Gujarat High Court
Essar Bulk Terminal Limited vs Arcelormittal Nippon Steel India ... on 18 October, 2021
Author: B.N. Karia
Bench: B.N. Karia
C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10577 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE B.N. KARIA
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1 Whether Reporters of Local Papers may be allowed -YES-
to see the judgment ?
2 To be referred to the Reporter or not ? -YES-
3 Whether their Lordships wish to see the fair copy -NO-
of the judgment ?
4 Whether this case involves a substantial question -NO-
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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ESSAR BULK TERMINAL LIMITED
Versus
ARCELORMITTAL NIPPON STEEL INDIA LIMITED & 2 other(s)
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Appearance:
MR DEVEN PARIKH, SENIOR ADVOCATE WITH MR MIT S
THAKKAR(11223) for the Petitioner(s) No. 1
for the Respondent(s) No. 2,3
MR MIHIR THAKORE, SENIOR ADVOCATE AND MR NAVIN PAHWA,
SENIOR ADVOCATE WITH MR ADITYA J. PANDYA, ADVOCATE FOR
MR NIRAG N PATHAK(5622) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE B.N. KARIA
Date : 18/10/2021
CAV JUDGMENT
1. By preferring this petition, petitioner has challenged the order dated 15th July 2021 passed by the learned 13th Additional District Judge, Surat in Misc. Civil Appeal No. 19 of 2021 reversing the order dated 30th March 2021 passed in the Page 1 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 interim application filed under Order 39 Rule 1 and 2 of the Civil Procedure Code in Regular Civil Suit No. 96 of 2021 by the learned 8th Additional Civil Judge, Surat wherein learned Civil Judge confirmed the ex-parte interim order dated 2 nd March 20021 passed in pursuant to the interim application.
2. Short facts of the present case may be summarized as under:
2.1 As per the averments made by the petitioner, petitioner is providing cargo handling services to the Respondent No. 1 since May 2010 at the port terminal managed and operated by the Petitioner. An agreement was executed on 21 st February 2021 between the petitioner and the Respondent No. 1 along with all the amendments thereto from time to time, which governs the terms and conditions of such agreement. Pursuant to the CHA 2011, both the parties have also entered into a Service Level Agreement dated 28th August 2012 which was subsequently revised by way of the Service Level Agreement dated 01st April 2016 and respondent no.1 vested the management of the AMNS Jetties with the petitioner.
Thereafter, Petitioner applied for and procured in its name necessary certification under the ISPS Code from the Directorate General of Shipping, India in compliance with the guidelines of International Maritime Organization in respect of the AMNS Jetties. That, the petitioner is obliged under the ISPS Page 2 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 Code to inter-alia ensure that access to the port facility is controlled as per the Port Facility Security Plan, which was approved, stamped and verified by the Director General of Shipping, Government of India, which is a security sensitive and confidential document on account of its bearing on port and national security. It was the responsibility of the petitioner to ensure that the necessary documents are verified for authorised persons and vehicles, and a satisfaction is arrived at by the Security Team of the Petitioner whether such access be allowed in the ISPS Area in the interest of port and national security. That, the respondent no.1 illegally and without authorization from the petitioner instructed the respondent no.2 and respondent no.3 as well as other unknown persons to gain unauthorized and forced access into the areas of the AM/ NS Jetties which are subject to the security protocols prescribed under the ISPS Code and have a restricted access. Respondent No.1 breached the PFSP of the ISPS Area from 16 th February 2021 onwards, however, Petitioner issued a correspondence dated 18th February 2021 requiring the Respondent No. 1 to abstain from breaching the security protocol in the interest of the port and national security.
2.2 Being dissatisfied with the conduct of the respondents, petitioner filed a Civil Suit before the learned Judge of the Commercial and Civil Court, Surat seeking inter alia a Page 3 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 permanent injunction retraining the Respondents from accessing the ISPS Area without prior approval/authorization of the petitioner. That, the petitioner also filed an interim application seeking grant of ex-parte interim relief under Order 39 Rule 1 and 2 of the Code of Civil Procedure (herein after referred to as "the Code"). Learned Civil Judge, vide order dated 2nd March 2021 passed ex-parte interim relief in favour of the petitioner restraining the respondents from accessing the IPSP Area of AM/NS Jetties without prior approval of the Petitioner. The respondent no1 subsequently filed an application on 4th March 2021 under Order 39 Rule 4 read with Section 151 of the Code for vacation of the ex-parte interim relief granted in favour of the petitioner. Learned Civil Judge, after hearing the parties, was pleased to dismiss the application filed by the respondent no.1 vide order dated 15 th March 2021. In the said suit, respondents filed separate application on 4th March 2021 under Section 8 of the Arbitration and Conciliation Act 1996 (Hereinafter referrred to as "the Act") seeking an order of referring the matters addressed in the Suit for arbitration pursuant to arbitration clause provides in Article 15 of the CHA 2011. The said application was also disposed of vide order dated 15 th March 2021 and learned Civil Judge had dismissed the application observing that the issues involving compliance of the ISPS Code Page 4 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 pertains to statutory duties and are not contractual in nature and cannot be referred to arbitration under Article 15 of the CHA. That, the respondent no.1 filed an Appeal challenging the order dated 15th March 2021 vide Civil Misc. Application No. 18 of 2021 (Section 8 of the Arbitration & Conciliation Act, 1996) and instituted an appeal against the final order. The respondent no.1 preferred Misc. Civil Appeal No. 19 of 2021 with a prayer for executing an order dated 31 st March 2021 passed in interim application filed under Order 39 Rule 1 and 2 of the Code in Regular Civil Suit No. 96 of 2021 wherein the ex-parte order was confirmed by the court below dated 2 nd March 2021 and both the appeals preferred by the respondent no.1 were placed before the court of learned Additional District Judge. On 15th July 2021, learned Additional District Judge, Surat passed the judgment and order deciding the appeals filed against the final order dated 15 th March 2021 and allowed the appeal by quashing and setting aside the order in an appeal under Section 8 of the Arbitration Act ie., Civil Misc. Application No. 18 of 2021. Learned Additional District Judge directed the parties to resolve their disputes forming a subject matter of the suit pursuant to arbitration under article 15 of the CHA. In Civil Misc. Application No. 19 of 2021, learned Additional district Judge, in his order dated 15 th July 2021, made various observations in para 35 to 46 on the Page 5 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 merits of dispute which is subject matter of the suit. Present petitioner, being dissatisfied with the impugned order, passed in Misc. Civil Appeal No. 19 of 2021 by the learned 13 th Additional District Judge, Surat on 15 th July 2021 has approached this Court by way of filing this petition under Article 227 of the Constitution of India.
