Karnataka High Court
Smt. Tejavathamma vs Sri M Nataraj on 19 June, 2020
Author: H.P.Sandesh
Bench: H.P. Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU R
DATED THIS THE 19th DAY OF JUNE, 2020
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
WRIT PETITION NO.2121/2020 (GM-RES)
BETWEEN:
SMT TEJAVATHAMMA
AGED ABOUT 73 YEARS
W/O. LATE ESWARAIAH SETTY
NO.10/2, FORT 'E' STREET
KALASIPALYA
BENGALURU-560 002 ... PETITIONER
(BY SRI. MANJUNATH B.R, ADVOCATE)
AND:
1. SRI M. NATARAJ
AGED ABOUT 56 YEARS
S/O. LATE ESWARAIAH SETTY
2. SMT. M.N. NISCHALA
AGED ABOUT 54 YEARS
W/O. SRI. M. NATARAJ
BOTH ARE RESIDING AT
NO.103, 2ND CROSS
TATA SILK FARM
BASAVANAGUDI
BENGALURU-560 034
2
3. SRI M. SREENATH GUPTA
AGED ABOUT 54 YEARS
S/O. LATE ESWARAIAH SETTY
4. SMT UMA SRINATH
AGED ABOUT 48 YEARS
W/O. SRI. SREENATH GUPTA
BOTH ARE RESIDING AT NO.11/1
'D' STREET, FORT
KALASIPALYA
BENGALURU-560 002 ... RESPONDENTS
(BY SRI. K.S. VENKATA RAMANA, ADVOCATE
FOR CAVEATOR/R1 TO R4)
THIS WRIT PETITION IS FILED UNDER ARTICLE 227
OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE
THE IMPUGNED ORDER DATED 10.10.2019 PASSED IN
A.C.No.16/2019 PENDING ADJUDICATION BEFORE THE
ARBITRAL TRIBUNAL OF SHRI. S.S. NAGARALE, DISTRICT
JUDGE, (RETD) - SOLE ARBITRATOR AT ARBITRATION
AND CONCILIATION CENTER, BENGALURU.
THIS WRIT PETITION HAVING BEEN HEARD ON
MAINTAINABILITY AND RESERVED FOR ORDERS ON
15.06.2020, THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:-
ORDER
This writ petition is filed assailing the order passed by the Sole Arbitrator seeking the relief of Writ of Certiorari or any other writ or direction by setting aside the impugned order dated 10.10.2019 passed in 3 A.C.No.16/2019, questioning dismissal of the interlocutory application filed by the petitioner herein under Sections 33 and 34 of the Karnataka Stamp Act, 1957 read with Section 151 of the Code of Civil Procedure, 1908.
2. The brief facts leading to the case on hand is that, the petitioner herein is the mother, respondents No.1 and 3 are the sons of the petitioner and respondents No. 2 and 4 are the spouses of respondents No.1 and 3 and daughter-in-laws of the petitioner, respectively. The respondents herein had filed a suit for partition and separate possession in O.S.No.6774/2016 before the City Civil Court at Bengaluru, the same was referred to adjudicate by the Arbitrator since the alleged Joint Venture Agreements contains an arbitration clause. Hence, the respondents have filed A.C.No.16/2019 before the Sole Arbitrator.
3. The statement of objections and issues have been framed by the Sole Arbitrator and the respondents herein wanted to get the insufficiently stamped Joint 4 Venture Agreements dated 30.06.1991 and 10.07.1997, which are marked as Exs.C23 and C24. While marking the documents, the same are opposed by the learned counsel appearing for the petitioner hence, the same were marked as 'subject to objections'. The petitioner herein has filed an Interlocutory Application under Sections 33 and 34 of the Karnataka Stamp Act, 1957 read with Section 151 of the Code of Civil Procedure, 1908, seeking to impound the alleged Joint Venture Agreements, which is numbered as I.A.No.V. The Learned Arbitrator considering the application on merits vide order dated 10.10.2019, rejected the same.
4. The learned counsel appearing for the petitioner submits that the impugned order of rejection of application was challenged by filing M.A.No.29/2019 before the City Civil Court, Bengaluru and the same was withdrawn reserving liberty to the petitioner to approach the same before the appropriate forum, since the learned City Civil Judge was of the opinion that the City Civil Court 5 does not have jurisdiction. Hence, the present writ petition is filed.
5. Learned counsel appearing for the respondents raised a preliminary objection with regard to the maintainability of writ petition. He contends that on the basis of an order passed by the Arbitrator on Interlocutory Application, the writ petition is not maintainable. The learned counsel would submit that the Division Bench Judgment of this Court in the case of Radiant Infosystems Limited, Bangalore v. Karnataka State reported in AIR 2019 Karnataka 6, held that, against interlocutory order passed by Arbitrator in course of arbitral proceedings, writ petition is not maintainable.
6. Further, he also referred to the decision of the Division Bench of this Court in the case of Associated Constructions v. Dolomite Berhad - A. L. S. Limited (Jv) reported in LAWS(KAR) 2015 4324, has held that the writ petition is not maintainable referring paragraphs No.45 and 47 of the Judgment of the Apex Court in the 6 case of SBP & CO. v. Patel Engineering Ltd. and Another reported in 2005 (8) Supreme Court Cases
618. Hence, the petitioner cannot urge and seek any relief at the hands of this Court aggrieved by the order passed on interlocutory application.
7. The learned Counsel further would submit that, the Division Bench of this Court in W.P.No.37175/2013 (Mr.K.Satish Kumar v. M/s. Rohan Associates) also followed the dictum of Hon'ble Supreme Court in the case of SBP & CO.(supra), and held that the writ petition was not maintainable.
8. Per contra, learned counsel appearing for the petitioner made an endeavour to submit that the observations of the Hon'ble Supreme Court in the case of SBP & CO.(supra), which has been relied upon by this Court is of no use with regard to any challenge being made to an order of the learned Arbitrator therein and he tried to distinquish the decision of the Apex Court. 7
9. The learned counsel would contend that a right is accrued to the petitioner under Section 37 of the Arbitration and Conciliation Act, 1996 ('the Arbitration Act' for short). The order is an appealable order and referring to Section 37(2)(b), he would submit that, an appeal shall lie to a Court from an order of the arbitral Tribunal granting or refusing to grant an interim measure under Section 17.
10. The learned counsel also referring to Section 17 of the Arbitration Act, regarding interim measures ordered by arbitral tribunal, sub-clause (1)(i)(c) brought to the notice of this Court and would contend that a party may, during the arbitral proceedings or at any time after making of the arbitral award but before it is enforced in accordance with Section 36, apply to the arbitral tribunal and expedient for the purpose of obtaining full information or evidence. Hence, the writ petition is maintainable before the Court.
8
11. Having heard the arguments of learned counsel appearing for both the parties and perused the material placed on record, this Court has to examine as to whether the writ petition is maintainable as against the interlocutory order passed by Arbitrator in the course of arbitral proceedings.
12. Having heard the learned counsel appearing for both the parties and considering the contentions urged in the petition, which has already been mentioned while referring the brief facts of the case, the dispute arose between the parties with regard to marking of Joint Venture Agreements dated 30.06.1991 and 10.07.1997, as Exs.C23 and C24. This Court, with regard to merits of the writ petition cannot consider at this juncture since the question raised before this Court is as to whether the writ petition is maintainable or not. On the directions of this Court, a memo has been filed and a copy of the examination-in-chief of CW.1 recorded in A.C.No.16/2019 is also produced for kind consideration of this Court. By 9 assailing marking of the documents - Exs.C23 and C24, an application is filed before the Arbitrator, which is numbered as I.A.No.V under Sections 33 and 34 of the Karnataka Stamp Act, 1957 read with Section 151 of the Code of Civil Procedure, 1908 and the prayer sought in the application is to impound the Joint Venture Agreements dated 30.06.1991 and 10.07.1997 and direct the claimants to pay duty and penalty as enshrined under Section 33 and 34 and other provisions of the Karnataka Stamp Act, 1957. The same was resisted by claimant No.1 by filing objections contending that those documents are properly stamped and proper duty paid by the parties. Those applications and objections are annexed as Annexures 'F' and 'G' to this writ petition. The Sole Arbitrator considering the matter on merits, dismissed I.A.No.V. Hence, the present writ petition is filed.
13. It has to be noted that there is no dispute before this Court that an interlocutory application filed before the Sole Arbitrator was dismissed and the order 10 impugned in the present writ petition is an interlocutory order. The Division Bench of this Court in the case of Radiant Infosystems Limited, Bangalore v. Karnataka State (supra), has discussed in detail in paragraph No.13 of the Judgment and also referred the Judgment of the Apex Court in the case of SBP & CO. v. Patel Engineering Ltd. and Another (supra), and having expounded on the principles in relation to all the questions involved, it is held that Hon'ble Supreme Court summarized its point wise conclusions in paragraph No.47 of the decision aforesaid. The Division Bench also extracted the relevant part of such summation, applicable directly to the present case, as occurring in clause (vi) of paragraph 47, which reads as under:
"Once the matter reaches the Arbitral Tribunal or the Sole Arbitrator, the High Court would not interfere with the orders passed by the Arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the court only in terms of Section 37 of the Act or in terms of Section 34 of the Act." 11
14. The Division Bench had discussed in detail the said Judgment and had come to the conclusion that the writ jurisdiction will not interfere in an interlocutory order passed by the Arbitrator in the pending arbitral proceeding and this Court would like to refer to the relevant paragraph No.19, which reads as under:
"19. For what has been discussed hereinabove, we are clearly of the view that this Court in the writ jurisdiction will not interfere in an interlocutory order passed by the Arbitrator in the pending arbitral proceeding; and that the party aggrieved may reserve its right to lay a challenge to such an interlocutory order, if and when it suffers an adverse award."
15. The Division Bench of this Court in the case of Associated Constructions v. Dolomite Berhad - A. L. S. Limited (Jv)(supra), in paragraph No.6 of the Judgment referred to the Judgment of the Apex Court in the case of SBP & CO. (supra) at paragraph No.45, made an observation that, it is a case of interim award or a final award passed by an Arbitrator, then the aggrieved party 12 has alternative remedy of approaching the appropriate Civil Court under Section 34 or the High Court under Section 37 of the Act as the case may be, but when an order passed by the learned Arbitrator is not in the nature of interim award, although no remedy is prescribed under the Act, that would not imply that the extraordinary original jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India could be invoked. The Division Bench in paragraph No.7 has held that the writ petition is not maintainable.
16. However, the learned counsel appearing for the petitioner though he admits in the arguments that as against the interlocutory order, the writ petition is not maintainable, referring to Section 37 and also referring to Section 17 of the Arbitration Act, he vehemently submits that granting or refusing to grant an interim measure under Section 17, an appeal shall lie to a Court from an order of the arbitral tribunal. In the case on hand, the learned counsel did not dispute the fact that he had 13 disputed the very marking of the documents and however 'subject to objections', the said documents are marked and thereafter interlocutory application is filed to impound the documents on the ground that the documents which are marked are not properly stamped. It has to be noted that, when the objection was raised, the arbitrator ought to have decided then and there itself the admissibility of the documents but the same has not been done. But the documents are marked as 'subject to objections'. In view of the submissions made by the learned counsel appearing for the petitioner, this Court would like to refer to Section 37(2)(b) of the Arbitration Act, which reads as under:
"37. Appealable orders. - (1) An appeal shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely, -
[(a) x x x x x
(b) x x x x x
(c) x x x x x (2) An appeal shall also lie to a Court from an order of the arbitral tribunal,-14
(a) x x x x x
(b) granting or refusing to grant an interim measure under section 17."
17. This Court also would like to refer to Section 17(2)(b) of the Arbitration Act, which reads as under:
"17. Interim measures ordered by arbitral tribunal.- (1) A party may, during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with Section 36, apply to the arbitral tribunal-
(i) x x x x x
(ii) x x x x x
(a) x x x x x
(b) x x x x x
(c) the detention, preservation or inspection of any property or thing which is the subject-
matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient 15 for the purpose of obtaining full information or evidence;"
18. Having taken note of Section 37 and Section 17 of the Arbitration Act, which read together no doubt an appeal, shall lie to a Court from an order of the arbitral tribunal granting or refusing to grant an interim measure under Section 17. On clear reading of Section 17, power is conferred to seek the interim measures by a party, during the arbitral proceedings or at any time after passing of the arbitral award before it is enforced in accordance with Section 36, apply to the arbitral tribunal for interim measures. Though, the learned counsel would submit that Section 17(1)(i)(c) comes to the aid of this petitioner that the interlocutory application filed by her is for the purpose of obtaining full information or evidence, the said contention cannot be accepted. Clause (c) of Section 17 (i) will not come to the aid of and the same is not pertaining to questioning the admissibility of the documents. Hence, the contention of the petitioner cannot be accepted. 16
19. Having considered the material available on record and also the rival contentions of both the parties, this Court has already pointed out that the order in question before this Court is an order on interlocutory application and in view of the decision of the Division Bench of this Court in the case of Radiant Infosystems Limited, Bangalore v. Karnataka State (supra), categorically held that, against interlocutory order passed by Arbitrator in course of arbitral proceedings, the writ petition is not maintainable. The same is also held by the Division Bench of this Court in the case of Associated Constructions v. Dolomite Berhad - A. L. S. Limited (Jv) (supra), by referring the principles laid down by the Apex Court in the case of SBP & CO. (supra), that the writ petition is not maintainable and further observed that once the matter reaches the Arbitral Tribunal or the Sole Arbitrator, the High Court would not interfere with the orders passed by the Arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 17 37 of the Act or in terms of Section 34 of the Act. It is also important to note that the party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under Section 37 of the Arbitration Act, has to wait until the award is passed by the Tribunal. It is further observed that, this appears to be the scheme of the Arbitration Act. It is further observed that the parties have to wait till disposal of the arbitration proceedings and aggrieved party may reserve its right to lay a challenge to such an interlocutory order, if and when it suffers an adverse award and set out the grounds by invoking Section 34 of the Arbitration Act. It is also important to note that, it is observed that, 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. It is further observed that, it is necessary that once the arbitration was commenced in the Arbitral Tribunal, parties have to wait until the order was 18 pronounced and they can question the same before the appropriate forum. Hence, it is clear that the writ petition is not maintainable before this Court as against the interlocutory order as held by this Court and Apex Court in the aforesaid Judgments. Hence, the writ petition is not maintainable before this Court.
20. In view of the discussions made above, I pass the following:
ORDER The writ petition is not maintainable against the interlocutory order. Consequently, the writ petition is dismissed.
Sd/-
JUDGE cp*