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2011 DIGILAW 279 (PAT)

Bihar State Housing Board v. Harendra Nath Kapoor

2011-02-18

RAVI RANJAN

body2011
ORDER Heard the parties. This Civil Revision is directed against the order dated 4.4.2009 passed by the Additional District and Sessions Judge-IV, Patna, in Execution Case No. 4 of 2007/01 of 2008, whereby and whereunder the executing court has held in this matter, that in view of the fact that the Arbitrator was appointed by the High Court in exercise of its power under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred to as “the Act”), the execution case would be maintainable before the court below and not before the Subordinate Judge. 2. The petitioner challenges the aforesaid order chiefly on two grounds:– (i) Since the petitioner has already moved before the Sub Judge-I, Patna, by filing Miscellaneous Case No. 14 of 2007 for setting aside the earlier award given by the sole Arbitrator, the executing court was duty bound to stay execution proceeding awaiting decision to be taken by the court concerned in the aforesaid case. (ii) The Additional District and Sessions Judge-IV, Patna, does not have jurisdiction to proceed with the application filed under Section 36 of the Act for enforcement of the award given by the sole arbitrator. 3. Learned counsel appearing for the petitioner, in support of the aforesaid contentions, submitted that on bare perusal of Section 36 of the Act, which is the relevant provision for enforcement of award, it would be manifest that the application for enforcement of award can be entertained either after expiry of the time for making application to set aside the arbitral award under Section 34 of the Act or if such application having been made, it has been refused by the court concerned. In the present case, since the Miscellaneous Case No.14 of 2007 for setting aside the award has already been filed before Sub-Judge-I, Patna, the execution case should have been stayed awaiting result of such application. It has further been submitted that the Additional District and Sessions Judge, not being covered within the meaning of “Court” as per the definition under Section 2 (1) (e) of the Act, would not have jurisdiction to proceed with the execution case. It has further been submitted that the Additional District and Sessions Judge, not being covered within the meaning of “Court” as per the definition under Section 2 (1) (e) of the Act, would not have jurisdiction to proceed with the execution case. Learned counsel drew attention of this Court towards the definition provided under Section 2 (1) (e) of the Act to impress upon that the “Court” means the Principal Civil Court of original jurisdiction in a district which is a Court of Sub-Judge having been unlimited pecuniary jurisdiction to decide the suit. The Additional District and Sessions Judge, though being superior in hierarchy, but having got no original jurisdiction for deciding the suit, is not a Court with the definition aforesaid and hence is not competent to enforce the award under Section 36 of the Act. Learned counsel has placed reliance upon three reported judgments of this Court rendered by the learned Single Judge of this Court in Md. Sadique Vs. State of Bihar ( 2000(4) PLJR 814 ), Thakur Prasad Singh Vs. The State of Bihar and another ( 2000(4) PLJR 843 ) and Union of India & Ors. Vs. M/s Jialal Kishorilal (2010(3) BLJ 129). 4. On the other hand, learned counsel appearing for opposite parties submitted that firstly, there is no bar in making an application under Section 36 of the Act prior to a decision having been taken under Section 34 of the Act by the competent court, however, the executing court shall proceed with to enforce the award only after either the time for making application to set aside the arbitral award under Section 34 of the Act has expired or on such application having been made, the same has been refused by the Court. Secondly, the application for setting aside the arbitral award not having been made before the Court of competent jurisdiction, the same cannot be construed to be an application in accordance with law. Thus, it has to be deemed by the executing court that no application has been made under Section 34 of the Act for setting aside the arbitral award. In above view of the matter, it has been contended that the court below was fully justified in not staying the execution proceeding and holding that the same was competent to proceed with the issue under Section 36 of the Act. In above view of the matter, it has been contended that the court below was fully justified in not staying the execution proceeding and holding that the same was competent to proceed with the issue under Section 36 of the Act. In support of his contention learned counsel for the opposite parties also drew attention of the Court towards the definition of Clause (1)(e) of Section 2 of the Act and has also placed reliance upon certain decisions of the various High Courts reported in Smt. Narmada Devi Vs. State of Bihar and others (AIR 1999 Patna 3), Madhya Pradesh State Electricity Board & Anr. Vs. ANSALDO Energia, S.P.A. and another (AIR 2008 Madhya Pradesh 328) to demonstrate before this Court that an Additional District Judge is competent to decide appeals assigned to him by the District Judge for disposal and, while doing so, he exercises the same powers as those of the District Judge. By putting the same analogy, the learned counsel submits that since the matter has been assigned by the District Judge to the Additional District Judge, he is competent to proceed with the matter. He has placed reliance upon a Division Bench of the Madhya Pradesh High Court reported in