Full Judgment
W.P.C Nos.19643/2022 & others 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN MONDAY, THE 26TH DAY OF JUNE 2023 / 5TH ASHADHA, 1945 WP(C) NO. 19643 OF 2022 PETITIONERS: 1 SHWAS HOMES PVT.LTD., MYSTIC HEIGHTS PHASE-I, GROUND FLOOR, KANIYAMPUZHA ROAD, EROOR P.O. ERNAKULAM DISTRICT PIN 682 306 REPRESENTED BY ITS DIRECTOR- SREENI PARAMESWARAN. 2 SREENI PARAMESWARAN, AGED 47 YEARS, SON OF M.G. PARAMESWARAN NAIR, VILLA NO.1, MYSTIC BELLS, KANIYAMPUZHA ROAD, EROOR P.O.,ERNAKULAM DISTRICT. PIN 682306. BY ADVS. S.VINOD BHAT ANAGHA LAKSHMY RAMAN GREESHMA CHANDRIKA.R RESPONDENTS:
1 UNION OF INDIA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, DEPARTMENT OF LAW & JUSTICE, MOULANA AZAD ROAD, NEW DELHI-110 011. 2 STATE OF KERALA, REPRESENTED BY SECRETARY, DEPARTMENT OF HOME, SECRETARIAT, THIRUVANANTHAPURAM-695 001. 3 HIGH COURT OF KERALA, REPRESENTED BY REGISTRAR GENERAL, ERNAKULAM-682 031. 4 SUKAM CONSTRUCTIONS PVT. LTD., 1ST FLOOR, PADIYATH CHAMBER, MARKET ROAD, ERNAKULAM, PRESENTLY AT DOOR NO.39/4039-C, 2ND FLOOR, DWARAKA, RAVIPURAM ROAD, ERNAKULAM-682016. REPRESENTED BY ITS MANAGING DIRECTOR. BY ADVS. KARTHIK S.A., CGC B.G.HARINDRANATH AMITH KRISHNAN H.
W.P.C Nos.19643/2022 & others 2 OTHER PRESENT: DSGI S. MANU; SPL.GP T.B.HOOD; CGC SUVIN R. MENON; SR.ADV.P.K.SURESH KUMAR; ADV.M.GOPIKRISHNAN NAMBIAR;CGC B.RAMOD; CGC K.R.RAJKUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2023, ALONG WITH WP(C).256/2022, 5628/2022 AND CONNECTED CASES, THE COURT ON THE 26/6/2023 DELIVERED THE FOLLOWING: W.P.C Nos.19643/2022 & others 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN MONDAY, THE 26TH DAY OF JUNE 2023 / 5TH ASHADHA, 1945 WP(C) NO. 256 OF 2022 PETITIONER: BLOO AQUA STUDIO 50, PUTTENHALLI MAIN ROAD, OPPOSITE BRIGADE MILLENNIUM APARTMENTS, J.P NAGAR, 7TH PHASE, BANGALORE - 560078 REPRESENTED BY ITS PROPRIETOR N. NANDAKUMAR. BY ADVS. S.VINOD BHAT ANAGHA LAKSHMY RAMAN GREESHMA CHANDRIKA.R RESPONDENTS:
1 UNION OF INDIA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, DEPARTMENT OF LAW & JUSTICE, MOULANA AZAD ROAD, NEW DELHI - 110011. 2 STATE OF KERALA, REPRESENTED BY SECRETARY, DEPARTMENT OF HOME, SECRETARIAT, THIRUVANANTHAPURAM - 695001. 3 HIGH COURT OF KERALA, REPRESENTED BY REGISTRAR GENERAL, ERNAKULAM - 682031. 4 THE MARINE PRODUCTS EXPORT DEVELOPMENT AUTHORITY, MINISTRY OF COMMERCE AND INDUSTRY, GOVERNMENT OF INDIA, MPEDA HOUSE, PANAMPILLY AVENUE, P.B.NO. 4272, KOCHI - 682036., REPRESENTED BY ITS SECRETARY. BY ADVS. SHRI.B.PRAMOD, CGC B.G.HARINDRANATH(R3) P.K.SURESH KUMAR (SR.)(R4) RAAGA R.RAMALAKSHMI S.SUBHASH CHAND SPL.G.P.T.B.HOOD(K/000253/1998)
W.P.C Nos.19643/2022 & others 4 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2023, ALONG WITH WP(C).19643/2022 AND CONNECTED CASES, THE COURT ON 26/6/2023 DELIVERED THE FOLLOWING: W.P.C Nos.19643/2022 & others 5
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN MONDAY, THE 26TH DAY OF JUNE 2023 / 5TH ASHADHA, 1945 WP(C) NO. 5628 OF 2022 PETITIONER: INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE IIMK CAMPUS P.O., KOZHIKODE KERALA REPRESENTED BY ITS CHIEF ADMINISTRATIVE OFFICER, PIN - 673570 BY ADVS. S.VINOD BHAT GREESHMA CHANDRIKA.R ANAGHA LAKSHMY RAMAN RESPONDENTS:
1 UNION OF INDIA REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF LAW AND JUSTICE, MOULANA AZAD ROAD, NEW DELHI, PIN - 110011 2 STATE OF KERALA REPRESENTED BY SECRETARY, DEPARTMENT OF HOME, SECRETARIAT, THIRUVANANTHAPURAM, PIN - 69001 3 HIGH COURT OF KERALA REPRESENTED BY REGISTRAR GENERAL, ERNAKULAM, PIN - 4 RAY CONSTRUCTIONS LIMITED RAY COMPOUND, PLOT NO.2, BLOCK NO.2, IIT POST, POWAL, MUMBAI, PIN - 400076 BY ADVS. ASG OF INDIA GOVERNMENT PLEADER B.G.HARINDRANATH SHRI.K.R.RAJKUMAR, C.G.C. AMITH KRISHNAN H. ADVOCATE GENERAL OFFICE KERALA T.B.HOOD(K/000253/1998)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION W.P.C Nos.19643/2022 & others 6 ON 12.01.2023, ALONG WITH WP(C).19643/2022 AND CONNECTED CASES, THE COURT ON 26/6/2023 DELIVERED THE FOLLOWING: W.P.C Nos.19643/2022 & others 7
