Gujarat High Court
Reliance Defence And Engineering Ltd. ... vs Diakofto Shipping S A & on 29 March, 2017
Equivalent citations: AIR 2018 (NOC) 280 (GUJ.)
Author: R. Subhash Reddy
Bench: R.Subhash Reddy, Vipul M. Pancholi
C/LPA/23/2017 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 23 of 2017
In
SPECIAL CIVIL APPLICATION NO. 15649 of 2015
With
CIVIL APPLICATION NO. 730 of 2017
In
LETTERS PATENT APPEAL NO. 23 of 2017
With
LETTERS PATENT APPEAL NO. 24 of 2017
In
SPECIAL CIVIL APPLICATION NO. 15650 of 2015
TO
LETTERS PATENT APPEAL NO. 26 of 2017
In
SPECIAL CIVIL APPLICATION NO. 15647 of 2015
With
CIVIL APPLICATION NO. 731 of 2017
In
LETTERS PATENT APPEAL NO. 24 of 2017
TO
CIVIL APPLICATION NO. 733 of 2017
In
LETTERS PATENT APPEAL NO. 26 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE
MR. R.SUBHASH REDDY
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
==========================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ?
Page 1 of 28 HC-NIC Page 1 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT 2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?
========================================================== RELIANCE DEFENCE AND ENGINEERING LTD. (FORMERLY KNOWN AS PIPAVAV DEFENSE AND OFFSHORE ENGINEERING COMPANY LTD.)....Appellant Versus DIAKOFTO SHIPPING S A & 1....Respondents ========================================================== Appearance:
MR TEJAS KARIA, MR NIRAG PATHAK, MS GRISHMA AHUJA, ADVOCATES for SHARDOL AMARCHAND MANGALDAS & CO, ADVOCATE for Appellant MR HARDIK P MODH, ADVOCATE for Respondent No. 1 MR GM JOSHI, ADVOCATE for Respondent No. 2 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. R.SUBHASH REDDY and HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI Date :29/03/2017 COMMON CAV JUDGMENT (PER : HONOURABLE THE CHIEF JUSTICE MR. R.SUBHASH REDDY)
1. All these Letters Patent Appeals under Clause-15 of the Letters Patent are filed by the original respondent in a group of Special Civil Applications, aggrieved by the common C.A.V. order dated 26th August, 2016, passed by learned single Judge, and therefore, they are heard together and disposed of by this Page 2 of 28 HC-NIC Page 2 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT common judgment.
2. For the purpose of disposal, we refer to the facts and parties arrayed in Special Civil Application No. 15647 of 2015 in which Letters Patent Appeal No. 26 of 2017 is filed.
3. By the aforesaid common order, the learned single Judge allowed draft amendments in each of the petitions and aggrieved by such order, these appeals are filed. As such, we confine to state the facts which are necessary for disposal of these appeals.
4. The facts, in brief, giving rise to filing of these appeals, are that, the appellant herein, entered into ship building contract with the respondent no.1 herein on 6th December, 2006. By the aforesaid contract, the appellant agreed to design, build, launch, equip, outfit, test and complete one 74,600 DWT Panamax Bulk Carrier (Hull No. P011) and the respondent no.1 has agreed to purchase and accept the delivery thereof. The appellant, under the contract, has furnished refund bank guarantee against the payment made in terms of advances on signing the contract. The respondent no.1-company, on the ground that there was delay in delivering the ship and thus, terms of the contract were violated, cancelled and terminated the contract on 10th December, 2011. In view of the termination of the contract, the appellant herein was left with no option but to invoke arbitration as per the contract. Accordingly, arbitration proceedings were commenced between the present Page 3 of 28 HC-NIC Page 3 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT appellant and respondent no.1-company herein at Singapore as per the Singapore International Arbitration Centre Rules, being SIAC Arbitration No. 175 of 2011. In the arbitration proceedings, the 1st partial award was passed on 20th December, 2012, 2nd partial award was passed on 24th September 2013 and final award was passed on 5th May, 2014.