Madhya Pradesh State Electricity Board & Anr. Vs. ANSALDO Energia, S.P.A. and another (supra), where the issue was as to whether Additional District Judge having been empowered to discharge any function of District Judge meets the requirement as engrafted under Section 2(1)(e) of the Act so as to entitle him to hear applications under Section 34 of the Act. Learned counsel submitted that the Division Bench was not in any doubt that the Additional District Judge being the principal Civil Court of original jurisdiction, who was competent court to hear and decide an application under Section 34 of the Act, however, it has gone further to hold that Additional District Judge having been empowered to discharge the functions of the District Judge would come into the definition of the Court, thus, he would also be competent to hear the matter under Section 34 of the Act if such duty is assigned to him by the District Judge concerned. Learned counsel has further placed reliance upon a decision of the Orissa High Court in M/s. Nila Chakra Construction Vs. State of Orissa and others (AIR 2005 Orissa 30). Learned counsel has further placed reliance upon a decision of the Orissa High Court in M/s. Nila Chakra Construction Vs. State of Orissa and others (AIR 2005 Orissa 30). Learned Single Judge of the Orissa High Court has held that for enforcement of award the District Judge having been the principal Civil Court of the original jurisdiction is the competent court and not the Civil Judge (Sr. Division). The Court has held that Civil Judge (Sr. Division) concerned has no jurisdiction to entertain application under Section 34 of the Act or under Section 36 of the Act. In Garhwal Mandal Vikas Nigam Ltd. Vs. Krishna Travel Agency { (2008) 6 Supreme Court Cases 741}, the Supreme Court has held that even if the High Court, in exercise of its power under Section 11(6) of the Act, has appointed Arbitrator, that is certainly not the intention of the Legislature that the High Court itself would be the Principal Civil Court of original jurisdiction for the purpose of deciding the application under Section 34 of the Act. That can happen only in case High Court is having the ordinary original jurisdiction to decide such suits. Thus, the Apex Court has held that even if appointment of Arbitrator is made by the High Court, the principal Civil Court of original jurisdiction remains the same as contemplated under Section 2(1)(e) of the Act and the matter was remitted to the District Judge concerned. 5. The Full Bench of the Bombay High Court in M/s Fountain Head Developers and etc. Vs. Mrs. Maria Arcangela Sequeira deceased by L.R.’s and others (AIR 2007 Bombay 149) has held that only the District Judge or High Court in exercise of its original civil jurisdiction would come within the ambit of the definition of Court under Section 2(1)(e) of the Act. However, it is common ground that Patna High Court does not have the original jurisdiction to try and decide such suits as the same has not been included under original jurisdiction as per provisions under Section 18 of Bengal, Agra, Assam Civil Courts Act, 1887. Under the scheme of the Act the provision for referring the parties to arbitration is under Section 8 of the Act. Under this provision the judicial authority refers the matter to Arbitrator if action has been brought before it which is a subject matter of agreement. Under the scheme of the Act the provision for referring the parties to arbitration is under Section 8 of the Act. Under this provision the judicial authority refers the matter to Arbitrator if action has been brought before it which is a subject matter of agreement. However, the word judicial authority has been intentionally used by the Legislature in place of Court. Thus, in the opinion of this Court, if question of arbitration is raised before the Court before which an action has been brought by filing a suit and it is also a subject matter of arbitration agreement then it shall refer the matter to Arbitrator under Section 8 of the Act. Therefore, the term “Judicial Authority” will definitely include the Courts which would be in seisin of the matter in terms of its pecuniary and territorial jurisdiction. The High Court also can appoint Arbitrator as per the provisions as contained under Section 11(6) of the Act. However, while dealing with the question of setting aside the arbitral award, significantly, the word “Court” has been used in place of ‘Judicial Authority’ and definition of the “Court” as per Section 2(1) (e) of the Act is as under:– “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 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 any Court of Small Causes.” 6. The definition of principal Civil Court of original jurisdiction in a district is not available under the Act. However, the same stands defined under Bihar and Orissa General Clause Act, 1917. From sub-sections (15) and (16) of Section 4 of the aforesaid Act it is apparent that the same would mean Principal Civil Court of original jurisdiction of a District and the District Judge shall mean Judge of the District Court. The relevant provisions are quoted as under:– “4(15). “District Court” shall mean the principal Civil Court of original jurisdiction of a district, but shall not include a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction.” “4(16). “District Judge” shall mean the Judge of a District Court.” 7. The relevant provisions are quoted as under:– “4(15). “District Court” shall mean the principal Civil Court of original jurisdiction of a district, but shall not include a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction.” “4(16). “District Judge” shall mean the Judge of a District Court.” 