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN MONDAY, THE 26TH DAY OF JUNE 2023 / 5TH ASHADHA, 1945 WP(C) NO. 17466 OF 2021 PETITIONER: WEST COAST DREDGING COMPANY, ATLANTIS, KOCHI-682 015, REPRESENTED BY ITS MANAGING PARTNER, K.V. THOMAS. BY ADVS. K.L.VARGHESE (SR.) SANTHA VARGHESE RAHUL VARGHESE RANJITH VARGHESE RESPONDENTS:
1 THE UNION OF INDIA, REPRESENTED BY THE PRINCIPAL SECRETARY, MINISTRY OF LAW AND JUSTICE, GOVERNMENT OF INDIA, LOK NAYAK BHAVAN, KHAN MARKET, NEW DELHI-110 003 2 THE STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF LAW, GOVERNMENT OF KERALA, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM -695 001. 3 DREDGING CORPORATION OF INDIA LIMITED, "DREDGE HOUSE", PORT AREA, VISAKHAPATANAM-530 035, REPRESENTED BY THE MANAGING DIRECTOR. 4 THE PROJECT MANAGER, DREDGING CORPORATION OF INDIA, PROJECT OFFICE, KADAVANTHRA, COCHIN -682 018. 5 THE HIGH COURT OF KERALA, ERNAKULAM, KOCHI 682 031, REPRESENTED BY THE REGISTRAR GENERAL. BY ADVS. SRI.SUVIN R.MENON, CGC ADVOCATE GENERAL OFFICE KERALA B.G.HARINDRANATH SPECIAL GOVT.PLEADER T.B.HOOD(K/000253/1998)
W.P.C Nos.19643/2022 & others 8 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2023, ALONG WITH WP(C).19643/2022 AND CONNECTED CASES, THE COURT ON 26/6/2023 DELIVERED THE FOLLOWING: W.P.C Nos.19643/2022 & others 9
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN MONDAY, THE 26TH DAY OF JUNE 2023 / 5TH ASHADHA, 1945 WP(C) NO. 17724 OF 2021 PETITIONER: TECHNI BHARATHI PRIVATE LIMITED, EDAPPALLY, KOCHI, PIN-682 024, REPRESENTED BY ITS MANAGING DIRECTOR, MR.P.SANKARAN NAIR. BY ADVS. JAWAHAR JOSE CISSY MATHEWS JAISON ANTONY RESPONDENTS:
1 THE STATE OF KERALA, REPRESENTED BY ITS SECRETARY, HOME DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN-695 001. 2 THE REGISTRAR GENERAL, HIGH COURT OF KERALA, ERNAKULAM, PIN-682 031. 3 M/S. COCHIN INTERNATIONAL AIRPORT LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, KOCHI AIRPORT (PO), ERNAKULAM, PIN-683 111. BY ADVS. ADVOCATE GENERAL B.G.HARINDRANATH M.GOPIKRISHNAN NAMBIAR K.JOHN MATHAI JOSON MANAVALAN KURYAN THOMAS PAULOSE C. ABRAHAM RAJA KANNAN SHRI.T.B.HOOD, SPL.GOVERNMENT PLEADER AMITH KRISHNAN H.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION W.P.C Nos.19643/2022 & others 10 ON 12.01.2023, ALONG WITH WP(C).19643/2022 AND CONNECTED CASES, THE COURT ON 26/6/2023 DELIVERED THE FOLLOWING: W.P.C Nos.19643/2022 & others 11
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN MONDAY, THE 26TH DAY OF JUNE 2023 / 5TH ASHADHA, 1945 WP(C) NO. 22912 OF 2020 PETITIONER: TIDEWATER MRI MRI SCAN AND RESEARCH CENTRE, NEAR LAKESHORE HOSPITAL, MARADU, NETTOORP.O.,COCHIN-682 040, THROUGH ITS POWER OF ATTORNEY HOLDER A.V.VARADARAJAN, AGED 52 YEARS, SON OF LATE A.V.VENKATASUBRAMANIAN BY ADVS. RAJIV ABRAHAM GEORGE SRI.EAPEN ABRAHAM GEORGE JOHN MATHEW SATISH MOHAN RESPONDENTS:
1 THE UNION OF INDIA REPRESENTED BY THE PRINCIPAL SECRETARY, MINISTRY OF LAW AND JUSTICE, GOVERNMENT OF INDIA, 3RD FLOOR, 'C' WING, LOK NAYAK BHAVAN, KHAN MARKET, NEW DELHI- 2 THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT OF KERALA, 2ND FLOOR, NORTH BLOCK, GOVERNMENT SECRETARIAT, STATUE, THIRUVANANTHAPURAM-695 001 3 THE STATE OF KERALA REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF LAW, GOVERNMENT OF KERALA, ROOM NO.375, 1ST FLOOR, MAIN BLOCK, GOVT. SECRETARIAT, THIRUVANANTHAPURAM-695 001 4 LAKESHORE HOSPITAL AND RESEARCH CENTRE, NH-47, BY-PASS, MARADU , NETTOOR P.O., COCHIN-682 040, REPRESENTED BY ITS MANAGING DIRECTOR 5 THE II ADDITIONAL DISTRICT JUDGE, DISTRICT COURT COMPLEX, PARK AVENUE ROAD, KOCHI-682
W.P.C Nos.19643/2022 & others 12
