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[ The Civil Courts Amins Act, 1856
Section 2 in [ The Civil Courts Amins Act, 1856
The Code Of Civil Procedure (Amendment) Act, 2002
Section 2 in THE ARBITRATION AND CONCILIATION ACT, 1996
THE ARBITRATION AND CONCILIATION ACT, 1996

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Jammu High Court
B.V. Sharma vs Skuast And Ors. on 29 November, 2006
Equivalent citations: 2007 (1) JKJ 161
Author: Y Nargotra
Bench: Y Nargotra

JUDGMENT

Y.P. Nargotra, J.

1. The non-applicant Sh. B.V. Sharma, filed a petition under Section 9 of the Jammu and Kashmir Arbitration and Conciliation Act 1997 (hereinafter referred to as '1997 Act') against the applicants herein in the Court of learned Principal District Judge, Jammu. The learned District Judge while expressing his inability to hear the case due to his acquaintance with the non-applicant made a reference to this Court for entrusting the matter to some other Court of competent jurisdiction. This Court by order dated 25-9-2006 passed in Arbitration Application No. 31/2006 on the joint request of the counsel for the parties transferred the petition filed under Section 9 of the said Act from the Court of District Judge to the Court of learned 2nd Additional District Judge, Jammu.

2. Despite the fact that the case was transferred to the Court of learned 2nd additional District Judge on the joint request of the parties, the applicants who were respondents in the said matter have filed the instant application for seeking modification of the order dated 25-9-06 on the plea that Court of 2nd additional District Judge lacks the inherent jurisdiction to try that petition.

3. Section 9 of 1997 Act provides that a party may before or during arbitral proceedings or at time after the making the arbitral award but before it becomes decree of the court, apply to a "Court" for any interim measures etc. specified in the section. The Section 2 (e) of the Act defines the term "Court" in the following manner:

2. Definitions:

(1) In this part unless the context otherwise requires-

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(e) "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 Causes.

The question arising for consideration is whether the Court of Additional District Judge is the Court within the meaning of Section 2 (e) of the Act. The contention of Mr. Gupta, learned Counsel for the applicant is that the Court of Additional District Judge being not a principal Court of original jurisdiction in a District does not fall within the term "Court" as defined in Section 2(e) of the Act. According to him as per the definition of the term "Court" only two Courts i.e. the Principal Court of Civil Original jurisdiction and the High Court in exercise of its ordinary original jurisdiction come within the definition of term "Court", which alone can have the jurisdiction to hear a petition under Section 9 or any other petition filed under other sections of part-I of the Act. He submits that once a party chooses a forum out of the said two Courts by filing a petition only that forum alone in which such petition is filed possesses the jurisdiction and this is so because under Section 42 of the Act all subsequent arbitration applications can be filed only before that forum to the exclusion of all other Courts.

4. To the contrary the contention of Mr. Raina, learned Counsel for the non-applicant is that if the Principal District Judge was disabled to hear the petition he himself was competent to transfer the case to the Court of Additional District Judge in exercise of his ordinary Civil jurisdiction and this apart simply because the High Court has been included in the definition of the term "Court" as defined in Section 2 (e) of the Act its ordinary civil jurisdiction for transferring a case cannot be said to have been lost. He submits that the bar of filing subsequent applications envisaged by Section 42 of the Act can operate only after the first Court in which the first application is filed proceeds to hear the matter on merits. If a Court entertains the application and transfers it to some other Court in exercise of its ordinary civil jurisdiction in that event all the subsequent applications in terms of Section 42 of the Act would lie only in that Court. He further submits that the Jammu and Kashmir Arbitration and Conciliation Act 1997 has not created any special Court, but it refers only to the Courts which stand already created under different statutes. He argues that the Court of Additional District Judge though possesses no independent original jurisdiction yet it exercises the original jurisdiction of a principal Court of original jurisdiction in respect of those cases which come to be assigned or transferred to it by the Principal Civil Court of original jurisdiction or the High Court as the case may be and therefore, the Court of Additional District Judge for the purposes of 1997 Act is to be deemed to be a Court within the meaning of Section 2(e) of the Act.

