Syko Bag Industries, Proprietor, Mr. T.K. Yahoo and Mrs. K. Zubaida Vs ICDS Limited and Sri B.I. Sharma, Advocate and Arbitrator

V. Gopala Gowda, J.@mdashThe order impugned in this Appeal passed by the District Judge, Udupi dated 27/11/2002 in AS. No. 98/2002, on the question of jurisdiction of the said court after interpretation of Section 2(1)(e) of the Arbitration and Conciliation Act 1996 (hereinafter called as ''the Act'' in short) made by the learned Judge, has returned the petition to the appellants herein for presenting the same before the jurisdictional court by granting time till 12/12/2002 to facilitate the Appellants to name the court to which they propose to present the same is questioned before this Court inter alia contending that the learned District Judge has wrongly applied Section 16(c) of CPC ignoring the relevant fact, of dispute between the parties involved in the arbitration proceedings, which is in relation to the loan transaction and not a suit for foreclosure of the immovable properly of the first appellant which is furnished as collateral security to the respondent. The sale of redemption of mortgage was charged upon the immovable property namely, ''B'' schedule property furnished by the first appellant as collateral security to the first respondent. Therefore, the learned Counsel Sri N.A. Satish Chandra for appellants contends that the learned District Judge has made observation in tire order impugned stating that the said court has no jurisdiction to entertain the petition of the appellants by accepting the plea taken by the first respondent with regard to the territorial jurisdiction of Prl.District Judge Court after referring to the decision of the Supreme Court reported in Gagandeep Pratishthan Pvt. Ltd. and Others Vs. Mechano and Another, , wherein the Supreme Court has held that the question relating to territorial jurisdiction of the court is an important aspect, the same shall be taken and decided as a preliminary issue and it goes to the root of the matter, which finding of the learned District Judge is erroneous in law, as he has not taken into consideration the dispute between the parties in relation to money recovery in respect of the machineries supplied by the first respondent to the first appellant for which Schedule-''B'' immovable property was furnished by it as collateral security to the first respondent. Therefore the claim of the first respondent before the Arbitrator in the Arbitral Proceedings is not in relation to subject matter of the above immovable property. The relief granted by the Arbitrator for sale of ''B'' Schedule property in the event of money awarded in the Award in favour of the first respondent cannot be recovered. Therefore, the reliance placed upon by the learned District Judge u/s 16(c) CPC in support of his conclusion that the District Court has no territorial jurisdiction to entertain the petition filed by the appellants ignoring the definition of the Civil Court under the Act, wherein it has been specifically stated that the District. Court and the High Court in exercise, of its ordinary civil jurisdiction to decide the questions "forming the subject matter of the arbitration, if the same had been the subject matter of a suit. The subject Matter of the arbitration between the parties before the Arbitrator was for recovery of money due from the first appellant to the first respondent for having supplied the machineries to it. There was a dispute in this regard between the parties and the second respondent was appointed as an Arbitrator and dispute was referred to him for adjudication, he has passed the Award directing the appellants to pay in all a sum of Rs. 23,33,595/- with interest at 18% p.a. on Rs. 12,70,336/- train 11/11/1999 till realisation and also pay a sum of Rs. 7.750/- as the cost of arbitral proceedings. Aggrieved by the Award the petition was filed before the Prl. District Judge, Udupi by the appellants and the same was numbered as A.S No. 98/2002. The learned principal District Judge has accepted the submission made on behalf of the first respondent after interpreting Section 2(1)(e) of the Act and Section 16(c) of CPC and passed the impugned order holding that court has no territorial jurisdiction, further the petition was ordered to be returned to the appellants for presenting it before proper court. The learned Counsel Mr. T.N. Raghupathy for the first respondent has sought to justify the same placing reliance upon Section 16(c) CPC and decision of this Court reported in Shree Shanthi Homes Private Limited, Bangalore and Others Vs. Cref Finance Limited, Calcutta, .