3. Heard learned advocate for the petitioner and learned advocate for the respondents.
4. It was submitted by learned advocate for the petitioner that Learned Additional District Judge, Surat while allowing Misc. Civil Appeal No. 19 of 2021, has erred and transgressed his jurisdiction as a court of appeal against an interlocutory order when he made observations in nature of final determination of rights of parties despite the fact that no written statement was filed till the date by the respondent in the suit. That, such final determination of rights and issues can only be arrived at after filing of the written statement by the trial court. That, in exercise of his jurisdiction in deciding the Impugned Order on merits and making observations regarding the rights of the parties on merits, learned Additional District Judge has committed an error as in a separate order of the same date, it was held that under Section 8 of the Arbitration Act, Civil Court had no jurisdiction in the subject matter as the same is arbitrable under Article 15 of the CHA 2011, and Page 6 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 consequently having referred the parties to arbitration. That, once the learned Judge appreciates that Civil Court has no jurisdiction of referring the parties to arbitration, it has referred to entire dispute to the arbitration and hence, he could not have passed an impugned order. That, impugned order is in complete disregard of the settled restrictions on the courts ability to grant interim reliefs. That, learned Additional District Judge has undertaken a mini trial without regard for the complex issues of law and fact that underlines the dispute at hand and the evidence required in this regard, for determining the rights and obligations of the parties to the dispute. That, learned Judge having acceded jurisdiction and referred the disputes to arbitration could not have passed the impugned order on merits. That, learned Judge has effectively decided the issue and has given adverse findings against the petitioner, which are untenable and ought not to have been allowed. That, when same Judge concluded that he had no jurisdiction to decide the disputes in the suit and referred the matter to arbitration under Section 8 of the Arbitration and Conciliation Act 1996, he could not have gone into the merits of the case and made determination affecting the rights of the parties, and therefore, impugned order is untenable in law; both in law and in facts. That, the petitioner alone can determine whether a particular instance constitutes a breach of security or not.
Page 7 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 When the petitioner has entrusted with the duty of ensuring the security of the Port, learned Judge has acted outside the bounds of authority inasmuch as it could not have gone into the merits of the case at all after having determination that he did not have jurisdiction to decide the disputes. That, the question of determination of the merits of the cases arises only after settling the issue of jurisdiction to make any determination on the merits. That, by passing impugned order read with Section 8 of the Arbitration Act, learned Judge has kept the issue of breach of security of port open for adjudication by the Arbitral Tribunal and has reversed the Ex- parte order and made a determination on the merits of the case allowing the security of the ISPS Area to be exposed. That, making observation in the impugned order on the interpretation of Section 344 of the Maritime Shipping Act 1958 and the ISPS Code, which have far reaching consequences in rem, including in relation to the obligations of any entity holding compliance certificate under the ISPS Code. That, remarks passed by the learned Judge in the final order will continue to prejudice the case of the petitioner as set out in the suit unless the remarks in the impugned order are not expunged or the impugned order is not set aside.
5. In support of his arguments, Learned advocate for the petitioner has placed his reliance on the following judgments:
Page 8 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021
1. Sundaram Finance Limited and Ors vs. T. Thankam, reported in (2015) 14 SCC 444
2. P. Anand Gajapathi Raju v. P.V.G. Raju, reported in (2000) 4 SCC 539
3. Ford India Put. Ltd. v Priyadarshni Pumanand Automobiles Pvt. Ltd, reported in 2017 (3) PLJUR 841
4. Shalini Shyam Shetty v. Rajendra Shankar Patil, reported in (2010) 8 SCC 329
5. Vimal Kishore Shah and Others v. Jayesh Dinesh Shah and Others, reported in (2016) 8 SCC 788
6. Bharatbhai Hasmukhbhai Oza v. Gandabhai Khodabhai Desai, reported in 2014 SCC OnLine Guj 9238
7. Achutananda Baidya vs. Prafullya Kumar Gayen and Others, reported in (1997) 5 SCC 76
8. Industrial Credit and Investment Corporation of India Limited vs. Grapco Industries Ltd. and Others, reported in (1999)4 SCC 710
9. Radhey Shyam and Another vs. Chhabi Nath and Ors, reported in (2015) 5 SCC 423
10. Narayan Dutt Tiwari vs. Rohit Shekhar and Another, reported in (2012) 12 SCC 554.
11. Arun Singh vs. Mohindra Kumar and Others, reported in (1964) 5 SCR 946 Page 9 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021
12. Surya Dev Rai vs. Ram Chander Rai and Others, reported in (2003) 6 SCC 675
6. Ultimately, it was requested by learned advocate appearing for the petitioner to quash and set aside the impugned order dated 15th July 2021 passed by the learned 13th Additional District Judge, Surat in Misc. Civil Appeal No. 19 of 2021.
7. Per contra, learned advocate for the respondent has vehemently opposed the submissions made by learned advocate for the petitioner and submitted that in the suit filed by the petitioner ex-parte temporary injunction to restrain respondent no.1 from gaining access to the ISPS areas of the Port without prior approval or authorization of the petitioner was granted by the Civil Court pending and hearing of the suit. That, respondent no.1, being aggrieved by ex-parte order dated 4th March 2021, filed an application under Order XXXIX Rule IV of the Code for vacation of the ex-parte order. That, another application was also filed by the respondent no.1 under Section 8 of the Arbitration and Conciliation seeking reference of the disputes to arbitration in view of Article 15 of CHA. That however, vide orders dated 15th March 2021, learned Civil Judge rejected both the applications filed by the respondent no.1. Application under Section 8 of the Act was rejected inter- alia on the ground that port security is a matter of compliance Page 10 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 than a contract and the obligations towards statement of compliance under the ISPS Code cannot be a point of contractual arbitration between the parties. Application under Order 39 Rule 4 of the Code was rejected inter-alia on the grounds that (i) respondent no.1 failed to provide any evidence to show that no security breach has occurred at the port; (ii) respondent no.1 has granted and enabled entry of unauthorized personnel into port without prior and necessary approval from the petitioner and (iii) respondent no.1 does not hold an independent statement of compliance under the ISPS Code and hence, rely on the petitioner for port security. That, with the leave of the court, respondent no.1 had filed its reply on 16th March 2021 to the injunction application. That, learned Civil Judge refused to vacate or modify ex-parte order vide order dated 30th March 2021, and therefore, respondent no.1 filed Misc. Civil Appeal No. 19 of 2021 on 2nd April 2021 challenging the injunction order on the various grounds. That, respondent no.1 also challenged the order passed under Section 8 of the act by way of Misc. Civil Appeal No. 18 of 2021 seeking setting aside of the order below application filed under section 8 of the Act and referral of disputes to arbitration in view of Article 15 of the CHA. That, learned Additional District Judge, Surat vide order dated 15 th July 2021, rightly allowed Misc. Civil Appeal No. 18 of 2021 and Page 11 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 Misc. Civil Appeal No. 19 of 2021 in favour of the respondent no.1. That, learned Additional