A Fair Comment On The Verdict Of The Hon’ble Apex Court About Section 173(8) Cr. P.C.

(M.S. Girish Panju, Deputy Director of Prosecution, Kottayam.)

“Every criminal trial is a voyage of discovery in which truth is the quest”  (Ritesh Tiwari v. State of U.P. (AIR 2010 SC 3823)

The spirit and message of the above classic words of the Hon’ble Apex Court is apparent from the wordings itself. Determination of truth however difficult and taskful is the goal to be achieved. All barriers and barricades fettering discovery of truth has to be removed. The horizon of criminal jurisprudence in our nation has been widening in its true letter and spirit for the past two decades. Some far reaching and progressive illustrations are the following:-

Once our courts were insisting the practice that prosecution should prove its case beyond the shadow of any doubt. But now a days courts do not follow the principle of proof beyond the shadow of any doubt. The concept of proof beyond shadow of doubt was replaced by proof beyond reasonable doubt. Our criminal jurisprudence has crossed a hundred miles hazardous journey through this new concept. Thereafter our courts dared to declare that the foreign concept of ‘Falsus in uno Falsus in omnibus” (false in one-thing, false in everything) is not at all applicable to Indian conditions. Our Hon’ble Apex Court in its quench for finding out the truth declared that a duty is cast upon the courts to separate the chaff from grain and falsehood from truth. Truly, if both are inextricably mixed up, there is no other option left to the court but to acquit the accused. Thereafter our Hon’ble Apex Court reconstructed the old and conservative principle of evaluation of evidence that the benefit of faulty investigation should go in favour of the accused.

In State of Karnataka v. Yarappa Reddy (1999 (3) KLT 456 (SC)), our Hon’ble Apex Court observed that criminal trial should not be made the casualty for the wrong committed by the investigating officer. In its historical judgment in Ram Babu v. State of U.P.

((2004) SCC (Crl) 959), our Hon’ble Apex Court observed that acquittal on the ground of illegality or irregularity on the part of the investigating officer is not correct and warned the courts that such contaminated conduct would be deprecated. Thus the horizon of criminal jurisprudence has been growing day by day with the intellectual interference of our Hon’ble Apex Court. But the recent decision reported in (2017 (1) KLT 707 (SC)) (Amritabai Shambubai Patel v. Sumanbai Kaushalbai Patel) is totally disappointing and is really a hindrance to the free voyage to the determination of truth. It is really a set back of administration of justice. It does not make a hallow around our system. The 41st report of the Law Commission of India deals with the concept of reopening of investigation for the determination of truth. Before that the concept was that once a final report is filed, police cannot touch the case again and cannot reopen the investigation. But after the incorporation of S.173(8) Cr.P.C., our nation witnessed a drastic change in the sphere of investigation and trial. In Bengal Immunity Co Ltd. v. State of Bihar (AIR 1995 SC 661), the Hon’ble Apex Court adopted the methodology of construing an Act as follows:-

1. What was the prior law?

2. What was the mischief or defect?

3. What is the remedy of law now provided?

4. What is the reason for the remedy?

On going through the parameters referred above, it is crystal clear and transparent that introduction of S.173(8) Cr.P.C. is a powerful remedy which is capable to rule out the evil of defect in the investigation. The nail and tooth of S.173(8) Cr.P.C. functioned excellently due to the timely interference of the courts, the advocates, the prosecutors, the litigants as well as the aggrieved and affected parties. Now due to the recent decision referred above, S.173(8) Cr. P.C. became a toothless legislation.

To arrive at the conclusion, the Hon’ble Apex Court relied much on the decision of Reetha Nag v. State of West Bengal (2009 (4) KLT Suppl. 917 (SC) = AIR 2010 SC 410). It is interesting to note that in Chandra Babu v. State through Inspector of Police (2015 (3) KLT Suppl. 81 (SC) = AIR 2015 SC 3566), our Hon’ble Apex Court relied on the decision rendered in Vinay Thyagi v. Irshad Ali (2013 (1) KLT SN 69 (C.No.57) SC = AIR 2013 SC 252 = (2013) 5 SCC 762) and
held the different view that Reetha Nag’s case and Randhip Singh’s case had not considered the views expressed in Bhagavath Singh v. Commissioner of Police ((1985) 2 SCC 537). It is pertinent to note that the judgment in Bhagavath Singh’s case was delivered by three Judges Bench. In Vinay Thyagi’s case the Hon’ble Apex Court relying on the decision of the Bhagavath Singh’s case held that the following three decisions are per incuriam. They are:-

1. Reetha Nag v. State of West Bengal (2009 (4) KLT Suppl. 917 (SC) = AIR 2010 SC 401)

2. Ram Naresh Prasad v. State of Jharkhand (AIR 2009 SC (Suppl.) 219)

3. Randhir Singh Rana v. Delhi Administration (AIR 1997 SC 639).

So it is too unsafe to rely the dictum held in Reetha Nag’s case.

Here the dictum laid down by our Hon’ble Apex Court in Krishnalal v. Dharmendra reported in 2009 Crl.L.J. 3721 is worth mentioning. In that decision, the Hon’ble Court expanded the width and magnitude of S.173(8) Cr. P.C. and enlighted us for what S.173(8) Cr. P.C. stands. They are:-

1.    Finding out what are the hidden truth required to be unearthed;

2.    When certain aspects of the matter has not been considered;

3.    If the investigation is found to be tainted and or otherwise unfair or is otherwise necessary in the interest of justice.

So it can be seen that the defects in a tainted and unfair investigation can be cured and rectified invoking S.173(8) Cr.P.C. If such a power is vested only with the police, who will rectify the defect? It is against the yardstick of ‘check and balance principle’ on which the constitutional principles rests. Now the question is who will check? The same authority who conducted the defective investigation? In this respect, it is pertinent to note the dictum of our Hon’ble Apex Court in Hasan Bai v. State reported in (AIR 2004 SC 2478 : ((2004) 5 SCC 347) that if defective investigation came to light during the course of trial it may be cured by further investigation.

Our Hon’ble High Court in Abdul Latheef v. State of Kerala (2013 (3) KLT 905) also expressed a similar view that public prosecutor who notices serious lapses committed by the investigating officer in not conducting the investigation properly can invite the attention of the court through an application for satisfying the court in respect of the necessity to invoke S.173(8) Cr. P.C. In Ramachandran v. State of Bihar (2009 (2) KLT 814 SC), it is held that if further investigation would help the court in arriving at the truth and to do real, substantial and effective justice, it has to be invoked.

