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2005 DIGILAW 2152 (RAJ)

Hindustan Petroleum Corporation Ltd. v. Shravan Kumar Burdak

2005-08-12

VINEET KOTHARI

body2005
Judgment Vineet Kothari, J.-Additional District Judge is covered by the definition of Principal Civil Court as defined in Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 or not is the short but interesting controversy involved in the present case. 2. The new Arbitration and Conciliation Act, 1996 (Hereinafter referred to as "The Act" of 1996 is based on the United Nations Commission on International Trade Law (UNCITRAL) Model replaced the three existing statutes namely; the Indian Arbitration Act, 1940 based on the English Arbitration Act, 1934; the Arbitration (Protocol and Convention) Act, 1937, is based on the General Protocal, 1923 and the Foreign Awards (Enforcement) Act, 1961 based on the New York Convention on Recognition and Enforcement on Foreign Arbitral Awards, 1958 and the Geneva Convention of the Execution of Foreign Arbitral Awards, 1937. The new law attempts to be a self contained Code, containing within it, the laws relating to domestic and foreign arbitrations as well as those relating to enforcement of foreign arbitral awards. The new law seeks to achieve the very goals for which, Arbitration itself was conceived i.e., to achieve speedy inexpensive and effective solution to disputes. However, over the time, the arbitration proceedings have also become susceptible to the same ailments which afflict normal legal processes. This has largely been due to the tendency of one or other party to take recourse to every conceivable judicial measure to frustrate, or atleast to injunct the arbitration proceedings. The new law, therefore, seeks to drastically curtail the interference of Courts of law various stages of arbitration proceedings. 3. In the back drop of this, the definition of Section 2(1)(e) of the Act of 1996 which defines the term "Court" comes up for interpretation in the present case qua the hierarchy of judiciary within the State of Rajasthan. The definition is reproduced below for ready reference:- Section 2(1)(e):-"Court" means the Principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary Civil Jurisdiction, having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes." 4. The facts in brief before I come to the case laws cited at bar touching the controversy in question are given here in. The respondent Shravan Kumar Burdak is a dealer of appellant Hindustan Petroleum Corporation carrying its business of petrol pump on National High Way No. 11 at Village Ranoli, Distt. Sikar within the State of Rajasthan under the name and style of M/s. Laxmi Diesal Service, since, 1988. The respondent claims to invest a sum of Rs. twenty lac in construction of the said petrol pump. The appellant company appears to have cancelled the dealership of the respondent w.e.f. 06.09.2003 on the alleged ground that the dealer is not maintaining the requisite sale targets. The respondent felt aggrieved by the same and in terms of Clause 68 of the agreement between the parties, the matter was referred to the Arbitrator where the said proceedings are pending. 5. During the pendency of these arbitration proceedings, the respondent appears to have filed a civil suit bearing No. 114/2004 wherein on an application filed under Section 9 of the Act, for interim measure the Court below namely; the Additional District Judge, No. 5 Jaipur City Jaipur passed impugned order on 20.11.2004 allowing that application and directing the appellant Hindustan Petroleum Corporation Ltd. Jaipur to refer the matter for arbitration and until further orders by the Arbitrator, the supply of petroleum products to the dealer may be maintained. Being aggrieved by the said order the present appeal has been filed in this Court by the appellant Hindustan Petroleum Corporation Ltd., Jaipur. 6. Mr. J.K. Singhi, learned Counsel appearing on behalf of the appellant vehemently submitted that the learned Additional District Judge not being the Principal Civil Court as defined in Section 2(1)(e) of the Act of 1996 had no jurisdiction to pass the impugned order on the application filed under Section 9 of the Act of 1996 and, therefore, the impugned order being without jurisdiction deserves to be quashed. Besides the point of jurisdiction, he submits that the learned Court below has also erred in directing the appellant Corporation to continue the supply of petroleum products until further orders, if any, passed by the Arbitrator. 7. As against this, Mr. Besides the point of jurisdiction, he submits that the learned Court below has also erred in directing the appellant Corporation to continue the supply of petroleum products until further orders, if any, passed by the Arbitrator. 