Calcutta High Court
M/S. Siemens Healthcare Private ... vs Sun Hospital And Ors on 20 August, 2024
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
OCD 1&2
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL DIVISION
IA NO. GA/1/2024
In AP/868/2023
M/S. SIEMENS HEALTHCARE PRIVATE LIMITED
VS
SUN HOSPITAL AND ORS.
AP-COM/729/2024
SUN HOSPITAL PRIVATE LIMITED
VS
M/S SIEMENS HEALTHCARE PRIVATE LIMITED
BEFORE:
The Hon'ble JUSTICE SABYASACHI BHATTACHARYYA
Date: 20th August, 2024.
Appearance:
Mr. Krishnaraj Thaker, Adv.
Mr. Tanish Ghaneriwala, Adv.
Mr. Ramendu Agarwal, Adv.
Ms. Rishika Goyal, Adv.
...for the petitioner
Mr. Prabal Mukherjee, Sr. Adv.
Ms. Madhushri Dutta, Adv.
...for the respondent
In Re: IA NO. GA/1/2024
The Court: the present application has been filed for recall of an order
dated January 17, 2024 passed by a co-ordinate Bench of this Court in
connection with AP/868/2023 under Section 11 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act"), appointing an
Arbitrator.
Learned counsel for the petitioner argues that the application under
Section 11(5) was filed in the Ordinary Original Civil Jurisdiction of this Court
and not in the Commercial Division. As such, the court inherently lacked
subject-matter jurisdiction to entertain and decide the said application in the
Ordinary Original Civil Side of this Court. Accordingly, the said order ought to be
recalled.
In support of his submission, learned counsel appearing for the petitioner
places reliance on Section 15 of the Commercial Courts Act, 2015 (for short, "the
2015 Act"), which provides that all suits and applications, including applications
under the 1996 Act, relating to a commercial dispute of specified value pending
in a High Court where a Commercial Division has been constituted, shall be
transferred to the Commercial Division.
In conjunction with the said provision, learned counsel relies on Laxmi
Polyfab Pvt. Ltd Vs. Eden Realty Ventures Pvt. Ltd. and another, reported at AIR
2021 Cal 190 where a co-ordinate Bench of this Court observed that Section 15
of the 2015 Act has to be read along with Sections 6 and 7 of the said Act. A suit
which has been filed subsequent to the Notification of the specified value in the
Ordinary Original Civil Jurisdiction of this Court cannot be transferred to the
Commercial Division by virtue of Section 15(1) of the Act of 2015. It was held
that a suit filed subsequent to the Notification cannot be said to be a "pending"
suit within the meaning of Section 15(1) of the 2015 Act. The moment a suit is
not "pending" in terms of Section 15(1), the same cannot be transferred to the
Commercial Division by virtue of Section 15(1). It was observed that despite the
absence of power under Section 15(1), the court has powers under Order VII Rule
10 of the Code of Civil Procedure, 1908 to deal with the same. Power under
Order VII Rule 10 of the Code stands regulated by Section 15(1) so far as pending
suits relating to a commercial dispute of the specified value in the Ordinary
Original Civil Jurisdiction of this Court. Once the suit has been filed beyond the
date of the Notification of the specified value, it was held that Order VII Rule 10
of the Code governs the field.
It is submitted that on the date on which the application was filed under
Section 11(5) of the 1996 Act, the Notification had already come into effect. As
such, the court, sitting in Ordinary Original Civil Jurisdiction, inherently lacked
the power of deciding the matter.
Also, the application itself had been filed in the Ordinary Original Civil
Jurisdiction and not the Commercial Division, thus, making it liable to be
rejected at the outset.
Learned counsel places reliance on the Commercial Courts Practice
Directions, 2021 (in short, "the Practice Directions") of this Court in that regard.