In Shaji v. State (2003 (2) KLT 929), our Hon’ble High Court also expressed a similar view that if real culprits are not included in the final report, and if there is lacuna in the investigation which will cause failure of justice the Court is free to order further investigation u/S.173(8) Cr.P.C. It is significant to say that at the pre cognizance stage, it is not practical to find out the failure of investigation and hence the application of Section 156(3) Cr.P.C. will be of no use. Inclusion of the provision in Section 173(8) Cr. P.C. is definitely to prevent the misuse of the power by the investigating agency.

The next reason canvassed by the Hon’ble Apex Court in its judgment is the time limit in concluding the trial. It is significant to note at this juncture the decision laid down by the Hon’ble Apex Court in Hasan Bai Sali Bai Khureshi v. State of Gujarat (AIR 2004 SC 2078) wherein it is held that scope of further investigation cannot be ruled out merely because it may delay the trial as ultimate object is to arrive at the truth. In the decision reported in 2012 Crl.L.J. 4206 SC, it is also held the view that fixing time limit for conclusion of criminal trial is neither judicially permissible nor admissible. Last but not the least thing to be respectfully submitted is the fate and plight of the poor and downtrodden litigants who have to suffer at the hands of the investigating officers who are interested only in mocking at the system. By the recent verdict those helpless group are forced to knock at the doors of the constitutional courts under writ jurisdiction instead of straight away walking to the Magistrates’ court which alone is the easiest forum of their access. They should not be allowed to feel that the system itself is mocking at them.

With due respect to the Hon’ble Apex Court, I may submit that neither S.311 Cr.P.C. nor S.319 Cr. P.C. is a substitute for S.173(8) Cr. P.C . The function and object of S.311 Cr.P.C. and 319 Cr.P.C. are much different from that of S.173(8) Cr.P.C. Hence for the redressal of the grievances of our poor litigants suo moto reconsideration of the decision by the Hon’ble Apex Court is highly necessary for the interest of justice.

Crime And Human Behaviour - A Study

(By V.K.Babu Prakash,Secretary, Kerala Legislative Assembly)

“The web of our life is of a mingled yarn, good and ill together: our virtues would be proud if our faults whipped them not, and our crimes would despair if they were not cherished by our own virtues”

                                                      -William Shakespeare in All’s well that ends well-

Predatory and violent crimes are happening in an everyday basis which tends to make the people think that rule of criminal law has turned to a grinding halt. Most of the crimes are committed by young males. Violent Crimes hence become more common in big cities and suburban areas. High rates of criminality tend to shape and happen in families. The persons who frequently commit the most certain crimes typicaly begin their criminal careers at a quite young age. Persons who turn out to be criminals usually do not do very well in school. Young men who drive recklessly and have many accidents tend to be similar to those who commit crimes. Programmes designed to rehabilitate high rate offenders have not been shown to have much success and those programmes that do manage to reduce criminality among certain kinds of offenders often increase it among others.

Crime and Human Nature

All serious political and moral philosophy, and thus any serious social enquiry, must begin with an understanding of human nature. Though society and its institutions shape man, man’s nature sets limits on the kinds of societies we can have. Cicero said that the nature of law must be founded on the nature of man. First of all Crime is neither easily observed nor readily measured. There is no way of knowing the true crime rate of a society or even of a given individual. Crime is very common, especially among males. Using interviews and studies, scholars have discovered that the majority of all young males have broken the law atleast once by a relatively early age. The word ‘Crime’ can be applied to such a varied behaviour that it is not clear that it is a meaningful category of analysis. Stealing a comic book, punching a friend, cheating on a tax return, murdering a wife, robbing a bank, bribing an official or politician, these and countless acts are all no doubt crimes. Crime is as broad a category as disease and perhaps as useless. To explain why one person has ever committed a crime and another has not may be as pointless as explaining why one person has ever gotten sick and another has not.

Crime and its meaning

A crime is any act committed in violation of a law that prohibits it and authorizes punishment for its commission. Crimes are short term, circumscribed events that result from the coming together of an individual having certain characteristics and an opportunity having certain immediate and deferred costs and benefits. Criminality refers to stable differences across individuals in the propensity to commit criminal or equivalent acts. The equivalent acts will be those that satisfy, perhaps in entirely legal ways, the same traits and predisposition that lead, in other circumstances, to crime. For example, a male who is very impulsive and so cannot resist temptation may, depending on circumstances, take toys from his friends, money from his mother, and strangers etc. Some of these actions may break the law, some may not.

Theory of Criminal Behaviour

People ordinarily obey society’s, rules but violate them, when following those rules, it does not enable them to satisfy their legitimate aspirations. There is a strain between the goal they seek and the means at their disposal to reach that goal. There is a theory which holds that criminals have learned their values from deviant rather than law abiding persons. Criminals have learned that crime is worthwhile because it is reinforced by the good opinion of persons in whose company one commits the crime or who later learns of it.

Constitutional Factors

Some individuals are more likely to become criminals than others. Males are more disposed than females to criminal behaviour and younger males are more likely than older ones to commit crimes at high rates. It is likely that the effect of maleness and youthfulness on the tendency to commit crime has both constitutional and social origins. Constitutional factors refer to factors usually present at or soon after birth, whose behavioural consequences appear gradually during the child’s development. Constitutional factors are not necessarily genetic, although they may be. A genetic factor, if not a mutation is inherited from one or both parents. There is no ‘Crime gene’, and so there is no such thing as a ‘born criminal’, but some traits that are to a degree heritable, such as intelligence and temperament, affect to some extent the likelihood that individuals will engage in criminal activities.

Age and Criminal Behaviour

Criminal behaviour depends as much or more on age than on any other demographic characteristic like sex, social status, family pedigree etc. In general, the tendency to break the law declines thoroughout life. Crime declines only after an initial rise in childhood and the early teens. Children are typically closely watched by adults who have the power physically and by arranging contingencies of reinforcement to control their behaviour and their major needs and desires. The strongest and most influential people in a child’s environment such as parents, adult relatives and teachers usually consider it an obligation to reinforce the standards of the community in their dealings with children. Only later in adolescence and beyond, do most people run into bad influences and willing to reinforce antisocial activities. Although Crime rates decline throughout life beyond the initial rise, certain crimes peak later, or decline slower or both. Most juvenile offenders do not become adult offenders. Almost all chronic adult offenders were also juvenile offenders, most of them were infact, chronic juvenile offenders. Why does age affect crime? Youth is the adventurous time of life, old age the settled time. Ofcourse, at each age, people vary along all of the criminogenic variables. Those few individual who fail to find legitimate means of success, who get especially adept at benefitting from crime, who do not form lies to the community or who actively scorn it, who do not internalize prohibitions, who do not mind the bite of their conscience, who are afflicted with extreme impulsiveness or intense anti social drives may well continue active criminal careers beyond the usual term.