7. As against this, Mr. R.K. Agarwal learned Counsel appearing on behalf of the respondent dealer Shravan Kumar submits that the Additional District Judge has the same powers and jurisdiction as the learned District Judge has as per the provisions of Rajasthan Civil Court Ordinance, 1950 and, therefore, for all purposes under the Act of 1996, the Court of Additional District Judge is a Principal Civil Court as defined under the said Act of 1996 and, therefore, the impugned order cannot be said to be without jurisdiction by any stretch of imagination. On merits, he submits that since, admittedly, there is an arbitration clause in the agreement between the parties and there is an existing dispute, therefore, the learned Court below has not committed any error in referring the matter to the Arbitrator, who happens to be a Senior Officer of the appellant Corporation itself , and since the matter has already been referred and the claimant has filed its claim petition before the Arbitrator to which the appellant Corporation is yet to file the written statement, therefore, he submits that in the interest of justice the Arbitrator can be directed by this Court to expedite the disposal of the arbitration proceedings and to pass an appropriate award in accordance with law and till than the interim measure directed to be taken by continuing supply of the petroleum products to the dealer may be maintained as he has been carrying on this business since, 1988 with a huge investment in it and sudden and abrupt closure of his business would not only cause loss of source of livelihood but would also frustrate the arbitration proceedings and no amount of damages would not be adequate to compensate the respondent. 8. I have heard the learned Counsel for the parties at length and given my thoughtful consideration to the facts and laws cited at bar. 9. 8. I have heard the learned Counsel for the parties at length and given my thoughtful consideration to the facts and laws cited at bar. 9. The provisions of Rajasthan Civil Courts Ordinance, 1950 which is the law governing the constitution of Civil Courts within the State of Rajasthan defines classes of Courts in Section 6 of this Ordinance of 1950, Section 6 reads as follows:- "Section 6 Classes of Courts:-There shall be the following classes of Subordinate Civil Courts in (the State of Rajasthan) namely;- (1). the Court of the District Judge, (2). (the Special Civil Court) (3). the Court of the Civil Judge, and (4). the Court of the Munsiff " 10. The provision relating to appointment of Additional Judge has been made in Section 10 of the same Ordinance of 1950 which is also important to decide the present controversy and, therefore, the said provision is also reproduced for ready reference:- "Section 10. Additional Judges;-(1) When the business pending before any District Judge or District Judges so requires for its speedy disposal, the (State Government) may, upon the recommendation of the High Court sanction the appointment of such number of Additional Judges (for the Court or Courts of such District Judge of District Judges) as may be necessary. .(2) The provisions of Section 9 shall apply also to the appointment, posting and promotion of , and filling up of vacancies among Additional Judges. .(3) Any Additional Judge so appointed shall discharge any of the functions of a District Judge which the District Judge may assign to him, and in the discharge of those functions, he shall exercise the same powers as the District Judge." 11. Chapter III is relating to jurisdiction of Courts in the said Ordinance of 1950. Section 18 lays down that the District Court shall be the Principal Civil Court. Section 19 defines the jurisdiction of other Civil Courts namely; the Court of Civil Judge and the Court of Munsiff . 12. A closer reading of Section 6 reveals that there is no separate class of Additional District Judge in the four classes of Courts defined in Section 6 of the Ordinance of 1950, The category of the Special Civil Court at Section No. 2 in Section 6 was also inserted by Rajasthan Civil Courts Ordinance of No. 2 of 1992 replaced by Rajasthan Act No. 20 of 1992 w.e.f 12.08.1992. Section 10(3) of the Ordinance of 1950 makes it very clear that the Additional Judges so appointed under Section 10(3) shall discharge any of the functions of the District Judge which District Judge may assign to him and in discharge of those functions, he shall exercise the same powers as the District Judge. Section 18(1) says that the Court of District Judge shall be the Principal Civil Court of original civil jurisdiction. 13. Therefore, prima facie the Additional District Judge so appointed, has the same judicial powers as the District Judge has, will naturally be construed as the Court of District Judge and shall be thus, the Principal Civil Court. This prima facie view is further supported by the language of Section 19 of the same Ordinance which defines the jurisdiction of other Civil Courts namely; the Court of Civil Judge and the Court of Munsiff but it does not define separately the jurisdiction of Additional District Judge. 