Bommisetty Prasada Rao, and Others Vs. Sas Mines and Minerals Ltd., Hyderabad and Another - Court Judgment

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arbitration - interim relief - sections 2 (e) and 9 of arbitration and conciliation act, 1996 - suit filed to restrain excavation and transportation of black granite without making full payment - high court not authorised to try proceedings of civil nature - held, application for interim relief under section 9 of act did not lie in high court. - - it does not mean that the original side work in the high court means civil suits of all or any type including proceedings civil in nature, but it relates to exercising original jurisdiction under special enactments like the indian companies act, the indian divorce act, the representation of peoples act, etc.order1. this is an application under section 9 of the arbitration and conciliafion act, 1996 (for short, 'the new arbitration act') for restraining the respondents from excavating and transporting the black granite stone from the land in question, without making full payment of the excavated stones as also payment of arrears of rs.62,53,923.30 during the pendency of the arbitration application.2. it is no longer in dispute before me that the petitioners and b. srinivasa rao and ramanadham were joint owners of land admeasuring ac. 17.92 cts. in survey no.55/68 situated in rajupalem lakshmipuram of chimakurthi mandal of prakasham district (for short, 'the land in question'). srinivasa rao and ramanadham had 20 per cent share each in the land in question and the remaining 60 per cent share belongs to the petitioners. the first respondent had taken the lease of the land in question from the petitioners and srinivasa ran and ramanadham through two registered lease deeds dated 25-6-1992 for a period of 30 years for mining black galaxy granite and, had agreed inter alia for exploiting the black galaxy granite at the rate of rs.3,000/- per cub. mtr. with the size of 0.30 cub. mtr. and above and rs.1,500/- per cub. mtr. with the size of less than 0.30 cub. mtr. the first respondent has since merged with the second respondent. ramanadham had soldhis 20 per cent share in the land in question to the second respondent while during the pendency of the arbitration proceedings b. srinivasa rao, who was the originally the 2nd petitioner, had sold his 20 per cent share in the land in question to the respondents no.3 to 6 who had purchased 5 per cent share each from him. they were ordered to be impleaded as petitioners in the place of the original petitioner no.2 srinivasa rao, vide docket order dated 30-11-1998 and thereafter were ordered to be transposed as respondents no.3 to 6 vide docket order dated 12-4-1999 because they supported the respondents no. 1 and 2.3. the petitioners have filed an arbitration application no.38/1998 for appointment of sole arbitrator under section 11 of the new arbitration act alleging that the respondent no.2 had stopped making payment in full in accordance with the terms of the lease deeds dated 25-6-1992 and the two named arbitrators when approached had not taken active part in resolving the dispute and had not made any progress deliberately causing huge loss to the petitioners. it is also alleged that the respondents no.l and 2 are operating the mine and removing the mineral worth several iacs of rupees without paying the lease money which is being accumulated and that the respondents no.l and 2 are not solvent and it would be impossible for the petitioners to recover dues after the award is passed. therefore, they should be restrained from removing the extracted mineral without making full payment to the petitioners of lease money as per the terms of the agreement.4. the petitioners have filed miscellaneous application no.1022/1998 for temporary injunction on the aforesaid allegations and also for a direction to the respondents for depositing the arrears of rs.62,53,923.30.5. both the petition and the application were resisted by the respondents no.1and 2 through counter. it is denied that the respondents no.1 and 2 have to pay rs.62,53,923.30. it is also denied that the 2nd respondent is not solvent. it is alleged that they have got sufficient immovable and moveable properties in the stale of andhra pra'desh. it is pleaded that the petitioners have got only 60 per cent share in the lease amount as per the terms of the agreement because the 2nd respondent possessed 20 per cent share in the land in question while the respondents no.3 to 6 have 5 per cent share each total 20 per cent share in the land in question. the assets of 2nd respondent in prakasham district itself is worth seven crores. the petitioners are entitled to claim their share of 60 per cent in the iease money only when the mineral is despatched from the factory for sale and the lease money that is royalty is to be paid not on the raw granite but on the net granite that is to say after removing the waste from the raw that is finished granite. it is also alleged that the alleged dispute is pending before the named arbitrators and, therefore, the application for appointment of new sole arbitrator is not maintainable as no ground for appointing new arbitrator in the place of the named arbitrators has been made out by the petitioners. therefore, the application should be dismissed.6. it is a matter of record that in pursuance of the docket order dated 7-10-1998 the second respondent has deposited royalty at the rate which, according to the respondents no.l and 2, was the agreed royalty, with the registrar (judicial).7. learned counsel of the respondents no.l and 2 raised a preliminary objection as to the jurisdiction of the high court to consider an application under section 9 of the new arbitration act. it has been contended that under section 9 of the new arbitration act, power has been conferred on the court to take interim measures and the high court of a.p. isnot a court within the meaning of section 2(e) of the new arbitration act because this high court docs not exercise ordinary, original civil jurisdiction. the courts constituted under the a.p. civil court act, 1972 (for short 'the civil court act') have been conferred with jurisdiction to try all original civil suits and proceedings of civil nature and the pecuniary jurisdiction of the chief judge and the additional chief judge in the district of hyderabad and the pecuniary jurisdiction of district judges out of hyderabad district for the remaining districts in the state of andhra pradesh is unlimited to try civil suits. the high court is empowered to receive suits and appeals under section 33 of the civil court act only when no vacation civil judge is appointed under sub-section (1) of section 32 and the appeal, suit or other proceeding is adjourned under section 31 of the civil court act. the legislature has power to alter the jurisdiction created by the letters patent and, therefore, even if it is assumed for the sake of arguments, that the high court has original jurisdiction to try civil suits under section 30 of the andhra state act of 1953, it has been taken away with the enactment of the civil court act.8. on the other hand, it has been urged by the learned counsel of