Gujarat High Court
Nirav Babubhai Patel vs Vinaykumar Mohanbhai Patel on 26 April, 2022
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 19530 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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1 Whether Reporters of Local Papers may
be allowed to see the 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 ?
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NIRAV BABUBHAI PATEL
Versus
VINAYKUMAR MOHANBHAI PATEL
=====================================================
Appearance:
MR NV GANDHI(1693) for the Petitioner(s) No. 1,2
VASIM MANSURI(8824) for the Petitioner(s) No. 1,2
for the Respondent(s) No. 2
MR JIGAR P RAVAL(2008) for the Respondent(s) No. 1
=====================================================
CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 26/04/2022
ORAL JUDGMENT
1. The present writ application under Article 226 Page 1 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 of the Constitution of India filed by the petitioners seeking following reliefs :-
"A)YOUR LORDSHIPS may be pleased to issue appropriate writ, order or direction and be pleased to quash and set aside impugned order dated 16.11.2021 and be please to allow production of documents for contradicting witness during cross examination, as applied vide application at Exh 106 and Exh.120; AND B) Pending hearing and final disposal of this petition YOUR LORDSHIPS may be pleased to stay the further proceedings of said Arbitration; AND C) YOUR LORDSHIPS may be pleased to grant ad-interim relief in terms of Para-B; AND D) YOUR LORDSHIPS be pleased to pass any other and further order as may be deemed fit in favour of the petitioner.
2. The brief facts germane to the present petitioners are stated thus :-
2.1 The petitioners are the original claimants.
On 14.03.2019, the petitioners filed statement of claim (Exh-3) along with 15 documents and prayed for the following reliefs :-
"a) To declare that the partnership firm viz M/s Adorn Gioielli being partnership at Will, stands dissolved on 01.07.2018 on the date of notice of Claimants or it stands dissolved on the date of receipt of this notice, or alternatively be pleased to dissolve the said partnership firm from the date that this hounourable Tribunal deems fit.Page 2 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022
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b) To determine the correct accounts of the partnership firm viz. m/s Adorn Gioielli of last six Financial year starting from 2013-13 to 2017-18 (i.e. F.Y. 2012-13, 2013-14, 2014-15, 215-16, 2017-18) and provisional Trial Balance of the F.Y. 2018-19 till date along with all supporting vouchers, bills documents, ledger accounts, bank statements etc and for that purpose if deemed fit be pleased to pass order for appointing and getting the accounts thoroughly audited by independent chartered accountants as deemed fit by Hon'ble Tribunal.
c) on determination of accounts to direct the Respondents to pay Rs.1,93,730/- being an amount of capital of Claimant no 1 as well as amount of Rs. 1,93,732/- to Claimant no 2 being the amount of Capital in partnership Firm and also to give true and correct share of each claimant @ 15% in partnership firm viz M/s Adorn Gioielli.
d) That if the accounts are not ascertained than be pleased to direct the Respondents to pay to Claimant no 1 amount of Rs. 1,50,65,330/- Rupees One crore fifty Lakh sixty Five Thousand Three Hundred and Thirty only, as well as to Claimant no 2 amount of Rs.1,50,65,332/- Rupees one core Fifty lakh sixty five thousand three hundred and thirty two, and also direct Respondents to give Claimants their share from the movable assets and the profit ascertained of the partnership firm viz. Adorn Gioielli.
e) To pass any other order as deemed fit in the interest of justice."
3. The respondent No.1 submitted written statement (Exh-6) on 01.04.2019 denying allegations made Page 3 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 by the petitioners in their claim statement. The claimants preferred applications below Exh.106 and Exh.120 for production of documents on behalf of the claimants which is duly produced at Annexure-B.
4. In the application below Exh.106, the petitioners contended that the respondents vide application dated 24.10.2020 wanted to produce additional documents, however, the Tribunal rejected the said application for production of documents vide its order dated 09.01.2021 and in the said application it was observed while dismissing the application preferred by the respondents for production of documents that the statement already made in the affidavits of the respondents and/or their witnesses shall remain without prejudice to the rights and contentions of both sides and shall be without prejudice to the opportunity on the part of the claimants to deal with or to contradict the same at the time of cross examination of the respective witnesses.