Family

The role of family in producing criminal behaviour seems to be a greater mystery. The family can moderate or magnify any natural predisposition of the child. The interactions between parent and child my make the latter more or less impulsive, more or less willing to take the feelings of others into account. That sort of interactions has three process of involvements.

(1) It develops attachment by which it inculcates in the child of a desire to win and hold the approval of others.

(2) The development of a time horizon. It shapes the child’s ability and inclination to take into account the more distant consequences of personal actions.

(3) The development of conscience, by which an internalized constraint happens against certain actions, the violation of which causes feelings of anxiety.

Broken and abusive family

A broken home presumably supplies less opportunity for creating a strong attachment between child and parents and thus reduces the ability of the parents to condition the child, so that, he will internalize conventional rules. An abusive home presumably uses inconsistent and violent disciplinary practices that both weaken the child’s capacity to learn what consequences follow from what acts and instruct the child, through his observational learning of relying on violence to settle quarrels.

Schools

When a child enters school, he or she becomes part of one of the few state supervised institutions in our society to alter, by plan, individual differences in behaviour. As a result, the schools become for many of us the focus of our fondest dreams and greatest disappointments. We hope that within their walls, dull children will become brighter and gifted ones brighter yet, unruly children will settle down and quiet ones will assert themselves. Sometimes, this happens, but just as often, whatever differences existed among children upon entering school seem to become, if anything, greater by the time they leave. We are aware that children begin school with different intellectual abilities, though we expect all children to benefit from their experiences there. We are not surprised when children who seemed brightest in the early grades turn out to be among the brightest in the later grades and when the slower children remain slower than the others during all of the grades. We naturally become distressed when bright children do less well than expected and not so bright children seem to fall farther behind, and we often speak to the teachers or complains to the school authorities. But, when a child’s experiences in school seem to conform to the child’s natural aptitudes, we are usually contented or at worst resigned. Individual differences affect crime rates both directly or indirectly, the latter occuring as personal attributes interacting with school processes. Boys with below normal verbal intelligence will commit more crimes, on the average, than boys with higher verbal skills, whether or not they attend a good school, but if they attend a good school, their probability of committing a crime will drop. Perhaps the relationship between schools and behaviour excits with respect to other personal traights, such as temperament and attitude. Schools may also affect criminality in ways that are largely independent of what teachers do. A school, afterall brings together a large number of young persons. If the school is in a high crime neighbourhood, boys attending it will be more likely to meet high rate offenders than if the school were is a low crime area. Thus, the school may contribute to criminality because of the peer groups that form there.

Community

Aspects of social life like friends on the street, the boundaries of the neighbor-hood, the destiny of opportunities, the informal processes of social control affect individual crime rates to some degrees; peers and gangs can affect the value a person assigns to the reward of crime like adding the approval of colleagues to the perceived value of the act done. The social boundaries of the neighbor-hood can affect the value he assigns to the reward of non crime like narrowing the range of persons who encourage the commission of crime. The density of human settlement can affect the frequency with which one encounters opportunities for crime and the extent of natural surveillance of the streets by people and police may affect the probability of being caught and punished.

Television and Mass Media

When in the 18th Century, the German writer Goethe, published ‘The Sorrows of Young Werther’, the authorities in several countries worried that readers captivated by this popular novel would commit suicide in imitation of the book’s tragic hero. Though no such wave of suicides was ever established, the book itself was banned in several countries. Today TV and newspapers have become so pervasive a part of our lives that it seems only reasonable to suppose that their combined effect on our tendancy to resort to violence must be many times greater than that of a single novel. The media especially TV, might alter our tendency to commit crimes in several ways. Viewing programmes or watching films might increase the material value we attach to crime by calling to our attention things we did not realize we wanted until we saw them effectively portrayed or by suggesting to us that things we always knew we wanted are more accessible than we had imagined.

Alcohol

Alcohol is another matter whose statistical association with crime is overwhelming. Alcohol affects crime directly, by the changes it works in the aggressiveness, impulsiveness and time horizon of some of the persons who consume it. Drugs also affect crime indirectly by increasing the incentive to do the criminal act.

Crime and Punishment

There are various ways of punishment prescribed to eradicate crime. They are retributive, incapcitation, deterrence, moral education and capital punishment. Punishment incapacitates, deters and educates morally, but those justifications alone would seem insufficient to many members of a civilized society. In addition to the utilisation purposes, punishment must also restore the equity that the criminal offence violated, which is to say, punishment must seem to people to be just legislators and courts are the formal instruments for setting just punishments, but they must, conform to the prevailing consensus on what is fair or the legal system losses legitimacy. An excessively cruel system of law may control the behaviour of its citizens even more strictly than a just one, but people will surely hate it, may resist submitting to it in the longer course. Too lax system of law will fail to satisfy the public desire for justice and thereby risk vigilantism. It will fail to deter and to educate morally. The punishments of the legal system are an essential part to control criminal behaviour. So long as legal punishments are no more or less severe than dictated by the principle of equity, they will simultaneously control the actions of people and satisfy their desire for justice.

A Re-look on Pazhani v. State of Kerala

(By T.V. George, Advocate, High Court of Kerala)

The Full Bench judgment in Pazhani v. State of Kerala, reported in (2017 (1) KLT 341 (F.B.)) is hereby discussed.

The question referred to the Full Bench of the Hon’ble High Court of Kerala was “Whether an appeal from a sentence of fine would abate if no relative of the appellant comes forward to continue to prosecute the appeal”.

A Full Bench of this Hon’ble High Court of Kerala, in that judgment held that

(1) “Since the proviso to sub-section (2) of Section 394, provides for a period of thirty days for filing an application for leave to continue the appeal, the period for filing an application to come on record in an appeal from a sentence of fine can also be taken as thirty days. “

2. Within the period of thirty days, if the near relatives do not file an application to come on record, the court shall consign the appeal to record room……….. If anybody comes forward nothing prevents the State from recovering the fine”.

I may state that these two findings are clearly against the spirit of legislation.

A benefit allowed by the statute to the near relatives of a deceased appellant, is now done away with.

For proper appreciation of the legal issues in the case, Section 394 of the Code of Criminal Procedure is extracted herewith:-

Section 394 - Abatement of Appeals-

(1) Every appeal under Section 377 or 378 shall finally abate on the death of accused.

