Rajasthan High Court - Jaipur
Porsche Middle East And Africa F.Z.E. & ... vs Precision Cars India Pvt. Ltd on 16 April, 2015
Author: Alok Sharma
Bench: Alok Sharma
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR O R D E R IN S.B. CIVIL WRIT PETITION NO.5032/2014 Porsche Middle East and Africa F.Z.E. & Anr. Vs. Precision Cars India Pvt. Ltd. Date of Order : April 16th, 2015 HON'BLE MR. JUSTICE ALOK SHARMA Mr. A.K. Sharma, Sr. Advocate with Mr. Peush Nag, for the petitioners-defendants. Mr. R.K. Agarwal, Sr. Advocate with Mr. Amol Vyas, for the respondent-plaintiff. BY THE COURT:
This petition has been filed challenging the order dated 24.04.2014, passed by the Additional District Judge No.3, Jaipur Metropolitan, Jaipur dismissing the petitioner-defendant's (hereinafter the defendant) application under Section 151 CPC praying that the Court first address its application under Section 45 of the Arbitration and Conciliation Act, 1996 (hereinafter the Act of 1996) before requiring it to file a written statement to the respondent-plaintiff's (hereinafter the plaintiff) suit for declaration and permanent injunction.
The facts of the case are that the plaintiff filed a suit for declaration and permanent injunction inter alia praying that the defendant be restrained from terminating the local import agreement dated 03.06.2009 without due process till the recovery of the amounts invested by the plaintiff under the said agreement and further that aside of declaring the defendant's Press Release dated 28.04.2012 to be null and void, the defendant also be restrained by way of permanent injunction from supplying products covered under the local import agreement dated 03.06.2009 to any third party. A copy of the local import agreement dated 03.06.2009 was filed along with the plaint. The trial court while issuing notices on the plaintiff's suit for declaration and permanent injunction as also on the accompanying application under Order 39 Rule 1 & 2 CPC vide order dated 02.04.2013 directed that the pending service of notice on the defendants in the suit, they would be under the court's ad interim injunction to maintain status quo in their relation with the plaintiff with reference to the local import agreement dated 03.06.2009.
On service of notice in the plaintiff's suit, the defendant moved an application under Section 45 of the Act of 1996 on 13.01.2014 inter alia stating that the disputes sought to be agitated by the plaintiff in the suit were wholly arbitrable in terms of Section 14.8 of the local import agreement dated 03.06.2009 which reads as under :
Section 14.8 Arbitration Agreement :
14.8.1 Any dispute or difference as to any matter or thing arising out of or in connection with this Agreement including (but not limited to) any dispute as to the existence, validity, construction, application or termination of this agreement (a Dispute) that is not resolved within thirty (30) days after either of the Importer or PME gives a notice in writing of that Dispute to the other, shall be referred to arbitration in accordance with the Rules of the London Court of International Arbitration (the Rules) and in the manner specified in this Section.
14.8.2. The Rules are deemed to be incorporated by reference into this Section but in the event of any conflict or inconsistency between this Section and the Rules, the provisions of this Section will prevail.
14.8.3. For the purpose of any arbitration proceedings commenced pursuant to this Section, subject to applicability :
a) the number of arbitrators shall be three;
b) (i) the Importer and PME shall each be entitled to nominate one arbitrator in accordance with and subject to the Rules not later than 14 days after service of a request in writing by either party to do so and the two arbitrators so appointed shall forthwith appoint a third arbitrator as the chairman of the tribunal. The 3rd arbitrator is to be appointed by mutual consent by the two arbitrators appointed by the Importer and PME; if agreement cannot be reached, the 3rd arbitrator shall be appointed by the London Court of International Arbitration;
(ii) In the event that the two arbitrators appointed by the parties (or in accordance with paragraph (iv) of this section, as the case may be) fail to appoint a third arbitrator within 21 days of the date on which the two arbitrators were appointed (or, in the event that the two arbitrators were appointed on different dates, of the date on which the second arbitrator was appointed), either party shall be at liberty to apply for such appointment to be made by the London Court of International Arbitration (the LCIA Court) in accordance with the Rules.
