Domestic commercial arbitration applications could be transferred to a Senior Civil Judge designated as a Commercial Court. The Court upheld the statutory framework, notification and transfers, rejecting challenges based on the Arbitration and Conciliation Act. All five petitions were dismissed and interim orders vacated.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
W.P.(C) No. 3523, 5491 & 5494 of 2022 …. Petitioners
M/s. M.G. Mohanty and another
-versus-
….
State of Odisha and others Opposite Parties
W.P.(C) No. 28644 of 2021 …. Petitioner
M/s. Budhraja Mining & Construction
Limited.
-versus-
….
District Judge, Khurda and others Opposite Parties
AND
W.P.(C) No. 30554 of 2021 …. Petitioner
Odisha Hydro Power Corporation Ltd.
(OHPC), Bhubaneswar
-versus-
M/s. TRAFLGAR House Construction …. Opposite Parties
(T) Satyam Sankarnarayan Joint
Venture (TSSJV) and others
Appeared in this case:
For Petitioners : Mr. Gautam Mukherjee, Senior Advocate Mr. Durga Prasad Nanda, Senior Advocate Mr. Prabhu Prasanna Behera, Advocate (In W.P.(C). 3523, 5491 & 5494 of 2022)
Mr. Avijit Pal, Advocate (In W.P.(C) No.28644 of 2021)
Mr. Durga Prasad Nanda, Senior Advocate (In W.P.(C). No.30554 of 2021)
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 1 of 36
For Opposite Parties :
Mr. P.K. Parhi, Asst. Solicitor General Mr. P.K. Muduli, Addl. Govt. Advocate Mr. Gautam Misra, Senior Advocate Mr. Yogesh Jagia, Senior Advocate Mr. Tanmay Mishra, Advocate Mr. S.S. Parida, Advocate
CORAM:
THE CHIEF JUSTICE JUSTICE R.K. PATTANAIK
JUDGMENT 08.04.2022
Dr. S. Muralidhar, CJ.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 2 of 36
Facts in W.P. (C) Nos. 3523, 5491 and 5493 of 2022
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 3 of 36
of the A&C Act by the Senior Civil Judge (Commercial Court) would be against the spirit of the A&C Act in terms of the recent definition of the expression, "Principal Civil Court", in the A&C Act. By an order dated 25th October 2021, the learned D&SJ rejected that application inter alia on the ground that the order dated 7th July 2021, passed by the D&SJ transferring the matter to the Senior Civil Judge (Commercial Court) was an order under Section 15 of the A&C Act, and that order had not been challenged before a higher forum.
6. In the present petitions, a challenge has been raised not only to the notification dated 13th November, 2020 but also the order dated 7th July, 2021 passed by the learned D&SJ transferring the cases pending before him to the Court of the Senior Civil Judge (Commercial Court) as well as the above order dated 25th October, 2021. A direction is sought for the establishment of the Commercial Court by conferring the power on the Presiding Officer in the cadre of the District Judge, not subordinate to the rank of the District Judge.
7. In the aforementioned three petitions by M/s. M.G. Mohanty, the interim order passed by this Court was to the effect that proceedings may continue before the Senior Civil Judge (Commercial Court), Bhubaneswar, but no final order would be passed in the applications pending before that Court.
Facts in W.P. (C) No.28644 of 2021
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 4 of 36
and National Aluminium Company Limited (NALCO) (Opposite Party No.3) and the General Manager, Captive Power Plant (CPP) (Opposite Party No.4) had a contractual relationship. The disputes between the parties were referred to the arbitration of a former Judge of this Court as sole Arbitrator.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 5 of 36
Facts in W.P. (C) No.30554 of 2021
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 6 of 36
Advocate, instructed by Mr. Prabhu Prasanna Behera, learned counsel on behalf of the Petitioners in W.P.(C) No.3523, 5491 and 5494 of 2022. Mr. Avijit Pal, learned counsel appeared for BMCL, the Petitioner in W.P.(C) No.28644 of 2021 and Mr. D.P. Nanda, learned Senior Advocate appeared on behalf of OHPC in W.P.(C) No.30554 of 2021.