District Judge has not excess his jurisdiction by transgressing into the matters of national security as alleged by the petitioner nor erred in exercising of his jurisdiction in deciding the impugned order on merits, however, held that civil court has no jurisdiction. It was further submitted that learned Additional District Judge has undertaken a prima facie review on the merits of the case to the extent it was necessary to determine an appeal before it. That, by impugned order, learned Judge has merely set aside the injunction order without any final determination of rights and obligations of the parties. That, certain observations made in the impugned order have not far reaching consequences in rem, as argued by the petitioner. That, the observations on merits and rights of the parties in the impugned order against the interlocutory application will neither interfere or impact the adjudication by the Arbitral Tribunal hearing the dispute. It was further submitted that learned Judge has not committed any error or transgress his jurisdiction as the court of appeal against interlocutory order while making observations in nature of final determination of the right of the parties as argued by the petitioner. It was further submitted that there has been no final determination of the rights of the parties as the learned Judge has merely undertaken prima facie review of Page 12 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 the merits of the case which an appeal court is permitted to do so. That, learned Judge was well within its rights to make prima facie observations and pass necessary orders to dispose of the IA Appeal challenging the injunction order. Otherwise, learned Judge could not have merely disposed of the appeal without returning any finding as to its decision. That, impugned order satisfies the test of grant of injunction and the same is recorded in the impugned order and therefore, it cannot be said to be perverse or irrational as submitted by the petitioner. That, remarks made in the impugned order will never prejudice the case of the petitioner as set out in the suit unless the remarks in the impugned order are not expunged or impugned order is not set aside. That, since the order Under Order 8 of the Act has been passed and the disputes have been referred to arbitration, injunction order has been set aside/vacated due to which respondent no.1 is not and cannot be restrained from entering into in the AMNS Jetties without permission. That, the learned Judge has not exceeded its jurisdiction while passing the impugned order and remained well within its bounds while determining whether the Civil Judge had rightly granted the injunction in favour of the petitioner and against the respondent no.1. That, learned Judge has analyzed the contractual arrangement between the parties, interpreted the rights of the parties thereunder, applied Page 13 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 the test of injunction under Order 39 Rules 1 and 2 of the Code and rightly came to the conclusion that the injunction order ought to have been set aside as there was no case of licensee ie., respondent no.1. That, learned Judge had necessary jurisdiction to hear the IA Appeal and remained well within it while passing the impugned order. It was further submitted that as per the settled law, High Court is not vested with any unlimited prerogative to correct all kinds of hardship or wrong decisions made within the limits of the jurisdiction of the subordinate courts or tribunal. That, High Court acting under Article 227 of the Constitution of Indian cannot act as an Appellate Court or substitute its own judgment in place of that of the subordinate court to correct an error, which is not apparent on the fact of the record. That, there has not been any final determination under the rights and obligations of the parties nor the learned Judge has had undertaken a mini trial. That, the same are to be decided by the Arbitral Tribunal and an Appeal No. 18 of 2021 filed under Section 8 of the Act, the learned Judge has referred the parties to Arbitration. It was further submitted that when an order passed below application Ex. 8 of the Act and the parties are referred to Arbitration, earlier interim orders of the court stand vacated as the court is satisfied to have passed such orders without jurisdiction in view of the multiplicity of the dispute, and therefore, this Court Page 14 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 cannot reinstate the injunction order. It was further submitted that this court cannot grant expunction of the observations made at Paragraphs No. 36 to 45 of the impugned order as the same would result in the impugned order being passed without any reasons. In support of his arguments, Learned advocate for the respondent has placed his reliance on the following judgments:
1. Hindustan Petroleum Corporation Limited vs. Pink City Midway Petroleums, reported in (2003) 6 SCC 503
2. Smt. Rashmi Solanki vs. BS Sham Sunder reported in 2015 SCC Online Kar 8992
3. Narayan Prasad Jalan vs. Chetan P.S. Chauhan, reported in AIR 2006 Delhi 8.
4. Bhaven Construction through authorized signatory Premjibhai K. Shah vs. Executive Engineer, Sardar Sarovar Narmada Nigam Limited, reported in 2021 SCC Online SC 8.
5. Khimji Vidhu vs. Premier High School reported in (1999) 9 SCC 264
6. Waryam Singh and another vs. Amarnath and Another, reported in AIR 1954 SC 215.
7. Babhutmal Raichand Oswal vs. Laxmibai R. Tarte and Another, reported in AIR 1975 SC 1297.
8. Ganpat Ladha vs. Sashikant Vishnu Shinde, reported Page 15 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 in AIR 1978 SC 955.
9. Mohd. Yunus vs. Mohd. Mustaqim and others, reported in AIR 1984 SC 38
10. Venkatlal G. Pittie and Another vs. M/s. Bright Bro.
(Pvt.) Limited, reported in AIR 1987 SC 1939.
Ultimately, it was requested by learned advocate for the respondents to dismiss present petition.
8. Having heard learned advocates for the respective parties, perused the record produced before the court, it appears that Regular Civil Suit No. 96 of 2021 was filed by the petitioner before the court of learned 8th Additional Civil Judge, Civil Court, Surat inter-alia raising concerns regarding national security and port security. Along with the Plaint, the Petitioner also filed an Injunction Application seeking inter alia an injunction restraining Respondent No. 1 from accessing licensed jetties without prior approval/authorization of the petitioner. Based on representations and material facts, an ex- parte injunction order dated 2 March 2021 was passed by the learned Civil Judge restraining Respondent No.1 from accessing the port area managed by the Petitioner, more particularly, an area defined by the International Ship and Port Facility Security Code ("ISPS Code") without prior approval or authorization of the Petitioner, pending the hearing and final disposal of the Injunction Application. It appears that Page 16 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 thereafter, Respondent No. 1 sought vacation of the Ex-Parte Order and reference of the disputes to arbitration. Applications made by respondent no.1 were rejected and ex-parte order passed earlier was confirmed vide order dated 30 March 2021 passed by the learned Civil Judge. The respondent no.1 preferred two different appeals ie., Misc. Civil Appeal No. 18 of 2021 and Misc. Civil Appeal No. 19 of 2021 against the dismissal of the application filed under Section 8 of the Act praying for reference of the dispute to the Arbitration and against the order of the vacation of interim injunction before the learned District Court.
9. While deciding Misc. Civil Appeal No. 18 of 2021 filed by the respondent no.1 before the learned District Court at Surat, following observations were made by the learned 13 th Additional District Judge, in Point No.A, as under:
9. As far as the existence of arbitration agreement Is concerned, both the parties are ad idem to the existence of Arbitration Agreement as contained in Art. 15 of Cargo Handling Agreement 2011, but, there are disagreement regarding the covering of the dispute in suit, under this arbitration agreement.