the petitioners that the high court of andhra pradesh, as a successor to the madras high court, is vested with ail the appellate and original jurisdiction by virtue of section 30 of the andhra state act of 1953 read with section 52 of the stale reorganisation act, 1956. under clauses 11 and 12 of the letters patent of the high court of madras, the madras high court was competent to exercise ordinary original civil jurisdiction and was empowered to receive, try and determine suits of every description and, therefore, this high court also has jurisdiction to try civil suits and possesses original jurisdiction and thus, this high court is also a 'court' within the meaning of the word 'court' undersection 2(e) of the new arbitration act.9. under section 11 of the new arbitration act, the chief justice or any person or institution designated by him is empowered tp appoint arbitrator on the request of the parties. under sub-section (10) of section 11 of the new arbitration act, the chief justice is empowered to frame a scheme for dealing with the matters brought before him by way of request for appointment of arbitrators in terms of the arbitration agreement between the parties. the chief justice of the high court of a.p has framed a scheme namely the scheme for arbitration 1996 and has designated the judge of the high court who at the relevant time has been allotted original side work in the high court where the value of the subject matter exceeds rs.5 lacs but does not exceed rs.1 crore. the chief justice has also designated the subordinate judge and the district judge for appointment of arbitrators when the value of the subject matter does not exceed rs.l lakh and rs.5 lakh respectively and where the value of the subject matter exceeds rs.l crore, the chief justice has to deal with the request for the appointment of arbitrator. under section 9 of the new arbitration act, power has been conferred on the court for taking interim measures not only during the arbitral proceedings but even before commencement of the arbitration proceedings.10. the word 'court' has been defined in section 2(e) of the new arbitration act which reads as under :'2(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 suchprincipal civil court, or any court of small causes.' (underlining is mine)11. the dispute is about the jurisdiction of this court. if it is found that the high court does not exercise ordinary original civil jurisdiction, it will not come within the meaning of the word 'court' as defined in section 2(e) of the new arbitration act. therefore, the question that looms large for determination is whether the high court of andhra pradesh exercises ordinary original civil jurisdiction or not ?12. paras 11 and 12 of (he amendedletters patent of the high court of madras read as under :'11. local limits of the ordinary original jurisdiction of the high court-and we do hereby ordain that the said high court of judicature at madras shall have and exercise ordinary original civil jurisdiction within such local limits as may from time to time be declared and prescribed by any law made by the governor-in-council, and, until some local limits shall be so declared and prescribed within the limits of the local jurisdiction of the said high court of madras at the date of the publication of these presents, and the ordinary original civil jurisdiction of the said high court shall not extend beyond the limits for the time being declared and prescribed as the local limits of such jurisdiction. 12. original jurisdiction as to suits -and we do further obtain that the said high court of judicature at madras, in exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if in the case of suits for land or other immovable property, such land or property shall be situated, or, in all other cases, if the cause of action shall have arisen, either wholly, or, in case the leave of the court shall havebeen first obtained, in part, within the focal limits of the ordinary original jurisdiction of the said high court, or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personal work for gain, within such limits; except that the said high court shall not have such original jurisdiction in cases falling within the jurisdiction of the small causes court at madras, in which the debt or damage, or value of the property sued for does not exceed one hundred rupees.' 13. the history of creation of this court has been traced out in the case of a. srinath and others v. andhra pradesh state road transport corporation and another, 1996 (3) ald 56 (fb), by a full bench of this court, and the relevant portion of which is extracted as below :'the history of the creation of this court goes to the period of king george iii of great britain when under the letters patent dated 26-12-1818 a supreme court of judicature at madras was established followed by its revocation under the letters patent dated 26-6-1862 under which the high court of judicature for the presidency of madras was created, and reconstituted by the letters patent dated 28-12-1865. on creation of the state of andhra under the andhra state act, 1953 (30 of 1953) and the state of andhra pradesh under the state reorganisation act, 1956 (act 37 of 1956), this court has been established as a successor of the power of appeal under clause 15 of the letters patent of the madras court. ever since its establishment, the madras high court has exercised in such civil, criminal, admiralty, vice-admiralty, testamentary, intestate and matrimonial jurisdiction, original and appellate and all such powers and authorities for and in relation to the administration of justiceas are conferred upon it under the said letters patent and/or amendment thereto. this court has also exercised all the above powers except the ordinary original jurisdiction as spelled out in clause 12 of the madras letters patent. a letters patent power of the court in clause 15, however, is common to both the courts and exclusive to this court for the territorial jurisdiction of the state of andhra pradesh. (underlining is mine).14. i will consider the reasons for notexercising ordinary civil jurisdiction by thiscourt in subsequent paragraphs. 