THE HON'BLE SRI JUSTICE P.NAVEEN RAO
AND
THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
CIVIL REVISION PETITION No.1073 OF 2023
ORAL ORDER : (Per Hon'ble Sri Justice P.Naveen Rao)
Heard learned senior counsel Sri Avinash Desai on behalf of
learned counsel Sri M.Pranav for petitioner.
2. The petitioner and respondent No.2 entered into contract for
undertaking works related to boilers. Later, differences arose between them leading to respondent No.2 approaching the Indian Council of Arbitration seeking appointment of Arbitrator. Petitioner instituted COS(SR).No.1363 of 2023 before the Principal Special Court in the Cadre of District Judge for Trial and Disposal of Commercial Disputes, at Hyderabad, praying to declare the action of defendant No.1 in not rejecting the request of defendant No.2 to constitute the Arbitrary Tribunal, as illegal and not in consonance with the law including the Arbitration and Conciliation Act, 1996 (for short 'Act, 1996'), read with the Indian Council for Arbitration Rules, 2022 (for short 'ICA Rules'). The Commercial Court held that the dispute raised by the petitioner is not a commercial dispute and therefore, it has no jurisdiction and accordingly, returned the plaint by order dated 24.03.2023. However, while rejecting the plaint, the Commercial Court has also gone into the merits of pleas raised by the petitioner in the plaint and has discussed -2- extensively the scope of provisions of ICA Rules and several other aspects.
3. This revision is preferred aggrieved by the orders of the Commercial Court dated 24.03.2023 while rejecting the plaint and making observations on merits of the dispute raised by the petitioner.
4. Learned senior counsel for petitioner contends that while returning the plaint, the Commercial Court ought not to have gone into merits of the case and record observations on the contentions urged by petitioner and the same is contrary to law. These observations prejudice the claim of petitioner in the Civil Court. In support of the said contention, he relied upon the judgment of the Hon'ble Supreme Court in Athmanathaswami Devasthanam Vs. K.Gopalaswami Ayyangar1 and the decision of the learned single Judge of this Court in Ayesha Begum Vs. Venkataswamy2.
5. We have gone through the order passed by the Commercial Court dated 24.03.2023. As rightly contended by learned senior counsel for petitioner, the Commercial Court has extensively discussed various provisions of Act, 1996, Civil Procedure Code and ICA Rules, and made observations touching upon the merits of the claim set up by petitioner. The Commercial Court erred in making such 1 AIR 1965 SC 338 2 Second Appeal No.656 of 1988 dated 19.03.1997 -3- observations when it was convinced that the dispute is not a commercial dispute and it has no jurisdiction.
6. In Athmanathaswami (supra) the Hon'ble Supreme Court dealt with the issue of observations made on merits when the case was dismissed on the ground of lack of jurisdiction. Paragraph No.14 of the judgment reads as under:
"14. The last point urged is that when the civil court had no jurisdiction over the suit, the High Court could not have dealt with the cross-objection filed by the appellant with respect to the adjustment of certain amount paid by the respondent. This contention is correct. When the Court had no jurisdiction over the subject-matter of the suit it cannot decide any question on merits. It can simply decide on the question of jurisdiction and coming to the conclusion that it had no jurisdiction over the matter had to return the plaint".
7. In Ayesha Begum (supra) the learned single Judge has also taken similar view. Paragraph No.7 of the judgment reads as under:
"7. In the light of the above discussion, I hold on the question that the Court cannot decide the issues involved on merits, after holding that it has no jurisdiction over the subject-matter of the suit. It has to return the plaint for presentation to the proper Court".
8. Having regard to the facts noted above, the Civil Revision Petition is allowed and the observations made by the Commercial Court on -4- merits in order dated 24.03.2023 are set aside. It is made clear that if petitioner seeks to present the suit before the Civil Court, the Civil Court shall consider the pleas of the petitioner objectively and un-influenced by the observations made by the Commercial Court in order dated 24.03.2023. We also make it clear that there is no expression of opinion on merits and the pleas of respondents on all issues that may arise in a civil suit are preserved and as defendants they are entitled to raise all pleas as available in law, including on issues considered by the Commercial Court in the order impugned. Miscellaneous petitions, pending if any, shall stand closed.
____________________ P. NAVEEN RAO, J _____________________________ NAGESH BHEEMAPAKA, J Date: 11.04.2023 Note: Issue C.C., in two (2) days.
B/o.
PT -5- THE HON'BLE SRI JUSTICE P.NAVEEN RAO AND THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA CIVIL REVISION PETITION No.1073 OF 2023 Date:11.04.2023 PT