(iii) In the event that one party (the party in Default) fails to appoint an arbitrator within the time prescribed in paragraph (i) of this Section, the other party, having duly appointed its arbitrator, may give notice in writing to the Party in Default requiring the Party in Default to appoint its arbitrator.
(iv) If the Party in Default does not within 7 days of that notice being given notify the other party of the appointment of its arbitrator, the arbitrator that should have been appointed by the Party in Default shall be appointed by the LCIA Court in accordance with the Rules upon the application of the other party.
c) the place at which the arbitration takes place shall be the Emirate of Dubai;
d) the language to be used in the arbitral proceedings and in any award of the arbitrator made in the course of those proceedings (the Award) shall be English; and
e) the Award shall include a summary of the parties' submissions and documents, the grounds on which the Award is made and the relief granted, it shall state the date and place of the Award, it shall be signed by each of the arbitrators and a copy of the agreement to arbitrate will be attached to it.
14.8.4. Each of the Importer and PME hereby agrees that :
a) it will submit to the exclusive jurisdiction of the Dubai civil courts for the purposes of ratifying any Award;
b) it will not challenge any Award;
c) it will not object to or challenge any application to enforce an Award in any court and it will submit to the jurisdiction of that court for the purposes of those enforcement proceedings; and
d) no defect in the application of the procedure contained in this Section of the Rules shall render an Award void, voidable or otherwise subject to a valid challenge, save insofar as the defect affects a matter of substance in the Award itself.
14.8.5 Within 30 days after the last of the three arbitrators is appointed under and in accordance with the Rules, the arbitrators shall notify each of the Importer and PME of the date and place for an initial hearing, (the Initial Hearing) the purpose of which shall include, but not be limited to, fixing to, fixing the timetable for the presentation of each party's submission of evidence. The Importer and PME agree that the final Award shall be rendered within three hundred and sixty five (365) days after the Initial Hearing and any other period contained in the applicable law shall be and is hereby ....
It was stated that the local import agreement dated 03.06.2009 was one referable to Section 44 of the Act of 1996 and therefore the dispute in the suit as laid be referred to arbitration under Section 45 without prejudice to the main contention with regard to the civil court lacking jurisdiction for reasons stated. Aside of the aforesaid, it was also submitted that the suit had been filed belatedly one year subsequent to the Press Release dated 28.04.2012 and was liable to be dismissed on that count too. Mala fide invoking the jurisdiction of the civil court was also alleged stating that in respect of a similar local import agreement dated 08.06.2007 with a pari materia arbitration clause, the issue of arbitrability of the disputes arising therefrom between the parties (i.e. the plaintiff and the defendant) had been considered by the Additional District and Sessions Judge under its order dated 28.04.2012 to the defendant's benefit, affirmed by this Court under its order dated 04.05.2012 whereto a challenge before the Hon'ble Supreme Court had failed under the Apex Court's order dated 21.08.2012. It was submitted that it was held thus upto the Hon'ble Apex Court that the Indian Courts did not have the jurisdiction to determine the disputes arising under a similar local import agreements between the parties. It was submitted that consequently the civil court in India evidently had no jurisdiction to hear the dispute arising out of or relating to the local import agreement dated 03.06.2009 as agitated in the plaintiff's suit. Disputes pertaining to the aforesaid agreement in all their myriad aspects had to be referred to arbitration in accordance with the Rules of the London Court of International Arbitration (LCIA) with the place/seat of arbitration being Dubai under clause 14.8 of the local import agreement dated 03.06.2009. It was submitted that the said Arbitration Clause contained in the local import agreement dated 03.06.2009 squarely fell within the scope of New York Convention and India also had a reciprocal arrangement with United Arab Emirates for the purpose of recognition and enforcement of Foreign Arbitral awards. In the circumstances, it was prayed that the dispute sought to be agitated in the suit for declaration and permanent injunction in the context of the local import agreement dated 03.06.2009 and the release press in respect thereto be referred to arbitration in consonance to the provisions of Section 45 of the Act of 1996.
