JAYCEE HOUSING PVT. LTD. & ORS. versus REGISTRAR (GENERAL), ORISSA HIGH COURT, CUTTACK & ORS

[2022] 15 S.C.R.

AJAYCEE HOUSING PVT. LTD. & ORS.

REGISTRAR (GENERAL), ORISSA HIGH COURT,CUTTACK & ORS.

(Civil Appeal No. 6876 of 2022)

OCTOBER 19, 2022

[M. R. SHAH AND KRISHNA MURARI, JJ.]

Commercial Courts Act, 2015 – ss.3, 10, 15, 21, 30 –Arbitration and Conciliation Act, 1996 – s.2(1)(e) – Odisha CivilCCourts Act, 1984 – ss.3, 9 – Whether in exercise of powers u/s.3 ofthe Commercial Courts Act, 2015, the State Government can conferjurisdiction to hear applications u/ss. 9, 14 and 34 of the ArbitrationAct, 1996, upon Commercial Courts which are subordinate to therank of the Principal Civil Judge in the District, contrary to theDprovisions of s.2(1)(e) of the Arbitration Act – Held: Objects andReasons of the 2015 Act is to provide for speedy disposal of thecommercial disputes which includes the arbitration proceedings –Legislature in its wisdom has specifically conferred the jurisdictionin respect of arbitration matters as per s.10 of the 2015 Act – Whenthe 2015 Act was been enacted, more particularly ss.3 & 10, thereEwas already provision in s.2(1)(e) of the 1996 Act – As per settledposition of law, it is to be presumed that while enacting thesubsequent law, the legislature is conscious of the provisions of theAct prior in time and therefore the later Act shall prevail – Even asper s.15 of the 2015 Act, all suits and applications includingFapplications under the 1996 Act, relating to commercial disputeof specified value shall have to be transferred to the CommercialCourt – Further, as per s.21 of the 2015 Act, the 2015 Act shallhave overriding effect – Thus, ss.3 & 10 of the 2015 Act shall prevailand all applications or appeals arising out of arbitration under theprovisions of the 1996 Act, other than international commercialGarbitration, shall be filed in and heard and disposed of by theCommercial Courts, exercising the territorial jurisdiction over sucharbitration where such commercial courts have been constituted –In the present case, notification issued by the State of Odisha inconsultation with the High Court of Orissa to confer jurisdictionHupon the court of Civil Judge (Senior Division) designated as

JAYCEE HOUSING PVT. LTD. v. REGISTRAR (GENERAL),ORISSA HIGH COURT, CUTTACK

Commercial Court to decide the applications or appeals arising outof arbitration under the provisions of the 1996 Act, cannot be saidto be illegal and bad in law – It is in consonance with ss.3 & 10 ofthe 2015 Act – View taken by the High Court is agreed with.

Commercial Courts Act, 2015 – Object and purpose of –Discussed.

Dismissing the appeals, the Court

HELD: 1.1 In the year 2003, the Law Commission of Indiasuo moto took up the issue of constitution of CommercialDivisions in the High Courts with view to facilitate fast disposalof high value commercial disputes. In its 188th Report, the LawCommission, after carrying out in-depth study of CommercialCourts in United Kingdom, USA, Singapore etc. recommendedsetting up of Commercial Division in each of the High Courts toexpedite commercial cases of high pecuniary value. On the basisof the recommendations of the Law Commission, Bill wasintroduced in Lok Sabha on 16.12.2009 and passed on 18.12.2009for setting up commercial divisions in the High Courts. The Billwas referred to Select Committee which suggested certainamendments to the said Bill. The Bill was redrafted and placedbefore the Rajya Sabha for its consideration. However, the samecame to be withdrawn by the Government and thereafter thematter was again referred to the Law Commission for its report.The Law Commission in its 253rd Report submitted in January,2015 suggested new approach for expediting commercialdisputes and therefore proposed new Bill. Accordingly,Commercial Courts, Commercial Division and CommercialAppellate Division of High Courts Bill, 2015 was introduced inRajya Sabha on April 29, 2015 which was referred to DepartmentalRelated Parliamentary Standing Committee on Personnel, PublicGrievances, Law and Justice. While the matter was pending beforethe Parliamentary Committee, an Ordinance was promulgatedby His Excellency the President of India on 23.10.2015, namely,Commercial Courts, Commercial Division and CommercialAppellate Division of High Courts Ordinance, 2015. Thatthereafter, the Commercial Courts, Commercial Division andCommercial Appellate Division of High Courts Act, 2015 waspassed by the Parliament, which has been subsequently re-named

