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2019 DIGILAW 37 (JK)

Union of India v. Aable Traders

2019-01-30

DHIRAJ SINGH THAKUR

body2019
JUDGMENT : Dhiraj Singh Thakur, J. 1. The dispute in the present petitions filed under Section 104 of the Constitution of Jammu and Kashmir read with Article 227 of the Constitution of India is centered around the jurisdiction of the court to entertain an application under Section 34 of the Jammu and Kashmir Arbitration and Conciliation Act, 1999 (for short, the Act) which was filed challenging the award dated 20.07.2017 in the court of learned 2nd Additional District Judge, Jammu. On the one hand, learned counsel for the petitioner contends that the forum for filing the application under Section 34 of the Act of 1997 against the award dated 20.07.2017 is only the court of learned 2nd Additional District Judge, Jammu, whereas, counsel for the respondent contends that the High Court was the appropriate forum. 2. Briefly stated the material facts are as under: 3. The respondent M/s. Aable Traders Pvt. Ltd. filed an application under Section 9 of the Act of 1997 before the Principal District Judge, Jammu. 4. A petition under Section 11 of the Act of 1997 was subsequently filed in the court, which was pleased to refer the disputes to the arbitrator vide order dated 28.05.2014. It appears that the arbitrator entered upon the reference and passed an interim award dated 17.12.2015. This interim award came to be challenged under Section 34 of the Act of 1997 before this court. Since the application was filed beyond time, the same was accompanied by an application for condonation of delay. A coordinate bench of this court vide order dated 20.02.2018, however, dismissed the application for condonation of delay and consequently the petition under Section 34 of the Act as well on the ground that the maximum period permissible for challenging an award in terms of Section 34 of the Act of 1997 was 120 days which had already expired and, therefore, in that view of the matter, since the challenge was beyond the prescribed period, the same was untenable. 5. It needs to be highlighted that the interim award subsequently attained finality and according to learned counsel for the parties, the same has since been satisfied. 6. The arbitration proceedings before the arbitrator finally culminated in a final award dated 20.07.2017. 5. It needs to be highlighted that the interim award subsequently attained finality and according to learned counsel for the parties, the same has since been satisfied. 6. The arbitration proceedings before the arbitrator finally culminated in a final award dated 20.07.2017. This was challenged by the Union of India-petitioners herein on 14th of October, 2017 before the learned Principal District Judge, Jammu, which was subsequently transferred to the court of learned 2nd Additional District Judge, Jammu. An application in terms of Section 42 of the Act, came to be filed by the respondents herein, challenging the jurisdiction of the court primarily on the ground that petition under Section 34 of the Act could be maintained before the High Court only inasmuch as it was the High Court, which had first entertained the application for setting aside the interim award in terms of Section 34 of the Act. 7. The court below, on hearing the parties, finally allowed the application under Section 42 of the Act vide order dated 15.02.2018 by holding that since the motion for challenging the interim award was first laid in the High Court, it was only the High Court, which could have entertained the petition. It is against this order that one of the petitions bearing No. 37/2018 has been filed under Section 104 of the Constitution of Jammu and Kashmir. 8. Petition bearing OWP No. 133/2018 is also filed by the Union of India against the order dated 22.11.2019 whereby the court of 2nd Additional District Judge, Jammu dismissed the application for staying the execution of the award pending disposal of petition bearing OWP No. 37/2018. 9. The decision in OWP No. 37/2018 would determine the fate of petition bearing OWP No. 133/2019, hence I deem it appropriate to first deal with OWP No. 37/2018. OWP No. 37/2018 10. A party aggrieved of an arbitral award can have recourse to challenge the same under Section 34 of the Act before a court, which is empowered and has the jurisdiction to entertain and decide the same. 11. OWP No. 37/2018 10. A party aggrieved of an arbitral award can have recourse to challenge the same under Section 34 of the Act before a court, which is empowered and has the jurisdiction to entertain and decide the same. 11. The 'Court' as defined under Section 2(e) of the Act of 1997 envisages as under: "Court" means the Principal 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." 12. A full bench of this court in 2015 (3) JKJ 659 [HC] Ramesh Chand Kathuria and Anr. v. Trikuta Chemicals Private Ltd. and Anr., 2015 AIR (J & K) 52 went into the issue of jurisdiction of the High Court of Jammu and Kashmir as also the district courts and finally concluded that both the High Court as well as the District Courts in the district were principal civil courts of original jurisdiction and, thus, were courts within the meaning of Section 2(1)(e) of the Act of 1997. What was concluded in paragraph 43 sub-clause (vii) is important and is reproduced thus: (vii) Suitor is a dominus litis. When two forums are available to him, he has a choice of instituting the suit in either of the forums. As already concluded that both High Court being court of civil original jurisdiction and District Court being court of civil original jurisdiction in the district, therefore, application for setting aside the award under section 34 of the Act can lie in either of the Courts. So if only one party is aggrieved, he has a choice to file the application under section 34 of the Act either in High Court or in the District Court. But in case application under section 9 is filed in either of the Court then subsequent applications including application under section 34 of the Act for setting aside the award has necessarily to be filed in the same court and in none other court. There the principle of dominus litis becomes irrelevant". 