Despite the application under Section 45 of the Act of 1996 having been filed by the defendant seeking reference to the arbitration in terms of Section 14.8 of the local import agreement dated 03.06.2009 and asserting that the civil court had no jurisdiction, reply thereto was not filed by the plaintiff and the trial court continued to adjourn the matter for requiring the defendant to file a written statement in response to the plaint. The ad interim injunction dated 02.04.2013 was also continued. In the circumstances, the defendant filed an application under Section 151 CPC on or about 06.03.2014 praying that an early date be fixed for hearing its application under Section 45 of the Act of 1996 and it was also prayed that till the decision on the said application, time for filing written statement, if warranted subsequent to the court's decision, be extended. It appears that reply to the application under Section 45 of the Act of 1996 laid by the defendant was finally filed by the plaintiff on 11.04.2014 wherein it was submitted that the affidavit purporting to be in support of the application under Section 45 of the Act of 1996 in fact referred not to an application under Section 45 of the Act of 1996 but to one under under Order 7 Rule 10 & 11 CPC. It was submitted that the application under Section 45 of the Act of 1996 was liable to be dismissed on this ground alone. The defendant in the circumstances moved an application under Section 151 CPC admitting to the inadvertent error in filing the affidavit referring to an application under Order 7 Rule 10 & 11 CPC and it filed an affidavit in support of the averments in the application under Section 45 of the Act of 1996.
Vide impugned order dated 24.04.2014, the trial court has held that even though in terms of Section 45 of the Act of 1996, the issue of jurisdiction of the civil court was first required to be addressed and determined, yet as the defendant had been allowed several opportunities to file its written statement to the plaint, another interlocutory application was also pending in the suit and in the circumstances, the defendant was free to take up its objection to the jurisdiction of the civil court in its written statement. It was held that consequently an address to the question of jurisdiction of the civil court on the defendant's application under Section 45 of the Act of 1996 was not warranted in the facts and circumstances of the case although the said question would be determined as a preliminary issue following the filing of the written statement. So holding the application under Section 151 CPC at the instance of the defendant seeking early hearing of its application under Section 45 of the Act of 1996 was dismissed by the court below and the defendant required to file its written statement by the next date. The application under Section 45 of the Act of 1996 remains pending before the court below. Hence this petition.
Mr. A.K. Sharma, Sr. Advocate appearing with Mr. Peush Nag, for the defendant has submitted that the trial court grossly erred in holding that the question of its jurisdiction could not be decided on an application under Section 45 of the Act of 1996, but instead would be so determined as a preliminary issue subsequent to the filing of the written statement by the defendant. It has been submitted that the submission of written statement in a suit would tantamount a party to an international commercial agreement within an arbitration clause submitting to the non-existent jurisdiction of the civil court and hence the approach of the court below was wholly contrary to the scheme of the Act of 1996 and more particularly Section 45 of thereof. It has been submitted that the order dated 24.04.2014 passed by the trial court is also vitiated for inherent contradiction therein inasmuch as even while the trial court held that the question of its jurisdiction was an issue to be first determined before proceeding with the suit, it yet required the defendant to file a written statement and submit to its jurisdiction overlooking the special provisions under Section 45 of the Act of 1996. It has been submitted that a civil court does not have any jurisdiction whatsoever to address dispute/s covered under an international commercial agreement with an arbitration clause unless it first comes to a conclusion, within the scope under Section 45 of the Act of 1996, that the arbitration clause in issue was either null and void, inoperative or otherwise incapable of being performed. It has been submitted that it was incumbent upon the trial court to address the application under Section 45 of the Act of 1996 independently of the filing of the written statement and if trial court suffered from gross conceptional error in confusing an application under Section 45 of the Act of 1996, requiring reference of the dispute laid in the suit to an arbitration, with a defence in a written statement inter alia questioning the jurisdiction of the civil court. It has been submitted that the trial court did not even consider that the arbitration clause contained in the local import agreement dated 03.06.2009 relied upon by the plaintiff itself clearly fell within the scheme of New York Convention, the fact that India -also had a reciprocal arrangement with the United Arab Emirates for the purpose of recognition and enforcement of foreign Arbitral awards and as such all the requisites envisaged under Sections 44 & 45 of the Act of 1996 stood duly satisfied, rendering it mandatory for the trial court, on the defendant's application under Section 45 of the Act of 1996 to refer the dispute laid in the suit before it to arbitration. It has been submitted that in the circumstances, the trial court grossly erred in not addressing the application under Section 45 of the Act of 1996 and instead requiring the defendant to submit its written statement to the plaintiff's suit for declaration and permanent injunction in the context of the local import agreement dated 03.06.2009.
