IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF OCTOBER 2017 BEFORE:
THE HON’BLE MR. JUSTICE G.NARENDAR CIVIL REVISION PETITION NO.105/2013 BETWEEN M/S KWALITY CONSTRUCTION ENGINEERS, A REGISTERED PARTNERSHIP FIRM HAVING ITS REGISTERED OFFICE AT 7-1-67/10, AMEERPET, HYDERBAD-560016, REP. BY ITS MANAGING PARTNER SRI. V.SUDHAKAR, S/O V.NEELAKANTA RAO. ... PETITIONER (BY SRI. MADHUSUDHANA RAO, ADV.) AND UNION OF INDIA, REP. BY ITS EXECUTIVE ENGINEER, TELECOM CIVIL DIVISION, MYSORE-570001. ... RESPONDENT (BY SRI. Y HARIPRASAD, ADVOCATE) * * * THIS CRP IS FILED UNDER SEC.115 OF CPC., AGAINST THE ORDER DATED 3.1.2013 PASSED IN EX.NO.619/2012 ON THE FILE OF THE PRL. DISTRICT JUDGE, MYSORE, DISMISSING THE EXECUTION PETITION AS NOT MAINTAINABLE FILED UNDER ORDER 21 RULE 11 OF CPC., R/W. SEC.36 OF THE ARBITRATION AND CONCILIATION ACT 1996.
THIS CRP COMING ON FOR ‘ADMISSION’ THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Heard the learned counsel for the petitioner and the learned counsel for the respondent.
2. The revision petition lies in a narrow compass involving the jurisdiction of the executing Court to consider the petition moved under Order 21 Rule 11 of C.P.C. r/w. Section 36 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as “the Act of 1996” for short], praying for enforcement of the Award passed in favour of the Decree-Holder in CE[ARB]/SBI/18 dated 30.12.2000.
3. The brief facts necessary for disposal of the revision petition is as follows:
The petitioner was awarded a construction contract by the respondent in respect of civil work to be executed in Mysuru. It is also not in dispute that the respondent has its head office at New Delhi. In the course of execution of the contract work, certain disputes arose and upon request made by the petitioner, the dispute was referred to the sole Arbitrator, having his seat at New Delhi. Subsequently, the sole Arbitrator passed an Award in favour of the petitioner.
Aggrieved, the respondent preferred a petition under Section 34 of the Act of 1996. The said petition came to be moved in the Court of Principal District Judge, Mysuru, which has the original jurisdiction in the district of Mysuru. The Court of Principal District Judge, Mysuru by Order dated 05.12.2009 was pleased to reject the Arbitration Suit in A.S. No.2/2001 and thereby confirmed the Award passed in favour of the petitioner.
Thereafter, the petitioner moved the petition under Order 21 Rule 11 of C.P.C. r/w. Section 36 of the Act of 1996, seeking for enforcement of the Award passed in its favour. Upon notice, the respondent entered appearance and raised objections regarding maintainability of the petition on the premise that the Principal District Court at Mysuru has no jurisdiction to enforce the Award and it is only the Court at New Delhi, which is bestowed with jurisdiction to entertain the petition and enforce the Award, and unless the Court having original jurisdiction at New Delhi issued Decree Transfer Certificate, the Principal District Court at Mysuru is divested of any authority or jurisdiction to entertain the petition for enforcement of the Award.
The Court below accepting the second plea was pleased to uphold the objection regarding jurisdiction of the Court to entertain and adjudicate the petition preferred under Section 36 of the Act of 1996 r/w. Section 21 Rule 11 of C.P.C. and held that the decree cannot be executed unless and until transfer of the Award to the Court where the respondent/Judgment-Debtor is residing. In this regard, it has also placed reliance on an unreported Judgment of this Court in W.P. Nos.38220-221/2010 [GM- RES] and other similar writ petitions.
4. The question involved herein and to be decided by this Court is;
Whether the Execution Petition filed before the Court in Mysore, Karnataka is maintainable?
5. The trial Court has placed reliance on the order of this Court in W.P. Nos.38220-221/2010 [GM-RES] and other similar writ petitions after observing that petition has already been filed under Section 34 of the Act of 1996 before the Court at Chennai was pleased to hold that the Execution Petition preferred in the Court of District Judge, Mysuru was not maintainable. The facts in the referred cases and in the instant case are dis-similar on the point of previous litigation as stipulated under Section 42 of the Act of 1996 and the reliance placed on them by the trial Court was erroneous. The trial Court has also placed reliance on Order 21 Rule 11 of C.P.C. to arrive at the said conclusion.
6. The learned counsel for the petitioner would submit that reliance placed on the decision rendered in unreported decision of this Court in W.P. Nos.38220- 221/2010 [GM-RES] and other similar writ petitions is of no avail since in the said petitions, the Court arrived at such conclusion in the light of the fact that one of the party had already moved the petition under Section 34 of the Act of 1996 before the Court at Chennai. Hence, this Court held that the subsequent petition for execution in the Court at Mysuru is not maintainable in view of the provisions of Section 42 of the Act of 1996. In this Regard, it is necessary and convenient to re-produce the provisions of Section 36 of the Act of 1996, which reads as follows:
“36. Enforcement.- (1) Where the time for making an application to set aside the arbitral award under Section 34 has expired, then, subject to the provisions of sub- Section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.
From plain reading of the above provision, it is apparent that the award ought to be enforced as if it were a decree of the said Court.