14. Mr. R.K. Agarwal learned Counsel appearing on behalf of the respondent cited before me a number of Judgment s in support of his submissions that in the absence of Additional District Judge being a separate class of Court within the State of Rajasthan, any person so appointed as Additional District Judge shall have the same judicial powers as the District Judge has and merely because he is sub-ordinate to District Judge for some limited purpose of administrative control it does not render him to be a Court of grade inferior to that of District Judge and, therefore, the Court of District Judge manned by an Additional District Judge will also fall within the definition of Court as defined in Section 2 (1)(e) of the Act of 1996. The Honble Supreme Court in the Case of State of Maharashtra vs. Labour Law Practitioners Association and Ors, 1998 (2) SCC 688 , in Para 10 of the Judgment held that term District Judge, covers a Judge of any Principal Civil Court of original jurisdiction. The structure of Civil Court exercising original jurisdiction is no longer monolithic. The Judge of the Principal Civil Court heading the set of Courts concerned under him and exercise that jurisdiction can also fall in the category of a District Judge by whatever name called. The structure of Civil Court exercising original jurisdiction is no longer monolithic. The Judge of the Principal Civil Court heading the set of Courts concerned under him and exercise that jurisdiction can also fall in the category of a District Judge by whatever name called. The term District Judge should not be confined only to the Judge of the Principal Civil Court in the hierarchy of general Civil Courts and the term would now have to include also to hierarchy of specialization of Civil Court such as a hierarchy of Labour Court and Industrial Court. 15. The Karnataka High Court in the Case of Ms. Valliappa Software Technological Park Pvt. Ltd. vs. C. Sundaram & Ors., 2002 AIHC 3017, while dealing with the Arbitration and Conciliation Act, 1996 itself , for a similar controversy held that by virtue of the power conferred upon him the Principal City Civil Judge has to distribute the cases amongst other Judges and it is purely an administrative matter. By exercising this power, the Principal City Civil Judge and his Court would not become a Judge or Court superior to other City Civil Court presided over by other Judges or the other City Civil Court or other Judges would become grade inferior to such Principal City Civil Judge or the Court presided over by him. The Court, therefore, held that the Principal City Civil Judges and the Additional City Civil Judges are of the same rank and by virtue of the provisions contained in Section 3(2) of the Bangalore City Civil Court Act, 1979 each of those Courts are the City Civil Courts of the original jurisdiction of the district and can have jurisdiction to entertain the arbitration matter arising under the Act of 1996. 16. 16. Way back in 1948 the Division Bench of Bombay High Court in the case of Ganpat Prahlad & Ors., vs. Mahadeo Paikajee Kolhe & Ors., AIR (36) 1949, Nagpur 408, was concerned with the question as to whether the term District Judge can include Additional District Judge for the purpose of Section 264 (1) and Section 2 (bb) of the Indian Succession Act, 1925 held that the Judges of the District Courts include not only the District Judge properly so termed but also the Additional District Judges appointed to that Court and that the jurisdiction of each of these Judges is co-extensive with that of the District Judge properly so called unless such jurisdiction is specially curtailed by a general or special order. 17. Similarly, in Sagar Chaudhury & Ors. vs. Nabin Ch. Chaudhury & Ors., AIR 1970 Assam & Nagaland 111, the Division Bench of the Court held that the Additional District Judge shall have jurisdiction to grant probate of Will under Indian Succession Act, 1925. Section 2 (bb) of the Indian Succession Act, defines District Judge to mean the Judge of a Principal Civil Court of original jurisdiction. The D.B. relying on the Judgment of Honble Supreme Court in the Case of Kuldip Singh vs. State of Punjab in AIR 1956 SC 391 , held that the District Judge of a District Court may make an administrative allotment of work among the Judges of that Court and does not affect their jurisdiction and powers. Probate and letters of the administration under the Succession Act may be issued by the Court of District Judge which is the Principal Civil Court of original jurisdiction. 18. The Honble Supreme Court in the Case of Kuldip Singh vs. State of Punjab (Supra), while making it clear in Para 24 of the Judgment that the decision in that matter was confined to the Punjab Act, as Their Lordships noticed that similar Acts in other State were so worked that what was decided by the Court for Punjab may not hold good for other states noted that in view of the provisions of Punjab Courts Act, 1950 which made the provisions of three classes of Civil Court namely:- 1. The Court of District Judge. 