Aas Commercial Courts Act, 2015. That thereafter the CommercialCourts Act, 2015 has been amended in the year 2018 which hascome into force with effect from 03.05.2018, by which Sections3(1A) & 3A have been inserted enabling the State Governmentsto designate such number of commercial Appellate Courts atDistrict level to exercise appellate jurisdiction over theBcommercial courts below the District Judge level. Thus, acommercial Court can be set up under Section 3 of the Act, 2015and commercial appellate Court can be set up under Section3A of the Act, 2015. [Paras 9.1-9.2][813-C-F; 814-C-E, G-H; 815-

1.2 Thus, the Objects and Reasons of Commercial CourtsAct, 2015 is to provide for speedy disposal of the commercialdisputes which includes the arbitration proceedings. To achievethe said Objects, the legislature in its wisdom has specificallyconferred the jurisdiction in respect of arbitration matters as perDSection 10 of the Act, 2015. The Act, 2015 is the Act later in timeand therefore when the Act, 2015 has been enacted, moreparticularly Sections 3 & 10, there was already provisioncontained in Section 2(1)(e) of the Act, 1996. As per settledposition of law, it is to be presumed that while enacting thesubsequent law, the legislature is conscious of the provisions ofEthe Act prior in time and therefore the later Act shall prevail.Even as per Section 15 of the Act, 2015, all suits and applicationsincluding applications under the Act, 1996, relating to acommercial dispute of specified value shall have to be transferredto the Commercial Court. Even as per Section 21 of the Act,F2015, Act, 2015 shall have overriding effect. It provides that saveas otherwise provided, the provisions of this Act shall have effect,notwithstanding anything inconsistent therewith contained in anyother law for the time being in force. [Para 10][815-B-E]

1.3 Therefore, considering the afore-stated provisions ofGthe Act, 2015 and the Objects and Reasons for which the Act,2015 has been enacted and the Commercial Courts, CommercialDivision and Commercial Appellate Division in the High Courtsare established for speedy disposal of the commercial disputesincluding the arbitration disputes, Sections 3 & 10 of the Act,2015 shall prevail and all applications or appeals arising out ofH

arbitration under the provisions of Act, 1996, other thaninternational commercial arbitration, shall be filed in and heardand disposed of by the Commercial Courts, exercising theterritorial jurisdiction over such arbitration where suchcommercial courts have been constituted. If the submission onbehalf of the appellants that all applications/appeals arising out ofarbitration under the provisions of Act, 1996, other than theinternational commercial arbitration, shall lie before the principalcivil Court of district, in that case, not only the Objects andReasons of enactment of Act, 2015 and establishment ofcommercial courts shall be frustrated, even Sections 3, 10 & 15shall become otiose and nugatory. If the submission on behalf ofthe appellants is accepted, in that case, though with respect toother commercial disputes, the applications or appeals shall liebefore the commercial courts established and constituted underSection 3 of Act, 2015, with respect to arbitration proceedings,the applications or appeals shall lie before the principal civil Courtof district. There cannot be two fora with respect to differentcommercial disputes. Under the circumstances, notification issuedby the State of Odisha issued in consultation with the High Courtof Orissa to confer jurisdiction upon the court of learned CivilJudge (Senior Division) designated as Commercial Court todecide the applications or appeals arising out of arbitration underthe provisions of Act, 1996 cannot be said to be illegal and bad inlaw. On the contrary, the same can be said to be absolutely inconsonance with Sections 3 & 10 of Act, 2015. This Court is incomplete agreement with the view taken by the High Courtholding so. [Para 11][815-E-H; 816-A-D]

State of Maharashtra and Anr. Vs. Atlanata Ltd. (2014)11 SCC 619 : [2014] 1 SCR 507; State of West Bengaland Ors. v. Associated Contractors (2015) 1 SCC 32 :[2014] 10 SCR 426; Fuerst Day Lawson Ltd. v. JindalExports Ltd. (2011) 8 SCC 333 : [2011] 11 SCR 1;Kandla Export Corporation and Anr. v. OCICorporation and Anr. (2018) 14 SCC 715 : [2018] 1SCR 915; BGS SGS SOMA JV v. NHPC Ltd. (2020) 4SCC 234 – referred to.

