In Civil Appeal No. 6876 of 2022-SC- Top Court dismisses plea challenging State Govt. notification conferring jurisdiction upon Court of Civil Judge (Sr.Division), designated as Commercial Court, to decide applications or appeals arising out of arbitration under A&C Act, 1996 
Justices M.R. Shah & Krishna Murari [19-10-2022]

Read Judgment: Jaycee Housing Pvt. Ltd. & Ors Vs. Registrar (General), Orissa High Court, Cuttack & Ors 

Tulip Kanth

New Delhi, October 20, 2022: Highlighting the fact that the object of Commercial Courts Act, 2015 is to provide for speedy disposal of the commercial disputes which includes the arbitration proceedings, the Supreme Court has dismissed an appeal challenging the notification whereby the Court of Civil Judge (Sr.Division), designated as Commercial Court, was conferred with the jurisdiction to decide applications or appeals arising out of arbitration.

The Bench of Justice M.R. Shah and Justice Krishna Murari said, “As per settled position of law, it is to be presumed that while enacting the subsequent law, the legislature is conscious of the provisions of the Act prior in time and therefore the later Act shall prevail.”

The State Government of Odisha on the recommendation of and after consultation with the High Court of Orissa had established the Courts of Civil Judge (Senior Division) as Commercial Courts for the purposes of exercising the jurisdiction and powers under the Act, 2015.

The original writ petitioners – appellants initially filed the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 in the Court of District Judge. However, on establishment of the Commercial Courts under the aforesaid notification, the said proceedings were transferred to the Commercial Court i.e., the Court of Civil Judge (Senior Division), which was designated as Commercial Court. 

Therefore, the appellants challenged the aforesaid notification before the High Court on the ground that to confer the jurisdiction upon the Court of Civil Judge (Senior Division) to exercise the powers under the Commercial Courts Act including the proceedings under the Arbitration Act, 1996 would be contrary to Section 2(1)(e) of the Arbitration Act, 1996, which is the Special Act. By the impugned judgment, the High Court dismissed the said writ petitions which gave rise to the appeals in question.

It was opined by the Bench that the 2015 Act is the Act later in time and therefore when the Act, 2015 has been enacted, there was already a provision contained in Section 2(1)(e) of the Act, 1996. The Bench made it clear that as per Section 15 of the Act, 2015, all suits and applications including applications under the Act, 1996, relating to a commercial dispute of specified value shall have to be transferred to the Commercial Court. Even as per Section 21 of the Act, 2015, the Act of 2015 shall have an overriding effect.

Considering the provisions of the Act, 2015 and the aspect that Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts are established for speedy disposal of the commercial disputes including the arbitration disputes, the Bench held that Sections 3 & 10 of the Act, 2015 shall prevail and all applications or appeals arising out of arbitration under the provisions of Act, 1996, other than international commercial arbitration, shall be filed in and heard and disposed of by the Commercial Courts, exercising the territorial jurisdiction over such arbitration where such commercial courts have been constituted. 

“Under the circumstances, notification issued by the State of Odisha issued in consultation with the High Court of Orissa to confer jurisdiction upon the court of learned Civil Judge (Senior Division) designated as Commercial Court to decide the applications or appeals arising out of arbitration under the provisions of Act, 1996 cannot be said to be illegal and bad in law. On the contrary, the same can be said to be absolutely in consonance with Sections 3 & 10 of Act, 2015”, the Bench held while completely agreeing with the view taken by the High Court.

Hence, the Bench dismissed the appeals.