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14. The challenge under Section 34 of the Act of 1996 was filed in the
Non-commercial Division. The value of the award under challenge
is more than Rs. 2 Crores on the date of filing of the challenge of
the award. Filing of the challenge in the non-commercial division
was incorrect. None of the parties took any steps to convert the
proceedings under the Act of 1996 to the Commercial Division. The
Department also did not transfer the proceedings to the
Commercial Division.
15. The challenge petition being AP/175/2020 was taken up by a
learned Single Judge on January 20, 2022. Learned Single Judge
noted that, a review petition was pending before a Co-ordinate
Bench and therefore, released AP/175/2020.
16. Execution petition filed to implement the award being
EC/156/2020 was also released by the learned Single Judge on
December 6, 2021 after noticing that, a connected review petition
was pending before the Co-ordinate Bench.
17. Both these proceedings were placed before the Hon'ble the Chief
Justice on February 7, 2022 when, His Lordships was pleased to
assign both the matters to a learned Single Judge.
18. Assignment occurred on February 2, 2022. On such date, the
learned Single Judge to whom both the proceedings were assigned
was not the Court designated under Section 4(2) of the Act of
2015. On the date, when, the impugned judgment and order was
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passed, the learned Single Judge was not the Court designated
under Section 4(2) of the Act of 2015.
19. Issue as to the validity of a judgment and order passed by a Court
in the Non-commercial Division, in respect of disputes involving
commercial disputes within the meaning of the Act of 2015 was
considered by us in Pam Development Pvt. Ltd. (supra), Starlift
Services Private Limited (supra) and Tractel Tirfor India Pvt.
Ltd. (supra). There is, however, a pronouncement of the Hon,ble
Supreme Court in Shri Balaji Industrial Engineering Ltd.
(supra), where the Hon'ble Supreme Court is of the view that, if a
judge, is designated under Section 4(2) of the Act of 2015, then
notwithstanding a proceeding involving a commercial dispute
within the meaning of the Act of 2015 is disposed of by such
learned Judge, in the Non-commercial Division, the same cannot
be termed as a nullity. It is also of the view that, in the event, a
judgment and order is passed without determination, then the
same is to be treated as a nullity.
20. In the facts and circumstances of the present case, the challenge
petition being AP/175/2020 could not be filed in the non-
Commercial Division. On the date, when, the assignment took
place as also on the date when, the impugned judgment and order
was passed, the learned Judge was not a Court designated under
Section 4(2) of the Act of 2015. However, the matters were
assigned to the learned Judge.
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21. In our understanding, Shri Balaji Industrial Engineering Ltd.
(supra) does not permit a decision to be rendered by a Court not
designated under Section 4(2) of the Act of 2015 in respect of a
commercial dispute in the Non-commercial Division. It does not
clothe legality to a decision rendered in matter involving a
commercial dispute, by a Court which is not a designated Court
under Section 4(2) of the Act of 2015 when, such decision was
rendered.
22. The Notification dated November 11, 2015 of the High Court, also
does not aid the respondent. Such notification was issued
subsequent to the impugned judgment and order was passed. On
the date of the assignment as also on the date of the impugned
judgment and order, the learned Judge, was not a Court
designated under Section 4(2) of the Act of 2015.
23. We initially delivered a judgment in Court on May 8, 2026.
However, while correcting such judgment, we thought it prudent
that we should seek clarification from the parties with regard to
the specified value of the subject matter of the disputes.
Consequently, we placed the matters in the list on May 12, 2026.
24. The matters were adjourned on May 12, 2026 in order to facilitate
the learned counsel for the parties to assist the Court on the point
raised.
25. Twin conditions must concurrently exist for a pending proceeding
to be dealt with under Section 15 of the Act of 2015. First
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condition is that the subject must involve a commercial dispute
within the meaning of the Act of 2015. The other is that the
valuation of the subject matter of the Specified Value. Both must
exist concurrently.
26. The bone of contention is the specified value of the subject matter.
It appears from the records that, the claim before the Facilitation
Council was in excess of Rs.1 crore. The principal amount
awarded together with the interest awarded, will exceed the sum of
Rs.1 crore. The relevant notification governing the pecuniary
jurisdiction of the Commercial Division, when, the proceedings
were filed is dated November 15, 2018 which prescribed a sum of
Rs.1 crore as the specified value.
27. In such circumstances, we are constrained to hold that the
impugned judgment and order was passed by a Court, which did
not possess requisite jurisdiction to do so, and hence, a nullity.
28. We clarify that we did not enter into the merits of the present case.
29. The impugned judgment and order dated May 23, 2022 is set
aside.
30. Since, presently the pecuniary jurisdiction of the Commercial
Division is above Rs. 10 lakhs, on setting aside of the impugned
judgment and order, we are required to remand the matters to the
learned Court for fresh adjudication. As noted above, since,
present pecuniary jurisdiction of the Commercial Division is above
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Rs.10 lakhs, we deem it appropriate to issue directions under
Section 15 (5) of the Act of 2015.
31. Since, AP/175/2020 and EC/156/2020 involve commercial
disputes within the meaning of the Act of 2015, Department will
transmit the records of the AP/175/2020 and EC/156/2020 along
with all connected applications pending in respect of those two
proceedings to the Commercial Division. Immediately on
transmission, the Non-commercial Division will treat
AP/175/2020 and EC/156/2020 along with all connected
applications as disposed of so far as such Non-commercial
Division is concerned.
32. Learned Senior Advocate appearing for the respondent draws the
attention of the Court to Section 19 of the Act of 2006. He submits
that, since, the bank guarantee furnished by the appellant stood
lapsed, the proceedings under Section 34 of the Act of 1996 is no
longer valid. The same, therefore, need not be transmitted to the
Commercial Division.
33. Learned Senior Advocate appearing for the appellant submits that,
when, the application under Section 34 of the Act of 1996 being
AP/175/2020 was presented, 50% of the award amount was
secured by deposit of cash with the Registrar, Original Side and
the balance was secured by way of a bank guarantee. He submits
that, this bank guarantee lapsed due to sheer oversight. He seeks
time to extend such bank guarantee.
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34. We find from the records that, there was compliance with the
provisions of Section 19 of the Act of 2006 for a substantial period
of time. However, as on date, the bank guarantee stands lapsed.
35. In our view, interest of justice would be subserved by permitting
the appellant to renew the lapsed bank guarantee within 7 days
from date or file fresh bank guarantee. In the event of default in
doing so, the order requiring transmission of the records from the
Non-commercial Division to the Commercial Division shall stand
vacated without further reference to the Court. In such
eventuality, the Department will treat AP/175/2020 as dismissed.
36. APO/41/2022 and APO/85/2023 are disposed of accordingly.
(DEBANGSU BASAK, J.)
37. I agree.
(MD. SHABBAR RASHIDI, J.)
KB
AR(CR)