It has been also submitted that where the validity of an arbitration clause was not in dispute, as it was not before the trial court the plaintiff not having so done, and in fact having relied upon the local import agreement dated 03.06.2009 which included arbitration clause No.14.8, reference to arbitration should have been a matter of course. Not making the reference was obviously failure to exercise jurisdiction by the court below. Sr. Counsel further submitted that the trial court overlooked the basic legal proposition as enunciated by the Hon'ble Apex Court in a catena of decisions that the provisions of Section 45 of the Act of 1996 prevailed over the provisions of Code of Civil Procedure. It has been submitted that ad interim injunction dated 02.04.2013 was wholly without jurisdiction and it continuation subsequent to the filing of the application under Section 45 of the Act of 1996 before the trial court palpably illegal.
Sr. Counsel emphatically submitted that the error of the trial court in failing to address the application under Section 45 of the Act of 1996 is of the grossest kind inasmuch as it failed to appreciate that the arbitration clause in the local import agreement dated 03.06.2009 was pari materia to the one in the local import agreement dated 08.06.2007 where the same parties in dispute contested the matter through the trial court at Jaipur and this Court upto the Hon'ble Supreme Court whereupon it was held under the orders dated 28.04.2012, 04.05.2012, and 21.08.2012 respectively that the civil court had no jurisdiction to try any dispute between the parties to the agreement dated 08.06.2007 in view of an identical Arbitration Clause. It has been submitted that even though the aforesaid facts were brought to the notice of the trial court evidencing the plaintiff having suppressed material facts at the time of filing of the suit and having misused the processes of the court, the trial court has allowed the plaintiff to continue to misuse the judicial processes by illegally invoking its jurisdiction. It has been submitted that the continued pendency of the suit and non-address to the application under Section 45 of the Act of 1996 before the trial court is working harassment on the defendants and the trial court continues to exercise jurisdiction and seisin in a matter over which it palpably and clearly has no jurisdiction. The trial court, submitted by the Sr. Counsel, is allowing the plaintiff to abuse the processes of law and continue enjoy the benefit of an ex-parte ad interim injunction order dated 02.04.2013. The said ex-parte ad interim order is being used by the plaintiff as a lever to pressurize the defendants as by filing an application for contempt and seeking direction from the trial court against the Customs and Excise Department to supply all goods imported by the Local Importer, now the petitioner No.1 to the plaintiff. It has been submitted that the dismissal of the defendant's application under Section 151 CPC is wholly arbitrary and founded upon the reasons unsustainable in law. In the circumstances, it has been also prayed that the court below be directed to dispose of the defendant's application under Section 45 of the Act of 1996 with reasonable expedition.
