Skip to content


Union of India (Uoi) and ors. Vs. Girdhari Lal and Etc. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtRajasthan High Court
Decided On
Case NumberCivil Revn. Nos. 51, 53 and 136 of 1998
Judge
Reported inAIR1998Raj240; 1998(3)WLC76; 1998(1)WLN216
ActsCode of Civil Procedure (CPC) , 1908 - Sections 3 and 115; Arbitration and Concilication Act, 1996 - Sections 11(4), 11(5) and 11(6)
AppellantUnion of India (Uoi) and ors.
RespondentGirdhari Lal and Etc.
Appellant Advocate J.P. Joshi and; V.K. Mathur, Advs.
Respondent Advocate K.N. Joshi and; Rajesh Joshi, Advs.
DispositionRevision petition dismissed
Cases ReferredUnited India Insurance Co. v. Brij Mohan Das
Excerpt:
.....and conciliation act, 1996--section 11(6)--revision--district judge appointed as authority by the chief justice under section 1 (6) of the 1996 act is not a court subordinate to high court under section 3 cpc but is persona designata--orders of such authority are not amenable to revisional jurisdiction of high court under section 115 cpc--revision treated as writ petition.; revision petition held not maintainable - - or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; sub-section (1) of section 19 of the new act, release the arbitral tribunal from the bonds of procedure of (i) the civil procedure code, 1908 as well as of (ii) the indian evidence act, 1872. this provision is intended also to enable the. the..........up for consideration in all the three revisions, is whether the district judge designated by the chief justice, as 'authority' to deal with the request for taking necessary measures under subsection (6) of section 11 of the arbitration and conciliation act, 1996, is subordinate to the high court within the meaning of section 3 of the code of civil procedure (for short cpc), for making its order revisable under section 115. cpc? 2. this question arises in (he following circumstances - (i) in connection with the contract works certain dispute arose between the union of india and the contractor non-petitioners. thereafter claims were referred to the arbitrator. while the proceedings were in progress before the arbitrator, the contractor non-petitioners submitted applications under section.....
Judgment:
ORDER

Shiv Kumar Sharma, J.

1. Common question that cropped up for consideration in all the three revisions, is whether the District Judge designated by the Chief Justice, as 'authority' to deal with the request for taking necessary measures under subsection (6) of Section 11 of the Arbitration and Conciliation Act, 1996, is subordinate to the High Court within the meaning of Section 3 of the Code of Civil Procedure (for short CPC), for making its order revisable under Section 115. CPC?

2. This question arises in (he following circumstances -

(i) In connection with the contract works certain dispute arose between the Union of India and the contractor non-petitioners. Thereafter Claims were referred to the Arbitrator. While the proceedings were in progress before the Arbitrator, the Contractor non-petitioners submitted applications under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the New Act) before the District Judge. Jodhpur praying therein that the scope of Arbitration be expanded with a direction to the Arbitrator to take cognizance of all the claims.

(ii) The learned District Judge, Jodhpur vide order dated December 19,1997 allowed the application and issued directions that claims referred in the application shall also be referred to the Arbitrator for adjudication who shall give his award within a period of four months.

(iii) The Union of India and other petitioners have assailed the said order of the learned District Judge by filing the instant revisions underSection 115, CPC.

(iv) Preliminary objection was raised by the K.N. Joshi, learned counsel for the contractor non-petitioners (for short the contractors) in respect of maintainability of the revision petitions. It was vehemently contended that the learned. District Judge appointed under Sub-section (6) of Section 11 of the New Act is a persona designata and his orders cannot be revised under Section 115, CPC by the High Court. On the other hand Mr. J.P, Joshi, learned counsel fur the Union of India canvassed that the orders of District Judge arc revisable under Section 115, CPC.

3. Before, I deal with the rival submissions in detail, it will be useful to examine the relevant statutory provisions. For application of Section 115, CPC it is necessary that order impugned should be an order of a Court subordinate to the High Court. According to Section 3, CPC the District Court is subordinate to the High Court. Therefore in order to adjudge whether District Judge acts as a Court or as a persona designata, the entire scheme of the New Act shall have to be looked into.

