Andhra Pradesh High Court - Amravati
U.V. Satyanarayana vs M/S Shriram City Union Finance Ltd on 4 July, 2024
Author: R. Raghunandan Rao
Bench: R. Raghunandan Rao
APHC010157272024
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3488]
(Special Original Jurisdiction)
THURSDAY, THE FOURTH DAY OF JULY
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
THE HONOURABLE SRI JUSTICE HARINATH.N
CIVIL REVISION PETITION NO: 740/2024
Between:
U.v. Satyanarayana, and Others ...PETITIONER(S)
AND
M/s Shriram City Union Finance Ltd ...RESPONDENT
Counsel for the Petitioner(S):
1. ARRABOLU SAI NAVEEN
Counsel for the Respondent:
1. MAHESWARA RAO KUNCHEAM
The Court made the following order: (per Hon'ble Sri Justice R. Raghunandan Rao)
The learned Arbitrator appointed for resolution of the disputes
between the petitioners and the sole respondent had passed an award in
favour of the sole respondent for a sum of Rs.32,99,625/- along with interest
@ 10% p.a. with costs to the sole respondent in Arbitration Case No.309 of
2014. The sole respondent sought execution of the said award by moving
Arbitration Execution Petition No.151 of 2017 before the Learned Principal
District Judge, East Godavari District.
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2. The petitioners herein objected to the proceedings before the
Learned Principal District Judge, East Godavari District on the ground that the
execution petition had been filed to realize an amount of Rs.46,46,965/- and
the same could not have been filed before the Learned Principal District Judge
as it is only the Commercial Court at Visakhapatnam which would have
jurisdiction under the Commercial Courts Act, 2015.
3. The learned Principal District Judge, East Godavari District, by an
order dated 31.01.2024 had held that the objection raised in relation to the
jurisdiction is not maintainable as the limit for such jurisdiction to be conferred
on the Commercial Court was Rs.1,00,00,000/-, while the amount which is
sought to be recovered was only Rs.46,46,965/-.
4. Aggrieved by the said order of the Learned Principal District
Judge, East Godavari District, the petitioners have moved this Court by way of
the present Civil Revision Petition.
5. Heard Sri A. Sai Naveen, learned counsel for the petitioners and
Sri Maheswara Rao Kunchem, learned counsel for the sole respondent.
6. Sri A. Sai Naveen, the learned counsel for the petitioners relies
upon a Division Bench Judgment of this Court dated 12.09.2023 in
C.R.P.No.2183 of 2022 & batch. The Division Bench considered the question
of whether the execution petitions for recovery of amounts above the
pecuniary limit set out under the Commercial Courts Act, 2015 can be filed
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and maintained only before the Commercial Court or the Learned Principal
District Judge. The Division Bench, after considering various judgments, was
pleased to hold in the following manner:
"53) Therefore, the following conclusions are reached by
ironing out the creases:
<
a) The Commercial Court alone is competent to execute
decrees, which are above the specified value. The regular Civil
Court will not have the jurisdiction to entertain such Execution
Petitions with effect from 16.05.2019 in the State of Andhra
Pradesh.
b) It is only the Commercial Court, Vijayawada or the
Commercial Court at Visakhapatnam which can entertain the
Execution Petitions if they are above the specified value in view of
the G.O.Ms.No.78.
c) All orders passed after 16.05.2019 are orders passed by
a coram non-judice. They suffer from an inherent lack of
jurisdiction and they are held to be per se bad in law.
d) The pending E.P.No.13 of 2016 shall be transferred to
the Commercial Court, Vijayawada, and both the parties are given
liberty to start the proceedings afresh from the said date i.e.,
16.05.2019."
7. Sri A. Sai Naveen, the learned counsel for the petitioners would
submit that the Commercial Courts Act, 2015 was amended in the year 2018
and pecuniary jurisdiction set out in Clause-2(1)(i) had been reduced from
Rs.1,00,00,000/- to Rs.3,00,000/- by Ordinance No.3 of 2018 which was
subsequently replaced by Central Act No.28 of 2018 with effect from
03.05.2018. He would submit that in such circumstances, it is only the
Commercial Court which would have jurisdiction over the matter and the
proceedings pending before the Learned Principal District Judge, East
Godavari District at Rajamundry would have to be set aside.