15. clause 44 of the letters patent for the madras high court reads as under:'44. powers of indian legislature preserved - and we do further ordain and declare that all the provisions of these our letters patent are subject to the legislative power of the governor-general in legislative council, and also the governor-general in council under section 71 of the government of india act, 1915, and also of the governor-general, in cases of emergency under section 72 of that act and may be in all respects amended and altered thereby.'16. under clause 11 of the letters patent for the high court of judicature at madras, it is provided that the high court of madras had ordinary original civil jurisdiction which it shall exercise within such local limits as may from time to time be declared and prescribed by law made by the governor-in-council. the madras high court (jurisdictional limit) act, 1927 was enacted and the ordinary original civil jurisdiction of the high court of madras extended within the limits set out in the schedule, of section 2.17. the madras civil court act, 1873 was enacted and it came into force with effect from 1-3-1873. the local jurisdiction of every civil court had been fixed undersection 10 of the said act. the courts of district munsif, subordinate judge and district judge were constituted and their local jurisdiction, territorial and pecuniary, was also fixed. they were competent to try all the original suits and proceedings of civil nature. the district judges were conferred with unlimited jurisdiction for trying original suits and proceedings of a civil nature within their local limits which from 17-5-1927 was outside the local limits of the high court of madras as specified in the schedule made under section 2 of the madras high court (territorial limits) act, 1927. with the formation of the slate of andhra pradesh under the andhra state act, 1953, the madras civil court act, 1873 was renamed as the andhra pradesh (andhra area) civil court act, 1873.18. the territories comprised in srikakulam, visakhapalnam, east godavari, west godavari, krishna, nellore, new kurnool and new anantapur district, cuddapah and chittoor were transferred from the state of madras to the andhra state vide section 3 of the andhra state act, 1953. under section 3 of the states reorganisation act, 1956, after including certain territories as mentioned in clauses (b) to (g) in mahabubnagar, hyderabad, medak, ni?,amabad and adilabad districts respectively, these districts along with karimnagar, warangal, khammam and nalgonda were added to the state of andhra. these districts were governed by the andhra pradesh (telangana area) civil court act, 1954. under this act, heirarchy of courts were constituted for trying all suits and proceedings of civil nature and the district judges were conferred with the powers to try civil suits of unlimited jurisdiction. the hyderabad high court had no ordinary original jurisdiction to try civil suits and proceedings civil in nature. therefore, by virtue of section 52 of the states reorganisation act, 1956, the high court of andhra pradesh has the same jurisdiction as was vested in the hyderabadhigh court prior to the transfer of those territories. in other words, this high court cannot exercise jurisdiction in respect of the aforesaid territories for trying civil suits and other proceedings which are civil in nature.19. it would be beneficial to reproduce paras 9 and 10 of the judgment delivered by the apex court in the case of m. v. elisabeth and others v. harwan investment & trading pvt. ltd., : [1992]1scr1003 '9. the andhra pradesh high court is the successor to the madras high court in respect of the territories transferred from madras and included in the state of andhra which was formed by the andhra state act, 1953 (act 30 of 1953). section 30 of this act provides: '30. jurisdiction of andhra high court - the high court of andhra shall have, in respect of the territories for the time being included in the state of andhra, all such original, appellate and other jurisdiction as, under the law in force immediately before the prescribed day, is exercisable in respect of the said territories or any part thereof by the high court at madras.' 10. the high court of andhra was redesignated as the high court of andhra pradesh when the state was so named by the states re-organisation act, 1956. section 52 of that act provides : '52. jurisdiction of high courts for new stales - the high court for a new state shall have, in respect of any part of the territories included in that new state, all such original, appellate and other jurisdiction as, under the law in force immediately before the appointed day, is exercisable in respect of that part of the said territories by any high court or judicial commissioner's court for an existing state.' 20. from what has been stated in the preceding paragraphs, it is evident that by virtue of section 30 of the andhra state act, 1953 read with section 52 of the state reorganisation act, 1956, the andhra pradesh high court being the successor of the madras high court had ail such original, appellate and other jurisdiction as, only in respect of the territories that were transferred from the madras state and included in the state of andhra pradesh, under the law in force immediately before the prescribed day, was exereisable in respect of such transferred territories or any part thereof by the high court at madras.21. in the case of national sewing thread co. ltd. v. james chandwick and bros. ltd., : [1953]4scr1028 , the apex court has held that provincial legislature is also competent to alter the jurisdiction created by the letters patent. it is pertinent to note that the jurisdiction transmitted to the high court of andhra pradesh by section 52 of the state reorganisation act, 1956 is subject to the legislation which may be made by the appropriate legislature in the same way in which the continuance of the old jurisdiction ensured by article 225 of the constitution of india vide section 69 ibid.22. in order to consolidate and amend the law relating to the civil courts subordinate to the high court in the state of andhra pradesh, the government has enacted the a.p. civil court act, 1972 and vide section 34 of the act, the andhra pradesh (andhra area) civil court act, 1873 and the andhra pradesh (telangana area) civil court act, 1974 have been replaced. this act has come into force from 1-11-1972. under section 3 of this act, the government, after consultation with the high court, has established city civil court in the district of hyderabad and under section 5, the chief judge and additional chief judge have jurisdiction to try all original civil suits and proceedingsof civil nature, the amount or the value of the subject matter of which exceeds rupees five lakhs. senior civil judge is competent to try civil suits etc., where the amount or value of the subject matter exceeds rupees one lakh but does not exceed rupees five lakhs and pecuniary jurisdiction of junior civil judge is limited to rupees one lakh. similarly, under sections 10, 11 and 12 of the civil court act, the government has, after consultation with the high court, established courts of district judges, additional district judges, senior civil judges and junior civil judges and under section 16 of this act, their pecuniary jurisdiction has been prescribed. district judges are competent to try original suits and proceedings of civil nature including land acquisition original petitions where the amount or the value of the subject matter exceeds rupees five lakhs. thus, they have got unlimited pecuniary jurisdiction to try civil suits where the amount or value of the subject matter exceeds rupees five lakhs. section 33 of the civil court act provides that the high court shall have power to receive suits, appeals and other proceedings when the district court or the court of senior civil judge or the court of junior civil judge to which a suit, appeal or other proceeding lies is adjourned under section 31 and when no vacation civil judge is appointed under sub-section (1) of section 32 of the act.23. thus, it is evident that the state of andhra pradesh has enacted the civil court act wherein three types of courts have been