6 ADDL.R6. THE STATE OF KERALA REPRESENTED BY THE PRINCIPAL SECREARY TO GOVERNMENT, HOME DEPARTMENT, GOVERNMENT SECRETARIAT, TRIVANDRUM-695001. 7 ADDL.R7. THE REGISTRAR GENERAL HIGH COURT OF KERALA, HIGH COURT ROAD, MARINE DRIVE, COCHIN-682031. (ADDITIONAL 6TH AND 7TH RESPONDENTS ARE IMPLEADED AS PER ORDER DATED 2-11- 2020 IN IA 1/2020 IN WP(C) 22912/2020). BY ADVS. SHRI.P.VIJAYAKUMAR, ASG OF INDIA ADVOCATE GENERAL OFFICE KERALA SANTHEEP ANKARATH B.G.HARINDRANATH MANU S., ASG OF INDIA P.K.SURESH KUMAR (SR.)(S-793) P.ANIRUDHAN(K/002306/2021) M.GOPIKRISHNAN T.B.HOOD(K/000253/1998)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2023, ALONG WITH WP(C).19643/2022 AND CONNECTED CASES, THE COURT ON 26/6/2023 DELIVERED THE FOLLOWING: W.P.C Nos.19643/2022 & others 13
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN MONDAY, THE 26TH DAY OF JUNE 2023 / 5TH ASHADHA, 1945 WP(C) NO. 22780 OF 2020 PETITIONERS: SILPPI REALTORS AND CONTRACTORS (P) LTD. COCHIN - 682035, REPRESENTED BY ITS MANAGING DIRECTOR, F.EDISON, AGED 73 YEARS, S/O. LATE FRANCIS. BY ADVS. RAJIV ABRAHAM GEORGE SRI.EAPEN ABRAHAM GEORGE JOHN MATHEW SATISH MOHAN RESPONDENTS:
1 THE UNION OF INDIA REPRESENTED BY THE PRINCIPAL SECRETARY, MINISTRY OF LAW AND JUSTICE, GOVERNMENT OF INDIA, 3RD FLOOR, C WING, LOK NAYAK BHAVAN, KHAN MARKET, NEW DELHI- 110003. 2 THE STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT OF KERALA, 2ND FLOOR, NORTH BLOCK, GOVERNMENT SECRETARIAT, STATUE, THIRUVANANTHAPURAM - 695001. 3 THE STATE OF KERALA REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF LAW, GOVERNMENT OF KERALA, ROOM NO. 375, 1ST FLOOR, MAIN BLOCK, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695001. 4 THE UNION OF INDIA, REPRESENTED BY THE CHIEF ENGINEER(NW), MILITARY ENGINEER SERVICES, NAVAL BASE P O, KOCHI - 682004, 5 THE IIND ADDITIONAL DISTRICT JUDGE DISTRICT COURT COMPLEX, PARK AVENUE ROAD, KOCHI- 682011. 6 ADDL.R6.THE STATE OF KERALA,
W.P.C Nos.19643/2022 & others 14
REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, HOME DEPARTMENT, GOVERNMENT SECRETARIAT TRIVANDRUM-695001. 7 ADDL.R7. THE REGISTRAR GENERAL, HIGH COURT OF KERALA, HIGH COURT ROAD, MARINE DRIVE,COCHIN-682031. (ADDL.R6 AND R7 ARE IMLEADED AS PER ORDER DATED 3/11/2020 IN IA.NO.1/2020 IN WPC BY ADVS. SRI.SUVIN R.MENON, CGC ADVOCATE GENERAL OFFICE KERALA B.G.HARINDRANATH M.GOPIKRISHNAN T.B.HOOD(K/000253/1998)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2023, ALONG WITH WP(C).19643/2022 AND CONNECTED CASES, THE COURT ON 26/6/2023 DELIVERED THE FOLLOWING:
W.P.C Nos.19643/2022 & others 15 V.G.ARUN J. ------------------------------------- [WP(C) Nos.19643/2022, 256/2022, 5628/2022, 17466/2021, --------------------------------- Dated this the 26th day of June 2023
JUDGMENT
The petitioners had entered into work contracts with different entities. Their contractual agreements contained an arbitration clause. Disputes arose between the contracting parties and the arbitration clause was invoked. Accordingly, the disputes were referred to Arbitral Tribunals and awards passed in accordance with the procedure prescribed under the Arbitration and Conciliation Act, 1996 (the ‘Arbitration Act’ for short). Being not satisfied with the award, one among the contracting parties had approached the jurisdictional court. While so, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 ('The Commercial Courts Act' for short) came into force with effect from 23/10/2015. Following the mandate of Sections 10(3) and 15(2) of the Commercial Courts Act, all the arbitration W.P.C Nos.19643/2022 & others 16 original Petitions, to which the petitioners are parties, were transferred to the Commercial Courts constituted in accordance with Section 3 of the Act. As matters stood thus, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act of 2018 was introduced, bringing about drastic changes to the Commercial Courts Act. By virtue of the amendment, the 'specified value' got reduced from Rupees One Crore to Rupees Three Lakhs and provision was made for notifying courts below the level of District Judge also as Commercial Courts. The petitioners are aggrieved by the amendments, which according to them, are counterproductive and contradictory to the provisions of the Arbitration Act.