7. In view of aforesaid provisions, in the opinion of this Court, only the District Judge or the concerned Additional District Judge would be covered under the definition of the Court engrafted under Section 2 (1)(e) of the Act. However, the learned Single Judge of this Court in Md. Sadique Vs. State of Bihar (supra) has held that since the District Judge does not have any original jurisdiction to try the cases, thus, he is not the Court within the meaning of the definition under 2(1) (e) of the Act rather the Subordinate Judge, having limited pecuniary jurisdiction to try the suits, would come under the definition for the purposes of Section 8. In paragraph 5, the learned Single Judge has clarified that since the matter before him was a matter arising out of Section 8 of the Act and the same does not use the word “court” and mentions is about the “Judicial Authority” thus, in that sense the discussion made earlier regarding the Principal Civil Court shall be of an academic value only. Thus, the aforesaid decision cannot be considered to be a binding precedent. In another decision the learned Single Judge of this Court in Thakur Prasad Singh (supra) placed reliance upon the judgment of Md. Sadique (supra) and has held that Subordinate Judge would be the “Court” within the meaning of the Act. However, the same having been passed by placing reliance upon the decision which in itself says that the relevant discussion in the decision is only of an academic value, this decision would also not have a binding effect. But another learned Single Judge of this Court in Union of India & others Vs. Jialal Kishorilal (2010 BLJR (PHC) 129), placing reliance upon a decision of the Apex Court in Hindustan Copper Limited Vs. Nicco Corporation Limited ((2009) 6 SCC, 69), has held that the application under Section 34 of the Act was not maintainable before District and Sessions Judge. 8. Jialal Kishorilal (2010 BLJR (PHC) 129), placing reliance upon a decision of the Apex Court in Hindustan Copper Limited Vs. Nicco Corporation Limited ((2009) 6 SCC, 69), has held that the application under Section 34 of the Act was not maintainable before District and Sessions Judge. 8. The second question is as to which court would be the competent court to enforce the award under Section 36 of the Act. For proper appreciation section 36 of the Act is quoted hereunder :– “36. Enforcement.–Where the time for making an application to set aside the arbitral under section 34 has expired, or such award application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the court.” 9. In clear terms it appears that award shall be enforced under the Code of Civil Procedure in the same manner as if it were the decree of the Court. The relevant provision of Section 37 of the Code of Civil Procedure is as under:– 37. Definition of court which passed a decree.–The expression “Court which passed a decree”, or words to that effect, shall, in relation to the execution of decrees, unless there is anything repugnant in the subject or context, be deemed to include.– (a) where the decree to be executed has been passed in the exercise of appellate jurisdiction, the Court of first instance, and (b) Where the Court of first instance has ceased to exist or to have jurisdiction to execute it, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of the decree, would have jurisdiction to try such suit.” 10. From perusal of the aforesaid provision, it appears that in a case where the Court of first instance has either ceased to exist or has ceased to have the jurisdiction to execute its decree, the Court which, if the suit wherein the decree was passed was instituted at the time of making the application for the execution of decree, would have jurisdiction to try such cases, would be the Court competent to execute the decree. In the present case, though the High Court has appointed arbitrator, however, as has been discussed above and clearly decided by the Apex Court and as per the relevant provisions of the Bengal, Agra, Assam Civil Courts Act, as well as the relevant provisions of Bihar and Orissa General Clauses Act, 1917 as discussed above, it would also not be a proper forum to enforce the award. In that case, it appears that the court, in the absence of appointment of Arbitrator, wherein the suit could have been filed as per the pecuniary and territorial jurisdiction, would be the competent executing Court to enforce the award in terms of the provisions contained in Section 36 of the Act read with Section 37 of the C.P.C. However, in some cases, even Apex Court has remitted back the matter for decision under Section 34 of the Act before the District Judge such as in Garhwal Mandal Vikas Nigam Ltd. (supra). 11. In view of the aforesaid discussions, I deem it proper to refer this Civil Revision for its adjudication by appropriate larger Bench on the following questions:– (I). For deciding the issue of setting aside the arbitral award under Section 34 of the Act, the competent court in terms of definition of “Court” engrafted under Section 2(1)(e) of the Act would be the District or Additional District Judge of the concerned Civil Court or the Subordinate Judge having the pecuniary and territorial jurisdiction. (II). Whether the Principal Civil Court of original jurisdiction as per the definition of “Court” under Section 2(1)(e) of the Act is the competent to enforce the award under Section 36 of the Act or the concerned court having the pecuniary and territorial jurisdiction in terms of Section 37 of Code of Civil Procedure would be the competent court to proceed with the execution case. 12. The office is directed to place the records of the case before the Hon’ble the Chief Justice.