SUSHANTA MALIK Vs. SREI EQUIPMENT FINANCE LTD.

JUDGEMENT

(1.) A point of demurrer is taken as to whether the City Civil Court has jurisdiction to entertain a proceeding arising from Arbitration & Conciliation Act, 1996. The Opposite Party put reliance upon a judgment of the Co-ordinate Bench rendered in case of Mrs. Hosenara Begum -v- Sk. Asraf Ali & Ors; (AP No. 1048 of 2013 decided on February 27, 2014). To support the aforesaid plea of demurrer that the City Civil Court at Calcutta has no jurisdiction to receive the petition under Arbitration & Conciliation Act, 1996. So long as, the High Court at Calcutta exercises ordinary original civil jurisdiction, it would be apt to quote the relevant portion from the said order which runs thus:

(2.) The reliance is further placed upon a judgment of the Supreme Court rendered in case of State of Maharashtra through Executive Engineer, Road Development Div No. 111, Panel & Anr; -v- Atlanta Ltd., 2014 11 SCC 619. To support the aforesaid contention that the High Court is a Principal Civil Court of the original jurisdiction in a District and, therefore, any other Court except the High Court exercising the original jurisdiction does not have the jurisdiction to entertain the proceeding under the said Act. Relying upon the aforesaid two decisions, it is submitted that the Court as defined in Section 2(1)(e) of the said Act means the Principal Civil Court of the original jurisdiction in a District and includes the High Court in exercise of ordinary original civil jurisdiction and expressly excludes the Civil Court of a grade inferior to such Principal Civil Court.

(3.) The entire argument is based upon the aforesaid two decisions and invited the attentions of this Court that the proceeding before the City Civil Court at Calcutta is not maintainable as it lacks jurisdiction to entertain such proceeding having taken under the said Act. This Court, at the first blush, was inclined to hold that the City Civil Court at Calcutta shall have no jurisdiction both pecuniary or territorial or in relation to the subject matter of dispute as the same has been exclusively conferred upon the High Court. But after carefully reading the judgment of the Supreme Court rendered in case of Atlanta Ltd; , this Court desires to give a second thought and ponder as to whether the ratio laid down therein is the one which is sought to be contended before this Court. Bearing in mind that the judgment should not be read as a statute, it becomes necessary to give anxious scrutiny on the factual matrix of the said case to find out whether the question cropped up in the instant case was advanced and decided. In Atlanta Ltd; , the State of Maharashtra through its Public Work Department awarded a contract to the said Company for construction Mumbra Bypass. The said contract contains an arbitration clause and a dispute arose between the parties to the contract attracting the evocation of the arbitration clause for resolution or disputes. The parties submitted to the jurisdiction of the arbitral tribunal who made an award excepting almost all the claims of the Company therein. While awarding the relief to the Company, the counterclaim of the State of Maharashtra was rejected by the arbitral tribunal. The State of Maharashtra filed an application under Section 34 of the Arbitration & Conciliation Act, 1996 before the District Judge, Thane. On the same day, the Company i.e. Atlanta Ltd; filed an arbitration petition before the High Court of judicature of Bombay for setting aside some of the directions passed by the arbitral tribunal and claimed further compensation. Atlanta subsequently filed an application under Section 24 of the Code of Civil Procedure before the High Court for transfer of the application under Section 34 of the Act filed before the District Judge, Thane to the original side of the High Court. The said transfer petition was filed to avoid the conflicting decisions as the same award is challenged in two forums. The High Court allowed an application under Section 24 of the Code transferring the arbitration application filed by the State of Maharashtra from the Court of District Judge, Thane to the original side of the High Court. The said order is further assailed by the State before the Supreme Court. An argument was advanced beyond the State that the definition of the term "Court" under Section 2(1)(e) means a Principal Civil Court of the original jurisdiction in a district having jurisdiction to decide the question forming the subject matter of a suit and, therefore, the District Judge, Thane is the Principal Civil Court of original jurisdiction in the district and not the High Court at Bombay.