(2) Every other appeal under this Chapter (except an appeal from a sentence of fine) shall finally abate on the death of the appellant:

Provided that where the appeal is against a conviction and sentence of death or of imprisonment and appellant dies during the pendency of the appeal, any of his near relatives may, within thirty days of the death of the appellant, apply to the appellate court for leave to continue the appeal, and if leave is granted, the appeal shall not abate.

On a mere reading of the section, it is luminous and glaring that all and every appeal from a sentence of fine, shall not abate on the death of appellant. So also, no time limit or period is prescribed in the section for a near relative to come on record to continue the appeal. The framers of our law was liberal and magnanimous but also very conscious to incorporate the specific exception clause in brackets, with sub-section (2) of Section 394 (“except an appeal from a sentence of fine”).

Section 431 of the Code of Criminal Procedure, 1898 also contained the very same exception clause. Later, when the Code of Criminal Procedure 1973 was enacted, the Indian Parliament consciously and indeed very prudently included the said exception clause with sub-section (2) of Section 394, without any change or modification. This issue was discussed by the Apex Court of the country and that of the High Court of Kerala through numerous cases:-

(a) A Division Bench of the High Court of Kerala in Pradeep v. State of Kerala (2013 (4) KLT SN 135 (C.No.144)) held that “ But none of the near relatives has come forward and made application. That the appeal will not abate in the case of an appeal from a sentence of fine does not mean that the appeal cannot be disposed of without bringing on record the near relatives of the appellant. It only means that the near relatives can continue to prosecute the appeal on getting leave from the court.

(b) Whereas in Suo-moto v. Ismail (2014 (2) KLT 290), a learned Single Judge of the Hon’ble High Court of Kerala held that “an appeal involving composite sentence of jail and fine will not abate on the death of the appellant. In the interest of the estate of the deceased appellant, the appellate court will have to hear and dispose off....on merits. Without a finding in favour of the prosecution, the amount of fine cannot be realised under the law, though the sentence of imprisonment may not be enforceable”. The learned Single Judge relied on the decision rendered by the Apex Court in State of Andhra Pradesh v. Narasimha Kumar (2006 (3) KLT 505 (SC)) to arrive at such a conclusion.

(c) Later, a Division Bench of the Hon’ble High Court of Kerala in Raveendran v. State of Kerala (2014 (4) KLT 382) held that there is no principle that an appeal from a sentence of fine should be heard in the absence of anybody and the Appellate Court should pass a judgment on the merits and only then the State could recover the fine, by proceeding against the property of the deceased appellant/accused. If the appeal abates, it would have the effect of the judgment and conviction and sentence thereunder passed by the Trial court being in force.

Thus, the issue in Section 431 of the Code of Criminal Procedure,1898 was considered and decided by the Apex Court of the country, way back in Pranabkumar Mitra v. State of West Bengal & Anr. (AIR 1959 SC 144) where it was categorically held that “ In our opinion, therefore where the High Court thinks it fit and proper to entertain an application in revision or calls for the record Suo-Motu, it has the power to examine the whole question of the correctness, propriety or legality of the sentence of fine, which necessarily involves examining the order of conviction itself from that point of view. It is pertinent to note that the Apex Court never thought of or always eschewed from scrapping the exception Clause in Section 431 Cr. P.C., 1898.

The Hon’ble Supreme Court of India in Bondada Gajapathi Rao v. State of Andhra Pradesh (AIR 1964 SC 1645) though dealt with the issue, did not disturb the beneficial exception clause incorporated in the Code of Criminal Procedure for the benefit of the near relatives of deceased - appellant in an appeal against sentence of fine.

In the same way, in State of Kerala v. Narayani Amma (AIR 1962 SC 1530) also, the Apex Court of the country considered the issue and finally held that “ the High Court or the Court of Sessions cannot therefore exercise its appellate jurisdiction in favour of a dead person, even if an appeal has been filed by him, except in an appeal from a sentence of fine”. The exception clause was again not disturbed by the Apex Court.

In Harnam Singh v. The State of Himachal Pradesh ((1975) 3 SCC 343) the Hon’ble Supreme Court held that by the judgment under appeal, a sentence of fine is imposed either singularly or in conjunction with a sentence of imprisonment, the appeal against conviction would be an appeal from a sentence of fine in the meaning of Section 431. All that is necessary is that a sentence of fine should have been imposed on the accused and the appeal filed by him should involve the consideration of the sentence.

Thus, in none of the cases considered by the Apex Court of the country, the learned Judges of the Supreme Court thought of prescribing any time limit, for the near relatives of a deceased appellant to come on record to continue the appeal.

At the same time, a Full Bench of the Hon’ble High Court of Kerala in Pazhani v. State of Kerala (2017 (1) KLT 341 (F.B.)) by fixing a time limit of 30 days for the near relatives of the deceased appellant to come on record to continue the appeal, has clearly gone against the spirit and intent of the legislation. The makers of the law consciously incorporated the benevolent exception clause “except an appeal from a sentence of fine” with sub-s.(2) of Section 394 Cr. P.C. 1973. By limiting the period to 30 days, the Full Bench of the Hon’ble High Court of Kerala practically deleted the bounteous exception clause incorporated by the framers of law, way back in the year 1898, when the Code of Criminal Procedure was enacted, which was retained in the Code of Criminal Procedure 1973 also. The right of near relatives of a deceased appellant in an appeal against sentence of fine and that of the near relatives of a deceased appellant in an appeal against sentence of imprisonment are in fact unequal but now are made equal by the Full Bench in Pazhani v. State of Kerala, which is clearly against the intent, purport and spirit of the legislation, which the draftsmen of law in India never thought of at all.

The object of criminal procedure is to provide a machinery for the punishment of offenders against substantive criminal law. It prescribes the procedure for the trial of offences, which the Indian Penal Code defines. The Penal Code is thus the substantive law, of which the procedure code furnishes the adjective law to put in force its provisions. The Code is a Code of Procedure and like all procedural laws, is designed to further the ends of justice and not to frustrate them by the introduction of endless technicalities. The object of the Code is to ensure that an accused person gets a full and fair trial, along certain well established and well understood lines that accord with our notions of natural justice. Art.21 of the Constitution of India guarantees that “no person shall be deprived of his personal liberty, except according to procedure established by law”. The ‘procedure established by law’ means procedure prescribed by the legislature. It is open to the Parliament to change the procedure by enacting a law and that procedure becomes procedure established by law within the meaning of that expression in Article 21 of the Constitution of India. (As inscribed in the Statement and Reasons of the Code of Criminal Procedure, 1973).

