Shivam Housing Pvt. Ltd. and Another vs Thakur Mithilesh Kumar Singh and Another

Mungeshwar Sahoo, J.—I have already heard Mr. Pushkar Narain Shahi, the Learned Counsel appearing on behalf of the appellants and Mr. S.K. Verma, the learned senior counsel appearing on behalf of the respondents. This Miscellaneous Appeal has been filed u/s 37(i)(b) of the Arbitration and Conciliation Act, 1996 against the order dated 21.4.2007 passed by the learned Sub-Judge-I, Patna City in Miscellaneous Application No. 3 of 2007 whereby the Sub-Judge dismissed the Miscellaneous Application filed by the appellants u/s 34 of the Arbitration and Conciliation Act, 1996.

It appears that the respondents filed request case No. 36 of 2005 before this Court for appointment of Arbitrator and by terms of order dated 3.7.2006, Hon''ble Mr. Justice B.P. Sharma (retired) was appointed Arbitrator to adjudicate the dispute between the parties arising out of development agreement in question. Since Hon''ble Mr. Justice B.P. Sharma declined to proceed with the arbitration, this Court by order dated 8.9.2006 appointed Hon''ble Mr. Justice R.N. Prasad (retired) as Arbitrator to adjudicate the dispute between the parties. The Arbitrator vide his award dated 5.2.2007 held that the claimants-respondents are entitled to Rs. 49,32,000/- frorn the appellants. The appellants then filed an application u/s 34 of the Arbitration and Conciliation Act, 1996 (Annexure-1 to this memo of appeal) before the Court of Sub-Judge-I, Patna City on 16.4.2007 for setting aside the award.

By impugned order dated 21.4.2007, the learned Sub-Judge held that this application u/s 34 has been filed after lapse of prescribed time and no condonation petition has been filed on be half of the petitioner and also held that the Sub-Judge has got no power to set aside the order dated 5.2.2007 passed by Ex-Justice, Mr. R.N. Prasad in Arbitration Case No. 2 of 2006 and accordingly, the Miscellaneous Case No. 3 of 2007 was dismissed at the admission stage itself.

The Learned Counsel for the appellants submitted that according to Section 34(iii) of the Arbitration and Conciliation Act, 1996, an application for setting aside award can be filed within three months from the date of the award and admittedly, in this case, the award is dated 5.2.2007 and the application u/s 34 was filed on 16.4.2007 which is within three months. The Learned Counsel further submitted that the learned Court below has wrongly held that Sub-Judge has got no power to set aside the award as it has been passed by Ex-Justice. According to the Learned Counsel in view of the provisions of Section 34 read with Section 2(i)(e) of the Arbitration and Conciliation Act, 1996, the application is required to be filed before the Court as defined u/s 2(i)(e) of the said Act and the said Court has the jurisdiction to entertain an application and it could only be the Principal Civil Court of original jurisdiction which could entertain such an application as contemplated u/s 2(i)(e) of the Act. The Learned Counsel in support of his contention relied upon a decision reported in 2000 Volume 4 P.L.J.R. 814.

On the other hand, the Learned Counsel for the respondents submitted that Subordinate Judge of a District is not the Principal Civil Court of original jurisdiction to entertain an application u/s 34 of the Arbitration and Conciliation Act, 1996. The Learned Counsel submitted that only District Judge can be termed as Principal Civil Court of original jurisdiction in a District. According to Section 18 of the Bengal, Agra and Assam Civil Court Act, 1887, the jurisdiction of District Judge extends to all original suits for the time being cognizable by Civil Courts. The Learned Counsel further submitted that this Court in the case of Executive Engineer vs. Ms. R.L. Singh reported in 1997 Vol. 1 P.L.J.R. 523 has not considered Section 18 of the Bengal, Agra and Assam Civil Court Act, 1887 and held that Subordinate Judge is a Civil Court of original jurisdiction and therefore, application u/s 8 of the Act was maintainable. Subsequently, the said decision has been followed again in 2000 Vol. 4 P.L.J.R. 814 (Md. Sadique vs. State of Bihar) and while following the said decision, it has been observed that as per Civil Court Act, 1887, the District Judge or the Additional District Judge have got no original jurisdiction and the sole power has been given to the Subordinate Judge under the Act which is contrary to the provision of law.

The Learned Counsel for the respondents conceded that the application u/s 34 was filed within time. Therefore, so far that point is concerned, no dispute is raised by the respondents. The only dispute raised is that Subordinate Judge is not a Court as defined u/s 2(i)(e) of the Arbitration and Conciliation Act, 1996. In such circumstances, the question arises for consideration is as to "whether the application u/s 34 of the Arbitration and Conciliation Act is maintainable before the Subordinate Judge or before the District Judge".

