Brief Background

In a recent order of the Division Bench of the Delhi High Court in the case of Simplex Infrastructure Limited vs Energo Engineering Projects Limited, Simplex Infrastructure (hereinafter referred to as the ‘Petitioner’) filed a review petition seeking review of an earlier order passed on December 10, 2015, in which the Court dismissed the grant of certain interim reliefs against Energo Engineering Projects Limited (hereinafter referred to as the ‘Respondents’). The Court rejected the claim for interim reliefs because there was no arbitration clause between the two concerned parties in the Deed of Joint Undertaking and thus, the petition was not maintainable under Section 9 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘1996 Act’).

Issue

  • Whether the Court has jurisdiction to adjudicate upon the petition under Section 9 of the 1996 Act?

Contentions of the Petitioner

The Petitioner submitted that Section 10 (2) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 (hereinafter referred to as the ‘2015 Ordinance’), stated that the Commercial Appellate Division of a High Court exercised jurisdiction over applications and appeals arising out of arbitration under the 1996 Act, and thus, passed the aforementioned order on December 10, 2015. Subsequently, placing reliance on Ascot Estates Pvt. Ltd. v Bon Vivant Life Style Limited[1], he submitted that when the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as the ‘2015 Act’) was passed, Section 10 (2) was slightly changed and such matters were to be adjudicated by the Commercial Division of the High Court i.e. a Single Judge and not a Division Bench. The Counsel further submitted that the ‘2015 Act’ was retrospective in applicability with effect from October 23, 2015, i.e. the date when the ordinance was passed.

Interpreting Section 13 of the ‘2015 Act’, the Petitioner stated that though any action taken under the Ordinance shall be deemed to have been done under the provisions of the Act, but it did not apply to judicial orders passed under the Ordinance by a Court that lacked jurisdiction[2]. He stated that even though this ground of lack of jurisdiction was not raised in the first instance, the petitioner had the right of raising such ground in subsequent proceedings[3].

He further submitted that the aforementioned interpretation constituted a valid ground for review under Order XLVII Rule 1 of Code of Civil Procedure, 1908 (hereinafter referred to as the ‘CPC’).

Contentions of the Respondent

The Respondent relying on Section 13 of the 2015 Act, put forward its contention that any action taken under the Ordinance shall be deemed to be taken under the provisions of the ‘2015 Act’. It was also submitted that in the initial petition the prayer of the Petitioner had been dismissed. The Respondent further submitted that an action taken under a previous enactment is saved and held valid under Section 6 of the General Clauses Act, 1897 even after the amended statute becomes operative.

Judgment

The Court, while clearing its stand on the applicability and scope of Section 13 of the ‘2015 Act’ held that a judgement or order rendered by this Court that lacked jurisdiction in such matters would lie outside the purview of Section 13 while applying the ‘2015 Act’ retrospectively[4].

The Court relied on The Hon’ble Supreme Court’s judgement in the case of Raja Shatrunji v. Mohammad Azmat Azim Khan[5], and held that the ‘2015 Act’ in this case is fully effective and operative from October 23, 2015. It stated that the decision of the Commercial Appellate Division of the High Court was an “error on the fact of the record”. It was thus held that the Division Bench lacked jurisdiction to entertain application under Section 9 of the 2015 Act, and that such application had to be heard by the Commercial Division that comprised of a Single Judge.

The Review petition was thus allowed and order dated December 10, 2015 was recalled and reviewed.