established and the high court has power under section 33 of the civil court act to receive suit, appeal or other proceeding only when district court or the court of senior civil judge or the court of junior civil judge to which appeal, suit or other proceeding lies, is adjourned and when a particular court is closed during vacation and no vacation civil judge has been appointed to act during such vacation period in that court. it is noteworthy thattinder the civil court act, the high court has not been conferred with powers to try original civil suits and/or other proceedings of civil nature.24. for the foregoing reasons, i find that the andhra pradesh high court is the successor of the madras high court in respect of the territories transferred from madras and included in the andhra praclesh which were formed by the andhra state act, 1953, but this court has not exercised original jurisdiction as mentioned in clauses 11 and 12 of the madras letters patent as from time to time with the aforementioned enactments of the civil court act, the legislature has brought deprivation of such jurisdiction.25. the question that fell for determination before the apex court in the case of m. v. elisabeth (supra), was whether the high court of andhra pradesh possesses admiralty jurisdiction or not. it appears that the aforementioned enactments were not brought to the notice of the apex court and the observation made by the apex court that the andhra pradesh high court as a successor of the madras high court is vested with all the appellate and original jurisdiction including admiralty jurisdiction to order arrest and detention does not appear to be relevant to the question relating to the ordinary original jurisdiction of the andhra pradesh high court to try civil suits and proceedings which are civil in nature.26. the high court of andhra pradesh exercises original jurisdiction under the indian companies act, indian divorce act, and in respect of the election petitions filed under the representation of peoples act, etc., etc.. the chief justice under clause 3(c) of the scheme for arbitration, has designated the judge of the high court who at the relevant time has been allotted original side work in the high court for the purposes of appointment of arbitrator under section 11 where thevalue of the subject matter exceeds rupees five lakhs but does not exceed rupees one crore. it does not mean that the original side work in the high court means civil suits of all or any type including proceedings civil in nature, but it relates to exercising original jurisdiction under special enactments like the indian companies act, the indian divorce act, the representation of peoples act, etc., etc.27. because this high court does not exercise any ordinary original civil jurisdiction, therefore, for the purpose of section 9 of the new arbitration act, it cannot be said to be a court within the meaning of section 2(e) of the new arbitration act, and consequently, the application for interim relief under section 9 of the act does not lie in the high court.28. on the merits, learned counsel for the petitioners has argued that as per the terms of the lease deeds, the respondents no.1 and 2 are bound to permit the petitioners to inspect, examine and ensure the quantity and size of the granite carried and before removing the material from the land, the respondents no.1 and 2 shall intimate and obtain acknowledgment from the lessor for removal and transportation of such goods and material. it has also been argued that though they had agreed to pay the royalty as per the agreement on the ore and not on the net or finished ore, the respondents no. 1 and 2, in contravention of the term of the lease deeds are removing the ore and are making payment only on the finished ore after it is despatched to its purchasers and huge amount of royally is accumulating which amount shall not be recoverable from them because they have no substantial properties in the state of andhra pradesh. learned counsel of the petitioners has lastly argued that the respondents no.1 and 2 should be directed to permit the petitioners to measure the extracted ore on the site and then to deposit lease money with the registrar(judicial), high court, so that as and when the award is passed in their favour, they may be able to eat the fruits of the award.29. on the other hand, learned counsel of the respondents no. 1 and 2 has contended that they have got 20 per cent share in the royalty to be paid while 20 per cent share in the royalty is to be received by the remaining respondents and, therefore, the petitioners are entitled to only 60 per cent of the royalty. the lease has been taken for a period of 30 years. when they possess 40 per cent share in the royalty, it is improbable that they will abandon the lease hold area and run away. it has also been contended that as per the agreement, the royalty is to be paid only on the net granite, that is to say after removal of the waste from the ore. they are not indebted to any creditor. the allegation regarding the indebtedness is false. they own substantial properties in the state of andhra pradesh and there is no possibility of any loss much less irreparable loss.30. the lease is for a period of 30 years. the respondents have got 40 per cent share in the lease hold area. there is no documentary evidence on record that they are indebted heavily to any financial institution or person. they have sworn in the affidavit that they have got substantial property in the state of andhra pradesh. it is not disputed before me that as and when the ore is extracted, the mining department is weighing it and noting the size of the ore in order to fix royalty to be paid to the state. under these circumstances, even if the ore is permitted to be removed from the site to the siding, the petitioner shall not be put to any loss because they may ascertain the quantify of ore extracted from the records of the mining department. it does not prima facie appear that it would be difficult for the petitioners to recover the amount of royalty that may be determined by the arbitrators if the award is passed in their favour. the question incontroversy between the parlies is whether the royalty is to be paid on net cub, mtr. granite carried or removed or on the size of the ore extracted before waste is removed. the word 'net' used in the agreement means finished goods after removing the waste or net weigh! and size of the ore as extracted in its original form, is a serious dispute to be decided by the arbitrators. as a serious question is to be decided by the arbitrators, it can be inferred that the petitioners have established a prima jade case but balance of convenience does not lie in their favour. even if the respondents no. 1 and 2 are not directed to deposit the alleged difference of amount of royalty with the registrar (judicial) high court of a.p., it does not appear that the petitioners shall suffer irreparable loss because it does not appear that the respondents have no capacity to pay the amount that may be awarded by the arbitrafors.31. for the foregoing reasons, miscellaneous application no.i022/1998 filed under section 9 of the new arbitration act is dismissed.