2. The Court of Additional Judge, and 3. The Court of Subordinate Judge. 19. The Court of District Judge. 2. The Court of Additional Judge, and 3. The Court of Subordinate Judge. 19. In view of these three different classes of Courts defined under the Punjab Court Act, 1950 the Honble Supreme Court held that under Section 18 the Court of the Additional District Judge is constituted as a distinct class of Court and it speaks of the Court of Additional Judge and not of the Additional District Judge as is the case with certain other Acts and other parts in India and therefore, in view of that distinction the Honble Supreme Court held that the Court of Additional Judge is not a division Court of the Court of District Judge and its jurisdiction was limited to discharge such functions as may be entrusted to them by the District Judge under Section 21. .20. That learned Single Judge of Rajasthan High Court in the case of Smt. Veena Lodha vs. Narendra Mal Lodha, 1976 RLW 383, held in a matter arising under the Hindu Marriage Act that the proceedings under the Hindu Marriage Act are to be initiated before the District Judge but once it is entertained by him it is certainly open to the District Judge to assign or transfer the proceedings under Section 10(3) of the Rajasthan Civil Court Ordinance, 1950. The powers to assign or transfer the proceedings are in no way curtailed by the Hindu Marriage Act as a necessary corollary the proceedings under the Act can be tried by the Additional District Judge on proper assignment of the same under Section 10(3) of the said Ordinance. In Paras 6 and 7 of the said Judgment of distinguishing the case of Kuldip Singh vs. State of Punjab (Supra), as noted above and concurring with the earlier view of Kan Singh, J. in the case of Pushpa Devi vs. Radhey Shyam, AIR 1972 (Raj) 620 the Court held that once the petition under the Hindu Marriage Act, is presented to the District Judge who transfers the same of the Additional District Judge, the latter is competent to exercise all the functions which are exercisable by the District Judge and competent to try the petition under the Hindu Marriage Act. In a latter Judgment again the same view was reiterated in Sarojani Devi vs. Gulab Chand & Ors., 1990 (2) RLR 411, where in a case arising under the Rajasthan Public Trust Act, 1959 the Court again held that learned Additional District Judge was fully empowered to exercise the same powers as District Judge in an execution proceedings where the High Court directed that the entire suit property shall vested in a Trustee to be appointed by the District Judge. Recently, again another learned Single Judge of this Court while deciding the SBC WP No. 272/2005, Hindustan Copper Ltd. Khetari vs. M/s. Bhagwati Gases Ltd. & Ors., vide Judgment dated 30.07.2005 dismissed the writ petition holding that as per Section 10 of the Ordinance of 1950 the Additional District Judge is fully empowered to exercise the powers as the District Judge as has been held by this Court in the case of Sarojani Devi vs. Gulab Chand (Supra) and, therefore, there was no jurisdictional error in entertaining the application filed under Section 34 of the Act of 1996 by the learned Additional District Judge, Khetri. .20-A. As against the weight of authorities and provisions of the Ordinance of 1950, the learned Counsel for the appellant has cited two Judgment s before me which deserve to be noticed. .21. Firstly, Mr. J.K. Singhi learned Counsel appearing on behalf of the appellant relief upon the Judgment of J.B. Mangharam & Co. Gwalior vs. K.B. Kher & Ors., AIR 1956 Madhya Bharat 183, wherein it was held that the definition of “District Judge” as given in Section 3(17) of the General Clauses Act, is an exhaustive definition. The use of the article the before the word Judge in the definition is very significant. It has specifying or particularising effect as opposed to the indefinite and generalising force of a and denotes that it is not only a Judge of Principal Civil Court of original Civil Court that can be termed as a District Judge but that only the sole presiding Judge of a Principal Civil Court or original jurisdiction can be called a District Judge. It was further observed that the office of .the District Judge is quite distinct from the office of the Additional District Judge and there cannot be more District Judges than there are districts in a State and a person holding a substantive rank of District Judge is never appointed to the office of the Additional District Judge and the Additional District Judge is, in rank and grade inferior and subordinate to a District Judge. It appears that the said observations of the Honble Court turned on the definition of the District