2. After careful perusal of the findings and reasons recorded by the learned District Judge in the impugned order and the reference order made to the second respondent for adjudication of the dispute between the parties as extracted at paragraph 2 on the basis of the Hire-Purchase agreement dated 10/3/997 for supply of equipment''s mentioned in ''A'' schedule properties of machineries supplied to the first appellant, the first appellant has executed an equitable mortgage by way of deposit of title deeds in respect of ''B'' schedule property and the same was furnished as collateral security to the first respondent, the relief" sought In the claim petition by him against appellants is not directly in relation to ''B'' schedule property referred to in the Arbitration Award, but only the amount due, from the first Appellant for having supplied ''A'' schedule machineries to it by first respondent. The learned Prl.District Judge has misconstrued the provisions of Section 2(1)(e) of the Act and interpreted the same erroneously by placing reliance upon Section 16(e) of CPC and field that the District Court had no jurisdiction to examine the case in view of the fact that the subject matter of the dispute is only for recovery of money from appellants for supply of machineries mentioned in the ''A'' schedule to the first appellant and ''B'' schedule immovable property was not the subject matter of Arbitration between the parties before the second respondent. ''The agreement entered between the parties for supply of machineries to first appellant is at Bangalore, the second respondent arbitrator is at Udupi, arbitration proceedings were referred to him at Udupi as per the terms of the Hire Purchase agreement between the parties. Therefore, the Prl. District Judge, Udupi has got territorial jurisdiction to examine the correctness of the award passed by the second respondent. Therefore, it is contended by the learned Counsel for the appellants that the order impugned is liable to be set aside. Accordingly the order is set aside. The matter is remitted back to the Principal District Judge, Udupi to examine the case on merits and pass order within 3 months from the date of receipt of this order.

VGGJ and CRKSJ:                                                                MFA 1499/2003

27.11.1006.

ORDERS ON ''FOR BEING SPOKEN TO''

1. This matter is listed ''for being spoken to'' at the request of Sri T.N. Raghupathy, learned Counsel for the first respondent placing reliance upon certain decisions of the Apex Court and various High Courts with regard to applicability of the provision of Section 16(c) of CPC to the Arbitral suit proceedings before the Prl.District Judge in the arbitration. The alternative prayer made in the claim petition by the first respondent for recovery of money that may be awarded in its favour by the Arbitrator against appellants after accepting its claim to sell ''B'' schedule immovable property which was furnished as collateral security by first appellant is also the subject matter of Arbitration proceedings. Therefore, the Prl.District''s Judge, court Udupi is the Court in terms of Section 2(e) of the Act for the purpose of examining correctness of the award passed by the Arbitrator and therefore it has got territorial jurisdiction to entertain the claim of the appellants in view of Section 16(c) of CPC, which provision of the code states that if, the ''B'' Schedule property upon which charge is created is within the jurisdiction of Kerala State, the sale of the said immovable property if the loan amount advanced to the first appellant is not recovered, the Civil Court having jurisdiction to deckle the question forming the subject matter of reference has got jurisdiction to attach the immovable property and sell it for recovery of money due to the first respondent''. Therefore, the learned Counsel for first respondent submits that the order of the learned Prl.District Judge, Udupi is legal and valid and therefore he has requested to recall the order dated 8.11.2006 as this Court has set aside the impugned order passed by the learned judge of the District Court for its consideration on merits after hearing the parties stating that it has got jurisdiction to entertain the petition of the appellant. In support of his legal submissions he has placed reliance upon the following decisions.