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8. Sri Maheswara Rao Kunchem, the learned counsel for the sole
respondent would submit that the proceedings in the execution petition have
come to the stage of auction of the property of the petitioners and the only
step left was finalization of the terms of the auction. He would further submit
that the Arbitration Conciliation Act, 1996 [for short "the Arbitration Act"]
stipulates that it is only the Learned Principal District Judge of the District who
can be treated as the Civil Court for purposes of jurisdiction in relation to any
matters arising out of the Arbitration Act, including Execution Petitions. He
would submit that in such circumstances, the Judgment of the Division Bench
requires further consideration as this aspect had not been placed before the
Division Bench. He would also point out that the Judgment relied upon by the
petitioners is the subject matter of an appeal before the Hon'ble Supreme
Court of India in S.L.P.No.23322-23325 of 2023. He would also submit that
the Hon'ble Supreme Court of India had stayed the transfer of the execution
proceedings and consequently, the order of the Division Bench cannot be
relied upon.
9. Section 2(1)(e) of the Arbitration Act defines Court to mean the
Principal Civil Court of original jurisdiction in the District. Section 36 of the
Arbitration Act stipulates that enforcement of an arbitral award is to be done in
accordance with the provisions of the Code of Civil Procedure, 1908 in the
same manner as if it were a decree of the Court. This would mean that
execution petitions would have to be filed before the Principal Civil Court of
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original jurisdiction in the District in as much as the Court has been defined
under Section 2 (1)(e) to mean Principal Civil Court.
10. However, Section 10(3) of the Commercial Courts Act, 2015
reads as follows:-
"Section-10: Jurisdiction in respect of arbitration matters - Where the subject-matter of
an arbitration is a commercial dispute of a Specified Value and-
(1) .......
(2) ......
(3) If such arbitration is other than an international commercial arbitration, all
applications or appeals arising out of such arbitration under the provisions of the
Arbitration and Conciliation Act, 1996 (26 of 1996) that would ordinarily lie before any
principal civil court of original jurisdiction in a district (not being a High Court) shall be
filed in, and heard and disposed of by the Commercial Court exercising territorial
jurisdiction over such arbitration where such Commercial Court has been constituted."
11. In view of this provision, the Principal Civil Court of original
jurisdiction would have to be treated to be the Commercial Court having
territorial jurisdiction over the said area. It may also be noted that Section 21
states that the Commercial Courts Act, 2015, save as otherwise provided will
have effect over every other law which is in force for the time being.
12. This would clearly denude the power of the Learned Principal
District Judge, East Godavari to deal with E.P.No.151 of 2017 unless it is
shown that the specified value is more than the amount being claimed in the
execution petition.
13. Section 2(i) of the Commercial Courts Act, 2015 had fixed the
specified value to mean a value in respect of a suit which shall not be less
than Rs.1,00,00,000/-. However, this value was reduced to Rs.3,00,000/- by
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an Ordinance No.3 of 2018, which was subsequently replaced by the Central
Act No.28 of 2018, with effect from 03.05.2018.
14. In such circumstances, this matter would have to be placed
before the Commercial Court at Visakhapatnam as the Commercial Court at
Visakhapatnam has territorial jurisdiction over East Godavari District.
15. Sri Maheswara Rao Kunchem, learned counsel for the
respondent had also raised the issue that the Judgment relied upon by the
petitioners, passed by the Division Bench of this Court, had been stayed by
the Hon'ble Supreme Court of India and as such, the principles enunciated in
the said Judgment cannot be applied to the present case. It is now settled law
that it is only the suspension of a Judgment that will stop the operation of the
principles or interpretation of law set out in the said Judgment. In the case of a
stay, it is only the parties to the Judgment that are affected and the principle
laid down in the said Judgment would continue to hold the field and could be
relied upon.
16. This Civil Revision Petition is allowed, setting aside all the
proceedings in E.P.No.151 of 2017 before the Learned Principal District
Judge, East Godavari District, with a leave to the sole-respondent to either
move for transfer of the said execution petition to the Commercial Court at
Visakhapatnam or in the alternative to withdraw the execution petition before
the Learned Principal District Judge, East Godavari District and move a fresh
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execution petition before the Commercial Court. There shall be no order as to
costs.
As a sequel, pending miscellaneous petitions, if any, shall stand
closed.
________________________
R. RAGHUNANDAN RAO, J.
_______________
HARINATH.N, J.
MJA/BSM
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
AND
HONOURABLE SRI JUSTICE HARINATH.N
CIVIL REVISION PETITION No.740 of 2024
04-07-2024
MJA/BSM