Submissions of counsel for the Petitioners
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 7 of 36
(ii) The definition of 'Court' under Section 2(1)(e) of the A&C Act would prevail over the provisions of the CC Act. Thus, the Principal Civil Court of the District alone has the exclusive jurisdiction to try and decide the matters relating to the disputes in arbitration under Sections 9, 14, 29A, 34, 36, 37(1)(a) and 37(2) of the A&C Act.
(iii) The maxim 'generalia specialibus non-derogant' was squarely applicable in these matters. In other words, it is submitted that the provisions of the general law i.e., the CC Act had to yield to the provisions of the special Act, i.e., the A&C Act. Reliance was placed on certain passages from Maxwell on Interpretation of Statutes (11th edition) [Chapter-VII Section 3, Page 168].
(iv) The mere fact that the general law i.e., the CC Act contained a non obstante provision viz., Section 21 stating that the CC Act has overriding effect, did not demolish the force of the rule of construction advanced on behalf of the Petitioners. It is submitted that Section 21 of the CC Act will not override the provisions of the A&C Act.
Submissions of counsel for the Opposite Parties
(i) There is no apparent conflict between the A&C Act and the CC Act. Since both enactments could be labelled as ‘special’ laws, inter se among them, the latter enactment being the CC Act, would prevail.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 8 of 36
(ii) It is further submitted, on the strength of the decision of the Supreme Court of India in Innoventive Industries Ltd. v. ICICI Bank and others (2018) 1 SCC 407 that the ‘inconsistency must be clear, direct and irreconcilable and inconsistency should be of such a magnitude that the legislations appear to be in ‘direct collision’ with each other and it is impossible to obey both of them simultaneously’.
(iii) To resolve the repugnancy, a purposive and harmonious construction was required to be applied. On a collective reading of Section 9 with Section 2(1)(e) of the A&C Act read with Section 10 (3) and 21 of the CC Act, it is clear that the legislature while providing substantive provisions in the A&C Act for speedy disposal also provided procedurally the forum under the CC Act viz., the Commercial Court, to adjudicate all disputes arising under Section 9 and other sections of the A&C Act.
(iv) Reliance is placed on the decision in New India Assurance Company Limited v. Shanti Misra (1975) 2 SCC 840 , and it is submitted that:
“5. ……the change in law was merely change of forum, i.e., a change of adjectival or procedural law not a substantive law and such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to change of forum.”
(v) It is submitted that both the A&C Act and the CC Act aim at speedy adjudication. Whereas the CC Act covers all commercial disputes, the A&C Act is only concerned with the disputes that
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 9 of 36
involved arbitration. It is submitted that if at all there is any conflict between the two enactments substantively, it would be the A&C Act that prevails. However, since it is the procedural aspect of resolution of commercial disputes, including arbitral disputes, that has been provided under the CC Act, the latter can co-exist harmoniously with the A&C Act. .
(vi) Reliance was placed on the decision of the Bombay High Court in Gaurang Mangesh Suctancar v. Sonia Gaurang Suctancar , where it was held that it would be the CC Act that prevails over the A&C Act. It is submitted that the main purpose of the CC Act was for speedy disposal of commercial cases. Pursuant to the amendments of 2018 to the CC Act even the appellate jurisdiction has been conferred in the form of a Commercial Appellate Court at the district level which was not provided for prior to the 2018 amendment. The purpose of specifying the forum under Section 10 of the CC Act was further substantiated from the fact that the CC Act stipulated timebound completion of pleadings without any discretion for extension which was otherwise permitted in common law.
(i) In view of Sections 3, 3A, 10(3), 13, 15(2) and 21 of the CC Act, the contention of the Petitioners is that arbitration matters must be exclusively triable by the D&SJ who happens to be the Principal Civil Court original jurisdiction in a district, is not legally tenable.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 10 of 36
(ii) As per Section 10 (3) of the CC Act, the State Government in consultation with the High Court can designate a Senior Civil Judge as a Commercial Court. Appeals from the said Court would lie to the Commercial Appellate Court which would be in the rank of the District Judge. Thus even an Additional District Judge can be designated as a Commercial Appellate Court under Section 3A of the CC Act.