Clause 4 of the same provides that every suit, appeal or other proceeding pending
before any Civil Court or the High Court immediately before the date of issuance
of the appropriate Notification in terms Section 3(1A) of the 2015 Act shall be
transferred by the Registry to the Commercial Division of this Court. Sub-clause
(2) provides that the above provision for transfer shall not be applicable to the
suits, appeals or other proceedings, instituted before any Civil Court as per the
Bengal, Agra and Assam Civil Courts Act, 1887 or in the High Court in its
Ordinary Original Civil Jurisdiction after the date of issuance of the appropriate
Notification of the pecuniary value in terms of Section 3(1A) of the 2015 Act.
Clause 9(1) of the Practice Directions provides that the High Court or the
District Court, as the case may be, shall not, subsequent to the date of issuance
of the appropriate Notification in terms of Section 3(1A), receive, try or determine
any suit involving a commercial dispute of and above the specified value if the
same is filed in its Ordinary Original Civil Jurisdiction.
Sub-clause (2) of Clause 9 provides an exception in the event any suit or
other proceeding involving a commercial dispute is filed in its Ordinary Original
Civil Jurisdiction subsequent to the date of issuance of the Notification in case
where an application is made by either party, when the court may return the
plaint or the application to the plaintiff on principles pari materia with Order VII
Rule 10 of the Code of Civil Procedure. Under sub-clause (4), in the event of a
suit or other proceeding which is barred in terms of Clause 9(1), if neither party
applies for the plaint or application to be returned, the court shall reject the
plaint or the application, as the case may be. Thus, it is argued that the only
recourse open to the court on the relevant date was to reject the application. It is
argued that on a composite reading of Clause 9, it cannot but be construed that
this Court did not have any jurisdiction even to receive, let alone try or determine
the application. In the absence of any application under Order VII Rule 10 of the
Code, the only option open to the Court was to reject the same.
Learned counsel next contends that the said legal bar, being one pertaining
to inherent jurisdiction of the Court, could not be waived merely because the
present petitioner (respondent in the application under Section 11) did not raise
any objection in that regard and/or participated before the Arbitrator in
subsequent proceedings.
In support of the said argument, learned counsel places reliance on a
Division Bench Judgment of this Court in the matter of STP Limited Vs. State of
West Bengal, reported at AIR 2023 Cal 46, where it was held that the defect of
jurisdiction strikes at the authority of the court to pass an order which cannot be
cured by consent or waiver of the party. In such backdrop, the suit was required
to be transferred to the Commercial Court for hearing.
Learned senior counsel appearing for the respondent, who was the
applicant in the Section 11 application, controverts the petitioner's arguments
and reiterates that no objection was raised as to the jurisdiction of the court
when the order under recall was passed. Further, the present petitioner
participated in the proceeding before the learned Arbitrator on several occasions
thereafter, never raising the issue of jurisdiction. Thus, the present petitioner is
precluded from taking such objection at this belated juncture.
In any event, it is argued that the appropriate remedy of the petitioner, if
aggrieved by an order passed under Section 11 of the 1996 Act, does not lie in a
recall application but elsewhere.
With regard to Clause 9 of the Practice Directions, learned senior counsel
appearing for the respondent argues that the same governs commercial suits and
not applications under the 1996 Act. It is pointed out that Clause 9(4) and
Clause 9(2) are inherently contradictory and are also contrary to the provisions of
Order VII Rule 10 of the Code of Civil Procedure. The Practice Directions, it is
argued, cannot override the Code, which is a substantive statute. Moreover, it is
pointed out that Section 15 of the 2015 Act does not create any distinction
between matters filed before or after the Notification under Section 3(1A) of the
2015 Act.
Learned senior counsel next contends that this Court has been rendered
functus officio after passing the order under Section 11 and cannot now reopen
its own order.
Learned senior counsel argues that on the relevant date, the Bench which
passed the order had determination both under the Commercial Division and the
Ordinary Original Civil Jurisdiction of this Court. Hence, it cannot be said that
the order under recall is vitiated by inherent lack of jurisdiction. Learned senior
counsel also places reliance on Section 10(2) of the 2015 Act, which according to
him is the relevant provision to be looked into in the present context.
