M/S Peniel Cashew Company v. M/S Ahcom SARL

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE SATHISH NINAN THURSDAY, THE 28TH DAY OF JUNE 2018 / 7TH ASHADHA, 1940 OP(C).No. 1005 of 2018** **EP.NO.97/2013 OF II ADDL.DISTRICT COURT, KOLLAM** **---------** ## **PETITIONER(S)/RESPONDENTS/AWARD DEBTORS:** **1 M/S.PENIEL CASHEW COMPANY, PUTHOOR P.O., KOLLAM- 691 507, REPRESENTED BY ITS PROPRIETOR JOB G.OOMMEN.** **2 JOB G.OOMMEN, VARUR MADATHILAZHIKATHU VEEDU, PUTHOOR P.O., KOLLAM- 691 507.** **BY ADVS.SRI.N.D.PREMACHANDRAN SRI.D.AJITHKUMAR** ## **RESPONDENT/PETITIONER/AWARD HOLDER:** **M/S.AHCOM SARL, GALERIE DU GRAND LARGE, 42 QUAL JEAN-CHARLES REY, 98000 MONACO, REPRESENTED BY ITS AUTHORIZED SIGNATORY, ANILKUMAR S., 237, 13TH STREET, GIRINAGAR, KOCHI- 682 020.** **BY ADV. SRI.T.R.ASWAS** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 22-06-2018, THE COURT ON 28-06-2018 DELIVERED THE FOLLOWING:** **sts 28/6/2018** ## **OP(C).No. 1005 of 2018** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** - **EXT P1 A COPY OF THE CONTRACT NO.S/RCN/014/12 DATED 21.08.2012.** - **EXT P2 A COPY OF THE NEW CONTRACT SIGNED BY THE RESPONDENT SENT TO THE PETITIONER BY THE BROKER SRI.GIREESH R.NAIR ALONG WITH HIS EMAIL DATED 24/08/2012. EXT P3 COPY OF THE EMAIL DATED 22.08.12 SEND BY THE PETITIONER ATTACHING EXT P2 TO MATHEW LABAN SABARIRISHNA INTERNATIONAL. EXT P4 COPY OF EMAIL DATED 24.08.12 ATTACHING EXT P2 AFTER SIGNING IT BY RESPONDENT, SEND TO THE PETITIONER BY BROKER SRI.GIREESH R NAIR. EXT P5 A COPY OF THE CONTRACT ENTERED BY THE RESPONDENT WITH M/S.EMMANUEL CASHEW DATED 23.05.12. EXT P6 A COPY OF THE EMAIL DATED 14.09.12 SENT BY THE PETITIONER TO THE RESPONDENT. EXT P7 A COPY OF THE MAIL DATED 15.09.12 SENT TO THE PETITIONER BY THE RESPONDENT. EXT P8 A COPY OF THE LETTER DATED 21.09.12. EXT P9 A COPY OF THE REPORT OF SRI.GOPAKUMAR DATED 6.10.12. EXT P10 A COPY OF THE MAIL DATED 19.10.12. EXT P11 A COPY OF LETTER DATED 20.11.12 FROM THE RESPONDENT BY REGISTERED POST. EXT P12 A COPY OF THE LETTER DATED 10.12.12 SENT BY THE PETITIONER TO THE RESPONDENT. EXT P13 THE POSTAL RECEIPT. EXT P14 A COPY OF THE AWARD DATED 20.12.12. EXT P15 A COPY OF THE EP NO.97 OF 2013 DATED 11.02.13. A COPY OF JUDGMENT OF THIS HON'BLE COURT IN OP(C) NO.222 OF THE 2013.** - **EXT P16 A COPY OF THE OBJECTION DATED 22/07/13 FILED BY THE PETITIONER.** **2/-** **-2-** ## **OP(C).No. 1005 of 2018** **EXT P17 A COPY OF THE REPLY AFFIDAVIT FILED BY THE RESPONDENT.** - **EXT P18 A COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN ARB APPEAL NO.54 OF 2017 DATED 25.10.17.** - **EXT P19 COPY OF THE ARGUMENT NOTES SUBMITTED BY THE AWARD HOLDER DATED 08.12.2017.** - **EXT P20 COPY OF THE ARGUMENT NOTE SUBMITTED BY THE AWARD DEBTOR DATED 07.12.17.** - **EXT P21 COPY OF THE ARGUMENT NOTE SUBMITTED BY THE AWARD HOLDER DATED 16.12.2017.** - **EXT P22 COPY OF THE TRANSFER PETITION DATED 15.01.2018.** **EXT P23 A COPY OF THE ORDER OF THIS HON'BLE COURT DATED 8.2.18.** **EXT P24 A COPY OF THE ORDER DATED 15.03.18 IN EP NO.97 OF 2013. EXT P25 A COPY OF THE LETTER DATED 7.12.12 SENT BY THE PETITIONER TO THE RESPONDENT.** **EXT P26 A COPY OF CAVEAT OP NO.162 OF 2012.** **EXT P27 THE ORDER IN EP.NO.97 OF 2013 PASSED BY THE 2ND ADDITIONAL DISTRICT JUDGE ON 13/3/2018** - **EXT P28 THE ORDER DATED 21/11/2017 OF THE 2ND ADDL.DISTRICT COURT ON EA 347 OF 2017 IN EP.NO.97 OF 2013** ## **RESPONDENT'S EXHIBITS: NIL** **/TRUE COPY/** **P.S.TO JUDGE** **sts 28/6/2018** ## **SATHISH NINAN, J. = = = = = = = = = = = = = = = = = = O. P. (C) No.1005 of 2018 = = = = = = = = = = = = = = = = = = Dated this the 28[th] day of June, 2018** ## **J U D G M E N T** A foreign award is under execution before the District Court in E.P. No.97 of 2013, under Section 47 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as “the Act”). In the course of the proceedings, question arose regarding the jurisdiction of the District Court to proceed with execution in view of the amendment to Section 47 as per Act 13 of 2016. As per the amendment, the court having jurisdiction to execute foreign award is the High Court. The amendment came into force with effect from 23.10.2015. As per the impugned order, the District Court affirmed its jurisdiction to proceed with execution. The same is under challenge by the award debtor. 2. The court below upheld its jurisdiction footing on an inter-parte judgment by a Division Bench of this Court in an earlier round in relation O. P. (C) No.1005 of 2018 :- 2 :- to the same award. The said Original Petition viz. O.P.