1. Madhao Deshpande Vs. Madhav Dharmadhikaree,

2. Hakam Sing Vs. Gammon (India) Ltd.,

3. Modi Entertainment Network and Another Vs. W.S.G. Cricket PTE. Ltd.,

4. AIR 1965 MYS316

5. AIR 2001 KAR 364

6. AIR 2002 KAR 252

7. Gade Sreeramulu Vs. Matta Adinarayana Rao and Others,

8. AIR 1917 BOM 10

9. State Bank of India, Delhi Vs. O.P. Gupta and Others,

10. Sarju Singh Vs. Smt. Gurdwaru and Others,

2. The learned Counsel appearing on behalf of appellants places strong reliance upon the provision of Section 36 of the Arbitration Act, which states that enforcement of an award i.e. passed by the Arbitrator after expiry of the time by filing petition for setting aside the Arbitral Award u/s 34 should be enforced under Civil Procedure Code, 1908, as if, it were to be the decree of the Court. Further Section 19 of the said Act expressly provides that provisions of CPC are not applicable to the Arbitral Tribunal. Therefore, CPC has no application to the proceedings either before the Arbitral Tribunal or before the District Court, Udupi or this Court in exercise of its jurisdiction u/s 37 either under Sub-section (1)(a), (b) or (2) of the Act.

3. This Court has heard the submissions of the learned Counsel for the parties at length having regard to the legal question raised in this appeal by the learned Counsel for the parties, the following legal issue would arise for our consideration viz., whether Section 16(c) of the CPC in the absence of express ouster of the applicability of the above provisions of CPC before the Arbitrator and Prl.District Judge Court, Udupi in the arbitration proceedings is applicable to the proceedings u/s 34 of the Act before?. The Apex Court while examining similar legal questions that had arisen before it with reference to the legal contention as has been urged in this case to the effect that in the absence of express ouster of applicability of the provisions of CPC to the arbitral proceedings, the interim order that would be passed by the Civil Court in the arbitral proceedings u/s 34 the revision petition before the High Court is maintainable u/s 115 CPC. In this regard the decision of the Apex Court reported in I.T.I. Ltd. Vs. Siemens Public Communications Network Ltd., , is cited by the learned Counsel who was appearing in the Arbitration Appeal case. The provisions of Section 13 of the Consumer Protection Act, 1986 fell for consideration before the Apex Court in the ease of Savita Garg v. Director, National Heart Institute wherein the Apex Court: after extracting the a hove said provisions and interpretation of the phrases used in Section 14(1)(b) of the Act in so far as they can be ascertained and examined the various provisions of Section Sections 12, 13, 18, 22 of the Consumer Protection Act, 1986 and Rule 14 of the ''Rules of 1987, the Apex Court, at para-7 after referring to Sections 193 and 228 of the IPC has held that the District Consumer Forum, shall be deemed to be the Civil Court for the purpose of Section 195 and XXVI of Code of Criminal Procedure. Sub-section (6) of the aforesaid Section 13 of the Act states that if there is more than one consumer then one of them can sue as required under Order 1 Rule 8 of CPC. In the same paragraph, observation is made which reads thus:

Therefore, as far as the Commission is concerned, the provisions of the CPC are applicable to a limited extent and not all the provisions of the CPC are made applicable to the proceedings of the National Forum.

4. Strong reliance is placed upon the aforesaid passage of the Apex Court in Savita Garg''s case referred to supra by this Court in support of its conclusion. The said observations are made by the Supreme Court in the said case keeping in view certain provisions of CPC as enumerated u/s 13 of the Consumer Protection Act which are made applicable to the proceedings before the District Forum and other forums under the Consumer Protection Act.

5. The reliance placed upon by learned Counsel Sri Chidanandaiah in the other case where similar question arose in MFA10961/06 to contend that the Apex Court has dealt with similar provisions under the Arbitration Act, 1940 in the case of Shyam Sunder Agarwal and Co. Vs. Union of India, the relevant portion of the head note paragraph which reads thus as the said decision is applicable to the ease on hand:

