Ashok Kumar Tripathy vs M/s Toyota Financial Services India Ltd

Arindam Sinha, J

Mr. Mishra, learned senior advocate appears on behalf of appellant and submits, impugned is order dated 8th July, 2022 made by the Commercial Court, rejecting his client’s challenge to the award on preliminary objection of jurisdiction taken by respondent. He submits, clause-23 in the agreement provides for arbitration and clause 24 for exclusive jurisdiction. Both the clauses mentioned New Delhi, respectively for seat and Court/Tribunal situate therein. He draws attention to ground ‘D’ in the appeal memo reproduced below.

“For that it is apparent from records that the arbitration was initiated at Sahadava (near Varkadooma District Court), it was conducted at South Delhi (Saket District Court) and the award was passed At: East Delhi under Karkadooma District Court. Thus the respondent as well as the arbitrator having not adhered to the exclusive jurisdiction clause, the Commercial Court should have entertained the ARBP, as the entire cause of action arises within his jurisdiction;”

Mr. Panigrahi, learned advocate appears on behalf of respondent and submits, appeal under section 37 of Arbitration and Conciliation Act from order under section 34 made by the Commercial Court is to be preferred to the concerned District Judge. He relies on view taken by the first Division Bench of this Court in judgment dated 8th April, 2022, in, inter alia, W.P.(C) no.3523 of 2022 (M/s. M. G. Mohanty and another vs. State of Odisha and others), paragraph 52 of Indian Kanoon print, reproduced below.

“52. Section 37 of the A&C Act does not confine the appellate power to the High Court. The very wording of Section 37 contemplates a Court other than the High Court hearing appeals against orders under the A&C Act by Courts subordinate to the High Court. Therefore, the CC Act providing for Commercial Appellate Division at the District Judge level is not inconsistent with the Section 37 of the A&C Act.”

Court has before it two points on maintainability, first is raised by appellant asserting that the challenge could be maintained before the Commercial Court because there had been waiver on seat and exclusive jurisdiction clauses in the agreement. Second, maintainability point is taken by respondent on the appeal as to be made before concerned District Judge and not the High Court.

In M. G. Mohanty (supra) the Division Bench did not direct filing of appeal at the District Judge level. View expressed by the Division Bench was, the Commercial Courts Act, 2015 providing for Commercial Appellate Division at the District Judge level is not inconsistent with section 37 of the 1996 Act. This Bench intending to respectfully follow the view, is unable to do so because the State Government has not yet notified Commercial Appellate Courts over the Commercial Courts, notified under section 3-A in the Act of 2015. Situation emerging is that according to respondent the appeal should be filed before the District Judge and not the High Court. That is not possible under sub-section (1) in section 13 of the 2015 Act. Same, however, cannot confer jurisdiction on this Court.

In circumstances aforesaid the appeal is adjourned sine die with direction to place this order on the Administrative Side of this Court for moving the Government on notifying Commercial Appellate Courts for the Commercial Courts notified.

In view of appellant rendered remediless on the interim relief sought, appellant is granted liberty to seek such remedy in spite of pendency of the appeal.

Liberty to mention.

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