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iqbal Ahmad and ors. Vs. Abdul Quddus Ansari and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 239 of 1984
Judge
Reported inAIR1984All296
ActsArbitration Act, 1940 - Sections 20 and 41; Code of Civil Procedure (CPC) - Sections 24
Appellantiqbal Ahmad and ors.
RespondentAbdul Quddus Ansari and ors.
Appellant AdvocateNavin Sinha, Adv.
Respondent AdvocateK.M. Sinha, Adv.
DispositionPetition allowed
Excerpt:
.....1910 - original proceeding commenced in the court of civil judge - proceedings converted into suit - suit transferred to the court of additional district judge - application under section 41(b) filed before civil judge subsequent to transfer - application not maintainable. - - it is well settled that a court dealing with an application under section 20 of the act can exercise the powers as envisaged under section 41 of the act. the second clause similarly places an embargo on the court to exercise its power except where the order, if allowed to stand would occasion a failure of justice or cause irreparable injury to the party against whom it was made. where there is a patent lack of jurisdiction to passan order or decide a matter it would occasion a failure of justice or..........judge. varanasi passed an ordersuo motu under section 24 cpc transferring many suits including the originalsuit no. 42 of 1981 to the court of addl.district judge. gyanpur. on the 8thmarch. 1984 plaintiff filed an applicationin the court of civil judge. 'misc. caseno. 26 of 1981 for further order of injunction restraining the defendants from re-starting the coldstorage. the defendants raised various objections to the grants of theabove prayer but they did not expresslytake any objection as to the lack ofjurisdiction of the civil judge to passany order on the application since theoriginal suit had been transferred. thereis no dispute in regard to these facts. 7. the relevant question, therefore, is whether the civil judge had jurisdiction to pass orders on the application made in misc......
Judgment:

Amitabh Banerji, J.

1. This revision raises a patent question of jurisdiction although the point now urged in this Court was not raised before the Court below.

2. A proceeding under Section 20 of the Arbitration Act hereinafter referred to as the Act was converted into a suit and later the proceedings were transferred from the Court of Civil Judge. Gyanpur to the Court of the Additional District Judge, Gyanpur. An application for grant of injunction against the defendants applicants was, however, granted by the Civil Judge, Gyanpur even though the original suit stood transferred to the Court of Additional District Judge, Gyanpur. The contention of the revisionists was that the Court of Civil Judge, Gyanpur had no jurisdiction whatsover to entertain or grant the injunction when the suit itself had been transferred and was pending in another Court. This objection was however, mot taken in the Court below and has been raised for the first time in this Court.

3. On behalf of the plaintiff-opposite party it was urged that there was no patent lack of jurisdiction but only a latent lack of jurisdiction and therefore, there was no question of interference with the order passed by the Court below. It was further urged that it was Permissible under Section 41 of the Act to pass orders independent of the proceedings under Section 20 of the Act. Since the firm stood dissolved it was in the interest of justice that the defendants were restrained from operating the cold storage. In other words, the contention was that the application for injunction was maintainable independent of the proceedings under Section 20 of the Act.

4. Thus the main question is whether there was a patent lack of jurisdiction in the Court to pass the impugned order.

5. I have heard Sri Navin Sinha, learned counsel for the revisionists and Sri Murlidhar, learned counsel for the plaintiff-opposite party.

6. The relevant facts are as follows: The original proceedings commenced by an application under Section 20 of the Arbitration Act. That proceeding was converted into original suit No. 42 of 1981. Thereafter the plaintiff had filed an application on 22-4-1981 for injunction restraining the alienation ofthe suit property in that Court under Section 41 of the Act and this was numbered and registered as MiscellaneousCase No. 26 of 1981'. On 23-4-1981the Court passed an ad interim orderrestraining the parties from transferringthe property in dispute. The final disposal of the said application remainedpending. On the 1st October, 1982 theDistrict Judge. Varanasi passed an ordersuo motu under Section 24 CPC transferring many suits including the originalsuit No. 42 of 1981 to the Court of Addl.District Judge. Gyanpur. On the 8thMarch. 1984 plaintiff filed an applicationin the Court of Civil Judge. 'Misc. CaseNo. 26 of 1981 for further order of injunction restraining the defendants from re-starting the coldstorage. The defendants raised various objections to the grants of theabove prayer but they did not expresslytake any objection as to the lack ofjurisdiction of the Civil Judge to passany order on the application since theoriginal suit had been transferred. Thereis no dispute in regard to these facts.

