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Judgment
Rameshwar Vyas, J
The instant revision petition under Section 151 CPC has been filed against the impugned order dated 16.03.2021 passed by Commercial Court No.2,
Jaipur Metropolitan-II, Jaipur (afterwards referred to as ‘Commercial Court’) in Suit No. 53/2020 (430/2019), whereby, the application under
Order VII, Rule 11 read with Section 151 CPC and Sections 8 & 5 of the Arbitration and Conciliation Act, 1996 (afterwards referred to as the
‘A&C Act’) filed by defendant No.5 â€" petitioner herein has been dismissed.
Brief facts of the case are that the plaintiff-respondent No.1 herein applied for loan to so many Banks including petitioner Bank; the consolidated
amount taken on loan from different seven Banks is Rs. 98,34,413/-; plaintiff filed a suit against all the banks including the present petitioner â€
defendant No. 5 to the effect that a fraud has been committed by some doctors viz. Dr. Manohar Lal, Dr. Vikash Sharma and other persons;
defendants managed to get sign of the plaintiff on blank papers and forms; a total sum of Rs. 98,32,101/- was credited by defendant Banks in the
account of plaintiff; afterwards plaintiff came to know that the said credited money has been transferred in the account of Kishan Hospital and
Research Centre; thereafter plaintiff lodged an FIR No.274/2019 under Sections 420 and 406 IPC on 02.07.2019 against all the defendants; thereafter
plaintiff came to know from the newspaper that an FIR No. 17/2019 under Sections 420, 406, 467, 468, 471 and 120B IPC has been registered against
Dr. Ram Lakhan Desaniya, Dr. Nand Lal Desaniya, Dr. Suresh Rolaniya, Dr. Manohar Kanwariya, Dr. Pavan Sharma, Dr. Ravi Prakash Khatri, Dr.
Neha Jain, Vikas Sharma, Radha Mohan, Karan and Laxmi Narayan, in which, after filing charge-sheet cognizance has been taken by the Court;
from the FIR No.17/2019 plaintiff came to know that fraud has been committed with her by the defendants then plaintiff intimated the Banks that no
proceedings should be initiated against the plaintiff on the forged document; all the banks sent notices to the plaintiff and initiated arbitration
proceedings; since all the loan accounts were opened in a fraudulent manner, hence the arbitration proceedings cannot be initiated; the plaintiff prayed
that all the loan agreements may be declared void and defendants may be restrained from initiating any arbitration and recovery proceedings against
the plaintiff on the basis of above forged loan agreements.
An application under Order VII, Rule 11 CPC read with Sections 8 and 5 of the A&C Act was filed by defendant No.5 â€" petitioner herein, to the
effect that plaintiff borrowed a sum of Rs. 10,42,000/- as personal loan from it, for which, a loan agreement was entered between them on 16.02.2019,
which contained the arbitration clause No.23; since the dispute between the parties could have been decided under the provisions of the A&C Act, the
Commercial Court has no jurisdiction to decide the same; it is further averred that the suit is barred by law; if plaintiff has any grievance then she has
right to seek reference of the dispute to the Arbitrator; it is also averred in the application that the plaintiff did not file sufficient court fees also; as per
the averments of defendant No.5-petitioner herein no cause of action arises in favour of the plaintiff and the suit is barred by law, hence the same was
liable to be dismissed.
The above application was dismissed by the impugned order. Hence, this revision petition has been filed by defendant No.5-petitioner herein.
Learned counsel for the petitioner submitted that the plaintiff filed a suit against seven Banks containing therein that the loan amount credited in
plaintiff’s account was transferred to Kishan Hospital and Research Centre. It is submitted that the petitioner in its application has only sought
relief for rejection of plaint being barred by law. The petitioner has not made any prayer in terms of Section 8 of the A&C Act to refer the dispute to
the Arbitrator for the reason that as per arbitration clause the Bank has right to appoint the Arbitrator, which they already did and the Arbitrator has
passed the award dated 28.02.2020 determining the liability of the plaintiff-respondent No.1 herein. It is submitted that if the application filed by the
petitioner would have been allowed then the proceedings of the Civil Court would have been terminated on the ground that the suit is barred by law as
there is arbitration clause between the parties.
It is submitted that as the impugned order is not an interlocutory order, thus the revisional jurisdiction of the High Court can be invoked. The provisions
of A&C Act are special provisions, which prevails over the general statute. As per the provisions of Section 5 of the A&C Act notwithstanding
anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so
provided in this Part.
It is further submitted that the above provisions show that if there is an arbitration clause in loan agreement then judicial authority shall not intervene
and the jurisdiction of the Civil Court is curtailed by operation of Section 5 of the A&C Act. As per the provisions of Section 8 of the A&C Act a
judicial authority is under an obligation to refer the parties to arbitration.
It is further submitted by learned counsel for the petitioner that the impugned order passed under Order VII, Rule 11 CPC is not an interlocutory order
and, therefore, the provisions contained in Section 8 of the A&C Act are not attracted.
Learned counsel for the petitioner relied upon the following judgments in support of his contentions:-
(1) M/s. Caravel Shipping Services Pvt. Ltd. v. M/s. Premier Sea Foods Exim Pvt. Ltd. : 2019 (1) WLC (SC) Civil 183.
(2) Johra Bi & Ors. v. Jageshwar & Ors. : (2010) 1 MP LJ 98.
(3) Rashid Raza v. Sadaf Akhtar : (2019) 8 SCC 710.
