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Judgment
The present Civil Revision Application is directed against the order dated 19.11.2015 passed by the 2nd Additional Sr. Civil Judge, Jamnagar (hereinafter referred to as "the trial Court") below Exh. 197 in Special Civil Suit No.111 of 1992, whereby the trial Court has rejected the application of the applicant - original plaintiff, seeking termination/disposal of the suit.
At the outset, it is required to be stated that the present revision application is the outcome of various erroneous proceedings filed by the parties and by the Arbitrator, and various erroneous orders passed by the Courts at different stages.
The undisputed chequered history of the case may be narrated as under:- 3.1 The Applicant was awarded a Contract by the respondents for the work of construction of Bhumg Minor Irrigation Scheme in Taluka Kalyanpur, District Jamnagar. An Agreement bearing No.B-2/l of 1981-82 was entered into between the Applicant and the respondent No.2 on behalf of the Respondent No.1. The work order for commencing the work was issued by the respondent No.2, wherein the date of commencement of work was specified as 18.12.1981 and the period of completion of work was 24 months.
3.2 The Applicant filed Special Civil Suit No.111 of 1992 before the trial Court against the respondents for recovery of Rs.20,10,867.66 towards damages for the delay caused at the instance of the respondents. On 10.3.1997, the respondent No.3 District Panchayat filed Application at Exh.l42 in the said suit, seeking transfer of the matter to an Arbitration Tribunal constituted under the Gujarat Public Works Contract Disputes Arbitration Tribunal Act, 1992. The Trial Court, therefore, passed the order dated 20.6.1997 below Exh.l42 transferring the proceedings to the Arbitration Tribunal in view of the said Act. The Applicant being aggrieved by the said order filed Civil Revision Application No.1063 of 1997 before this Court. 3.3 This Court set aside the said order dated 20.06.1997, vide the order dated 03.04.1998 in Civil Revision Application No. 1063 of 1997 and held that the Gujarat Public Works Contract Disputes Arbitration Tribunal Act, 1992 did not apply to the dispute between the Applicant and the respondents. The Applicant (original plaintiff) thereafter filed an Application at Exhibit 149 in Special Civil Suit No. 111 of 1992 showing willingness to resolve the disputes by way of arbitration, and suggested names of three persons for being appointed as the Arbitrators. The Trial Court passed the order on 1.11.1999 appointing Shri B.V. P. Patel, retired Superintendent Engineer as the sole Arbitrator to adjudicate the disputes in view of the Arbitration Clause in the Contract, keeping the suit pending. The Arbitrator passed the Arbitral Award on 3.10.2000 in favour of the Applicant directing the respondents to pay the applicant Rs.13,96,991.04 with an interest @ 18% per annum from the due date.
3.4 The said Award dated 03.10.2000 was presented by the Arbitrator before the Trial Court on which the trial Court issued the notices to the parties. The respondent Nos. 2 and 3, therefore, filed an application at Exhibit 160 raising objection with regard to the jurisdiction of the Trial Court to hear objections in relation to the Award dated 03.10.2000, and thereafter without prejudice to the said objection with regard to jurisdiction, also filed objections at Exh. 164 on 26.12.2000 against the said Award under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act"). The Trial Court passed an Order below Exh. 160 on 20.1.2001 holding that in view of Section 2 (e) read with Section 34 of the the said Act, the District Court would have the jurisdiction to hear the objection application against an Arbitral Award and not the Trial Court. The trial Court directed the Arbitrator to present the Award in the District Court. 3.5 The Arbitrator thereafter filed Civil Miscellaneous Application No.25 of 2001 before the District Court, Jamnagar for filing the Arbitral Award dated 03.10.2000. It appears that the applicant as well as the respondent Panchayat had raised objections as regards the jurisdiction of the District Court, and therefore, the Joint District Court, Jamnagar passed an order on 21.12.2001 holding that it had no jurisdiction to consider the award and the other applications in view of Section 42 of the said Act. The said Court directed the Arbitrator to place the Award and the files before the trial Court.
3.6 On remand of the matter to the trial Court, the Applicant filed reply at Exhibit 172 to the objections dated 26.12.2000 filed by the Respondents under Section 34 of the the said Act. The trial Court passed the order dated 14.8.2006 setting aside the Arbitral Award in view of the Notification dated 20.1.2001 issued by the High Court, though the Notification was intended for the Applications under Section 11 of the the said Act. The Applicant, therefore, filed First Appeal being No.1388 of 2007 before this Court for quashing and setting aside the said order dated 14.08.2006 of the Trial Court. This Court allowed the said First Appeal No. 1388 of 2007 by passing the following order:- "7. In the premises aforesaid, this appeal is allowed and the following order is passed:
(i) The impugned award 14.08.2006 passed by the Civil Judge (S.D.), Jamnagar is hereby quashed and set aside. (ii) Matter is remanded to the trial court for consideration afresh on merits of the case.