Judgment:
ORDER

1. This is an application under Section 9 of the Arbitration and Conciliafion Act, 1996 (for short, 'the new Arbitration Act') for restraining the respondents from excavating and transporting the black granite stone from the land in question, without making full payment of the excavated stones as also payment of arrears of Rs.62,53,923.30 during the pendency of the arbitration application.

2. It is no longer in dispute before me that the petitioners and B. Srinivasa Rao and Ramanadham were joint owners of land admeasuring Ac. 17.92 cts. in Survey No.55/68 situated in Rajupalem Lakshmipuram of Chimakurthi Mandal of Prakasham District (for short, 'the land in question'). Srinivasa Rao and Ramanadham had 20 per cent share each in the land in question and the remaining 60 per cent share belongs to the petitioners. The first respondent had taken the lease of the land in question from the petitioners and Srinivasa Ran and Ramanadham through two registered lease deeds dated 25-6-1992 for a period of 30 years for mining black galaxy granite and, had agreed inter alia for exploiting the black galaxy granite at the rate of Rs.3,000/- per cub. mtr. with the size of 0.30 cub. mtr. and above and Rs.1,500/- per cub. mtr. with the size of less than 0.30 cub. mtr. The first respondent has since merged with the second respondent. Ramanadham had soldhis 20 per cent share in the land in question to the second respondent while during the pendency of the arbitration proceedings B. Srinivasa Rao, who was the originally the 2nd petitioner, had sold his 20 per cent share in the land in question to the respondents No.3 to 6 who had purchased 5 per cent share each from him. They were ordered to be impleaded as petitioners in the place of the original petitioner No.2 Srinivasa Rao, vide docket order dated 30-11-1998 and thereafter were ordered to be transposed as respondents No.3 to 6 vide docket order dated 12-4-1999 because they supported the respondents No. 1 and 2.

3. The petitioners have filed an arbitration application No.38/1998 for appointment of sole arbitrator under Section 11 of the new Arbitration Act alleging that the respondent No.2 had stopped making payment in full in accordance with the terms of the lease deeds dated 25-6-1992 and the two named arbitrators when approached had not taken active part in resolving the dispute and had not made any progress deliberately causing huge loss to the petitioners. It is also alleged that the respondents No.l and 2 are operating the mine and removing the mineral worth several iacs of rupees without paying the lease money which is being accumulated and that the respondents No.l and 2 are not solvent and it would be impossible for the petitioners to recover dues after the award is passed. Therefore, they should be restrained from removing the extracted mineral without making full payment to the petitioners of lease money as per the terms of the agreement.

4. The petitioners have filed miscellaneous application No.1022/1998 for temporary injunction on the aforesaid allegations and also for a direction to the respondents for depositing the arrears of Rs.62,53,923.30.

5. Both the petition and the application were resisted by the respondents No.1and 2 through counter. It is denied that the respondents No.1 and 2 have to pay Rs.62,53,923.30. It is also denied that the 2nd respondent is not solvent. It is alleged that they have got sufficient immovable and moveable properties in the Stale of Andhra Pra'desh. It is pleaded that the petitioners have got only 60 per cent share in the lease amount as per the terms of the agreement because the 2nd respondent possessed 20 per cent share in the land in question while the respondents No.3 to 6 have 5 per cent share each total 20 per cent share in the land in question. The assets of 2nd respondent in Prakasham District itself is worth seven crores. The petitioners are entitled to claim their share of 60 per cent in the iease money only when the mineral is despatched from the factory for sale and the lease money that is royalty is to be paid not on the raw granite but on the net granite that is to say after removing the waste from the raw that is finished granite. It is also alleged that the alleged dispute is pending before the named arbitrators and, therefore, the application for appointment of new sole arbitrator is not maintainable as no ground for appointing new arbitrator in the place of the named arbitrators has been made out by the petitioners. Therefore, the application should be dismissed.

6. It is a matter of record that in pursuance of the docket order dated 7-10-1998 the second respondent has deposited royalty at the rate which, according to the respondents No.l and 2, was the agreed royalty, with the Registrar (Judicial).

7. Learned Counsel of the respondents No.l and 2 raised a preliminary objection as to the jurisdiction of the High Court to consider an application under Section 9 of the new Arbitration Act. It has been contended that under Section 9 of the new Arbitration Act, power has been conferred on the Court to take interim measures and the High Court of A.P. isnot a Court within the meaning of Section 2(e) of the new Arbitration Act because this High Court docs not exercise ordinary, original civil jurisdiction. The Courts constituted under the A.P. Civil Court Act, 1972 (for short 'the Civil Court Act') have been conferred with jurisdiction to try all original civil suits and proceedings of civil nature and the pecuniary jurisdiction of the Chief Judge and the Additional Chief Judge in the District of Hyderabad and the pecuniary jurisdiction of District Judges out of Hyderabad District for the remaining Districts in the State of Andhra Pradesh is unlimited to try civil suits. The High Court is empowered to receive suits and appeals under Section 33 of the Civil Court Act only when no vacation Civil Judge is appointed under sub-section (1) of Section 32 and the appeal, suit or other proceeding is adjourned under Section 31 of the Civil Court Act. The Legislature has power to alter the jurisdiction created by the Letters Patent and, therefore, even if it is assumed for the sake of arguments, that the High Court has original jurisdiction to try civil suits under Section 30 of the Andhra State Act of 1953, it has been taken away with the enactment of the Civil Court Act.

8. On the other hand, it has been urged by the learned Counsel of the petitioners that the High Court of Andhra Pradesh, as a successor to the Madras High Court, is vested with ail the appellate and original jurisdiction by virtue of Section 30 of the Andhra State Act of 1953 read with Section 52 of the Stale Reorganisation Act, 1956. Under Clauses 11 and 12 of the Letters Patent of the High Court of Madras, the Madras High Court was competent to exercise ordinary original civil jurisdiction and was empowered to receive, try and determine suits of every description and, therefore, this High Court also has jurisdiction to try civil suits and possesses original jurisdiction and thus, this High Court is also a 'Court' within the meaning of the word 'Court' underSection 2(e) of the new Arbitration Act.