I may state that Section 394 and its sub-sections and proviso are quite luminous and unambiguous. The same was reaffirmed by the Apex Court of the country, by its various judgments especially by the decisions rendered in Harnam Singh v. State of Himachal Pradesh ((1975) 3 SCC 343 ) and in Pranab Kumar Mitra v. State of West Bengal and Another (AIR 1959 SC 144). I may state with due respect that the law is not correctly interpreted by the Full Bench in Pazhani v. State of Kerala (2017 (1) KLT 341 (F.B.)) and requires reconsideration by a large Bench of the Hon’ble High Court of Kerala.

In view of the above, it would be in the interests of justice, if these legal issues are referred to a larger Bench of the High Court of Kerala, for consideration and settlement of the law in its correct perspective and pronouncement of an authoritative judgment ensues at the earliest.

Law on Registration of F.I.R. Unsettled Again

(By Ajit Joy, Advocate, High Court of Kerala)

U.S. Circuit Court Judge, thinker and author, Richard Posner in his book, How Judges Think1 commented in the context of the replacement of a moderately conservative Judge (Justice O’Connor) of the U.S.Supreme Court by another an extreme conservative (Justice Alito), that different personal and political elements in judging lead to the sense that, “the nation is ruled by judges rather than by law.” He further added, “If changing judges changes law, it is not even clear what law is.”

The recent order in January 2017 of the Hon’ble Supreme Court in Common Cause v.Union of India2 rendered by Justices Arun Mishra and Amitava Roy throws open once again the question of what exactly is the law on the registration of a First Information Report (F.I.R.) and launch of a criminal investigation. One had imagined that the final word on this had already been spoken by the Constitution Bench of the Apex Court in the Lalita Kumari v. Government of U.P. (2013 (4) KLT 632 (SC)). However, proving Posner right, it seems, different Judges will continue to have different interpretations with the casualty being uncertainty on first principles.

More disturbingly in this latest case whose facts involved allegations against the Prime Minister and other top constitutional functionaries of having accepted illegal gratification from corporates, the Supreme Court, glossing over our sacred principle of equality before law, identified a new class called “important Constitutional Functionaries.” It also laid down different criteria that would apply while launching criminal investigations against them. In this decision, the Court ruled that unless cogent, legally cognizable material having evidentiary value under the Indian Evidence Act, 1872 is supplied no investigation against an important constitutional functionary can be initiated.

Therefore the following question arises. When a larger bench of the Supreme Court has laid down clear directions on the modalities of registering an F.I.R., was another interpretation by a smaller bench warranted on the question of “information sufficient to trigger an investigation.” And further whether a new class, the so called “important constitutional functionary” could be recognized under law for whom this new stricter requirement would apply.

As per the directions in the Lalita Kumari case:

* Registration of F.I.R. is mandatory under Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is permissible in such a situation.

* If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether cognizable offence is disclosed or not.

* The Police Officer cannot avoid his duty of registering an offence if cognizable offence is disclosed. Action must be taken against erring officers who do not register the F.I.R. if information received by him discloses a cognizable offence.

Allowing preliminary enquiry in a limited number of cases like matrimonial disputes, commercial offence, medical negligence, corruption etc., to be completed in a time bound manner of 45 days, the Court clarified that:

* The scope of preliminary inquiry is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence.

It is in the above legal context that the present case arose. The facts of the Common Cause case in brief are the following. In a raid by the CBI and the Income Tax on the Aditya Birla Group and Sahara, incriminating documents including emails and excel sheets were recovered revealing transfer of money to important political functionaries including the present Prime Minister who was then the Chief Minister of Gujarat. The petitioners alleged that neither the Income tax nor the C.B.I. was following up on this information owing to the clout of the persons involved and therefore the petitioners prayed for the establishment of a Special Investigation Team and commencement of an investigation monitored by the Supreme Court.

When such an information which on the face of it appears to reveal the offence of corruption, was there a scope for the SC to examine the credibility or evidentiary nature of such information? The Lalita Kumari case makes it mandatory to register an F.I.R. if the information discloses commission of a cognizable offence. After examining various past decisions, the Court had clarified that the reasonableness or creditability of the information is not a condition precedent for the registration of a case. (para 79). Instead of applying the principles in the Lalita Kumari case, which the Court surprisingly held would not apply to the facts of the present case, it sought to rely on C.B.I. v. V.C. Shukla (1998) 3 SCC 410), wherein the evidence was considered at the discharge stage after completion of investigation. In this case, the Court held that entries in loose sheets of paper not in the nature of “books of accounts” cannot be admissible and have no evidentiary value. Relying upon the rigour that the SC placed on evaluating the evidence collected subsequent to investigation in the V.C.Shukla case, the SC in the present Common Cause case erroneously applied the same standards disregarding the ratio laid down in the Lalita Kumari case. The Court speaking through Justice Arun Mishra and Amitava Roy opined:

“We are constrained to observe that the Court has to be on guard while ordering investigation against any important constitutional functionary, officers or any person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence and not admissible in evidence, we have apprehension whether it would be safe to even initiate investigation. In case we do so, the investigation can be ordered as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any unscrupulous person or business house that too not kept in regular books of accounts but on random papers at any given point of time. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and that too, supported by some other circumstances pointing out that the particular third person against whom the allegations have been levelled was in fact involved in the matter.”

The information placed before the Supreme Court by the petitioners included emails, excel sheets etc., of an incriminating nature pointing at illegal payments to certain politically exposed persons. Such materials were recovered by none other than State agencies like the C.B.I. and Income Tax in raids carried out by them. Based on the directions in the Lalita Kumari case for the SC ought not to have carried out a credibility check or evidentiary value test on such information when the matter is still in the pre-F.I.R. stage. To expect individuals or public spirited persons approaching the Court to produce high quality evidence without tasking investigation agencies of the State who have the resources to probe further on such information would be unfair. In fact the Constitution Bench had observed that “The insertion of sub-section (3) of Section 154, by way of an amendment, reveals the intention of the Legislature to ensure that no information of commission of a cognizable offence must be ignored or not acted upon which would result in unjustified protection of the alleged offender/accused.” (para. 84).

If the concern of the Court was protection against unscrupulous informants, it could at least have got such information tested by an SIT or an investigation agency at the preliminary enquiry stage. By not having ordered at least a preliminary enquiry the nation has lost an opportunity to follow up on information relating to the unholy nexus between corporates and politicians. The Court judgment is a major blow to the fight against corruption and highly demoralising to anti-corruption activists and whistle blowers.