13. But in case application under section 9 is filed in either of the Court then subsequent applications including application under section 34 of the Act for setting aside the award has necessarily to be filed in the same court and in none other court. There the principle of dominus litis becomes irrelevant". 13. Admittedly, an application under Section 9 of the Act had first been filed in the court of learned Principal District Judge, Jammu by the claimant-respondent herein. Since the court of learned Principal District Judge, Jammu had first entertained the application under Section 9 of the Act, it was that court alone, which could, in terms of Section 42 of the Act, read with the ratio of the judgment (supra), be competent and had jurisdiction to entertain and decide the application under Section 34 of the Act of 1997. 14. Mr. Gagan Basotra, learned counsel for the respondents, took pains to suggest that notwithstanding the fact that an application in terms of Section 9 of the Act of 1997 had already been entertained by the court of learned Principal District Judge, Jammu, yet since it was the High court that had first decided the application under Section 34 of the Act of 1997, which was accompanied by an application for condonation of delay against the interim award, vide order dated 20.02.2018, therefore, it was the High Court alone, which could have entertained the petition under Section 34 of the Act. The argument, however, is based more on issues of proprietary rather than anything else. 15. It was further stated that this court, thus, became the principal court of original jurisdiction, since it was seized of the matter filed under Section 34 of the Act of 1997 and had proceeded to decide the same. This argument, however, appears to be untenable in law. The challenge earlier thrown by the Union of India before this court in terms of Section 34 of the Act of 1997 was against an interim award passed by the arbitrator. Admittedly, the interim award has since been satisfied and proceedings have since come to an end and attained finality. 16. The issue now pertains to determining the forum where the final award could be challenged. Admittedly, the interim award has since been satisfied and proceedings have since come to an end and attained finality. 16. The issue now pertains to determining the forum where the final award could be challenged. Admittedly, if one were to apply strictly the ratio of the full Bench judgment of this court in the light of the provisions of Section 42 of the Act, it is the court where the application is filed first under any of the provisions of Part-I of the Act barring sections 8, 11 and 17, which determines the jurisdiction of the court. 17. It appears that the respondents/claimants had not specifically brought to the notice of the court below the fact that an application under Section 9 of the Act of 1997 had been filed earlier in point of time by them before the District court. The order impugned dated 15.02.2018 was, thus, passed in ignorance of that very important material fact. Unfortunately, even the petitioners herein did not highlight the said issue before the court, but the fact remains, as has been admitted by learned counsel for the parties, that the application under Section 9 of the Act was filed on 01.07.2011, which was much before the application under Section 34 of the Act filed before the High Court, which was against the interim award. In fact, this court could have refused to exercise jurisdiction had this important fact been brought to its notice but appears to have proceeded to exercise jurisdiction under the impression that it had jurisdiction to decide the application under Section 34 of the Act of 1997, which was otherwise contrary to the ratio of the full Bench judgment discussed hereinabove. 18. Learned counsel for the respondents, Mr. Gagan Basotra, next contended that since the remedy of appeal was available to the petitioners in terms of Section 37 of the Act of 1997, the remedy under Section 104 was thus not available. In my view, even this argument is untenable inasmuch as an appeal can be preferred in terms of Section 37 of the Act of 1997 against an order granting or refusing to grant any measure under Section 9 of the Act of 1997 or setting aside or refusing to set aside an arbitral award under Section 34 of the Act of 1997. 19. 19. By virtue of order impugned dated 15.02.2018, the court below has not refused to set aside the award but only refused to exercise jurisdiction. 20. From all what has been stated above, in my view, the court below has committed an error in refusing to entertain the petition under Section 34 of the Act of 1997. It was the court of learned 2nd Additional District Judge, Jammu alone, which could have entertained the petition under Section 34 of the Act of 1997. 21. The petition bearing OWP No. 37/2018 is accordingly allowed and the order impugned dated 15.02.2018 is set aside. In view of the fact that petition under Section 37/2018 stands allowed, the connected petition bearing OWP No. 133/2019 shall also stand allowed and the order impugned dated 22.01.2019 in the said petition is consequently set aside. The court below shall proceed further in the matter. Parties to appear before the court below on 6.02.2018. 22. Both the petitions stand disposed of accordingly along with the connected application(s).