M/S. Binoy Trading Co. And Another vs Tata Motors Finance Limited
2023 Latest Caselaw 1899 Cal/2

                       IN THE HIGH COURT AT CALCUTTA
                       Ordinary Original Civil Jurisdiction
                                 Original Side
                             (Commercial Division)


Present :-
The Hon'ble Justice Moushumi Bhattacharya


                              AP 289 of 2023
                                       with

                              AP 368 of 2023

                     M/s. Binoy Trading Co. and Another

                                       vs.

                        Tata Motors Finance Limited


For the Petitioner                 :           Mr. Shyamal Chakraborty, Adv.

                                               Mr. Debajyoti Mondal, Adv.

                                               Ms. Anjana Das, Adv.



For the Respondent                 :           Mr. Rohit Banerjee, Adv.

                                               Mr. Saubhik Chowdhury, Adv.

                                               Ms. Tapasika Bose, Adv.


Last Heard on                      :           02.08.2023


Delivered on                       :           07.08.2023
                                          2

Moushumi Bhattacharya, J.

1. The petitioner/award-debtor has filed the present applications under

section 34 of The Arbitration and Conciliation Act, 1996 for setting aside of two

awards dated 4.8.2022 and 1.11.2022 passed by the learned sole arbitrator in

arbitrations where the petitioner was the respondent. Both the applications

involve identical facts. Learned counsel for the respondent in both the

applications have argued on the point of maintainability. Hence the

applications are being disposed of together.

2. The respondent/award-holder has taken a preliminary point of

maintainability of the present applications on sections 2(1)(e) and 42 of the Act

of 1996. The respondent says that the present applications should be filed

before the Ld. City Civil Court since the petitioner has already filed a

miscellaneous application in that Court. Learned counsel appearing for the

respondent also takes the point of pecuniary jurisdiction of the High Court and

the City Civil Court as determined by a Notification dated 20.3.2020 issued by

the Judicial Department of the Government of West Bengal.

3. The brief facts of the case is that the petitioner has suffered an award

dated 1.11.2022 for a principal sum of Rs. 82,91,536.50/-. The respondent

filed a post-award application for interim relief under section 9 of the Act before

the Ld. City Civil Court on 29.12.2022. An ad-interim order was passed on the

same day inter alia authorising the Receiver to take necessary steps with

regard to the petitioner's vehicle and that the vehicle would remain in the

custody of the Receiver. The petitioner filed an application thereafter on

4.4.2023 connected with the Misc. Case (No. 7612 of 2022) of the respondent

praying for dismissal of the Misc. Case and for a direction on the Receiver to

handover the vehicle to the petitioner. The present applications were filed for

setting aside of the award on 28.4.2023.

4. Since the respondent / award-holder has raised an objection with regard

to the maintainability of the present applications, that question will be decided

first.

5. Section 2(1)(e) of the Act defines "Court" for the purposes of domestic

arbitration, as 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 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 Small Causes.

6. Section 42 begins with a non-obstante clause and stipulates that any

application made in respect to an arbitration agreement under Part-I of the

1996 Act would confer that Court alone with jurisdiction over 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.

7. The object of section 42 is to prevent conflict and multiplicity of decisions

of different Courts. The section aims to provide uniformity by bringing the

parties to the Court where the first application was made under an arbitration

agreement and ensuring that all subsequent applications are made only in that

Court.

8. The undisputed facts indicate that the petitioner approached the Ld.

City Civil Court in the Misc. Case filed by the respondent and prayed for

appropriate orders with regard to release of the petitioners' vehicle. The

petitioner has also made specific averments in the application stating that the

City Civil Court is empowered to forthwith try and entertain the application

and pass necessary orders. The petitioner, at such point of time, did not take

any stand of the City Civil Court not being competent or empowered to try and

entertain the application.

9. Learned counsel for the petitioner has relied on a Division Bench

decision passed in Shri Sushanta Malik vs. Srei Equipment Finance Limited

reported in AIR 2015 Cal 335 to urge that the Ld. City Civil Court does not

have pecuniary jurisdiction to entertain the section 34 application since it is

not a principal Civil Court of Original Jurisdiction and that the present

applications can therefore only be filed before the Calcutta High court.