In reply, Mr. R.K. Agarwal, Sr. Advocate appearing with Mr. Amol Vyas, for the plaintiff has submitted that this petition purporting to be filed under Article 226 of the Constitution of India is not maintainable as in Radhey Shyam & Anr. Vs. Chhabi Nath & Ors., Civil Appeal No.2548/2009, decided on 26.02.2015, the Hon'ble Supreme Court has held that judicial orders of the civil courts are not amenable to writ jurisdiction under Article 226 of the Constitution of India. It has been further submitted that even otherwise it was within the discretion of the trial court to address the issue of its jurisdiction even where an application is made under Section 45 of the Act of 1996 either with reference to the said application or require the applicant to file the written statement reiterating its objection to the maintainability of the suit laid and thereafter proceed to frame the issues on the pleadings of the parties and determine the question of the civil court's jurisdiction for reasons of an arbitration clause obtaining in International Commercial agreement. Sr. Counsel submitted that a bare look at the application purporting to be one under Section 45 of the Act of 1996 would indicate that aside of the questioning the jurisdiction of the civil court for reason of clause 14.8 in the local import agreement dated 03.06.2009, the defendants application had also raised various issues touching on the merits of the maintainability of the suit inter alia on the ground of laches, not approaching the trial court with clean hands and reasons in law to doctrine of res judicata for the reason that a similar arbitration clause in an earlier local import agreement dated 08.06.2007 had been interpreted by the trial court through the High Court and upto the Hon'ble Supreme Court as one mandating a reference to arbitration and excluding the jurisdiction of the civil court. Sr. Counsel submitted that the trial court in the facts and circumstances of the case and contents of the application purporting to be under Section 45 of the Act of 1996 therefore in its discretion decided to require the defendant to file a written statement. It has been submitted that no prejudice has been caused to the defendant, nor would it be so if they would comply with the impugned order dated 24.04.2014, file the written statement to the suit for declaration and permanent injunction and thereafter seek the determination of the issue of the trial court's jurisdiction as a preliminary issue.
Heard. Considered.
I find no force in the contention of Mr. R.K. Agarwal, Sr. Advocate that this petition is not maintainable. The subject matter of the writ petition indeed refers to the writ petition as being a composite one under Article 226 and 227 of the Constitution of India. It is no doubt true that the Hon'ble Supreme Court in the case of Radhey Shyam (Supra) has held that a writ petition under Article 226 of the Constitution of India is in the nature of original proceedings and is not maintainable in respect of interlocutory orders passed by the civil court. The proposition enunciated by the Hon'ble Supreme Court in the case aforesaid however is of no event in the context of the prayers in the writ petition as also in view of the fact that the writ petition also in its subject matter invokes Article 227 of the Constitution of India. Prayer (a) in the writ petition inter alia is that the order dated 24.04.2014, passed by the trial court dismissing the application of the defendant under Section 151 CPC for fixing an early date for the disposal of the application under Section 45 of the Act of 1996 be quashed and set aside. Further the prayer in the writ petition is that this Court, apparently in the exercise of its superintending power direct the trial court to decide the defendant's application under Section 45 of the Act of 1996 within such reasonable time as the court may deem fit. A prayer has also been made to set aside the ad interim injunction order dated 02.04.2013 passed by the trial court and that all further proceedings before the trial court in the plaintiff's suit No.15/2013 be stayed till the decision of the defendant's application under Section 45 of the Act of 1996. All the aforesaid prayers, in my considered opinion, are eminently addressable with reference to Article 227 of the Constitution of India which empowers this Court to exercise its supervisory powers in respect of matters before the Subordinate courts and Tribunals within its jurisdiction. The powers under Article 227 of the Constitution of India are exercisable, it is well settled by this Court where the legal processes have been overlooked by the trial court or law misapplied resulting an error apparent on the face of proceedings. Reference for the purpose can be had to the Hon'ble Supreme Court's judgment in the case of State of A.P. Vs. P.V. Hanumantha Rao (dead) through LRs. 7 Anr. [(2003) 10 SCC 121]. In Jai Singh & Ors. Vs. Municipal Corporation of Delhi & Anr. [(2010) 9 SCC 385] it has been held by the Hon'ble Supreme Court that the supervisory jurisdiction of of a High Court under Article 227 of the Constitution of India is to be exercised in cases where orders have been passed in grave dereliction of duty or flagrant abuse of the fundamental principles of law or justice. In Shankara Cooperative Housing Society Ltd. Vs. M. Prabhakar & Ors. [(2011) 5 SCC 607], the Hon'ble Supreme Court has held that interference under Article 227 of the Constitution of India is warranted when there is error of jurisdiction and manifest failure of justice.
