The Judgment of the Court was delivered by
Arvind Kumar, J.:— This appeal by the first judgment debtor is against an order passed on IA No. 1 in Execution Case No. 17/2000 by the Principal District Judge, Shimoga, dated 16.12.2002
2. On 31.07.1999, an award came to be passed by the arbitrator and in order to have the fruits of the award, claimant filed an execution petition in Ex. Case No. 17/2000 before the Principal District Judge, Shimoga. The Registry of the office of the District Judge, Shimoga raised an office objection under two grounds:
(i) Under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 “court” means the Principal Civil Court of original jurisdiction in a district and as such execution petition was not maintainable.
(ii) Further, under Section 42, it is clearly stated that where with respect to an arbitration agreement any application under this Part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court.
3. On raising these queries Registry noted that Principal District Judge, Shimoga has no jurisdiction to adjudicate the execution petition and accordingly, it was posted before the court. By order dated 14.11.2000, the Principal District Judge kept open the point regarding jurisdiction and ordered notice on judgment debtors. On service of notice judgment debtors 1 and 2 have appeared and contested the execution petition. On 09.08.2001, Principal District Judge had issued sale notice, pursuant to which, two properties were sold at spot. Court auction/sale was conducted on 03.08.2002
4. On 19.10.2002; an application came to be filed under Order 21 Rule 90 of CPC by the first judgment debtor represented by its proprietrix, who is also the wife of the second judgment debtor to set aside the sale contending there were certain irregularities in the sale. The said application came to be resisted by the decree holder. Trial court after considering rival contentions, by its order dated 16.12.2002 dismissed the application, which order is assailed in this appeal.
5. Heard the learned advocates appearing for the parties.
6. Sri Venkatachala, learned counsel appearing for the appellant-first JD, would contend that Principal District Judge did not have the jurisdiction to entertain the execution petition and the objection raised by the office ought to have been upheld in view of Section 2(1)(e) read with Section 42 of the Arbitration and Conciliation Act, 1996. He would submit that execution petition ought to have been rejected or ought to have been returned for being presented before the court having jurisdiction. He would elaborate his submission by contending that reading of Section 2(1)(e) would clearly establish that court having jurisdiction to entertain a suit of original jurisdiction would be the court which would be entitled to consider and adjudicate an application filed by the claimant for execution of a decree. He would further contend that in the instant case execution petition ought to have been filed before Principal Civil Judge (Sr. Dn.), Shimoga since the said court has the jurisdiction to try a original suit of this nature. In support of his submission he relies upon the judgment of the Hon'ble Apex Court in Bharat Coking Coal Limited v. Annapurna Construction reported in (2008) 6 SCC 732 : AIR 2008 SC 2028 : 2008 SCACTC 127 (SC) : 2008 (1) Arb. LR 545 (SC) and also the judgment of the Delhi High Court reported in AIR 1970 Delhi 14—Virendra Saigal v. Sumatilal Jamnala and seeks for allowing of the appeal and setting aside the order passed by the executing court.
7. Per contra, Sri K.V Shyamaprasad, learned counsel appearing for the respondent-decree holder, would support the order passed by the executing court and contends by reading of Section 2(1)(e) of the Arbitration Act, 1996 it would emerge that it is the Principal Civil Court of the district which has jurisdiction to try execution petition and when it is read with reference to the word “district” the execution petition presented in the instant case by the decree holder before the Principal District Judge, Shimoga cannot be found fault with. He would also submit that Principal Civil Court is defined under Section 14 of the Karnataka Civil Courts Act, which would mean and include only Principal District Judge of the district and as such the Principal Civil Court would mean and include only the Principal District Judge of the district and the jurisdiction cannot be conferred on the Court of Principal Civil Judge (Sr. Dn.) as contended by the learned counsel for the appellant as it would be contrary to Section 14 of the Karnataka Civil Courts Act. He would also draw the attention of the court to the judgment of this court in the case of Hatti Gold Mines Co. Ltd. v. Khaleel Ahmed Dakhani* reported in 2000 (5) KLJ 557 whereunder Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 was the subject matter of consideration and it was held therein that principal court referred to in Arbitration Act would be the Principal District Judge of the district. He would also submit that judgment in Bharat Coking Coal Ltd.'s case referred to supra is inapplicable to the facts of the present case since dicta laid down by the Apex Court is under Section 2(c) of the Arbitration Act, 1940 and would not have any application to the facts of the present case as the words used in 1996 Act are different. He would also submit that application filed under Order 21 Rule 90 itself was not maintainable since it is filed by the wife of the second J. Dr. and as such she did not have or possess an independent right over the property in question and as such he seeks for rejection of the appeal. Having heard the learned advocates appearing for the parties following points arise for consideration:
(i) Whether the application filed under Order 21 Rule 90 is maintainable?
(ii) Whether the execution petition in Execution Case No. 17/2000 was maintainable before Principal District Judge, Shimoga?