5. As per Section 145 of the Evidence Act - at the time of cross examination if the witness is to be confronted with his previous statements made by him in writing or reduced into writing and if the witness is contradicting, such document is required to be shown to the witness for the purpose of contradiction. It is further stated that if the claimants wants to contradict the Page 4 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 respondent no.1, the deponent of affidavit with his previous statement and the claimants even otherwise is entitled to deal with the statement made by the respondents in the cross examination and therefore, for the purpose of cross examination the documents are required to be produced.
6. Application to produce documents on behalf of the claimants below Exh.106 seeks the following reliefs which reads thus :-
"1.xxx xxx xxx
2. xxx xxx xxx
3. xxx xxx xxx
4. In view of the above observation made by Hon'ble Tribunal and the contentions of the Respondents no 1 in his examination-in- chief, & in view of the provision of Section 145 of Evidence Act which is based on principle of natural justice, Claimants crave leave to produce documents to contradict the say of Respondent no 1. It is therefore submitted that in interest of justice and for just cause, production of documents may be allowed.
5. The Claimants therefore humbly prays to this Hon'ble Tribunal that:
(a) may be pleased to allow the applicant to produce documents as mentioned in list of documents produced separately herewith and same may be taken on record;
(c) to pass such other and further order/s that may be deemed fit and proper in the interest of justice may also be granted."Page 5 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022
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7. The application below Exh.120 came to be filed by the petitioners seeking production of the order dated 04.05.2021 passed by the First Appellate Authority under RTI Act, 2005, by application dated 11.06.2021 seeking the following reliefs which reads thus :-
"1) XXX XXX XXX
2) XXX XXX XXX
3) The Claimants therefore humbly prays to this Hon'ble Tribunal that:
(a) may be pleased to allow production of Order dated 04.05.2021 passed by First Appellate Authority under RTI Act, 2005 and same may be taken on record;
(c) to pass such other and in further the interest order/s of that justice may maybe deemed fit and proper also be granted."
8. The Tribunal by considering the said applications preferred by the petitioners passed the following order. The paragraphs no.31 and 32 read as under :-
31. In view of the aforementioned reasons and the observation, the applications Exh.106 and Exh.120 are dismissed with the observation that the claimant in the cross examination may,by oral statement, contradict the aspects for which the claimant is advised to contradict in the cross examination. It is further observed that the question of evidentiary value or the relevancy of the evidence of the examination in chief as well as in the cross examination, shall be considered at the time of final Award after hearing the learned counsels appearing for both the sides and at that stage the rights and Page 6 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 contentions of both the sides as may be available in accordance with law shall remain open.
32. It is further observed and clarified that the reasons and the observations made by the Tribunal in the present order below Applications Exh.106 and Exh.120, are for the limited purpose of consideration of the present applications only and the rights and contentions of both the sides shall not be prejudiced, in any manner, whatsoever at the time of final arguments while passing the final Award and suffice it to observe that the rights and contentions of both the sides as may be available in accordance with law shall remain open, to be considered at the time of final arguments for passing final Award.
The Order is passed on 16th Day of Nov. 2021.
S/d.
(JUSTICE JAYANT PATEL) SOLE ARBITRATOR"
9. Mr. Sunit Shah, the learned counsel appearing for the petitioners relied upon the written submissions on behalf of the petitioners dated 18.04.2020 which are taken on record. Mr. Sunit Shah, the learned counsel mainly submitted that contents of the respondents are that (i) writ cannot lie. Reliance is placed on following judgments :-
(i) Padmarajsinh Ghanshyamsinh Jadeja V/s Hitesh M Bagdai;
(ii) Bhaven Construction through Authorized Signatory Premjibhai K Shah V/s Execution Page 7 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 Engineer Sardar Sarovar Narmada Nigam Ltd;
(iii) SBP & Co V/s Patel Engineering Ltd;
(iv)GTPL Hathway Ltd V/s Strategic Marketing Pvt Ltd.