4. An Arbitration and Conciliation Bill XXX-C of 1995 received the President's assent on August 16, 1996 and was notified on August 19, 1996 as No. 55 in the Gazette of India Extraordinary Part II, Section 1 and the Arbitration and Conciliation Act, 1996 came into force on and from August 22, 1996. While introducing the Bill its main objective were shown as under --

(i) to comprehensively cover international commercial arbitration and conciliation as also , domestic arbitration and conciliation;

(ii) to make provision for an arbitrator procedure which is lair, efficient and capable of meeting the needs of the specific arbitrations;

(iii) to provide that the arbitral tribunal gives reasons for its arbitral award;

(iv) to ensure that the arbitral tribunal remains within the limits of its jurisdiction;

(iv) to minimize the supervisory role of courtsin the arbitral process:

(vi) to permit an arbitral tribunals to use mediation, conciliation or other procedures during the arbitral proceedings to encourage settlement of disputes;

(vii) to provide that every final arbitral awardis enforced in the same manner as if it were a decree of the Court;

(viii) to provide that a settlement agreement reached by the parties as a result of conciliation proceedings will have the same status and effect as an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal; and

(ix) to provide that, for purposes of enforcement of foreign awards, every arbitral award made in a country to which one of the two international conventions relating to foreign arbitral awards to which India is party applies, will be treated as foreign award.

It is thus apparent that the intention of the Legislature in enacting the Act was to minimise the supervisory role of the courts in arbitral proceedings.

5. It is now necessary to examine the provisions of Section 11 of the New Act. This section relates to appointment of Arbitrators. Sub-section (1) permits a person of any nationality to be appointed as arbitrator. Sub-section (2) allows liberty to the parlies to mutually agree upon a procedure for appointment of Arbitrators. Subsection (3) lays down the procedure for appointment of arbitrators where the number agreed upon is three, and no procedure is laid down, or agreed upon, regarding their appointment. Sub-section (4) operates when the procedure prescribed by the statute in Sub-section (3) fails. Sub-section (5) operates where the number of arbitrators agreed upon is one sole arbitrator, but there is no agreed procedure for his appointment, Sub-section (6) deals with making a request for 'taking necessary measures' to the Chief Justice or any person or institution designated by him, Sub-section (7) places finality on the decisions not of a Court but the Chief Justice or the person or the institution designated by him on matters under Sub-sections (4) (5) or (6), Sub-section (8) is for the guidance of the Chief Justice or the person or institution in appointing an arbitrator. Sub-section (9) applies exclusively to appointment of arbitrators in international commercial arbitrators. Sub-sections (10) (11) and (12) are either procedure or for purposes of interpretation.

6. Under Section 8 of the Arbitration Act 1940 (for short the old Act) the powers to appointArbitrators vested in local courts but under the New Act no such power is now vested in local courts. Sub-section (6) of Section 11 of the New Act now provide thus --

'(6) Where, under an appointment procedure agreed upon by the parties --

(a) a party fails to act as required under the procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or if under that procedure.

a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement or the appointment procedure provides other means for securing the appointment.'

7. Under Sub-section (10) of Section 11 of the New Act the Chief Justice is authorised to make such scheme as he may deem appropriate for dealing with matters entrusted by Sub-section (4) or Sub-section (5) or Sub-section (6) to him. Hon'ble the Chief Justice of the High Court of Judicature for Rajasthan accordingly made a scheme for appointment of Arbitrators and a Notification in this regard was issued on March 6, 1997. For the purposes of dealing with the request made under Sub-section (4) or Sub-section (5) or Sub-section (6) of Section 11 of the New Act following authorities were designated by the Chief Justice --

(a) the Civil Judge (Senior Division) where the value of the subject matter does not exceed Rs. 50,000/-.

(b) the District Judge/Additional District Judge, where the value of the subject matter exceed Rs. 50,000/- and

(c) the Judge of the High Court exercising powers of original and extraordinary civil jurisdiction, in any matter inclusive of any case which is withdrawn by High Court for trial or while exercising company jurisdiction.

8. In the light of the discussions made hereinabovc I proceed to deal with the rival submissions. Mr. J.P. Joshi, learned counsel appearing for the petitioners canvassed that entire scheme of New Act demonstrates that the authoritydesignated by the Chief Justice is a Civil Court for all purposes. My attention was drawn towards Sections 2(1)(a), 34, 36 and 77 of the New Act. It was further contended that Clause 11 of the scheme for appointment of Arbitrators made by Hon'ble the Chief Justice of the Rajasthan High Court, provides that reference with reference to interpretation of the provisions of the scheme may be made to the Chief Justice, therefore, revision against the order of the District Judge is also maintainable. On the other hand, Mr. K.N. Joshi learned counsel appearing for the contractors urge that the District Judge being an authority designated by Hon'ble the Chief Justice is a persona designata and cannot be deemed as 'Court' subordinate to the High Court. To substantiate the arguments learned counsel referred Sections 5,19,29 and 37 of the New Act. Reliance was placed on Smt. Indirav.Smt.Prabha,(1998) 1 WLC(Raj)81 and United India Insurance Co. v. Brij Mohan Das, 1998 WLC (Raj) (UC) 1.