(iii) Whether the order passed by the Principal District Judge in Execution Case No. 17/2000 dated 16.12.2000 is liable to be affirmed or reversed?
(iv) To what order?
Re.: Question No. 1
8. Insofar as contention regarding the maintainability of the application is concerned same is taken up for consideration at first instance itself since any finding given on this point will have the effect on adjudicating other points. Though Sri Shyamaprasad has raised such a contention before this court for the first time, it is seen that at the first instance when application was filed by the first J. Dr. it was on behalf of a proprietary firm and was represented by its proprietrix Smt. Annapoorna. In the said capacity application in question has been filed by her and not in the capacity of being wife of second J. Dr. Even otherwise by reading of Order 21 Rule 90 it would emerge that any person entitled to share in rateable distribution of assets would be entitled to object to the sale of property and as such applicant would be entitled to seek for setting aside the sale. In the instant case firm being the judgment debtor it would also be entitled to seek rateable distribution of the sale proceeds in execution proceedings. In view of the same, contention of Sri Shyamaprasad, learned counsel for respondent cannot be accepted and it is hereby rejected. Question No. 1 is held in favour of the appellant and against the respondent.
Re.: Question Nos. 2 and 3
9. These two questions being interlinked and are being taken up for consideration together. In order to consider rival contentions raised by the learned advocates it would be necessary to extract relevant provisions of law pressed into service, namely, Section 2(1)(e) and Section 42 of the Arbitration and Conciliation Act, 1996 and Section 2(c) of the Arbitration Act, 1940 which reads as under:
Section 2(1)(e) of 1996 Act
“2. Definitions—
(1) In this Part, unless the context otherwise requires,—
xxx xxx xxx
(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;”
Section 42 of 1996 Act
“42. Jurisdiction—Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court.”
Section 2(c) of 1940 Act
“2. Definitions—In this Act, unless there is anything repugnant in the subject or context,—
xxx xxx xxx
(c) “Court” means a civil court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, butdoes not exceptfor the purpose of arbitration proceedings under Section 21 include a small cause court;”
10. The contention of Sri Venkatachala that words “Principal Civil Court” referred to in 1996 Act is to be read in conjunction with the succeeding words in the same section wherein it has been stated that civil court which has the jurisdiction to decide the subject matter of a suit, would mean a court which would have “original jurisdiction” to try a suit in the ordinary course if there was no arbitration agreement and it is that court of original jurisdiction which alone would be entitled to adjudicate an application is to be considered in the background of the judgment of the Hon'ble Supreme Court in Bharat Coking Coal Ltd.'s case referred to supra relied upon by the learned counsel for the appellant particularly paragraph 22 which reads as under (at page 552 of Arb. LR):
“We, therefore, for the foregoing reasons as also the binding precedents are of the opinion that this court has no jurisdiction to entertain these applications. The Registry, therefore, is directed to send the records to the Court of District Judge, Dhanbad who in turn is directed to transfer the case to a court having appropriate jurisdiction. The court concerned is requested to dispose of the objection filed by the appellant herein as expeditiously as possible and not later than three months from the date of receipt of records.”
11. Sri Venkatachala would contend that Hon'ble Supreme Court having found that arbitration award not being sustainable remitted the matter back to the District Judge, Dhanbad and it did not stop at it and a further direction was given to the District Judge to transfer the records to the court having proper jurisdiction and contends that it would only mean that court having the original jurisdiction to try a suit. He would submit dicta laid down by the Hon'ble Supreme Court, when applied to the facts of the present case the only conclusion according to him which can be drawn is that Principal Civil Judge (Sr. Dn.), Shimoga is the court which has the original jurisdiction to try a suit with unlimited jurisdiction which has to try the execution petition in question and no other court. As such he submits that execution petition ought to have been filed before the said court, namely, Principal Civil Judge (Sr. Dn.) and not the Principal District Judge, Shimoga.
12. This court in the case of Hatti Gold Mines had an occasion to consider the issue regarding jurisdiction of the courts to try petition filed under Section 34 of 1996 Act and while interpreting the provisions of Arbitration and Conciliation Act, 1996 held to the following effect:
“A careful reading of Sections 34 and 2(1)(e) of the Act, 1996 makes it clear that an application under Section 34 has to be filed in the principal court of original jurisdiction in a district and does not include any civil court of a grade inferior to such Principal Civil Court or any court of small causes. Interpreting Section 2(c) of the Act, 1940 and Sections 11 and 14 of the Act, Supreme Court in Guru Nanak Foundation v. Rattan Singh and Sons, (1981) 4 SCC 634 : AIR 1981 SC 2075 observed that in the absence of an arbitration agreement if a dispute was required to be resolved by initiating proceedings in a civil court that court which will have jurisdiction to entertain the suit alone would have jurisdiction to entertain the award and the arbitration in view of Section 14(2) would have to file the award in that court.”