4.1. The appellant herein challenged the arbitral award dated 24th September, 2013, passed in arbitration proceedings, by way of application under Section 34 of the Arbitration & Conciliation Act, 1996 ("the Act" for short) before the 2nd Additional District Judge, Amreli at Rajula. Along with the application under Section 34 of the Act, the appellant also filed an application vide exh. 6, seeking stay of operation, implementation, execution and/or enforcement of the arbitral award till the final disposal of the application under Section 34 of the Act. The learned 2nd Additional District Judge, Amreli, vide order dated 25th October, 2013, returned the application which was filed under Section 34 of the Act, under Order VII of Rule 10 of the Code of Civil Procedure, 1908. The said order was challenged by the present appellant before this Court by way of Appeal From Order No. 462 of 2013 and the learned single Judge of this Court, while issuing notice in the said Appeal From Order, granted status quo with regard to execution of the arbitral award till final disposal of the appeal.Page 4 of 28
HC-NIC Page 4 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT 4.2. It is the case of the appellant that in spite of the fact that respondent no.1 was aware of the proceedings initiated before the Indian court, respondent no.1 purposefully and in complete disrespect and disregard to the Indian courts, has not appeared in the said proceedings and ultimately, vide judgment dated 8th May, 2014, the Appeal From Order filed by the appellant came to be allowed by the learned single Judge of this Court by setting aside the order dated 25th October, 2013 passed by the learned Additional District Judge, Amreli at Rajula. By the said order, it is held by the learned single Judge of this Court that the learned Additional District Judge, Amreli at Rajula has jurisdiction to hear and adjudicate the application filed under Section 34 of the Arbitration & Conciliation Act, 1996.
4.3. It is the further case of the appellant that after the C.A.V judgment dated 8th May, 2014 passed in the Appeal From Order, the learned Additional District Judge, vide order dated 28th May, 2014 issued notice to the respondent no.1 calling upon it to appear on 6th June, 2014 and to show cause as to why reliefs as sought in the application filed under Section 34 of the Act should not be granted. It appears that thereafter, the appellant sent the complete set of application filed under Section 34 of the Act along with stay application to respondent no.1, through courier service and proof of such intimation was placed on record before the Page 5 of 28 HC-NIC Page 5 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT Additional District Judge by way of affidavit of service dated 6th June, 2014. It is stated that respondent no.1 has not chosen to appear before the Additional District Judge and the learned Additional District Judge proceeded ex parte and passed ad interim order dated 16th June, 2014, granting stay of operation, implementation, execution and/or enforcement of the arbitral award. It is the case of the appellant that even after issuance of notice, though respondent no.1 was aware of the proceedings initiated before the Additional District Judge, Amreli at Rajula, it has not deliberately appeared before the learned Additional District Judge and thereafter, has indirectly enforced the arbitral award under challenge by encashing the money secured under the refund bank guarantees on 17th October, 2014, 20th October, 2014 and 22nd October, 2014. It is the further case of the appellant that thereafter, in stead of filing reply to the application filed by the present appellant under section 34 of the Act, respondent no.1 filed an application vide exh. 19 (Application for Dismissal) on 24th December, 2014 before the Additional District Judge, Amreli at Rajula, raising the contention with regard to maintainability of the application under Section 34 of the Act. The appellant herein filed its reply vide exh. 23 to the application for dismissal on 27th February, 2015, mainly highlighting the mala fide conduct of the respondent no.1 company. Apropos to filing of the Page 6 of 28 HC-NIC Page 6 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT application for dismissal by the respondent, the appellant herein filed an application vide exh. 26 before the Additional District Judge, Amreli at Rajula on 17th April, 2015, challenging the maintainability of the application for dismissal filed by the respondent no.1 company, mainly on the ground that the Act itself is a self-contained code and the Act does not contain any provision for filing of the application in the nature of application for dismissal. The respondent herein chose not to file reply to the said application. Accordingly, the Additional District Judge, Amreli at Rajula, after bipartite hearing, by a reasoned order dated 28th August, 2015, dismissed the application of respondent no.1 for dismissal of the application filed by the appellant under section 34 of the Act, and granted the application, exh. 26, filed by the appellant herein.
4.4. Challenging the said order dated 28th August, 2015, Special Civil Application No. 15647 of 2015 was filed by the respondent-original petitioner with the prayers which read as under:
"28(a). that the Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction calling for records of the case and after going into the legality and validity thereof, direct the learned Civil Judge at Rajula, Amreli District, Gujarat, not to exercise its jurisdiction in the matter and to dismiss the application filed by the respondent under S.34 of the Page 7 of 28 HC-NIC Page 7 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT Arbitration & Conciliation Act, 1996;
(b) that this Hon'ble Court may be pleased to set aside the order of the learned District Judge at Rajula, Amreli District dated 28 August 2015 allowing the respondents application dated 17 April 2015 filed under Exh.26 and rejecting the application challenging jurisdiction (Filed under Exh.19);
(c) that this Hon'ble Court may be pleased to set aside the interim order of the learned District Judge at Rajula, Amreli District staying the operation, implementation, execution and/or enforcement of the Award pending hearing and final disposal of the Original Application;
(d) interim and ad-interim reliefs as terms of prayers Clause (a), (b) and (c);
(e) for such further and other reliefs as the Hon'ble Court may deem fit and proper in the nature and circumstances of the case."