9. 'Court' has been defined in Section 2(1)(e) of the New Act thus :

'(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 of 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.' 10. Section 5 of the New Act provides that no judicial authority shall intervene except where so provided in the Act Section 5 of the New Act reads thus --

'Section 5. Extent of judicial intervention --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.' 11. As already staled in foregoing paras of this judgment that in the statement of objects and reasons of the Arbitration and Conciliation Bill 1995 presented to Parliament, one of the main objective was proclaimed to be 'to minimise the supervisory role of courts in the arbitral process'. In order to eliminate for possibility of intervention by courts the section begins with non obstante clause -- 'Notwithstanding anything containedin any other law. Furthermore it is not only the intervention by courts which is prohibited but by all 'judicial authorities' whatever they be.

12. Under Section 34 of the New Act recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with Sub-section (2) and Sub-section (3) of the said section. Which court is proper court for recourse? Answer may be traced in the definition of courts in Section 2(1)(e).

13. Section 41 of the Old Act stated that the provisions of the Civil Procedure Code, 1908 shall apply to proceedings before the Court, subject to the provisions of the Arbitration Act and the rules made thereunder. Sub-section (1) of Section 19 of the New Act, release the arbitral tribunal from the bonds of procedure of (i) the Civil Procedure Code, 1908 as well as of (ii) the Indian Evidence Act, 1872. This provision is intended also to enable the. arbitral tribunal to decide disputes ex aequo et bono as has been provided in Sub-section (2) of Section 28 of the New Act, which reads as under :

'28(2) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.' 14. Sub-section (2) of Section 29 provides that questions as to procedure may be decided by the presiding arbitrator.

15. Section 36 of the New Act relates to the enforcement of award. It reads as under --

'Enforcement -- Where the time for making an application to set aside the arbitral award under Section 34 has expired, the award shall be enforced under the Code of Civil Procedure 1908(5 of 1908) in the same manner as if it were a decree of the Court.' 16. Section 17 of the Old Act stated, 'no appeal shall lie from such decree' but made two exceptions -- except on the ground that --

(i) it is an excess of the award, or

(ii) it is not otherwise in accordance with the award.

17. But no such statement nor exception is made in Section 37 of the New Act. This section uses the word 'orders', not 'decree' or 'award'. This section peremptorily permissive. It reads as under --

'Section 37, Appealable orders -- (1) Anappeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely --

(a) graining or refusing to grant any measure under Section.

(b) setting aside or refusing to set aside arbitral award under Section 37.

(2) Appeal shall also lie to a Court from an order of the Arbitral.

(a) accepting the plea referred to in Sub-section (2) or Sub-section (3) of Section 16, or

(h) granting or refusing to grant an interim measure under Section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or lake away any right to appeal to the Supreme Court.'

18. Section 77 of the New Act provides that 'the parlies shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of THC dispute that is the subject matter of the conciliation proceedings except that party may initiate arbitral or judicial proceedings where in his opinion, such proceedings are necessary for preserving his rights.'

19. A cursory look al Sub-section (6) of Section 11 of the New Act demonstrates that a party may request the Chief Justice or any person or institution designated by him to take necessary measure. The Chief Justice, as such may designate any person or institution. In the scheme framed by the Chief Justice of the High Court of Judicature, Rajasthan, the 'person' designated under Sub-section (6) of Section 11 is the Civil Judge (Senior Division) (where the value of the subject matter does not exceed Rs. 50,000/-) and the District Judge/Additional District Judge (in ease the value exceeds Rs. 50,000/-). Hon'ble the Chief Justice could have designated any person or any institution as authority under the said subsection but the Chief Justice thought it proper lo designate the judicial officer as 'person' to adhere the request of the party concerned to take the necessary measure under Sub-section (6) of Section 11 of the New Act. Had the Chief Justice designated private person an authority to take the necessary measure, could his orders be revised by the High Court under Section 115 CPC? Theanswer of this question cannot be given in affirmative. The 'Judicial Officer' designated by the Chief Justice under Sub-section (6) of Section 11 of the New Act, comes within the preview of 'person' and not under the definition of court subordinate to the High Court. Section 3, CPC provides the subordination of courts. It says that for the purpose of CPC the District Court is subordinate to High Court. Obviously the 'person' or the institution designated by the Chief Justice under Sub-section (6) of Section 11 are neither the 'District Court' nor the Civil Court of a grade inferior to that of District Court, Legal position is crystal clear that where it is provided that a matter is to be decided by a certain court, then Presiding Officer of such Court will act as a Court but where it is not so provided the entire provisions of the statute will have to be looked into for the purpose of determining whether such judicial officer acts as a Court or as a persona designata.