Section 2(i)(e) defines the term "Court" as follows:-

(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;

Therefore, according to the definition, it does not include any Civil Court of a grade inferior to such Principal Civil Court or any Court of small causes. So far the word "Principal" is concerned, ac cording to Black''s Law Dictionary, it means chief, leading, most important or consider able, primary, original, highest in rank, authority, character, importance or degree. Likewise, in Law Lexicon the word "Principal" is described to mean highest in rank, authority, character, importance or degree, most considerable or important, chief, main. Therefore, the word "Principal" clearly indicates only one Court being the highest in rank or chief.

Section 18 of the Bengal, Agra and Assam Civil Court Act reads as follows;-

Extent of original jurisdiction of District or Subordinate Judge.-Save as otherwise provided by any enactment for the time being in force, the jurisdiction of a District Judge or Subordinate Judge extends, subject to the provisions of Section 15 of the Code of Civil Procedure, 1908 to all original suits for the time being cognizable by Civil Courts.

In view of the above provision, the jurisdiction of District Judge extends to all original suits for the time being cognizable by Civil Court but the suits are filed before the Sub-Judge because according to Section 15 of the CPC every suit shall be instituted in the Court of the lowest grade competent to try it. Only because the suits are instituted before Sub-Judge, it cannot be said that the District Judge has no original jurisdiction to try the suit. Further Court of Sub-Judge is inferior in grade than that of District Judge so the Court of Sub-Judge cannot be the Principal Civil Court in a District.

Section 3(17) of the General Clauses Act defines "District Judge" as the Judge of a Principal Civil Court of original jurisdiction but shall not include a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction.

In the case of Executive Engineer vs. Ms. R.L. Singh, a Bench of this Court while considering the definition of the term "Court" as provided u/s 2(i)(e) of the 1996 Act at paragraph 6 has observed that "it can mean only Court having civil jurisdiction over the subject matter of reference. Of course, the expression "Civil Court" as used in this Section does not include the Revenue Court. Under the Bengal, Agra and Assam Civil Court Act, 1887, the Court of Subordinate Judge is a Civil Court having original jurisdiction". With this observation, it was held that application u/s 8 of the 1996 Act was maintainable before the Sub- Judge. This decision has been followed in the case of Md. Sadique vs. State of Bihar (supra) and at paragraph 4, it was observed that as per Civil Court Act, 1887, the District Judge or Additional District Judge have got no original jurisdiction for deciding a suit and also observed that the sole power has been given to the Sub- Judge under the Act and in that way, it was held that the Sub-Judge should be construed as the Principal Civil Court in a District for the purpose of entertaining a suit of original jurisdiction and not the District Judge. These observations appear to be contrary to Section 18 of the Bengal, Agra and Assam Civil Court Act, 1887. These decisions of Single Benches have been followed subsequently in other decisions by this Court which are also of Single Bench. It may be mentioned here that in the case of Executive Engineer (supra), this Court was considering the case u/s 8 of the 1996 Act. So far Section 8 of the Act of 1996 is concerned, this provision confers power on judicial authority to refer the parties to arbitration where there is a arbitration agreement. Therefore, ail authorities which can be described as judicial authorities in the sense that they administer justice have got jurisdiction to refer the dispute and in that context it can be held that Subordinate Judge can be described as judicial authority. So far Section 34 is concerned, it specially refer to Court which has been defined u/s 2(i)(e) of 1996 Act.

In the definition as provided u/s 2(i)(e) of 1996 Act, the words "means" and "includes" and the expression "does not include", have been used. According to the word "means" indicates that definition is a hard and fast definition and no other meaning can be assigned to the expression. The word "includes" is a term of enlargement. The expression does not include any Civil Courts of a grade inferior to said Principal Civil Court or any Court of small causes occurring in Section 2(i)(e) further restricts the meaning of the term "Court" defined therein. It clearly excludes the Courts inferior to the Principal Court of original jurisdiction.

In view of the above position, the decisions of this Court referred to above in the case of Executive; Engineer and also in the case of Md. Sadique and other Single Bench decisions subsequent to the above i.e. Bhopal Singh and Others Vs. Nagendra Narain Singh and Others and Thakur Prasad Singh Vs. The State of Bihar and Another, requires reconsideration by a larger Bench for deciding the question as to "whether it is the Subordinate Judge or the District Judge which should be construed as being the Principal Civil Court of original jurisdiction in a district for the purpose of a petition u/s 34 of the "Arbitration and Conciliation Act, 1996?"

No decision of the Hon''ble Apex Court deciding the aforesaid question is brought to the notice of this Court. However, the other High Courts have decided the questions and have taken contrary view than that of this Court. The office may place this matter before the Hon''ble the Chief Justice for constitution of a larger Bench to decide the above question.