From the Judgment and Order dated 12.04.2022 of the High Courtof Orissa at Cuttack in WP (C) No. 31939 of 2021.C

With

Civil Appeal Nos. 6878 and 6877 of 2022.

Gaurav Aggarwal, (Amicus Curiae)

DMs. Uttara Babbar, Adv. for the Appellants.The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned commonjudgment and order dated 12.04.2022 passed by the High Court of OrissaEat Cuttack in respective writ petitions, by which, the Division Bench ofthe High Court has dismissed the respective writ petitions in which theappellants herein – original writ petitioners challenged notification dated13.11.2020, issued by the State of Odisha through its Principal Secretary,Law Department in establishing the Court of the Civil Judge (SeniorFDivision) as Commercial Courts for the purposes of exercising jurisdictionand powers under the Commercial Courts Act, 2015, the original writpetitioners have preferred the present appeals.

2. In exercise of powers conferred by Section 3 and sub-section(1) of Section 9 read with Section 10 of the Odisha Civil Courts Act,G1984 and Section 30 of the Commercial Courts Act, 2015 (hereinafterreferred to as the Act, 2015), the State Government on therecommendation of and after consultation with the High Court of Orissahas established the Courts of Civil Judge (Senior Division) as CommercialCourts for the purposes of exercising the jurisdiction and powers underthe Act, 2015.H

2.1 The original writ petitioners – appellants herein initially filedthe proceedings under Section 34 of the Arbitration and ConciliationAct, 1996 (hereinafter referred to as the Arbitration Act, 1996) in theCourt of learned District Judge. However, on establishment of theCommercial Courts under the aforesaid notification, the said proceedingswere transferred to the Commercial Court i.e., the Court of Civil Judge(Senior Division) [designated as Commercial Court]. Therefore, theappellants herein challenged the aforesaid notification and designatingthe Courts of Civil Judge (Senior Division) as Commercial Courts underthe Act, 2015 before the High Court by way of present writ petitions. Itwas the case on behalf of the appellants – original writ petitioners thatconstituting and/or designating the Courts of Civil Judge (Senior Division)as Commercial Courts and to exercise the powers under the CommercialCourts Act would be in conflict with the provisions of Section 2(1)(e) ofthe Arbitration Act, 1996. It was the case on behalf of the appellantsherein that under Section 2(1)(e) of the Arbitration Act, 1996, only thePrincipal Civil Court of original jurisdiction in district (Court of PrincipalDistrict Judge) shall be the “Court” for the purpose of deciding the disputesunder the Arbitration Act, 1996 and in case of an arbitration it does notinclude any Civil Court of grade inferior to such Principal DistrictJudge. Therefore, it was the case on behalf of the appellants that toconfer the jurisdiction upon the Court of Civil Judge (Senior Division) toexercise the powers under the Commercial Courts Act including theproceedings under the Arbitration Act, 1996 would be contrary to Section2(1)(e) of the Arbitration Act, 1996, which is the Special Act. By theimpugned common judgment and order the High Court has dismissedthe said writ petitions which has given rise to the present appeals.

3. Ms. Uttara Babbar, learned counsel has appeared on behalf ofthe respective appellants – original writ petitioners and Shri GauravAggarwal, learned counsel has appeared as Amicus Curiae appointedby the Court.

3.1 Ms. Babbar, learned counsel appearing on behalf of theappellants has vehemently submitted that there is conflict betweenSection 3 of the Act, 2015 and Section 2(1)(e) of the Arbitration Act,1996. It is submitted that Section 2(1)(e) of the Arbitration Act, 1996provides that the Principal Civil Court of original jurisdiction in districtshall be the “Court” in the case of an arbitration other than internationalcommercial arbitration. It is submitted that Section 2(1)(e) of the

AArbitration Act, 1996 specifically provides that it does not include anyCivil Court of grade inferior to such Principal Civil Court. It is submittedthat therefore, under Section 2(1)(e)(i) of the Arbitration Act, 1996, allcourts inferior to Principal Civil Court are excluded. It is submitted thatwherever an application has to lie to “court” (under the Commercial

Courts Act), it must lie to the Principal Civil Court and the jurisdiction ofBall inferior courts is excluded.