A revisional application before the High Court against, an appellate order passed u/s 39 of the Arbitration Act is maintainable. There is no express provision in the Arbitration Act putting an embargo against filing a revisional application against appellate order u/s 39 of the Act. The Arbitration Act has put an embargo on filing any second appeal from appellate order u/s 39 of the Act. The: Arbitration Act is a special statute having limited application relating to matters governed by the said Act. Such special statute, therefore, must have its application as provided for in the said statute. The revisional jurisdiction of the High Court under the CPC or under any other statute therefore shall not stand superseded under the Arbitration Act if the Act does not contain any express bar against exercise of revisional power by the High Court provided exercise of such revisional power does not mitigate against giving effect to the provisions of the Arbitration Act. Even if a special statute expressly attaches finality to an appellate order passed under that statute, such provision of finality will not take away revisional powers of the High Court u/s 115 of the Civil Procedure Code. There is also no such express provision in the Arbitration Act attaching finality to the appellate older u/s 39.

6. In the above said decision it has been observed by the Apex Court that in the absence of any such express exclusion of appeal being provided under the provisions of Section 41 Rule 22 CPC to the Civil. Court the Court should apply the above provisions of CPC for filing appeal is the legal contention argued on behalf of the appellants. The same view has been accepted by the Apex court in M/s. I.T.I''s case referred to supra at para-13 after referring to Section 37(1) of 1996 Act which provisions of the Act provides for an appeal to the Civil Court and the term ''Civil Court'' as defined u/s 2(e) of the Act, an appeal is provided to Civil Court in such situation, the proceedings before such Court will have to be controlled by the provisions of the C.P.C. Therefore, the remedy by way of revision under the Code of C.P.C is not provided but appeal to the Court under the Act. (Para-13 reads) as under:

13. We also do not; find much force in the argument of learned Counsel for the appellant based on Section 5 of the Act. It is to be noted that, it is under this part, namely, Part I of the Act that Section 37(1) of the Act is found, which provides for an appeal to a Civil Court. The term ''Court'' referred to in the said provision is defined u/s 2(c) of the Act. From the said definition, it is clear that the appeal is not to any designated person but to a Civil Court. In such a situation, the proceedings before such a Court will have to be controlled by the provisions of the Code, therefore, the remedy by way of a revision u/s 115 of the Code will not amount to a judicial intervention not provided for by Part I of the Act. To put it in other words, when the Act u/s 37 provided for an appeal to the Civil Court and the application of Code not having been expressly barred, the revisional jurisdiction of the High Court gets attracted. If that be so, the bar u/s 5 will not be attracted because conferment of appellate power on the Civil Court in Part I of the Act attracts the provisions of the Code also.

7. The Judgment in the cast reported in I.T.I. Ltd. Vs. Siemens Public Communications Network Ltd., is followed by the Andhra Pradesh High Court in the case of B. Rama Swamy Vs. B. Ranga Swamy, , wherein Section 4 of CPC is examined in support of the proposition of law that setting aside award under Arbitration and Conciliation Act, as the power to entertain an application u/s 34 is only available to the Civil Court all the powers necessary for disposal of such application under CPC would be available to such a Court and plea that dismissal is not proper since provisions of CPC are not applicable to proceedings under the Act are not tenable in law. Section 4 of CPC states that in the absence of any specific provision is contrary to the provisions of the other statutory enactments nothing in the C.P.C shall be deemed to limit or otherwise affect any special or local law now in force or any special jurisdiction or power conferred, or any special form of procedure prescribed, by or under any other law for the time being in force. Section 4 of C.P.C has to be applied to the case on hand when ever rights accrued in favour of parties under the Arbitration Act would affect. As such jurisdiction conferred upon the Civil Court under the Act is to examine the correctness of the Award of the Arbitrator on an application filed by either of the parties u/s 37 Sub-sections (1) and. (2) of the Arbitration and Conciliation Act and Section 4(1) of C.RC itself clearly states that the provisions of CPC shall be deemed to limit or otherwise affect any special law or local law.

8. In this background, we have examined the case of the appellants to find out and answer whether the provision of Section 16(e) of CPC is applicable to the fact situation of the present ease or not?

