Delhi High Court
Mr. Shivraj Gupta And Anr. vs Mr. Deshraj Gupta And Ors. on 22 February, 2008
Author: Badar Durrez Ahmed
Bench: Badar Durrez Ahmed
JUDGMENT Badar Durrez Ahmed, J.
1. This petition has been filed by the respondent seeking a review of the order dated 07.12.2007 which was passed in arbitration petition No. 101/2005, which in turn had been filed invoking the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'said Act') for the appointment of an arbitrator. On 07.12.2007 when this matter was heard and disposed of, counsel for the parties had agreed that a sole arbitrator be appointed. Consequently, the sole arbitrator was appointed by virtue of the said order dated 07.12.2007. The respondent has moved this review petition seeking a review of that order and for the appointment of another person in place of the one appointed by the order dated 07.12.2007.
2. A preliminary objection has been taken by the learned Counsel for the petitioner/non-applicant that a review petition is not maintainable. It was submitted by Mr Chandhiok, the learned senior counsel appearing on behalf of the petitioner/non-applicant, that the appointment of an arbitrator under Section 11(6) of the said Act is done in terms of the said Act. The Chief Justice or his designate functions within the four corners of the said Act. An appointment, once made under Section 11(6) of the said Act, attains finality as would be clear from the provisions of Section 11(7) of the said Act itself. He submits that no specific provision has been made in the Act for review of an order passed under Section 11(6) of the said Act whereby an arbitrator or arbitral tribunal is appointed. Since the powers of appointment of an arbitrator under Section 11(6) are exercised under the said Act, it is only that Act which could have given the powers of review. Since no power of review has been given in the said Act, the provisions of Code of Civil Procedure, 1908 (hereinafter referred to as the 'CPC') cannot be introduced into such proceedings. The learned Counsel then referred to provisions of Section 114 CPC to point out that, in any event, none of the three instances under which a review is permissible, are satisfied. He submitted that, therefore, the provisions of Order 47 CPC cannot at all be invoked. He also contended that when the Chief Justice or his designate exercises his powers under Section 11(6) of the said Act, he does not function as a court and, therefore, provisions of the CPC cannot be invoked to seek a review of an order passed there under.
3. Mr Jayant Bhushan, the learned senior counsel appearing on behalf of the applicant/review petitioner, submitted that this Court has the power to review inasmuch as the order dated 07.12.2007 was a judicial order and not an administrative one. He submitted that it was a judicial order passed by a Judge of the High Court, which, in any event, has inherent power to review its orders. Mr Jayant Bhushan placed reliance on a decision of a Division Bench of the Calcutta High Court in the case of Maheshwari Brothers Ltd. v. National Highways Authority of India 2007 (1) Arb. L.R 64 (Cal) wherein the said Division Bench was of the view that in Section 9 proceedings under the Act, the Court functioned as a 'Court' as defined in Section 2(e) of the said Act and, therefore, since there was no specific exclusion of the review power of a civil Court, the said Court would have the power to review its own orders passed under Section 9 of the said Act.
4. In rejoinder, Mr Chandhiok placed reliance on the Constitution Bench decision of the Supreme Court in the case of S.B.P. and Co. v. Patel Engineering Ltd. and Anr. (2005) 8 SCC 618 wherein the powers under Section 11(6) of the said Act were considered threadbare and the Supreme Court came to the conclusion that the power was a judicial power and not an administrative power. In particular, he drew my attention to paragraph 15 of the said decision, which reads as under:
15. Normally a persona designata cannot delegate his power to another. Here, the Chef Justice of the High Court or the Chief Justice of India is given the power to designate another to exercise the power conferred on him under Section 11(6) of the Act. If the power is a judicial power, it is obvious that the power could be conferred only on a judicial authority and in this case, logically on another Judge of the High Court or on a Judge of the Supreme Court. It is logical to consider the conferment of the power on the Chief Justice of the High Court and on the Chief Justice of India as presiding Judges of the High Court and the Supreme Court and the exercise of the power so conferred, is exercise of judicial power/authority as presiding Judges of the respective courts. Replacing of the word 'court' in the Model Law with the expression "Chief Justice" in the Act, appears to be more for excluding the exercise of power by the District Court and by the court as an entity leading to obvious consequences in the matter of the procedure to be followed and the rights of appeal governing the matter. The departure from the Model Law and the use of the expression "Chief Justice" cannot be taken to exclude the theory of its being an adjudication under Section 11 of the Act by a judicial authority.