9. Under Section 11 of the new Arbitration Act, the Chief Justice or any person or institution designated by him is empowered tp appoint arbitrator on the request of the parties. Under sub-section (10) of Section 11 of the new Arbitration Act, the Chief Justice is empowered to frame a scheme for dealing with the matters brought before him by way of request for appointment of arbitrators in terms of the arbitration agreement between the parties. The Chief Justice of the High Court of A.P has framed a scheme namely the Scheme for Arbitration 1996 and has designated the Judge of the High Court who at the relevant time has been allotted original side work in the High Court where the value of the subject matter exceeds Rs.5 lacs but does not exceed Rs.1 crore. The Chief Justice has also designated the Subordinate Judge and the District Judge for appointment of arbitrators when the value of the subject matter does not exceed Rs.l lakh and Rs.5 lakh respectively and where the value of the subject matter exceeds Rs.l crore, the Chief Justice has to deal with the request for the appointment of arbitrator. Under Section 9 of the new Arbitration Act, power has been conferred on the Court for taking interim measures not only during the arbitral proceedings but even before commencement of the arbitration proceedings.

10. The word 'Court' has been defined in Section 2(e) of the new Arbitration Act which reads as under :

'2(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 suchPrincipal Civil Court, or any Court of Small Causes.' (underlining is mine)

11. The dispute is about the jurisdiction of this Court. If it is found that the High Court does not exercise ordinary original civil jurisdiction, it will not come within the meaning of the word 'Court' as defined in Section 2(e) of the new Arbitration Act. Therefore, the question that looms large for determination is whether the High Court of Andhra Pradesh exercises ordinary original civil jurisdiction or not ?

12. Paras 11 and 12 of (he amendedLetters Patent of the High Court of Madras read as under :

'11. Local limits of the ordinary original jurisdiction of the High Court-And we do hereby ordain that the said High Court of Judicature at Madras shall have and exercise ordinary original civil jurisdiction within such local limits as may from time to time be declared and prescribed by any law made by the Governor-in-Council, and, until some local limits shall be so declared and prescribed within the limits of the local jurisdiction of the said High Court of Madras at the date of the publication of these presents, and the ordinary original civil jurisdiction of the said High Court shall not extend beyond the limits for the time being declared and prescribed as the local limits of such jurisdiction.

12. Original jurisdiction as to suits -And we do further obtain that the said High Court of Judicature at Madras, in exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if in the case of suits for land or other immovable property, such land or property shall be situated, or, in all other cases, if the cause of action shall have arisen, either wholly, or, in case the leave of the Court shall havebeen first obtained, in part, within the focal limits of the ordinary original jurisdiction of the said High Court, or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personal work for gain, within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Causes Court at Madras, in which the debt or damage, or value of the property sued for does not exceed one hundred rupees.'

13. The history of creation of this Court has been traced out in the case of A. Srinath and others v. Andhra Pradesh State Road Transport Corporation and another, 1996 (3) ALD 56 (FB), by a Full Bench of this Court, and the relevant portion of which is extracted as below :

'The history of the creation of this Court goes to the period of King George III of Great Britain when under the Letters Patent dated 26-12-1818 a Supreme Court of Judicature at Madras was established followed by its revocation under the Letters Patent dated 26-6-1862 under which the High Court of Judicature for the Presidency of Madras was created, and reconstituted by the Letters Patent dated 28-12-1865. On creation of the State of Andhra under The Andhra State Act, 1953 (30 of 1953) and the State of Andhra Pradesh under the State Reorganisation Act, 1956 (Act 37 of 1956), this Court has been established as a successor of the power of appeal under Clause 15 of the Letters Patent of the Madras Court. Ever since its establishment, the Madras High Court has exercised in such civil, criminal, admiralty, vice-admiralty, testamentary, intestate and matrimonial jurisdiction, original and appellate and all such powers and authorities for and in relation to the administration of Justiceas are conferred upon it under the said Letters Patent and/or amendment thereto. This Court has also exercised all the above powers except the ordinary original jurisdiction as spelled out in Clause 12 of the Madras Letters Patent. A Letters Patent power of the Court in Clause 15, however, is common to both the Courts and exclusive to this Court for the territorial jurisdiction of the State of Andhra Pradesh. (Underlining is mine).

14. I will consider the reasons for notexercising ordinary civil jurisdiction by thisCourt in subsequent paragraphs.

15. Clause 44 of the Letters Patent for the Madras High Court reads as under:

'44. Powers of Indian Legislature preserved - And we do further ordain and declare that all the provisions of these Our Letters Patent are subject to the legislative power of the Governor-General in Legislative Council, and also the Governor-General in Council under Section 71 of the Government of India Act, 1915, and also of the Governor-General, in cases of emergency under Section 72 of that Act and may be in all respects amended and altered thereby.'

16. Under Clause 11 of the Letters Patent for the High Court of Judicature at Madras, it is provided that the High Court of Madras had ordinary original civil jurisdiction which it shall exercise within such local limits as may from time to time be declared and prescribed by law made by the Governor-in-Council. The Madras High Court (Jurisdictional Limit) Act, 1927 was enacted and the ordinary original civil jurisdiction of the High Court of Madras extended within the limits set out in the schedule, of Section 2.

17. The Madras Civil Court Act, 1873 was enacted and it came into force with effect from 1-3-1873. The local jurisdiction of every civil Court had been fixed underSection 10 of the said Act. The Courts of District Munsif, Subordinate Judge and District Judge were constituted and their local jurisdiction, territorial and pecuniary, was also fixed. They were competent to try all the original suits and proceedings of civil nature. The District Judges were conferred with unlimited jurisdiction for trying original suits and proceedings of a civil nature within their local limits which from 17-5-1927 was outside the local limits of the High Court of Madras as specified in the Schedule made under Section 2 of the Madras High Court (Territorial Limits) Act, 1927. With the formation of the Slate of Andhra Pradesh under the Andhra State Act, 1953, the Madras Civil Court Act, 1873 was renamed as the Andhra Pradesh (Andhra Area) Civil Court Act, 1873.