9. For this purpose the objects of the Arbitration and Conciliation Act, 1996 are extracted as hereunder:

i) to comprehensively cover international commercial arbitration and conciliation as also a domestic arbitration and conciliation.

ii) to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration;

iii) to provide that the arbitral tribunal gives reason for its arbitral award;

iv) to ensure that the arbitral tribunal remains within the limits of its jurisdiction;

v) to minimise the supervisory role of courts in the arbitral process;

vi) to permit an arbitral tribunal to use mediation, conciliation or other procedure during the arbitral proceedings to encourage settlement of disputes;

vii) to provide that every final arbitral award is enforced in the same manner as if it were a decree of the court;

viii) to provide that a settlement agreement reached by the parties as a result of conciliation proceedings will have the same status and effect a an arbitral award on agreed terms on the substance of the dispute rendered by n arbitral tribunal; and

ix) to provide that, for purposes of enforcement of foreign awards, every arbitral award made in a country to which one of the two International Conventions relating to foreign arbitral awards to which India is a party applies, will be heated as a foreign award.

10. By a careful reading the aforesaid objects of the Act, it makes clear that the dispute in relation to the commercial matters between the parties has to be resolved by the Arbitrator and the Court as expeditiously as possible either in relation to domestic arbitration or international domestic arbitration by conciliation proceedings. Keeping in view the above object of the Act, we have answered the legal issue framed by us in this Appeal holding that the provision of Section 16(c) of CPC is not applicable to the arbitral proceedings before the Civil Court, in view of the decision of Supreme Court reported in Municipal Corporation of Delhi and Others Vs. Intnl. Security and Intelligence Agency Ltd., wherein the Apex Court has held that right of appeal being a creature of statute, no appeal can he filed, heard or determined on merits unless the statute confers that right on the appellant and power on the Court to do so. Section 39 of the Arbitration Act, 1940 confers right to file appeal only against such orders as fall within the descriptions given in Clauses (i) to (iv) of Sub-section (1) of Section 39 of the Act of 1940 Parliament has taken care specifically to exclude any other appeal being filed, against any order passed under the Act, which arc not covered by Section 39(1)(I) to (iv), by inserting the words and from no others'' in the text of Sub-section (1) of the above Section thereof. It is not merely the procedure prescribed by the CPC which has been made applicable to proceedings under the Arbitration Act by Section 41(a) of the Act; the entire body of the Code of Civil Procedure, 1908 has been made applicable to all proceedings before the Court and to all appeals under the Arbitration Act, 1940. The above said provisions of the Act is general and wide in its applicability which cannot be curtailed; the only exception being made is where the provisions of the Arbitration Act under/or of the rules made thereunder may be inconsistent: with the provisions of the Code of Civil Procedure, 1908 in which case the applicability of the provisions of the Code shall stand excluded but only to the extent of the inconsistency. A bare reading of Section 39(1) read with Section 41(a) of the 1940 Act, which provisions of the Act would clearly show that in all the appeals filed u/s 39, the provisions of the Civil Procedure Code, 1908 would be applicable. This would include the applicability of Order 41 Rule 22 C.P.C. the right to file cross-objection in the appeals filed u/s 39 of the Act is available to a party.

11. Further the Apex Court has examined the provisions of Section 41(a) and 39(1) of the Arbitration Act: of 1940 vis-a-vis Section 96 and 100 of CPC and the Order 41 Rule 22 (1) and (4) of CPC, the Apex Court after referring to various earlier decisions of the Supreme Court & Full Bench decision of Madras High Court, the legal question which came up for consideration before that Court in the appeal under repealed Act where the cross-objection as provided under 41 Rule 22(1) &(4) of CPC cart be entertained or not is examined and answered in the affirmative with reference to the aforesaid provisions of the repealed Act in this regard, certain observations are made by the Apex Court at paragraphs 14 and 16 in the above decision, which are relevant for the present purpose as the right of appeal is a creature of statute and it is not inherent right and the Apex Court has examined Clauses (i) to (iv) of provision of Section 39 of the repealed Act. The Apex Court has held that the appeal being filed against any order passed under the above Clauses (i) to (iv) of abovesaid Act by inserting the phrases that "any other provisions" such as Sub-section (1) of Clause (a) of Section 41 of the Act, the Civil Courts as contained in the object of CPC in the proceedings before any Court.