(iii) Reference is made to the 16th Lok Sabha Parliamentary Debates dated 1st August, 2018 to urge that the objective of setting of Commercial Courts was the expeditious disposal of the commercial cases. In terms of the scheme of the CC Act, it would not be proper for one Court to hear civil suits and another to hear arbitration matters. It is pointed out that in some other States i.e., the States other than Odisha, an Additional District Judge has been appointed as a Commercial Court. It is, however, the State Government to take call in that regard. The corresponding appeal would lie to the High Court under Section 13 (1-A) of the CC Act, hence, there was no denial of the opportunity of an appeal.
Analysis and reasoning
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 11 of 36
therein. Then we have Section 14(2) which states that if there is a controversy regarding termination of the mandate of an Arbitrator, then a party may unless, otherwise agreed to by the parties, ‘apply to the Court to decide on the termination of the mandate’. Section 34 of the Act which gives the remedy of challenge to an arbitral award states that such an application may be made ‘to a Court’.
(b) granting or refusing to grant any measure under section 9;
(2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal
(a) accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 12 of 36
“Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the 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.”
“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.”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 13 of 36
Court of small causes’. In certain States other than Odisha including the State of Madhya Pradesh, the ‘Principal Civil Court of original jurisdiction in a district’ need not be only the District & Sessions Judge (D&SJ) but can be even an ADJ. However, the admitted position is that as far as Odisha is concerned, further purposes of 2(1)(e)(i) of the A&C Act, it is only the D&SJ who is the Principal Civil Court in a district.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 14 of 36
CC Act as it was enacted in 2015 was meant to deal with high value commercial disputes, the 2018 amendment acknowledged that there was a need for early resolution of commercial disputes ‘of even lesser value’. The specific objectives enumerated in the SOR to the 2018 Amendment Bill read as under:
“(i) to reduce the specified value of commercial disputes from the existing one crore rupees to three lakh rupees, and to enable the parties to approach the lowest level of subordinate courts for speedy resolution of commercial disputes;
(ii) to enable the State Governments, with respect to the High Courts having ordinary original civil jurisdiction, to constitute commercial courts at District Judge level and to specify such pecuniary value of commercial disputes which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction of the district courts;
(iii) to enable the State Governments, except the territories over which the High Courts have ordinary original civil jurisdiction, to designate such number of Commercial Appellate Courts at district judge level to exercise the appellate jurisdiction over the commercial courts below the district judge level;
(iv) to enable the State Governments to specify such pecuniary value of a commercial dispute which shall not be less than three lakh rupees or such higher value, for the whole or part of the State; and
(v) to provide for compulsory mediation before institution of a suit, where no urgent interim relief is contemplated and for this purpose, to introduce the Pre-Institution Mediation and Settlement Mechanism and to enable the Central Government to authorise the authorities constituted under the Legal Services Authorities Act, 1987 for this purpose.”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 15 of 36
“3. Constitution of Commercial Courts:-
(1) The State Government may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary.
(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 16 of 36
Commercial Court shall extend and may, from time to time, increase, reduce or alter such limits.
“3A. Designation of Commercial Appellate Courts:-
Except the territories over which the High Courts have ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, designate such number of Commercial Appellate Courts at District Judge level, as it may deem necessary, for the purposes of exercising the jurisdiction and powers conferred on those Courts under this Act.”
“10. Jurisdiction in respect of arbitration matters:-
Where the subject-matter of an arbitration is a commercial dispute of a Specified Value and-
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 17 of 36
Commercial Division has been constituted in such High Court.
(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.
(3) 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 would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) shall be filed in, and heard and disposed of by the Commercial Court exercising territorial jurisdiction over such arbitration where such Commercial Court has been constituted.”
“15 (2) 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 any civil court in any district or area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court:
Provided that no suit or application where the final judgment has been reserved by the Court prior to the constitution of the Commercial Division or the Commercial Court shall be transferred either under sub-section (1) or sub-section (2).”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 18 of 36
“21. Act to have overriding effect:-
Save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act.”