10. The decision of the Division Bench in Sushanta Malik was however

delivered on 8.9.2015 whereas the Commercial Courts Act, 2015 was published

in the Gazette of India dated 31.12.2015 and was deemed to have come into

force on 23.10.2015.

11. Section 2(1)(b) of The Commercial Courts Act, 2015 defines "Commercial

Courts" as the Commercial Court constituted under section 3(1) of the said Act.

Section 3 empowers the State Government in consultation with the concerned

High Court to constitute Commercial Courts by notification as may be

necessary for the purpose of exercising jurisdiction and powers conferred on

the Courts. Section 3(1-A) empowers the State Government to also specify the

pecuniary value while section 3(2) empowers the State Government to specify

the local limits of the area to which the jurisdiction of a Commercial Court

shall extend.

12. Section 10(3) of the 2015 Act empowers all Commercial Courts exercising

territorial jurisdiction to receive petitions where the subject matter of

arbitration constitute a commercial dispute of a specified value. Section 12(2)

provides for basis of determination of a specified value for cases where the

subject matter of arbitration is a commercial dispute. Section 21 of the Act

declares that the Act shall have overriding effect on any other law for the time

being in force.

13. By a Notification published on 20.3.2020 in the Kolkata Gazette

Extraordinary, by the Judicial Department, Government of West Bengal, the

pecuniary jurisdiction of the City Civil Court and the Calcutta High Court was

notified in exercise of the power conferred under section 3(1-A) of the 2015 Act.

The pecuniary jurisdiction was specified in terms of the value of the

commercial disputes and provided that in case of Commercial Courts within

the territorial jurisdiction of the City Civil Court at Calcutta of an amount

exceeding Rs. 10 lacs but not exceeding Rs. 1 crore would concurrently be with

the City Civil Court and the Commercial Division with the High Court,

Calcutta. The other parts of the Notification have not been mentioned as they

are not relevant to the present matter.

14. Admittedly, the value of the arbitration petition is somewhere between

Rs. 10 lacs - 85 lacs. The ambiguity is on account of the petitioner saying that

the subject matter of the award is in excess of Rs. 10 lacs while the respondent

says that the value of the arbitration petition is in excess of Rs. 85 lacs.

Whatever be the case, the Notification, which has fixed the pecuniary

jurisdiction of the learned City Civil Court and the Calcutta High Court, makes

it clear that both the City Civil Court and the High Court will have concurrent

pecuniary jurisdiction to entertain the present arbitration petition.

15. Section 42 of the 1996 Act will however settle the jurisdiction in favour of

the City Civil Court since the respondent first approached with an application

for interim relief and the petitioner subjected itself to the jurisdiction of the

City Civil Court also by making a separate application for interim relief in the

form of release of the petitioner's vehicle. As stated above, section 42 mandates

that when any application with regard to an arbitration agreement has been

made under Part I in a Court, that Court alone shall have jurisdiction over the

arbitral proceedings and all subsequent application arising out of that

agreement and further that no other Court shall have jurisdiction in such

cases.

16. It is undisputed that the section 9 application arose out of the arbitration

agreement between the parties and was a post-award application made by the

respondent. The present application under section 34 for setting aside of the

award must also therefore be filed before the City Civil Court also by reason of

the fact that the City Civil Court has pecuniary jurisdiction to entertain the

application under section 34 of the 1996 Act.

17. The Division Bench of this Court in Sushanta Malik held that the Original

Side of this Court alone will have jurisdiction to entertain an application under

the 1996 Act where the value of the subject matter of the dispute in arbitration

exceeds Rs. 10 lacs. As stated above, this decision was pronounced before The

Commercial Courts Act, 2015 was notified on 31.12.2015. Therefore, the

decision of this Court has to abide by the 2015 Act read with the Notification

dated 20th March, 2020 which has since been the guiding document for

determining the Court competent to entertain a commercial dispute in

accordance with the pecuniary limits fixed under the Notification.

18. This Court therefore is constrained to hold that the learned City Civil

Court is the competent Court to entertain the present application. The above

discussion reflects the reasons for this view.

19. AP 289 of 2023 and AP 368 of 2023 are accordingly dismissed as not

being maintainable.

Urgent photostat certified copies of this judgment, if applied for, be

supplied to the parties upon fulfillment of requisite formalities.

(Moushumi Bhattacharya, J.)