On a plain reading of the definition of the term "Court" as defined in Section 2 (e) of 1997 Act, it is manifest that an arbitration petition can be filed either before the Principal Civil Court of original jurisdiction of the District or the High Court in exercise of its ordinary civil jurisdiction as the case may be having jurisdiction to decide the question forming the subject matter of the arbitration, if same had been subject matter of a suit. Section only excludes two types of Courts i.e. Civil Court inferior in grade to the Principal Court of civil original jurisdiction and the Courts of Small Causes from the definition of the term "Court". It would be significant to note that Section 2 (e) or any other provision of 1997 Act does not provide for creation of any special Courts for the trial and disposal of the arbitration petitions to be filed under Part-I of the Act. It only refers to the High Court in exercise of ordinary original civil jurisdiction and Principal Civil Court of original jurisdiction.

5. The Court (s) of Additional District Judge (s) are created in terms of Section 16 of the Civil Courts Act. Section 16 reads as follows:

16. Additional Judges: - (1) When the business pending before any District Judge requires the aid of an additional Judge or Judges for its speedy disposal, the Government may on the recommendations of the High Court appoint such Additional Judge or Judges as may be necessary;

(2) An Additional Judge so appointed shall discharge any of the functions of a District Judge which the District Judge may assign to him, and in the discharge of those functions he shall exercise the same powers as the District Judge.

6. From the bare perusal of Section 16, it is manifest that if the business pending before any District Judge requires the aid of any Additional District Judge for its speedy disposal, the Government on the recommendations of the High Court is empowered to appoint Additional Judge or Judges, and in terms of Sub-section 2 of Section 16 the District Judge is empowered to assign any case pending before him to the Court of an Additional District Judge for trial and disposal and the Additional District Judge in respect of such assigned case exercises the same powers as the Principal District Judge may have exercised.

7. The Court of District Judge in a District is a Principal Civil Court of original jurisdiction in a District. Apart from Sub-section (2) of Section 16 of the Civil Courts Act, Section 24 of the Civil Procedure Code also confers powers upon the District Judge/District Court to transfer any suit, appeal or other proceedings pending before it for trial or disposal to any court subordinate to it and competent to try and dispose of the same. Section 24 CPC also vests power in the High Court to transfer any suit, appeal or other proceedings pending before one subordinate Court to any other subordinate Court which is competent to try and dispose of the same. The Court of Additional District Judge for the purposes of the Section, is to be deemed subordinate to the District Court.

8. Now, it is to be seen whether Section 42 of 1997 Act places any fatters on the general power of transferring the cases of the High Court and the District Court or upon the power of the District Court regarding assignment of a case pending before it vested under Section 16 (2) of the Civil Courts Act.

Section 42 of the Act 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 and the arbitral proceedings shall be made in that Court and in no other Court.

9. Mr. Gupta, learned Counsel for the applicant contends that as the non-applicants had made application under Section 9 of the 1997 Act in the Court of District Judge, therefore, "that court alone" rule envisaged by Section 42 will be applicable for the purposes of disposal of that petition and there would be no scope for transferring that petition by the Court of District Judge or for that matter by the High Court to a Court of an Additional District Judge. In support of his contention he strongly relies upon cases I.T.I. Ltd. Allahabad v. District Judge, Allahabad and Ors. reported in AIR 199S All 313; and Surat Singh v. State of Himachal Pradesh and Anr. 2003 (3) Arb LR 606 (HB) (DB).

10. In case I.T.I. Ltd. Allahabad v. District Judge, Allahabad and Ors. AIR 1998 All 313 the question which arose for consideration before the High Court was "Whether the Court of Additional District Judge is a Court within the meaning of Section 2(e) of the Arbitration and Conciliation Act 1996?'. If not can the District Judge transfer to the court of an Additional District Judge an application moved for setting aside the arbitral award under Section 34 of the said Act. It observed-

Unless the context otherwise requires, the term "Court" as defined in Section 2(e) of the Act, "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 question forming the subject matter of 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". The term 'Court' as elucidated in Section 2(c) of the Arbitration Act, 1940 meant 'a civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit'. A Small causes Court was expressly excluded, except for the purpose of Section 21, from the purview of the term "Court" as defined in the said Act. By using the words 'means', 'includes' and 'does not include' in Section 2(e) of the new Arbitration Act, the parliament has exhaustively explained the meaning of the term 'Court' in that the word 'means' is a term of restriction, while the word 'includes' is a term of enlargement and when both the words 'means' and 'includes' are used together to define a thing, the intendment of the legislature is to supply restricted meaning to the term (See Lachche v. Dewan Mal ; Mahalakshmi Oil Mills v. State of A.P. AIR 1999 SC 335; P. Kasilingam v. P.S.G College of Technology ). The expression 'but does not include any civil Court of a grade inferior to such principal civil Court or any Court of Small causes' used in Section 2(e) of the Act, further restricts the meaning of the term 'Court' defined therein. The statement of objects and reasons as given in the Arbitration and Conciliation Bill, 1995 would point to the fact that one of the main objects, sought to be achieved by the Bill was 'to minimize the supervisory role of Courts in arbitral process'. This object might be overreached by giving an amplified meaning to the term 'Court'. Section 3(17) of the General Clauses Act, 1897 defines the term 'District Judge' as 'the judge of a principal civil Court of original jurisdiction'. The High Court in the exercise of its ordinary original jurisdiction is not included in the term 'District Judge' as defined in Section 3(17) of the General Clauses Act, 1897 albeit the term 'Court' used in the Act includes the High Court in exercise of its original jurisdiction.