2. The arguments on behalf of the petitioners were led
by Senior Advocate K.L.Varghese and Adv.John Mathew, ably supported by Advs.Jawahar Jose and Vinod Bhat. The counter arguments on behalf of the High Court of Kerala, Union of India and the State of Kerala were advanced by Adv.B.G.Harindranath, Adv.S.Manu, the Deputy Solicitor General and Adv. T.B.Hood, the Special Government Pleader. Adv. M.Gopikrishnan Nambiar learned Standing Counsel for the Cochin International Airport Ltd.was also heard. W.P.C Nos.19643/2022 & others 17
3. The thrust of the arguments advanced by the learned
Counsel for the petitioners is that the Arbitration Act being a special statute overrides the Commercial Courts Act, which is a general legislation. It is contended that the supremacy of the Arbitration Act is recognised by the Apex Court in Kandla Export Corpn.& Another v. OCI Corpn.& Another [(2018) 14 SCC 715] and reiterated in BGS SGS Soma JV v NHPC [(2020) 4 SCC 234]. In so far as the jurisdictional court under the Arbitration Act is the Principal Civil Court of original jurisdiction in the District, transfer of the pending original petitions to the Commercial Courts below the level of District Judge is patently illegal. As per Section 2(1)(e)(i) of the Arbitration Act, no civil court of a grade inferior to the Principal Civil Court has jurisdiction to decide the questions forming the subject matter of arbitration. In the Commercial Courts Act, as originally enacted, the specified value was fixed at Rupees One Crore. By Amendment Act 28 of 2018, the specified value in relation to commercial disputes is brought down to Rupees Three Lakhs, or such higher value as may be notified by the Central Government. The very purpose of the Commercial Courts Act, viz; to ensure speedy disposal of high value commercial suits involving complex facts and W.P.C Nos.19643/2022 & others 18 questions of law, is defeated by the reduction of specified value to Rupees Three Lakhs. An anomalous situation is a created by the disputes pertaining to arbitration having specified value below Rupees Three Lakhs being entertained by the District Courts, while matters of specified value above Rupees Three Lakhs will be decided by the Subordinate Judges' Court. The petitioners therefore pray that, Sections 2(1)(i),3,6,7,10,11,12, 12A,15,19 and 21 of the Commercial Courts Act should be declared as arbitrary, discriminatory and ultra vires the Constitution of India and consequently, struck down. The other prayer is to quash the notification dated 24/2/2020 issued by the Government of Kerala, designating Subordinate Courts as Commercial Courts.
4. In answer to the contentions, learned Counsel for the
respondents placed reliance on the decision of the Apex Court in Jaycee Housing (P) Ltd.& Others v. Registrar (General), Orissa High Court, Cuttack & Others (2022 SCC OnLine SC 1457), upholding the notification issued by the Registrar of Orissa High Court, designating the Court of the Civil Judge (Senior Division) as Commercial Court. It is contended that the objective of the Commercial Courts Act is speedy disposal of suits involving commercial disputes. As W.P.C Nos.19643/2022 & others 19 arbitration disputes are invariably commercial disputes, they are to be disposed by following the procedure prescribed in the Commercial Courts Act. Moreover, no prejudice is caused to the petitioners by reason of arbitration matters being decided by the Commercial Courts below the level of the District Courts.