Upon a careful consideration of the arguments advanced by the parties,
this Court comes to the following conclusions:
The present petitioner (recall applicant) has laid much stress on the
Commercial Courts Practice Directions of this Court. However, a careful scrutiny
of the said Practice Directions clearly shows that the same, at least insofar as
Clauses 4 and 9 thereof are concerned, does not cover applications under the
1996 Act but only relate to commercial suits and connected proceedings in civil
matters.
Clause 4 speaks about suits, appeals or other proceedings "pending before
any Civil Court as per the Bengal, Agra and Assam Civil Courts Act, 1887 or in
the High Court". Again, sub-clause (1) of Clause 9 of the Practice Directions
refers to "the High Court or the District Court" alternatively.
The 1996 Act clearly distinguishes between "court" as defined in Section
2(1)(e) of the said Act and the "High Court" as contemplated in Section 11 of the
same. The underlying theme of Section 11 is that the Chief Justice of the
concerned High Court has to designate a panel of Arbitrators for discharging the
functions and duties of arbitral institutions. The appointment under Section 11,
on an application of the party, has to be made by the arbitral institution so
designated or by the High Court in case of arbitrations other than International
Commercial Arbitrations. In contradistinction with "court" as used in the other
provisions referring to courts in the 1996 Act, Section 11 clearly refers to the
High Court, acting as the High Court, through its Chief Justice or his/her
designate.
On the other hand, Clauses 4 and 9 of the Practice Directions refers to
matters pending either before a Civil Court as per the Bengal, Agra, Assam Civil
Court Act, 1987, or the District Court, in the same bracket as the High Court.
Again, Clause 2(3) of the Practice Directions defines "court" to mean the
Commercial Division and the Commercial Appellate Division of this Court and
also the Commercial Courts and Commercial Appellate Courts at the District
level, as the case may be. Thus, the very fact that both Clause 4 and Clause 9
refer to District Courts and Civil Courts having jurisdiction under the Bengal,
Agra and Assam Civil Courts Act, 1987 on a parallel footing as the High Court
shows that the litigations referred to therein pertain to civil suits and connected
applications, appeals or other proceedings. As per the above discussion, no Civil
Court under the Bengal, Agra and Assam Civil Courts Act or District Court has
the jurisdiction to decide an application under Section 11 of the 1996 Act. Thus,
by necessary implication, the matters covered by the provisions of transfer under
Clause 4 and improperly filed suits, applications and other proceedings under
Clause 9 pertain to matters adjudicable by civil courts acting as such, and not
the High Court within the contemplation of the 1996 Act.
Moreover, in the entire Practice Directions, there is not a single reference to
any application or other proceeding filed under the 1996 Act, in stark contrast
with Sections 10 and 15 of the 2015 Act. In Laxmi Polyfab Pvt. Ltd (supra), the
learned Single Judge was dealing with a regular commercial civil suit and not a
proceeding under the 1996 Act. The learned Single Judge took into consideration
Sections 6 and 7 read with Section 15 of the 2015 Act, all of which provisions
deal with commercial suits and connected applications, as opposed to Section 10
of the 2015 Act, which specifically refers to applications or appeals arising out of
arbitration under the 1996 Act. Hence, the said decision cannot be said to be a
binding precedent with regard to an application under Section 11 of the 1996
Act.
Therefore, the relevant provision which has to be looked into in the context
of an application under Section 11 of the 1996, Act or, for that matter, any
application or appeal under the 1996 Act, is Section 10 of the 2015 Act.
Section 10(2) of the 2015 Act deals with domestic arbitrations. It provides
that all applications or appeals arising out of an arbitration under the provisions
of the 1996 Act that have been filed in the Original Side of the High Court shall
be heard and disposed of by the Commercial Division where such Commercial
Division has been constituted in such High Court. The specific language of
Section 10(2) makes it amply clear that even if an application or appeal under the
1996 Act relating to a commercial dispute is filed on the Original Side of this
Court, the same can be heard and disposed by the Commercial Division.