It admits of no manner of doubt and rather, it is abundantly clear from Section 3(17) of the General Clauses Act, 1897 as well that the 'Court of District Judge' and the expression 'the principal Civil Court of original jurisdiction in a district' are synonym. The Court of Civil Judge may also be a Civil Court of original jurisdiction but it would not be 'the principal Civil Court of original jurisdiction in a district'. The Court of an Additional District Judge is no doubt, a class of Civil Court as visualized by Section 3 of the Bengal, Agra and Assam Civil Courts Act, 1887 and it exercises the same power as the District Judge in relation to the functions assigned to it by the District Judge under Section 87(2) of the aforesaid Act but that by itself, would not invest it with the trappings of the principal Civil Court of original jurisdiction in a district.

It was further observed after noticing the provisions of Section 42 of the Arbitration and Conciliation Act-

A conjoint reading of Section 2(e) and 42 of the Act, leaves no manner of doubt that the parliament intended to make only one Court - the Principal Civil Court of original jurisdiction or, as the case may be, the High Court in exercise of its ordinary original jurisdiction, whichever Court is approached earlier, as the venue for all matters connected with an arbitration agreement, and award; and all arbitral proceedings. Sections 2(e) and 42 paraphrased in simple language, would mean that any application with respect to an arbitration agreement' will have to be filed in the principal Civil Court of original jurisdiction in a district, or as the case may be, in the original civil jurisdiction of the High Court, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit and that Court alone to which the application is filed shall have the jurisdiction over the entire arbitral proceedings to the exclusion of any other Court, having jurisdiction to decide the questions forming the subject matter of arbitration.

11. So in the view of Allahabad High Court, the Court of Additional District Judge cannot fall within the meaning of 'Court' as defined in Section 2(e) of the Arbitration and Conciliation Act 1996 (which is para-materia with Section 2(e) of the Jammu and Kashmir Arbitration and Conciliation Act 1997); only Principal Civil Court of original jurisdiction and the High Court in exercise of its ordinary Civil jurisdiction come within the definition of term 'Court" because under Section 42 which of the said Courts is first approached by filing an arbitration petition has to be the only forum to the exclusion of all other courts for filing subsequent applications arising out of the same arbitration agreement. If the given view is extended a bit further it would mean that even where a District Judge, who is approached first by filing an arbitration application is disabled to hear that petition for whatsoever reasons shall be bound to hear the application himself there being no power available to him to transfer the same to a Court of Additional District Judge, irrespective of the bar contained in Section 40 of the Civil Courts Act. Section 40 of the Civil Courts Act reads as follows:

40. Bar against trial of certain suits and appeals.

(1) The presiding officer of a Civil Court shall not try any suit or other proceedings to which he is a party or in which he is personally interested;

(2) The presiding officer of an Appellate Civil Court under this Act shall not try an appeal against a decree or order passed by himself in another capacity;

(3) When any such suit, proceeding or appeal as is referred to in Sub-section (1) or Sub-section (2) comes before any such officer, the officer shall forthwith transmit the record of the case to the Court to which he is immediately subordinate, with a report of the circumstances attending the reference;

(4) The superior Court shall there-upon dispose of the case under Section 24 of the Code of Civil Procedure.

12. Thus the District Judge shall be bound to hear that petition despite of his disablement to hear the same because neither he nor the High Court would have any power to transfer that case to a Court of Additional District Judge. This proposition seems to me absurd ex-facie. When this was pointed out to Mr. Gupta, learned Counsel for the petitioner he submitted that this may be absurd, yet this is a statutory compulsion which cannot be over come in any manner whatsoever as per 'that Court alone' rule envisaged by Section 42, only the District Judge would be bound to hear the petition.

