Dr. Pratap Singh Hardia Vs. Sanjay Chawrekar - Court Judgment

Subhash Samvatsar, J.

1. This writ petition is filed by the defendant under Article 227 of the Constitution of India, being aggrieved by the order dated 11th August 2008 passed by Seventh Additional District Judge, Indore in Misc. Judicial Case No. 13/03 whereby the learned Additional District Judge has dismissed the application filed by the present petitioner under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996.

2. Brief facts of the case giving rise to this writ petition are that there was some agreement between the petitioner and the respondents, in execution of which certain dispute arose between the parties and the matter was referred to Arbitrator as per the provisions of the Arbitration and Conciliation Act, 1996 (for brevity the 'Arbitration Act'). The Arbitrator passed award on 11-4-2003.

3. Respondent No. 1 filed an application under Section 34 of the Arbitration Act for setting aside the award dated 11-4-2003. The said application was registered as Arbitration Case No. 13/03 before the Seventh Additional District Judge, Indore.

4. During the pendency of these proceedings, an application under Section 2(1)(e) of the Arbitration Act was filed by the present petitioner stating that the Seventh Additional District Judge, Indore has no jurisdiction to entertain the said application. According to him, application under Section 34 of the Arbitration Act is maintainable only before the principal Civil Court of original jurisdiction. He invited attention of this Court to the definition of the 'Court' as defined in Section 2(1)(e) of the Arbitration Act which reads as under:

'Court' means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or to any Court of Small Causes.

Learned Counsel for the petitioner thus contends that as per the definition of the 'Court' as per definition under Section 2(1)(e) of the Arbitration Act, the 'Court' means the principal Civil Court of original jurisdiction in the district and therefore, the Additional District Judge has no jurisdiction.

5. Learned Counsel for the petitioner has referred to the provisions of Section 42 of the Arbitration Act which reads as under:

42. Jurisdiction.--Notwithstanding anything contained elsewhere in this Part or any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.

Thus, as per the provisions of Section 42 of the Arbitration Act, if any application is filed under the Arbitration Act in a particular Court, then that Court alone has jurisdiction to deal with the subsequent application and no other Court has jurisdiction to decide the same.

6. According to the learned Counsel for the petitioner, principal Civil Court means that District Judge alone. To buttress his contention, he lay hands on a decision of Allahabad High Court in the case of ITI Ltd. Allahabad v. District Judge, Allahabad AIR 1998 All 313 and the judgment of the Chhattisgarh High Court in the case of Raipur Development Authority v. Sarin Construction Co., Raipur AIR 2006 Chhatt 12. In both these cases, the Allahabad High Court and the Chhattisgarh High Court respectively have taken a view that the District Judge has no jurisdiction to transfer application under Section 34 of the Arbitration Act to Additional District Judge and the Additional District Judge hearing the application under Section 31 of the Arbitration Act has no jurisdiction to decide the same. As such, according to the learned Counsel for the petitioner, the impugned order is without jurisdiction.

7. Learned Counsel for the petitioner also contended that the objector i.e. respondent No. 1 Sanjay Chawrekar has already accepted the amount awarded, hence, he has no right to file objection under Section 34 of the Arbitration Act. In support of this contention, he relied upon a decision of the Apex Court in the case of Pooran Chand Nangia v. National Fertilizers Ltd. : (2003)8SCC245 .

8. So far as second contention of the learned Counsel for the petitioner that once the amount awarded by the Arbitrator is accepted by a party, then it has no right to challenge the award by filing application under Section 34 of the Arbitration Act is concerned, there is no dispute about this proposition advanced, by the learned Counsel for the petitioner. However, in the present case, the fact remains that the objector has denied to have received the amount awarded by the Collector in its application filed under Section 34 of the Arbitration Act. Thus, the question whether or not the amount is received by the objector, is to be determined after recording evidence and assessing the same.

9. Learned Counsel for the petitioner tried to demonstrate that in the present case, the defendant in his cross-examination has admitted to have accepted the amount. Even if it is so, it is for the Court below to decide the said question at the time of final disposal after assessing the evidence on record. At this stage, without appreciating the evidence, it is not possible for the Court to come to a conclusion that any amount is received by the objector before filing of the application under Section 34 of the Arbitration Act. The said question has to be ultimately decided by the Court below at the time of final judgment.

10. So far as first contention about the jurisdiction of the Additional District Judge is concerned, Allahabad High Court in the case of ITI Ltd. (supra) has held that the District Judge has no jurisdiction to transfer application under Section 34 of the Arbitration Act to Additional District Judge. For arriving at this conclusion, the Allahabad High Court in para 7 of its judgment has considered the language of Bengal, Agra and Assam Civil Courts Act, 1887 and held that the expression 'in the discharge of those functions they shall exercise the same power as a District Judge' used in Sub-section (2) of Section 8 of the Bengal, Agra and Assam Civil Courts Act, 1887 is not potent enough to confer in the Court of an Additional District Judge the status of 'the principal Civil Court of original jurisdiction in a district.'