3.2 It is submitted that when in exercise of the powers underSection 3 of the Act, 2015, jurisdiction to hear applications under Sections9, 14, 34 of the Arbitration Act, 1996, is conferred on commercial courtswhich are subordinate to the Principal Civil Court of original jurisdictionCin the district, there is clear conflict with the provisions of Section2(1)(e) of the Arbitration Act, 1996.

3.3 It is further submitted by Ms. Babbar, learned counselappearing on behalf of the appellants that the “Court” under Section2(1)(e) of the Arbitration Act, 1996 is the superior most court in theDdistrict and as such legislature intended to minimize the supervisory roleof the courts in the arbitral process. Reliance is placed on the decisionsof this Court in the cases of State of Maharashtra and Anr. Vs.Atlanata Ltd.; (2014) 11 SCC 619 and State of West Bengal andOrs. Vs. Associated Contractors; (2015) 1 SCC 32.

3.4 It is further submitted by Ms. Babbar, learned counselappearing on behalf of the appellants that the Arbitration and ConciliationAct, being special statute vis-à-vis the Commercial Courts Act, shallprevail over the Commercial Courts Act in the case of any conflict asheld by this Court in the cases of Fuerst Day Lawson Ltd. Vs. JindalFExports Ltd.; (2011) 8 SCC 333 and Kandla Export Corporationand Anr. Vs. OCI Corporation and Anr.; (2018) 14 SCC 715, theArbitration and Conciliation Act shall prevail.

3.5 It is further submitted that the High Court has proceeded onan erroneous premise that the Arbitration and Conciliation Act must yieldGto the Commercial Courts Act as both are special statutes, and theCommercial Courts Act is the later statute. It is submitted that aforesaidis contrary to the aforesaid two decisions of this Court. It is submittedthat as observed and held by this Court in the case of Fuerst DayLawson Ltd. (supra) the Arbitration Act is self-contained code andexhaustive and therefore, the same shall prevail over the CommercialHCourts Act being Special Act. It is further submitted that the decision

of this Court in the case of Kandla Export Corporation (supra) hasbeen subsequently approved by bench of three Hon’ble Judges in thecase of BGS SGS SOMA JV Vs. NHPC Ltd.; (2020) 4 SCC 234. Itis submitted that in the said decision, this Court has categorically heldthat the Arbitration Act is complete code and Special Act whichexcludes the general law, including the Commercial Courts Act. It issubmitted that therefore the view taken by the High Court in the commonimpugned judgment and order is just contrary to the decision of thisCourt in the case of Kandla Exports Corporation (supra) and anotherdecision referred hereinabove.3.6 It is further submitted by Ms. Babbar, learned counselappearing on behalf of the appellants that the objective of the ArbitrationAct is to ensure speedy disposal of cases which minimal court’sinterference. If the Civil Judge (Senior Division) is designated asCommercial Court, then the litigant would be provided another challengeto the High Court under Article 227 even after disposal of the appeal bythe District Judge, which shall defeat the objective of speedy disposal.Reliance is placed on para 27 of the decision of this Court in the case ofKandla Exports Corporation (supra).

3.7 Ms. Babbar, learned counsel appearing on behalf of theappellants has pointed that there is conflict in the views of variousHigh Courts. It is submitted that the Gujarat High Court and the MadhyaPradesh High Court have taken the view that the Arbitration Act willprevail over the Commercial Courts Act and on other hand the BombayHigh Court, Rajasthan High Court and Orissa High Court have taken acontrary view.

3.8 Making the above submissions and relying upon the abovedecisions, it is prayed to declare and hold that the notification issued bythe State of Odisha conferring the powers upon the Commercial Court– Court of Civil Judge (Senior Division) to exercise the powers underthe Commercial Courts Act in respect of arbitration disputes as illegal,bad in law and consequently to quash and set aside the impugned commonjudgment and order passed by the High Court.