13. At this stage it would be beneficial to take note of the view expressed by Himachal Pradesh High Court also, in Surat Singh v. State of Himachal Pradesh 2003 (3) Arb. LR 606 (HP), where their Lordships of the Division Bench have held as follows:

A comparative look at the two provisions, one occurring in 1996 Act and the other in the Arbitration act, 1940 insofar as the definition of the term "Court" is concerned would manifestly and very very clearly demonstrate that whereas in the Arbitration Act, 1940 the "Court" was defined to mean any Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference as if the same had been the subject-matter of a suit, under 1996 Act the meaning of the expression 'Court" was narrowed down and confined to be principal Civil Court of the original jurisdiction in a district. As noticed earlier, under Section 9 of the H.P. Courts Act, 1976, the "Court" of a District Judge alone is a principal Civil Court of original jurisdiction in a district. This is in sharp contrast to the definition as was occurring in the Arbitration Act, 1940 wherein any Civil Court, with reference to its pecuniary and territorial limits, would have the jurisdiction to entertain any matter arising out of, or relating to any issue covered by 1940 Act as if it was the subject matter of a civil suit. In elaboration of this point, we may refer to Section 15 CPC occurring in Part-I of the Code of Civil Procedure relating to the subject matter of the jurisdiction of the 'Courts", whereby it has been clearly stipulated that every suit shall be instituted in the "Court" of the lowest grade competent to try it. Not only Section 15, even subsequent Sections in Part-I of the Code of Civil Procedure, such as Sections 16 to 20, being closely inter-linked with each other would have the direct bearing to the substance and applicability of Section 2(c) of Arbitration Act, 1940 to clearly spell out the Legislative intent behind Section 2(c) of that Act so as to convey that any Civil Court having territorial jurisdiction as well as having pecuniary jurisdiction would be competent to decide any question forming a subject matter of the reference arising under the aforesaid Act as if such subject-matter related to a suit. In clear departure from the aforesaid definition, under the 1996 Act the Legislature clearly circumscribed and specially narrowed down the definition of the "Court" only to mean the " Court of principal civil original jurisdiction in a district" and it is only a Court of District Judge in a district which is such a "Court" of principal civil original jurisdiction (In this case, we are not concerned with the inclusive definition as occurring in Section 2(e) of 1996 Act relating to the jurisdiction of the High Court also being a Court of ordinary original civil jurisdiction.

On the basis of the aforesaid discussion, therefore, what clearly emerges is that irrespective of the valuation of the subject matter of a reference or any application filed under Part-I of 1996 Act, including an application filed under Section 34 of the Act, no Court other than the Court of a District Judge would have the jurisdiction to decide such a reference or such an application. In other words, therefore, the Court of Senior Sub Judge, would not have the jurisdiction to decide such a reference or such an application.

14. The Himachal Pradesh High Court thus appears to be of the view that Court of a District Judge alone (to the exclusion of the Court of Additional District Judge) shall have the jurisdiction to decide an application filed before it under Part-I of the Act.

15. The Allahabad High Court's view is also that the District Court is not empowered to transfer the arbitration petition filed before it to the Court of Additional District Judge, in view of the provision made in Section 42.

16. What can be the true scope of Section 42?. Upon the plain reading of Section 42, it appears to me that the Section 42 in which 'that Court alone' rule has been envisaged was enacted by the legislature with a view to provide a 'Forum conveniens' to the parties and to seek avoidance of conflicting orders of the Courts at the different stages of an arbitration proceeding arising out of the same agreement between the same parties. The provision made in this section is similar to the provision made in Section 31(4) of the Arbitration Act 1940, which provided as follows: 31 (4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court.

While pointing out the necessity for clothing a single Court with effective and exclusive jurisdiction, their Lordships of the Supreme Court in Kumbha Mawji v. Dominion of India observed as follows:

The necessity for clothing a single Court with effective and exclusive jurisdiction and to bring about by the combined operation of these three provisions the avoidance of conflict and scramble is equally essential whether the question arises during the pendency of the arbitration or after the arbitration is completed or before the arbitration is commenced.