12. In view of the law laid down by the Apex Court in Municipal Corporation of Delhi and Others Vs. Intnl. Security and Intelligence Agency Ltd., referred to supra, the applicability of the provisions of the CPC to the Arbitral proceedings under the Arbitration and Conciliation Act shall be subject to affecting any rights of a party under special law or local law in force in relation to the arbitration proceedings.

13. The provisions of CPC were made applicable to the case on hand in view of the Jaw laid down by the Apex Court at 14 and 36 of the decision mentioned supra. The similar view was taken by A.P High Court in the case reported in Bhadurmal Vs. Bizaatunnisa Begum and Others, With, reference to Hyderabad Jagirdar Debt Settlement Act the provisions of Sections 28 and 35 of the Act were examined by the A.P. High Court and it has held that the provisions are an essential part of the Scheme of the Act and hence the same cannot be ignored. Further the provisions of the CPC apply, save as otherwise expressly provided in the Act, and since Sections 47 to 49 Jagirdar Debt Settlement Act provide only for an appeal, it must be deemed that the provide only the CPC which deal with the filing of cross -objections are, specifically excluded.

14. The provisions of CPC are applicable to the arbitral proceedings as they are Civil in nature as stated u/s 4 of CPC as observed by the A.P High Court decision in the case of B. Ramaswamy referred to supra. In the absence of any specific provisions in the Act which are contrary to the provisions of CPC, which would affect the rights of a party under special law or local law in force or such jurisdiction conferred has to he applied to the case on hand. The claim was made by the first respondent before the Arbitrator on the basis of Arbitration clause in the Arbitration agreement between the parties which dispute is required to be resolved by an Arbitrator, applying the Arbitration and Conciliation Clause in the Hire-Purchase agreement proceedings initiated by either of the party is the special right given to the parties under the provisions of the Act. Keeping this relevant aspect of the matter in view and also the object of the Act, with a view to see that dispute between the parties should be resolved expeditiously with a view to minimize the time of the Court in Arbitral Proceedings by approaching the Civil Court constituted under the Civil Courts Act. Section 19 of the Arbitration and Conciliation Act expressly excludes the applicability of the provision of CPC to the Arbitral Tribunals and. the proceedings that are required to be conducted and resolved, if they fail to do so, Arbitral Tribunal proceedings may subject to Part-V of the Act It has to conduct its proceedings in the manner in which it consider appropriate. If those provisions are read along with Section 36 of the Act which would clearly go to show the intention of the act is that the award of Arbitral Tribunal shall be executed in the Civil Court as provided under the provisions of CPC, 1908 as if it were to be the decree of the Court. But, the applicability of other provisions are not either expressly provided or taken away in the Act

15. Therefore, Section 4(1) of the CPC has to be applied to the arbitral proceedings under the Arbitration and Conciliation Act as held in Municipal Corporation of Delhi v. International Security and intelligence Agency case referred to supra by the Apex Court at paragraphs 14 and 16, wherein it has observed that: the provisions of CPC can be applied if they are not inconsistent with the provisions of Arbitration and Conciliation Act. In this background, we have examined the applicability of the provision of Section 16(c) of CPC to the Arbitration proceedings in respect of this case before the District Court at Udupi For the reasons stated supra on the basis of the provisions of the Act, C.P.C, the decisions of the Apex Court; and A.P High Court, we have to hold that Court has got the jurisdiction to entertain the petition of the appellants.