4.5. In the aforesaid special civil application, which was filed under Article 227 of the Constitution of India, affidavit in reply was filed on behalf of the appellant herein. After filing of the affidavit in reply on behalf of the appellant, respondent no.1 herein has moved a draft amendment to add prayer Clause-28(aa) after prayer clause 28(a) in the petition. The prayer which is sought to be impleaded by way of amendment reads as under:
"28(aa). This Hon'ble Court may be pleased to issue a writ of prohibition and/or any other appropriate writ, order or direction restraining the learned District Judge, Amreli at Rajula from entertaining and/or adjudicating Misc. Civil Application No.16 of 2014 filed under Section Page 8 of 28 HC-NIC Page 8 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT 34 of the Arbitration and Conciliation Act, 1996 by the respondent herein and the learned District Judge, Amreli at Rajula may be directed to dispose of the said application as not maintainable."
4.6. When the said draft amendment was filed, the same was opposed by the appellant herein, mainly on the ground that draft amendment which is allowed, could enlarge the scope of the petition. It was the case of the appellant before the learned single Judge that as the petition was filed in the capacity under Article 227 of the Constitution of India challenging the validity of the order passed by the Civil Court on the maintainability of the petition, if any prayer as sought for is allowed by introducing the prayer for issuance of writ of prohibition under Article 227 of the Constitution of India, the same will change the nature of the subject-matter in the proceedings between the parties. It is also pleaded that there were delay and laches in seeking such prayer by way of amendment. In spite of the same, the learned single Judge, by overruling the objection of the appellant to the draft amendment, has allowed the draft amendment permitting to carry out the amendment mainly on the ground that, no ground existed to relegate the respondent no.1 company to the Civil Court to decide its own jurisdiction when it has opposed the proceedings initiated by the appellant under section 34 of the Act on the ground of Page 9 of 28 HC-NIC Page 9 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT applicability of provisions of Part-I of the Arbitration & Conciliation Act, 1996.
5. Heard Shri Tejas Karia, learned counsel assisted by Shri Nirag Pathak and Ms Grishma Ahuja for Shardul Amarchand Mangaldas and Co., Advocate for the appellant, Shri Rashesh Sanjanwala, learned Senior Advocate, assisted by Shri Hardik P Modh and Shri Amit Laddha, learned counsel for respondent no.1 and Shri G.M. Joshi, learned counsel for respondent no.2.
6. In these appeals, it is contended by Shri Karia, learned counsel appearing on behalf of the appellant, that the learned single Judge has committed an error in allowing the draft amendment, in spite of the fact that it would result in the change of nature of the proceedings, being special civil application. It is contended by the learned counsel that special civil application was filed challenging the order dated 28th August, 2015 passed by the learned Additional District Judge, Amreli at Rajula, whereby the application filed by the appellant herein to reject the application filed by the respondent no.1 for dismissal of application of the appellant filed under Section 34 of the Act was allowed and the application of respondent no.1 was rejected. It is submitted that initially, respondent no.1 has filed special civil application under Article 227 of the Constitution of India. But during the course of hearing, draft amendment was filed to introduce the new prayer for issuance of writ of prohibition. It is contended by the learned counsel that the Page 10 of 28 HC-NIC Page 10 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT learned single Judge has virtually decided the merits of the matter in the impugned order itself and allowed the petition contrary to the settled norms that no amendment can be allowed when it changes the nature of a proceeding. It is further submitted that there were abnormal delay and laches in seeking the amendment and in spite of the same, such contention was not considered and the learned single Judge has allowed the draft amendment. Learned counsel for the appellant, in support of his argument has relied on the following judgments:
(i) Thirumala Tirpuati Devasthanams and another vs. Thallappaka Ananthacharyulu and others, reported in (2003) 8 Supreme Court Cases 134;
(ii) Radhey Shyam and another vs. Chhabi Nath and others, reported in (2015) 5 Supreme Court Cases 423;
(iii) Jogendrasinhji Vijaysinghji vs. State of Gujarat and others, reported in (2015) 9 Supreme Court Cases 1;
(iv) Mahanagar Telephone Nigam Limited vs. Applied Electronics Limited, reported in (2017) 2 Supreme Court Cases 37;
(v) judgment of learned single Judge of this Court rendered in Special Civil Application No. 8009 of 2010 on 18.8.2010;
(vi) Venture Global Engineering vs. Satyam Computer Services Ltd and another, reported in (2008) 4 Supreme Court Page 11 of 28 HC-NIC Page 11 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT Cases 190.
