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Judgment
S. Palanivelu, J.—With consent of both the counsel, the Civil Revision Petition itself has been taken up for final disposal.
This Civil Revision Petition is preferred by the petitioner, to declare the Arbitration O.P. No. 28 of 2005, pending on the file of Principal Sub-
Court, Vridhachalam, as non-est in law and void ab initio.
The factual background of the matter is as follows:
(i) The petitioner was a Contractor under the respondent Corporation and he executed five works during the year 1998. There was a fire accident
on 05.05.1998 in the Additional Cooling Tower of the Fertilizer Factory of the respondent. The respondent informed the petitioner that he was
responsible for the said inferno, due to his negligence, and he had to compensate the Corporation to the extent of Rs. 6,49,425/- as damages. All
the Units of the Corporation were directed not to honour the bills of the petitioner. The petitioner filed a writ petition before this Court and this
Court, by a common order, dated 03.04.2003, in W.P. Nos. 18504 of 1998, 12825 of 1999 and 328 of 2000, directed the parties to refer the
matter to arbitration. Thereafter, an Arbitrator was appointed and on 10.09.2004, an award was passed by the said Arbitrator for a sum of Rs.
3,65,431/-, directing the respondent herein to pay the said amount to the petitioner, towards damages.
(ii) Aggrieved over the said award, the respondent filed the Arbitration O.P. No. 28 of 2005 u/s 34 of the Arbitration and Conciliation Act, 1996,
on the file of the Principal Sub-Court, Vridhachalam, to set aside the award, dated 10.09.2004, passed by the Arbitrator.
(iii) Then, the petitioner filed A.S. No. 130 of 2004 on the file of Principal District Judge at Cuddalore for reimbursement of damages. The
petitioner also moved this Court for stay of further proceedings in the Arbitration O.P. on the file of Sub-Court, Vridhachalam, and stay was also
granted in C.M.P. No. 11494 of 2005 in this C.R.P.
(iv) Consequently, the respondent filed two applications one in I.A. No. 260 of 2005 u/s 10 read with Section 151 of C.P.C. to stay the appeal
proceedings in A.S. No. 130 of 2004, pending disposal of the present C.R.P., and the other in I.A. No. 261 of 2005, praying for dismissing the
appeal A.S. No. 130 of 2004, on the file of Principal District Court, Cuddalore.
(v) The learned Principal District Judge, after hearing both sides, passed a common order on 05.12.2005 in both the interlocutory applications,
holding that both the applications shall be kept pending till the disposal of the C.R.P.on the file of High Court, Madras.
The bottom line contention of the learned Counsel for the petitioner is that the Principal Sub-Court, Vridhachalam, lacks jurisdiction to entertain
any application under the provisions of the Arbitration and Conciliation Act, 1996, and the proceedings before the said Court are non-est in the
eye of law.
On the contrary, learned Counsel for the respondent would contend that the Sub-Court has to be construed as a Court of ""Original Civil
Jurisdiction"", as adumbrated in Section 2(1)(e) of the Act and hence, the said Court is competent to try the matter.
In this context, it is profitable to refer to Section 2(1)(e) of the Arbitration and Conciliation Act, which reads thus:
2(1)(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.
In support of his contention, learned Counsel for the respondent placed reliance upon a decision of the Hon''ble Supreme Court in Pandey and
Co. Builders Pvt. Ltd. Vs. State of Bihar and Another, , wherein, it is held as follows:
The definition of ''Court'' means the Principal Civil Court of original jurisdiction in a district and includes the High Court which exercises the original
civil jurisdiction. If a High Court does not exercise the original Civil Jurisdiction, it would not be a ''Court'' within the meaning of the said provision.
The learned Counsel also cited a Division Bench decision of this Court in Sundaram Finance Limited Vs. M.K. Kurian and Tomy Thomas
Mathew, . The operative portions of the said decision are culled out as under:
5... See V. Ramamirtham, Sole Proprietor, Glorious Pictures Vs. Rama Film Service, . It is thus clear that as far as the City of Chennai is
concerned, the words ""principal civil Court of original jurisdiction"", as defined in Section 2(1)(e) of the Act, would mean the High Court exercising
jurisdiction on the original side and not the City Civil Court....
Therefore, the view taken by the learned single Judge that the City Civil Court should be regarded as the principal Court of Civil jurisdiction u/s
2(1)(e) of the Act in matters involving value of less than Rs. 10 lakhs is clearly erroneous and cannot be sustained.