The other question is whether there is any justification on the creation of a separate class, of “important constitutional functionaries”? If the purpose is to protect them against vexatious complaints, this aspect has been dealt with elaborately by the Lalita Kumari decision. The law already provides for adequate safe guards including bringing the matter upon registration of an F.I.R. under the supervision of the Courts to avoid the possibility of any witch hunt. Thus it is submitted that there was no need for the Apex Court to create a separate class for whom criminal law would apply differently.

The equilibrium established through the Lalita Kumari case has been upset. There is uncertainty now on supply of information and launching of investigation against important constitutional functionaries after this exception created by the Court. We can only hope that the situation is rectified and the principles laid down by the Lalita Kumari case is unambiguously restored at the earliest.

Foot Notes:

Relevance of ‘Seat of Arbitration’ in Considering Territorial Jurisdiction of Court of Law for Applications under the Arbitration and Conciliation
Act, 1996 in Domestic Arbitrations

(By K.L. Varghese, Sr. Advocate)¹

The concept of ‘seat theory’ in arbitration, has its origin in ‘international commercial arbitration’ as the ‘juridical seat of arbitration’ determines the procedural law of the arbitration. Hence in international arbitrations much importance is placed on the territory or state within which the arbitration is to take place in regulating the arbitration process. By judicial pronouncement of the Apex Court, the concept of ‘seat theory’ has been made applicable to Domestic Arbitrations in India as well.

Recently, two decisions rendered by two Division Benches of the Hon’ble High Court of Kerala have expressed conflicting opinions relating to the relevance of ‘seat of arbitration’while considering the jurisdiction of the court of law for applications under the Arbitration and Conciliation Act, 1996.

In D Net Malayalam Digitals Pvt. Ltd. v. Asianet Satelite Communications Ltd.2, in para.12, it has been stated:

“Seat of arbitration or the place, where the arbitration proceedings were conducted and concluded, has no relevancy or significance in the conferment of territorial jurisdiction for challenging the award”.(emphasis supplied)

However, in another decision rendered by another Division Bench in Zillion Infraprojects v. A.I.Kuriakose&Anr.3, referring to two decisions of the Apex Court and Section20 of the Arbitration and Conciliation Act, in para.12, the learned Judges have held as follows:

“12. In view of the above authoritative pronouncements what emerges is that, by the operation of Section 20 of the Act, the parties are free to confer jurisdiction even on a Court that does not ordinarily have jurisdiction to entertain the matter. Once the parties exercise their right under Section 20 and confer jurisdiction on a Court that does not have jurisdiction to entertain the matter, such Court would also have jurisdiction,together with the court/courts that would originally have jurisdiction to try the matter…..…..”.(emphasis supplied)

Careful reading of the above decisions show that the finding arrived at in Zillion InfraprojectsCase (supra) is based on the concept of ‘seat theory’ which gives due consideration to the ‘seat or place of arbitration’ agreed to by the parties and the principle of ‘party autonomy’ under Section 20 of the Arbitration & Conciliation Act,1996 which was not raised nor brought to the attention of the Bench considering D Net Malayalam DigitalsCase (supra).

Party autonomy and supervisory jurisdiction over arbitral process and the tribunal

The legal question whether ‘seat of arbitration’ is relevant to the question of jurisdiction of the court as defined under Section2 (1) (e) of the Arbitration and Conciliation Act,19964while filing applications before the court of competent jurisdiction relating to arbitral proceedings under the Arbitration and Conciliation Act, 1996 is no more res integra.The Hon’ble Supreme Court in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc.,(2012) 9 SCC 552 (hereinafter referred to as the BALCOCase), while considering whether the 1996 Act is seat centric held that the Arbitration Act, 1996 consolidates the law on domestic arbitration as well as international commercial arbitrations by taking into account the 1985 UNCITRAL Model Law and Rules. It held that para.3 of the Statement of Objects and Reasons of the Act makes it clear that although the UNCITRAL Model Law and Rules are intended to deal with international commercial arbitration and conciliation, they could, with appropriate modifications, serve as a model law for legislation of domestic arbitration and conciliation as well. Reference was also drawn to Article 1(2) of the UNICITRAL Model Law5and the Report of UNCITRAL during its 18th Session to come to a finding that the UNCITRAL Rules adopted strict territorial principle. The Court held that as UNCITRAL Model Law unequivocally accepted the territoriality principle, similarly, the Arbitration Act, 1996 has also adopted the territoriality principle. Further, referring to Para. 3.54 of Redfern and Hunter on International Arbitration, the Court held that it is accepted by most experts that in most national laws, arbitrations are anchored to the seat/place/situs of arbitration and held that the seat of arbitration was the ‘centre of gravity’ of the arbitration6. The Court also set out the definition of seat theory as defined in Redfern and Hunter on International Arbitration (Para.3.51) thus: “The concept that an arbitration is governed by the law of the place in which it is held, which is the ‘seat’ (or ‘forum’ or locus arbitri) of the arbitration, is well established in both the theory and practice of international arbitration.” Consequently, with reference to domestic arbitrations the Court in paragraph 967(quoted in Zillion Infraproject’scase) has made the following observations:

1.The term “subject-matter”in Section 2(1)(e) of the Act is confined to Part I of the Act i.e., relating to ‘domestic arbitration’.

2.‘Subject matter’ under Section 2(1)(e) of the A & C Act8, has a reference and connection with the process of dispute resolution which is to identify the courts having “supervisory control”over the arbitration proceedings. Hence it refers to a court which would essentially be ‘a court of the seat of the arbitration process’.

3. The Constitution Bench has considered Section 20 of the A & C Act which gives recognition to ‘party autonomy’and held that “the legislature has intentionally given jurisdiction to two courts”i.e., the court which would have jurisdiction where the cause of action is located and the courts ‘where the arbitration takes place’ while interpreting definition of ‘Court’ under Section 2(1)(e) of the A & C Act.

4. Conferring jurisdiction on courts where the ‘seat of arbitration’ is located, is necessary because on many occasions the parties may by agreement providefor a ‘seat of arbitration at a place which would be neutral to both the parties’. Hence the courts where the ‘seat of arbitration is located’ would be required to exercise “supervisory control” over the arbitral process.

The Apex Court has given an example; if the arbitration is held in Delhi, though neither of the parties are from Delhi and Delhi has been selected as a neutral place as between a party from Mumbai and a party from Calcutta and the arbitral tribunal sitting in Delhi passesan interim order under Section 17 of the A & C Act, 1996, the appeal under the Act against such an interim order under Section 37 must lie to the ‘courts of Delhi which has got supervisory jurisdiction over the arbitration proceedings and the tribunal’.This ‘supervisory jurisdiction’ of courts of Delhi is irrespective of the fact that the obligations to be performed under the contract in which disputes have arisen may be either at Mumbai or at Kolkata and ‘only arbitration is to take place in Delhi’. Hence it was made clear that both ‘the courts within whose jurisdiction the subject matter of the suit is situated’ and ‘the courts within whose jurisdiction arbitration for dispute resolution is conducted’ shall have territorial jurisdiction.