18. The territories comprised in Srikakulam, Visakhapalnam, East Godavari, West Godavari, Krishna, Nellore, New Kurnool and New Anantapur District, Cuddapah and Chittoor were transferred from the State of Madras to the Andhra State vide Section 3 of the Andhra State Act, 1953. Under Section 3 of the States Reorganisation Act, 1956, after including certain territories as mentioned in Clauses (b) to (g) in Mahabubnagar, Hyderabad, Medak, Ni?,amabad and Adilabad Districts respectively, these districts along with Karimnagar, Warangal, Khammam and Nalgonda were added to the State of Andhra. These districts were governed by the Andhra Pradesh (Telangana Area) Civil Court Act, 1954. Under this Act, heirarchy of Courts were constituted for trying all suits and proceedings of civil nature and the District Judges were conferred with the powers to try civil suits of unlimited jurisdiction. The Hyderabad High Court had no ordinary original jurisdiction to try civil suits and proceedings civil in nature. Therefore, by virtue of Section 52 of the States Reorganisation Act, 1956, the High Court of Andhra Pradesh has the same jurisdiction as was vested in the HyderabadHigh Court prior to the transfer of those territories. In other words, this High Court cannot exercise jurisdiction in respect of the aforesaid territories for trying civil suits and other proceedings which are civil in nature.

19. It would be beneficial to reproduce Paras 9 and 10 of the judgment delivered by the Apex Court in the case of M. V. Elisabeth and others v. Harwan Investment & Trading Pvt. Ltd., : [1992]1SCR1003

'9. The Andhra Pradesh High Court is the successor to the Madras High Court in respect of the territories transferred from Madras and included in the State of Andhra which was formed by the Andhra State Act, 1953 (Act 30 of 1953). Section 30 of this Act provides:

'30. Jurisdiction of Andhra High Court - The High Court of Andhra shall have, in respect of the territories for the time being included in the State of Andhra, all such original, appellate and other jurisdiction as, under the law in force immediately before the prescribed day, is exercisable in respect of the said territories or any part thereof by the High Court at Madras.' 10. The High Court of Andhra was redesignated as the High Court of Andhra Pradesh when the State was so named by the States Re-organisation Act, 1956. Section 52 of that Act provides : '52. Jurisdiction of High Courts for new Stales - The High Court for a new State shall have, in respect of any part of the territories included in that new State, all such original, appellate and other jurisdiction as, under the law in force immediately before the appointed day, is exercisable in respect of that part of the said territories by any High Court or Judicial Commissioner's Court for an existing State.'

20. From what has been stated in the preceding paragraphs, it is evident that by virtue of Section 30 of the Andhra State Act, 1953 read with Section 52 of the State Reorganisation Act, 1956, the Andhra Pradesh High Court being the successor of the Madras High Court had ail such original, appellate and other jurisdiction as, only in respect of the territories that were transferred from the Madras State and included in the State of Andhra Pradesh, under the law in force immediately before the prescribed day, was exereisable in respect of such transferred territories or any part thereof by the High Court at Madras.

21. In the case of National Sewing Thread Co. Ltd. v. James Chandwick and Bros. Ltd., : [1953]4SCR1028 , the Apex Court has held that provincial Legislature is also competent to alter the jurisdiction created by the Letters Patent. It is pertinent to note that the jurisdiction transmitted to the High Court of Andhra Pradesh by Section 52 of the State Reorganisation Act, 1956 is subject to the legislation which may be made by the appropriate Legislature in the same way in which the continuance of the old jurisdiction ensured by Article 225 of the Constitution of India vide Section 69 ibid.

22. In order to consolidate and amend the law relating to the Civil Courts subordinate to the High Court in the State of Andhra Pradesh, the Government has enacted the A.P. Civil Court Act, 1972 and vide Section 34 of the Act, the Andhra Pradesh (Andhra Area) Civil Court Act, 1873 and the Andhra Pradesh (Telangana Area) Civil Court Act, 1974 have been replaced. This Act has come into force from 1-11-1972. Under Section 3 of this Act, the Government, after consultation with the High Court, has established City Civil Court in the District of Hyderabad and under Section 5, the Chief Judge and Additional Chief Judge have jurisdiction to try all original civil suits and proceedingsof civil nature, the amount or the value of the subject matter of which exceeds rupees five lakhs. Senior Civil Judge is competent to try civil suits etc., where the amount or value of the subject matter exceeds rupees one lakh but does not exceed rupees five lakhs and pecuniary jurisdiction of Junior Civil Judge is limited to rupees one lakh. Similarly, under Sections 10, 11 and 12 of the Civil Court Act, the Government has, after consultation with the High Court, established Courts of District Judges, Additional District Judges, Senior Civil Judges and Junior Civil Judges and under Section 16 of this Act, their pecuniary jurisdiction has been prescribed. District Judges are competent to try original suits and proceedings of civil nature including land acquisition original petitions where the amount or the value of the subject matter exceeds rupees five lakhs. Thus, they have got unlimited pecuniary jurisdiction to try civil suits where the amount or value of the subject matter exceeds rupees five lakhs. Section 33 of the Civil Court Act provides that the High Court shall have power to receive suits, appeals and other proceedings when the District Court or the Court of senior Civil Judge or the Court of Junior Civil Judge to which a suit, appeal or other proceeding lies is adjourned under Section 31 and when no Vacation Civil Judge is appointed under sub-section (1) of Section 32 of the Act.