“GOVERNMENT OF ODISHA
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 19 of 36
LAW DEPARTMENT *****
NOTIFICATION
Bhubaneswar dated, the 13- NOV, 2020
No. IJ-68/2018. 10933/ L, In exercise of the powers conferred by section-3 and sub-section (1) of section 9 read with section 10 of the Odisha Civil Courts Act, 1984 (Odisha Act 18 of 1984) and section 30 of the Commercial Courts Act, 2015 (4 of 2016) and in supersession of the notification of the Government of Odisha in the Law Department No.12640/L, dated 26th October 2017, published in the Extraordinary issue No.1478 of the Odisha Gazette dated the 28th October, 2017, the State Government on the recommendation of and after consultation with the High Court of Orissa do hereby establish the Courts of Civil Judge (Senior Division) at the places as mentioned in column (2) of t he Schedule below, and number of such Courts as mentioned in column (4) thereof in addition to the existing number of such Courts in the respective Judgeship having local limits of jurisdiction coextensive with the local limits of jurisdiction mentioned in column (3) of the said Schedule for the purpose of exercising the jurisdiction and powers on those Courts under the Commercial Courts Act, 2015, with effect from the date on which the said Courts are made functional.
Schedule
| Sl. No. | Place of sitting of Commercial Courts |
Extent of local limits of jurisdiction |
No. of Courts at the place of sitting |
|---|---|---|---|
| (1) | (2) | (3) | (4) |
| 1 | Cuttack Sadar | Judgeship of Cuttack, Angul, Dhenkanal and Jajpur |
1 |
| 2 | Bhubaneswar | Judgeship of Khurda | 1 |
| 3 | Berhampur | Judgeship of Ganjam, | 1 |
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 20 of 36
| Kandhamal, Boudh and Gajapati |
||
|---|---|---|
| 4 | Sambalpur | Judgeship of Sambalpur, Bargarh, Deogarh and Jharsuguda 1 |
By order of the Governor Principal Secretary to Government”
“Classes of Civil Courts-
(a) The Court of the District Judge which shall include the Court of the Additional District Judge;
(b) The Court of the Civil Judge (Senior Division) which shall include the Court of the Additional Civil Judge (Senior Division) and;
(c) The Court of Civil Judge (Junior Division) which shall include the Court of Additional Civil Judge (Junior Division).
(2) The Court of the District Judge shall be the principal Court of original civil jurisdiction in the district.
Explanation- For the purposes of this sub-section the expression “District Judge” shall not include an Additional District Judge.”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 21 of 36
Bhubaneswar. In the said memo, it was directed that case records pertaining to commercial disputes under the CC Act be transferred for smooth functioning to the Commercial Court.
35.1 In order to press home the point that it is the A&C Act that would prevail and therefore the petitions pending in the Court of Senior Civil Judge (Commercial Court) Bhubaneswar should continue to be heard only by the D&SJ and not by the Senior Civil Judge Commercial Court, extensive reliance is placed by counsel for the Petitioners on the decision of the Supreme Court in Kandla Export Corporation v. OCI Corporation ( supra ). A careful perusal of the said decision reveals that the question addressed there was whether ‘an appeal, not maintainable under Section 50 of the A&C Act, is nonetheless maintainable under Section 13(1) of the CC Act?’ The question, in that case arose in an international commercial arbitration and not a domestic arbitration. It was contended in that case, relying on the decision in Fuerst Day Lawson Limited v. Jindal Export Limited (supra) that the A&C Act is a self-contained Code on all matters pertaining to arbitration, which would exclude the applicability of the general law contained in Section 13 of the CC Act.
