A division bench of the Madhya Pradesh High Court comprising of Chief Justice Mohammad Rafiq and Justice Vijay Kumar Shukla, in the case of Yashwardhan Raghuwanshi Vs. District & Sessions Judge and another, has held that Commercial matters involving Arbitration disputes can only be heard by Commercial Court of the status of District Judge or Additional District Judge. It held that a Civil Judge would not be the competent authority to entertain cases under Sections 9, 14, 34 and 36 of the Arbitration and Conciliation Act, 1996.
Factual Background
This writ petition was filed by Yashwardhan Raghuwanshi, an advocate practising law at Bhopal, assailing the validity of order dated 20th October, 2020 passed by the District and Sessions Judge, Bhopal, in exercise of powers conferred upon him by Section 15(1) of the Madhya Pradesh Civil Courts Act, 1958 read with Sections 194, 381(1) & 400 of the Code of Criminal Procedure,1973, distributing civil and criminal business amongst the various Additional District Judges and Subordinate Judges working under his supervision in the District of Bhopal.
Challenge in particular was made to Entry No. 45 of the aforesaid order vide which the disputes/ cases filed under the provisions of Sections 9, 14, 34 & 36 of the Arbitration and Conciliation Act, 1996 involving commercial disputes under the provisions of the Commercial Courts Act, 2015 of specified value between Rs. 3 1ac. to Rs. 1 crore, was assigned to the Court of XX Civil Judge Class-I, Bhopal.
Reasoning and Decision of the Court
While stating that the term "Court" as used in Section 2(1)(c) of the Arbitration Act is the highest judicial Court of a District, the Court observed that:
"It would be thus evident from the language employed by the Legislature in the definition clause of “Court” in Section 2(1)(c) of the Arbitration Act that it intended to confer power in respect of the disputes involving arbitration on the highest judicial Court of a District so as to minimize the supervisory role of the Courts in the arbitral process and, therefore, purposely excluded any Civil Court of grade inferior to such Principal Civil Court, or any Court of Small Causes."
The Court further looked into the scheme of the Act and observed that:
"The Court of superior most jurisdiction in a District is the Court of District Judge as interpreted by the Supreme Court in the case of Atlanta Limited (supra). The jurisdiction in respect of arbitration matter is provided in Section 10 of the Commercial Courts Act and Section 15 thereof contemplates transfer of all suits and applications including the application under the Arbitration Act pending in Civil Courts in any district or pending in High Court where Commercial Division is constituted or area in respect of which the Commercial Courts have been constituted.
While Section 11 of the Commercial Courts Act bars the jurisdiction of a Commercial Court or a Commercial Division to entertain or decide any suit, application or proceedings relating to any commercial dispute in respect of which the jurisdiction of the Civil Court is either expressly or impliedly barred under any other law for the time being in force, Section 21 of the Commercial Courts Act stipulates that save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act. Segregation of an arbitration matters on the basis of a pecuniary limit is not what the law provides for.
Holding that all the arbitration matters, irrespective of the value of claim, are required to be adjudicated by Principal Civil Court of original jurisdiction, it was expounded that:
"Therefore, it is clear that in respect of commercial disputes involving an arbitration dispute only the Commercial Court of the status of District Judge or Additional District Judge would be the competent court to entertain the matters under Sections 9, 14, 34 & 36 of the Arbitration Act. Although, the impugned order can be sustained in so far as the distribution of the commercial disputes of the value of the claim in cases other than arbitration matters are concerned. The impugned order to the extent of classifying the commercial disputes having subject matter of arbitration on the basis of valuation and conferring powers therefore on the Court of XX Civil Judge Class-I, Bhopal, would be violative of relevant provisions of law.”
Held
“In view of the above discussions, the present petition deserves to succeed. The Entry No.45 of the impugned order dated 20.10.2020 is set aside. It is hereby declared that the Court of District Judge as the Principal Civil Court of original jurisdiction would be competent to decide the matters/disputes filed under the provisions of Sections 9, 14, 34 & 36 of the Arbitration Act and also under the provisions of the Commercial Courts Act regardless of the value of claim. However, the District Judge by virtue of Section 7 read with Section 15 of the Civil Courts Act would be entitled to distribute such work amongst any of the Additional District Judges under his supervision, but not to any Court of Civil Judge Class-I or Senior Civil Judge, or any Court of Small Causes. The writ petition is accordingly allowed. A copy of this order be endorsed to the Registrar General of the High Court for being circulated amongst all the District & Sessions Judges of the State.”
Case Details
Name: Yashwardhan Raghuwanshi v. District & Sessions Judge and another
Case No.: WP-19656-2020
Bench: Chief Justice Mohammad Rafiq and Justice Vijay Kumar Shukla
Date of Decision: February 26, 2021
Read Order@LatestLaws.com
