Case Brief M/S. India Media Services Private Limited v. SBPL Infrastructure Limited and Others
- Fiducia Legal
- Jun 22, 2022
- 4 min read
Asmit Gupta, Intern
Case: M/S. India Media Services Pvt. Ltd. v. SBPL Infrastructure Ltd.
Citation: CRP No. 507 of 2021
Court: Telangana High Court
Bench: Hon'ble Sri Justice P. Naveen Rao, Hon’ble Sri Justice Sambasivarao Naidu
Date of decision: 09.06.2022
FACTS OF THE CASE:
Disputes emerged between two parties over a negotiating agreement signed on December 5, 2005, and the petitioner, India Media Services Pvt. Ltd., invoked the arbitration clause in a letter dated October 24, 2011. The Hon’ble Calcutta High Court appointed Hon’ble Justice Jayanta Kumar Biswas as arbitrator under section 11 of the Arbitration and Conciliation Act, 1996 (“Act”) in response to a plea filed by the petitioner. Respondent submitted an application with the Hon'ble court for the appointment of an arbitrator after the judge recused himself. The Hon'ble Justice Baskar Bhattacharya was subsequently appointed as an arbitrator with a deadline of August 2020 to conclude the proceedings which eventually concluded on August 9, 2020. The petitioner filed a petition under section 34 of the Act before the Hon'ble court, challenging the award which was passed on October 27, 2020.
On the file of the IX Additional Chief Judge, City Civil Court in Hyderabad (“IX ACJ, CCC, Hyderabad”), the respondent filed an execution petition under section 151 of the Code of Civil Procedure, 1908 (“CPC”). It is also obvious that respondent filed an Arbitration Application under Section 9 and that an appeal is pending before the Hon’ble Court against the orders in that application. It is worth noting that the Arbitrator's decision is being challenged in a Calcutta High Court suit filed under Section 34. In the State of West Bengal, applications regarding Section 9 have also been filed. While this is true, on the grounds that the property is located in Hyderabad, the arbitrator's ruling is being enforced in the state of West Bengal.
ISSUE RAISED
Whether the Hyderabad Civil Courts lack jurisdiction to entertain Execution Petition No. 191 of 2021?
APPLICABLE STATUTES
Section 2(1)(e), Arbitration and Conciliation Act, 1996
Section 09, Arbitration and Conciliation Act, 1996
Section 11, Arbitration and Conciliation Act, 1996
Section 34, Arbitration and Conciliation Act, 1996
Section 36, Arbitration and Conciliation Act, 1996
Section 42, Arbitration and Conciliation Act, 1996
Section 151, Code of Civil Procedure, 1908
Section 111, Companies Act, 2013
CONTENTIONS MADE BY THE PETITIONERS
According to the petitioner's counsel, Hyderabad lacks jurisdiction to hear Execution Petition cases, and so the decisions of IX ACJ, CCC, Hyderabad in E.P. No. 191 of 2021 are prima facie invalid and void ab initio, since the jurisdictional mistake lies at the heart of the matter. Section 42 of the Act makes it clear that only the Principal District Court or the High Court, where applications under Sections 9 and/or 34 are filed, has jurisdiction to deal with subsequent applications after the arbitral proceedings have concluded, and no other Court has jurisdiction to entertain such applications. The counsel relied on the Supreme Court's ruling in State of West Bengal Vs Associated Contractors[1] to back up his contention.
CONTENTIONS MADE BY THE RESPONDENTS
On the other hand, according to counsel for the respondent, once an arbitrator's award is made, it can be enforced as a civil court judgement anywhere in the nation, particularly where the relevant property is situated. The City Civil Court in Hyderabad has authority to hear the execution petition and consider it to be filed under Section 36 of the Act since the subject property is located in the city of Hyderabad. As a result, the order of the IX ACJ, CCC, Hyderabad, is not void for lack of jurisdiction.
The counsel vehemently contended that, under Sundaram Finance Limited vs. Abdul Samad and others[2], the most recent judgement directly on the point approved by the Hon'ble Supreme Court in Cheran Properties Limited vs. Kasturi and Sons Limited and others[3], a person in whose favor an award is passed by Arbitrator can seek its enforcement anywhere in the country like any Civil court decree, and that, because the concerned property is located in Hyderabad city, State of Telangana, an Execution Petition is rightly filed in Hyderabad and the suit is maintainable.
DECISION OF THE COURT
The relevant provisions of the Act that have an effect on the matter in this revision, according to the Hon'ble Court, are Section 2(1)(e), Section 93, Section 344, Section 365, and Section 42. Section 42 applies despite any other provision in Part I of the Act or any other legislation on the topic that conflicts with the provision. As a result, it sweeps all other regulations dealing with the implementation of an award under the rug, despite the fact that it is equivalent as a "decree in fiction" by a Civil Court. The judgements in Sundaram Finance Limited and Cheran Properties Limited were considered in order to comprehend the arguments presented by the respondents' counsel.
The Hon'ble Supreme Court considered the decisions of various High Courts, as well as relevant provisions of the Act and the Civil Procedure Code, and concluded that an award can be enforced anywhere in the country without the need for a transfer of the decree from the court with jurisdiction over the arbitral proceedings. It is significant to mention that Section 42 does not address the situation that the Hon'ble Supreme Court addressed. The Hon'ble Supreme Court did not take into account the opinion of a three-judge bench of the Hon'ble Supreme Court in Associated Contractors. The mere mention of the Supreme Court's decision in Associated Contractors does not imply that the decision is overturned. As a result, the Associated Contractors ruling still holds the field today.
The view of a learned single judge of the Calcutta High Court that because the parties consented to the High Court's jurisdiction, the High Court alone has jurisdiction to hear future motions for award enforcement. Looking back to the circumstances of the case, it is clear that an application under Section 9 has been brought before the Calcutta High Court, based on the provisions of Section 42 and the law put down by the Hon'ble Supreme Court in Associated Contractors. Even a Section 34 application appears to have been filed in the Calcutta High Court. As a result, an application for execution of the award can only be heard by the Calcutta High Court.
As a result, the IX ACJ, CCC, Hyderabad in the state of Telangana has no jurisdiction to hear Execution Petition No. 191 of 2021, which seeks to enforce an arbitrator's award dated March 8, 2021 under Section 36 of the Act. The Hon’ble Court permitted the Civil Revision Petition and closed any pending miscellaneous petitions.
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