35.2 The Supreme Court considered the definition of the word ‘specified value’ in the CC Act which at the relevant point of time meant not less than Rs.1crore or higher value ‘as may be notified by the Central Government’. Incidentally, that definition has undergone a change by the 2018 amendment with retrospective effect from 3rd May, 2018 and the figures ‘1crore rupees’ has been substituted by ‘3
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 22 of 36
Lakh rupees’. The discussion in Kandla Export Corporation v. OCI Corporation ( supra ) turned on the interpretation of Section 50 of the A&C Act, which was considered in Fuerst Day Lawson (Supra) . It was held as under:
“20.Given the judgment of this Court in Fuerst Day Lawson (supra), which Parliament is presumed to know when it enacted the Arbitration Amendment Act, 2015, and given the fact that no change was made in Section 50 of the Arbitration Act when the Commercial Courts Act was brought into force, it is clear that Section 50 is a provision contained in a self-contained code on matters pertaining to arbitration, and which is exhaustive in nature. It carries the negative import mentioned in paragraph 89 of Fuerst Day Lawson (supra) that appeals which are not mentioned therein, are not permissible. This being the case, it is clear that Section 13(1) of the Commercial Courts Act, being a general provision vis-à-vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to cases covered by Section 50 of the Arbitration Act.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 23 of 36
more category into the category of appealable orders in the Arbitration Act, namely, a category where an order is made under Section 8 refusing to refer parties to arbitration. Parliament may have found it necessary to emphasize the fact that an order referring parties to arbitration under Section 8 is not appealable under Section 37(1)(a) and would, therefore, not be appealable under Section 13(1) of the Commercial Courts Act. Whatever may be the ultimate reason for including Section 37 of the Arbitration Act in the proviso to Section 13(1), the ratio decidendi of the judgment in Fuerst Day Lawson (supra) would apply, and this being so, appeals filed under Section 50 of the Arbitration Act would have to follow the drill of Section 50 alone.
35.3 An argument was advanced based on Section 21 of the CC Act but was repelled by the Court in Kandla Export Corporation (Supra) as under:
“26. In this view of the case, it is unnecessary to advert to Shri Giri’s arguments based on Section 21 of the Commercial Courts Act. Section 21 would only apply if Section 13(1) were to apply in the first place, which, as has been found, cannot be held to apply for the reasons given hereinabove. Equally, it is unnecessary to advert to the arguments of the learned counsel for the Appellants based on Section 11 of the Commercial Courts Act.”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 24 of 36
35.4 The Supreme Court in Kandla Export Corporation v. OCI Corporation ( supra ) then discussed another aspect as under:
“27. The matter can be looked at from a slightly different angle. Given the objects of both the statutes, it is clear that arbitration itself is meant to be a speedy resolution of disputes between parties. Equally, enforcement of foreign awards should take place as soon as possible if India is to remain as an equal partner, commercially speaking, in the international community. In point of fact, the raison d’être for the enactment of the Commercial Courts Act is that commercial disputes involving high amounts of money should be speedily decided. Given the objects of both the enactments, if we were to provide an additional appeal, when Section 50 does away with an appeal so as to speedily enforce foreign awards, we would be turning the Arbitration Act and the Commercial Courts Act on their heads. Admittedly, if the amount contained in a foreign award to be enforced in India were less than Rs. one crore, and a Single Judge of a High Court were to enforce such award, no appeal would lie, in keeping with the object of speedy enforcement of foreign awards. However, if, in the same fact circumstance, a foreign award were to be for Rs.one crore or more, if the Appellants are correct, enforcement of such award would be further delayed by providing an appeal under Section 13(1) of the Commercial Courts Act. Any such interpretation would lead to absurdity, and would be directly contrary to the object sought to be achieved by the Commercial Courts Act, viz., speedy resolution of disputes of a commercial nature involving a sum of Rs.1 crore and over. For this reason also, we feel that Section 13(1) of the Commercial Courts Act must be construed in accordance with the object sought to be achieved by the Act. Any construction of Section 13 of the Commercial Courts Act, which would lead to further delay, instead of an expeditious enforcement of
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 25 of 36
a foreign award must, therefore, be eschewed. Even on applying the doctrine of harmonious construction of both statutes, it is clear that they are best harmonized by giving effect to the special statute i.e. the Arbitration Act, vis-à-vis the more general statute, namely the Commercial Courts Act, being left to operate in spheres other than arbitration.”