4. Shri Gaurav Aggarwal, learned counsel and Amicus Curiaehas taken us to the object and purpose of enactment of CommercialCourts Act and establishment of the Commercial Courts, CommercialDivision and Commercial Appellate Division of the High Court. It issubmitted that the Commercial Courts Act and the establishment of

ACommercial Courts are with view to facilitate early disposal of thehigh value disputes/commercial disputes. It is submitted that with viewto achieving the object of speedy disposal of the commercial disputes,the legislature has enacted the Commercial Courts Act, 2015. It issubmitted that under Section 3 of the Commercial Courts Act, 2015, acommercial Court can be set up and commercial Appellate Court canBbe set up under Section 3A of the Commercial Courts Act, 2015. It issubmitted that dispute relating to arbitration is commercial disputeunder Section 2(c) of the Commercial Courts Act, 2015. It is submittedthat Section 10 of the Commercial Courts Act, 2015 is special provisionin respect of arbitration matters. It is submitted that as per sub-sectionC(3) of Section 10, if the arbitration is other than an international commercialarbitration, all applications or appeals arising out of such arbitration underthe provisions of the Arbitration Act that would ordinarily lie before anyprincipal civil court of original jurisdiction in district, shall be filed in,and heard and disposed of by the Commercial Court exercising territorialjurisdiction over such arbitration where such Commercial Court has beenDconstituted. It is submitted that the Commercial Courts Act – being alater Act and has been enacted for specific purpose for speedy disposalof the commercial disputes, the same shall prevail. It is submitted thatwhen the legislature in its wisdom in later enactment has specificallyprovided as per sub-section (3) of Section 10 of the Commercial CourtsEAct, 2015 that all applications/appeals arising out of the Arbitration Actother than the international commercial arbitration would be heard anddisposed of by the Commercial Court, the same shall prevail. It is submittedthat if the submissions made on behalf of the appellants is accepted inthat case Section 10 would become otiose or redundant and/or nugatory.It is submitted that therefore, it is requested not to have the interpretationFwhich shall result any provision of the Act nugatory and/or otiose.4.1 Now so far as the reliance placed upon the decision of thisCourt in the case of Kandla Export Corporation (supra) is concerned,it is vehemently submitted that the said decision does not imply that allprovisions of the Arbitration Act would prevail over the CommercialGCourts in case of any conflict and inconsistency.

4.2 It is submitted that similarly the decision of this Court in thecase of BGS SGS SOMA JV (supra) shall not be applicable to thefacts of the case on hand, it is submitted that in the said decision it is held

that Section 13(1) of the Commercial Courts Act does not provide forindependent right of appeal, but merely provides forum of filing appeal.

4.3 Making the above submissions it is prayed to dismiss the presentappeals and hold that in the present case the notification issued by theState Government conferring powers upon the Commercial Court – Courtof Civil Judge (Senior Division) to exercise the powers under theCommercial Courts Act is neither illegal nor bad in law.

5. We have heard Ms. Uttara Babbar, learned counsel appearingfor the appellants and Shri Gaurav Aggarwal, learned Amicus Curiae.

6. The question of law arising for consideration in the presentappeal is, whether in exercise of powers under Section 3 of theCommercial Courts Act, 2015, the State Government can conferjurisdiction to hear applications under Sections 9, 14 and 34 of theArbitration and Conciliation Act, 1996, upon Commercial Courts whichare subordinate to the rank of the Principal Civil Judge in the District,contrary to the provisions of Section 2(1)(e) of the Arbitration Act?

7. While considering the aforesaid question of law, relevantprovisions of the Arbitration Act, 1996 and the Commercial Courts Act,2015 are required to be referred to and considered, namely, Section2(1)(e) of the Arbitration Act and Sections 3, 10, 15 & 21 of theCommercial Courts Act, 2015, which read as under:

“Section 2(1)(e) of the Arbitration Act, 1996:

(e) “Court” means –

(i) in the case of an arbitration other than international commercialarbitration, the principal Civil Court of original jurisdiction in adistrict, and includes the High Court in exercise of its ordinaryoriginal civil jurisdiction, having jurisdiction to decide the questionsforming the subject-matter of the arbitration if the same had beenthe subject-matter of suit, but does not include any Civil Courtof grade inferior to such principal Civil Court, or any Court ofSmall Causes;

(ii) in the case of international commercial arbitration, the HighCourt in exercise of its ordinary original civil jurisdiction, havingjurisdiction to decide the questions forming the subject-matter ofthe arbitration if the same had been the subject-matter of suit,

Aand in other cases, High Court having jurisdiction to hear appearsfrom decrees of courts subordinate to that High Court”

Sections 3, 10, 15 & 21 of the Commercial Courts Act, 2015:

