M.P. Road Development ... vs Baisakhu Alias Sadhu
2021 Latest Caselaw 1784 MP

HIGH COURT OF MADHYA PRADESH PRINCIPAL SEAT AT JABALPUR



MISC PETITION NO.                           1532/2021
Parties Name                MADHYA    PRADESH           ROAD      DEVELOPMENT
                            CORPORATION

                            VS.

                            BAISAKHU @ SADHU
Bench Constituted           Single Bench
Judgment delivered By       HON'BLE SHRI JUSTICE VISHAL DHAGAT
Whether       approved   for YES/NO
reporting
Name of counsel for parties For petitioner: Shri Atul Nema, Advocate.

                            For Respondent :

Law laid down               -
Significant       paragraph -
number


                                (O R D E R )
                                05/05/2021

Petitioner has filed this Misc. Petition calling in question

order dated 02.02.2021 passed by First Additional District Judge,

Mandla, MP.

2. Registry has raised an objection regarding maintainability of

Misc. Petition filed by the petitioner. Registry has pointed out that

Misc. Appeal under Order 43 Rule 1 of CPC ought to have been

filed by petitioner instead of Misc. Petition under Article 227 of

the Constitution of India.

3. Considered the objections raised by the Registry.

4. As per the judgement of Apex Court in the case of Kandla

Export Corporation and another Vs. OCI Corporation and

another, (2018) 14 SCC 715, it has been held in para 13, 14 and

15 of said judgement as under:-

"13. Section 13(1) of the Commercial Courts Act, with which we are immediately concerned in these appeals, is in two parts. The main provision is, as has been correctly submitted by Shri Giri, a provision which provides for appeals from judgments, orders and decrees of the Commercial Division of the High Court. To this main provision, an exception is carved out by the proviso. The primary purpose of a proviso is to qualify the generality of the main part by providing an exception, which has been set out with great felicity in CIT v. Indo-Mercantile Bank Ltd., 1959 Supp (2) SCR 256 at 266- 267, thus:

"9.... The proper function of a proviso is that it qualifies the generality of the main enactment by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main enactment. Ordinarily it is foreign to the proper function of a proviso to read it as providing something by way of an addendum or dealing with a subject which is foreign to the main enactment. "8.....it is a fundamental rule of construction that a proviso must be considered with relation to the principal matter to which it stands as a proviso".

Therefore it is to be construed harmoniously with the main enactment. (Per Das, C.J. in Abdul Jabar Butt v. State of Jammu & Kashmir [(1957) SCR 51, 59]). Bhagwati, J., in Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax [(1955) 2 SCR 483, 493] said:

"10. It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other."

10. Lord Macmillan in Madras & Southern Maharatta Railway Co. v. Bezwada Municipality [(1944) LR 71 IA 113, 122] laid down the sphere of a proviso as follows:

".....The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case. Where, as in the present case, the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication what clearly falls within its express terms."

The territory of a proviso therefore is to carve out an exception to the main enactment and exclude something which otherwise would have been within the section. It has to operate in the same field and if the language of the main enactment is clear it cannot be used for the purpose of interpreting the main enactment or to

exclude by implication what the enactment clearly says unless the words of the proviso are such that that is its necessary effect. (Vide also Corporation of City of Toronto v. Attorney-General for Canada [(1946) AC 32, 37] .)"

14. The proviso goes on to state that an appeal shall lie from such orders passed by the Commercial Division of the High Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure Code, 1908, and Section 37 of the Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order XLIII of the CPC would, therefore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are appeals that can be made to the Commercial Appellate Division of a High Court.

15. Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act."

5. In view of above judgement it is clear that provisions under

Arbitration and Conciliation Act 1996 (hereinafter referred to as

'the Act of 1996') are special provisions and same will over-rule

the general provisions of Commercial Court Act 2015 and Code of

Civil Procedure, 1908. Since appeal is not maintainable under

section 37 of Arbitration and Conciliation Act 1996, therefore,

petitioner cannot resort to Order 43 of Code of Civil Procedure

read with Section 13 of Commercial Courts Act for filing a Misc.

Appeal before this Court. In view of the same objection raised by

registry is overruled.

6. Petitioner has filed an application under section 34 of

Arbitration and Conciliation Act 1996 which has been returned to

petitioner for filing the same before Principal Civil Court at

Jabalpur. Application was returned by the trial court on the

ground that Divisional Commissioner, Jabalpur has been

appointed as an Arbitrator by Central Government by order dated

17.05.2013, therefore, Principal Civil Court, Mandla does not have

jurisdiction to entertain application under section 34 of Act of

1996. Principal Civil Court at Jabalpur will have jurisdiction to

consider and decide application filed by petitioner under section

34 of the Act of 1996.

7. Learned Additional District Judge, Mandla relied on

judgement passed by the Apex Court reported in (2020) 4 SCC

234, BGS SGS Soma JV Vs. NHPC Limited. Learned court

below relied on para 59, 61 and 82 of said judgement. Learned

First Additional District Judge, Mandla held that Central

Government has issued notification dated 17.05.2013 by which

Commissioner Jabalpur was appointed as Arbitrator to consider

and decide cases of acquisition of land under National Highways

Act, as per section 3G(5) of National Highways Act 1956. Since

the seat of Arbitrator is at Jabalpur, therefore, it was held that

Principal Civil Court at Jabalpur will have jurisdiction to consider

and decide application filed under section 34 of the Act of 1996.