5. Indisputably, the Commercial Courts Act is enacted
with the objective of speedy disposal of high value commercial disputes involving complex facts and questions of law. 'Commercial disputes', as defined in Section 2(1)(c) of the Act, takes in arbitration disputes also. By virtue of Section 10(3) of the Act, all applications or appeals arising out of domestic arbitration under the provisions of the Arbitration Act, that would ordinarily lie before any Principal Civil Court of original jurisdiction in a district, has to be filed in, and heard and disposed of by, the Commercial Court exercising territorial jurisdiction over such arbitration. Section 3(1) provides for constitution of commercial courts at District level by the State Government, after consultation with the High Court. With the introduction of Amendment Act 28 of 2018, Sub Section (3) of Section 3 provides for constitution of commercial courts either at the level of District Judge or W.P.C Nos.19643/2022 & others 20 below. A corresponding amendment was brought about by incorporating Section 3A, which provides for constitution of Commercial Appellate Court at District Judge level, except the territories over which the High Courts have ordinary original civil jurisdiction. As far as High Courts having ordinary original civil jurisdiction are concerned, a Commercial Division having one or more Benches consisting of a Single Judge is to be constituted for the purpose of exercising the appellate jurisdiction. As per Section 5, Commercial Appellate Division having one or more Division Benches is to be constituted for the purpose of exercising the jurisdiction and powers conferred by the Act. It is therefore clear that the scheme of the Commercial Courts Act provides for original and appellate remedies. The petitioners may be right in their contention that, while in States with High Courts having original jurisdiction, appeals from the Commercial Courts would lie to the High Court, in other States like Kerala, the parties have to take the circuitous route of challenging the decision of the Commercial Court before the Commercial Appellate Court, before approaching the Commercial Appellate Division in the High Court. In my opinion, such a distinction, by itself, is not sufficient to hold the provisions to be ultra vires the W.P.C Nos.19643/2022 & others 21 Constitution.
6. The challenge against Section 3(3) of the Commercial
Courts Act is on the ground that the provision militates against Section 2(1)(e) of the Arbitration Act. The contention is that the supremacy of the Arbitration Act as a special statute is acknowledged by the Apex Court in Kandla Exports(supra). The reliance placed on the Kandla Exports is misplaced, since that decision was rendered on an entirely different set of facts. Therein, the seller, suffered an award in an International Commercial Arbitration and the buyer initiated execution before the District Court. The seller succeeded in getting the execution transferred to the High Court under Section 15(5) of the Commercial Courts Act and the High Court allowed the buyer’s execution petition. The aggrieved seller filed an appeal to the Commercial Appellate Division of the High Court. The appeal was dismissed on the premise that the Commercial Courts Act does not provide any right of appeal, which is not otherwise available under the Arbitration Act. By the well considered judgment in Kandla Exports, the Apex Court held as under; “20. Given the judgment of this Court in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 W.P.C Nos.19643/2022 & others 22 : (2011) 4 SCC (Civ) 178] , which Parliament is presumed to know when it enacted the Arbitration Amendment Act, 2015, and given the fact that no change was made in Section 50 of the Arbitration Act when the Commercial Courts Act was brought into force, it is clear that Section 50 is a provision contained in a self- contained code on matters pertaining to arbitration, and which is exhaustive in nature. It carries the negative import mentioned in para 89 of Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] that appeals which are not mentioned therein, are not permissible. This being the case, it is clear that Section 13(1) of the Commercial Courts Act, being a general provision vis-à-vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to cases covered by Section 50 of the Arbitration Act.
21. However, the question still arises as to why Section 37 of
the Arbitration Act was expressly included in the proviso to Section 13(1) of the Commercial Courts Act, which is equally a special provision of appeal contained in a self-contained code, which in any case would be outside Section 13(1) of the Commercial Courts Act. One answer is that this was done ex abundanti cautela. Another answer may be that as Section 37 itself was amended by the Arbitration Amendment Act, 2015, which came into force on the same day as the Commercial Courts Act, Parliament thought, in its wisdom, that it was necessary to emphasise that the amended Section 37 would W.P.C Nos.19643/2022 & others 23 have precedence over the general provision contained in Section 13(1) of the Commercial Courts Act. Incidentally, the amendment of 2015 introduced one more category into the category of appealable orders in the Arbitration Act, namely, a category where an order is made under Section 8 refusing to refer parties to arbitration. Parliament may have found it necessary to emphasise the fact that an order referring parties to arbitration under Section 8 is not appealable under Section 37(1)(a) and would, therefore, not be appealable under Section 13(1) of the Commercial Courts Act. Whatever may be the ultimate reason for including Section 37 of the Arbitration Act in
the proviso to Section 13(1), the ratio decidendi of the judgment
in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] would apply, and this being so, appeals filed under Section 50 of the Arbitration Act would have to follow the drill of Section 50 alone.