Further reference to Section 42 of the Act of 1996 is necessary for adjudication of the present dispute. Section 42 of the Act of 1996 reads as follows:
“42. Jurisdiction.-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 [emphasis supplied by the Court] and the arbitral proceedings shall be made in that Court and in no other Court.”
7. The learned counsel for the petitioner would rely on the decision of the Hon’ble Apex Court, rendered in the case of State of West Bengal and Others Vs. Associated Contractors, reported in (2015)1 Supreme Court Cases 32; wherein the Hon’ble Apex Court referred to the provisions of Sections 42 and 2(1)(e) and 8 and 11 and 9 and 34 of the Act of 1996 and held that Section 42 does not apply in respect of the applications, which were not made before any ‘Court’ as defined under Section 2(1)(e) and when applications made before any Court whether before or during arbitral proceedings or after an award is pronounced, then all subsequent applications shall be before the said Court before which the applications at the first instance were made. Hence, he would pray that the impugned order passed by the Court below in Ex. No.619/2012 be set aside.
8. Per contra, learned counsel for the respondent would submit that the trial Court was right in holding so, and has rightly placed reliance on the unreported Judgment of this Court and would draw the attention of this Court to paragraph 25(c) of the Ruling reported in the case of State of West Bengal and Others referred to supra and would contend that if an application were to be made to a Court which has no subject-matter jurisdiction, such application would be outside Section 42 and would not debar subsequent applications from being filed in a Court other than such Court. He would contend that the subject-matter is the Arbitration Award and the Arbitration Award having been passed in New Delhi it is only the Court at New Delhi, which is the Court of original jurisdiction at New Delhi, which is vested with the Jurisdiction to entertain and adjudicate the petition under Section 36 of the Act of 1996 praying for enforcement of the Award.
He would also place reliance on the ruling of the Hon’ble Apex Court reported in AIR 2008 Supreme Court 2028 in the case of Bharat Coking Coal Ltd. Vs. M/s. Annapurna Construction. It is seen that the said ruling is inapplicable to the present proceedings as it was dealing with an Award passed under the erstwhile Arbitration Act (10 of 1940), whereby parties invoked the provisions of Section 14 of the said Act for making the Award a rule of the Court.
9. It is also relevant to note that the erstwhile Arbitration Act, 1940 is not in pari materia to the provisions of Section 42 of the Act of 1996. It is also relevant to note that the law laid-down by the Hon’ble Apex Court in the case of Bharat Coking Coal Ltd. referred to supra is by the Division Bench, whereas the law laid-down by the Hon’ble Apex Court in the case of State of West Bengal and others referred to supra is by a Larger Bench of three Judges. Hence, the reliance placed on by the respondent’s counsel on the ruling rendered in the case of Bharat Coking Coal Ltd. is of no avail.
10. This Court has adverted to the contentions raised on behalf of the petitioner and the respondent. It is not in dispute that pursuant to the Award passed by the named Arbitrator having seat at New Delhi, the party had initiated proceedings before the Court of Principal District Judge, Mysuru, under Section 34 of the Act of 1996. The petition was contested and came to be rejected by affirming the Award. In the light of the said fact, the contentions of the respondent that the said Court has no jurisdiction cannot be countenanced and is contrary to law laid down by the Hon’ble Apex Court. The Hon’ble Apex Court has held, that the Court which entertained the first petition, in the instant case, the one filed under Section 34 of the Act of 1996, is that Court alone having jurisdiction to try all subsequent petitions as mandated by the provisions of Section 42 of the Act of 1996.
11. In this regard, it is relevant to note that in the case of State of West Bengal and Others referred to supra, the Hon’ble Apex Court while considering the applicability of Section 42 vis-à-vis Sections 8, 9, 11 and 34 of the Act of 1996 after taking note of the definition of ‘Court’ as defined under Section 2(1)(e) of the Act of 1996 was pleased to hold that expression “with respect to arbitration agreement” are words of wide import and would take in all applications made before during or after the arbitral proceedings are over. In the instant case, there is no dispute with regard to the fact that the arbitration agreement was entered into at Mysuru. The civil work under the said contract came to be instituted at Mysuru. That apart, application under Section 34 of the Act came to be preferred in the Court of Principal District Judge, Mysuru. It is not in dispute that no other application has been preferred before any other Court as defined under Section 2(1)(e) of the Act of 1996. It is not in dispute that the Court of Principal District Judge, Mysuru has jurisdiction to entertain the petition filed under Section 34 of the Act of 1996 as it is the highest Court of original jurisdiction as held by the Hon’ble Apex Court. The highest Court of originally jurisdiction in a State or District alone have been conferred Jurisdiction under Section 42 of the Act of 1996.
12. That being so, the law laid-down by the Hon’ble Apex Court in the case of State of West Bengal and Others, referred to supra, squarely applies to the facts on hand.
13. In the circumstances, the order impugned herein passed on the petition filed under Section 36 of the Act of 1996 for enforcement of the Award as not being maintainable is bad in law and calls for interference. Hence, the impugned order is set aside. The petition filed under Order 21 Rule 11 of CPC r/w. Section 36 of the Act of 1996 seeking for enforcement of the Award passed in favour of the petitioner/Decree-Holder in CE[ARB]/SBI/18 dated 30.12.2008 is held to be maintainable. The Court below is directed to hear and dispose of the petition on merits within six months from the date of receipt of copy of this order.
Accordingly, the civil revision petition stands allowed.
Sd/- JUDGE CT-HR Ksm*