17. Same being the under-lying object for enacting Section 42 the scope of 'that Court alone' rule envisaged by the Section is required to be understood The Rule of 'that Court alone' applies to "that Court" in which any application under this part (Part-D has been made. If the expression "that Court" in which any application under this Part has been made is to be understood to mean as that Court in which arbitration application has been filed or instituted then the term "Court" for the purposes of Section 2(e) can only be the High Court or District Court in which an arbitration petition comes to be filed and therefore, it would not be possible for that Court to transfer that application to any other Court which may otherwise be having jurisdiction to try and dispose of the same. Such restricted interpretation of the above expression in Section 42 in my considered view would not be justified as the same as a necessary consequence would lead to a curious situation in which on one hand it would defeat the basic and cardinal principle of civil jurisprudence, which requires every civil judicial forum to be an independent and impartial forum in regard to a lis pending before it and thereby render the Act unworkable and on the other hand would oust the legally vested jurisdiction of transferring cases of the High Court and District Court. If a statute confers a jurisdiction upon a forum such jurisdiction can be ousted expressly or by necessary implication by a statute only. Section 42 or for that matter any other provision of the Act has no where expressly ousted the general power of transferring the cases of the High Court vested under Section 24 C.P.C and of a District Court vested under Section 24 CPC and Section 16 (2) of Civil Courts Act. Such exclusion can also not be inferred by implication from the language of Section 2(e) or Section 42 of 1997 Act. Had the legislature intended to exclude Court of Additional District Judge which is empowered to exercise the jurisdiction of the Principal District Court in respect of cases assigned or transferred to it, from the definition of the term "Court" then they would not have used the negative expression "but does not include any Civil Court of a grade inferior to such Principal Civil Court". Legislatures are to be presumed to be aware of the fact that the Court of Additional District Judge possessed the power for exercising the same jurisdiction which could be exercised by a Principal Court of Civil jurisdiction, in respect of the cases transferred to it and that the High Court and District Court possessed the power of transferring cases to the Court of Additional District Judge and keeping this in view they in their wisdom appear to have excluded only the Courts inferior in grade to the Principal Civil Court and Courts of Small Causes from the definition of term 'Court" and not the Court of an Additional District Judge.

18. This being the position in reference to the definition of term "Court" Section 42 of 1997 Act deserves to be liberally construed being a procedural and enabling provision. 1 do not think that the legislature would have intended that even if the Presiding Officer of Principal Civil Court of original jurisdiction was disabled under general law to hear an arbitration application filed before him he alone should have jurisdiction to hear that petition. Such absurdity can be avoided by giving a liberal construction to the expression "that Court" used in Section 42 to mean "that Court" would include the Court to which the proceedings have been validly transferred under Section 24 CPC or under Section 16 (2) of Civil Court's Act. I would quote the statement of Maxwell on The Interpretation of Statutes, Twelfth Edition, page 228 for support: Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity which can hardly have been intended, a construction may be put upon it which modifies the meaning of the words and even the structure of the sentence. This may be done by departing from the rules of grammar, by giving an unusual meaning to particular words, or by rejecting them altogether, on the ground that the legislature could not possibly have intended what its words signify, and that the modifications made are mere corrections of careless language and really give the true meaning. Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used.

19. Faced with the identical situation the Allahabad High Court in Union of India v. Rup Kishore and Anr. , held as follows:

That appears to be the idea underlying Section 31 of the Act. Sub-section (4) of Section 31 requires that a single Court should deal with arbitration proceedings at different stages. If the strict interpretation suggested by Mr. Sanyal is accepted, serious difficulties would arise in practice. Suppose, an additional court dealing with a case under the Act is abolished; or the Presiding Officer of a certain Court becomes personally disqualified on account of bias or some other reasons. It would be impossible to conclude the proceedings under the Act. I do not think that the Legislature intended that Section 31 (4) should have such a curious result. Such a result can be avoided by giving a liberal interpretation to Sub-section (4) of Section 31 of the Act. On this liberal interpretation, the expression "that Court" would include any court to which proceedings have been validly transferred under the provisions of Section 24 CPC. There is no clear indication either in Section 31 or Section 41 of the Act that Section 24 CPC should not apply to proceedings under the Act. I am, therefore, of the opinion that Section 24 CPC does apply to proceedings under the Act.

20. For the above reasons, respectfully disagreeing with the contrary view expressed in I.T.I. Ltd. Allahabad v. District Judge, Allahabad and Ors. reported in AIR 1998 All 313; and Surat Singh v. State of Himachal Pradesh and Anr. 2003 (3) Arb LR 606 (HE) (DB), I hold that the term "that Court" in Section 42 on liberal construction would include the Court of an Additional District Judge to which an arbitration application made before a Principal Civil Court of original jurisdiction has been validly transferred and such Court of an Additional District Judge would be deemed to be a civil Court of original jurisdiction within the purview of the definition of the term "Court" defined in Section 2 (e) of 1997 Act.

21. Therefore, the order of this Court dated 25-9-2006 does not deserve to be recalled. There is no merit in the application of the applicant. The application is as such, dismissed.