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2019 DIGILAW 38 (ORI)

Bedabyas Barik v. Sukanti Barik

2019-01-16

S.K.MISHRA

body2019
JUDGMENT : S.K. Mishra, J. 1. In this Civil Revision Petition filed under Section 115 of the Code of Civil Procedure (hereinafter referred to as the “Code” for brevity) the petitioner (respondent before the sole arbitrator), has challenged the order dated 09.12.2017 passed by the Sole Arbitrator in M.P. No. 1/2017 arising out of ARBP No. 1/2017 whereby the learned Arbitrator rejected the prayer of the petitioner-respondent to close/terminate the arbitral proceeding on the ground that it is initiated wrongly and illegally. 2. Though no provision has been mentioned in the application that has been filed by the respondent, who is petitioner in this revision, it is obvious that this application has been made under Section 16 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act” for brevity), which provides for competence of arbitral tribunal to rule on its jurisdiction. It is appropriate to take into consider the exact provision: “16. Competence of arbitration tribunal to rule on its jurisdiction - (1) The arbitral may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,- (a) An arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and (b) A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. (2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator. (3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. (4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified. (5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or subsection (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award. (5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or subsection (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award. (6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34. 3. A bare reading of this provision reveals that the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose, i.e. (a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract, and (b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. Sub-section (2) of Section 16 of the Act provides that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator. 4. Thus, it is apparent that the present petitioner, who was the respondent before the Sole Arbitrator, has filed the application under Section 16 of the Act that application was contested by the present opposite party, who was claimant before the Sole Arbitrator. The Sole Arbitrator came to the conclusion that the arbitration proceeding is based on the agreement dated 11.10.2014 entered into by the respondent with the claimant. The respondent is a party, signatory and author of the aforesaid agreement and he is in possession of the agreement and as such he is well aware of the contents of the agreement. The respondent has received and acknowledged the claimant's notice and he has send the reply date 15.10.2017, and, therefore, he is in possession of the aforesaid notice and reply notice. Accordingly, the aforesaid agreement, notice and reply notice are all in his possession and he is well aware of the contentions and disputes raised therein. 5. The respondent has received and acknowledged the claimant's notice and he has send the reply date 15.10.2017, and, therefore, he is in possession of the aforesaid notice and reply notice. Accordingly, the aforesaid agreement, notice and reply notice are all in his possession and he is well aware of the contentions and disputes raised therein. 5. The learned Sole Arbitrator further held that clause-6 of the agreement provides that all the disputes if any arising out of this agreement shall be referred to the Sole Arbitrator, within jurisdiction, Bhubaneswar, whose decision is being final and binding among the parties. Thus, holding the same the learned Sole Arbitrator has rejected the application of the petitioner-respondent. Such order is challenged in this Civil Revision Petition. 6. At the initial state, the learned counsel for the opposite party raises objection regarding maintainability of the revision petition whereas the learned counsel for the petitioner submits that in view of the judgment rendered by this Court in the case of M/s. Trafalgar v. Government of Orissa, 2014(1) OLR-287 (W.P.(C) No. 6989/2009; wherein a question arose whether the writ petition is maintainable or a revision petition is maintainable against the order passed by the learned District Judge under Section 37(2)(a) of the Act. Before the Tribunal the petitioner in the arbitral proceeding filed an application under Section 16(3) of the Act, which was rejected. Challenging that order the said party filed a writ petition and a Bench of this Court having taken into consideration various aspect of the case, came to hold that a civil revision is maintainable and the writ petition is not maintainable. Therefore, the writ petition was dismissed. 7. The facts of the case are different. In the reported case, an application was filed before the arbitral tribunal, but on the rejection thereof the petitioner filed an appeal, to the learned District Judge, under Section 37 of the Act. On dismissal of the same a writ petition was filed. The Court held that the revision application is maintainable and in view of the existence of an alternative remedy the Court refused to entertain the writ petition. 8. On dismissal of the same a writ petition was filed. The Court held that the revision application is maintainable and in view of the existence of an alternative remedy the Court refused to entertain the writ petition. 8. In the case of M/s. I.T.I. Ltd. V. M/s. Siemens Public Communications Network Ltd., AIR 2002 SC 2308 , the Hon'ble Supreme Court has held that a revision petition under Section 115 of the Code lies to the High Court as against the order made by a Civil Court in an application preferred under Section 37 of the Act. 9. However, in this case without approaching the District Judge under Section 37 of the Act, the petitioner has approached this Court directly under Section 115 of the Code. Section 37 of the Act provides for appealable orders, which reads as follows:- “37. Appealable orders.- (1) An appeal shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely:- (a) Refusing to refer the parties to arbitration under section 8; (b) Granting or refusing to grant any measure under section 9; (c) Setting aside or refusing to set aside an arbitral award under section 34. (2) An appeal shall also lie to a Court from an order of the arbitral tribunal- (a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court. 