At, In the High Court of Bombay at Nagpur
By, THE HONOURABLE MR. JUSTICE A.S. CHANDURKAR
For the Appellants: S.G. Loney, Counsel. For the Respondents: R1, S. Bajaj, C.S. Dhore, Counsels.
1. ADMIT. Heard finally with consent of counsel for the parties.
2. This appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, ‘the said Act’) takes exception to the judgment dated 21.03.2018 passed by the learned Principal District Judge on the application filed under Section 34 of the said Act. By the said judgment, the challenge as raised to the award dated 29.07.2011 has been turned down.
3. It is not necessary to refer to the facts of the proceedings in detail. Suffice it to observe that an application under Section 34 of the said Act was filed by the appellant on 17.10.2011. When the said application was pending before the learned Principal District Judge, the provisions of the Commercial Courts Act, 2015 (for short, ‘the Act 2015’) came into force. By virtue of provisions of Section 15(2) of the Act of 2015, all suits and applications including applications under the said Act were liable to be transferred to the Commercial Court from the Civil Court where they were pending. The application under Section 34 of the said Act was not transferred as required but was decided by the Civil Court on 21.03.2018 instead of the Commercial Court. Hence, Shri S.G. Loney, learned counsel for the appellants after amending the memorandum of appeal raised an objection to the impugned judgment by submitting that the learned Principal District Judge had no jurisdiction to entertain the proceedings under Section 34 of the said Act in view of the provisions of Section 15(2) of the Act of 2015. In that regard, he referred to the decision in M/s D.M. Corporation Pvt. Ltd. Versus The State of Maharashtra & Others [2018(4) Mh.L.J. 457]. He submitted that even if the parties did not apply for transfer of the proceedings to the Commercial Court, it was not permissible for the Civil Court to have adjudicated the proceedings. It was also submitted that the notification dated 30.06.2016 was issued by the Law & Judiciary Department of the State of Maharashtra constituting Commercial Courts in each district. Hence, after that date, the “Court” lost the jurisdiction to entertain the proceedings which was vested with the Commercial Court. It was thus a case of exercise of jurisdiction not vested in the “Court”.
4. On the other hand Shri S. Bajaj, learned counsel for the respondent no.1 submitted that after having participated in the proceedings under Section 34 of the said Act and having suffered the impugned order, it was not permissible for the present appellants to raise such an objection. Despite the fact that the provisions of the Act of 2015 came into force, the appellants did not take any steps whatsoever to have the proceedings transferred. He referred to the provisions of Section 15(5) of the Act of 2015 to submit that even if no application for such transfer was made, it was for the High Court to direct such transfer. In that regard, the learned counsel placed reliance on the decision in Municipal Commissioner, Calcutta & Others Versus Salil Kumar Banerjee & Others [(2000) 4 SCC 108] and submitted that the impugned order deserves to be examined on merits. Without prejudice to the aforesaid, it was submitted that the respondent no.1 had moved an application under Section 9 of the said Act and relief had been granted therein which was still operating. If it was held that the “Court” had no jurisdiction in the present proceedings, the effect of the order passed under Section 9 of the said Act would be taken away.
5. I have heard the learned counsel for the parties and I have given due consideration to their respective submissions. It is seen that the proceedings under Section 34 of the said Act were filed on 17.10.2011. When those proceedings were pending the provisions of the Act of 2015 came in force. In view of Section 15(2) of the Act of 2015, suits and applications in relation to a commercial dispute pending in any Civil Court were liable to be transferred to the Commercial Court. Under the proviso to Section 15(2) of the Act of 2015 only those cases where final judgment was to be passed were permitted to be dealt with by the Court. It is thus clear that with the coming into force of the Act of 2015, the “Court ceases to have jurisdiction to entertain an application under the provisions of the said Act in relation to a commercial dispute of a specified value. It is not in dispute between the parties that the proceedings related to a commercial dispute of the specified value. Hence, it is clear that after 23.10.2015, the “Court” ceased to have jurisdiction to proceed with the application under Section 34 of the said Act. Though it is submitted on behalf of the respondent no.1 that the appellants without any protest or objection pursued the application filed under Section 34 of the said Act, the same would not preclude the appellants from raising the question of jurisdiction. The present objection is based on lack of inherent jurisdiction of the “Court” and exclusive jurisdiction being vested with the Commercial Court. Hence, consent/implied consent or failure to object to jurisdiction or even acquiesce cannot clothe the “Court” with jurisdiction which was taken away from it by virtue of Section 15(2) of the Act of 2015. Hence, the judgment relied upon in the case of Municipal Commissioner, Calcutta & Others (supra) does not assist that contention. The proceedings are therefore decided by a Court not having jurisdiction and hence fresh consideration of the same in the light of provisions of the Act of 2015 is warranted.
6. It is not in dispute that an order under Section 9 of the said Act is operating between the parties. The said order is dated 12.11.2018. As a result of the present adjudication, that order would also become vulnerable on the aspect of jurisdiction. In the facts of the case therefore, by permitting that order to operate for a period of six weeks from today, the respondent no.1 can be permitted to apply afresh under Section 9 of the said Act before the Commercial Court and seek appropriate reliefs.
7. Accordingly, the following order is passed:-
I. The judgment dated 21.03.2018 in Civil Miscellaneous Application No.55 of 2012 dated 21.03.2018 is set asi
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de for the aforesaid reasons. II. The appellants are at liberty to challenge the award dated 29.07.2011 by approaching the Commercial Court within a period of six weeks from today. The order dated 12.11.2018 passed under Section 9 of the said Act shall continue to operate for a period of six weeks from today within which period, the respondent no.1 is free to seek appropriate reliefs under Section 9 of the said Act before the Commercial Court. III. It is clarified that this Court has not examined the correctness of the impugned order. All the points raised on merits are kept open. 8. The Arbitration Appeal is allowed in the aforesaid terms. No order as to costs.