7. On the other hand, Shri R.S.Sanjanwala, learned Senior Advocate appearing on behalf of respondent no.1, contended that there is no error committed by the learned single Judge so as to challenge the said order by way of Letters Patent Appeal. It is submitted that as per the terms of the contract entered into between the parties, it was specifically agreed that the disputes between the parties are to be resolved by way of arbitration as per the provisions under Singapore International Arbitration Centre Rules and as per the laws of England, and therefore, the court of Additional District Judge at Amreli has no jurisdiction either to entertain the application filed under Section 34 of the Act or to pass interim order thereon. It is contended that the grounds with regard to jurisdiction were already taken in the special civil application, which is filed under Article 227 of the Constitution of India. But at the same time, there was no specific prayer for writ of prohibition and as such, the amendment sought is merely clarificatory in nature. It is submitted that by virtue of allowing such draft amendment, no prejudice is caused to the appellant herein and to avoid the multiplicity of proceedings, the learned single Judge has rightly allowed the draft amendment. In support of his contentions, the learned counsel has placed reliance on the following judgments:
Page 12 of 28
HC-NIC Page 12 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT
(i) Judgment of the learned single Judge of Allahabad High Court in the case of Arun Lata v. Civil Judge, Bulandshahar and others, reported in 1997 SCC Online All 367;
(ii) Abdul Rehman and another v. Mohd. Ruldu and others, reported in (2012) 11 Supreme Court Cases 341;
(iii) Andhra Bank vs. ABN Amro Bank N.V. and others, reported in (2007) 6 Supreme court Cases 167.
8. Having heard the learned counsel for the parties, we have perused the order passed by the learned single Judge and other materials placed on the record.
9. Having regard to the contentions advanced by the learned counsel on both sides, the only question that is required to be considered is, whether the draft amendment granted by the learned single Judge would result in the change in the nature of proceedings pending in the special civil application or not. As the special civil application in which the draft amendment is granted, is pending before the learned single Judge, it is not desirable to enter into the merits of the matter, and therefore, we proceed to record our finding only for the purpose of disposal of these appeals.
10. From the materials placed on record, it is clear that there was an agreement entered into between the appellant and the respondent no.1 for ship building on 6th December, 2006 and by the aforesaid contract, the appellant agreed to design, build, Page 13 of 28 HC-NIC Page 13 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT launch, equip, outfit, test and complete one 74,600 DWT Panamax Bulk Carrier (Hull No. P011) and the respondent companies agreed to purchase and accept the delivery thereof. It is the case of the respondent no.1 that the contract was not executed within the time as agreed upon and there was breach of terms of contract, resultantly, the respondent no.1 terminated the contract and is entitled to invoke the bank guarantees which were furnished by the appellant. On the other hand, it is the case of the appellant that circumstances were beyond the control of the appellant and the delay occurred on account of vis major, and therefore, there was no breach of terms of contract. When the award was passed by Singapore International Arbitration Centre, the said award was sought to be challenged by the appellant by way of an application under the provisions of Section 34 of the Arbitration & Conciliation Act, 1996 before the learned Additional District Judge, Amreli at Rajula. In the said application, it was the case of the appellant that though there was knowledge about initiation of proceedings, respondent no.1 has purposely and deliberately avoided to appear before the learned Additional District Judge, Amreli at Rajula and the learned Additional District Judge, Amreli at Rajula, after hearing the appellant herein, has passed order of status quo granting injunction by restraining respondent no.1 from enforcing and executing the award under challenge. But the fact remains that subsequently respondent Page 14 of 28 HC-NIC Page 14 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT no.1 has appeared before the learned Additional District Judge, Amreli at Rajula and filed an application seeking dismissal of the application filed by the appellant under Section 34 of the Act, mainly on the ground that, the said court has no jurisdiction to entertain the application in view of the contractual terms. When such application was filed, the appellant herein also filed another application to reject the application filed by respondent no.1 which questioned the maintainability of the application filed by the appellant under Section 34 of the Act. The learned Additional District Judge, Amreli at Rajula, allowed the application of the appellant, which resulted in the rejection of the application filed by respondent no.1, wherein respondent no.1 has questioned the maintainability of the application of the appellant under Section 34 of the Act. Aggrieved by such order passed by the learned Additional District Judge, Amreli at Rajula, respondent no.1 approached this Court by filing special civil application with the reliefs which are quoted hereinabove. At a belated stage, respondent no.1 has sought amendment by introducing prayer for a writ of prohibition under Article 227 of the Constitution of India, mainly on the ground that, the learned Additional District Judge, Amreli at Rajula has no jurisdiction to adjudicate and proceed with the matter.