10. This court is not in agreement with the contention raised by the learned Sr. Advocate Mr. Navin Pahwa that at the referral Stage under Sec. 8 of Arbitration Act, , the Referral Court is only required to see the prima-facie existence of arbitration agreement, and once the Court finds that there exists prima-facie Page 17 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 arbitration agreement between the parties to the dispute, then the dispute has to be referred for arbitration without making any further inquiry. The language in Sec. 8 of Arbitration Act, even after amendment in the year 2015, do not restrict the Referral Court to assess the scope of arbitration agreement. Only the matters, in relation to which there exist an arbitration agreement, can only be referred for arbitration under Sec. 8 of Arbitration Act. After the amendment in Sec. 8 of Arbitration Act, the Court is not required to undertake a deep exercise to find out the validity of arbitration agreement. The legality or illegality of an arbitration agreement is not required to be gone into at very deep level at the stage of making reference U/s 8 of the Arbitration Act, and if the Court finds that prima-facie there exists an arbitration agreement, then it is sufficient to refer the dispute for arbitration, if such dispute is covered by arbitration agreement. The arbitrability of a dispute is sine qua non for referring it to arbitration U/s 8 of the Arbitration Act. Even if the judgments referred on behalf of AMNS, which have been passed after amendment of 2015, Hon'ble Apex Court has not held that arbitrability of subject matter, not to be taken into consideration, at the referral stage U/s 8 of the Arbitration Act.
11. Therefore, the arbitrability of a dispute sought to be referred, has to be assessed by the Referral Court prior to referring the same for arbitration. This Court is required to see whether the dispute arising between the parties is covered by arbitration agreement and the same is arbitrable, then only the dispute can be referred for arbitration.Page 18 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022
C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 POINT B ::
12. The plaintiff EBTL claims that the disputes and cause of action in the suit is, in regard to the enforcement of statutory right of EBTL to make compliance of ISPS Code. It has been asserted on behalf of plaintiff EBTL that the Court has to determine the scope of arbitration agreement and the dispute in question, is covered under arbitration agreement, and the same has to be assessed from reading the pleadings in plaint in its entirety. As per the law settled in Vidya Drolia (Supra) this Court has to make balance between avoiding arbitration obstructing tactics at referral stage and protecting parties from being forced to arbitrate when the matter is clearly non-arbitrable. To make this balance, the Court is required to scratch the surface of the suit and to go a little bit deeper, to find out the exact nature of the dispute between the parties and then a scanning has to be done under the light of the matters covered under arbitration agreement. This is the duty of the Court to eliminate the tactics which are just created to avoid arbitration and, at the same time, to protect the parties from being forced to abitrate on non-arbitrable matter, and for this exercise, the Court cannot restrict itself only to the plaint, but has to examine all the materials on record including the documentary evidence submitted by the plaintiff so as to assess the real nature of the dispute.
POINT C:
14. As this court finds that EBTL is in management of the securitY of two jetties in question in pursuance of the Service Level Agreement which has been entered as a result of Cargo Page 19 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 Handling Agreement 2011, therefore, the dispute whether EBTL, being the service provider, has right td restrict the entry of employees/ Agents of AMNS at its jetty, falls within the scope of interpretation of the terms of the agreements between these two parties to the contract.
POINT E:
17. The learned Trial Court while passing the Impugned Order, has wrongly concluded that dispute in suit as to security of Port, do not fall under contractual obligations between the parties, inspite of its own findings that EBTL would be contractually liable to AMNS for any failure to secure Port. The learned Trial Court failed to evaluate the true nature of dispute, the right and obligation of parties to dispute under contract, and the scope of the Arbitration Agreement between the parties, therefore, the Impugned Order dated 15-03-2021 passed by the learned Trial Court below Application Exh. 12 under Sec. 8 of the Arbitration Act, is not sustainable in the eyes of law.
18. As a sequel of my above discussion and finding, on the points for determination, the dispute raised in present suit, is held to be covered under the Arbitration Agreement between the Appellant AMNS and Respondent No. 1 / Original plaintiff EBTL, hence, the Impugned Order of not referring the parties to arbitration, is held to be against the provision of Sec. 8 of the Arbitration Act, and the learned Trial Court wrongfully and illegally refused to refer the parties to the arbitration, therefore, the present Misc. Appeal deserves to be allowed, and the Impugned Order is liable to be Set aside and parties are ordered to be referred to the arbitration and Page 20 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 the following final orders are passed.
:FINAL ORDER:
A] The present Misc. Civil Appeal No. 18 2021 is hereby allowed.
B] The Impugned Order dated 15-03-2021 passed by the learned 08" Addl. Civil Judge, at Surat, in Application Exh. 12 under Sec. 8 of the Arbitration Act, in Regular Civil Suit No. 96/ 2021, is hereby ordered to be set aside.
C] Application Exh. 12 under Sec. 8 of Arbitration Act filed before the Trial Court by the Appellant AMNS is hereby ordered to be allowed and parties in the present suit are referred to the Arbitration as per Art. 15 of CHA -2011, entered between EBTL and AMNS.
D] The parties to the Arbitration Agreement are free to take recourse for appointment of Arbitrator as per Art. 15 of CHA- 2011.
10. The aforesaid order was passed on 15 th July 2021 by the learned 13th Additional District Judge, Surat and same learned Judge, ie., learned 13th Additional District Judge, Surat has pronounced an order on 15th July 2021 in Misc. Civil Appeal No. 19 of 2021 between the same party against the order dated 30.03.2021 passed by the learned 8th Additional Civil Judge, Surat whereby the trial Court refused to vacate or modify its previous ex-parte ad interim order dated 2nd March 2021 passed below injunction application Ex. 5 granting interim Page 21 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 injunction in favour of the plaintiff in Regular Civil Suit No. 96 of 2021. Learned Judge, in the impugned order dated 15.07.2021 passed in Misc. Civil Appeal No. 19 of 2021 made certain observations in Paragraphs No. 35, 36, 37, 41, 42 and 45 as under:
35. The AMNS is the licensee of these two Captive Shallow Water Jetties for its own personal use, therefore, under Sec. 344-
O of Merchant Shipping Act, 1958, the AMNS is under obligation/ responsible to maintain the security as per ISPS Code, and also to obtain Compliance Certificate for the same, from the competent authorities. ISPS Code Compliance Certificate as it has no license for these two Captive Shallow Water Jetties from GMB. The obligations and duties to maintain security and to enforce ISPS Code comes with the grant of license, which is in favour of( AMNS) as far as the jetties in question are concerned.
36. Neither the provisions of Sec. 344-O of Merchant Shipping Act give the right or impose any obligation/ responsibility upon EBTL to make security arrangement as per ISPS Code, nor any independent competent authority has given any license/ authority to maintain security arrangement at these two Captive Shallow Water Jetties. The plaintiff EBTL nowhere pleaded or shown its independent right to maintain the security arrangement, independent to CHA 2011. EBTL failed to establish its right or capacity to apply and obtain Certificate of Compliance of ISPS Code.