A perusal of the above said decisions would make it clear that they are not at all helpful to the respondent''s case, since, in both the decisions,
the original Civil jurisdiction exercisable by High Court has been dealt with.
Per contra, learned Counsel for the petitioner cited a Division Bench decision of the Madurai Bench of Madras High Court in The State of
Tamil Nadu v. R. Sundaram reported in 2006 (1) CTC 178, which throws much light on the subject. The relevant portions of the said decision are
as follows:
By examining the matter from any angle, it is thus apparent that the Court in which application u/s 34 of the Arbitration and Conciliation Act
can be filed is the principal Civil Court of original jurisdiction in a district. Moreover, as per the definition clause contained in the Arbitration and
Conciliation Act, any Civil Court of a grade inferior to the principal Civil Court is specifically excluded. In view of the specific provision contained
in Section 2(1)(e) of the Act read with Section 2(4) of the Code of Civil Procedure, it must be taken that the expression ""Court"" as contained in
Sections 34 and 36 of the Act is the principal Civil court of original jurisdiction in a district, that is to say, the District Court or the District Judge.
The view expressed above by us, apparent from the plain language contained in the Arbitration and Conciliation Act and even the Code of
Civil Procedure, receives considerable support from the decisions of several High Courts.
In the above said decision, after considering and referring to a catena of decisions of this High Court and various other High Courts, it has been
concluded that the District Judge of a District Court alone is the competent authority, to exercise the original Civil jurisdiction in a district, as
contemplated in Section 2(1)(e) of the Act and not a Subordinate Judge. It is also opined that the clear language indicated in the Arbitration and
Conciliation Act as well as the CPC leaves no room for any doubt that only a Principal District Court of a district, namely, a Court of District
Judge has jurisdiction in such matters and not a Subordinate Judge.
In view of the factual and legal backgrounds of this case, I am of the view that the Principal District Court, Cuddalore, alone is competent to
deal with the matter.
The next question that arises for consideration is, as to the further course of proceedings to be conducted.
Legally, the Sub-Court is not competent to try the proceedings under the Arbitration and Conciliation Act. It was represented before this
Court that the matter may be transferred to Principal District Court, Cuddalore, from Sub-Court, Vridhachalam. Merely because a proceeding is
instituted before a wrong forum, it cannot be said that the said forum has to reject the same, for lack of jurisdiction.
In Geo. Miller and Co. Ltd. Vs. United Bank of India, , the Delhi High Court has held as under:
In the result, it is held that this Court has no jurisdiction to try and decide the present petition filed by the petitioner u/s 41 of the Arbitration
Act. In view of the above decision reached by me, it is not necessary to consider the other issues raised before me. Accordingly, I direct return of
the petition to the petitioner to file the same in an appropriate Court in Lucknow in terms of Clause 7.24.2 of the contract agreement. The registry
may take immediate steps to return the petition of the petitioner to file the same in an appropriate Court. The petition stands disposed of in the
above terms but without any cost.
In the case on hand, neither of the parties brought to the notice of this Court as to whether there was any written agreement between them
while referring the matter to arbitrator and, if so, whether there are any clauses with regard to the jurisdiction of the Courts, in case any dispute
arises between them.
Therefore, in view of decision in Geo. Miller & Co. Ltd. v. Union Bank of India and also in the absence of this Court being put to any notice
regarding the agreement between the parties, this Court is left with no other option except to direct the learned Principal Subordinate Judge,
Vridhachalam, to return the Arbitration O.P. No. 28 of 2005, pending on his file, to the respondent herein, who is the petitioner in the said O.P.,
for presenting it before the Principal District Court, Cuddalore, and the ends of justice will be met, if it is ordered as such.
Accordingly, a direction is hereby issued to the learned Principal Subordinate Judge, Vridhachalam, to return the Arbitration O.P. No. 28 of
2005, pending on his file, to the respondent herein, who is the petitioner in the said O.P., for presenting it before the Principal District Court,
Cuddalore, and, on such return, the respondent shall present the same before the Principal District Court, Cuddalore, within three days.
Thereupon, the Principal District Judge, Cuddalore, is directed to dispose of the matter in accordance with law, within a period of six months.
Civil Revision Petition is disposed of, in the above terms. No costs. Consequently, the connected C.M.P. Nos. 11494 of 2005, 36 and 586 of
2007 are closed.