11. For the reasons we propose to record hereafter, we are of the view that, by allowing the draft amendment filed by Page 15 of 28 HC-NIC Page 15 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT respondent no.1 in the special civil application, it will change the nature of the proceedings. The application which is initially filed is amenable to correction only in view of the power of superintendence conferred on this Court under Article 227 of the Constitution of India. It is also fairly well settled that jurisdiction vested in the High Court under Article 227 of the Constitution is revisional jurisdiction and no Letters Patent Appeal lies against such order passed by learned single Judge in exercise of such power. The power conferred under Article 226 of the Constitution on this Court is original jurisdiction and therefore, this Court is empowered to issue orders, directions or writs which are in the nature of habeas corpus, mandamus, prohibition, quo-warranto, certiorari, etc. So far as the writ of prohibition is concerned, the High Courts are empowered to issue writs, including a writ in the nature of prohibition. A writ of prohibition is normally issued only when the inferior Court or Tribunal proceeds to act without or in excess of jurisdiction, in violation of rules of natural justice or under the law which is itself ultra vires or unconstitutional, or in contravention of fundamental rights. It is also equally well settled that writs of prohibition are to be issued in the rarest of rare cases and such jurisdiction is original jurisdiction under Article 226 of the Constitution of India. Where the order of a civil court is challenged by way of a proceeding, no amendment can be allowed therein by introducing the prayer for a writ of Page 16 of 28 HC-NIC Page 16 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT prohibition which is normally to be issued in exercise of power under Article 226 of the Constitution. When such amendment is allowed, definitely, it changes the nature of proceedings from revisional jurisdiction to original jurisdiction. Whereas the order under challenge in the special civil application is to be tested under the revisional jurisdiction under Article 227 of the Constitution of India, the amendment which introduces the prayer for issuance of a writ of prohibition, can be considered only in exercise of power conferred under original jurisdiction of this Court in exercise of power under Article 226 of the Constitution of India.
12. In the judgment relied on by the learned counsel for the appellant in the case of Thirumala Tirpuati Devasthanams and another vs. Thallappaka Ananthacharyulu and others, reported in (2003) 8 Supreme Court Cases 134, the Hon'ble Supreme Court has considered the scope for issuance of a writ of prohibition and has held that the Supreme Court and the High Courts have power to issue writs, including a writ of prohibition. It is further held that a writ of prohibition is normally issued only when the inferior court or tribunal proceeds to act without or in excess of jurisdiction, in contravention of the rules of natural justice and in contravention of fundamental rights. It is also held that a writ of prohibition must be issued only in the rarest of rare cases and judicial discipline of the highest order has to be exercised while Page 17 of 28 HC-NIC Page 17 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT issuing such writs. It is specifically observed that writ jurisdiction is original jurisdiction distinct from appellate jurisdiction. In clear terms, it is held that an appeal cannot be allowed to be disguised in the form of a writ. In para-14 of the aforesaid judgment, Hon'ble the Supreme Court has held as under:-
"14. On the basis of the authorities it is clear that the Supreme Court and the High Courts have power to issue writs, including a writ of prohibition. A writ of prohibition is normally issued only when the inferior Court or Tribunal (a) proceeds to act without or in excess of jurisdiction, (b) proceeds to act in violation of rules of natural justice, (c) proceeds to act under law which is itself ultra vires or unconstitutional, or (d) proceeds to act in contravention of fundamental rights. The principles, which govern exercise of such power, must be strictly observed. A writ of prohibition must be issued only in rarest of rare cases. Judicial disciplines of the highest order has to be exercised whilst issuing such writs. It must be remembered that the writ jurisdiction is original jurisdiction distinct from appellate jurisdiction. An appeal cannot be allowed to be disguised in the form of a writ. In other words, this power cannot be allowed to be used "as a cloak of an appeal in disguise". Lax use of such a power would impair the dignity and integrity of the subordinate Court and could also lead to chaotic consequences. It would undermine the confidence of the subordinate Court. It was not even argued that there was total lack of jurisdiction in the civil Court. It could not be denied that the civil Court, before which the suit was pending, had powers to decide on the maintainability of the suit and to decide on questions of its jurisdiction. The