(C).2932/17, related to the jurisdiction of the court to direct the award debtor to furnish security for the award amount. In the judgment dated 25.10.2017, this Court observed thus: “The petitioners herein are entitled to take all or any of the defence available under Section 48 of the Act, but subject to the stage of the proceedings before the II Additional District Court, Kollam.” 3. The learned District Judge was of the opinion that since this Court restricted the right of the award debtors to raise defences which could be urged from that stage alone, the award debtors are not entitled to agitate on the issue of jurisdiction. 4. Heard Sri.T.Krishnanunni, the learned Senior Counsel appearing on behalf of the petitionersaward debtors and Sri.T.R.Aswas, learned counsel appearing for the respondent-award creditor. 5. Evidently, the question of jurisdiction has not been adjudicated upon by the court below. The court has confined itself to the observation by the O. P. (C) No.1005 of 2018 :- 3 :- Division Bench of this Court in O.P.(C).2932/17. The finding of jurisdiction is sought to be supported by the learned counsel for the respondent on two grounds. Firstly, that the petitioners had acceded to the jurisdiction of the District Court; that in the earlier proceedings before this Court, they did not challenge the jurisdiction of the District Court to entertain the execution petition. Secondly, as noticed by the court below, the stage from which further proceedings are to be continued was specified by this Court in the judgment in O.P(C).2932/17 which binds both parties. Therefore, it is not open for the petitioners to raise a challenge regarding jurisdiction of the District Court to proceed with execution. I am afraid that I cannot, for the reason given below, agree with the submissions of the learned counsel. 6. As pointed out by the learned Senior Counsel appearing for the petitioners, it is trite that a decree, order or award passed by a court which lacks inherent jurisdiction, is void. Mere agreement or consent cannot confer jurisdiction on O. P. (C) No.1005 of 2018 :- 4 :- a court which lacks inherent jurisdiction to entertain the lis. In _**The United Commercial Bank Ltd. v. Their Workmen [AIR 1951 SC 230]**_ ,the Apex Court held that when the question is of the jurisdiction of the Tribunal to make an award, acquiescence or consent cannot confer jurisdiction. In _**Kiran Singh and others v. Chaman Paswan and others [AIR 1954 SC 340]**_ , the Apex Court held that a defect of jurisdiction cannot be cured even by consent of the parties. In _**Mathura Prasad Sarjoo Jaiswal and others v. Dossibai N. B. Jeejeebhoy [1970**_ _**(1) SC 613]**_ , the Apex Court held that question relating to jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court. The Court further held: “........ If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment operate as res judicata. Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute the question cannot operate as res O. P. (C) No.1005 of 2018 :- 5 :- judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise.” In _**Chief Justice of A.P. v. Dixitulu [1979 (2) SCC 34]**_ , the Apex Court held that if the decision is made by an authority suffering from inherent lack of jurisdiction, such decision cannot be sustained even under the doctrine of res judicata or estoppel. In _**Sushil Kumar Metha v. Gobind Ram Bohra [(1990) 1 SCC 193]**_ it was held that where there is inherent lack of jurisdiction, which depends upon a wrong decision, the earlier wrong decision cannot be res judicata. In _**Smt. Isabella Johnson v. M.A. Susai (Dead) by Lrs. [(1991) 1 SCC 494]**_ , the Apex Court held that a Court which has no jurisdiction cannot be conferred with jurisdiction by applying the principle of res judicata, as it is well settled that there is no estoppel on a pure question of law which relates to jurisdiction. In _**Mathevan Padmanabhan @ Ponnan (Dead) Through Lrs. v. Parmeshwaran Thampi [1995**_ O. P. (C) No.1005 of 2018 :- 6 :- _**Suppl. 