13. And in conclusion it was held to the following effect:
“Learned District Judge while considering Section 14 of the Civil Courts Act has neither considered sub-section (2) of Section 14 nor Sections 15 and 16 of the Civil Courts Act and Section 15 of CPC. Whatever that may be, a close reading of those sections perhaps makes it difficult to say that the District Court at Raichur had no jurisdiction to entertain the matter. But the question that would arise in this case is as to whether in the given circumstances of the case, District Court at Raichur could have entertained the application for execution and ordered for attachment of movables.”
14. It is to be noticed that contention now put forward by Sri Venkatachala is on the basis of the judgment of the Hon'ble Supreme Court rendered in Bharat Coking Coal Limited referred to supra. In the said judgment it is noticed that judgment and award that came to be passed was under Arbitration Act, 1940 and incidentally Section 2(1)(e) of 1996 Act was referred to since by that time Arbitration Act, 1996 had come into force. In the said case Hon'ble Supreme Court has also taken note of the fact of Section 2(1)(e) having been interpreted by the Apex Court in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd., (2004) 1 SCC 540 : 2004 (1) Arb. LR 67 (SC) and at paragraph 14 of the said judgment it has been held to the following effect (at page 550 of Arb. LR):
“14. We may notice that such a view has been taken by this court in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd., (2004) 1 SCC 540 : AIR 2005 SC 1514 : 2004 (1) Arb. LR 67 (SC), stating:
‘9. …In regard to the forum before which the application for modification or setting aside the award is concerned, we find no difficulty in coming to the conclusion that in view of the provisions of Section 34 read with Section 2(1)(e) of the 1996 Act it is not this court which has the jurisdiction to entertain an application for modification of the award and it could only be the Principal Civil Court of original jurisdiction as contemplated tinder Section 2(1)(e) of the Act, therefore, in our opinion, this application is not maintainable before this court.”
15. By reading of Section 2(1)(e) of 1996 Act it would emerge that word “court” has been defined to mean and include a Principal Civil Court in a district. It is also to be noticed that under Section 2(1)(e) it excludes certain courts. The exclusion clause excludes certain courts. The exclusion clause excludes any civil court inferior to such Principal Civil Court or any court of small causes to exercise jurisdiction or to entertain the petition or application under the Act. The exclusion is specific. Thus, a conjoint reading of inclusion and exclusion clauses of Section 2(1)(e) it would emerge that legislature in its wisdom have thought necessary to vest the jurisdiction to decide the questions forming the subject matter of a suit under the Arbitration and Conciliation Act, 1996 with the “Principal Civil Court” of a “district” and by excluding any other civil court of a grade inferior to such Principal Civil Court or any court of small causes. When the word “Principal Civil Court” is examined with reference to jurisdiction of “District Court”, as defined under Karnataka Civil Courts Act, which reads thus:
“14. Jurisdiction of the District Court—-
(1) The District Court shall be deemed to be Principal Civil Court of original jurisdiction within the local limits of this jurisdiction.
(2) Subject to the provisions of the Code of Civil Procedure, 1908 (Central Act 5 of 1908) the jurisdiction of a District Court shall extend to all original suits and proceedings of a civil nature.”
it would emerge that District Courts are deemed to be Principal Civil Court of original jurisdiction and as such “Principal District Judge” of the district alone will have jurisdiction to decide the questions forming subject matter of a suit and no other court.
16. Thus, when these two sections, namely, Section 2(1)(e) of Arbitration and Conciliation Act, 1996 and Section 14 of the Karnataka Civil Courts Act are read in conjunction it would mean “Principal District Judge” of that particular district would be the Principal Civil Court of original jurisdiction within the local limits of its jurisdiction which would be entitled to decide the questions forming the subject matter of arbitration. Hence, to import into words Principal Civil Court to mean and include the Principal Civil Judge (Sr. Dn.) would be otiose for two reasons:
(a) Unlike in Section 2(c) of 1940 Act where the word “district” is used same does not find a place in 1996 Act.
(b) While reading the exclusion clause in comparison of two enactments, namely, 1940 Act and 1996 Act the marked difference which is to be found is that in 1940 Act only the court of small causes was excluded whereas under 1996 Act any court inferior to such Principal Civil Court is also included for the purpose of exclusion.
17. Thus, Principal Civil Court of original jurisdiction in a district would mean and include only the Principal District Judge of the district and not the Principal Civil Judge (Sr. Dn.) or any other court having original jurisdiction which is inferior in grade to such “Principal Civil Court”.
18. In view of the same Question No. 2 has to be held against the appellant and in favour of the respondent by holding execution petition filed before Principal District Judge, Shimoga was maintainable and it is to be held that order passed by the executing court in Ex. Case No. 17/2000 dated 16.12.2002 does not suffer from any infirmity whatsoever and deserves to be affirmed.
Re.: Question No. 4
19. In view of discussions made hereinabove following order is passed:
(i) Appeal is hereby dismissed.
(ii) Order passed by the executing court in Ex. Case No. 17/2000 dated 16.12.2002 is hereby confirmed.
(iii) No order as to costs.