10. A plain reading of sub-section (2) of Section 37 of the Act reveals no doubt in the minds of the Court that an appeal shall also lie to a Court from an order of the arbitral tribunal accepting the plea referred to in sub-section (2) or sub-section (3) of section 16 of the Act. 11. In this case, a petition was filed by the petitioner before the arbitral tribunal under subjection (2) read with sub-section (1) of Section 16 of the Act and, therefore, it should have filed an appeal under Section 37(2) to the learned District Judge, Khurdha at Bhubaneswar. 12. 11. In this case, a petition was filed by the petitioner before the arbitral tribunal under subjection (2) read with sub-section (1) of Section 16 of the Act and, therefore, it should have filed an appeal under Section 37(2) to the learned District Judge, Khurdha at Bhubaneswar. 12. This Court in the case of M/s. KCS Private Limited V. Rosy Enterprises, 2018 (II) OLR-781 has held the definition of “court” in Section 2(1)(e) in the 1996 Act fixes “court” to be the Principal Civil Court of Original Jurisdiction in the district or the High Court in exercise of its ordinary original civil jurisdiction. Section 2(1)(e) further goes on to say that a court would not include any civil court or a grade inferior to such Principal Civil Court, or a Small Cause Court. The definition is an exhaustive one as it uses the expression “means and includes”. It is settled law that such definitions are meant to be exhaustive in nature”. 13. In the case of M/s. Pandey and Co. Builders Pvt. Ltd. -vrs.- State of Bihar, (2007) 1 SCC 467 , the Hon'ble Supreme Court has ruled thus:- “16. Unlike the 1940 Act, the Arbitrator is entitled to determine his own jurisdiction. In the event, the Arbitrator opines that he has jurisdiction in the matter, he may proceed therewith, which order can be challenged along with the award in terms of Section 34 of the 1996 Act. If the Arbitrator opines that he has no jurisdiction to hear the matter, an appeal lies before the court. “Court” has been defined in Section 2(1) (e) of the 1996 Act in the following terms: “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;” 17. It is not disputed before us that the Patna High Court does not exercise any original civil jurisdiction. The definition of “court” as noticed hereinbefore means the Principal Civil Court of original jurisdiction in a district and includes the High Court which exercises the original civil jurisdiction. It is not disputed before us that the Patna High Court does not exercise any original civil jurisdiction. The definition of “court” as noticed hereinbefore means the Principal Civil Court of original jurisdiction in a district and includes the High Court which exercises the original civil jurisdiction. If a High Court does not exercise the original civil jurisdiction, it would not be a 'court' within the meaning of the said provision. Constitution of the courts vis-à-vis the hierarchy thereof is governed by the 1887 Act, Section 3 whereof reads as under: “3. Classes of Courts - There shall be the following classes of Civil Courts under this Act, namely:- (a) The Court of the District Judge; (b) The Court of the Additional Judge; (c) The Court of the Subordinate Judge; and (d) The Court of the Munsif.” 18. Chapter III of the 1887 Act relates to ordinary jurisdiction of the civil courts. Section 18 provides for extent of original jurisdiction of District and Sub-ordinate Judge in the following terms; “18. Extent of original jurisdiction of District or Subordinate Judge. Save as otherwise provided by any enactment for the time being in force, the jurisdiction of a District Judge of Subordinate Judge extends, subject to the provisions of Section 15 of the Code of Civil Procedure, 1908 to all original suits for the time being cognizable by Civil Courts”. “ A three Judge Bench of the Hon'ble Supreme Court in the case of State of West Bengal and others V. Associated Contractors, (2015) 1 SCC 32 has held that Section 2(1) (e) contains an exhaustive definition marking out only the Principal Civil Court of Origin all Jurisdiction in the district or a High Court having original civil jurisdiction in the State, and no other court as “court” for the purpose of Part 1 of the Act. Hon'ble Supreme Court further held that “where a High Court exercises ordinary original civil jurisdiction over a district, the High Court will have preference to the Principal Civil Court of Original jurisdiction in that District. Hon'ble Supreme Court further held that “where a High Court exercises ordinary original civil jurisdiction over a district, the High Court will have preference to the Principal Civil Court of Original jurisdiction in that District. Firstly, the very inclusion of the High Court in the definition would be rendered nugatory if the above conclusion was not to be accepted, because the Principal Civil Court of Original Jurisdiction in a district is always a court lower in grade than the High Court, and such District Judge being lower in grade than the High Court would always exclude the High Court from adjudicating upon the matter. Secondly, the provisions of the Arbitration Act leave no room from any doubt that it is the superior most court exercising original jurisdiction which has been chosen to adjudicate disputes arising out of arbitration agreements.” It was a case of Calcutta High Court which exercised original civil jurisdiction. Hence, the Hon'ble Supreme Court have held that the High Court of Calcutta is the Principal Civil Court exercising Original Civil Jurisdiction. 14. Thus, it is clear that the High Court of Patna is not the 'Court' and that the High Court of Calcutta is the Court within the meaning of Section 2(1) (e) of the Act. This Court further held that the High Court of Orissa does not exercise the original civil jurisdiction. Sub-section (2) of Section 2 of the Orissa Civil Courts Act, 1984 provides that the court of the District Judge shall be the principal court of original civil jurisdiction in the district and the explanation provides that for the purpose of this sub-section the expression 'District Judge' shall not include an Additional District Judge. Thus, for the State of Odisha, the District Judge is the 'Court' within the definition of the aforesaid Section and not the High Court. 15. In that view of the matter, the Civil Revision Petition is not maintainable and, therefore, this Court is not inclined to interfere with the order passed by the learned Sole Arbitrator. Accordingly, the Civil Revision Petition is dismissed as not maintainable. There shall be no order as to costs.