Having heard the learned Advocates for the respective parties and upon considering the record, it is evident that the Trial Court conflated the concepts of jurisdiction and maintainability. The terms "jurisdiction" and "maintainability" are often mistakenly
used interchangeably, yet they hold distinct legal connotations. A
precise understanding of the distinction is crucial for judicial
adjudication. Jurisdiction refers to the power and authority of a
court or tribunal to adjudicate a dispute and render a binding
decision. It is derived from the Latin words "juris" (law) and "dico" (I speak), which collectively signify "speaking by the law." The concept extends to the legal power to entertain, inquire into facts, apply the law, and issue enforceable judgments. Jurisdiction can be classified into three distinct categories:
Subject Matter Jurisdiction – The court’s power to deal with
a specific type of case based on statutory provisions.
Territorial Jurisdiction – The geographic area within which a
court can exercise its authority.
Pecuniary Jurisdiction – The monetary limits of a court’s
power to hear a case. {Para 11}
12. Jurisdiction derives its authority from statutes, and its
absence renders the court incompetent to decide the matter.
Jurisdiction does not depend on the correctness of the decision; a
court may decide rightly or wrongly, yet its jurisdiction remains
unaffected. It is foundational to the legitimacy of judicial
proceedings, as it embodies the legal capacity to entertain a suit
and adjudicate on the merits.
13. Maintainability pertains to whether a legal proceeding is
competent to be entertained, factoring in procedural and
substantive requirements. Maintainability relates to whether the
suit is procedurally valid and not inherently barred. A case
dismissed for lack of maintainability does not necessarily negate
the existence of jurisdiction, as it may only reflect procedural
infirmities. Unlike jurisdiction, maintainability addresses
preliminary objections arising from procedural non-compliance or statutory bars rather than the inherent authority of the court.
Examples of factors affecting maintainability include:
(i) Bar under Statutes: Prohibitions on the initiation of
proceedings due to legislative provisions (e.g., res judicata
under Section 11 of CPC).
(ii) Limitation Period: Filing of proceedings after the
prescribed period under the Limitation Act, 1963.
(iii) Locus Standi: The legal standing of the petitioner to
institute proceedings.
14. Jurisdiction derives its authority from statutes conferring
power on the court. Maintainability arises from procedural and
statutory compliance requirements for initiating proceedings. Lack of jurisdiction results in the nullity of proceedings, as the court inherently lacks authority to adjudicate. Non-compliance with maintainability bars leads to dismissal without deciding the merits of the case but does not affect the court’s inherent power.
15. Thus, while jurisdiction focuses on the court’s authority,
maintainability examines the legal validity of the proceedings.
19. The jurisdiction of the Civil Judge, Senior Division, to
entertain such an application is derived under Section 2(c) of the
Act which defines court as 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.
20. The Trial Court improperly conflated the provisions of
Section 20 with maintainability. Jurisdiction must be determined
based on the pleadings in the application. The petitioner’s
averments regarding the arbitration agreement and the alleged
consent by respondent No. 1 to appoint the arbitrator establish a
prima facie case for jurisdiction under the 1940 Act. The issue of
whether respondent No. 1 consented to the arbitrator’s
appointment or the draft award is a matter for substantive
adjudication and does not affect the Court’s jurisdiction to
entertain the application.
21. The Trial Court, while concluding that it lacked jurisdiction,
proceeded to consider the maintainability of the petitioner’s claim under Section 20 of the Arbitration Act, 1940. This consideration was beyond the scope of the Trial Court’s authority, as a finding of lack of jurisdiction precludes further deliberation on the merits or maintainability of the case.
22. In view of the above analysis, the Trial Court’s order reflects
a fundamental misapplication of legal principles.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.2315 OF 2015
Deepak Manaklal Katariay V/s. Ahsok Motilal Katariya
CORAM : AMIT BORKAR, J.
DATED : NOVEMBER 29, 2024
Citation: 2024:BHC-AS:46238
1. The petitioner is challenging the order dated 10th November
2014 passed by the 3rd Joint Civil Judge Senior Division, Nashik,
in Civil Miscellaneous Application No. 321 of 2000 filed under
Section 20 of the Arbitration Act, 1940, wherein it was held that
the Court had no jurisdiction to entertain the application.
2. The relevant facts for adjudication are as follows. According
to the petitioner, on 28th May 1995, an arbitration agreement was
executed between the petitioner and respondent No. 1 concerning
movable and immovable properties described in the application.
The arbitration agreement was purportedly governed by the
Arbitration Act, 1940. A dispute arose between the parties in 1994,
leading to the appointment of an Arbitrator. The Arbitrator
submitted a draft arbitration award on 17th February 1997, which
was accepted by the petitioner but refused by respondent No. 1.
Consequently, no final arbitration award materialized between the
parties, which became the crux of the subsequent litigation.