20. Distinction between 'Court' and 'Tribunal' was drawn in Associated Cement Co. Ltd. v. P.N. Sharma, AIR 1965 SC 1595. Their Lordships of the Supreme Court propounded that the Tribunal occupy a special position of their own under the Scheme of our Constitution. The special matters and questions are entrusted to them for the decision. Under our Constitution the judicial functions and powers of State are primarily conferred on the ordinary courts. The Constitution recognised a hierarchy of Courts and to their adjudication arc normally entrusted all disputes between the citizens and citizens as well as between the citizens and the State. These courts are ordinary courts of Civil Judicature. The judicial powers of the State can be conferred on the hierarchy of Courts established under the Constitution as well on tribunals which are not courts, strictly so called. A Tribunal is an authority other than a regular court of justice. A Tribunal is an adjudicating authority other than a Court vested with the Judicial powers under the statutes. Tribunals which fall within the purview of Article 136(1) of the Constitution occupy a special position of their own under the scheme of our Constitution. Special matters and questions are entrusted to them. The procedure followed by the courts is regularly prescribed but the procedure which the tribunals have to follow may not always be so strictly prescribed. The basic and the fundamental feature which is common to both the courts andthe Tribunals, is that they discharge judicial functions and exercise judicial powers.

21. As already stated, the District Judge, designated by the Chief Justice as authority to discharge the judicial function is a 'person1 as provided in Sub-section (6) of Section 11 of the New Act. The District Judge is an authority other than a regular court of justice. It is not necessary for him to follow the procedure prescribed for the courts. The District Judge is thus an adjudicating authority 'other than a court'. From the legislative intent as discussed by me in the foregoing paras, it is evident that 'person' appointed by the Chief Justice under Sub-section (6) of Section 11 of the New Act, is not the Court. In Clause (3) of the Scheme for appointment of Arbitrators by the Chief Justice of the Rajasthan High Court, the word 'authority' has been used. The request under Sub-section (4) or Sub-section (5) or Sub-section (6) of Section 11 has to be made to the 'authority' and not to the 'Court'. According to clause (3), the District Judge, Additional District Judge and Civil Judge (Senior Division) come within the purview of authority designated by the Chief Justice.

22. Full Bench of this Court in United Insurance Co. Ltd. v. Brij Mohan Das, 1998 WLC (Raj) (UC) 1 held that Motor Accident Claims Tribunal and Workmen's Compensation Commissioner are not civil Courts and revision against the order of said tribunal or Commissioner does not lie to High Court under Section 115, CPC.

23. Similarly in Smt. Indira v. Smt. Prabha (1998) 1 WLC (Raj) 81 it was held by this Court that Judge acting under Rule 80 of the Rajasthan Parichayat Raj (Election) Rules, 1994 is persona designata and his action in dealing with the Election Petition cannot be revised by the High Court under Section 115, CPC.

24. In the ultimate analysis, I am unable to agree with the submissions of Mr. J.P. Joshi, learned counsel for the petitioners. Looking to the entire scheme of the New Act as well as the Scheme framed by Hon'ble the Chief Justice of this Court for appointment of Arbitrators, I am of the considered view that the District Judge and other judicial officers designated by the Chief Justice under sub-section (6) of Section 11 of the New Act are 'persona designata' and they do not come under the definition of court subordinate to High Court. Thus their orders arc not revisableunder Section 115. CPC by the High Court.

25. Resultantly, I hold that the instant revision petitions are not maintainable. However, subscribing the view expressed by Kill Bench in United India Insurance Co. v. Brij Mohan Das (1998 WLC (Raj) (UC) 1 (supra) I treat these revisions as writ petitions under Articles 226/227 of the Constitution of India, subject lo the fulfilment of the required formalities regarding stamps etc. Let all these mailers be placed before Hon'ble the Chief Justice for listing the same before the appropriate Bench.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //