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Judgment
521 paragraphs · 11,230 wordsJ.B.Pardiwala, J
1 This appeal under Clause 15 of the Letters Patent Act is at the instance of an unsuccessful writ applicant and is directed against the judgement and
order passed by a learned Single Judge of this Court dated 18th May 2020 in the Special Civil Application No.18097 of 2017, by which, the learned
Single Judge rejected the writ application preferred by the appellant herein on the ground that the same is not maintainable in law as it seeks to
challenge an order passed by an Arbitrator rejecting the application preferred by the appellant herein under Section 16 of the Arbitration and
Conciliation Act, 1996 (for short, “the Act, 1996â€).
2 The facts giving rise to this appeal may be summarised as under:
2.1 The appellant herein came before the learned Single Judge by filing the Special Civil Application No.18097 of 2017 seeking the following reliefs:
“(A) Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ or writ in the nature of Å"rtiorari or any other
appropriate writ. order or direction, quashing and setting aside the order I Minutes of Meeting (MOM) dated 1.10.2017 of the respondent No.2 and
further be pleased to hold that the respondent No.2 has no jurisdiction to conduct the hearing of the proceedings being Case No.AC- 1903;
(B) Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ or writ in the nature of certiorari or any other
appropriate writ, order or direction, issuing appropriate directions to the respondent No.1 to undertake the procedure as contemplated under ˙Ruled 27
of the ICA Rules in connection with Case No.AC 1903;
(C) Pending hearing and final disposal of the captioned writ petition, Your Lordships may be pleased to stay further arbitration proceedings of Case
No.AC-1903 conducted by the respondent No.2 between the . respondent No.3 and the petitioner arising out of the contract between the parties and
restrain the respondent No.2 from proceeding any further in the arbitration proceedings. which are subject matter of the present petition;
(D) Ad-interim relief in terms of para 10 (D) be granted by this Hon’ble Court.
(E) Any other and further orders that are deemed necessary in the interests of justice may be passed.â€
3 We need not delve much into the facts of this litigation as the controversy is in a narrow compass. The appellant herein is in a litigation before an
Arbitral Tribunal. The appellant is a respondent before the Arbitral Tribunal.
4 The appellant preferred an application dated 16.09.2017 before the Arbitral Tribunal seeking termination of the arbitration proceedings in terms of
Rule 63 of the Indian Council of Arbitration (for short, “the ICA Rulesâ€).
5 The aforesaid application preferred by the appellant referred to above reads thus:
“Application seeking termination of the Arbitration proceedings in terms of Rule 63 of the ICA Rules.
MAY IT PLEASE THE HON’BLE ARBITRATOR
On behalf of the respondent above named, it Is respectfully submitted as under:
That the Hon’ble Arbitrator was appointed by the Indian Council of Arbitration (“ICA†for short) for conducting the Arbitration
proceedings between the parties.
That the Arbitral Tribunal while conducting the Arbitration Proceedings has been following the ICA Rules of Arbitration as per the arbitration
clause between the parties.
That the Arbitral Tribunal seems to have entered into Reference in terms of Rule 38 on 2.1.2014 when the Procedural Order No.1 was passed
(Copy enclosed).
That the award was to be made as per Rule 63 however the mandatory time period for making the award has already expired and the mandate of
the Arbitrator has already terminated and the Arbitrator has become functus officio.
The language in Rule 63 of the ICA Rules clearly indicate that the award is to be made subject to ˙maximum limit of two years’ from the date
on which the reference in terms of Rule 38 has been made and the same can be extended only after following the due procedure that too for a period
‘not exceeding one year’.
The parties have never been intimated about any extension granted to the Arbitral Tribunal as per Rule 63 which gives & strong presumption about
absence of any extension given to the Arbitral Tribunal coupled with the fact of verification by the respondent with the ICA. Even otherwise, there
being no mandate to proceed after a period of three years from the date of Reference as per Rule 38. the Arbitral Tribunal cannot undertake the
arbitration proceedings in view of his mandate having been lost.
That the mandate of the Arbitral Tribunal has lapsed in view of Rule 63 of the ICA Rules and therefore, at this juncture, the Arbitral Tribunal has
no jurisdiction to proceed with the Arbitration Proceedings which automatically stand terminated in terms of Rule 63 of the ICA Rules.
Other grounds as may be taken up at the time of hearing.
The respondent. Therefore, prays that:
(i) since the mandate of the Arbitral Tribunal stands terminated in view of the provisions of the ICA Rules and the provisions of the Arbitration Act.
1995, the Hon’ble Arbitrator may not proceed any further and close the Arbitration Proceedings.
(ii) Till the application is decided. The Arbitral Tribunal may adjourn the proceedings and not proceed further with the arbitration proceedings.
(iii) Any other and further order, as prayed for, at the time of hearing by-the respondent may pleased be considered and appropriately granted.â€
6 The aforesaid application preferred by the appellant herein was looked into by the Arbitral Tribunal and by an order dated 1st October 2017, the
same came to be rejected by the Arbitral Tribunal. The order passed by the Arbitral Tribunal reads thus:
“ORDER
The AT has the mandate to continue with the arbitral proceedings. The Application filed by the respondent on 16.09.2017 stands rejected. The
detailed reasoned Order In the matter shall be issued along with the Award for this dispute.
The AT also stated that this oral Order shall be followed in writing vide proceedings of meeting to be issued for the meeting of today.
6.1 The AT directed the counsel of the claimant to commence its defence arguments / submissions.
6.2 The counsel for the respondent objected to such oral Order, which was to be followed by the written Order vÃde the record of the proceedings to
be issued. It may be mentioned here that for want of facilities of typing and printing at the venue of the meeting. The copies of the proceedings for the
15 meeting held so far. Have been issued by the Sole Arbitrator by e-mail from his residence after the completion of the arbitral meeting for the day.