3. Constitution of Commercial Courts - (1) The StateGovernment, may after consultation with the concerned High Court,Bby notification, constitute such number of Commercial Courts atDistrict level, as it may deem necessary for the purpose ofexercising the jurisdiction and powers conferred on those courtsunder this Act:

Provided that with respect to the High Courts having ordinaryCoriginal civil jurisdiction, the State Government may, afterconsultation with the concerned High Court, by notification,constitute Commercial Courts at the District Judge level:

Provided further that with respect to territory over which theHigh Courts have ordinary original civil jurisdiction, the StateDGovernment may, by notification, specify such pecuniary valuewhich shall not be less than three lakh rupees and not more thanthe pecuniary jurisdiction exercisable by the District Courts, as itmay consider necessary.]

(1-A) Notwithstanding anything contained in this Act, the StateEGovernment may, after consultation with the concerned High Court,by notification, specify such pecuniary value which shall not beless than three lakh rupees or such higher value, for whole or partof the State, as it may consider necessary.]

(2) The State Government shall, after consultation, with theFconcerned High Court specify, by notification, the local limits ofthe area to which the jurisdiction of Commercial Court shallextend and may, from time to time, increase, reduce or alter suchlimits.

(3) The [State Government may], with the concurrence of theGChief Justice of the High Court appoint one or more persons havingexperience in dealing with commercial disputes to be the Judge orJudges, of [Commercial Court either at the level of District Judgeor court below the level of District Judge].

10. Jurisdiction in respect of arbitration matters - WhereHthe subject-matter of an arbitration is commercial disputeof specified value and—

(1) If such arbitration is an international commercial arbitration,all applications or appeals arising out of such arbitration under theprovisions of the Arbitration and Conciliation Act, 1996 (26 of1996) that have been filed in High Court, shall be heard anddisposed of by the Commercial Division where such CommercialDivision has been constituted in such High Court.

(2) If such arbitration is other than an international commercialarbitration, all applications or appeals arising out of such arbitrationunder the provisions of the Arbitration and Conciliation Act, 1996(26 of 1996) that have been filed on the original side of the HighCourt, shall be heard and disposed of by the Commercial Divisionwhere such Commercial Division has been constituted in suchHigh Court.

(3) If such arbitration is other than an international commercialarbitration, all applications or appeals arising out of such arbitrationunder the provisions of the Arbitration and Conciliation Act, 1996(26 of 1996) that would ordinarily lie before any principal civilcourt of original jurisdiction in district (not being High Court)shall be filed in, and heard and disposed of by the CommercialCourt exercising territorial jurisdiction over such arbitration wheresuch Commercial Court has been constituted.

15. Transfer of Pending Cases— (1) All suits and applications,including applications under the Arbitration and Conciliation Act,1996 (26 of 1996), relating to commercial dispute of SpecifiedValue pending in High Court where Commercial Division hasbeen constituted, shall be transferred to the Commercial Division.

(2) All suits and applications, including applications under theArbitration and Conciliation Act, 1996 (26 of 1996), relating to acommercial dispute of specified value pending in any civil courtin any district or area in respect of which Commercial Courthas been constituted, shall be transferred to such CommercialCourt:

Provided that no suit or application where the final judgment hasbeen reserved by the court prior to the constitution of theCommercial Division or the Commercial Court shall be transferredeither under sub-section (1) or sub-section (2).

(3) Where any suit or application, including an application underthe Arbitration and Conciliation Act, 1996 (26 of 1996), relating toa commercial dispute of specified value shall stand transferred tothe Commercial Division or Commercial Court under sub-section(1) or sub-section (2), the provisions of this Act shall apply tothose procedures that were not complete at the time of transfer.

(4) The Commercial Division or Commercial Court, as the casemay be, may hold case management hearings in respect of suchtransferred suit or application in order to prescribe new timelinesor issue such further directions as may be necessary for speedyand efficacious disposal of such suit or application inaccordance [with Order XV-A] of the Code of Civil Procedure,1908 (5 of 1908):

Provided that the proviso to sub-rule (1) of Rule 1 of Order V ofthe Code of Civil Procedure, 1908 (5 of 1908) shall not apply tosuch transferred suit or application and the court may, in itsDdiscretion, prescribe new time period within which the writtenstatement shall be filed.

