High Court Retains Original Civil Jurisdiction Despite Changes Introduced Post-2019 Re-Organisation Act: J&K High Court

While addressing critical questions of law concerning the court's authority to hear arbitration disputes a bench of Justice Sanjay Dhar observed,

“.. there is no manner of doubt in holding that this Court even after de-operationalization of the Constitution of Jammu and Kashmir, 1957, and the enactment of the J&K Reorganization Act, 2019, is vested with the ordinary original civil jurisdiction as well as extraordinary original civil jurisdiction”.

These observations were made while hearing petitions filed by Zaffar Abbas Din and Nasir Hamid Khan, which involved commercial arbitration disputes. The core legal issue revolved around whether the High Court, post-2019, still possessed its original civil jurisdiction, and whether it could hear arbitration cases in the absence of a designated Commercial Division under the Commercial Courts Act, 2015.

Senior counsel Z. A. Shah and Advocate Shariq J. Reyaz, representing the petitioners, had argued that with the constitutional changes post-2019, the Jammu and Kashmir High Court no longer had the authority to hear civil suits and arbitration matters under its original jurisdiction. They pointed out that the lack of a Commercial Division, as required by the Commercial Courts Act, 2015, further limited the court's jurisdiction over commercial disputes.

Adjudicating the matter the court formulated two Key Questions of Law

1. Does the High Court retain its original civil jurisdiction following the 2019 reorganization?
2. Can the court entertain arbitration cases without a designated Commercial Division, as mandated by the Commercial Courts Act, 2015?

Court Observations:

Ruling that the High Court continues to hold its ordinary and extraordinary original civil jurisdiction, despite the de-operationalization of the Constitution of Jammu and Kashmir, 1957, following the promulgation of the Constitution (Application to Jammu and Kashmir) Order, 2019 Justice Dhar observed that the Jammu and Kashmir Reorganization Act, 2019, particularly Section 77, ensured that pre-existing rules and procedures would continue unless specifically repealed.

Pointing out the Letters Patent of 1943, which remains in effect the Court observed that the court's powers under the Letters Patent, specifically Clause 10, which grants ordinary original jurisdiction, and Clause 11, which provides extraordinary original jurisdiction, continue to hold.

“.. It is true that with the de-operationalization of Constitution of J&K, 1957, the existing High Court does not have the luxury of deriving ordinary original civil jurisdiction from any constitutional provision… The Letters Patent for the High Court of Judicature for the Jammu and Kashmir issued by the Maharaja on 28th August, 1943, governs the practice and procedure in the High Court and the same was in force as on date of enforcement of the J&K Reorganization Act, 2019”, the court explained.

Referencing L. Tota Ram vs. State (AIR 1975 J&K 73) and Ramesh Chand Kathuria vs. Trikuta Chemicals Pvt. Ltd. (AIR 2015 J&K 52), where the court upheld the validity of the Letters Patent in conferring civil jurisdiction the Court noted that Section 102 of the Constitution of Jammu and Kashmir, 1957, had originally saved the jurisdiction provided under the Jammu and Kashmir Constitution Act, 1939.

“.. it is clear that while we cannot bank upon the provisions of the J&K Constitution Act, 1939 and Constitution of J&K, 1957, so far as existence of civil original jurisdiction of this High Court is concerned, but clause (10) of the Letters Patent is still available for vesting the ordinary original civil jurisdiction with the High Court of Jammu and Kashmir”, the bench maintained.

Thus, while the Constitution of Jammu and Kashmir, 1957, had been de-operationalized following the issuance of the Constitution (Application to Jammu and Kashmir) Order, 2019, the Letters Patent continues to govern the High Court's practice and procedure under Section 77 of the Reorganization Act, the court reasoned.

Answering the second question the Court ruled that in the absence of a Commercial Division, the High Court could not adjudicate arbitration matters involving commercial disputes of specified value, as mandated by the Commercial Courts Act, 2015.

Elaborating further on the issue Justice Dhar highlighted Section 4 of the Act, which requires a High Court to constitute a Commercial Division to hear such matters and without this division, the court was barred from proceeding with arbitration cases concerning commercial disputes of specified value.

The court further cited Section 10 of the Commercial Courts Act, 2015, which explicitly states that commercial arbitration cases filed on the original side of the High Court must be heard by a designated Commercial Division and observed,

“In the absence of an order relating to constitution of Commercial Division of the High Court, the arbitration matters relating to commercial disputes of specified value filed before the High Court cannot be decided by the High Court in exercise of its original civil jurisdiction after coming into force of the Commercial Courts Act”.

Observing that since no such division has yet been constituted in Jammu and Kashmir, Justice Dhar opined that arbitration cases currently pending must await the establishment of this division.

“From a careful analysis of the aforesaid provisions contained in Commercial Courts Act, 2015, it becomes clear that constitution of a Commercial Division in a High Court, which is vested with ordinary original civil jurisdiction, is an absolute imperative to deal with the cases involving commercial disputes of specified value that may have been filed in the said High Court”, the court remarked.

In light of these observations, Justice Dhar directed the Registrar General to place the matter before the Chief Justice to expedite the establishment of a Commercial Division in the High Court.

“Since a large number of arbitration proceedings relating to commercial disputes are pending in the High Court which, in the absence of a Commercial Division, cannot proceed further, as such, the Registrar General is requested to take urgent steps in the matter”,the court concluded.

Case Title: Zaffar Abbas Din Vs Nasir Hamid Khan

Citation: 2024 LiveLaw (JKL) 266

Click Here To Read/Download Judgment