Above referred judgments relate to Section 16 which relates to jurisdiction. Said section said that if decision is held against applicant, arbitration proceedings shall proceed further and said decision can be challenged after final award under Section 34 of the Act. Section 16 is not applicable in the facts of the present case.
Further contention is regarding Section 18 which reads as under:
"18. Equal treatment of parties .- The parties shall be treated with equality and each party shall be given a full opportunity to present his case."
In this case principles of natural justice are violated and there is no equality. Therefore above referred judgments are not applicable because issue of jurisdictions are not raised. Therefore writ can lie but admittedly there should be minimum intervention at this stage.
Mr. Sunit Shah, learned counsel relied on the decision of the Hon'ble Delhi High Court in the case of Surender Kumar Singhal V/s Arun Kumar Page 8 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 Bhalotia reported in MANU/DE/0561/2021 after considering above mentioned nos.2 to 4 judgments, held at para 24.
10. Mr. Sunit Shah, the learned counsel submitted that the order passed by the tribunal is without observing the principles of natural justice. Mr. Sunit Shah, learned counsel submitted that the tribunal's decision to contradict orally amounts to changing the rule of procedure of cross examination. Mr. Sunit Shah, learned counsel submitted that at no point of time, the tribunal stated that the oral contradiction would be permitted and not by showing the documents.
11. Mr. Sunit Shah, the learned counsel relied on the following judgments :-
1. MANU/SC/1272/2017 reported in Srei Infrastructure Finance Limited Versus Tuff Drilling Private Limited. Paragraph No.25
2. Narmada Clean-Tech & others V/s Indian Council of Arbitration & others reported in 2020 Lawsuit(Guj)240. Paragraph Nos.34, 35, 36 and 41.
3. Shalini Shyam Shetty and another vs. Rajendra Shankar Patil reported in (2010) 8 SCC 329. Paragraph No. 47, 48, 49
4. S.B.P. and Company versus Patel Engineering Ltd. and others reported in (2005) 8 SCC 618, observed in paragraph Nos.45, 46 and 47.Page 9 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022
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12. Per contra, Mr. Jigar Raval, the learned counsel appearing for the respondents raised preliminary objection with regard to the maintainability of the present petition in view of the fact that the order passed by the tribunal being an interim order pending the arbitration proceeding is not maintainable under Article 226 of the Constitution of India. Mr. Jigar Raval, learned counsel submitted that filing of present petition challenging the order passed by the Arbitral Tribunal below Exh.106 and Exh.120 is not maintainable under Article 226 of the Constitution of India. Mr. Jigar Raval, learned counsel submitted that any order passed by the Arbitral Tribunal under the said Act is required to be challenged when it is a final award under Section 34 and/or under Section 37 of the Act.
13. Mr. Jigar Raval, the learned counsel submitted that the Arbitral Tribunal has given proper and valid reasons while rejecting the applications below Exh.106 and Exh.120 of the Act, 1996 and therefore, no interference is required under Article 226 of the Constitution of India. Mr. Jigar Raval, learned counsel submitted that both the applications preferred by the claimants i.e. Exh.106 and Exh.120 are for the production of documents, which are preferred at the stage of cross examination of the respondents and, hence, both these applications are required to be considered as Page 10 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 interim applications during the pendency of the arbitral proceedings. Mr. Jigar Raval, learned counsel has relied on the ratio laid down by this Court and Hon'ble Supreme Court and submitted that the applications are required to be considered as the order passed is by the Arbitral Tribunal during the pendency of the arbitration proceedings. In such circumstances, the order passed by the Arbitral Tribunal being an interim order cannot be challenged under Article 227 of the constitution of India and the same is not maintainable and therefore the petition be rejected. Mr. Jigar Raval, learned counsel submitted that the application preferred by the petitioners below Exh.106 was given at the stage when cross examination of the respondents was about to be completed.