(5) In the event that such suit or application is not transferred inthe manner specified in sub-section (1), sub-section (2) or sub-section (3), the Commercial Appellate Division of the High CourtEmay, on the application of any of the parties to the suit, withdrawsuch suit or application from the court before which it is pendingand transfer the same for trial or disposal to the CommercialDivision or Commercial Court, as the case may be, having territorialjurisdiction over such suit, and such order of transfer shall be finalFand binding.

21 Act to have overriding effect —Save as otherwise provided,the provisions of this Act shall have effect, notwithstandinganything inconsistent therewith contained in any other law for thetime being in force or in any instrument having effect by virtue ofany law for the time being in force other than this Act.”

8. It is the case on behalf of the appellants, relying upon Section2(1)(e) of the Act, 1996 that in case of arbitration other than theinternational commercial arbitration, the principal Civil Court of originaljurisdiction in district only have the jurisdiction to decide the questionsforming the subject-matter of the arbitration, but does not include any

Civil Court of grade inferior to such principal Civil Court, or any Courtof Small Causes. Therefore, it is the case on behalf of the appellantsthat therefore conferring the jurisdiction upon the Court of learned CivilJudge (Senior Division) as Commercial Court to hear applications underSection 9, 14 and 34 of the Act, 1996 shall be directly in conflict withSection 2(1)(e) of the Act, 1996 and therefore the notification of theState Government conferring such powers upon the Court of learnedCivil Judge (Senior Division) which is subordinate to the rank of PrincipalCivil Judge in district shall be bad in law.

9. While considering the aforesaid issue/question, first of all, onehas to consider the object and purpose of establishment of the CommercialCourts and the enactment of the Commercial Courts Act, 2015.

9.1 In the year 2003, the Law Commission of India suo moto tookup the issue of constitution of Commercial Divisions in the High Courtswith view to facilitate fast disposal of high value commercial disputes.In its 188[th] Report, the Law Commission, after carrying out in-depthstudy of Commercial Courts in United Kingdom, USA, Singapore etc.recommended setting up of Commercial Division in each of the HighCourts to expedite commercial cases of high pecuniary value.

9.2 On the basis of the above recommendations of the LawCommission, Bill was introduced in Lok Sabha on 16.12.2009 andpassed on 18.12.2009 for setting up commercial divisions in the HighCourts. The Bill was referred to Select Committee which suggestedcertain amendments to the said Bill. The Bill was redrafted and placedbefore the Rajya Sabha for its consideration. However, the same cameto be withdrawn by the Government and thereafter the matter was againreferred to the Law Commission for its report. The Law Commission inits 253[rd] Report submitted in January, 2015 suggested new approachfor expediting commercial disputes and therefore proposed new Bill.The Law Commission made the following recommendations quaarbitration matters involving the commercial disputes:

“3.24.4 Second, in the case of domestic arbitrations concerning acommercial dispute of more than Rupees One Crore, applicationsor appeals may lie either to the High Court or Civil Court (notbeing High Court) depending upon the pecuniary jurisdiction. Itis recommended that all applications or appeals arising out of sucharbitrations under the A& Act, that have been filed on theoriginal side of the High Court shall be heard by the Commercial

ADivision of the High Court where such Commercial Division isconstituted in the High Court. However, in the absence of aCommercial Division being constituted, the regular Bench of theHigh Court will hear such applications or appeals arising out ofdomestic arbitration. If the application or appeal in such domesticarbitration is not within the jurisdiction of the High Court and wouldBordinarily lie before Civil Court (not being High Court) andthere is Commercial Court exercising territorial jurisdiction inrespect of such arbitration, then such application or appeal shallbe filed in and heard by such Commercial Court.”

Accordingly, Commercial Courts, Commercial Division andCCommercial Appellate Division of High Courts Bill, 2015 was introducedin Rajya Sabha on April 29, 2015 which was referred to DepartmentalRelated Parliamentary Standing Committee on Personnel, PublicGrievances, Law and Justice. While the matter was pending before theParliamentary Committee, an Ordinance was promulgated by HisDExcellency the President of India on 23.10.2015, namely, CommercialCourts, Commercial Division and Commercial Appellate Division of HighCourts Ordinance, 2015.