3. On 17th March 1998, the petitioner filed Civil Miscellaneous
Application No. 54 of 1998 in the Court of Civil Judge, Senior
Division, Nashik, under Section 9 of the Arbitration and
Conciliation Act, 1996, seeking interim injunction against
respondent No. 1. The Trial Court granted a temporary injunction
on 7th April 1998.
4. Respondent No. 1 challenged the injunction order by filing
Civil Miscellaneous Application No. 244 of 1998 before the 2nd
Additional District Judge, Nashik. By judgment and order dated
20th October 1999, the District Judge set aside the injunction,
holding that the Civil Judge, Senior Division, was not a "Court"
within the meaning of Section 2(e) of the Arbitration and
Conciliation Act, 1996.
5. The petitioner challenged the District Judge's order in Writ
Petition No. 663 of 1999 before this Court. By order dated 4th
April 2000, this Court confirmed the Appellate Court's findings but
permitted the petitioner to withdraw the Section 9 application
with liberty to pursue appropriate remedies. The Supreme Court
dismissed the petitioner’s Special Leave Petition No. 12388 of 2000
on 6th November 2000. Subsequently, the petitioner withdrew
Civil Miscellaneous Application No. 54 of 1998 with liberty to file a
fresh application, which was allowed by the Trial Court on 13th
December 2000.
6. On 14th December 2000, the petitioner filed Civil
Miscellaneous Application No. 321 of 2000 under Section 20 of the
Arbitration Act, 1940, before the Civil Judge, Senior Division,
Nashik. Respondent No. 1 filed an application seeking the framing
of a preliminary issue regarding the Court's jurisdiction. By the
impugned order dated 10th November 2014, the Trial Court held
that it lacked jurisdiction to entertain the application.
7. Mr. Kulkarni, learned Advocate representing the petitioner,
contended that the respondents are barred by the principle of
estoppel from raising objections regarding the applicability of the
Arbitration Act, 1940. He pointed out that in earlier proceedings,
including before the Supreme Court, the respondents had
specifically pleaded that the purported arbitration agreement
dated 28th May 1995 and the subsequent dispute were governed
by the provisions of the Arbitration Act, 1940. Referring to
paragraph 6(i) of the reply filed by the respondents before the
Supreme Court, he submitted that the respondents unequivocally
acknowledged that the arbitration agreement and reference
pertained to the Arbitration Act, 1940. He argued that the doctrine
of estoppel, as enshrined in Section 115 of the Indian Evidence
Act, 1872, precludes a party from denying or going back on their
prior statements, especially when such statements were relied
upon by the petitioner to initiate proceedings under the old Act.
8. Further, Mr. Kulkarni submitted that the Trial Court erred in
conflating the issues of maintainability and jurisdiction. He
asserted that maintainability pertains to procedural compliance,
whereas jurisdiction involves the Court’s legal authority to
adjudicate. The Trial Court, he argued, failed to address the
petitioner’s submissions in light of the respondents’ own
admissions and prematurely concluded on jurisdiction without
analyzing the broader context of Section 20 of the Arbitration Act,
1940. In conclusion, Mr. Kulkarni argued that the impugned order
deserves to be quashed as it overlooked material facts, misapplied
the law, and failed to consider the binding nature of prior
statements made by the respondents in judicial proceedings.
9. Per contra, Mr. Garge, learned Advocate representing
respondent No. 1, supported the impugned order by emphasizing
the transition in the statutory regime governing arbitration. He
argued that the Arbitration and Conciliation Act, 1996, explicitly
repealed the Arbitration Act, 1940, through Section 85(1). The
savings clause under Section 85(2)(a) provides that the provisions
of the 1940 Act would only apply to arbitration proceedings that
had commenced before the enactment of the 1996 Act, i.e., before
22nd August 1996. Mr. Garge contended that the phrase
"commencement of arbitration proceedings" must be interpreted in
light of Section 21 of the Arbitration and Conciliation Act, 1996,
which states that proceedings commence when the respondent
receives a request for arbitration from the claimant. He argued
that since no arbitration proceedings had commenced under the
1940 Act before its repeal, the petitioner cannot invoke its
provisions.
10. Mr. Garge further argued that the Trial Court correctly
framed and decided the preliminary issue of jurisdiction under
Order XIV Rule 2 of the Code of Civil Procedure, 1908, as it
pertains to the foundational competence of the Court to entertain
the matter. According to him, the Trial Court’s findings align with
the legislative intent and jurisprudence under the 1996 Act, which
prioritizes procedural clarity and eliminates dual regimes for
arbitration.
11. Having heard the learned Advocates for the respective
parties and upon considering the record, it is evident that the Trial
Court conflated the concepts of jurisdiction and maintainability.
The terms "jurisdiction" and "maintainability" are often mistakenly
used interchangeably, yet they hold distinct legal connotations. A
precise understanding of the distinction is crucial for judicial
adjudication. Jurisdiction refers to the power and authority of a
court or tribunal to adjudicate a dispute and render a binding
decision. It is derived from the Latin words "juris" (law) and "dico"
(I speak), which collectively signify "speaking by the law." The
concept extends to the legal power to entertain, inquire into facts,
apply the law, and issue enforceable judgments. Jurisdiction can be
classified into three distinct categories:
Subject Matter Jurisdiction – The court’s power to deal with
a specific type of case based on statutory provisions.
