State of Hp and Anr. Vs Tilak Raj

For the appellants : Mr. Navlesh Verma, Additional Advocate General. For the respondents : Mr. Suneet Goel, Sr. Advocate with Mr. Vivek Negi, Advocate, for the respondent in Arb. Appeal No. 450 of 2025. Mr. R.L. Chaudhary, Advocate, for the respondent in Arb. Appeal No. 452 of 2025.

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1 Whether reporters of Local Papers may be allowed to see the judgment?

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G.S. Sandhawalia, Chief Justice (Oral):

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This judgment shall dispose of the present two appeals filed by the State, preferred under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the 1996 Act), wherein consideration has been sought against the order of learned Single Judge, passed in OMP(M) No. 25 of 2024 in Arbitration Case No. 851 of 2024 , titled Engineer-in-Chief & others vs. Dev Raj , decided on 22.11.2024, whereby the application for condonation of delay was dismissed being time barred, being 24 days before three months prescribed period, as the sufficient cause was not made out, resultantly, the Arbitration Case was also dismissed.

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Similarly, in Arbitration Appeal No. 452 of 2025 , consideration is being sought against the order passed by the learned Single Judge in OMP(M) No. 14 of 2024, titled State of H.P. & another vs. Tilak Raj , whereby on account of delay of 16 days in filing the petition under Section 34 of 1996 Act, the learned Single Judge dismissed the application on 11.03.2025.

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Mr. Navlesh Verma, learned Additional Advocate General appearing for the State has pointed out that the orders were passed by the two learned Single Judges, who had not been delegated the powers as such and not nominated to be Commercial Divisions (Single Benches) as per notification dated 24/25.10.2024 and the orders having been passed thereafter are coram non judice being a nullity. It is thus submitted that on the technical issue as such, the Courts not having the jurisdiction, these orders/judgments will have to be set aside, for afresh consideration by the Courts of competent jurisdiction.

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Learned counsels appearing for the respondents are not in a position to dispute this factual matrix. Apparently, vide notification dated 24.10.2024, following two learned Judges as such were nominated to be the Commercial Divisions (Single Bench). The said notification reads as under:-

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“ In supersession to this Registry Notification No.HHC/Admn.10 (155)/92-XVII-17812-44, dated 15/ 19.06.2024 and in exercise of powers vested under Section 4 (2) of the Commercial Courts, Commercial Division and commercial Appellate Division of High Courts

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Act, 2015 (Act No.4 of 2016), Hon’ble the Acting Chief Justice has been pleased to nominate the following Hon’ble Judges to be the Judges of the two Commercial Divisions (Single Benches):-

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1. Hon’ble Mr. Justice Ajay Mohan Goel, Judge,

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Hon’ble Mr. Justice Sandeep Sharma, Judge.

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BY ORDER

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HON’BLE THE ACTING CHIEF JUSTICE.”

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Perusal of the said notification would go on to

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show that the notification issued under Section 4 (2) of the Commercial Courts Act, talks about the nomination of such judges of the High Courts, who will exercise the powers, constituted as Commercial Divisions for exercising the jurisdiction under such provisions. Such provisions read as under:-

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“ 4. Constitution of Commercial Division of High Court .—(1) In all High Courts, having [ordinary original civil jurisdiction], the Chief Justice of the High Court may, by order, constitute Commercial Division having one or more Benches consisting of a single Judge for the purpose of exercising the jurisdiction and powers conferred on it under this Act.

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(2) The Chief Justice of the High Court shall nominate such Judges of the High Court who have experience in dealing with commercial disputes to be Judges of the Commercial Division”.

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As per definition under Section 2 (c) (vi), commercial dispute means regarding the dispute pertaining to construction and infrastructure contracts including tenders. It is not disputed that the disputes herein are arising out of the awards passed for construction and infrastructure contracts.

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Section 10 (2) also provides that all applications arising as such out of the provisions of 1996 Act filed on the original side shall be heard and disposed of by the Commercial Division, which has been constituted in such High Court, which reads as under:-

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“ Jurisdiction in respect of arbitration matters.-

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(2) 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 have been filed on 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.”

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Similarly, Section 15 (1) provides that all suits

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and applications pertaining to 1996 Act relating to commercial disputes pending in the High Court where the

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Commercial Division has been constituted shall be transferred to the competent Court. The same reads as under:-

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“15. Transfer of pending cases .—(1) All suits and applications, including applications under the Arbitration and Conciliation Act, 1996 (26 of 1996), relating to a commercial dispute of a Specified Value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division.”