Application filed by petitioner under section 34 of the Act of 1996

was returned to him to be presented in the court of proper

jurisdiction.

8. Counsel appearing for petitioner argued that compensation

amount has been decided by SDM-cum-competent authority at

Mandla and land is also situated at Mandla, therefore, Principal

Civil Court, Mandla have exclusive jurisdiction to entertain

application under section 34 of the Act of 1996. Learned trial

court failed to appreciate the fact that there is no arbitration

agreement between the parties and is a case of compulsory

acquisition of land for widening of National Highway, therefore,

Sections 20 and 42 of the Act of 1996 cannot be resorted to for

determining whether Principal Civil Court has jurisdiction to

decide application or not. Learned court below failed to consider

the fact that cause of action arose within the territorial

jurisdiction of Mandla. Since there is no arbitration agreement

and venue and place of arbitration has not been fixed by

agreement between parties, therefore Principal Civil Court where

cause of action arises is competent to consider and decide

application under section 34 of the Act of 1996. Learned court

below failed to consider the fact that Apex Court judgement

relied upon has distinguishable facts. In that case there was an

arbitration agreement between the parties but in present case

there is no arbitration agreement, therefore, ratio of said

judgement is not attracted in this case. On said grounds counsel

appearing for petitioner prayed for setting aside the order dated

02.02.2021 and to remand the matter back to Principal Civil

Court Mandla for considering it on its merits.

9. Heard the counsel for petitioner.

10. Learned Apex Court in case of Bharat Aluminium Co Vs.

Kaiser Aluminium Technical Services Inc. reported in (2012)

9 SCC 552 in para 96 held as under: -

"96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under:

"2. Definitions (1) In this Part, unless the context otherwise requires -

(a) - (d) x x x

(e) "Court" means 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."

We are of the opinion, the term "subject matter of the arbitration" cannot be confused with "subject matter of the suit". The term "subject matter" in Section 2(1)(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the learned counsel for the appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. For example, if the arbitration is held in Delhi, where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the Courts of Delhi being the Courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi. In such circumstances, both the Courts would have jurisdiction, i.e., the Court within whose jurisdiction the subject matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution, i.e., arbitration is located."

11. Considering paragraph 96 in the case of Bharat Aluminium

Co (supra) Apex Court in case of BGS SGS Soma JV (supra)

interprets same in para 57 of its judgement as under:-

"57. The view of the Delhi High Court in Antrix Corporation Ltd. (supra), which followed judgments of the Bombay High Court, does not commend itself to us. First and foremost, it is incorrect to state that the example given by the Court in paragraph 96 of BALCO (supra) reinforces the concurrent jurisdiction aspect of the said paragraph. As has been pointed out by us, the conclusion that the Delhi as well as the Mumbai or Kolkata Courts would have

jurisdiction in the example given in the said paragraph is wholly incorrect, given the sentence, "This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi". The sentence which follows this is out of sync with this sentence, and the other paragraphs of the judgment. Thus, BALCO (supra) does not "unmistakably" hold that two Courts have concurrent jurisdiction, i.e., the seat Court and the Court within whose jurisdiction the cause of action arises. What is missed by these High Court judgments is the subsequent paragraphs in BALCO (supra), which clearly and unmistakably state that the choosing of a "seat" amounts to the choosing of the exclusive jurisdiction of the Courts at which the "seat" is located. What is also missed are the judgments of this Court in Enercon (India) Ltd. (supra) and Reliance Industries (supra)".

12. Considering the aforesaid principles laid down by Apex

Court and the facts arising in this case it is clear that there is no

arbitration agreement between the parties by which seat of

arbitration has been agreed between them. Compensation for

acquisition of land for construction/widening of National Highway

is determined by competent authority. The amount determined

by competent authority was not acceptable to the parties,

therefore, an application was moved to determine the amount of

compensation by Arbitrator to be appointed by Central

Government. Central Government by its order dated 17.05.2013

has notified Commissioner, Jabalpur as an Arbitrator for

determining compensation under section 3G(5) of the National

Highways Act, 1956. Commissioner, Jabalpur has passed an

award on 29.8.2017 as per section 3G(5) and 3G(6) of National

Highways Act, 1956. Provision of Arbitration and Conciliation Act,

1996 is made applicable for determination of compensation by

Commissioner. As per notification of Central Government,

Commissioner Jabalpur was notified to be Arbitrator and both the

parties participated in arbitration proceedings before

Commissioner Jabalpur. The seat as well as venue of arbitration

proceedings were at Jabalpur, therefore, application for setting

aside the award under section 34 of the Act of 1996 will lie before

Principal Civil Court of original jurisdiction in Jabalpur and not at

Mandla.

13. Learned Additional District Judge, Mandla has not

committed any error in returning the application filed by

petitioner to be presented before proper court. Order dated

02.02.2021 passed by First Additional District Judge, Mandla is

affirmed and Misc. Petition filed by the petitioner is dismissed.

14. Registrar Judicial is directed to supply a copy of this order

to Commercial Courts and to Principal Civil Court of original

jurisdiction which are designated/assigned to adjudicate upon

application filed under section 34 of Arbitration and Conciliation

Act 1996.

(VISHAL DHAGAT) JUDGE mms

Digitally signed by MONSI M SIMON Date: 2021.05.06 11:26:31 +05'30'