16. It is an undisputed fact that Hire-Purchase agreement between the parties is entered at Udupi, the subject matter of the dispute is for recovery of money involved with regard to supply of machineries and the immovable property of the appellants is offered as collateral security. The Award is passed by the Arbitrator stating that if amount awarded by Arbitrator is not paid by appellants, if Section 16(c) of CPC is applied to the fact situation as contended by first respondent''s counsel then, the subject matter of Arbitration and the purpose of conducting Arbitral proceedings by the Arbitral Tribunal on the basis of agreement between the parties was held at Udupi and the award passed by the Arbitrator will be defeated. In respect of that Arbitration Award either of the party can question the correctness of the same by filing a petition u/s 34 to the Civil Court which has got original civil jurisdiction for the purpose of recovery of money due from the first appellant. Therefore the Civil Court viz; District Court jurisdiction at Udupi is not taken away. If Section 16(c) comes in the way for the purpose of sale of immovable B-Schedule property which was given as collateral security by the first appellant to the first respondent for having supplied by the machineries on credit basis to it by them, the same cannot be applied to the ease on hand for the reason that alternative prayer in the claim petition of the first respondent before the second respondent was that if the amount is not paid by the appellants to the first respondent as awarded by the Arbitrator, in that event, the sale of immovable property has to be made for recovery of the amount awarded against them by treating the award as the decree of the Civil Court; under CPC. In that regard, this Court has examined the case in the case of I.C.D.S. Ltd. Vs. Mangala Builders Pvt. Ltd. and Others, with reference to Section 14 of the Karnataka Civil Courts Act, 1964 which reads thus:

...Therefore, on a combined reading of these provisions it can be seen that the Court which can entertain a suit with respect to the subject matter of arbitration dispute alone can exercise the power u/s 36 of the Act as well Mr. Gopal Hegde, counsel petitioner submits that the respondents reside within the jurisdiction of the District Court, Mangalore. In such an event, which is the Court before whom the suits will have to be preferred? The answer to this question is available from Section 14 of the Karnataka Civil Courts Act. This Section reads as follows:

14. xxxxx

It means the District Court defined in the Act would be the Court of Principal District Judge. In other words, the Principal District Judge exercising jurisdiction over Mangalore alone would have jurisdiction to entertain the execution proceedings. The corollary position would be it is only that Court which could have entertained suit that can enforce the award.

17. If the argument of first respondent''s learned Counsel is accepted that the Prl.District Court Udupi has no jurisdiction to entertain the petition of the appellants as that of Civil Court as per definition of Section 2(e) of the Arbitration and Conciliation. Act, then rights conferred upon the appellant under the provisions of the Act will be affected and the object of the Act will be defeated. Therefore, we are not inclined to accept the submissions made by the learned Counsel on behalf of first respondent by placing reliance upon various decisions of Supreme Court other High Courts referred to above in support of his contention and also the provision of Section 16(c) of C.P.C.

18. The three Judge Bench decision of Supreme Court referred to supra in MUNICIPAL CORPORATION''S case referred to supra and also the observation made at para-7 of Savita Garg ease referred to supra are applicable to the fact situation in support of the legal submissions made by the learned Counsel on behalf of the appellants. Even in the absence of exclusion of applicability of the provisions of Section 16(c) of C.P.C to the arbitral proceedings is applied to the fact situation, then the very purpose of clause incorporated in the Arbitration agreement between the parties to arbitrate the dispute between them will be defeated. The rights conferred upon the appellant under the Act will be applied. Therefore, the order which we dictated on 8.11.2006 holding that order passed by the District Judge, Udupi holding that it has no jurisdiction by placing reliance upon the decision of this Court in the case reported in Shree Shanthi Homes Private Limited, Bangalore and Others Vs. Cref Finance Limited, Calcutta, is not correct in law as he had no opportunity to consider and examine the case in the light of observations made by the Apex Court in the case of I.T.I, Savita Garg and Municipal Corporation eases referred to supra.

19. For the aforesaid reasons, there is no need for us to change our decision in this case. Hence, the view which we had taken on 8.11.2006 need not be either recalled or reversed. It stands.