Judge as defined in Section 3(17) of the General Clauses Act and the said Judgment is of no help to decide the controversy in hand where, in view of the classes of Courts defined in Section 6 of the Rajasthan Civil Courts Ordinance, 1950. The said Judgment cannot be applied to the present case. .22. Another Judgment which was cited at bar on behalf of the appellant in the case of M/s. I.T.I. Ltd. Allahabad vs. District Judge, Allahabad & Ors., AIR 1998 Allahabad 313, wherein the learned Single Judge of the Allahabad High Court held that an application Order Section 34 for setting aside the award under the Arbitration and Conciliation Act, 1996 cannot be entertained by the Additional District Judge and therefore, the transfer of the said application by District Judge by invoking provisions under Section 8 (2) Bengal, Agra and Assam Civil Courts Act to the Court of Additional District Judge was not permissible. The said case appears to have turned on a conjoint reading of Sections 2(e) and 42 of the Act of 1996 wherein Section 42 of the Act of 1996 says that notwithstanding anything contained elsewhere in this part or in 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 Courts. Since, the case was before the Allahabad High Court, there was a transfer of proceedings namely; the application moved for setting aside the arbitration award under Section 34 of the Act, which was filed in the Court of District Judge and the same was transferred by the District Judge to the Additional District Judge and upon an application under Section 42 of the Act of 1996 praying therein that the case be remitted back to the District Judge for disposal, the Court in view of the definition of Section 8(1) of the Bengal, Agra and Assam Civil Court Act, held that the Additional District Judge, had no jurisdiction in the matter. Section 3 of the said Act says that there shall be following classes of Civil Courts namely;- .(1). The Court of the District Judge, (2). The Court of Additional District Judge, (3). The Court of Subordinate Judges, and (4). The Court of Munsiff . 23. Therefore, where the Court of Additional District Judge was a separate class of Court, it was held that the Additional District Judge had no jurisdiction in the matter. This case is also distinguishable in view of the provisions of Rajasthan City Civil Court Ordinance, 1950. 24. Another Judgment cited by Mr. Singh in the Case of Hindustan Petroleum Corporation Ltd. vs. Pink City Midway Petroleums, 2003 (6) SCC 503 wherein it was held that where the arbitration clause exists the Court has a mandatory duty to refer the dispute arising between the contracting parties to arbitrator. Civil Court has no jurisdiction to continue with the suit once an application under Section 8 has been filed. This case also is of no assistance to the appellant for deciding the controversy in hand. 25. Therefore, in view of the aforesaid position of law, the conclusion appears to be clear enough. Civil Court has no jurisdiction to continue with the suit once an application under Section 8 has been filed. This case also is of no assistance to the appellant for deciding the controversy in hand. 25. Therefore, in view of the aforesaid position of law, the conclusion appears to be clear enough. The Additional District Judge appointed under Section 10 of the Rajasthan Civil Courts Ordinance, 1950 has the same judicial powers and jurisdiction to discharge any of the functions of the District Judge which the District Judge may assign to him and, therefore, the jurisdiction of Additional District Judge being the same as that of the District Judge and the Additional District Judge having not been defined as a separate class of Court in Section 6 of the said Ordinance, there is no hesitation in holding that the impugned order passed by the learned Additional District Judge No. 5 Jaipur City, Jaipur cannot be said to be without jurisdiction and the Additional District Judge, cannot be said to be a Court of a grade inferior to that of District Judge in other words, the Additional District Judge would be a Principal Civil Court of original jurisdiction in a District as defined in Section 2(1 )(e) of the Act of 1996. 26. On merits of the case, it is found that since the matter has been directed to be referred to the Arbitrator and the arbitration proceedings are pending before the Arbitrator the learned Court below has not committed any error in directing the appellant Corporation to continue supply the petroleum products until further orders to be passed by the Arbitrator. 27. It is considered expedient while disposing of the present appeal to direct the Arbitrator to undertake and conclude the said arbitration proceedings expeditiously within a period of four months from today and till then the interim relief granted by the Court below shall continue. 28. With these observations, the present appeal is disposed of . No order as to costs.