That thereafter, the Commercial Courts, Commercial Division andCommercial Appellate Division of High Courts Act, 2015 was passed byEthe Parliament, which has been subsequently re-named as CommercialCourts Act, 2015. The statements of Objects and Reasons of the saidAct, inter alia, provides as under:

“The proposal to provide for speedy disposal of high valuecommercial disputes has been under consideration of theFGovernment for quite some time. The high value commercialdisputes involve complex facts and question of law. Therefore,there is need to provide for an independent mechanism for theirearly resolution. Early resolution of commercial disputes shallcreate positive image to the investor world about the independentand responsive Indian legal system.”G

That thereafter the Commercial Courts Act, 2015 has beenamended in the year 2018 which has come into force with effect from03.05.2018, by which Sections 3(1A) & 3A have been inserted enablingthe State Governments to designate such number of commercial AppellateCourts at District level to exercise appellate jurisdiction over theH

commercial courts below the District Judge level. Thus, commercialCourt can be set up under Section 3 of the Act, 2015 and commercialappellate Court can be set up under Section 3A of the Act, 2015.

10. Thus, the Objects and Reasons of Commercial Courts Act,2015 is to provide for speedy disposal of the commercial disputes whichincludes the arbitration proceedings. To achieve the said Objects, thelegislature in its wisdom has specifically conferred the jurisdiction inrespect of arbitration matters as per Section 10 of the Act, 2015. At thisstage, it is required to be noted that the Act, 2015 is the Act later in timeand therefore when the Act, 2015 has been enacted, more particularlySections 3 & 10, there was already provision contained in Section2(1)(e) of the Act, 1996. As per settled position of law, it is to be presumedthat while enacting the subsequent law, the legislature is conscious ofthe provisions of the Act prior in time and therefore the later Act shallprevail. It is also required to be noted that even as per Section 15 of theAct, 2015, all suits and applications including applications under the Act,1996, relating to commercial dispute of specified value shall have to betransferred to the Commercial Court. Even as per Section 21 of the Act,2015, Act, 2015 shall have overriding effect. It provides that save asotherwise provided, the provisions of this Act shall have effect,notwithstanding anything inconsistent therewith contained in any otherlaw for the time being in force.

11. Therefore, considering the afore-stated provisions of the Act,2015 and the Objects and Reasons for which the Act, 2015 has beenenacted and the Commercial Courts, Commercial Division andCommercial Appellate Division in the High Courts are established forspeedy disposal of the commercial disputes including the arbitrationdisputes, Sections 3 & 10 of the Act, 2015 shall prevail and all applicationsor appeals arising out of arbitration under the provisions of Act, 1996,other than international commercial arbitration, shall be filed in and heardand disposed of by the Commercial Courts, exercising the territorialjurisdiction over such arbitration where such commercial courts havebeen constituted. If the submission on behalf of the appellants that allapplications/appeals arising out of arbitration under the provisions of Act,1996, other than the international commercial arbitration, shall lie beforethe principal civil Court of district, in that case, not only the Objectsand Reasons of enactment of Act, 2015 and establishment of commercialcourts shall be frustrated, even Sections 3, 10 & 15 shall become otiose

Aand nugatory. If the submission on behalf of the appellants is accepted,in that case, though with respect to other commercial disputes, theapplications or appeals shall lie before the commercial courts establishedand constituted under Section 3 of Act, 2015, with respect to arbitrationproceedings, the applications or appeals shall lie before the principal civilCourt of district. There cannot be two fora with respect to differentBcommercial disputes.

Under the circumstances, notification issued by the State of Odishaissued in consultation with the High Court of Orissa to confer jurisdictionupon the court of learned Civil Judge (Senior Division) designated asCommercial Court to decide the applications or appeals arising out ofCarbitration under the provisions of Act, 1996 cannot be said to be illegaland bad in law. On the contrary, the same can be said to be absolutely inconsonance with Sections 3 & 10 of Act, 2015. We are in completeagreement with the view taken by the High Court holding so.12. In view of the above and for the reasons stated above, allDthese appeals fail and the same deserve to be dismissed and areaccordingly dismissed. However, in the facts and circumstances of thecase, there shall be no order as to costs.

13. Before parting with the case, we appreciate the assistancerendered by Shri Gaurav Aggarwal, learned counsel as Amicus CuriaeEin the matter.

Divya Pandey(Assisted by : Deepak Panwar, LCRA)

Appeals dismissed.