The counsel of the respondent insisted for written order immediately in the meeting. Further it was also insisted by him that the reasoned Order shall
be given before he (i.e. the counsel for the respondent) proceeds further In the matter. The AT requested him to give his objection / demand in writing
so that his objection / demand can be faithfully recorded in the record of proceeding to be issued for today. The counsel of the respondent refused to
give the same in writing. The AT thereupon requested the counsel of the respondent to dictate his objection / demand to the AT to enable the Sole
Arbitrator to faithfully record the same in the proceedings of the meeting to be issued. The dictation given by the counsel of the respondent is
reproduced below:
“The respondent has made oral submissions. The respondent is requesting the AT for issuance of reasoned detailed order to be passed before any
further arbitral proceedings so that the reasoned Order can be challenged before the appropriate forum. The AT wants to proceed without giving a
reasoned Order by saying that an Order has been passed verbally to be followed by a written order according to convenience of the AT. According to
the respondent it desires to know the grounds for rejection of its Application dated 16.09.2017 as according to the respondent the mandate of the AT
stands terminated as per Rule 63 and further procedure is required to be undertaken as per Rule 27 of the ICA. Therefore the respondent is not in a
position to proceed further today. If the written Order is passed immediately and copy thereof is given to the respondent, the respondent will undertake
procedure in accordance with the law.â€
8.0 At this stage the AT put both the parties to Notice about the provisions under Rules 46, 47. 48, 49 of ICA Rules of Arbitration and Para 19 of the
˙Guidelines for Arbitrators and Parties.’ under Rules of ICA.
9.0 In view of the above circumstances, the matter was adjourned for the day and the ˙AT decided to have the next meeting on 03.10.2017.
10.0 Accordingly the next meeting shall be held at 1100 hrs on 03.10.2017. The party making the arrangement for the meeting will intimate all
concerned about venue of the said meeting well before the date of the next meeting.
(A.B. Desai) Sole Arbitratorâ€
7 The appellant, being aggrieved and dissatisfied with the aforesaid order passed by the Arbitral Tribunal, came before this High Court and challenged
the same by filing the Special Civil Application No.18097 of 2017.
8 The learned Single Judge took the view that a writ application, under Article 226 of the Constitution of India or an application under Article 227 of
the Constitution of India invoking the supervisory jurisdiction of the High Court, is not maintainable for the purpose of questioning the legality and
validity of an order passed by the Arbitral Tribunal.
9 We quote the relevant observations made by the learned Single Judge declining to entertain the writ application as under:
“9. Having heard the learned advocates for the respective parties and having gone through the materials on record, the short question which arises
for consideration is whether the impugned order dated 1st October, 2017 passed by respondent no.2 arbitrator can be challenged by way of certiorari
under Articles 226 and
227 of the Constitution of India or not?
The issue is no more res integra as in case of GTPL Hathway Ltd. v. Strategic Marketing Pvt. Ltd in Special Civil Application No.4524/2019
rendered on 20.04.2020 this Court has held as under :
“14. In view of aforesaid conspectus of law, and considering the provisions of the Act, 1996, the order passed by the Arbitration Tribunal during
the course of Arbitration cannot be challenged by the petitioner under Articles 226 and/or 227 of the Constitution of India when the constitution bench
of the Apex Court in case of M/s. S.B.P. And Co. v. M/s. Patel Engineering Ltd. And Anr. (supra) has disapproved the stand that any order passed
by the Arbitral Tribunal is capable of being corrected by the High Court under Articles 226 and 227 of the Constitution of India and has categorically
held that such intervention by the High Court is not permissible. The Apex Court in case of M/s. Deep Industries Limited v. Oil and Natural Gas
Corporation (supra) has held that it is also importan t to notice that the seven Judge Bench has referred to the object of the Act being that of
minimizing judicial intervention and that this important object should always be kept in the forefront when a 227 petition is being disposed of against
proceedings that are decided under the Act,1996 and that the policy of the Act is speedy disposal of arbitration cases as the Act,1996 is ‘self
contained’ Code and deals with all the cases.
In view of aforesaid settled legal proposition, considering the policy, object and the provisions of the Act,1996, an order passed during arbitration
proceedings by the Arbitration Tribunal cannot be challenged under Articles 226 and 227 of the Constitution of India as the Act,1996 is a special act
and a self contained code dealing with arbitration. Therefore, the impugned order of the Arbitration Tribunal deciding the preliminary objection raised
by the petitioner cannot be challenged under Article 226 or 227 of the Constitution of India.
In view of foregoing reasons, the petition fails and is accordingly dismissed. It is, however, made clear that the petition is dismissed without
entering into merits of the matter, only on the ground that the order passed during course of arbitration cannot be challenged under Articles 226 and/or
227 of the constitution of India and it would be open for both the sides to raise all the contentions on merits before the appropriate forum in appropriate
proceeding at appropriate time in accordance with law. Interim relief, if any stands vacated. Rule is discharged with no order as to costs.â€
In view of aforesaid discernment of law, the decisions relied upon by both the sides are not required to be discussed at length as impugned order
dated 1st October, 2017 passed by respondent no.2 arbitrator during the arbitration proceedings cannot be challenged by way of certiorari by invoking
extra ordinary jurisdiction under Articles 226 and/or 227 of the Constitution of India.
In view of the foregoing reasons, the petitions fail and are accordingly dismissed. It is, however, made clear that the petitions are dismissed without
entering into merits of the matter, only on the ground that the order passed during course of arbitration proceedings cannot be challenged under
Articles 226 and/or 227 of the constitution of India and it would be open for both the sides to raise all the contentions on merits before the appropriate
forum in appropriate proceeding at appropriate time in accordance with law. Interim relief, if any stands vacated. Rule is discharged with no order as
to costs.â€
10 Being dissatisfied with the impugned judgement and order passed by the learned Single Judge, the appellant (original writ applicant) is here before
this Court with the present appeal.
● SUBMISSIONS ON BEHALF OF THE APPELLANT:
11 Mr. Kamal Trivedi, the learned senior counsel assisted by Mr. Abhishek M. Mehta, the learned counsel appearing for the appellant vehemently
submitted that the learned Single Judge committed a serious error in declining to entertain the writ application on the ground of its maintainability. Mr.
Trivedi would submit that not only a writ application under Article 226 of the Constitution is maintainable for the purpose of questioning the legality and
validity of any order passed by an Arbitral Tribunal, but as the Arbitral Tribunal exercises judicial powers and has all the trapping of a Court is subject
to the superintendence of the High Court under Article 227 of the Constitution of India. Mr. Trivedi would submit that the Arbitral Tribunal or other
Tribunals are subordinate to the High Courts, and in such circumstances, the High Court has the power under Article 227 of the Constitution of India
over such Arbitral Tribunals.
12 Mr. Trivedi would submit that a very important point came to be raised before the Arbitral Tribunal going to the root of the jurisdiction of the
Arbitral Tribunal itself to proceed further with the arbitration proceedings, and if such an important issue is decided one way or the other by the
Arbitral Tribunal, it is always subject to the challenge before the High Court either by invoking the writ jurisdiction under Article 226 of the
Constitution of India or the supervisory jurisdiction under Article 227 of the Constitution of India. Mr. Trivedi would argue that the entire approach of
the learned Single Judge in declining to entertain the writ application on the ground of its maintainability is not in conformity with the settled principles
of law.
13 Mr. Trivedi very vehemently submitted that the supervisory jurisdiction of the High Court under Article 227 of the Constitution of India is exercised
for keeping the subordinate Courts and Tribunals within the bounds of their jurisdiction. When a subordinate Court or Tribunal assumes jurisdiction
which it does not have or fails to exercise jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a
manner not permitted by law and leads to failure of justice, or grave injustice has occasioned thereby, then the High Court may be justified to exercise
its supervisory jurisdiction. Mr. Trivedi would submit that undoubtedly, the High Court cannot convert itself into a Court of appeal, but can only
interfere when there is an error of jurisdiction. Mr. Trivedi would submit that the very issue of the jurisdiction of the Arbitral Tribunal was raised in the
application preferred under Section 16 of the Act, 1996, and the same came to be rejected by the Arbitral Tribunal. The issue going to the root of the
matter ought to have been looked into by the learned Single Judge in exercise of its writ jurisdiction under Article 226 or supervisory jurisdiction under
Article 227 of the Constitution, however, the learned Single Judge could not have taken the view that a petition in any form before the High Court
questioning the legality and validity of any order passed by the Arbitral Tribunal is not maintainable.
14 Mr. Trivedi drew a fine distinction between a petition either under Article 226 or 227 of the Constitution of India being not maintainable and a
petition either under Article 226 or 227 of the Constitution of India challenging an order passed by the Arbitral Tribunal which ordinarily should not be
entertained. In other words, the argument of Mr. Trivedi is that any order of any authority can be challenged by invoking the writ jurisdiction under
Article 226 of the Constitution of India, except the orders passed by the Civil Courts, and in the same manner, if it is an order passed by any Tribunal
subordinate to the High Court, then such order can be questioned even by invoking the supervisory jurisdiction under Article 227 of the Constitution of
India. According to Mr. Trivedi, it is altogether a different question that the learned Single Judge declines to interfere with the impugned order passed
by the Arbitral Tribunal in exercise of its writ jurisdiction or supervisory jurisdiction on merits, but the learned Single Judge cannot say that a petition in
any form against an order of the Arbitral Tribunal is not maintainable at all in law.
15 Mr. Trivedi pointed out that the learned Single Judge, while holding that the petition in any form questioning any order passed by an Arbitral
Tribunal, is not maintainable, has placed strong reliance on the Constitution Bench decision of the Supreme Court in the case of SBP and company vs.
Patel Engineering Limited and another reported in (2005) 8 SCC 618. Mr. Trivedi pointed out that in the said case before the Supreme Court, it was
held that the Chief Justice or his delegatee exercising powers under Section 11(6) of the Act, 1996, exercises judicial powers and not administrative
powers. Mr. Trivedi would submit that in the said case, the Apex Court undoubtedly held that the High Court should not interfere with each and every
order passed by the Arbitral Tribunal and judicial intervention should be minimal, but the Apex Court did not lay down that the High Court had no
power to intervene.
16 Mr. Trivedi submitted that the entire law on the subject over a period of time has developed keeping in mind the principles enunciated by the
Supreme Court in the case of SBP and company (supra). Mr. Trivedi would submit that the ratio of the decision of the Supreme Court in the SBP and
company (supra) is being misconstrued.
17 Mr. Trivedi invited our attention to the observations made by the Supreme Court in para 46 of the SBP and company (supra). Mr. Trivedi invited
our attention to paragraph 46, which reads thus:
“The object of minimizing judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High
Court could be approached under Article 227 or under Article 226 of the Constitution of India against every order made by the arbitral tribunal.
Therefore, it is necessary to indicate that once the arbitration has commenced in the arbitral tribunal, parties have to wait until the award is
pronounced unless, of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage.â€
18 Mr. Trivedi laid much emphasis on the words “every orderâ€. According to Mr. Trivedi, all that has been conveyed by the Supreme Court in
SBP and company (supra) is that the judicial intervention while the matter is in the process of being arbitrated upon should be minimal, otherwise the
object of minimizing the judicial intervention would be defeated. The Supreme Court, according to Mr. Trivedi, has very carefully observed that the
object of minimizing the judicial intervention would be defeated, if the High Court could be approached under Article 227 or under Article 226 of the
Constitution of India against every order made by the Arbitral Tribunal. According to Mr. Trivedi, there could be an order like the one passed by the
Arbitral Tribunal in the present case going to the root of the issue of jurisdiction, which the High Court may be justified in looking into and adjudicating
the same.
19 Mr. Trivedi, in the last, submitted that it would be too much to say that the issue with regard to the jurisdiction of the Arbitral Tribunal to proceed
with the arbitration may be raised by the appellant herein in appeal under Section 34 of the Act, if, ultimately, the award goes against the appellant.
20 Mr. Trivedi, the learned senior counsel appearing for the appellant has placed reliance on the following case law to fortify his aforenoted
submissions:
[1] M/s. Deep Industries Limited vs. Oil and Natural Gas Corporation Limited [Civil Appeal No.9106 of 2019 decided on 28th November 2019]
[2] Punjab Agro Industries Corporation Limited vs. Kewalsingh Dhillon reported in (2008) 10 SCC 128
[3] SBP and company vs. Patel Engineering Limited reported in (2005) 8 SCC 618
[4] KKR India Financial Services Limited vs. Axis Bank Limited [Special Civil Application No.18466 of 2019 decided on 5th March 2020]
21 In such circumstances referred to above, Mr. Trivedi, the learned senior counsel prays that there being merit in his appeal, the same may be
allowed and the impugned judgement and order passed by the learned Single Judge be quashed and set aside. Mr. Trivedi prays that as the learned
Single Judge rejected the petition only on the ground of its maintainability without going into the merits of the matter, the matter may be remitted to the
learned Single Judge for being considered on merits after holding that the petition is maintainable in law.
● SUBMISSIONS ON BEHALF OF THE RESPONDENT NO.3:
22 Mr. Chirag K. Sukhwani, the learned counsel appearing for the contesting respondent No.3 has vehemently opposed this appeal. Mr. Sukhwani
would submit that no error, not to speak of any error of law could be said to have been committed by the learned Single Judge while declining to
entertain the petition on the ground of its maintainability.
23 Mr. Sukhwani would submit that the law on the subject developed over a period of time makes it abundantly clear that any order passed by the
Arbitral Tribunal cannot be questioned before the High Court either under Article 226 of the Constitution or Article 227 of the Constitution. Mr.
Sukhwani would submit that this issue was set at rest by the Supreme Court way back in the year 2005 in the case of SBP and company (supra),
wherein the Supreme Court, in no uncertain terms, has held that where the Arbitral Tribunal holds that it has jurisdiction, it shall continue with the
arbitral proceedings and make an arbitral award. Mr. Sukhwani pointed out that the Supreme Court proceeded to further observe that remedy
available to the party aggrieved is to challenge the award in accordance with Section 34 or Section 37 of the Act.
24 Mr. Sukhwani, in support of his aforenoted submissions, has placed reliance on the following case law:
[1] SBP and company vs. Patel Engineering Limited reported in (2005) 8 SCC 618.
[2] Sterling Industries vs. Jayprakash Associates and others reported in AIR 2019 SC 3558.
25 In such circumstances referred to above, Mr. Sukhwani prays that there being no merit in this appeal, the same may be dismissed.
● ANALYSIS:
26 Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question of law that falls for
our consideration is as under:
“Whether the High Court can exercise its writ jurisdiction under Article 226 or the power of superintendence vested in it under Article 227 of the
Constitution of India over the Arbitral Tribunals constituted under the provisions of the Arbitration and Conciliation Act, 1996?â€
27 Under Article 226 of the Constitution of India, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain
a writ petition. The power of the High Court to issue prerogative writs is wide. The Constitution does not place any limitation on such power.
However, the Courts have, through judicial pronouncements, evolved self imposed restrictions on the exercise of power by the writ Court. When an
efficacious alternative remedy is available, the High Court does not normally exercise jurisdiction. There are certain well-recognised exceptions where
the bar of alternative remedy does not apply. Where the authority has acted without jurisdiction, the High Court should not refuse to exercise its
jurisdiction under Article 226 of the Constitution on the ground of an alternative remedy, as held in the Kuntesh Gupta vs. Management of Hindu
Kanya Mahavidyalaya, Sitapur, U.P. and Ohers reported in 1987 (4) SCC 525. The complete lack of jurisdiction of an authority to take the impugned
action, could be a good ground to entertain a writ petition. Moreover, as held by the Supreme Court in the State of U.P and Others vs. Indian Hume
Pipe Co. Ltd, reported in AIR 1977 SC 1132, there is no rule of law that the High Court should not entertain a writ petition when an alternative
remedy is available to a party. It is always a matter of discretion with the Court.
28 The law is extremely well settled that the powers of superintendence vested in the High Courts under Article 227 are not confined to administrative
superintendence but include the power of judicial review also. A reference in this behalf may be made to the decision of the Apex Court in D.N.
Banerjee vs. P.R.Mukherjee reported in AIR 1953 SC 58, which is the locus classicus on the subject.
29 The supervisory jurisdiction under Article 227 is exercised for keeping the subordinate Courts and Tribunals within the bounds of their jurisdiction.
When a subordinate Court or Tribunal assumes jurisdiction which it does not have or fails to exercise jurisdiction which it does have or the jurisdiction
though available is being exercised by the Court in a manner not permitted by law and leads to failure of justice, or grave injustice has occasioned
thereby, then the High Court must step into exercise its supervisory jurisdiction. The High Court cannot convert itself into a Court of appeal and start
reappreciating the evidence but can only interfere when there is an error of jurisdiction. The powers under Article 227 are very wide and can be used
to secure the ends of justice and to ensure that people have faith in the judicial system. However, this power must be exercised sparingly to keep the
subordinate Courts and Tribunals within the bounds of their authority and not to correct mere errors committed by them. With regard to the inferior
tribunals, it has been held in a number of cases that the High Court can quash or set-aside the decision of an inferior tribunal in case the order has
been passed without jurisdiction or is against the principles of natural justice or the Tribunal fails to exercise jurisdiction vested in it by law. Though
every error is not to be corrected but if there is dereliction of duty or flagrant violation of law then the High Court must exercise its jurisdiction.
Therefore, when a Tribunal does not exercise jurisdiction or acts in a manner which will sully the image of the judicial process or gives findings which
are perverse then the High Court can and must exercise its powers of superintendence.
30 A seven Judge Bench of the Apex Court in Hari Vishnu Kamath vs. Ahmad Ishaque and others reported in AIR 1955 SC 233 held that the
election tribunals were subject to the powers of superintendence of the High Court under Article 227 of the Constitution of India and further that the
powers of superintendence were both judicial as well as administrative.
31 As held by the Apex Court in Engineering Mazdoor Sabha and another vs. Hind Cycles Ltd reported in AIR 1963 SC 87,4 the Tribunals have to
act judicially and reach their decisions in an objective manner and they cannot proceed purely administratively or base their conclusions on subjective
tests or inclinations. The procedural rules which regulate the proceedings before the Tribunals and the powers conferred on them in dealing with
matters brought before them are sometimes described as the ‘trappings of a court’ and in determining the question as to whether a particular
body or authority is a Tribunal or not, sometimes a rough and ready test is applied by enquiring whether the said body or authority is clothed with the
trapping of a court.
32 In Associated Cement Companies Ltd. vs. P.N. Sharma and another reported in AIR 1965 SC 159,5 a Constitution Bench of the Apex Court,
while dealing with the word ‘Tribunal’ as occurring in Article 136(1), held as follows:
“9. … Judicial functions and judicial powers are one of the essential attributes of a sovereign State and on considerations of policy, the State
transfers its judicial functions and powers mainly to the Courts established by the Constitution but that does not affect the competence of the State by
appropriate measures to transfer a part of its judicial powers and functions to tribunals by entrusting to them the task of adjudicating upon special
matters and disputes between parties. It is really not possible or even expedient to attempt to describe exhaustively the features which are common to
the tribunals and the Courts and features which are distinct and separate. The basic and the fundamental feature which is common to both the Courts
and the tribunals is that they discharge judicial functions and exercise judicial powers which inherently vest in a sovereign State.â€
33 The Apex Court in Manmohan Singh Jaitla vs. Commissioner, Union Territory, Chandigarh and others reported in AIR 1985 SC 364 was dealing
with the question as to whether the statutory authorities vested with the quasi judicial powers of deciding the service appeals of the teachers under the
Punjab Aided Schools (Security of Service) Act are amenable to the powers of superintendence under Article 227. The Apex Court held as follows:
“7. The High Court declined to grant any relief on the ground that an aided school is not ‘other authority’ under Article 12 of the Constitution
and is therefore not amenable to the writ jurisdiction of the High Court. The High Court clearly overlooked the point that Deputy Commissioner and
Commissioner are statutory authorities operating under the 1969 Act. They are quasi judicial authorities and that was not disputed. Therefore, they will
be comprehended in the expression ‘Tribunal’ as used in Article 227 of the Constitution which confers power of superintendence over all courts
and tribunals by the High Court throughout the territory in relation to which it exercises jurisdiction. Obviously, therefore, the decision of the statutory
quasi judicial authorities which can be appropriately described as tribunal will be subject to judicial review namely a writ of certiorari by the High Court
under Article 227 of the Constitution.â€
34 We have no doubt in our mind that an Arbitral Tribunal would come within the purview of Article 227 of the Constitution of India. In other words,
an Arbitral Tribunal under the Act, 1996 is a Tribunal within the meaning of Article 227 of the Constitution of India as the Act, 1996 has conferred
upon such Tribunal the inherent judicial power of the State.
35 The Supreme Court in Srei Infrastructure Finance Ltd. vs. Tuff Drilling (P) Ltd reported in (2018) 11 SCC 470 observed thus:
“13. The law of Arbitration was earlier governed by the Arbitration Act, 1940. The Law Commission of India and several other organisations
expressed opinion that the 1940 Act needs extensive amendments to make it more responsive to contemporary requirements. In the wake of rise in
commercial litigation both at domestic and international level, a need was felt for a comprehensive law to deal the subject. The United Nations
Organisation on International Trade Law (UNCILTRAL) adopted a Model Law on International Commercial Arbitration in the year 1985. Taking into
consideration domestic arbitration as well as international commercial arbitration, Parliament enacted the Arbitration and Conciliation Act, 1996. Main
objective for introducing the legislation was to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the
specific arbitration. In Section 2 of the Act, arbitral tribunal has been defined to mean a sole arbitrator or a panel of arbitrators. The arbitral tribunal
was entrusted with various statutory functions, obligations by the enactment.
The arbitration is a quasi judicial proceeding, equitable in nature or character which differs from a litigation in a Court. The power and functions of
arbitral tribunal are statutorily regulated. The tribunals are special arbitration with institutional mechanism brought into existence by or under statute to
decide dispute arising with reference to that particular statute or to determine controversy referred to it. The tribunal may be a statutory tribunal or
tribunal constituted under the provisions of the Constitution of India. Section 9 of the Civil Procedure Code vests into the Civil Court jurisdiction to
entertain and determine any civil dispute. The constitution of tribunals has been with intent and purpose to take out different categories of litigation into
the special tribunal for speedy and effective determination of disputes in the interest of the society. Whenever, by a legislative enactment jurisdiction
exercised by ordinary civil court is transferred or entrusted to tribunals such tribunals are entrusted with statutory power. The arbitral tribunals in the
statute of 1996 are no different, they decide the lis between the parties, follows Rules and procedure conforming to the principle of natural justice, the
adjudication has finality subject to remedy provided under the 1996 Act. Section 8 of the 1996 Act obliges a judicial authority in a matter which is a
subject of an agreement to refer the parties to arbitration. The reference to arbitral tribunal thus can be made by judicial authority or an arbitrator can
be appointed in accordance with the arbitration agreement under Section 11 of the 1996 Act.
There cannot be a dispute that the power exercised by the arbitral tribunal is a quasi-judicial. In view of the provisions of the 1996 Act, which
confers various statutory powers and obligations on the arbitral tribunal, we do not find any such distinction between the statutory tribunal constituted
under the statutory provisions or Constitution in so far as the power of procedural review is concerned. We have already noticed that Section 19
provides that arbitral tribunal shall not be bound by the rules of procedure as contained in Civil Procedure Code. Section 19 cannot be read to mean
that arbitral tribunal is incapacitated in drawing sustenance from any provisions of Code of Civil Procedure. This was clearly laid down in Nahar
Industrial Enterprises Limited Vs. Hong Kong and Shanghai Banking Corporation, (2009) 8 SCC 646. In Paragraph 98(n), following was stated:-
“(n) It is not bound by the procedure laid down under the Code. It may however be noticed in this regard that just because the Tribunal is not
bound by the Code, it does not mean that it would not have jurisdiction to exercise powers of a court as contained in the Code.
“Rather, the Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its powers is to observe the principles of
natural justice.†(See Industrial Credit and Investment Corpn. of India Ltd. v. Grapco Industries Ltd. (1999) 4 SCC 710))â€
36 The scope of powers of superintendence vested in the High Court under Article 227 of the Constitution of India again came up for consideration in
Shalini Shyam Shetty and another vs. Rajendra Shankar Patil reported in (2010) 8 SCC 32.9 The Apex Court, after detailed exposition of the entire
law on the subject, held as follows:
“47. The jurisdiction under Article 227 on the other hand is not original nor is it appellate. This jurisdiction of superintendence under Article 227 is
for both administrative and judicial superintendence. Therefore, the powers conferred under Articles 226 and 227 are separate and distinct and
operate in different fields. Another distinction between these two jurisdictions is that under Article 226, High Court normally annuls or quashes an
order or proceeding but in exercise of its jurisdiction under Article 227, the High Court, apart from annulling the proceeding, can also substitute the
impugned order by the order which the inferior tribunal should have made. {See Surya Dev Rai, SCC page 690, para 25 and also the decision of the
Constitution Bench of this Court in Hari Vishnu Kamath vs. Ahmad Ishaque and others - [AIR 1955 SC 233, para 20 page 243]}.
The jurisdiction under Article 226 normally is exercised where a party is affected but power under Article 227 can be exercised by the High Court
suo motu as a custodian of justice. In fact, the power under Article 226 is exercised in favour of persons or citizens for vindication of their
fundamental rights or other statutory rights. The jurisdiction under Article 227 is exercised by the High Court for vindication of its position as the
highest judicial authority in the State. In certain cases where there is infringement of fundamental right, the relief under Article 226 of the Constitution
can be claimed ex-debito justicia or as a matter of right. But in cases where the High Court exercises its jurisdiction under Article 227, such exercise
is entirely discretionary and no person can claim it as a matter of right. From an order of a Single Judge passed under Article 226, a Letters Patent
Appeal or an intra Court Appeal is maintainable. But no such appeal is maintainable from an order passed by a Single Judge of a High Court in
exercise of power under Article 227. In almost all High Courts, rules have been framed for regulating the exercise of jurisdiction under Article 226.
No such rule appears to have been framed for exercise of High Court's power under Article 227 possibly to keep such exercise entirely in the domain
of the discretion of High Court.
On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the
Constitution may be formulated:
(a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by High Court under
these two Articles is also different.
(b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is
substantially different from the history of conferment of the power of Superintendence on the High Courts under Article 227 and have been discussed
above.
(c) High Courts cannot, at the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders
of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of Court or tribunal subordinate to it.
In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the
High Court.
(d) The parameters of interference by High Courts in exercise of their power of superintendence have been repeatedly laid down by this Court. In this
regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh (supra) and the principles
in Waryam Singh (supra) have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court.
(e) According to the ratio in Waryam Singh (supra), followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can
interfere in order only to keep the tribunals and Courts subordinate to it, `within the bounds of their authority’.
(f) In order to ensure that law is followed by such tribunals and Courts by exercising jurisdiction which is vested in them and by not declining to
exercise the jurisdiction which is vested in them.
(g) Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent
perversity in the orders of tribunals and Courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles
of natural justice have been flouted.
(h) In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than
the one taken by the tribunals or Courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised.
(i) The High Court's power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of the basic structure
of the Constitution by the Constitution Bench of this Court in the case of L. Chandra Kumar vs. Union of India & others, and therefore abridgement
by a Constitutional amendment is also very doubtful.
(j) It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code
(Amendment) Act, 1999 does not and cannot cut down the ambit of High Court's power under Article 227. At the same time, it must be remembered
that such statutory amendment does not correspondingly expand the High Court's jurisdiction of superintendence under Article 227.
(k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu.
(l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this Article is
to keep strict administrative and judicial control by the High Court on the administration of justice within its territory.
(m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of
justice in such a way as it does not bring it into any disrepute. The power of interference under this Article is to be kept to the minimum to ensure that
the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the
functioning of the tribunals and Courts subordinate to High Court.
(n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed
for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual
grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above.
(o) An improper and a frequent exercise of this power will be counter-productive and will divest this extraordinary power of its strength and vitality.â€
37 We shall now look into the decision of the Supreme Court in the case of SBP and company (supra). In SBP and company (supra), the Supreme
Court held that the Chief Justice or his delegatee, exercising powers under Section 11(6) of the Act, 1996, exercises judicial powers and not
administrative powers. The question whether the High Court can exercise power of superintendence under Article 227 or the writ jurisdiction under
Article 226 of the Constitution of India in case of Arbitral Tribunal was also considered in this case. The Apex Court held as follows:
“45. It is seen that some High Courts have proceeded on the basis that any order passed by an arbitral tribunal during arbitration, would be capable
of being challenged under Article 226 or 227 of the Constitution of India. We see no warrant for such an approach. Section 37 makes certain orders
of the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating its grievances against the award including any
in-between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the
arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the
scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the
occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral
tribunal. It will still be a forum chosen by the parties by agreement. 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. Such an
intervention by the High Courts is not permissible.
The object of minimizing judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court
could be approached under Article 227 or under Article 226 of the Constitution of India against every order made by the arbitral tribunal. Therefore, it
is necessary to indicate that once the arbitration has commenced in the arbitral tribunal, parties have to wait until the award is pronounced unless, of
course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage.â€
38 The majority view in the SBP and company (supra) is that once the matter reaches the Arbitral Tribunal or the sole Arbitrator, the High Court
should not interfere with the orders passed by the Arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties
should approach the Court only in the terms of Section 37 of the Act or in terms of Section 34 of the Act. In other words, where the Arbitral Tribunal
holds that it has jurisdiction, it shall continue with the arbitral proceedings and make an arbitral award.
39 Thus, our understanding of the ratio of the Supreme Court decision in SBP and company (supra) is that the High Court should not interfere with
each and every order passed by the Arbitral Tribunal and judicial intervention should be minimal. We find it difficult to take the view interpreting the
SBP and company (supra) that the High Court has no power at all to intervene either in exercise of its writ jurisdiction or supervisory jurisdiction under
Article 227 of the Constitution of India with any of the orders that may be passed by the Arbitral Tribunal or the Arbitrator.
40 There is a fine distinction between the maintainability and entertainability of a writ petition under Article 226 of the Constitution or a petition under
Article 227 of the Constitution in arbitration matters. Maintainability is not synonymous to entertainability. This position of law has been well explained
by the Supreme Court in Hari Vishnu Kamath vs. Ahmed Ishaque reported in 1955 AIR 233. In the said case, the question that arose before the
Supreme Court was, as to whether the High Court had the jurisdiction to entertain a Writ Petition for the issue of a Writ of Certiorari against the order
of Election Tribunal constituted under the Representation of People's Act, 1951, as it stood in 1955, deciding an election dispute. Placing reliance on
Article 329 of the Constitution, it was contended before the Supreme Court that as an election to the Parliament or State Legislature could be
challenged only by means of an Election Petition, petition under Article 226 of the Constitution would not lie before the High Court for the issue of a
Writ of Certiorari against the decision of the Election Tribunal also. The Supreme Court negatived the contention. In doing so, the Supreme Court
pointed out that the bar created under Article 329 of the Constitution was against interfering in election matters and the said Article did not curtail the
power of the High Court under Article 226 of the Constitution to issue Writ of Certiorari to any Tribunal and the Election Tribunal was no exception.
The relevant portion of the Judgment reads:
The first question that arises for decision in this appeal is whether High Courts have jurisdiction under Article 226 to issue Writs against decisions
of Election Tribunals. That Article confers on High Courts power to issue appropriate writs to any person or authority within their territorial
jurisdiction, in terms absolute and unqualified, and Election Tribunals functioning within the territorial jurisdiction of the High Courts would fall within
the sweep of that power. If we are to recognise or admit any limitation on this power, that must be founded on some provision in the Constitution
itself.
41 In the aforenoted paragraph, the Supreme Court has emphatically laid down that any restriction on the power of the High Court under Article 226
of the Constitution, can be recognised only if it is incorporated in any of the provisions of the Constitution itself. In view of the above decision of the
Constitution Bench of the Supreme Court, it is clear that unless the jurisdiction of this Court under Article 226 of the Constitution stands curtailed by
any other provision of the Constitution, it cannot be said that a Petition under Article 226 of the Constitution does not lie or this Court has no
jurisdiction to interfere in arbitration matters. The principle laid down by the Supreme Court is that in respect of election matters, unless an
extraordinary case is made out in a given case, a petition under Article 226 of the Constitution should not be entertained. This clearly means that a
petition under Article 226 of the Constitution challenging the legality of actions taken or orders made in the course of an election to a local authority or
any other body on the ground of violation of law, is maintainable but should not be entertained by the High Court unless the violation of law made out is
such as would justify the interference under Article 226 of the Constitution immediately to prevent abuse of power and waste of public time and
money and the alternative remedy by way of Election Petition after the elections is not an efficacious remedy. The same principle of law should apply
even to the arbitration matters.
42 In the Union of India v. Varindera Constructions Ltd., (2018) 7 SCC 794, the Supreme Court held:-
“12. The primary object of the arbitration is to reach a final disposition in a speedy, effective, inexpensive and expeditious manner. In order to
regulate the law regarding arbitration, legislature came up with legislation which is known as Arbitration and Conciliation Act, 1996. In order to make
arbitration process more effective, the legislature restricted the role of courts in case where matter is subject to the arbitration. Section 5 of the Act
specifically restricted the interference of the courts to some extent. In other words, it is only in exceptional circumstances, as provided by this Act, the
court is entitled to intervene in the dispute which is the subject- matter of arbitration. Such intervention may be before, at or after the arbitration
proceeding, as the case may be. In short, court shall not intervene with the subject-matter of arbitration unless injustice is caused to either of the
parties.â€
43 The aforesaid observations of the Supreme Court have been quoted with approval in a recent pronouncement of the Supreme Court in the case of
M/s. ICOMM Tele Ltd. vs. Punjab State Water Supply and Sewarage Board and another [Civil Appeal No.2713 of 2019 decided on 11th March
2019].
44 However, the recent trend of case law is that the High Court should not interfere with any order passed by the Arbitral Tribunal. The same does
not mean that the petition itself is not maintainable. We may refer to and rely upon a recent order passed by the Supreme Court in the case of Sterling
Industries (supra). The same reads thus:
“1. Having heard learned counsel for the parties at length, we find that the judgment of the High Court is liable to be set aside on one ground alone.
The High Court entertained a writ petition under Article 227 of the Constitution of India against an order of the learned District Judge, Gautam Budh
Nagar purportedly passed under Section 20 of the Arbitration and Conciliation Act, 1996 (for short, ""the Arbitration Act"") read with Section 19 of the
Micro, Small & Medium Enterprises Development Act, 2006 (for short, ""the MSME Act""). This application was made to the District Judge by
respondent No. 1- Jayprakash Associates Ltd. against a partial award made under Section 16 of the Arbitration Act. Such an application was not
tenable vide Section 16 (6) of the Arbitration Act. Since such an application was not tenable, we fail to understand how in a writ petition filed against
an order made by the District Judge in an untenable application, the High Court could have set aside the partial award. This is clearly contrary to law.
This court in the case of SBP & Co. vs. Patel Engineering Ltd. & Anr., reported in (2005) 8 SCC 618 in Paragraph No. 45 held as follows.
45.It is seen that some High Courts have proceeded on the basis that any order passed by an arbitral tribunal during arbitration, would be capable of
being challenged under Article 226 or 227 of the Constitution of India. We see no warrant for such an approach. Section 37 makes certain orders of
the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating his grievances against the award including any in-
between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the
arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the
scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the
occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral
tribunal. It will still be a forum chosen by the parties by agreement. 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. Such an
intervention by the High Courts is not permissible.
In these circumstances, we are of the view that the judgment of the High Court is liable to be set aside. Ordered accordingly.â€
45 We shall now look into the four decisions, upon which, reliance has been placed on behalf of the appellant.
46 In M/s. Deep Industries Limited (supra), the Supreme Court observed as under:
“At the same time, we cannot forget that Article 227 is a constitution provision which remains untouched by the non- obstane clause of section 5 of
the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against the judgments allowing or
dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into
account the statutory policy as adumbrated by us herein above so that interference is restricted to orders that are passed which are patently lacking in
inherent jurisdiction.â€
47 The bare reading of the aforesaid observations of the Supreme Court makes it clear that it was a case which had travelled right upto the stage of
Section 37 of the Act. It is suggestive of the fact that an appeal was filed before the High Court against the order passed by the District Court under
Section 34 of the Act. In such circumstances, a petition under Article 227 of the Constitution of India would definitely be maintainable with a rider that
the High Court should be extremely circumspect in interfering with the same. In other words, the interference should be restricted to orders that are
passed, which are patently lacking any inherent jurisdiction. However, the ratio, as propounded in M/s. Deep Industries (supra) does not, in any
manner, dilute the principles propounded by the Supreme Court in the SBP and company (supra). This decision, in our opinion, is not in any manner
helpful to Mr. Trivedi, the learned senior counsel appearing for the appellant.
48 In Punjab Agro Industries Corporation (supra), the appellant had entered into a collaboration agreement with the respondent for setting up of a
project through a company to be jointly promoted by them. Certain disputes arose between the parties and the appellant by notice appointed its
Arbitrator and called upon the respondent to appoint his Arbitrator. As the respondent failed to comply, the appellant filed a petition under Section
11(4) of the Act, 1996 in the Court of the Civil Judge, Senior Division, Chandigarh (a designate of the Chief Justice of Punjab and Haryana High
Court). The said designate, by order dated 16th February 2002, dismissed the petition holding that the appointment of Arbitrator was not called for, as
the matter had already been decided by the Board for Industrial and Financial Reconstruction (for short, “BIFRâ€). Being aggrieved, the appellant
approached the High Court for quashing the order of the designate and for appointment of an Arbitrator in terms of the agreement. A Division Bench
of the High Court disposed of the said writ petition by the following short order:
The Petitioner is aggrieved by rejection of application for appointment of arbitrator under Section 11(4) of Arbitration and Conciliation Act, 1996.