He submitted that when the Chief Justice or his designate exercises power under Section 11(6) of the said Act, the Chief Justice or his designate does not function as a 'Court' though they act in exercise of judicial powers. He submitted that the word 'Court' had been defined in the said Act under Section 2(1)(e). Therefore, at all places where the word 'Court' is used in the Act, the meaning given in Section 2(1)(e) has to be ascribed to that word wherever it is used. He submitted that the word 'Court' is not used in Section 11(6) and the only expressions used are "the Chief Justice or any person or institution designated by him". Therefore, the meaning of the word 'Court', as defined in Section 2(1)(e), cannot be imported into the provisions of Section 11(6) of the said Act. He submits that the Calcutta High Court decision, relied upon by Mr Jayant Bhushan, can be distinguished because in that case the Court was concerned with the question of review of an order passed in exercise of the powers conferred under Section 9 of the said Act. He submits that Section 9 of the said Act has a specific reference to 'Court' and, therefore, the meaning ascribed in Section 2(1)(e) of the said Act would come into play. That, according to him, is the distinguishing feature of the decision in the Calcutta High Court and the case that presents itself before me.
5. I have considered the arguments advanced by the learned Counsel for the parties and given deep thought to what has been submitted. It is well settled that the power of review has to be given by the statute. Though, the High Courts, being courts of plenary jurisdiction, have inherent powers of review. But the question that arises in the present case is whether an order passed under Section 11(6) of the said Act would amount to an order passed by the High Court or, for that matter, a Court. The answer is, in my opinion, provided by paragraph 18 of the Supreme Court decision in the case of SBP & Co. (supra), which reads as under:
18. It is true that the power under Section 11(6) of the Act is not conferred on the Supreme Court or on the High Court, but it is conferred on the Chief Justice of India or the Chief Justice of the High Court. One possible reason for specifying the authority as the Chief Justice, could be that if it were merely the conferment of the power on the High Court, or the Supreme Court, the matter would be governed by the normal procedure of that Court, including the right of appeal and the Parliament obviously wanted to avoid that situation, since one of the objects was to restrict the interference by Courts in the arbitral process. Therefore, the power was conferred on the highest judicial authority in the country and in the State in their capacities as Chief Justices. They have been conferred the power or the right to pass an order contemplated by Section 11 of the Act. We have already seen that it is not possible to envisage that the power is conferred on the Chief Justice as persona designata. Therefore, the fact that the power is conferred on the Chief Justice, and not on the court presided over by him is not sufficient to hold that the power thus conferred is merely an administrative power and is not a judicial power.
(underlining added) After reading the aforesaid portion of the Supreme Court decision, it immediately becomes clear that the power under Section 11(6) of the said Act is not conferred on the High Court but is conferred on the Chief Justice of the High Court. The Supreme Court has also given one of the possible reasons for specifying the authority as the Chief Justice and for not conferring any power on the High Court. The possible reason given by the Supreme Court is that had the power been conferred on the High Court, then the matter would be governed by the normal procedure of that Court, including the right of appeal and Parliament obviously wanted to avoid that situation, since one of the objects was to restrict the interference by courts in the arbitral process. It is in this context that the Supreme Court concluded that the power was conferred on the highest judicial authority in the country and in the State in their capacities as Chief Justices. It is obvious from a reading of the said observations of the Supreme Court that the power that is exercised under Section 11(6) by the Chief Justice or his designate is not a power which is exercised by them as a Court and, therefore, would not be governed by the normal procedure of that court which includes the right of appeal as well as the power of review, revision etc. In these circumstances, I am of the view that a review petition would not be maintainable in respect of an order passed under Section 11(6) of the said Act.
This petition is dismissed.