Since, as per the earlier discussion, Clause 9 of the Practice Directions is
not made specifically applicable to arbitrations, an application or appeal under
the 1996 Act of a commercial nature, even if filed on the Original Side of the High
Court, cannot be thrown out at the inception but has to be heard and disposed of
by the Commercial Division of this Court. The language used in Section 10(2) is
"shall", which is mandatory and implies that even if an application is filed in the
original Side of the High Court (without any distinction between Ordinary
Original Civil Jurisdiction or Commercial Division), it would suffice if the same is
heard and disposed of by the Commercial Division.
In the above backdrop, the application under Section 11(5) of the 1996 Act
in the present case, which was allowed by the order under recall, was filed in the
Original Side of this Court and, thus, could very well be heard and decided by the
Commercial Division of this Court on the relevant date.
The next question which arises is whether on the date of passing of the
order the concerned Bench had Commercial Division determination. It is an
admitted position and also the practice of this Court that the same learned Judge
taking up applications and appeal in connection with the 1996 Act takes up both
Commercial Division and Ordinary Original Civil Jurisdiction. The present case is
not an exception, since the learned judge who passed the order under recall and
allowed the Section 11 application had both Commercial Division and Ordinary
Original Civil Jurisdiction on the date of the order. Thus, the requirement of
Section 10(2) of the 2015 Act is squarely fulfilled, since the application had been
filed "on the Original Side of the High Court" and had been heard and disposed of
by the Commercial Division.
Seen in such context, the only lacunae in the application on the relevant
date was that it was described wrongly in its cause title and that it appeared in
the non-Commercial Division list of the concerned Bench on the relevant date.
Both the said defects were curable; thus, liable to be waived. The objections at
best could be of a technical nature and, if raised at the relevant juncture, could
be cured by a simple direction to correct the description and by the court
assuming jurisdiction in the Commercial Side or to direct the matter to be listed
in the Commercial Division cause list. However, since Section 11 confers
jurisdiction on the Hon'ble Chief Justice of the High Court or his designate to
take up "applications under Section 11 of the 1996 Act", the distinction between
commercial and non-commercial is irrelevant. Fact remains that even apart from
the provisions of Section 10(2) of the 2015 Act, on the concerned day, the Bench
passing the order had the determination to take up applications under Section
11 of the 1996 Act, having been so designated by the Master of Roster, that is,
the Hon'ble The Chief Justice of this Court. Hence, by no stretch of imagination
can it be said that the learned Single Judge lacked inherent jurisdiction or
subject-matter jurisdiction to pass an order on the Commercial Side of this
Court. What matters in the ultimate analysis is that the application under
Section 11 of the 1996 Act was heard and disposed of by a Bench having
Commercial Division jurisdiction.
The defects, being technical, do not merit the high ground of inherent lack
of jurisdiction of the concerned Bench at the relevant juncture. Hence, there is
no scope of recalling the said order on the grounds as urged by the petitioner.
That apart, the recall applicant/petitioner has not come with clean hands.
It never raised the objection, which is the only ground of recall, before the
concerned court when the matter was heard or the order under recall was
passed, despite having participated in the hearing before the learned judge when
the application under Section 11(5) of the 1996 Act was allowed. Even thereafter,
the recall applicant continued to participate in the arbitral proceeding on several
occasions before the very Arbitrator who was appointed by virtue of the order
under recall, thereby submitting to the jurisdiction of the learned Arbitrator
without urging the issue of jurisdiction at any point of time. Hence, it does not lie
in the mouth of the recall applicant to turn back from such position of complicity
now and seek a recall of the order appointing the Arbitrator.
In view of the above, there is no merit in the recall application.
Accordingly, IA No. GA/1/ 2024 in AP/868/2023 is dismissed on contest,
however, without any order as to costs, thereby confirming the order dated
January 17, 2023 allowing the present respondents' application under Section
11(5) of the Arbitration and Conciliation Act, 1996.
(SABYASACHI BHATTACHARYYA, J.)