(iii) The trial court shall hear and decide the matter on merits under section 34 of the Act after considering the submissions made by both the sides. (iv) It shall be open to the parties to raise all contentions permissible under law during the course of hearing.
(v) It is clarified that this Court has not entered into the merits of the case. (vi) The trial court shall hear and dispose of the matter within a period of six months from the date of receipt of R & P from this Court.
(vii) R & P to be sent back forthwith. 3.7 In the said order, the Court remanded the matter back to the Trial Court with directions to hear and decide the matter on merits under Section 34 of the the said Act, permitting the parties to raise all contentions, as may be permissible under the law. The Applicant, therefore, filed an Application at Exh. 197 before the Trial Court to terminate the proceedings of the said Suit being No.111/1992. The said application having been rejected by the trial Court, the Revision Application has been filed by the applicant.
The learned Sr. Advocate Mr.S.N. Soparkar for the applicant - original plaintiff pointing out series of errors committed by the parties, the Arbitrator and the Courts submitted that at the outset the trial Court had committed an error in not disposing of the suit, while referring the disputes between the parties to the Arbitrator in the year 1999, as nothing further was required to be done by the Court in the suit. In this regard, he has relied upon the decision of the Supreme Court in case of P. Anand Gajapathi Raju and Ors. Vs. P.V.G. Raju (Dead) and Ors., reported in (2000) 4 SCC 539 and of our High Court in case of Gujarat Informatics Limited Vs. Creative Infocity Limited, reported in 2009(2) GLR 1281. According to him, thereafter the Arbitrator also committed an error in presenting the award before the trial Court, though the said award was to be treated as decree and was executable under the said Act. In any case, the respondent Panchayat filed the objections under Section 34 of the said Act against the said award. He further submitted that though the trial Court held that it had no jurisdiction to decide the proceedings under Section 34 of the said Act, in view of the definition of "Court" contained in Section 2(1)(e) of the said Act, and though the Arbitrator had filed CMA before the District Court, Jamnagar, the District Court relying upon Section 42 of the said Act, remanded the matter to the trial Court for deciding the objection application under Section 34 of the said Act. The said order remained unchallenged at the instance of the parties, and the trial Court passed the order on 14.8.2006 setting aside the arbitral order. The applicant having filed the First Appeal being No.1388 of 2017 challenging the said order, the said First Appeal was allowed by High Court as per the order dated 24.6.2015, whereby High Court directed the trial Court to hear and decide the application under Section 34 of the said Act on merits. He further submitted that as per the settled legal position the application under Section 34 of the said Act could lie only before the Principal Civil Court of original jurisdiction in a District i.e. the District Court, and therefore, the trial Court did not have the jurisdiction to hear and decide the said application of the respondent Panchayat under Section 34 of the said Act. In this regard he has relied upon various decisions of the Supreme Court. He, therefore, submitted that when the trial Court did not have jurisdiction to decide the application under Section 34 of the said Act and when the suit itself was required to be disposed of at the first instance by the trial Court when it referred the disputes to the arbitral Tribunal, the trial Court had committed an error in not allowing the application of the applicant for the disposal of the suit.
After arguing at length, Mr.Soparkar submitted that he has no objection if the application of the respondent Panchayat filed under Section 34 of the said Act raising the objections against the arbitral award is directed to be heard and decided on merits by the competent Court as defined in Section 2(1)(e) of the said Act, i.e. the District Court Jamkhambhalia. He also submitted that the applicant shall not raise any objection with regard to the issue of limitation, if the said application of the respondent Panchayat is transferred to the said District Court to be heard on merits, as the respondents had filed the said application before the trial Court within the prescribed time limit.
The learned Advocate Mr.Dhirendra Mehta appearing for the respondent Panchayat also fairly submitted that the trial Court would not have the jurisdiction to decide the application under Section 34 of the said Act, and that he has no objection if the same is directed to be heard and decided on merits by the competent Court i.e. the District Court at Jamkhambhalia after disposing of the suit before the trial Court.
Having regard to the submissions made by the learned Advocates for the parties and to the provisions contained in the said Act, in the light of the various decisions of the Supreme Court, it appears that series of erroneous proceedings were undertaken by the parties and erroneous orders were passed by various Courts dehors the provisions contained in the said Act. Be that as it may, without going into the merits, suffice is to say that both the learned Advocates for the parties do not dispute the settled legal position that the application filed by the respondent Panchayat under Section 34 of the said Act raising objections against the award made by the Arbitrator is required to be heard and decided by the Court as defined under Section 2(1)(e) of the said Act, and that in the instant case, it is the District Court, Jamkhambhalia, which would be the competent Court as per the said provision to decide the said Application under Section 34 of the said Act.