22. This, in fact, follows from the language of Section 50 itself.
In all arbitration cases of enforcement of foreign awards, it is Section 50 alone that provides an appeal. Having provided for an appeal, the forum of appeal is left “to the Court authorised by law to hear appeals from such orders”. Section 50 properly read would, therefore, mean that if an appeal lies under the said provision, then alone would Section 13(1) of the Commercial Courts Act be attracted as laying down the forum which will hear and decide such an appeal. W.P.C Nos.19643/2022 & others 24
23. In fact, in Sumitomo Corpn. v. CDC Financial Services
(Mauritius) Ltd. [Sumitomo Corpn. v. CDC Financial Services (Mauritius) Ltd., (2008) 4 SCC 91] , this Court adverted to Section 50 of the Arbitration Act and to Sections 10(1)(a) and 10-F of the Companies Act, 1956, to hold that once an appeal is provided for in Section 50, the Court authorised by law to hear such appeals would then be found in Sections 10(1)(a) and 10- F of the Companies Act. The present case is a parallel instance of Section 50 of the Arbitration Act providing for an appeal, and Section 13(1) of the Commercial Courts Act providing the forum for such appeal. Only, in the present case, as no appeal lies under Section 50 of the Arbitration Act, no forum can be provided for.
24. A recent judgment of this Court in Arun Dev Upadhyaya v. Integrated Sales Service Ltd. [Arun Dev Upadhyaya v. Integrated Sales Service Ltd., (2016) 9 SCC 524 : (2016) 4 SCC
(Civ) 564] , p. 537 was adverted to by the counsel for both
sides. On facts, in this case, the Single Judge had refused [Integrated Sales Services Ltd. v. DMC Management Consultants Ltd., 2016 SCC OnLine Bom 4445 : (2016) 6 Mah LJ 195] to enforce a foreign award in favour of the appellants. The respondents, in that case, claimed that an appeal from the Single Judge was not maintainable in view of the abolition of the letters patent appeal by a Maharashtra Act of 1986. This Court, following Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] , W.P.C Nos.19643/2022 & others 25 repelled the aforesaid contention in the following terms : (Arun Dev case [Arun Dev Upadhyaya v. Integrated Sales Service Ltd.,
(2016) 9 SCC 524 : (2016) 4 SCC (Civ) 564] , SCC p. 537, paras 25-26)
“25. The aforesaid provision clearly lays down that a forum is created i.e. Commercial Appellate Division. Section 50(1)(b) of the 1996 Act provides for an appeal. Section 50(1)(b) has not been amended by the Act that has come into force on 23-10-2015. Thus, an appeal under Section 50(1)
(b) of the 1996 Act before the Division Bench is maintainable.
26. Thus analysed, we find that the impugned
judgment Integrated Sales Services Ltd. v. DMC
Management Consultants Ltd. [Integrated Sales Services Ltd. v. DMC Management Consultants Ltd., 2016 SCC OnLine Bom 4445 : (2016) 6 Mah LJ 195] , of the learned Single Judge under Section 50(1)(b) of the 1996 Act is passed in the Original Side of the High Court. Be that as it may, under Section 13 of the Act, the Single Judge has taken the decision. Section 13 bars an appeal under the Letters Patent unless an appeal is provided under the 1996 Act. Such an appeal is provided under Section 5 of the Act. The letters patent appeal could not have been invoked if Section 50 of the 1996 Act would not have provided for an appeal. But it does provide for an appeal. A conspectus reading of Sections 5 and 13 of the Act and Section 50 of the 1996 Act which has remained unamended leads to the irresistible
conclusion that a letters patent appeal is
maintainable before the Division Bench. It has to be treated as an appeal under Section 50(1)(b) of the 1996 Act and has to be adjudicated within the said parameters.” W.P.C Nos.19643/2022 & others 26
25. What is important to note is that it is Section 50 that
provides for an appeal, and not the letters patent, given the subject-matter of appeal. Also, the appeal has to be adjudicated within the parameters of Section 50 alone. Concomitantly, where Section 50 excludes an appeal, no such appeal will lie.
26. In this view of the case, it is unnecessary to advert to Shri
Giri's arguments based on Section 21 of the Commercial Courts Act. Section 21 would only apply if Section 13(1) were to apply in the first place, which, as has been found, cannot be held to apply for the reasons given herein above. Equally, it is unnecessary to advert to the arguments of the learned counsel for the appellants based on Section 11 of the Commercial Courts Act.”
7. From the above discussion, it is beyond cavil that the
finding in Kandla Exports is on the choice of forum and not the procedure. Moreover, the decision was rendered in the context of Section 50 of the Arbitration Act.
8. The legal position stands clarified by the later
judgment in Jaycee Housing (P) Ltd.(supra). Therein the
challenge was against the notification issued by the High Court of Orissa, designating the Civil Judge (Senior Division) as Commercial Court and the consequential order of the Government of Odisha notifying the Court of the Civil Judge W.P.C Nos.19643/2022 & others 27 (Senior Division) as Commercial Court. After referring to Section 2 (1)(e) of the Arbitration Act and Sections 3, 10, 15 and 21 of the Commercial Courts Act, the Supreme Court
held as under ;
“27.If the submission on behalf of the appellants that all applications/appeals arising out of arbitration under the provisions of the 1996 Act, other than the international commercial arbitration, shall lie before the Principal Civil Court of a district, in that case, not only the Objects and Reasons of enactment of the 2015 Act and establishment of Commercial Courts shall be frustrated, even Sections 3, 10 & 15 shall become otiose and nugatory. 28.If the submission on behalf of the appellants is accepted, in that case, though with respect to other commercial disputes, the applications or appeals shall lie before the Commercial Courts established and constituted under Section 3 of the 2015 Act, with respect to arbitration proceedings, the applications or appeals shall lie before the Principal Civil Court of a district. There cannot be two fora with respect to different commercial disputes. 29.Under the circumstances, notification issued by the State of Odisha issued in consultation with the High Court of Orissa to confer jurisdiction upon the Court of learned Civil Judge W.P.C Nos.19643/2022 & others 28 (Senior Division) designated as Commercial Court to decide the applications or appeals arising out of arbitration under the provisions of the 1996 Act cannot be said to be illegal and bad in law. On the contrary, the same can be said to be absolutely in consonance with Sections 3 & 10 of the 2015 Act. We are in complete agreement with the view [Jaycee Housing (P) Ltd. v. District Judge, Khurda, 2022 SCC OnLine Ori 3833] taken by the High Court holding so .”
9. Although senior Counsel contended that the decision
was rendered per incuriam, without noticing the decision in Kandla Exports, the contention cannot be countenanced in view of the specific reference to Kandla Exports in the
judgment.
10. The grievance of the petitioners regarding the
drastic reduction of specified value from Rupees One Crore to Rupees Three Lakhs stands redressed to an extent with the issuance of G.O.(MS) No.53/2022/Home dated 18/3/2022 (SRO No.337 of 2022), specifying the pecuniary value to be not less than Rupees Ten Lakhs. As per the very same Government Order (SRO No.336/2022), all subordinate Judges Court in the State are designated as Commercial Courts for the purpose of trying commercial disputes within W.P.C Nos.19643/2022 & others 29 their respective jurisdiction. I am also informed that matters are now being before the Commercial Appellate Division in the High Court. It is therefore evident that, courts at various levels specified in the Commercial Courts Act have also become functional.
11. In my opinion, the challenge on the premise that,
while arbitration matters with specified value below Rupees Ten Lakhs is entertained by the District Court, matters with specified value above Rupees Ten Lakhs are to be moved before the Subordinate Judges Court, is not reason enough for this Court to hold the impugned provision to be unconstitutional. The said incongruity is a matter to be addressed by the law makers. For the aforementioned reasons, the writ petitions are dismissed. Sd/- V.G.ARUN JUDGE dpk W.P.C Nos.19643/2022 & others 30 APPENDIX OF WP(C) 256/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF NOTIFICATION NO. G.O(M.S) NO.51/2020/HOME DATED 24.02.2020. Exhibit P2 COPY OF OFFICE MEMORANDUM NO.A1- OF 3RD RESPONDENT. AAPPENDIX OF WP(C) 5628/2022 PETITIONER EXHIBITS Exhibit1 GOVERNMENT ORDER G.O. (MS). NO.51/2020/HOME