35.5 What appears to have weighed with the Supreme Court in deciding Kandla Export Corporation (Supra) in the above manner was that Section 50 of the A&C Act, in relation to international commercial arbitration, did not provide for an appeal whereas accepting the submissions of the Appellants in that case would mean that notwithstanding Section 50 of the A&C Act an appeal was still maintainable. The question was that whether Section 13(1) of the CC Act would apply in the first place? Since the answer to that question was in the negative, the Court held that it is Section 50 of the A&C Act which would prevail and not Section 13(1) of the CC Act.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 26 of 36
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 27 of 36
Court of superior most jurisdiction in a district is the Court of the District Judge. It concluded that:
“14……Segregation of an arbitration matters on the basis of a pecuniary limit is not what the law provides for. All the arbitration matters, irrespective of the value of claim, are required to be adjudicated by Principal Civil Court of original jurisdiction. Therefore, it is clear that in respect of commercial disputes involving an arbitration dispute only the Commercial Court of the status of District Judge or Additional District Judge would be the competent court to entertain the matters under Sections 9, 14, 34 & 36 of the Arbitration Act.”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 28 of 36
instructive. In defending its decision to expand the scope of commercial disputes beyond those which were of high value, three aspects that were mentioned on behalf of the Government defending the Bill in the Parliament, which read as under:
“Now, what really has transpired in December 2017? As has already been mentioned by the hon. Minister, in December, 2017, the Government had established a total of 247 commercial courts across the country. But, the non-exhausted list of 22 disputes, termed as commercial disputes, has also been brought in. To increase the efficiency of the system, there are still many enactments and many things which we need to correct and this is just one part of the correction to improve the ease of doing business. By bringing the jurisdiction to three lakhs, we will actually be bringing judicial accessibility to a wider audience and to a larger number of people. By making it available to a larger number of people, we will be resolving a larger number of disputes. It is in this context that the jurisdiction has been reduced after studying the data in detail.
This particular amendment has been brought in with the specific value which was determined under Section 2 (1) (i), where the minimum pecuniary jurisdiction is mentioned, which was one crore earlier before the Ordinance, now it has been brought to three lakhs. This jurisdiction will initiate more such disputes to have a faster disposal.
As I have mentioned earlier, under the Charter, there are Chartered High Courts and non-Chartered High Courts. So, certain original jurisdictions are vested with certain High Courts and not with every High Court. This was one impediment in establishing commercial divisions. So, there was a bar of some sort. To do away with the bar, this particular enactment has been brought in and this is another
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 29 of 36
major change which has been brought in through this particular Bill.
The third aspect of the commercial appellate court is that normally at the District Level, either a District Judge or a Judge below the level of District Judge, will be notified as the Commercial Court Judge. Then the appeal need not go to the High Court. The appeal can go to the District Judge. That is also a part of this particular enactment.”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 30 of 36
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 31 of 36
therefore, purely academic. Nevertheless, it will be open to the State Government to revise its notification in view of the above anomaly.
“60. G.P. Singh, in his cerebral commentary, Principles of Statutory Interpretation (G.P. Singh, Interpretation of Statutes , (reprint, 14 edn., Lexis Nexis, 2018) 403), has explained that “the expression ‘notwithstanding anything in any other law’ occurring in a section of an Act cannot be construed to take away the effect of any provision of the Act in which that section appears. In other words, ‘any other law’ will refer to any law other than the Act in which that section occurs.” In contrast, the expression ‘notwithstanding anything contained in this Act’ may
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 32 of 36
be construed to take away the effect of any provision of the Act in which the section occurs but it cannot take away the effect of any other law.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 33 of 36
Appellate Court. The approach in Kandla Exports ( supra ) about the CC Act being procedural in nature and therefore having retrospective effect, found support in the decision in New India Assurance Company Limited v. Shanti Misra (1975) 2 SCC 840 , where a threeJudge Bench held that once there was a change not in the substantive law but in the procedural law, it would operate retrospectively and ‘the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum’. The relevant passage of the decision of the Bombay High Court in Gaurang Mangesh Suctancar v. Sonia Gaurang Suctancar, reads as under:
“92. Evidently, the Commercial Courts Act is a later enactment, but it does not work at cross purpose with the Arbitration Act. In fact, both aim at speedy adjudication. The Commercial Courts Act covers all the commercial disputes, whereas the Arbitration Act covers only those disputes that involve arbitration. As Kandla Export Corporation has held, both the enactments call for a harmonious interpretation. If at all there is any conflict, as to the substantive provisions, the Arbitration Act prevails; but it has left the procedural niceties to the Commercial Courts Act.”