civil Court had jurisdiction to decide whether the suit was barred by Section 14 of the said Act or on principles of res judicata/estoppel. Thus unless there was some very cogent or strong reason the High Court should not have prevented the Court of competent jurisdiction from deciding these questions. In other words the High Court should not usurp the jurisdiction of the civil Court to decide these questions. In the impugned Judgment no reason, much less a cogent or strong reason, has been Page 18 of 28 HC-NIC Page 18 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT given as to why the civil Court could not be allowed to decide these questions. The impugned Judgment does not state that the civil Court had either proceeded to act without or in excess of jurisdiction or that it had acted in violation of rules of natural justice or that it had proceeded to act under law which was ultra vires or unconstitutional or proceeded to act in contravention of fundamental rights. The impugned Judgment does not indicate as to why the High Court did not consider it expedient to allow the civil Court to decide on questions of maintainability of the suit or its own jurisdiction. The impugned judgment does not indicate why the civil Court be not allowed to decide whether the suit was barred by virtue of Section 14 of the said Act or on principles of res judicata/estoppel. To be remembered that no fundamental right is being violated when a Court of competent jurisdiction is deciding, rightly or wrongly, matters before it."
13. In the case of Radhey Shyam and another vs. Chhabi Nath and others, reported in (2015) 5 Supreme Court Cases 423, the Hon'ble Supreme Court examined the scope and distinction between Articles 226 and 227 of the Constitution of India. In the aforesaid judgment, the Hon'ble Supreme Court has held that all the courts in the jurisdiction of a High Court are subordinate to it and subject to its control and supervision under Article 227 of the Constitution of India. It is specifically held that judicial orders of civil courts are not amenable to writ jurisdiction under Article 226 of the Constitution of India, and challenge to such judicial orders would lie by way of revision or under Article 227 of the Constitution, but not by way of a writ under Articles 226 or 32 of the Constitution of India. While answering the reference in the aforesaid judgment, the Hon'ble Supreme Court has held in Page 19 of 28 HC-NIC Page 19 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT paras 27 to 29.3 as under:
"27. Thus, we are of the view that judicial orders of civil courts are not amenable to a writ of certiorari under Article 226. We are also in agreement with the view of the referring Bench that a writ of mandamus does not lie against a private person not discharging any public duty.Scope of Article 227 is different from Article 226.
28. 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. In Mahendra Saree Emporium, reference to Surya Dev Rai is made in para 9 of the judgment only for the proposition that no subordinate legislation can whittle down the jurisdiction conferred by the Constitution. Similarly, in Salem Bar Assn. in para 40, reference to Surya Dev Rai is for the same purpose. We are, thus, unable to accept the submission of learned counsel for the respondent.
29. Accordingly, we answer the question referred as follows :
29.1. Judicial orders of civil court are not amenable to writ jurisdiction under Article 226 of the Constitution. 29.2 Jurisdiction under Article 227 is distinct from jurisdiction from jurisdiction under Article 226. 29.3 Contrary view in Surya Dev Rai is overruled."
14. Learned counsel for the appellant has also placed reliance on the judgment of the Hon'ble Supreme Court in the case of Jogendrasinhji Vijaysinghji vs. State of Gujarat and others, reported in (2015) 9 Supreme Court Cases 1. In the aforesaid judgment, the Hon'ble Supreme Court has summarized the principles on the maintainability of Letters Page 20 of 28 HC-NIC Page 20 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT Patent Appeals under Clause-15 of the Letters Patent of the High Court, against the order passed by the learned single Judges. While considering the various issues elaborately, the Hon'ble Supreme Court has held in the aforesaid judgment that the orders passed by the civil court are only to be scrutinised by the High Court in exercise of jurisdiction under Article 227 of the Constitution, which is different from Article 226 of the Constitution. In the aforesaid judgment, the view taken by the High Court in the case of Radhey Shyam (supra) is approved by the Hon'ble Supreme Court. The conclusions of the judgments are summarized in paras 45 and 46, which are quoted as under:
"45. In view of the aforesaid analysis, we proceed to summarise our conclusions as follows:-
45.1. Whether a letters patent appeal would lie against the order passed by the learned Single Judge that has travelled to him from the other tribunals or authorities, would depend upon many a facet. The Court fee payable on a petition to make it under Article 226 or Article 227 or both, would depend upon the rules framed by the High Court.