7. The relevant question, therefore, is whether the Civil Judge had jurisdiction to pass orders on the application made in Misc. Case No. 26 of 1981 after the transfer of the original suit No. 42 of 1981 from his Court. The answer to the question would depend on the fact whether the Misc. Case No. 26 of 1981 was a Part of the original suit No. 42 of 1981 or could it survive independently a part from the original suit No. 42 of 1981. If it was an independent proceeding, having nothing to do with the original suit No. 42 of 1981, it could be said, other things being in favour of the plaintiff, that the application was maintainable in the Court of Civil Judge and that the Court did not lack jurisdiction. As seen above, the original suit was an outcome of an application under Section 20 of the Act. It is well settled that a Court dealing with an application under Section 20 of the Act can exercise the powers as envisaged under Section 41 of the Act. For example, if any application was made for grant of injunction in a pending application under Section 20 of the Act or in a pending suit converted from a proceeding under Section 20 of the Act it could do so in exercise of its powers under Section 41 of the Act. Such an application would be an application in the suit itself even though it bore a separate miscellaneousnumber. The principle underlying the exercise of power is that the proceeding must be one which was 'for the purpose of and in relation to arbitration proceedings' before the Court, as laid down in Section 41(b) of the Act. The conception of a proceeding under Section 41 of the Act without reference to an arbitration proceeding before the Court is, therefore, not contemplated. While dealing with the case of H.M.K. Ansari & Company v. Union of India, AIR 1984 SC 29 their Lordships were of the view that the application for injunction moved by the appellant for restraining the Union of India from withholding payments due under pending bills of other contracts was not for the purpose of and in relation to arbitration proceedings before the Court. The arbitration proceedings pending before the Court in the above case pertained to an entirely different matter and the Union Government's efforts to withhold payment due to the party under other contracts was sought to be injuncted by the appellant in the above case. The Court held (Para 19) :

'This apart, the amount due under the pending bills to the appellant was not the subject matter of the present proceedings and therefore, an injunction order restraining the respondents from withholding the amount due to the appellant in the pending bills in respect of other contracts could not be said to be for the purpose of and in relation to the present arbitration proceedings. In this view of the matter it was not open to the Court to pass an interim injunction restraining the respondents from withholding the amount due to the appellant in pending bills in respect of other contracts.'

8. The observation in the above case makes it clear that the injunction order could be Passed under Section 41(b) of the Act, if it was for the purpose of and in relation to arbitration proceedings. Now Misc. Case No. 26 of 1981 was not by itself a separate case, it was an application for injunction in the original suit No. 42 of 1981. It had only been given a different number. In this view of the matter the present application for injunction Misc. Case No. 26 of 1981 could not survive apart from the original suit No. 42 of 1981. The application for injunction was related to the original suit and the power under Section 41(b) of the Act couldbe exercised only if it formed part at the original suit i.e. for the purpose of and in relation to arbitration proceedings pending before the Court, namely original suit No. 42 of 1981.

9. It is, therefore, clear from the above that the Misc. Case no. 26 of 1981 which was a number given to an earlier injunction in the original suit also ought to have been transferred along with the original suit to the transferee Court. A subsequent application made for further injunction would also invoke the exercise of powers under Section 41(b) of the Act and could only be passed provided it was for the purpose of and in relation to the arbitration proceedings pending in the Court. Therefore, such application would also lie before the Court where the original suit was pending. Even if the Civil Judge entertained the application, he should not have passed any orders as the original suit was not in his Court.