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 34 of 36
Parliament or how it is ‘manifestly arbitrary’. The identification of commercial disputes as distinct from ordinary civil disputes is based on an intelligible differentia and subjecting them to a special expedited procedure can neither be considered to be arbitrary nor ultra vires the A&C Act. That prayer, therefore, has to be rejected.
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 35 of 36
commercial law. All these provisions provide rational nexus to the object sought to be achieved by the CC Act, viz., the expeditious resolution of commercial disputes. For the aforementioned reasons, the Court finds nothing manifestly arbitrary in the enactment of Section 10 (3) of the CC Act.
(S. Muralidhar)
Chief Justice
(R.K. Pattanaik)
Judge
S. Behera/ Jr. Steno
W.P.(C) Nos. 3523, 5491 & 5494 of 2022 and W.P.(C) Nos. 28644 & 30554 of 2021
Page 36 of 36
3 issues framed by the court
Can a Commercial Court below District Judge rank decide domestic arbitration applications notwithstanding Section 2(1)(e) of the Arbitration and Conciliation Act?
Do Sections 10(3), 15(2) and 21 of the Commercial Courts Act permit transfer of pending arbitration applications notwithstanding Section 42 of the Arbitration and Conciliation Act?
Are Section 10(3) of the Commercial Courts Act and the notification constituting Senior Civil Judge Commercial Courts arbitrary or invalid?
Colour shows how this judgement treated each authority
Kandla Export Corporation v. OCI CorporationDistinguished¶193
Kandla Export Corporation v. OCI Corporation (2018) 14 SCC 715 · Who else cites this
Fuerst Day Lawson Ltd v. Jindal Exports Ltd.Referred¶169
Fuerst Day Lawson Ltd v. Jindal Exports Ltd. (2011) 8 SCC 333 · Who else cites this
Innoventive Industries Ltd. v. ICICI Bank and othersReferred¶59
Innoventive Industries Ltd. v. ICICI Bank and others (2018) 1 SCC 407 · Who else cites this
New India Assurance Company Limited v. Shanti MisraRelied on¶234
New India Assurance Company Limited v. Shanti Misra (1975) 2 SCC 840 · Who else cites this
Gaurang Mangesh Suctancar v. Sonia Gaurang SuctancarFollowed¶223
Gaurang Mangesh Suctancar v. Sonia Gaurang Suctancar
Yashwardhan Raghuwanshi v. District & Sessions JudgeDissented from¶202
Yashwardhan Raghuwanshi v. District & Sessions Judge 2021 SCC OnLine MP 457 · Who else cites this
State of Maharashtra, through Executive Engineer v. Atlanta LimitedReferred¶195
State of Maharashtra, through Executive Engineer v. Atlanta Limited (2014) 11 SCC 619 · Who else cites this
Apollo Real Estate LLP v. Dr. Arun WaghmareReferred¶201
Apollo Real Estate LLP v. Dr. Arun Waghmare 2019 SCC OnLine MP 2570 · Who else cites this
10 provisions across 3 enactments
M/s. M.G. Mohanty
State of Odisha
M/s. Budhraja Mining & Construction Limited.
District Judge, Khurda
Odisha Hydro Power Corporation Ltd. (OHPC), Bhubaneswar
M/s. TRAFLGAR House Construction (T) Satyam Sankarnarayan Joint Venture (TSSJV)
S. Muralidhar
R.K. Pattanaik
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