45.2. The order passed by the civil court is only amenable to be scrutinized by the High Court in exercise of jurisdiction under Article 227 of the Constitution of India which is different from Article 226 of the Constitution and as per the pronouncement in Radhey Shyam (supra), no writ can be issued against the order passed by the civil court and, therefore, no letters patent appeal would be maintainable.
45.3. The writ petition can be held to be not maintainable if a tribunal or authority that is required to defend the impugned order has not been arrayed as a party, as it is a necessary party.Page 21 of 28
HC-NIC Page 21 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT 45.4. Tribunal being or not being party in a writ petition is not determinative of the maintainability of a letters patent appeal."
15. Further reliance is also placed on the judgment of the Hon'ble Supreme Court in the case of Mahanagar Telephone Nigam Limited vs Applied Electronics Limited, reported in (2017) 2 Supreme Court Cases 37. In the aforesaid judgment, the Hon'ble Supreme Court has examined the applicability of the Code of Civil Procedure, 1908 to arbitration proceedings under the provisions of the Arbitration & Conciliation Act, 1996. The Hon'ble Supreme Court, in the aforesaid judgment has disagreed with the earlier view taken in the case of ITI Ltd. Vs Siemens Public Communications Network Ltd, reported in (2002) 5 SCC 510 and has referred the matter to the larger Bench. Paras 27 and 28 of the aforesaid judgment read as under:
"27. Section 5 which commences with a non-obstante clause clearly stipulates that no judicial authority shall interfere except where so provided in Part 1 of the 1996 Act. As we perceive, the 1996 Act is a complete Code and Section 5 in categorical terms along with other provisions, lead to a definite conclusion that no other provision can be attracted. Thus, the application of CPC is not conceived of and, therefore, as a natural corollary, the cross-objection cannot be entertained. Though we express our view in the present manner, the judgment rendered in ITI Ltd. (supra) is a binding precedent. The three-Judge Bench decision in International Security & Intelligence Agency Ltd. (supra) can be distinguished as that is under the 1940 Act which has Section 41 which clearly states that the procedure of CPC would be applicable to appeals. The analysis made in ITI Ltd.Page 22 of 28
HC-NIC Page 22 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT (supra) to the effect that merely because the 1996 Act does not provide CPC to be applicable, it should not be inferred that the Code is inapplicable seems to be incorrect, for the scheme of the 1996 Act clearly envisages otherwise and the legislative intendment also so postulates.
28. As we are unable to follow the view expressed in ITI Ltd.(supra) and we are of the considered opinion that the said decision deserves to be re-considered by a larger Bench. Let the papers be placed before the Hon'ble the Chief Justice of India for constitution of an appropriate larger Bench."
16. Lastly, the learned counsel for the appellant, in support of his argument that foreign award passed in international commercial arbitration outside India can be challenged by way of a petition under Section 34 of the Arbitration & Conciliation Act, 1996, placed reliance on the judgment of the Hon'ble Supreme Court in the case of Venture Global Engineering vs. Satyam Computer Services Ltd and another, reported in (2008) 4 Supreme Court Cases 190. The said judgment is not relevant for the purpose of disposal of these appeals as the matter before this Court is not with regard to such maintainability as in the said judgment. However, the judgment relied on by the leaned counsel for the appellant in the case of Radhey Shyam (supra) and the judgment in the case of Jogendrasinhji Vijaysinghji (supra) would render assistance to the appellant in support of the plea of the appellant that by allowing the amendment, the nature of proceedings pending in the special civil application would Page 23 of 28 HC-NIC Page 23 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT change. In the aforesaid judgments, in clear terms, the Hon'ble Supreme Court has held that the orders passed by subordinate courts are subject to challenge only in a proceeding under Article 227 of the Constitution of India and no challenge to such judicial orders could lie by way of a writ petition under Articles 226 and 32 of the Constitution of India. The aforesaid view taken in the judgments referred above, fortifies the stand of the appellant that, if amendment is allowed, certainly, it would alter or change the nature of the proceedings.
17. Learned Senior Advocate Shri R.S. Sanjanwala, appearing on behalf of respondent no.1 has placed reliance on the judgment of the learned single Judge of Allahabad High Court in the case of Arun Lata v. Civil Judge, Bulandshahar and others, reported in 1997 SCC Online All 367. In the said case, petition was filed only under Article 226 of the Constitution of India and amendment was sought by adding the words, "petition under Articles 226/227 of the Constitution of India". By the aforesaid judgment, without dealing with the petition with regard to the proposed amendment, the learned single Judge allowed such amendment by observing that such question can be gone into at a later stage.