Territorial Jurisdiction – The geographic area within which a
court can exercise its authority.
Pecuniary Jurisdiction – The monetary limits of a court’s
power to hear a case.
12. Jurisdiction derives its authority from statutes, and its
absence renders the court incompetent to decide the matter.
Jurisdiction does not depend on the correctness of the decision; a
court may decide rightly or wrongly, yet its jurisdiction remains
unaffected. It is foundational to the legitimacy of judicial
proceedings, as it embodies the legal capacity to entertain a suit
and adjudicate on the merits.
13. Maintainability pertains to whether a legal proceeding is
competent to be entertained, factoring in procedural and
substantive requirements. Maintainability relates to whether the
suit is procedurally valid and not inherently barred. A case
dismissed for lack of maintainability does not necessarily negate
the existence of jurisdiction, as it may only reflect procedural
infirmities. Unlike jurisdiction, maintainability addresses
preliminary objections arising from procedural non-compliance or
statutory bars rather than the inherent authority of the court.
Examples of factors affecting maintainability include:
(i) Bar under Statutes: Prohibitions on the initiation of
proceedings due to legislative provisions (e.g., res judicata
under Section 11 of CPC).
(ii) Limitation Period: Filing of proceedings after the
prescribed period under the Limitation Act, 1963.
(iii) Locus Standi: The legal standing of the petitioner to
institute proceedings.
14. Jurisdiction derives its authority from statutes conferring
power on the court. Maintainability arises from procedural and
statutory compliance requirements for initiating proceedings. Lack
of jurisdiction results in the nullity of proceedings, as the court
inherently lacks authority to adjudicate. Non-compliance with
maintainability bars leads to dismissal without deciding the merits
of the case but does not affect the court’s inherent power.
15. Thus, while jurisdiction focuses on the court’s authority,
maintainability examines the legal validity of the proceedings.
16. A perusal of the impugned order reveals that the Trial Court
framed the issue of jurisdiction. However, while recording its
findings, it concluded that the proceeding was not maintainable
due to the inapplicability of Section 20 of the Arbitration Act,
1940. This approach demonstrates a fundamental
misunderstanding of the distinction between jurisdiction and
maintainability.
17. The respondents’ stand before the Supreme Court, as
extracted below, further complicates the matter:
“6(i) …………. The alleged or purported agreement of the
arbitration entering into reference is of 1995 and therefore
the application, if any, could have been made only under the
Arbitration Act of 1940……….”
18. The respondents themselves admitted that the arbitration
agreement and reference pertained to the provisions of the
Arbitration Act, 1940. This admission assumes significance because
Section 85(2)(a) of the Arbitration and Conciliation Act, 1996
saves proceedings that commenced under the 1940 Act prior to its
repeal. The Trial Court’s failure to properly consider this aspect
underscores a flawed application of the legal principles.
19. The petitioner’s application under Section 20 of the
Arbitration Act, 1940 was filed to enforce an arbitration agreement
entered before the repeal of the 1940 Act. It is pertinent to note
that Section 20 allows parties to seek court intervention for filing
an arbitration agreement in court and for the appointment of an
arbitrator. The jurisdiction of the Civil Judge, Senior Division, to
entertain such an application is derived under Section 2(c) of the
Act which defines court as 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.
20. The Trial Court improperly conflated the provisions of
Section 20 with maintainability. Jurisdiction must be determined
based on the pleadings in the application. The petitioner’s
averments regarding the arbitration agreement and the alleged
consent by respondent No. 1 to appoint the arbitrator establish a
prima facie case for jurisdiction under the 1940 Act. The issue of
whether respondent No. 1 consented to the arbitrator’s
appointment or the draft award is a matter for substantive
adjudication and does not affect the Court’s jurisdiction to
entertain the application.
21. The Trial Court, while concluding that it lacked jurisdiction,
proceeded to consider the maintainability of the petitioner’s claim under Section 20 of the Arbitration Act, 1940. This consideration was beyond the scope of the Trial Court’s authority, as a finding of lack of jurisdiction precludes further deliberation on the merits or maintainability of the case.
22. In view of the above analysis, the Trial Court’s order reflects
a fundamental misapplication of legal principles. Consequently, the
following order is passed:
(a) The impugned order dated 10th November 2014
passed by the 3rd Joint Civil Judge, Senior Division, Nashik
in Civil Miscellaneous Application No. 321 of 2000 is
quashed and set aside.
(b) Civil Miscellaneous Application No. 321 of 2000 is
restored to the file of the Civil Judge, Senior Division,
Nashik. The Trial Court shall adjudicate the application on
merits, including the issue of maintainability, strictly in
accordance with law.
23. The writ petition stands disposed of in the above terms. No
order as to costs.
(AMIT BORKAR, J.)
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