In the context of the aforesaid state of law, the issue in this petition therefore is as to whether any ground is made out for the exercise of this Court's superintending powers under Article 227 of the Constitution of India in the facts of the case. The following facts are not disputed in the case at hand. The local import agreement dated 03.06.2009 for Porsche Series Production Gran Turismo Vehicle was entered into between Porsche Middle East & Africa, Airport Freezone, Dubai (UAE) (hereinafter PME) and Precision Cars India Pvt. Ltd (hereinafter PCI). The object of the agreement was for PME to transfer the right to sell new Porsche series production Gran Turismo vehicles, original Porsche spare parts and original Porsche exchange parts and original accessories generally referred to as contract goods to the Importer i.e. PCI on an non-exclusive basis in the contract area as defined in Appendix 2. Aside of the details of the contract between the parties pertaining to its working, Section 14.8 provides for an arbitration agreement. Clause 14.8 set out earlier in this judgment, categorically provides that any dispute or difference as to any matter or thing arising out of or in connection with this agreement shall be referred to Arbitration. Section 14.8.3 inter alia provides that place/seat of arbitration would be Emirate of Dubai.
The plaintiff itself, in its suit has relied upon the local import agreement dated 03.06.2009 and had sought protection thereof against termination by the defendant. It is thus evident that in respect of the dispute laid by way of a suit for declaration and permanent injunction by the plaintiff, an arbitration agreement clearly obtains and it was so brought to the civil court's notice in the application under Section 45 of the Act of 1996. No reply to the application under Section 45 of the Act of 1996 has been filed by the plaintiff to dispute that the arbitration clause 14.8 or that it did not fall within the scope of the New York Convention or that India did not have a reciprocal arrangement with UAE for the purpose of recognition and enforcement of a Foreign Arbitral awards. As such all requisites as envisaged in Sections 44 & 45 of the Act of 1996 were duly satisfied. It is also noteworthy that the plaintiff has not asserted that the arbitration clause 14.8 under the local import agreement dated 03.06.2009 is either null and void, inoperative or incapable of performance. The Hon'ble Supreme Court in the case of Learonal & Anr. Vs. R.B. Business Promotions Private Ltd & Anr. [(2010) 15 SCC 733] has held that where a suit having been laid, an application under Section 45 of the Act of 1996 is filed in terms of the scheme contemplated under the Act of 1996, the Court would be required to first concentrate on disposing of the application at the earliest and so long as the application is not disposed of, the Court could not take into consideration any other application in the suit, such as one for interlocutory relief at the instance of the plaintiff. In Shakti Bhog Foods Ltd. Vs. Kola Shipping Ltd. [(2009) 2 SCC 134] the Hon'ble Supreme Court has held that from the provisions of Section 45 of the Act of 1996, it was clear that such an application having been made, the court is to refer the parties to arbitration unless it finds that the arbitration agreement propounded was null and void, in operative or incapable of being performed. It was further held that where, as was in the case before the Hon'ble Apex Court, no such defence as to the agreement being null and void, in operative or incapable of being performed is taken, the plaintiff was perforce to be referred to arbitration on an application under Section 45 of the act of 1996 being made before the court before which civil proceedings in respect of dispute covered by the arbitration were taken. So holding and finding that the charter party agreement had an arbitration clause, it was held by the Apex Court that in view of Section 45 of the Act of 1996, both the trial court as also the High Court were fully justified in allowing the application and referring the parties to the suit to arbitration. In World Sport Group (Mauritius) Lts. Vs. MSM Satellite (Singapore) Pte. Ltd, Civil Appeal No.895/2014 , decided on 24.01.2014, the Hon'ble Apex Court held that once even a request is made even without a formal application under Section 45 of the Act of 1996 before the Court hearing the matter that the matter was one covered under an international commercial arbitration, the court seized of the suit would be obliged to refer the parties to arbitration unless it found that the arbitration clause was null and void, in operative or incapable of being performed. In Chloro Controls India Pvt. Vs. Vs. Severn Trent Water Purification Inc. & Ors. [(2013) 1 SCC 641] the Hon'ble Apex Court has held as under :
The provisions of Section 45 of the 1996 Act are to prevail over the provisions of CPC and when the court is satisfied that an agreement is enforceable, operative and is not null and void, it is obligatory (underlining mine) upon the court to make a reference to arbitration and pass appropriate orders in relation to the legal provisions before the court in exercise of its inherent powers.
