Date:25/02/2006 URL: http://www.thehindubusinessline.com/2006/02/25/stories/2006022502152100.htm

Back Sundaram Fin wins appeal on arbitration cases

Our Legal Correspondent

Chennai , Feb. 24

The Chennai-based Sundaram Finance Ltd, a non-banking finance company, has won an appeal in the Madras High Court establishing the Court's jurisdiction to try cases arising under the Arbitration & Conciliation Act where the value of the subject matter is less than Rs 10 lakh.

The case was heard by a single judge who held that the High Court could not entertain the proceedings, and the matter had to be filed before the City Civil Court.

In the appeal filed under Section 9 of the Act, the company prayed the Court to grant an order of interim injunction restraining the respondents (Mr M.K. Kurian, Pondicherry & Mr Tomy Thomas, Anakallu Post, Kottayam) from in any way alienating or encumbering the property belonging to the secondrespondent. The claim of the appellant against the respondents was for a sum of Rs 3,13,213. The Registry raised an objection regarding maintainability of the application before the single judge on the ground that the claim amount was less than Rs 10 lakh, and as such it should have been filed only before the City Civil Court, Chennai, and not before the High Court.

The First Bench, consisting of Chief Justice Mr A.P. Shah and Ms Justice Prabha Sridevan, held that so far as the City of Chennai was concerned, the ordinary original civil jurisdiction was vested in the High Court, and not in the City Civil Court. It was the civil court of limited pecuniary jurisdiction having power to deal with matters involving value of less than Rs 10 lakh, whereas under Clause 12 of the Letters of Patent, the High Court had unlimited original jurisdiction. While the Chennai City Civil Court allows institution of a suit in the court of the lowest grade competent to try it, it did not oust the jurisdiction of the court of a higher grade.

Even if the court of a higher grade tried and disposed of a suit which could have been instituted in a court of a lower grade, the decision rendered was not without jurisdiction, the Bench ruled. Therefore, the view taken by the single judge that the City Civil Court should be regarded as the principal court of civil jurisdiction was clearly erroneous and could not be sustained. In the result, the appeal was allowed. The order of the single judge was set aside. The Registry was directed to call for papers in similar cases, which had been transferred to the City Civil Court by following the judgement of the single judge, and place them before the appropriate court for disposal.