(4) Sundaram Finance Limited v. T. Thankam : (2015) 14 SCC 444.
(5) Swiss Timing Limited v. Commonwealth Games 2010 Organising Committee : (2014) 6 SCC 677.
(6) Shri Ram Tansport Finance Co. Ltd. & Ors. v. Jasveer Singh : 2000 (1) Arb. L.R. 192 (P&H).
On the other hand, learned counsel for respondent No.1- plaintiff contended that as per provisions of Section 13 of the Commercial Courts,
Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (afterwards referred to as the ‘Commercial Courts Act’)
any person aggrieved by decision of Commercial Court may appeal to the Commercial Appellate Division of that High Court.
Learned counsel while drawing attention of the Court towards provisions of Section 37 of the A&C Act submitted that against the impugned order an
appeal will lie to the Court authorized by law to hear the appeals from original decrees of the Court passing the order.
Since the impugned order was appealable under Section 37(1)(a) of the A&C ACt, no revision petition is maintainable against the said order.
Learned counsel for respondent No. 3 submitted that the impugned order is not an interlocutory order hence the provisions of Section 8 of the
Commercial Courts Act are not attracted. It is further submitted that the award has already been passed by the sole arbitrator deciding the
controversy between the parties.
Learned counsel for respondent No. 6 submitted that the revision petition is not maintainable. On the other hand, as per his contention a writ petition
under Article 226 of the Constitution of India is maintainable, for which, he relied upon the following judgments:-
(1) Shri Balaji Industrial Product Ltd. v. AIA Engineering Ltd. & Ors. : D.B. Civil Writ Petition No. 16794/2017.
(2) Raj. State Mines & Minerals Ltd. v. Ankur Mining Product Pvt. Ltd. : S.B. Civil Writ No. 920/2019.
(3) Balaji Industrial Product Ltd. v. AIA Engineering Ltd. & Ors. : 2018 SCC Online Raj 2315.
(4) N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. & Ors. : (2021) 4 SCC 379.
The question which arises for consideration before this Court is whether the impugned order may be categorized an order passed under Section 37(1)
(a) of the A&C Act or it is an order passed under Order VII, Rule 11 CPC. It has also to be looked into whether allowing the application under Order
VII, Rule 11 CPC will terminate the proceedings of suit.
The revisional jurisdiction of the High Court can only be invoked when the effect of allowing the application will be that it will finally terminate the
proceeding.
After carefully gone through the record it clearly reveals that the petitioner has not made any prayer to refer the dispute before the Arbitrator. On the
other hand, it was contended that the Commercial Court has no jurisdiction to decide the controversy since there is an arbitration clause in the loan
agreement entered in between the parties. It is not in dispute that an arbitration Clause No. 23 is there in the loan agreement entered in between the
parties. It is pertinent to note that the petitioner has already appointed sole arbitrator in this matter and award has already been passed by the
Arbitrator on 28.09.2020.
In these circumstances the application filed by the petitioner under Order VII, Rule 11 CPC and Sections 8 & 5 of the A&C Act cannot be
categorized as an application to refer the matter to arbitration under Section 8 of the A&C Act. Hence, the impugned order is not an appealable order
under the provisions of Section 37(1)(a) of the A&C Act.
In the considered opinion of this Court the application filed by the petitioner is certainly an application filed under Order VII, Rule 11(d) CPC on the
ground that the suit is barred by law.
It is true that generally decision on the application under Order VII, Rule 11(d) CPC may terminate the proceedings, but looking to the peculiar facts
of the present case, allowing the application of one of the defendants filed under Order VII, Rule 11 CPC will not terminate the suit filed by the
plaintiff against all the seven defendant â€" Banks.
As stated earlier, in the present case, the loan agreements have been entered in between the plaintiff and defendant-Banks separately and there is
dispute regarding recovery of the loan account. As per contention of the plaintiff, she has been cheated by Banks with the help of some other persons,
whereas, as per contention of the Banks including the petitioner the plaintiff has taken personal loan from the different Banks to the tune of Rs.
98,34,413/- and she has not repaid the same. There is arbitration clause in the agreement entered in between the parties.
As per the proviso to Section 115 CPC added by the Amendment Act, 1999 w.e.f. 2002 the High Court shall not, under this section, vary or reverse
any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where the order, if it had been made in favour of
the party applying for revision, would have finally disposed of the suit or other proceedings.
As stated earlier, in the facts and circumstances of the case, if application filed by the petitioner had been decided in the petitioner’s favour would
not finally dispose of the suit since there are other defendants also against whom plaintiff has sought the protection from initiating arbitration and
recovery proceedings.
It is also relevant to mention here about the legal position that in cases where there is an arbitration clause in the agreement then Civil Court instead of
rejecting the plaint is under an obligation to refer the matter to the Arbitrator, whereas, in the present case petitioner itself embarked upon the
proceeding under A&C Act and got award in its favour by Arbitrator.
In the considered opinion of this Court, the impugned order is certainly an interlocutory order passed by the Commercial Court, against which, as per
the provisions of Section 8 of the Commercial Courts Act there is bar on the Court to entertain any civil revision. Hence, the present revision petition
is not maintainable.
Regarding the contention of learned counsel for respondent No. 6 that writ petition lies against the impugned order, suffice it to say that there is need
to observe anything regarding the right of the petitioner to file writ petition against the impugned order.
Consequently, the present revision petition is dismissed as not maintainable.