To hold that an order passed by a Court lacking jurisdiction is a nullity and is non-est order and where a Court lacked inherent jurisdiction parties cannot confer jurisdiction by consent.

Ravikiran Shukre | Manikchand Pahade Law College, Aurangabad | 25th February 2020 

Case: Antikeros Shipping Corporation having its office at 80, Broad Street, Monrovia Liberia, C/o Eletson Corporation, 118 Koloktroni, St. Piraeus, Greece v. Adani Enterprises Limited, a Company incorporated under the Companies Act, 1956 having its office at 7th Floor, Eagle’s Flight, Suren Road, Andheri (East), Mumbai 400 093 (Appeal no. 533 of 2019)

Facts of the case:

1. On 28th February 2008 an agreement was entered into between the appellants (A company incorporated under the Laws of Liberia and thereby outside the territorial jurisdiction of India) and the respondent, a Company incorporated in India.  Under the agreement, the respondent, was to supply bunker fuel to the appellants’ vessel M.T. Antikeros at Mudra Port.  On 5th March 2008 the respondent supplied the fuel.  12 days’ latter, on 17^th March 2008 a dispute arose between the parties regarding the quantity and quality of the fuel supplied.  On 3rd June 2008 the appellant raised a demand towards damages in sum of $1,040,400.
2. The respondent denied liability vide reply dated 25th August 2008 and raised a Counter-Claim in sum of $90,325.00 towards the adjusted cost of the fuel which was offloaded in United Arab Emirates where the vessel was diverted. The agreement dated 28th February 2008 envisaged resolution of the dispute at Mumbai as per the Arbitration and Conciliation Act, 1996 (“Act”) before a Tribunal comprising three Arbitrators. One each to be nominated by contracting parties and 3^rd Arbitrator to be appointed by these two Arbitrators.
3. On 5^th July 2012 the appellant filed its Statement of Claim before the Arbitral Tribunal.  On 15^th October 2012 the respondent filed an application before the Arbitral Tribunal seeking disclosure of documents by the appellant.  On 23^rd October 2012 the respondent filed its Statement of Defence and raised a Counter-Claim before the Arbitral Tribunal and while doing so raised no objection to the constitution of the Arbitral Tribunal or its jurisdiction to decide the disputes.
4. On 25th August 2018 respondent’s counsel sought an adjournment informing that the respondent had sought review of the order dated 21st April 2011 passed by the Hon’ble High Court. On 28^th August 2018 the Tribunal rejected the respondent’s application dated 3rd August 2018 and refused to recall its order dated 3rd July 2013 and 19th September 2013.  On 30th August 2018 the respondent filed a petition seeking review of the order dated 21^st April 2011 passed by this Court.   It also sought 7 years’ delay in filing the Review Application to be condoned.
5. On 22^nd March 2018 the impugned order was passed condoning delay of 7 years’ in seeking review of the order dated 21st April 2011 and simultaneously recalling the said order appointing Ms.J.K. Bhatt as an Arbitrator on behalf of the respondent.

Judgment:

1. The Notice of Motion (L) No. 2015 of 2018 praying that 2680 days’ delay in filing Review Petition (L) No. 13/2018 and the Review Petition have been disposed of by the learned Single Judge.  Both have been allowed.  The two appeals challenge the composite impugned order, one appeal challenging the order in so far Notice of Motion (L) No. 2015/2018 has been allowed condoning 2680 days’ delay in seeking review of the order dated 21st April 2011 and the other Appeal challenging the order in so far review petition No. 13/2018 has been allowed.  
2. Hon’ble High Court held that, both appeals are maintainable regarding the impugned order having been passed in exercise of the review jurisdiction by the learned Single Judge.
3. The learned Single Judge has recognized the fact that under the Act no power of review is vested.  Though not specifically recognized, implicit in the impugned order is the recognition of the fact by the learned Single Judge that unlike the Supreme Court which is vested with a power of review under Art. 137 of the Constitution of India, High Courts are not vested with any power of review under the Constitution.  The learned Single Judge has recognized the difference between a substantive review and a procedural review and has held that the power of substantive review must be vested in a Court by a Statute and in the absence of such power vested, no substantive review can be undertaken by the Court.  But, a procedural review inheres in every Court and Tribunal to review its decision and if a procedural fault is found, to undo the same.
4. Where a Court takes wrong/erroneous decision of a matter and proceeds to pass an order on merits, an application filed pleading that the Court had no jurisdiction to take cognizance of the matter would relate to a substantive review being sought because the pleadings constituting the review would relate to the substance of the nature of law brought before the Court.
5. Prior to the amendment of the Act by the Arbitration & Conciliation (Amendment) Act 2015 brought into force with effect from 1st January 2016 when in sub-section 4, 5 & 6 of Section 11 of the Act the words ‘the Chief Justice or any person or institution designated by him’ wherever they occur were replaced by the words ‘the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court ‘ , the position was that under the Act the procedure for appointment in case of sub-section 3 being applicable was to file an application before the Chief Justice of a High Court or any person or institution designated by him,  in a case of domestic arbitration and before the Chief Justice of India or any person or institution designated by him in International Commercial Arbitration.
6. The impugned judgment has a reasoning which is rolled over with respect to the issue of 2680 days’ delay to be condoned. The learned Single Judge has held that by acquiescence and/or by consent jurisdiction cannot be conferred on a Court or an authority having no jurisdiction to take cognizance of a matter and because the learned Single Judge was exercising procedural review jurisdiction to correct a wrong by a Court of record, the issue of delay was irrelevant.  Therefore, the learned Single Judge has not dealt with the sufficiency of the cause shown in the pleadings in the Notice of Motion (L) No. 2015 of 2018.

Hon’ble High Court held that, both appeals are allowed. Impugned order dated 22nd March 2018 is set aside.  Notice of Motion (L) No.2015 of 2018 assigned Notice of Motion No. 1015 of 2019 after disposal whereof is dismissed and so is the Review Petition (L) No.13 of 2018.  The torpedo fired by the respondent is declared to be a dude and it sinks without hitting its target.  appellant would be entitled to costs incurred before the learned Single Judge as also in the instant appeals which quantify at 5 lakhs.