Karnataka High Court
Mr K. Satish Kumar vs M/S. Rohan Associates on 23 January, 2014
Bench: Chief Justice, B.V.Nagarathna
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 23RD DAY OF JANUARY, 2014
PRESENT
THE HON'BLE MR. D.H.WAGHELA, CHIEF JUSTICE
AND
THE HON'BLE MRS. JUSTICE B.V.NAGARATHNA
W.P NO. 37175 OF 2013(GM-RES)
BETWEEN:
Mr. K. Satish Kumar,
S/o. Late Krishnappa,
Aged 59 years,
R/a. No.27/A, 8th "A" Main Road,
R.M.V. Extension,
Bangalore - 560 080.
... Petitioner
(By Sri. Manmohan P.N., Advocate)
AND:
M/s. Rohan Associates,
A Partnership firm incorporated under
the provisions of the Indian Partnership Act, 1932,
Having its registered office at
Pradeep Chambers, No.813,
Bhandarkar Institute Road,
Pune - 411 004,
Branch Office at No.1201, 1st Floor,
Divya Shakti 100 Feet Road,
Indiranagar, Bangalore - 560 038.
2
Represented by its General Power of Attorney Holder,
Mr. Shubhra Bhattacharya,
Aged about 45 years,
S/o. Sri. R.N. Bhattacharya,
R/a. No.1201, 1st Floor,
Divya Shakti, 100 Feet Road,
Indiranagar, Bangalore - 38.
... Respondent
(By Sri. Suraj Govinda Raj, Advocate)
* *** *
This Writ Petition is filed Under Articles 226 and 227
of Constitution of India praying to quash the order dated
31.07.2013, passed by the Learned Arbitrator in allowing
the application for amendment filed by the respondent
(Produced as Annexure-"S") and consequently reject the
application for amendment and pass such other and further
reliefs as may be deemed fit in the facts and circumstances
of the case in the interest of justice and equity.
This petition coming on for preliminary hearing this
day, the Chief Justice made the following:-
ORDER
D.H. WAGHELA, CJ (oral)
1. The petitioner has invoked Articles 226 and 227 of the Constitution of India to call in to question the order dated 31st July, 2013 made by learned arbitrator so as to allow the application for amendment filed by the respondent herein. The entertainment of the petition was objected on the preliminary ground of its maintainability 3 and, therefore, learned Counsel are heard in esteso only on the issue of maintainability of the petition.
2. There is no dispute about the fact that the arbitration proceeding between the parties is pending before the learned arbitrator and only an interim order is made on 31st July, 2013, on the application of the claimant under Sec. 23(3) of the Arbitration and Conciliation Act, 1996, read with Order VI Rule 17 of the Code of Civil Procedure. Thus, there is also no dispute about the fact that the impugned order is an interlocutory order made during the pendency of the arbitration.
3. The law on the subject is well settled by Seven Judges Bench of the Apex Court in SBP & Co. vs. Patel Engineering Ltd. and another ( (2005) 8 SCC 618 ) and the relevant part thereof may be reproduced as under :
"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. We see no warrant for such an 4 approach. Section 37 makes certain orders of the Arbitral Tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating its grievances against the award including any in-between orders that might have been passed by the Arbitral Tribunal acting under Section 16 of the Act. The party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The Arbitral Tribunal is, after all, a 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. Such an intervention by the High Courts is not permissible.5
46. The object of minimizing judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 or under Article 226 of the Constitution against every order made by the Arbitral Tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the Arbitral Tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage."
After elaborate discussion of the various aspects of the matter, the Supreme Court has further categorically held inter alia in para 47 as under :
"47. We therefore, sum up our conclusions as follows :
(i) to (v) ........
(vi) Once the matter reaches the Arbitral Tribunal or the sole arbitrator, the High Court would not interfere with the orders passed by the arbitrator or the Arbitral 6 Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act or in terms of Section 34 of the Act.
(vii) to (xii) ........
4. As against the above settled position of law, learned Counsel relied upon two judgments of the Hon'ble Bombay High Court in Dowell Leasing and Finance Ltd. vs. Radheshyam B.Khandelwal and ors. (2008(1) Arb. LR 512; in Anuptech Equipments Private Limited vs. Ganpati Co-op. Housing Society Limited (LAWS (BOM)- 1991-1-13 ).
5. Learned Counsel for the petitioner also submitted that the propositions laid down in SBP & Co. supra were not related to the issues in controversy before the Apex Court and hence those propositions ought to be treated as obiter dicta rather than ratio decidendi. He also relied upon the observation made by the Apex Court in Uttaranchal Road Transport Corporation and others vs. Mansaram Nainwal ( 2006 AIR SCW 3928 ) and in State of Orissa and others vs. MD. Illiyas ( 2006(1) 7 SCC 275 ), to submit that a decision is a precedent on its own facts and the only thing which is binding in a decision is the principle upon which the case was decided. It is, however, also clearly held in the same judgment that a decision is an authority for what it actually decides, and a case is a precedent and binding for what it explicitly decides.
6. In view of the clear provisions of Article 141 of the Constitution and the categorical statement of law made by the Apex Court in SBP & Co. supra, there is no manner of doubt that the High Courts are ordained not to exercise their power under Articles 226 or 227 of the Constitution, since the party aggrieved by an order of the Arbitral Tribunal has to wait until the award is made by the Tribunal. There is a clear injunction by the Apex Court in para 47(vi) of the judgment that, once the matter reaches the Arbitral Tribunal, the High Court would not interfere with the orders passed by the arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings. 8
7. Therefore with due deference to the Constitutional mandate and clear injunction categorically issued by the Apex Court in SBP & Co. (supra), the petition is required to be summarily dismissed on the preliminary issue of maintainability itself and accordingly, it is dismissed, with no order as to costs.
SD/-
CHIEF JUSTICE SD/-
JUDGE Mgn/-
CT-bs*