37. Only because the Compliance Certificate of ISPS Code, is in favour of EBTL being service provider of AMNS, does not make it Page 22 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 entitled, to keep providing security to Captive Shallow Water jetties of AMNS, even if AMNS does not want so, nor EBTL is under obligation under Sec. 344-O of Merchant Shipping Act, to do so as the license of these jetties are not in its favour. The EBTL can remain in charge of security management of these two Shallow Water Jetties, till the time it is so required by AMNS.
41. The plaintiff EBTL has built up its claim in the suit on its right to issue gate pass, but, there is no right with EBTL to deny access to these Jetties to any person who has been duly authorized by AMNS.
42. The EBTL being in charge of security as per ISPS Code, does not have absolute authority to deny access to these jetties, even to the employees/ authorised persons of AMNS, the license holder of these jetties.
45. Even without going into the dispute whether prior request for issuance of gate passes was made by AMNS or not, when the EBTL was aware about the facts that the persons who entered into the Shallow Water Jetties Area were employees of AMNS and Shreeji Shipping, and also the fact that these persons were entitled to enter Shallow Water Jetties Area, and that EBTL has no right/ authority to stop these employees/ Agents of AMNS, then, it is unbelievable that such persons who can enter the Shallow Water Jetties legally, would enter forcibly. There appears to be no reason with the employees/ authorised persons of AMNS to enter the Shallow Water Jetties Area without gate pass issued by EBTL, when they are legally entitled to enter and use these jetties being its licensee.
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11. Ultimately, Misc. Civil Appeal No. 19 of 2021 was allowed and order dated 30th March 2021 passed by the learned 8th Additional Civil Judge, Surat below injunction application Exh. 5 in Regular Civil Suit No. 96 of 2021 was ordered to be set aside and application Exh. 5 for grant of interim injunction was ordered to be dismissed.
12. The same learned Judge, on the very same day, passed an order that application Exh. 12 filed under Section 8 of the Act before the learned Trial Court by the AMNS - respondent no.1 is hereby ordered to be allowed and parties in the present suit are referred to the Arbitration as per Art.15 of CHA-2011, entered between EBTL and AMNS. He also observed in the order that the dispute raised in the present suit is held to be covered under the Arbitration Agreement between the Appellant AMNS and respondent no.1/original plaintiff EBTL. Hence, impugned order of not referring the parties to arbitration is held to be against the provisions of Section 8 of the Act and the learned trial court wrongfully and illegally refused to refer the parties to the arbitration, and therefore, Misc. Civil Appeal deserves to be allowed. However, in Misc. Civil Appeal No. 19 of 2021, observations were made by the same learned Judge as referred above.
13. Hon'ble Apex Court in Sundaram Finance Limited and Ors vs. T. Thankam, reported in (2015) 14 SCC 444 has held Page 24 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 in Paragraphs Nos. 8, 9 and 13 as under:
8. Once there is an agreement between the parties to refer the disputes or differences arising out of the agreement to arbitration, and in case either party, ignoring the terms of the agreement, approaches the civil court and the other party, in terms of theSection 8of the Arbitration Act, moves the court for referring the parties to arbitration before the first statement on the substance of the dispute is filed, in view of the peremptory language of Section 8 of the Arbitration Act, it is obligatory for the court to refer the parties to arbitration in terms of the agreement, as held by this Court in P. Anand Gajapathi Raju and others v.
P.V.G. Raju (Dead) and others, reported in ( 2000)4 SCC 539.
9. The position was further explained in Hindustan Petroleum Corporation Limited v. Pinkcity Midway Petroleums, reported in (2003) 6 SCC 503 To quote: (SCC pp 510-11, Para 14) "14. This Court in the case of P. Anand Gajapathi Raju v. P.V.G. Rajuhas held that the language of Section 8 is peremptory in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator. Therefore, it is clear that if, as contended by a party in an agreement between the parties before the civil court, there is a clause for arbitration, it is mandatory for the civil court to refer the dispute to an arbitrator. In the instant case the existence [pic]of an arbitral clause in the Agreement is accepted by both the parties as also by the courts below but the applicability thereof is disputed by the respondent and the said dispute is accepted by the courts below. Be that as it may, at the cost of repetition, we may again state that the existence of the arbitration clause is admitted. If that be so, in view of the mandatory language of Section 8 of the Act, Page 25 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 the courts below ought to have referred the dispute to arbitration."
13. Once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statue, the civil court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law - generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the court."
14. In the case of P. Anand Gajapathi Raju v. P.V.G. Raju, reported in (2000) 4 SCC 539, Hon'ble Apex Court has held in the similar case observing in para 8 as under:
"8. In the matter before us, the arbitration agreement covers all the disputes between the parties in the proceedings before us and even more than that. As already noted, the arbitration agreement satisfies the requirements of Section 7 of the new Act. The language of Section 8 is peremptory. It is, therefore, obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement. Nothing remains to be decided in the original action or the appeal arising therefrom. There is no question of stay of the proceedings till the arbitration proceedings Page 26 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 conclude and the Award becomes final in terms of the provisions of the new Act. All the rights, obligations and remedies of the parties would now be governed by the new Act including the right to challenge the Award. The Court to which the party shall have recourse to challenge the Award would be the Court as defined in clause (e) of Section 2 of the new Act and not the Court to which an application under Section 8 of the new Act is made. An application before a Court under Section 8 merely brings to the Courts notice that the subject matter of the action before it is the subject matter of an arbitration agreement. This would not be such an application as contemplated under Section 42 of the Act as the Court trying the action may or may not have had jurisdiction to try the suit to start with or be the competent Court within the meaning of Section 2(e) of the new Act. We, therefore, allow the application and would refer the parties to arbitration. No further orders are required in this appeal and it stands disposed of accordingly".
15. Hon'ble High Court of Patna in Civil Misc. Jurisdiction No. 1122 of 2016 in case of Ford India Pvt. Ltd. v Priyadarshni Pumanand Automobiles Put. Ltd, reported in 2017 (3) PLJUR 841 has observed in para 19 as under:
"So far the exercise of jurisdiction under Article 227 of the Constitution of India is concerned, it may be mentioned here that in the case of Surya Deo Rai (Supra) itself the Supreme Court has held that power under Article 227 of the Constitution of India can be exercised by the High Court if the order passed by the court below is without jurisdiction or it has been passed in the manner not permitted by law or the court below assumed a jurisdiction which it has not. This case has been overruled in the case of Radhey Shyam & Anr. v. Chhabi Nath & Ors, reported in (2015)5 SCC 423. However, the principle under article 227 has been upheld."Page 27 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022
C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021
16. Hon'ble Apex Court in case of Shalini Shyam Shetty v. Rajendra Shankar Patil, reported in (2010) 8 SCC 329 has observed as 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. 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."
17. Hon'ble Apex Court in Vimal Kishore Shah and Others v. Jayesh Dinesh Shah and Others, reported in (2016) 8 SCC 788 has observed as under:
"The provision as to reference of disputes to arbitration is a matter that concerns the jurisdiction of courts. Ordinarily, the Courts are zealous of their jurisdiction and can only allow it to be curtailed by some provision of law. The provisions of the Indian Arbitration Act constitute such a law, but the provision must be strictly construed. In order that there may be a reference to Page 28 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 arbitration which ousts the jurisdiction of Courts, the parties must enter into an arbitration agreement. That is a matter that must be governed by the law and in a given case it must be shown that the parties have lawfully entered into such an agreement and there is in existence a lawful agreement. Nothing short of it can support such an agreement and any reference to arbitration or an award consequent thereon, in contravention of the provisions of the law cannot be supported and must be declared invalid."
18. In case of Bharatbhai Hasmukhbhai Oza v. Gandabhai Khodabhai Desai, reported in 2014 SCC OnLine Guj 9238, this Court has held as under:
"6.1. It is required to be noted that it is well settled law that the Appellate Court may not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. The Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion."
19. In case of Achutananda Baidya vs. Prafullya Kumar Gayen and Others, reported in (1997) 5 SCC 76, the Hon'ble Apex Court has held as under:
"The High Court can interfere under Article 227 of the Constitution in cases of erroneous assumption or acting beyond Page 29 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 its jurisdiction, refusal to exercise jurisdiction, error of law apparent on record as distinguished from a mere mistake of law, arbitrary ot capricious exercise of authority or discretion, a patent error in procedure, arriving at a finding which is perverse or based on no material, or resulting in manifest injustice. As regards finding of fact of the inferior court, the High Court should not quash the judgment of the subordinate court merely on the ground that its finding of fact was erroneous but it will be open to the High Court in exercise of the powers under Article 227to interfere with the finding of fact if the subordinate court came to the conclusion without any evidence or upon manifest misreading of the evidence thereby indulging in improper exercise of jurisdiction or if its conclusions are perverse."
20. In case of Radhey Shyam and Another vs. Chhabi Nath and Ors, reported in (2015) 5 SCC 423, the Hon'ble Apex Court has held as under:
"We may also deal with the submission made on behalf of the respondent that the view in Surya Dev Rai stands approved by larger Benches in Shail, Mahendra Saree Emporium and Salem Advocate Bar Assn and on that ground correctness of the said view cannot be gone into by this Bench. In Shail, though reference has been made to Surya Dev Rai, the same is only for the purpose of scope of power under Article 227 as is clear from para 3 of the said judgment. There is no discussion on the issue of maintainability of a petition under Article 226."
21. In case of Narayan Dutt Tiwari vs. Rohit Shekhar and Another, reported in (2012) 12 SCC 554, Hon'ble Apex Court has held in para 47, 49 and 50 as under:
47. The Supreme Court in V. B. Patil v. Y. L. Patil (1976) 4 SCC 66 opined that once an order made in the course of a proceeding becomes final, it would be binding at subsequent stage of that Page 30 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 proceeding. In Bhanu Kumar Jain v, Archana - Kumar' (2005) 1 SCC 787, it was clarified that the principles of constructive ses judicats alse apply with full force at subsequent stage of the same proceedings [he Supreme Court in Ajay Mohan v. H.N. Rai* held that a mere amendment of the plaint does not entitle the plaintiff to injunction under Order 39 Ruler J and 2 CPC which had been denied on an earlier occasion.
49. We may further observe that the injunction directing DNA testing falls in the category of an order in aid of disposal of the suit and deciding the rights of the parties to the suit i.e. the right asserted by the appellant to have such DNA testing done and the right asserted by Respondent | to not submit thereto. Once such rights had been adjudicated by the suit court and the appeal there against had been dismissed and the application for stay having been rejected by the Apex Court, it was not open to the suit court to again entertain the said question. If such practices were to be permitted, it will have dangerous consequences. It is rarely that the entire suit is decided by the same Judge. If it were to be permissible for each successive Judge presiding over a court to take a different view, it will not only lead to the litigants and the counsel urging the same issues repeatedly each time on change of roster but also be contrary to the rule of law.
50. A Division Bench of this Court in Swaran Singh v. Surinder Kumar (2011)179 DLT 136 observed that even if the principles of res judicata were to be not attracted, the principle of issue estoppel precludes the court from entertaining a second application (in that case under Order 7 Rule 11 CPC) based on the same factual matrix and no orders negating and nullifying the previous order can be made on change of roster. The Supreme Court in Gajraj v. Sudha (2010) 6 SCC 303 held repeated applications under Order 1 Rule 10 CPC to be not maintainable.
22. In case of Arun Singh vs. Mohindra Kmar and Others, reported in (1964) 5 SCR 946, Hon'ble Apex Court has held as under:
Page 31 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 "Even if the rule of resjudicata does not apply it would not follow that on every subsequent day on which the suit stands adjourned for further hearing the petition could be repeated and fresh orders sought on the basis of identical facts. The principle that repeated applications based on the same facts and seeking the same reliefs might be disallowed by the court does not however necessarily rest on the principle of resjudicata. Thus if an application for the adjournment of a suit is rejected, a subsequent application for the same purpose even if based on the same facts, is not barred on the application 'of any rule of res judicata, but would be rejected for the same grounds on which the original application was refused. The principle underlying the distinction between the rule of res judicata and a rejection on the ground that no new facts have been adduced to justify a different order is vital. If the principle of resjudicata is applicable to the decision on a particular issue of fact, even if fresh facts were placed before the Court, the bar would continue to operate and preclude a fresh investigation of the issue, whereas in the other case, on proof of fresh facts, the court would be competent, nay,, would be bound to take those into account and make an order conformably to the facts freshly brought before the court."
23. In case of Surya Dev Rai vs. Ram Chander Rai and Others, reported in (2003) 6 SCC 675, Hon'ble Apex Court has held as under:
"In exercise of supervisory jurisdiction the High Court may not only quash or set aside the impugned proceedings, judgment or order but it may also make such directions as the facts and circumstances of the case may warrant, may be by way of guiding the inferior court or tribunal as to the manner in which it would now proceed further or afresh as commended to or guided by the High Court. In appropriate cases the High Court, while exercising supervisory jurisdiction, may substitute such a decision of its own in place of the impugned decision, as the inferior court or Page 32 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 tribunal should have made. Lastly, the jurisdiction underArticle 226of the Constitution is capable of being exercised on a prayer made by or on behalf of the party aggrieved; the supervisory jurisdiction is capable of being exercised suo motu as well."
24. In case of Achutananda Baidya vs. Prafullya Kumar Gayen and Others, reported in (1997) 5 SCC 76, Hon'ble Apex Court has held in para 10 that:
"The High Court can interfere underArticle 227of the Constitution in cases of erroneous assumption or acting beyond its jurisdiction, refusal to exercise jurisdiction, error of law apparent on record as distinguished from a mere mistake of law, arbitrary ot capricious exercise of authority or discretion, a patent error in procedure, arriving at a finding which is perverse or based on no material, or resulting in manifest injustice. As regards finding of fact of the inferior court, the High Court should not quash the judgment of the subordinate court merely on the ground that its finding of fact was erroneous but it will be open to the High Court in exercise of the powers underArticle 227to interfere with the finding of fact if the subordinate court came to the conclusion without any evidence or upon manifest misreading of the evidence thereby indulging in improper exercise of jurisdiction or if its conclusions are perverse."
25. In case of "Industrial Credit and Investment Corporation of India Limited vs. Grapco Industries Ltd. and Others", reported in (1999)4 SCC 710, Hon'ble Apex Court has held as under:
"There was no bar on the High Court to itself examine the merits of the case in the exercise of its jurisdiction underArticle 227of the Constitution if the circumstances so require. There is no doubt that High Court can even interfere with interim orders of the Page 33 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 courts and tribunals underArticle 227of the Constitution if the order is made without jurisdiction."
26. From the other side, learned advocate appearing for the respondents has relied upon the following judgments:
27. In case of Hindustan Petroleum Corporation Limited vs. Pink City Midway Petroleums, reported in (2003) 6 SCC 503, Hon'ble Apex Court has held as under:
"Once it is held that the Civil Court had no jurisdiction to entertain a suit after an application under Section 8 of the Act is made for arbitration. Therefore, we are of the opinion that the trial court failed to exercise its jurisdiction vested in it under Section 115 of the C.P.C. when it rejected the application of the appellant filed under Sections 8and5of the Act. In such a situation, refusal to refer the dispute to arbitration would amount to failure of justice as also causing irreparable injury to the appellant. For the said reason, we are of the opinion that the High Court has erred in coming to the conclusion that the appellant was not entitled to the relief under Section 115 CPC."
28. In case of "Bhaven Construction through authorized signatory Premjibhai K. Shah vs. Executive Engineer, Sardar Sarovar Narmada Nigam Limited" reported in 2021 SCC OnLine SC 8, Hon'ble Apex Court has held as under:
18. It is therefore, prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure established under the enactment. This power needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear 'bad faith' shown by one of the parties. This high Page 34 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 standard set by this Court is in terms of the legislative intention to make the arbitration fair and efficient.
19. XXXX "15. -----no judicial authority shall intervene except where so provided in this Part......
20. In the instant case, Respondent No. 1 has not been able to show exceptional circumstance or 'bad faith' on the part of the Appellant, to invoke the remedy under Article 227of the Constitution. No doubt the ambit of Article 227is broad and pervasive, however, the High Court should not have used its inherent power to interject the arbitral process at this stage. It is brought to our notice that subsequent to the impugned order of the sole arbitrator, a final award was rendered by him on merits, which is challenged by the Respondent No. 1 in a separate Section 34 application, which is pending.
21. Viewed from a different perspective, the arbitral process is strictly conditioned upon time limitation and modeled on the 'principle of unbreakability'. This Court inP. Radha Bai v. P. Ashok Kumar, (2019) 13 SCC 445, observed:
36.3. Third, Section 34(3) reflects the principle of unbreakability.
Dr Peter Binder in International Commercial Arbitration and Conciliation in UNCITRAL Model Law Jurisdictions, 2nd Edn., observed:
"An application for setting aside an award can only be made during the three months following the date on which the party making the application has received the award. Only if a party has made a request for correction or interpretation of the award under Article 33 does the time- limit of three months begin after the tribunal has disposed of the request. This exception from the three-month time- limit was subject to criticism in the working group due to fears that it could be used as a delaying tactics. However, although "an unbreakable time-limit for applications for setting aside" was sought as being desirable for the sake of "certainty and expediency" the prevailing view was that Page 35 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 the words ought to be retained "since they presented the reasonable consequence of Article 33".
According to this "unbreakability" of time-limit and true to the "certainty and expediency" of the arbitral awards, any grounds for setting aside the award that emerge after the three-month time-limit has expired cannot be raised.
37. Extending Section 17of the Limitation Act would go contrary to theprinciple of "unbreakability" enshrined under Section 34(3)of the Arbitration Act.
29. In case of Khimji Vidhu vs. Premier High School reported in (1999) 9 SCC 264, Hon'ble Apex Court has held that :
"These findings of fact could not have been interfered with by the High Court in exercise of its jurisdiction under Art.227 of the Constitution. Jurisdiction under Art.227 of the Constitution must be sparingly exercised and may be exercised to correct errors of jurisdiction and the like but not to upset pure findings of fact, which falls in the domain of an appellate court only. The High Court, thus, exceeded the jurisdiction vested in it by upsetting the findings of fact and the impugned order suffers from a jurisdictional defect."
30. In case of Babhutmal Raichand Oswal vs. Laxmibai R. Tarte and Another, reported in AIR 1975 SC 1297, Hon'ble Apex Court has held as under:
"It is thus, clear that the powers of judicial interference under Art. 227 of the Constitution with orders of judicial or quasi- judicial nature, are not greater than the power under Art. 226 of the Constitution. Under Art. 226 the power of interference may extend to quashing an impugned order on the ground of a mistake apparent or the face of the record. But under Art. 227 of the Constitution, the power of interference is limited to seeing that the tribunal functions within the limits of its authority.Page 36 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022
C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 If an error of fact, even though apparent on the face, of the record, cannot be corrected by means of a writ of certiorari it should follow a fortiori that it is not subject to correction by the High Court in the exercise of its jurisdiction under Art. 227. The power of superintendence under Article 227 cannot be invoked to correct an error of fact which only a superior court can do in exercise of its statutory power as a court of appeal. The High Court cannot in guise of exercising its jurisdiction under Ar.
227."
31. In case of Waryam Singh and another vs. Amarnath and Another, reported in AIR 1954 SC 215, Hon'ble Apex Court has held as under:
"This power of superintendence conferred byArticle 227 is, as pointed out by Harries C. J., in Dalmia Jain Airways Ltd. v. Sukumar Mukherjee, A.I.R. 1951 Cal. 193 (SB)(B) to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors. As rightly pointed out by the Judicial Commissioner in the case before us the lower courts in refusing to make an order for ejectment acted arbitrarily. The lower courts realised the legal position but in effect declined to do what was by Section 13(2) (i) incumbent on them to do and thereby refused to exercise jurisdiction vested in them by law. It. was, therefore, a case which called for an interference by the court of the Judicial Commissioner and it acted quite properly in doing so."