Other High Courts have also followed the concept of ‘seat theory’, quoting the BALCOCase (supra) to construe the question ‘whether the seat of arbitration where the arbitration was conducted shall be relevant for deciding the question of territorial jurisdiction of the court’. The following are some of the decisions where the Courts have found to have territorial jurisdiction, being the seat of arbitration as stipulated in the agreement and in some cases the agreement further providing an ‘exclusion clause’ or ‘ouster clause’ providing for exclusive jurisdiction of the Court at the seat of arbitration.

1) Ion Exchange (India) Ltd. v. Panasonic Electric Works Co. Ltd.(208 (2014) DLT 597 (DB ruling of Delhi High Court) dt. 04.03.20149

2)  NHPC Limited v. Hindustan Construction Company Ltd.(2015 (4) Arb LR297 (Delhi), 221(2015) DLT 256 (DB ruling of the Delhi High Court)dt. 28.05.201510

3)  Priya Hiranandani Vandervala v. Niranjan Hiranandani and Ors.(2016 (4) Arb. LR 18(Delhi) (DB ruling of the Delhi High Court) dt. 30.05.201511

4)  SRS Private Investment Powai Ltd. v. Supreme Housing and Hospitality Pvt. Ltd. and Ors. dt. 03.10.2016 (Delhi High Court)12

It seems, before the Division Bench which dealt with the D Net Malayalam Digitals Pvt. Ltd. Case(supra), neither was the decision of the Apex Court in BALCO’s case (supra) nor any other related decision referred to, which has resulted in the finding that ‘seat of arbitration’ has no relevance or significance relating to territorial jurisdiction of the court whereas in later decision, Zillion Infraproject’sCase (supra), the decisions in BALCO’scase (supra) as also the decision in Jyothi Turbo Power Services Pvt. Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd.13have been referred to.

However, a learned single Judge of the Bench deciding the D Net Malayalam DigitalCase has noted the BALCO Case (supra) in M/s. Orbit Infrastructure Developers (India) Pvt. Ltd. v. M/s. Sastra Properties (India) Ltd.14and followed the ratio while considering a Section 11 Arbitration Request.

Exclusive jurisdiction clauses and seat of arbitration

In the case of domestic arbitrations, usually along with the ‘seat of arbitration’ the ‘Court exercising exclusive jurisdiction’ is also mentioned in the agreement which is usually one and the same. Hence, going by the ratio of the Full Bench decision of the Apex Court in Swastik Gases P. Ltd Case15followed in State of West Bengal & Co. v. Associated Contractors(supra) and in B.E.Simoese Von Staraburg Niedenthal & Anr. v. Chhatisgarh Investement Ltd.,16if the jurisdiction of a particular court is mentioned in the agreement, then ‘exclusive jurisdiction’ is deemed to be conferred on that particular Court going by the maxim expression unius est exclusion alterius(expression of one is the exclusion of the other) irrespective of whether the jurisdiction clause in the agreement uses words like ‘alone’, ‘only’, ‘exclusive’ or ‘exclusive jurisdiction’.

In this context, in D Net Malayalam Case(supra) the Division Bench of this Hon’ble Court has rightly construed the ‘exclusive jurisdiction’ clause whereby under Clause 19 it was agreed that only the Courts in Thiruvananthapuram would have jurisdiction to decide any dispute between the parties arising out of or consequent to the agreement and thus arrived at a finding that only Courts in Thiruvananthapuram can exercise jurisdiction.

‘Seat of Arbitration’ under English Law is statutorily recognised

In England however, the concept of ‘seat theory’ in arbitration has been statutorily recognized and the law governing the seat is always the law governing arbitration. Under Sections 2(1), 3 and 52 (5)of The English Arbitration Act, 1996 (Ref: Russel on Arbitration, 23rd Edition) reference is made to the ‘seat of arbitration’ and the said sections are extracted hereunder for ease of reference:

“Section 2. Scope of application of provisions

(1) The provisions of this Part apply where the seat of the arbitration is in England and Wales or Northern Ireland.

“3. The seat of the arbitration

In this Part “the seat of the arbitration” means the juridical seat of the arbitration designated –

(a) by the parties to the arbitration agreement, or

(b) by any arbitral or other institution or person vested by the parties with powers in that regard, or

(c) by the arbitral tribunal if so authorised by the parties,

or determined, in the absence of any such designation, having regard to the parties’ agreement and all the relevant circumstances”.

“52. Form of award

(5) The award shall state the seat of the arbitration and the date when the award is made.            (emphasis supplied)

While in England there is statutory recognition to the concept of ‘seat theory’, under Indian law there is no statutory recognition at present though the Law Commission in its 246th Report had proposed amendments to incorporate provisions in the Arbitration and Conciliation Act, 1996 in view of the findings of the Hon’ble Supreme Court in BALCO Case (supra).

Recommendations of the Law Commission

In the BALCOCase it was held by the Apex Court that in international commercial arbitration, there would be only one place/seat of arbitration designated in the arbitration agreement or the terms of reference or the minutes of proceedings or in some other way as the place or ‘seat’ of arbitration whereas the arbitral tribunal could hold its meetings or hearings at convenient locations. It was held that each move of the arbitral tribunal would not constitute a change in the seat and the seat of arbitration will remain the place initially agreed to by or on behalf of the parties.17

Subsequently, in Enercon (India) Ltd. v. Enercon GMBH18the Apex Court referring toBALCO(supra) held that the legal seat of arbitration which was India, (Indian law being the curial law in that international commercial arbitration case), should not be confused with the geographically convenient place for holding arbitration which was London, the venue of the arbitration.

Hence in keeping with the finding of the Apex Court in BALCO(supra), the Law Commission of India in its 246th Report had recommended that clause 2 (hh) be inserted into the Arbitration and Conciliation Act of 1996. Section 2 (hh) defined “seat of arbitration” as thejuridical seat of arbitration.19

Similarly under Sections 20 and 20 (1) of the Arbitration Act, it was proposed that the word ‘place’ be replaced by ‘seat and venue’ and under Clause 20 (3) which provides that the arbitrator can meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties or for inspection of documents, goods or other property, the word ‘place’ would be replaced by ‘venue’.20

Unfortunately, the above recommendations of the Law Commission have not been heeded to and none of the above proposed amendments have been inserted in the Arbitration and Conciliation Amendment Act of 2015(No.3 of 2016) which would have further made clear the distinction between ‘juridical seat of arbitration’ and mere ‘venue’ of arbitration.

