending on his file, to the respondent herein, who is the petitioner in the said O.P., for presenting it before the Principal District Court, Cuddalore, and, on such return, the respondent shall present the same before the Principal District Court, Cuddalore, within three days. Thereupon, the Principal District Judge, Cuddalore, is directed to dispose of the matter in accordance with law, within a period of six months.
19. Civil Revision Petition is disposed of, in the above terms. No costs. Consequently, the connected C.M.P.Nos.11494 of 2005, 36 and 586 of 2007 are closed.
dixit To The Principal Subordinate Judge, Vridhachalam.