32. In case of Ganpat Ladha vs. Sashikant Vishnu Shinde, reported in AIR 1978 SC 955, Hon'ble Apex Court has held as under:
"Lastly we think that the High Court committed a gross error in interfering, upon an application under Article 227 of the Constitution with what was a just and proper exercise of its discretion by the Court of Small Causes in Bombay even on the Page 37 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 erroneous view that the Court had a discretion in the matter. The High Court, without even considering or setting aside the findings of the Court in regard to the circumstances calling for the, exercise of a discretion in favour of the appellant. Allowed the application under Article 227of the Constitution. This, we think, was quite unwarranted. We feel certain that the High Court would not have fallen into such an error if its attention was drawn to the law as laid down by this Court in Babhutmal Raichand Oswal v. Laxmibai R. Tarte & Anr.(AIR 1975 SC 1297)"
33. In case of Mohd. Yunus vs. Mohd. Mustaqim and others, reported in AIR 1984 SC 38, Hon'ble Apex Court has held as under:
"The supervisory jurisdiction conferred on the High Courts udder Art. 227 of the Constitution is limited "to seeing that an inferior Court or Tribunal functions within the limits of its authority", and not to correct an error apparent on the face of the record, much less an error of law. In this case there was, in our opinion, no error of law much less an error apparent on the face of the record. There was no failure on the part of the learned Subordinate Judge to exercise jurisdiction nor did he act in disregard of principles of natural justice."
34. In case of Venkatlal G. Pittie and Another vs. M/s. Bright Bro.(Pvt.) Limited, reported in AIR 1987 SC 1939, learned Apex Court has held as under:
"Interference by the High Court under Article 227 of the Constitution must be within limits. This question has been considered by this Court from time to time and principles laid down. This Court in Ganpat Ladha v. Sashikant Vishnu Shinde, [1978] 3 SCR 198 expressed the view that the High Court commits a gross error in interfering with what was a just and proper exercise of discretion by the Court of Small Causes, in Page 38 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 exercise of its power under Article 227 of the Constitution. This was unwarranted. The High Court under Article 227 has a limited jurisdiction. It was held in that case that a finding as to whether circumstances justified the exercise of discretion or not, unless clearly perverse and patently unreasonable, was, after all a finding of fact and it could not be interfered with either under Article 226 or 227 of the Constitution."
35. Judgments of the Hon'ble Apex Court relied upon by the respective parties would certainly binding to this court but facts of the present case is also required to be considered by this court while deciding the present case particularly the fact that the learned Additional District Judge, who has passed an order simultaneously in Misc. Civil Appeal No. 18 of 2021 and Misc. Civil Appeal No. 19 of 2021 on the very same day ie., on 15.07.2021. Learned Additional District Judge in Misc. Civil Appeal No. 18 of 2021 has observed that under Section 8 of the Act, dispute requires to be referred to the Arbitration and thereby set aside the order dated 15 th March 2021 passed by the learned 8th Additional Civil Judge, Surat. However, Misc. Civil Appeal No. 19 of 2021 challenging the order passed by the learned Additional Civil Judge on 30.03.2021 under Order 39 Rules 1 and 2 of the Code in Regular Civil Suit No. 96 of 2021, learned Additional District Judge exceeded its jurisdiction in deciding the application on merits and making observations regarding the rights of the parties. Separate order of the same date was passed by the learned same Judge opining Page 39 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 that Civil Court has no jurisdiction in the subject matter as the same was arbitral under Art 15 of the CHA-2011 having agreement dated 21st February 2021.
36. As per the opinion of this Court, learned Additional District Judge has committed an error in exceeding its jurisdiction arrived at final determination of rights of the parties in the appeal against the impugned order. Observations made by the learned Additional District Judge are against the present petitioner in Misc. Civil Appeal No. 19 of 2021 would certainly raise hurdle before the Arbitral Tribunal, despite that, learned Additional District Judge accepted that the jurisdiction of the Civil Court is ousted to decide the dispute has committed jurisdictional error as the court set in appeal over and order passed under Order 39 of the Code by making observations in Para 35 to 46 in the impugned order which were not wanted on the merits of the dispute which is a subject matter of the suit, and therefore, these observations are required to be quashed and set aside under the powers vested under Article 227 of the Constitution of India with this Court.
37. Final determination of the rights and obligations of the parties to the dispute would not be permitted to the Appellate Court having limited jurisdiction under Order 39 of the Code.
38. Article 227 of the Constitution of India conferred on every High Court the power of subordinate over all the courts Page 40 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 and Tribunals through out the territories in relation to which, it exercises the jurisdiction except any court or tribunal constituted by or by any law relating to Armed Forces. Without prejudice to the generality of such powers, the High Court has been availed with certain specific powers by Clause (2) and (3) and Article 227, with which, we are not concerned, here at. It is well settled that a power of superintendence was conferred upon a High Court as administrative as well as judicial and capable of being invoked at the instance of any person aggrieved or may even be exercised suo motu. The paramount consideration behind vesting such wide power of superintendence in the High Court is paving the path of justice and removing any obstacles therein. The power under Article 227 is wider than the one conferred on the High Court by Article 226 in the sense that the power of superintendence is not subject to those technicalities of procedure or traditional fetters which are to be found in certiorari jurisdiction. Else the parameters invoking the exercise of power are almost similar.
39. Once an application under Section 8 of the Act is allowed by the learned Additional District Judge, Surat vide order dated 15th July 2021, the approach of the District Court should be not to see whether the court has jurisdiction but it should be to see whether its jurisdiction has been out set. Once it is brought to the notice of the court on its jurisdiction has been taken Page 41 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022 C/SCA/10577/2021 CAV JUDGMENT DATED: 18/10/2021 away in terms of the procedure prescribed under special statute, the civil court should first to see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievances and of course unnecessarily increase the pendency in the court, which has happened in the present case.
40. In view of the discussion and observations made by this court, the order dated 15th July 2021 passed by the learned 13 th Additional District Judge, Surat in Misc. Civil Appeal No. 19 of 2021 is hereby set aside alongwith the observations made against the petitioner particularly in paragraphs no. 35 to 46. Order dated 15th July 2021 shall be quashed, as the court of learned 13th Additional District Judge, Surat has no jurisdiction to decide the issue on merits alongwith the order passed below Exh. 5 in Regular Civil Suit No. 96 of 2021 in view of the Misc. Civil Appeal No. 19 of 2021.
Accordingly present petition stands disposed of. Rule is made absolute to the aforesaid extent.
(B.N. KARIA, J) K. S. DARJI Page 42 of 42 Downloaded on : Mon Jan 17 00:37:36 IST 2022