At this juncture, the relevant observations made by the Supreme Court on the interpretation of Section 2(1)(e) of he Act, in case of State of Maharashtra through Executive Engineer, Road Development Division No.111, Panvel and Anr. Vs. Atlanta Limited, reported in (2014) 11 SCC 619, at 634 may be reproduced as under:- "24.2 Secondly, the provisions of the Arbitration Act, leave no room for any doubt, that it is the superior most court exercising original civil jurisdiction, which had been chosen to adjudicate disputes arising out of arbitration agreements, arbitral proceedings and arbitral awards. Undoubtedly, a "principal Civil Court of original jurisdiction in a district", is the superior most court exercising original civil jurisdiction in the district over which its jurisdiction extends. It is clear, that Section 2(1)(e) of the Arbitration Act having vested jurisdiction in the "principal Civil Court of original jurisdiction in a district", did not rest the choice of jurisdiction on courts subordinate to that of the District Judge. Likewise, "the High Court in exercise of its ordinary original jurisdiction", is the superior most court exercising original civil jurisdiction, within the ambit of its original civil jurisdiction. On the same analogy and for the same reasons, the choice of jurisdiction, will clearly fall in the realm of the High Court, wherever a High Court exercises "ordinary original civil jurisdiction"."
In case of State of West Bengal and Ors. Vs. Associated Contractors, reported in (2015) 1 SCC 32, the Supreme Court held as under:- "25. Our conclusions therefore on Section 2(1)(e) and Section 42 of the Arbitration Act, 1996 are as follows:
(a) Section 2(1)(e) contains an exhaustive definition marking out only the Principal Civil Court of original jurisdiction in a district or a High Court having original civil jurisdiction in the State, and no other court as "court" for the purpose of PartI of the Arbitration Act, 1996. (b) The expression "with respect to an arbitration agreement" makes it clear that Section 42 will apply to all applications made whether before or during arbitral proceedings or after an Award is pronounced under PartI of the 1996 Act.
(c) However, Section 42 only applies to applications made under PartI if they are made to a court as defined. Since applications made under Section 8 are made to judicial authorities and since applications under Section 11 are made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his designate not being court as defined, such applications would be outside Section 42. (d) Section 9 applications being applications made to a court and Section 34 applications to set aside arbitral awards are applications which are within Section 42.
(e) In no circumstances can the Supreme Court be "court" for the purposes of Section 2(1)(e), and whether the Supreme Court does or does not retain seisin after appointing an Arbitrator, applications will follow the first application made before either a High Court having original jurisdiction in the State or a Principal Civil court having original jurisdiction in the district as the case may be. (f) Section 42 will apply to applications made after the arbitral proceedings have come to an end provided they are made under PartI.
(g) If a first application is made to a court which is neither a Principal Court of original jurisdiction in a district or a High Court exercising original jurisdiction in a State, such application not being to a court as defined would be outside Section 42. Also, an application made to a court without subject matter jurisdiction would be outside Section 42. The reference is answered accordingly."
In view of the above stated legal position, it is required to be held that the District Court, Jamkhambhalia, which is the Principal Civil Court of original jurisdiction in the District, would have the jurisdiction to hear and decide the application of the respondent Panchayat under Section 34 of the said Act. Mr.Soparkar has rightly submitted that neither the consent of the parties, nor the order of the Court can confer jurisdiction on the Court, which otherwise would not have under the Act. Hence, in order to streamline the proceedings, following directions are given:- (i) The impugned order dated 19.11.2015 is set aside. The trial Court is directed to send the application at Exh.164 along with the reply at Exh.172 and other record and proceedings with regard to the said application filed under Section 34 of the said Act by the respondent Panchayat, challenging the award passed by the Arbitral Tribunal, to the District Court at Jamkhambkalia, and to dispose of the Civil Suit No.111 of 1992.
(ii) The District Court at Jamkhambkalia shall register the said application under Section 34 of the said Act filed by the respondent Panchayat as per the rules. (iii) The District Court at Jamkhambkalia shall hear and decide the said application under Section 34 of the said Act, on merits in accordance with law after affording reasonable opportunity of hearing to all the parties, permitting them to raise all the contentions as may be permissible under the law.
(iv) The matter being very old, the District Court at Jamkhambkalia shall endeavour to dispose of the same as expeditiously as possible, preferably within a period of six months from the date of registration of the application. It is needless to say that both the parties shall cooperate the District Court at Jamkhambkalia for disposing of the said application.
Subject to the afore-stated directions, the Civil Revision Application stands allowed accordingly.