11. Section 8 of the Bengal, Agra and Assam Civil Courts Act, 1887 is also taken note of in the aforesaid judgment by the Allahabad High Court and as per Section 8 of the Bengal, Agra and Assam Civil Courts Act, 1887, the District Judge can take aid of additional Judges for speedy disposal of the cases before him and the State Government, may having consultation with the High Court appoint such additional Judges as may be requisite. Sub-section (2) of Section 8 of the Bengal, Agra and Assam Civil Courts Act, 1887 provides that the Additional Judges so aplp6inted shall discharge any of the functions of a District Judge which the District Judge may assign to them and in discharge of those functions, they shall exercise the same power as the District Judge. Considering this language the Allahabad High Court has held that the expression 'in the discharge of those functions they shall exercise the same power as a District Judge' used in Sub-section (2) of Section 8 of the Bengal, Agra and Assam Civil Courts Act, 1887 is not potent enough to confer in the Court of an Additional District Judge the status of the principal Civil Court of original jurisdiction in a district.

12. This is not the situation in the State of Madhya Pradesh. In the State of Madhya Pradesh, M.P. Civil Courts Act, 1958 is applicable. Section 7 of the M.P. Civil Courts Act, 1958 (hereinafter, referred to as 'Civil Courts Act') defines the words 'Principal Civil Court of original jurisdiction. It means that the Court of the District Judge shall be the Principal Civil Court of original jurisdiction in the civil district. Sub-section (2) of Section 7 of the Civil Courts Act further provides that an Additional District Judge shall discharge any of the functions of a District Judge, including the functions of Principal Civil Court of original jurisdiction, which the District Judge may, by general or special order, assign to him and in the discharge of such functions he shall exercise the same power as the District Judge. Thus, this subsection clearly confers powers upon the Additional District Judge to discharge the functions of Principal Civil Court of original jurisdiction.

13. Section 8 of the Civil Courts Act deals with the appointment of additional Judges. As per this section, the Additional District Judge shall exercise the jurisdiction of the Court to which he is appointed and the powers of the Judge thereof, subject to any general or special orders of the authority by which he is appointed as to the Class or Value of the suit which he may try, hear or determine.

14. Section 15 of the Civil Courts Act empowers the District Judge to prepare memo to distribute his business.

15. In the case in hand, respondent No. 1 objector has filed his objection under Section 34 of the Arbitration Act showing the cause title as 'Before the Learned District Judge, Indore'. The Presentation Section of the District Judge had fixed the case before the Additional District Judge as per the distribution memo prepared by the District Judge. Hence, the judgment of the Allahabad High Court relied upon by the learned Counsel for the petitioner in the case of ITI Ltd. Allahabad (supra) is quite distinguishable.

16. So far as another judgment relied upon by the learned Counsel for the petitioner on this point in the case of Raipur Development Authority (supra) is concerned, it dealt with the provisions of the Civil Courts Act which are applicable in the present case. Having perused the said judgment, we are unable to agree with the reasonings given by the Chhattisgarh High Court. As per the requirement of the Arbitration Act, application has to be filed before the principal Civil Court of original jurisdiction.

17. A co-joint reading of Section 2(1)(e) and Section 42 of the Arbitration Act makes it clear that the application is to be heard by the principal Civil Court of original jurisdiction and the Court which has entertained the first application shall decide the subsequent applications. As per Civil Courts Act prevailing in the State of Madhya Pradesh, Additional District Judge is a Court of principal Civil Court of original jurisdiction by virtue of Sections 7 and 8 of the Civil Courts Act and as per Section 15 of the Civil Courts Act, the District Judge is empowered to prepare distribution memo. Thus, intention of the Legislature in enacting Sections 2(1)(e) and 42 of the Arbitration Act is that once a Judge who is empowered to function as principal Civil Court of original jurisdiction, he should alone decide the matter and subsequent proceedings arising out of the said agreement and not that the District Judge alone is empowered to hear the case.

18. In the instant case, first application is filed by the petitioner by mentioning cause title 'Before the Learned District Judge, Indore'. But the same was fixed by the Presentation Section of the District Court before the Additional District Judge and the Additional District Judge dealt with the case. In the case in hand, there is nothing on record to show that any other Court has heard any persons application or dealt with it. Thus under Section 7 of the Civil Courts Act, the Additional District Judge is also a principal Civil Court of original jurisdiction. Hence, he had powers to hear the application in question and it cannot be said that he has no jurisdiction to proceed with the application in question.

Resultantly, finding no merit in the writ petition, we dismiss the same.