DATED 24-02-200 Exhibit2 OFFICIAL MEMORANDUM NO. A1W.P.C Nos.19643/2022 & others 31 APPENDIX OF WP(C) 17466/2021 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTIFICATION IN THE GAZETTE OF INDIA, EXTRA ORDINARY, MINISTRY OF LAW AND JUSTICE BY ACT NO. 28 OF 2018 DT. 20.08.2018. Exhibit P2 TRUE COPY OF THE GOVERNMENT NOTIFICATION G.O(MS) NO. 51/2020/HOME DT. 24.02.2020 PUBLISHED IN KERALA GAZETTE DT. 05.03.2020. Exhibit P3 TRUE COPY OF THE PROCEEDINGS OF THE HON'BLE SUPREME COURT IN KIRTIKUMAR FUTARMAL JAIN V. VELENCIA CORPORATION. Exhibit P4 TRUE COPY OF THE PROCEEDINGS OF THE HON'BLE SUPREME COURT IN SONIA GAURANG SUCTANCAR V. GAURANG MANGESH SUCTANCAR. RESPONDENT EXHIBITS Exhibit R5A TRUE COPY OF THE LIST OF SUBORDINATE COURTS DESIGNATED AS COMMERCIAL COURTS AND THE COMMERECIAL APPELLATE COURTS DATED 25.4.2019 Exhibit R5B TRUE COPY OF THE NOTIFICATION ISSUED BY THE HOME DEPARTMENT, GOVT.OF KERALA DATED 5.3.2020 Exhibit R5C TRUE COPY OF THE OFFICIAL MEMORANDUM SENT BY THE REGISTRAR, HIGH COURT OF KERALA DATED 12.3.2020 Exhibit R5D TRUE COPY OF THE SUBORDINATE JUDGE'S COURT TO BE DESIGNATED AS COMMERCIAL COURTS DATED 4.2.2022. W.P.C Nos.19643/2022 & others 32 APPENDIX OF WP(C) 17724/2021 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTIFICATION ISSUED BY THE GOVERNMENT DATED 24.02.2020 UNDER SECTION 3 OF THE COMMERCIAL COURTS ACT. Exhibit P2 TRUE COPY OF THE ORDER DATED 13.07.2020 WHEREBY OP(ARB) NO.1128/2015 IS TRANSFERRED TO THE COMMERCIAL COURT. Exhibit P3 TRUE COPY OF THE ORDER DATED 13.07.2020 WHEREBY OP(ARB) NO/1196/2015 IS TRANSFERRED TO THE COMMERCIAL COURT. RESPONDENT EXHIBITS Exhibit R2(a) TRUE COPY OF THE NOTIFICATION ISSUED BY
THE HOME DEPARTMENT, GOVT OF KERALA DTD 24.2.2020 IN PURSUANCE OF THE LETTER SENT BY THE HON'BLE HIGH COURT CONSTITUTING THE COMMERCIAL COURTS AND THE COMMERCIAL APPELLATE COURTS AT DISTRICT LEVEL. Exhibit R2(b) TRUE COPY OF THE OFFICIAL MEMORANDUM SENT BY THE REGISTRAR, HIGH COURT OF KERALA TO THE DISTRICT JUDGES IN ALL THE DISTRICTS DTD 12.3.2020. Exhibit R2(c) TRUE COPY OF THE NOTIFICATION ISSUED BY THE HOME DEPARTMENT, GOVT OF KERALA DTD 18.3.2022 IN PURSUANCE OF THE LETTER SENT BY THE HON'BLE HIGH COURT CONSTITUTING THE COMMERCIAL COURTS AND THE COMMERCIAL APPELLATE COURTS AT DISTRICT LEVEL.
W.P.C Nos.19643/2022 & others 33 APPENDIX OF WP(C) 22912/2020 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF REPORT NO.253 OF THE LAW COMMISSION OF INDIA EXHIBIT P2 TRUE COPY OF SCHEDULE ALONG WITH ITS ACCOMPANIMENT TO THE NOTIFICATION PUBLISHED IN KERALA GAZETTE EXTRAORDINARY DATED 5.3.2020 EXHIBIT P3 TRUE COPY OF NOTIFICATION DATED 10.08.2020 ISSUED BY THIS HONOURABLE COURT EXHIBIT P4 TRUE COPY OF NOTIFICATION DATED 15.12.2018 ISSUED BY GOVERNMENT OF MAHARASTRA EXHIBIT P5 COLLECTIVELY, TRUE COPY OF NOTIFICATIONS DATED 21.9.2017., 8.11.2017. 30.1.2018 AND 31.72018 ISSUED BY THE GOVERNMENT OF KARNATAKA EXHIBIT P6 COLLECTIVELY TRUE COPY OF ORDERS DATED 6.7.20920 OF THE 5TH RESPONDENT W.P.C Nos.19643/2022 & others 34 APPENDIX OF WP(C) 22780/2020 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF REPORT NO.253 OF THE LAW COMMISSION OF INDIA EXHIBIT P2 TRUE COPY OF THE SCHEDULE ALONG WITH ITS ACCOMPANIMENT TO THE NOTIFICATION PUBLISHED IN KERALA GAZETTE EXTRAORDINARY DATED 5.3.2020. EXHIBIT P3 TRUE COPY OF NOTIFICATION DATED 10.08.2020 ISSUED BY THIS HONOURABLE COURT. EXHIBIT P4 TRUE COPY OF NOTIFICATION DATED 15.02.2018 ISSUED BY GOVERNMENT OF MAHARASTRA. EXHIBIT P5 TRUE COPY OF NOTIFICATIONS DATED 21.09.2017, 8.11.2017, 30.01.2018 AND 31.7.2018 ISSUED BY THE GOVERNMENT OF KARNATAKA. EXHIBIT P6 TRUE COPY OF ORDER DATED 12.06.2020 OF THE 5TH RESPONDENT. W.P.C Nos.19643/2022 & others 35 APPENDIX OF WP(C) 19643/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF NOTIFICATION NO. G.O. (MS)NO.51/2020/HOME DATED 24-02-2020. Exhibit P2 COPY OF OFFICE MEMORANDUM NO.A1- OF 3RD RESPONDENT. Exhibit P3 COPY OF APPLICATION NO. I.A. NO.218/2016 IN E.P. NO.110/2016 IN NEW E.P. NO.727/2020 OF COMMERCIAL COURT, ERNAKULAM.