The legal position emanating from the judgments of the Hon'ble Apex Court referred to hereinabove makes it evident that in a suit before a civil court, resort being had by way of a formal application or even by way of an affidavit to Section 45 of the Act of 1996 claiming that the disputes agitated in a suit were arbitrable in terms of agreement between the parties, it is incumbent upon the civil court to address the question of its jurisdiction so under challenge and adjudicate in the first instance the issue as to whether it could continue to exercise jurisdiction with reference to the disputes laid before it in the suit or refer the contesting parties to arbitration in terms of the reference sought by the defendant. It is clear that absent the three situations of the arbitration clause being null and void, inoperative or incapable of performance, the Civil Court has no option but to adhere to the will of the legislature and refer the dispute agitated before it to arbitration in terms of the agreement between the parties. This state of law, to my mind, cannot brook any delay by the trial court in deciding the application under Section 45 of the Act of 1996 by fudging the issue and requiring, without cause, that the applicant invoking Section 45 of the Act of 1996 first submit to its jurisdiction by filing a written statement and only thereafter the issue of the court's jurisdiction would be addressed not with reference to Section 45 of the Act of 1996 but by formulating the issue of its jurisdiction as a preliminary issue in the trial of the suit. In my considered opinion, the trial court has in the case at hand has adopted a cavalier attitude in deferring, if not impliedly negating the defendant's right to have its application under Section 45 of the Act of 1995 addressed forthwith in the first instance and the trial court has thus acted in gross disregard to the clear principles enunciated on the issue in the judgments of the Hon'ble Supreme Court. In the case of Shin-Etsu Chemical Co. Ltd. Vs. Aksh Optifibre Ltd. & Anr. [(2005) 7 SCC 234], the Hon'ble Supreme Court has issued general directions for expeditious disposal of applications under Section 45 of the Act of 1996 ordinarily on the basis of affidavit, relevant documents and without oral evidence and held that such applications cannot be treated like regular civil suits.
Counsel for the defendant has submitted that the petition under consideration be confined to the issue of the defendant's rights to have its application under Section 45 of the Act of 1996 before the trial court adjudicated forthwith and he is not presently, as instructed, pressing the challenge to the illegality of the order dated 02.04.2013 whereby an ad interim injunction was granted to the plaintiff on its Order 39 Rule 1 & 2 CPC application and is still continuing. For reason of Sr. Counsel's submissions, it is directed that the writ petition in so far as it seeks to challenge the order dated 02.04.2013 is allowed to be not pressed and the petitioner shall be at liberty to lay a challenge to the ad interim order dated 02.04.2013 as continued from time to time, if so warranted, at any subsequent stage.
For the present the writ petition confined to the prayer of the defendant to have its application under Section 45 of the Act of 1996 decided within reasonable time is allowed. The order dated 24.04.2014 dismissing the defendant's application under Section 151 CPC is set aside. The trial court is directed to decide the petitioner's application under Section 45 of the Act of 1996 within a period of three months from the presentation of a certified copy of this order. It is made clear that further proceedings in the plaintiff's suit for declaration and permanent injunction shall remain stayed till the disposal of the defendant's application under Section 45 of the Act of 1996.
The writ petition stands allowed accordingly with costs of Rs.1,00,000/- to be paid to the defendant by the plaintiff within ten weeks from today.
(ALOK SHARMA), J MS/- All corrections made in the order have been incorporated in the order being emailed.
Manoj Solanki, Personal Assistant.