No clear distinction between Seat and Venue of arbitration in domestic arbitration- ambiguity persists.

In this context, while there is a clear demarcation as to the place/seat of arbitration and mere ‘venue’ in international commercial arbitration, in domestic arbitration, the terminology ‘seat’ and ‘venue’ have been sometimes used interchangeably. In Enercon (India) Ltd. v. Enercon GMBH(supra) in para. 106, while dealing with domestic arbitrations, referring to the BALCOCase, the Apex Court held that concurrent jurisdiction is vested in the courts of seat and venue, only when the seat of arbitration is in India. The Court held that the reason for the aforesaid conclusion was that there was no risk of conflict of judgments of different jurisdictions, as all courts in India would follow the Indian law.

In D Net Malayalam(supra), it seems, it was the case of the appellant that as the arbitration proceedings were conducted and concluded at Ernakulam, the seat of arbitration was at Ernakulam, whereas there was no ‘seat of arbitration’ prescribed in the agreement, but Clause 19 prescribed that Courts in Thiruvananthapuram would have ‘exclusive jurisdiction’.

In this context, even in the case of domestic arbitrations, it is required that a distinction be made between the ‘juridical seat of arbitration as per the agreement’ between the parties and ‘venue’. This is further clear if one considers the recommendations of the Law Commission in its 246th report referred to above which have not been included in the new Amendment Act of 2015 as otherwise Section 20(1) would be rendered nugatory and even a mere ‘venue’ chosen by the arbitrator under Section 20(2) and 20(3) of the Arbitration Act could be equated to a ‘seat of arbitration’ and it could be argued that the Court at the ‘venue’ would also assume jurisdiction in the case of domestic arbitrations, which it otherwise cannot exercise jurisdiction.

Conclusion

The Constitution bench of the Apex Court having declared that ‘seat of arbitration’ also shall be treated as relevant for considering the definition of ‘Court’ to decide the territorial jurisdiction referring to the ambit of ‘subject matter of arbitration’ in Section 2(1)(e) of the A & C Act and the concept of ‘party autonomy’ under Section 20 of the Act, necessarily the same has to be followed as the law of the land applicable to the whole country under Article 141 of the Constitution of India as held by the Division Bench in Zillion Infraprojects v. A.I. Kuriakose(supra).

Further, in the case of domestic arbitrations, a distinction has to be drawn between the ‘juridical seat of arbitration as per the agreement’ as envisaged under Section 20(1) of the Arbitration Act, 1996 and mere ‘venue of arbitration’ which comes within the purview of Section 20(3) of the Act as only ‘Courts located within the juridical seat’ would be entitled to exercise jurisdiction based on the concept of ‘seat theory’.

Foot Notes:

1.  Assisted by Ranjith Varghese, Advocate, practicing in the High Court of Kerala.

 2. D Net Malayalam Digitals Pvt. Ltd. v. Asianet Satelite Communications Ltd. (2016 (4) KLT 30).

3.  Zillion Infraprojects v. A.I. Kuriakose & Anr. (2017 (1) KLT 632).

4.    Section 2 (1) (e) “Court” means-- (i)  in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Cout, or any Court of Small Causes. 

5.    “1.(2) The provisions of this Law, except Articles 8, 9, 17-H, 17-I, 17-J, 35 and 36, apply ‘only’ if the place of arbitration is in the territories of this State.”

6.    See paragraphs 68-75, Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552.

7.    We are of the opinion, the term “subject-matter of the arbitration” cannot be confused with “subject-matter of the suit”. The term “subject matter” in Section2(1)(e) is confined to Part I. It has reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the learned counsel for the appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. For example, if the arbitration is held in Delhi, where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the courts of Delhi being thecourts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi.In such circumstances, both the courts would have jurisdiction i.e. the court within whose jurisdiction the subject-matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution i.e. arbitration is located.” (emphasis supplied)

8.    “20.Place of arbitration.

(1)   The parties are free to agree on the place of arbitration.

(2)   Failing any agreement referred to in sub-section (1), the place of arbitration shall be    determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(3)   Notwithstanding sub-section(1) or sub-section(2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.”

9.    A Section 9 petition was filed before the Delhi High Court. Neither the respondent resided in Delhi nor did any cause of action arise in Delhi, but arbitration was held in Delhi. The Court was considering the question whether the agreed seat or place of arbitration alone is sufficient to confer territorial jurisdiction on the courts of that place. The Division Bench held that it had jurisdiction after referring to the BALCO Case. Clause 11.6 of the Development Agreement provided that seat of arbitration was New Delhi and Clause 36.1 of the Sales Agreement provided that Courts in New Delhi would have exclusive jurisdiction.

10.   The seat of arbitration was stipulated as New Delhi/Faridabad as per clause 67.3 (v) of  COPA and entire arbitration was conducted in New Delhi.

11.   The seat of arbitration was New Delhi with the subject matter of arbitration being immovable properties situated in Mumbai and Chennai.

12.   The place of arbitration was New Delhi as per Clause 18.2 and exclusive jurisdiction was conferred on Courts at Delhi as per Clause 18.1.

13.   Jyothi Turbo Power Services Pvt Ltd v. Shenzhen Shandong Nuclear Power Construction Co. Ltd. AIR 2011 A.P. 111.

14.   2014 (1) KLT 1061.

15.   Swastik Gases P. Ltd. v. Indian Oil Corporation (2013) 9 SCC 32.

16.   B.E.Simoese Von Staraburg Niedenthal & Anr. v. Chhatisgarh Investement Ltd.(2015) 12 SCC 225

17.   See The Law and Practice of International Commercial Arbitration (1986) by Redfern and Hunter at paragraph 100, Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552.

18.   Nercon (India) Ltd. v. Enercon GMBH ((2014) 5 SCC 1).

19.   The Note appended to the proposed amendment to Section 2 specifically stated that the definition 2 (hh) was incorporated so as to make it clear that the ‘seat of arbitration’ is different from the venue of arbitration and that Section 20 had been modified accordingly.

20. The Note appended to the proposed amendment to Section 20 of the A & C Act stated that the departure from the existing phrase “place” of arbitration was to make the wording of the Act consistent with the international usage of the concept of a “seat” of arbitration, to denote the legal home of the arbitration. It was also to further legislatively distinguish between the “[legal] seat” from a “[mere] venue” of arbitration.