1 SCC 479]**_ , the Apex Court was dealing with an appeal from this Court wherein the issue was one regarding tenancy under the Kerala Land Reforms Act. By virtue of Section 125 of the Kerala Land Reforms Act, the matter needs to be decided by the Land Tribunal. This Court while remanding the appeal that arose from the suit, directed the civil court to dispose of the suit on entering a finding regarding tenancy, without making a further reference to the Land Tribunal since already there was a reference in the first round. It was interfered with by the Apex Court for the reason that jurisdiction could not be conferred on the civil court to decide the issue of tenancy when by virtue of Section 125 of the Kerala Land Reforms Act, the jurisdiction is vested with the Land Tribunal. It was held that there is inherent lack of jurisdiction for the civil court and that any decision entered would be a nullity. _**In Canara Bank v. N.G. Subbaraya Setty and Anr. [2018 (4)**_ _**Supreme 394]**_ , the Apex Court referred to the O. P. (C) No.1005 of 2018 :- 7 :- aforesaid principles and held that a Court having no jurisdiction in law cannot be conferred with jurisdiction by applying the principle of res judicata and further that a wrong decision on a point of jurisdiction could not operate as res judicata. In _**Harshad Chiman Lal Modi v. DLF Universal Ltd. [(2005) 7 SCC 791]**_ , the Apex Court held that a clause in a contract between the parties vesting jurisdiction on a court which otherwise does not have jurisdiction over the subject matter is void. It was further held that neither consent nor waiver nor acquiescence can confer jurisdiction upon a court which otherwise lacks jurisdiction to try the suit. The Full Bench of the Allahabad High Court in _**Mahabir Singh v. Narain Tewari and Ors. [AIR 1931 Allahabad 490]**_ held that estoppel against a party cannot confer jurisdiction on a court when it has none, and it cannot be allowed to defeat the provisions of a statutory enactment which affects the jurisdiction of a court, as a party cannot by his admission or O. P. (C) No.1005 of 2018 :- 8 :- previous conduct confer jurisdiction on a court where none exists. In _**Balvant N. Viswamitra & Ors. v. Yadav Sadashiv Mule (dead) Through Lrs. & Ors.**_ _**[2004 (8) SCC 706]**_ , the Apex Court held that a defect of jurisdiction of the court goes to the root of the matter and stares at the very authority of the court to pass a decree or order. The validity of such decree or order could be challenged at any stage even in execution or collateral proceedings. In _**Govindasami Pillai v. T.M.Srinivasa Chettiar and others [AIR 1969 Mad.**_ _**172]**_ , it was held thus: “........ Whether a particular party raises the question regarding the want of jurisdiction of a Court or not, it is the duty of the Court to take note of the statutory provisions conferring jurisdiction on it or taking away the jurisdiction from it. If, under the law, a Court has no jurisdiction, no amount of consent, acquiescence or assertion on the part of any of the parties can confer jurisdiction on the Court. xxxxx xxxxx xxxxx xxxxx ........ The principle of res judicata cannot be allowed to O. P. (C) No.1005 of 2018 :- 9 :- defeat the provisions of a statutory enactment which affects the jurisdiction of a Court, and a party cannot by his admission, omission or previous conduct or consent confer jurisdiction on a Court, where none exists.” 7. Therefore, it needs no elaboration to hold that if a court lacks jurisdiction, the same cannot be conferred by the consent of the parties or even by a decree. 8. As mentioned supra, the question regarding jurisdiction has not been considered on its merits in view of the observation by this Court in the judgment in O.P.(C).No.2932 of 2017 directing continuation of the proceedings from the stage at which the original proceedings arose. In fact there is no observation therein conferring jurisdiction or prohibiting the consideration of a question regarding jurisdiction. There is no observation, direction or finding therein preventing the court below from considering the issue of jurisdiction. This is all the more so in the light of the law as noticed supra. O. P. (C) No.1005 of 2018 :- 10 :- 9. In the circumstances, the order dated 13.03.2018 in E.P. No.97/13 is set aside. The learned District Judge will pass fresh orders on the question of jurisdiction, after hearing both sides. I am sure that every endeavour will be made by the court below to have orders passed, as expeditiously as possible and at any rate, within a period of three weeks from the date of receipt of a copy of this judgment. 10. As regards order dated 15.03.2018 in E.P. No.97/13, I leave open the right of the petitioners to challenge the said order afresh, in the event the court below finds that the said court has jurisdiction over the proceedings. The original petition is allowed as above. **Sd/SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge