Bombay High Court
Business India Exhibitions Pvt Ltd And 2 ... vs Hon'Ble Arvind V. Savant (Retd. ... on 7 February, 2019
Bench: Naresh H. Patil, N.M. Jamdar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION(l) NO.256 OF 2019
Business India Exhibition Pvt. Ltd.
& ors. ... Petitioner
V/s.
Hon'ble Arvind V. Sawant (Retd. Justice)
& ors. ... Respondents
Mr. Rushabh Shah a/w. Mr.Shaikh Yusuf Ali, Mr. Chirag Bhatia &
Ms.Chaiti Desai I/b. Advani & co. for the petitioner.
Ms.Kshama Loya i/b. Nishith Desai Associates for respondent no.3.
CORAM :NARESH H. PATIL, C.J.
& N.M. JAMDAR, J.
7th February, 2019.
P.C. This writ petition filed under Article 226 and 227 is directed against the order passed by the learned Single Judge of this Court (Coram:B.P.Colabawalla,J) on 17th January 2019 in Arbitration Petition ::: Uploaded on - 13/02/2019 ::: Downloaded on - 16/03/2019 11:01:49 ::: 2/9 901wpl 256.19.doc No.555/2017 which is filed under Section 14(2) of the Arbitration & Conciliation Act, 1996 preferred by the petitioner.
2. On 9th July, 2008 the petitioners/claimants issued notice of arbitration to respondents. On 30th June 2014 respondents filed counter claim for breach of Debenture Share Subscription Agreement (DSSA), rescission and restitution under DSSA. On 12th September 2006 Tribunal allowed respondents' application under Section 16 for rejection of SOC. On 25th January 2017, the Tribunal allowed the claimants' application under Section 16 for rejection of respondent's counter claim.
3. On 2nd February 2017 respondents filed the application under Section 32(2)(a) of the Arbitration & Conciliation Act for an Award/Order for refund of USD 13.5 million. The said application is pending before the Tribunal.
4. On 14th February 2017 the claimants filed an application for termination of arbitration proceedings under Section 32(2)(c) of the Arbitration & Conciliation Act, 1996 stating therein that judgment has become functus officio. The Tribunal placed the matter for hearing on 14th April 2017.
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5. The documents placed on record reveal that one day prior to arbitration i.e. on 13th April 2017, claimants filed Writ Petition No. 1039 of 2017 in the High Court praying for deferring the proceedings which were scheduled on 14th April 2017. By an order dated 24 April 2017, the Division Bench (Coram: Shantanu S. Kemkar & B.P.Colabawalla,JJ) allowed the petitioners to withdraw the petition by passing following order:-
"The learned counsel for the Petitioner seeks leave to withdraw this Petition with liberty to take appropriate steps challenging the order impugned.
With the aforesaid liberty, Petition is allowed to be withdrawn.
As a result, Notice of Motion stands disposed of."
6. On 11th May 2017, the claimants filed another writ petition No.1391/2017 seeking to declare that the Tribunal has become functus officio. The matter was heard. By an order dated 18th July 2017 the Division Bench of this Court (Coram:Anoop V. Mohta & Smt. Anuja Prabhudessai,JJ) rejected the petition as not maintainable. Paragraphs 6,7 and 8 of the said order reads as under:-
"6. The scope of power under Article 226/227 of the Constitution of India, to interfere with arbitral proceedings against any order passed by the Arbitral Tribunal, is well defined. The Himachal Pradesh High ::: Uploaded on - 13/02/2019 ::: Downloaded on - 16/03/2019 11:01:49 ::: 4/9 901wpl 256.19.doc Court in case of M/s.P.K. Construction Co. & another v. Shimla Municipal Corporation and others has observed the same view that Writ is not maintainable. This Court also in Chhabildas s/o Tukaram Khadke Vs. Jalgaon Municipal Council & Ors. refused to entertain writ petition against the arbitral tribunal order. Even otherwise, once the scheme of Arbitration Act is recognized, accepted and provided all the remedies, there is no question to entertain any writ petition, pending such arbitral proceedings, specifically when, against such order, the remedy is available needs to be invoked. Present Petition, therefore, is rejected, at this stage itself, as not maintainable.
7. However, it is made clear that the remedy available to the Petitioner under the Arbitration Act be invoked. Accordingly, writ petition is dismissed with above stated liberty.
8. In view of the disposal of writ petition, nothing survives in the notice of motion. Notice of Motion No.302 of 2017 is also disposed of accordingly. No order as to costs.
7. On 12th July 2017 the Tribunal passed order rejecting the claimant's application and the matter was posted for further hearing on respondent's application dated 2nd February 2017 on 19th July 2017.
8. On 18th July 2017 the claimants filed an Arbitration Petition No.555/2017. On 19th July 2017 the Arbitration Petition was admitted and the arbitration proceedings were stayed. By an order dated 19th July 2017, the learned Single Judge of this Court passed ::: Uploaded on - 13/02/2019 ::: Downloaded on - 16/03/2019 11:01:49 ::: 5/9 901wpl 256.19.doc following order:-
" The matter requires consideration. Admit.
The Arbitration Petition to come up in due course."
9. The impugned order was passed on claimants' praying for interim order. The Counsel appearing for the petitioners submitted that once the claimants' claim and the respondents counter claim were disposed of as rejected, the Arbitral Tribunal becomes functus officio, the proceedings get terminated before the Tribunal and in such case no application of whatsoever nature interim or otherwise can be entertained as the provisions of arbitration act pending on the date, becomes non est and without any operation. In other words, the Counsel submits that in the event of rejection of claims of the contesting parties, the Tribunal considering the very jurisdiction thereof, has taken up pending applications. The petitioners, therefore, filed an application seeking order of the Tribunal under Section 32(2)
(c) which came to be rejected by the Tribunal on 12th July 2017.
10. As the Tribunal would be taking up application filed by respondents herein under Section 32(2)(a), in case any adverse order is passed, the Counsel submits that as the Tribunal lost its jurisdiction over the matter, the petitioner preferred an application under Section 14(2). On getting rejected the interim prayer, the petitioner having no ::: Uploaded on - 13/02/2019 ::: Downloaded on - 16/03/2019 11:01:49 ::: 6/9 901wpl 256.19.doc other statutory remedy under the Act of 1996 preferred this writ petition.
11. The learned Counsel appearing for respondents submitted and raised preliminary objection of maintainability of this petition by placing reliance on the case of Lalitkumar V. Sanghavi (dead) through LRs Neeta Lalit Kumar Sanghavi & anr. V/s. Dharamdas V. Sanghavi & ors. 1. and SBP & Co. v/s. Patel Engineering Ltd. & anr.2. In the case of Lalitkumar the Supreme Court in Paragraph 8 referring to the case of SBP & Co. observed as under:-
"8. Within a couple of weeks thereafter, the original applicant died on 7-10-2012. The question is whether the High Court is right in dismissing the application as not maintainable. By the judgment under appeal, the Bombay High Court opined that the remedy of the appellant lies in invoking the jurisdiction of the High Court under Article 226 of the Constitution. In our view, such a view is not in accordance with the law declared by this Court in SBP & Co. v. Patel Engg. Ltd. The relevant portion of the judgment reads as under:
(SCC p.663, para 45).
" 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 1 (2014) 7 Supreme Court Cases 255 2 (2005) 8 Supreme Court Cases 618 ::: Uploaded on - 13/02/2019 ::: Downloaded on - 16/03/2019 11:01:49 ::: 7/9 901wpl 256.19.doc 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......."
12. The Counsel submits that at every stage, the petitioners have tried to stall the proceedings of Tribunal and this is the 3rd writ petition filed by the petitioners which is to create impediment in the functioning of the Tribunal. The petitioners failed in the earlier two writ petitions which were preferred by the petitioners. The learned Counsel has drawn our attention to the scheme of the arbitration and has referred to relevant provisions of law. In the submissions of the Counsel, the Tribunal is entitled to hear the application filed by the respondents and pass an appropriate order. It is submitted that even if the Tribunal deals with the application pending before it and pass an ::: Uploaded on - 13/02/2019 ::: Downloaded on - 16/03/2019 11:01:49 ::: 8/9 901wpl 256.19.doc order, the petitioners if aggrieved, may resort to appropriate remedy as prescribed under the Act of 1996. The Counsel, therefore, urged that in exercise of writ jurisdiction challenge raised by the petitioners to an order passed by the learned Single Judge of this Court, shall not be entertained.
13. We have perused the record placed before us, the order passed by the learned Single Judge and considered the submissions advanced. The brief list of dates and events is placed before this Court.
14. We are not convinced with the submissions advanced by the learned Counsel appearing for the petitioners that the petition of this nature in the facts scenario of this case, is maintainable against an order passed by the learned Single Judge. The learned Single Judge has posted the matter on future dates by issuing necessary directions to the Tribunal for deciding the application as expeditiously as possible and has prescribed 8 weeks outer limit. That itself discloses that the petition filed by the petitioners which was admitted on 19th July 2017 by this Court is still kept pending and the matter is adjourned by the learned Single Judge. In view of the issues raised and the question of law, we find that the submissions advanced on behalf of learned Counsel appearing for respondent are convincing and taking prima-facie view of the case we are not convinced to exercise our writ jurisdiction in ::: Uploaded on - 13/02/2019 ::: Downloaded on - 16/03/2019 11:01:49 ::: 9/9 901wpl 256.19.doc entertaining this petition against an order passed by the learned Single Judge. This position is settled by the Hon'ble Supreme Court.
15. Primarily, the petition in our view, is not maintainable. Keeping the rights and contentions of the parties open, we dismiss this petition.
16. At this stage, the learned Counsel appearing for petitioners prays for stay of the order. The Learned Counsel for the respondents has objected the same. In the facts of the case, the prayer for stay stands rejected.
N.M.JAMDAR, J CHIEF JUSTICE
L.S. Panjwani, P.S.
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