In Re: IA NO. GA/1/2024

The Court: the present application has been filed for recall of an order dated January 17, 2024 passed by a co-ordinate Bench of this Court in connection with AP/868/2023 under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the 1996 Act”), appointing an Arbitrator.

Learned counsel for the petitioner argues that the application under Section 11(5) was filed in the Ordinary Original Civil Jurisdiction of this Court and not in the Commercial Division. As such, the court inherently lacked subject-matter jurisdiction to entertain and decide the said application in the Ordinary Original Civil Side of this Court. Accordingly, the said order ought to be recalled.

In support of his submission, learned counsel appearing for the petitioner places reliance on Section 15 of the Commercial Courts Act, 2015 (for short, “the 2015 Act”), which provides that all suits and applications, including applications under the 1996 Act, relating to a commercial dispute of specified value pending in a High Court where a Commercial Division has been constituted, shall be transferred to the Commercial Division.

In conjunction with the said provision, learned counsel relies on Laxmi Polyfab Pvt. Ltd Vs. Eden Realty Ventures Pvt. Ltd. and another, reported at AIR 2021 Cal 190 where a co-ordinate Bench of this Court observed that Section 15 of the 2015 Act has to be read along with Sections 6 and 7 of the said Act. A suit which has been filed subsequent to the Notification of the specified value in the Ordinary Original Civil Jurisdiction of this Court cannot be transferred to the Commercial Division by virtue of Section 15(1) of the Act of 2015. It was held that a suit filed subsequent to the Notification cannot be said to be a “pending” suit within the meaning of Section 15(1) of the 2015 Act. The moment a suit is not “pending” in terms of Section 15(1), the same cannot be transferred to the Commercial Division by virtue of Section 15(1). It was observed that despite the absence of power under Section 15(1), the court has powers under Order VII Rule 10 of the Code of Civil Procedure, 1908 to deal with the same. Power under Order VII Rule 10 of the Code stands regulated by Section 15(1) so far as pending suits relating to a commercial dispute of the specified value in the Ordinary Original Civil Jurisdiction of this Court. Once the suit has been filed beyond the date of the Notification of the specified value, it was held that Order VII Rule 10 of the Code governs the field.

It is submitted that on the date on which the application was filed under Section 11(5) of the 1996 Act, the Notification had already come into effect. As such, the court, sitting in Ordinary Original Civil Jurisdiction, inherently lacked the power of deciding the matter.

Also, the application itself had been filed in the Ordinary Original Civil Jurisdiction and not the Commercial Division, thus, making it liable to be rejected at the outset.

Learned counsel places reliance on the Commercial Courts Practice Directions, 2021 (in short, “the Practice Directions”) of this Court in that regard. Clause 4 of the same provides that every suit, appeal or other proceeding pending before any Civil Court or the High Court immediately before the date of issuance of the appropriate Notification in terms Section 3(1A) of the 2015 Act shall be transferred by the Registry to the Commercial Division of this Court. Sub-clause (2) provides that the above provision for transfer shall not be applicable to the suits, appeals or other proceedings, instituted before any Civil Court as per the Bengal, Agra and Assam Civil Courts Act, 1887 or in the High Court in its Ordinary Original Civil Jurisdiction after the date of issuance of the appropriate Notification of the pecuniary value in terms of Section 3(1A) of the 2015 Act.

Clause 9(1) of the Practice Directions provides that the High Court or the District Court, as the case may be, shall not, subsequent to