18. Learned counsel for respondent no.1 has also placed reliance upon the judgment of the Hon'ble Supreme Court in the case of Abdul Rehman and another v. Mohd. Ruldu and others, reported in (2012) 11 Supreme Court Cases Page 24 of 28 HC-NIC Page 24 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT 341, wherein the Hon'ble Supreme Court has considered the scope of provision of Order-VI Rule 17 of the Code of Civil Procedure and the proviso which was added by the CPC Amendment Act 22 of 2002, and held that the courts should try merits of the case that comes before them and should, consequently, allow all amendments that may be necessary for determining the real question in controversy between the parties, provided it does not cause injustice or prejudice to the other side. In the aforesaid judgment, it is clearly held that when the nature of proceeding is not changed, such amendments are to be allowed.
19. Further reliance is placed by the learned counsel for respondent no.1 on the judgment of the Hon'ble Supreme Court in the case of Andhra Bank vs. ABN Amro Bank N.V. and others, reported in (2007) 6 Supreme court Cases 167, wherein, the Hon'ble Supreme Court has considered the relevant considerations at the stage of considering the application for amendment filed under Order VI Rule 17 of the Code of Civil Procedure, 1908. In the aforesaid judgment, the Hon'ble Supreme Court held that the court cannot go into the question of merit of such amendment and it can only consider whether such amendment would be necessary for the decision of the real controversy between the parties concerned.
20. The judgments relied on by the learned counsel for respondent no.1 are of no assistance in support of the plea of Page 25 of 28 HC-NIC Page 25 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT respondent no.1 having regard to the facts and circumstances of the present case. It is fairly well settled that all the amendments which are necessary for determination of the issue in controversy are to be liberally allowed. But at the same time, it is consistently held by the Hon'ble Supreme Court that when amendment in the petition results in the change of nature of the proceedings, such amendment cannot be allowed. The judgments relied on by the learned counsel for the appellant support the case of the appellant in this case.
21. Applying the ratio of the judgments referred above and further looking at the order passed by the learned single Judge, we are of the view that while considering the prayer for amendment, the learned single Judge has gone into the merits of the matter by relying on the clauses contained in the agreement. The learned single Judge has recorded a finding that arbitration was held in Singapore under the Rules of Singapore International Arbitration Centre and the parties to the proceedings participated in the said arbitral proceedings without any demur or protest, and thus, by agreement, excluded the applicability of all provisions of Part-I of the Arbitration & Conciliation Act, 1996. In view of the above, we are of the view that the learned single Judge has committed an error by placing reliance on such finding while considering the prayer for amendment of the pleading. Having regard to the fact that for determination of the real issue and controversy Page 26 of 28 HC-NIC Page 26 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT which arose for consideration in the special civil application, we are of the view that the prayer which is sought to be introduced by way of amendment is not necessary. Further, having regard to the judgments relied on by the learned counsel for the appellant and the fact that the scope of powers under Articles 226 and 227 of the Constitution are totally distinguishable and to operate differently and distinctly in different situation, we are of the view that the learned single Judge has committed an error by allowing the draft amendment.
22. For the aforesaid reasons, we are of the view that Letters Patent Appeal No. 26 of 2017 deserves to be allowed and accordingly, it is allowed by setting aside the order dated 26th August, 2016 passed by the learned single Judge in Special Civil Application No. 15647 of 2015. As the main Letters Patent Appeal No. 26 of 2017 is allowed, Civil Application No. 733 of 2017 does not survive and the same is disposed of.
23. Consequently, Letters Patent Appeal Nos. 23 of 2017 to 25 of 2017 are also allowed by setting aside the order dated 26th August, 2016 passed by the learned single Judge in Special Civil Application Nos. 15649, 15650 and 15651 of 2015. Since the Letters Patent Appeal Nos. 23 of 2017 to 25 of 2017 are allowed, connected civil applications filed therein do not survive and the same are disposed of. No order as to costs.
(R. SUBHASH REDDY, CJ) Page 27 of 28 HC-NIC Page 27 of 28 Created On Thu Mar 30 00:12:01 IST 2017 C/LPA/23/2017 CAV JUDGMENT (VIPUL M. PANCHOLI, J.) pirzada Page 28 of 28 HC-NIC Page 28 of 28 Created On Thu Mar 30 00:12:01 IST 2017