14. Mr. Jigar Raval, the learned counsel submitted that clearly the applications filed by the petitioners below Exh.106 and Exh.120 can be said to be misconceived and with an intention to delay the arbitral proceedings. Mr. Jigar Raval, learned counsel also relied on paragraph nos.18 and 25 of the impugned order and submitted that the order passed by the tribunal is just and proper. Mr. Jigar Raval, learned counsel submitted that the application under Exh.97 preferred by the respondents for production of documents came to be dismissed by the tribunal with an observation that the statement already Page 11 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 made in the affidavits of the respondents and/or their witnesses shall remain without prejudice to the rights and contentions of both the sides and shall be without prejudice to the opportunity on the part of the claimants to deal with or to contradict the same at the time of cross examination of the respective witnesses. The Tribunal clarified in paragraph no.10 of the order below Exh.97 and stated that contradiction in cross examination would be oral contradiction. Applying the same ratio, the tribunal dismissed the applications filed by the petitioners on the ground that equal treatment is required to be given to both, the claimants as well as the respondents.
15. Mr. Jigar Raval, the learned counsel further submitted that the Code of Civil Procedure and Evidence Act are strictly not applicable to the arbitration proceedings. However, it is well settled position of law that the arbitrator is required to follow the principles of natural justice and in the facts of the present case, the Hon'ble Arbitrator considered Section 145 of the Evidence Act and after considering the same passed the order below Exh.106 and Exh.120. The order passed by the learned arbitrator is after taking into consideration all the aspects and after appreciating all the judgments as referred to above by the respective parties and rightly Page 12 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 rejected the applications preferred by the petitioners below Exh.106 and Exh.120. Mr. Jigar Raval, the learned counsel submitted that this Court may not interfere with the impugned orders passed by the tribunal below Exh.106 and Exh.120.
16. Mr. Sunit Shah, the learned counsel in his rejoinder submitted that the order passed by the Arbitral Tribunal cannot be said to be an interim order, which can be challenged after final award is passed under Section 34 of the Arbitration & Conciliation Act, 1996. Mr. Sunit Shah, the learned counsel submitted that it is settled law that any order passed by the Court at interim stage is not necessarily an interim order. The order that may be passed at interim stage could be final order. Interim order is one which can be varied, modified or even scrapped while passing final order. In the facts of the present case not to allow claimant to contradict the respondents with his own earlier statement is a final order as same cannot be altered or changed at the time of passing the final order.
ANALYSIS
17. Mr. Sunit Shah, the learned counsel appearing for the petitioners has relied on the judgment of the Delhi High Court in matter of Surender Kumar Singhal V/s Arun Kumar Bhalotia reported in MANU/DE/0561/2021 and relying upon Page 13 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 the said judgment submitted that since cross examination is a part of principles of natural justice, the learned Arbitrator ought not to have rejected the application as the petitioners would not be able to contradict the witnesses. Mr. Sunit Shah, the learned counsel further relied upon the judgment of the S.B.P. and Company versus Patel Engineering Ltd. and others reported in (2005) 8 SCC 618.
18. In the written submissions furnished by the learned counsel appearing for the petitioners, it is contended that the order passed by the Arbitration Tribunal is in breach of the principles of natural justice and the tribunal cannot go beyond Civil Procedure Code, 1908 or the Indian Evidence Act, 1872 and further contended that production of document was to contradict the witness, which would be relevant for final disposal of the subject matter of dispute between the parties and that since it is breach of procedure, this Court can always entertain petition under Article 226 and 227 of the Constitution of India.
19. Per contra, Mr. Jigar Raval, the learned counsel appearing for the respondents submitted that the present petition under Article 226 and 227 of the Constitution of India is not maintainable in view of settled position of law and that any order passed by the tribunal can be subject matter of challenge under Section 34 Page 14 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 and/or Section 37 of the Act. Mr. Jigar Raval, the learned counsel also relied upon the order passed by the Tribunal and submitted that the tribunal has kept the question open and also submitted that the Civil Procedure Code, 1908 and the Evidence Act, 1872 are strictly not applicable in arbitral proceedings and in the facts and circumstances of the present case.
20. Mr. Sunit Shah, learned counsel in rejoinder submitted that the order passed by the Tribunal cannot be said to be an interim order and even that such order can be interfered with if it affects the rights of parties.