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In such circumstances, it was thus imperative

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as such to transfer the said cases to the Courts of competent jurisdiction as per notification dated 24.10.2024 by the Registry of this Court.

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Reliance can be placed upon the judgment of the Apex Court in Harshad Chiman Lal Modi vs. DLF Universal Ltd. & another , (2005) 7 SCC 791 , wherein the Apex Court came to the conclusion that there are three types of jurisdictions pertaining to the jurisdiction of the subject matter and if the Court does not have the jurisdiction the order passed is a nullity as such. The said observations had come on account of the fact that the Delhi Court had returned the plaint on account of the fact

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that the immoveable property was not situated within the jurisdiction of the said Court and, therefore, suit for specific performance of agreement and possession of immoveable property situated outside the jurisdiction of the Delhi Court was not maintainable. It was held that the Court could not confer jurisdiction, when it did not possess the same. Relevant paragraphs reads as under:-

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“30. We are unable to uphold the contention. The jurisdiction of a court may be classified into several categories. The important categories are (i) Territorial or local jurisdiction; (ii) Pecuniary jurisdiction; and (iii) Jurisdiction over the subject matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is nullity.

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32. In Bahrein Petroleum Co., this Court also held that neither consent nor waiver nor acquiescence can confer jurisdiction upon a court, otherwise incompetent to try the suit. It is well-settled and needs no authority that 'where

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a court takes upon itself to exercise a jurisdiction it does not possess, its decision amounts to nothing.' A decree passed by a court having no jurisdiction is non-est and its validity can be set up whenever it is sought to be enforced as a foundation for a right, even at the stage of execution or in collateral proceedings. A decree passed by a court without jurisdiction is a coram non judice.

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37. In the instant case, Delhi Court has no jurisdiction since the property is not situate within the jurisdiction of that court. The trial court was, therefore, right in passing an order returning the plaint to the plaintiff for presentation to the proper court. Hence, even though the plaintiff is right in submitting that the defendants had agreed to the jurisdiction of Delhi Court and in the original written statement, they had admitted that Delhi Court had jurisdiction and even after the amendment in the written statement, the paragraph relating to jurisdiction had remained as it was, i.e. Delhi Court had jurisdiction, it cannot take away the right of the defendants to challenge the jurisdiction of the court nor it can confer jurisdiction on Delhi Court, which it did not possess. Since the suit was for specific performance of agreement and possession of immovable property situated outside the jurisdiction of Delhi Court, the trial court was right in holding that it had no jurisdiction.”

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The said view was thereafter followed in

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Hasham Abbas Sayyad vs. Usman Abbas Sayyad &

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others, (2007) 2 SCC 355 , wherein also it was held that where the Court/Tribunal has no authority to pass order,

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any order passed by a Court without jurisdiction would be coram non judice being a nullity, which should not be given effect to. Relevant paragraphs read as under:-

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“22. The core question is as to whether an order passed by a person lacking inherent jurisdiction would be a nullity. It will be so. The principles of estoppel, waiver and acquiescence or even res judicata which are procedural in nature would have no application in a case where an order has been passed by the Tribunal/Court which has no authority in that behalf. Any order passed by a court without jurisdiction would be coram non judice being a nullity, the same ordinarily should not be given effect to. [See Chief Justice of Andhra Pradesh and Another v. L.V.A. Dikshitulu and Others - AIR 1979 SC 193 & MD Army Welfare Housing Organisation v. Sumangal Services (P) Ltd. (2004) 8 SCC 619].

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24. We may, however hasten to add that a distinction must be made between a decree passed by a court which has no territorial or pecuniary jurisdiction in the light of Section 21 of the Code of Civil Procedure; and a decree passed by a court having no jurisdiction in regard to the subject matter of the suit. Whereas in the former case, the appellate court may not interfere with the decree unless prejudice is shown, ordinarily the second category of the cases would be interfered with.”

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Keeping in view the above, we are of the considered opinion that we have no option but to set aside the orders passed by the learned Single Judges and

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remand the matters to be heard and decided afresh by the Court of competent jurisdiction. The office shall ensure that the matters are placed before the Courts which have been duly designated as per the notification, for decision afresh. Pending applications, if any, also stand disposed of.

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(G. S. Sandhawalia) Chief Justice

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(Bipin C. Negi) Judge

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13^th May, 2026

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(kck)

State of Hp and Anr. v. Tilak Raj

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State of Hp and Anr. v. Tilak Raj

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