23. Thus, it is evident that the State of Andhra Pradesh has enacted the Civil Court Act wherein three types of Courts have been established and the High Court has power under Section 33 of the Civil Court Act to receive suit, appeal or other proceeding only when District Court or the Court of senior Civil Judge or the Court of Junior Civil Judge to which appeal, suit or other proceeding lies, is adjourned and when a particular Court is closed during vacation and no vacation civil Judge has been appointed to act during such vacation period in that Court. It is noteworthy thattinder the Civil Court Act, the High Court has not been conferred with powers to try original civil suits and/or other proceedings of civil nature.

24. For the foregoing reasons, I find that the Andhra Pradesh High Court is the successor of the Madras High Court in respect of the territories transferred from Madras and included in the Andhra Praclesh which were formed by the Andhra State Act, 1953, but this Court has not exercised original jurisdiction as mentioned in Clauses 11 and 12 of the Madras Letters Patent as from time to time with the aforementioned enactments of the Civil Court Act, the Legislature has brought deprivation of such jurisdiction.

25. The question that fell for determination before the Apex Court in the case of M. V. Elisabeth (supra), was whether the High Court of Andhra Pradesh possesses admiralty jurisdiction or not. It appears that the aforementioned enactments were not brought to the notice of the Apex Court and the observation made by the Apex Court that the Andhra Pradesh High Court as a successor of the Madras High Court is vested with all the appellate and original jurisdiction including admiralty jurisdiction to order arrest and detention does not appear to be relevant to the question relating to the ordinary original jurisdiction of the Andhra Pradesh High Court to try civil suits and proceedings which are civil in nature.

26. The High Court of Andhra Pradesh exercises original jurisdiction under the Indian Companies Act, Indian Divorce Act, and in respect of the election petitions filed under the Representation of Peoples Act, etc., etc.. The Chief Justice under Clause 3(c) of the Scheme for Arbitration, has designated the Judge of the High Court who at the relevant time has been allotted original side work in the High Court for the purposes of appointment of arbitrator under Section 11 where thevalue of the subject matter exceeds rupees five lakhs but does not exceed rupees one crore. It does not mean that the original side work in the High Court means civil suits of all or any type including proceedings civil in nature, but it relates to exercising original jurisdiction under special Enactments like the Indian Companies Act, the Indian Divorce Act, the Representation of Peoples Act, etc., etc.

27. Because this High Court does not exercise any ordinary original civil jurisdiction, therefore, for the purpose of Section 9 of the new Arbitration Act, it cannot be said to be a Court within the meaning of Section 2(e) of the new Arbitration Act, and consequently, the application for interim relief under Section 9 of the Act does not lie in the High Court.

28. On the merits, learned Counsel for the petitioners has argued that as per the terms of the lease deeds, the respondents No.1 and 2 are bound to permit the petitioners to inspect, examine and ensure the quantity and size of the granite carried and before removing the material from the land, the respondents No.1 and 2 shall intimate and obtain acknowledgment from the lessor for removal and transportation of such goods and material. It has also been argued that though they had agreed to pay the royalty as per the agreement on the ore and not on the net or finished ore, the respondents No. 1 and 2, in contravention of the term of the lease deeds are removing the ore and are making payment only on the finished ore after it is despatched to its purchasers and huge amount of royally is accumulating which amount shall not be recoverable from them because they have no substantial properties in the State of Andhra Pradesh. Learned Counsel of the petitioners has lastly argued that the respondents No.1 and 2 should be directed to permit the petitioners to measure the extracted ore on the site and then to deposit lease money with the Registrar(Judicial), High Court, so that as and when the award is passed in their favour, they may be able to eat the fruits of the award.

29. On the other hand, learned Counsel of the respondents No. 1 and 2 has contended that they have got 20 per cent share in the royalty to be paid while 20 per cent share in the royalty is to be received by the remaining respondents and, therefore, the petitioners are entitled To only 60 per cent of the royalty. The lease has been taken for a period of 30 years. When they possess 40 per cent share in the royalty, it is improbable that they will abandon the lease hold area and run away. It has also been contended that as per the agreement, the royalty is to be paid only on the net granite, that is to say after removal of the waste from the ore. They are not indebted to any creditor. The allegation regarding the indebtedness is false. They own substantial properties in the State of Andhra Pradesh and there is no possibility of any loss much less irreparable loss.

30. The lease is for a period of 30 years. The respondents have got 40 per cent share in the lease hold area. There is no documentary evidence on record that they are indebted heavily to any financial institution or person. They have sworn in the affidavit that they have got substantial property in the State of Andhra Pradesh. It is not disputed before me that as and when the ore is extracted, the Mining Department is weighing it and noting the size of the ore in order to fix royalty to be paid to the State. Under these circumstances, even if the ore is permitted to be removed from the site to the siding, the petitioner shall not be put to any loss because they may ascertain the quantify of ore extracted from the records of the Mining Department. It does not prima facie appear that it would be difficult for the petitioners to recover the amount of royalty that may be determined by the arbitrators if the award is passed in their favour. The question incontroversy between the parlies is whether the royalty is to be paid on net cub, mtr. granite carried or removed or on the size of the ore extracted before waste is removed. The word 'NET' used in the agreement means finished goods after removing the waste or net weigh! and size of the ore as extracted in its original form, is a serious dispute to be decided by the arbitrators. As a serious question is to be decided by the arbitrators, it can be inferred that the petitioners have established a prima jade case but balance of convenience does not lie in their favour. Even if the respondents No. 1 and 2 are not directed to deposit the alleged difference of amount of royalty with the Registrar (Judicial) High Court of A.P., it does not appear that the petitioners shall suffer irreparable loss because it does not appear that the respondents have no capacity to pay the amount that may be awarded by the arbitrafors.

31. For the foregoing reasons, miscellaneous application No.I022/1998 filed under Section 9 of the New Arbitration Act is dismissed.