10. The Court derives jurisdiction to pass orders in a case either under the statute or when it is seized with the matter. An application for injunction in a suit can only be passed by the Court which is seized with the same. On the same analogy the application for injunction in this case could be passed by the Court which was seized with the original suit. Thus the present application for injunction which purported to be one under Section 41(b) of the Act could only be passed by a Court which was seized with the proceedings under Section 20 of the Act (now converted into original suit No. 42 of 1981) the reason being that it had to be for the purpose of and in relation to arbitration proceedings before the Court. It is thus obvious from the above that in the present case the Civil Judge had no jurisdiction to pass any order for injunction on the application made by the plaintiff. It was a case of patent lack of jurisdiction.

11. Sri Murlidhar, learned counsel for the opposite party urged that it was a case of latent lack of iurisdiction. I am unable to agree. Learned counsel referred to Rule 400 of the General Rules Civil and in particular to Sub-rules (5) and (11) which referred to forms Nos. 70 and 74. He urged that Form No. 74 would be attracted in the present case and item No. 23 therein referred to 'all other judicial proceedings relating to or arising out of suits or other cases.' to urge that the present application madebefore the Civil Judge had to be registered as Miscellaneous case judicial.' It is not necessary to examine whether the case was registered as a miscellaneous case judicial for the fact that the application could not be treated to he an independent or self contained separate case. It was an application made in a pending proceeding. The fact of the matter is that pending proceeding was not before the Civil Judge. Now if the proceeding was not pending before the Civil Judge, he would not get any jurisdiction to pass the order which he has done. There is no question of any latent lack of jurisdiction but in my opinion, there was a patent lack of jurisdiction to pass the order.

12. Learned counsel cited a decision of a learned single Judge of the Calcutta High Court in the case of Maheswari & Co. v. Corporation of Calcutta. AIR 1975 Cal 165 to urge that an application under Section 41 of the Act was maintainable even without an application under Section 20 of the Act. On a perusal of the reports it is apparent that there was a pending proceeding under Chapter II of the Act. It is, therefore, apparent that there was a pending proceeding under the Arbitration Act, though not under Section 20. It is, therefore, apparent that if there be a proceeding under the Arbitration Act pending before the Court the Court would have jurisdiction to exercise powers under Section 41 of the Act. This authority, therefore, does not help the learned counsel to urge that the application would be maintainable even if there was no proceeding pending under the Arbitration Act.

13. Another argument raised was that the revision under Section 115 CPC was not maintainable in view of the first proviso thereof. I find no merits in this contention either. The first proviso has two clauses. The first clause places an embargo on the exercise of the powers of the High Court in varying or reversing an order except where the order, if it had been made in favour of a party applying for revision would have finally disposed of the suit or other proceedings. The second clause similarly places an embargo on the Court to exercise its power except where the order, if allowed to stand would occasion a failure of justice or cause irreparable injury to the party against whom it was made. Where there is a patent lack of jurisdiction to passan order or decide a matter it would occasion a failure of justice or even cause irreparable injury to the party. If the Court does not have jurisdiction to pass an order and vet it passes the order it would undoubtedly amount to a failure of justice. Where there is a patent lack of jurisdiction to exercise power the revisional Court would certainly have power to interfere under Section 115 CPC. Of course the power being discretionary the Court may refuse to do so in an appropriate case.

14. Having considered the respective contentions of the learned counsel for the parties I am satisfied that this is a fit case in which the power of this Court under Section 115 CPC may be exercised to set aside the order of the Court below. The impugned order suffers from a patent lack of jurisdiction and has resulted in a failure of justice. However, even though the order of the Court below is liable to he set aside but the application would not stand dismissed. In my opinion, the application should be transferred to the transferee Court viz. the Court of the Addl. District Judge, Gyanpur where the original suit No. 42 of 1981 is pending. That Court would be appropriate Court to pass necessary and appropriate orders on the said application.

15. With these observations the revision is allowed and the order of the Court below is set aside. Although the applicants have succeeded in the revision, they are not entitled to any costs for they did not take this plea in the Court below. Parties are directed to bear their own costs.


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