Learned Counsel for the Respondent raises a preliminary objection that Writ Petition is not maintainable in view of judgment of Seven Judges of the
Hon'ble Supreme Court in S.B.P. & Co. Vs. Patel Engineering Ltd. - 2005 (8) SCC 618 wherein it has been held that power of deciding an application
for appointment of an arbitrator is judicial power and is not amenable to writ jurisdiction.
After hearing learned counsel for the parties, we uphold the preliminary objection and dismiss the Writ Petition. It is made clear that this will not debar
the Petitioner from taking such other remedy as may be available under the law.
49 The aforequoted order of the High Court was challenged in appeal by special leave, on the following grounds:
“(a) The order of the High Court is a non speaking order and it upholds the preliminary objection of the respondent without assigning any reason.
(b) A writ petition under Article 227 was maintainable against the order of the Civil Judge, Senior Division (designate of the Chief Justice) and the
High Court was wrong in assuming that the writ petition was not maintainable in view of the decision of this Court in SBP.â€
50 The Supreme Court, while allowing the appeal, held as under:
“8. We have already noticed that though the order under section 11(4) is a judicial order, having regard to section 11(7) relating to finality of such
orders, and the absence of any provision for appeal, the order of the Civil Judge was open to challenge in a writ petition under Article 227 of the
Constitution. The decision in SBP does not bar such a writ petition. The observations of this Court in SBP that against an order under section 11 of the
Act, only an appeal under Article 136 of the Constitution would lie, is with reference to orders made by the Chief Justice of a High Court or by the
designate Judge of that High Court. The said observations do not apply to a subordinate court functioning as Designate of the Chief Justice. This
Court has repeatedly stressed that Article 136 is not intended to permit direct access to this Court where other equally efficacious remedy is available
and the question involved is not of any public importance; and that this Court will not ordinarily exercise its jurisdiction under Article 136, unless the
appellant has exhausted all other remedies open to him. Therefore the contention that the order of the Civil Judge, Sr. Division rejecting a petition
under section 11 of the Act could only be challenged, by recourse to Article 136 is untenable. The decision in SBP did not affect the maintainability of
the writ petition filed by Appellant before the High Court.
We therefore allow this appeal and set aside the order of the High Court. As a consequence, Civil Writ Petition No.9889 of 2002 shall stand
restored to the file, and the High Court is requested to dispose it of in accordance with law.â€
51 The aforesaid decision, in the case of Punjab Agro Industries (supra) has laid down the same principle of law as explained in the case of M/s.
Deep Industries (supra).
52 KKR India Financial Services Limited (supra) is a Division Bench decision of this High Court to which one of us (J.B. Pardiwala, J.) is a party. In
the said case, the subject matter of challenge was an interim consent order passed by the Small Causes Court at Ahmedabad in a Commercial Civil
Suit instituted by the Axis Bank Limited against Sintex Company Limited. KKR India Financial Services Limited was not impleaded as one of the
defendants in the suit. The consent order obtained by the parties to the suit was hurting the KKR India Financial Services Limited. KKR had two
options available to it for the purpose of questioning the legality and validity of the consent order passed by the Small Causes Court at Ahmedabad.
The first option was to seek leave of the High Court to appeal against the consent order and the second option was to question the legality and validity
of the consent order by coming to the High Court invoking its supervisory jurisdiction under Article 227 of the Constitution of India. Having regard to
the gross facts of the case, the Division Bench of the High Court thought fit to entertain the application filed by the KKR India Financial Services
Limited under Article 227 of the Constitution of India by overruling the preliminary objection raised on behalf of the Axis Bank as regards the
alternative remedy available with the KKR India Financial Services Limited of filing an appeal after seeking leave from the High Court. While
deciding the matter, the Division Bench of this High Court considered various provisions of the law, more particularly, Article 227 of the Constitution
of India. This Court took the view that a petition under Article 227 of the Constitution of India was maintainable although the petitioner was not a party
in the suit proceedings. The Division Bench took the view that to prevent serious miscarriage of justice, it was necessary to interfere with the consent
order in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India.
53 At this stage, we once again go back to the impugned order passed by the learned Single Judge. At the cost of repetition, we once again
incorporate para 12 of the impugned order passed by the learned Single Judge, which reads thus:
“In view of the foregoing reasons, the petitions fail and are accordingly dismissed. It is, however, made clear that the petitions are dismissed
without entering into merits of the matter, only on the ground that the order passed during course of arbitration proceedings cannot be challenged
under Articles 226 and/or 227 of the constitution of India and it would be open for both the sides to raise all the contentions on merits before the
appropriate forum in appropriate proceeding at appropriate time in accordance with law. Interim relief, if any stands vacated. Rule is discharged with
no order as to costs.â€
54 It is apparent on plain reading of the para 12 quoted above that the learned Single Judge rejected the petition without entering into the merits of the
matter only on the ground that the order passed during the course of the arbitration proceedings cannot be challenged under Articles 226 and/or 227 of
the Constitution of India and it would be open for both the sides to raise all the contentions on merits before appropriate forum in appropriate
proceedings at an appropriate time in accordance with law. The learned Single Judge saying so held that the petitions were not maintainable in law.
55 To the aforesaid extent, we find it difficult to agree with the learned Single Judge. It would have been altogether a different matter if the learned
Single Judge would have said that having regard to the nature of the order passed by the Arbitral Tribunal, no case is made out for interference. The
learned Single Judge is very clear in his mind. The learned Single Judge says that His Lordship has not gone into the merits of the order passed by the
Arbitral Tribunal as no order passed by the Arbitral Tribunal can be questioned before the High Court either under Article 226 or 227 of the
Constitution as the petition itself is not maintainable.
56 Having taken the view that the writ application could be said to be maintainable against the order passed by the Arbitral Tribunal, we could have
quashed the order passed by the learned Single Judge and remitted the matter to the learned Single Judge. However, instead of remitting the matter,
this Court itself would like to hear the learned Senior Counsel appearing for the appellant on the merits of the impugned order passed by the Arbitral
Tribunal.
(VIKRAM NATH, CJ)
(J. B. PARDIWALA, J)
FURTHER ORDER
After the judgement was pronounced, a joint request was made by the learned counsel appearing for the respective parties that the matter may be
posted for further hearing on the merits of the impugned order passed by the Arbitral Tribunal in the next week. Post the matter for further hearing on
5th August 2020.