Heiza Boilers (I) Pvt Ltd And Another vs Union Of India And Others

This is an utterly unmeritorious and frivolous appeal which deserves to be thrown out with exemplary costs. The grievance of the writ petitioners-

appellants is that the Director General of Supplies & Disposals purported to resurrect an arbitral reference despite such reference being terminated by

a previous arbitrator under Section 32 of the Arbitration and Conciliation Act, 1996. There might be excellent grounds for the petitioners herein to

challenge the action of the DGS&D, but the question is what is forum before which the appellants can carry the grievance. Surely, a person with a

grievance against a traffic constable cannot carry such grievance to the nearest hospital or a person with a grievance against a doctor cannot

approach the nearest fire station for such purpose. The conduct of the appellants herein in carrying the grievance to this court under Article 226 of the

Constitution is akin to the absurd examples given above.

A Constitution Bench provided in 2005 that the grievance against any order passed by an arbitral tribunal or in matters pertaining to arbitration could

not be carried to a High Court under Article 226 or under Article 227 of the Constitution. The command of the dictum in paragraph 45 of the judgment

reported at (2005) 8 SCC 618 (SBP & Co. v Patel Engineering Ltd) is absolute as would be evident from the last sentence of the relevant paragraph:

“We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being

corrected by the High Court under Article 226 or 227 of the Constitution of India.â€​

Though such aspect of the matter did not engage the attention of the Single Bench, it is difficult to proceed on the merits of the appellants’

grievance in the light of the Constitution Bench dictum. In the judgment and order impugned dated July 20, 2009, the court has referred to the relevant

notice for revival of the arbitral proceedings issued by the DGS&D to the appellants. By referring to the judgments in Swaika Properties (AIR 1985

SC 1289) and Utpal Kumar Basu (1994 (4) SCC 711) the court found that the mere receipt of such notice was not a material or integral or essential

part of the appellants’ cause of action in the writ petition. The Single Bench held that since the DGS&D passed the relevant order in Mumbai and

the reference was also elsewhere, the writ court in Calcutta could not receive the objection.

The Arbitration and Conciliation Act, 1996 is a consolidating and amending Act, which, by its very nature, implies that it is a Code by itself. Unless

there are special provisions in some special statutes providing for a different mechanism for arbitration or the remedies therefrom, when matters

pertaining to arbitration are sought to be questioned in court, they have, per force, to be under the Act of 1996. Section 5 of the Act of 1996 mandates

that the court would interfere in matters pertaining to arbitration only to the extent as permitted by the statute.

Indeed, areas which were within the exclusive domain of the court under the predecessor statute of 1940 have now been parked exclusively with the

arbitral tribunal, particularly the authority of arbitral tribunal to rule on its own jurisdiction. Certain matters can be carried to court only at a certain

stage. If, for instance, the arbitral tribunal upholds its jurisdiction to continue with the arbitral reference despite an objection, the objector has to await

the outcome of the reference before resuming the challenge in course of proceedings under Section 34 of the Act of 1996.

In the present case, it appears that there was an agreement between the appellants and the Union through the office of the DGS&D. Certain disputes

as to a lot of supply arose and an arbitral reference was commenced which culminated in the reference being terminated under Section 32 thereof. As

to whether a reference which was terminated under Section 32 of the Act could subsequently be revived or not was not a question of public law that

could be addressed in proceedings under Article 226 of the Constitution. Further, there was no public element in the DGS&D acting as the appointing

authority since he was only a creature of a contract.

In view of the fact that the remedy of the appellants lay completely within the four corners of the Act of 1996, the writ petition should never have

been entertained, particularly in view of the dictum in SBP & Co. noticed above. For the reasons as aforesaid, which are independent of the reasons

indicated in the order impugned, the writ petition is held to have been appropriately dismissed though for reasons other than the grounds evident in the

order under appeal.

FMA 496 of 2010 is dismissed with costs assessed at Rs.10,000/-. Such costs need to be paid as a condition precedent for the appellants pursuing the

grievance carried to this court by way of this writ petition by instituting fresh proceedings in accordance with law. Certified website copies of this

order, if applied for, be urgently made available to the parties upon compliance with the requisite formalities.