POSITION OF LAW
21. In Union of India Versus M/s. Varindera Constructions Ltd. Etc. reported in JT 2018 (4) SC 550, the Hon'ble Supreme Court held thus :-
"8) The primary object of the arbitration is to reach a final disposition in a speedy, effective, inexpensive and expeditious manner. In order to regulate the law regarding arbitration, legislature came up with legislation which is known as Arbitration and Conciliation Act, 1996. In order to make arbitration process more effective, legislature restricted the role of courts in case where matter is subject to the arbitration. Section 5 of the Act specifically restricted the interference of the courts to some extent. In other words, it is only in Page 15 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 exceptional circumstances, as provided by this Act, the court is entitled to intervene in the dispute which is subject matter of arbitration. Such intervention may be before, at or after the arbitration proceeding, as the case may be. In short, court shall not intervene with the subject matter of arbitration unless injustice is caused to either of the parties."
22. In S.B.P. and Company versus Patel Engineering Ltd. and others reported in (2005) 8 SCC 618, the scope of power of jurisdiction of High Court under Article 226 and 227 of the Constitution of India has been analysed wherein the Hon'ble Supreme Court has observed in paragraph No.47 which reads thus :-
47. We, therefore, sum up our conclusions as follows:
i) The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11(6) of the Act is not an administrative power. It is a judicial power.
ii) The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another judge of that court and by the Chief Justice of India to another judge of the Supreme Court.
(iii) In case of designation of a judge of the High Court or of the Supreme Court, the power that is exercised by the designated, judge would be that of the Chief Justice as conferred by the statute.
(iv) The Chief Justice or the designated Page 16 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. These will be, his own jurisdiction, to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate.
(v) Designation of a district judge as the authority under Section 11(6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act.
(vi) Once the matter reaches the arbitral tribunal or the sole arbitrator, the High Court would not interfere with orders passed by the arbitrator or the arbitral 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) Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court.
(viii) There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act.Page 17 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022
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(ix) In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act.
(x) Since all were guided by the decision of this Court in Konkan Railway Corporation Ltd. and Anr. v. Rani Construction Pvt. Ltd. and orders under Section 11(6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of arbitrators or arbitral tribunals thus far made, are to be treated as valid, all objections being left to be decided under Section 16 of the Act. As and from this date, the position as adopted in this judgment will govern even pending applications under Section 11(6) of the Act.
(xi) Where District Judges had been designated by the Chief Justice of the High Court under Section 11(6) of the Act, the appointment orders thus far made by them will be treated as valid; but applications if any pending Page 1824 before them as on this date will stand transferred, to be dealt with by the Chief Justice of the concerned High Court or a Judge of that court designated by the Chief Justice.
(xii) The decision in Konkan Railway Corporation Ltd. and Anr. v. Rani Construction Pvt. Ltd. is overruled."
23. In Lalitkumar V. Sanghavi (D) Th. LRs Neeta Lalit Kumar Sanghavi & Anr. Versus Dharamdas V. Sanghavi & Ors. reported in 2014 (7) SCC 255, the Hon'ble Supreme Court observed in paragraph No.8 which reads thus :-
Page 18 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 "8. Within a couple of weeks thereafter, the original applicant died on 7.10.2012.
The question is whether the High Court is right in dismissing the application as not maintainable. By the judgment under appeal, the Bombay High Court opined that the remedy of the appellant lies in invoking the jurisdiction of the High Court under Article 226 of the Constitution. In our view, such a view is not in accordance with the law declared by this Court in S.B.P. & Co. v. Patel Engineering Ltd., (2005) 8 SCC
618. The relevant portion of the judgment reads 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 of India. We see no warrant for such an approach.
Section 37 makes certain orders of the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating his grievances against the award including any in- between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand Page 19 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India.
Such an intervention by the High Courts is not permissible. That need not, however, necessarily mean that the application such as the one on hand is maintainable under Section 11 of the Act."
24. In Bhaven Construction through Authorized Signatory Premjibhai K. Shah V/s. Executive Engineer Sardar Sarovar Narmada Nigam Ltd. & Anr. reported in 2021 (1) Scale 327 paragraph nos.17.1 and 18 reads thus :-
"17.1 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 standard set by this Court is in terms of the legislative intention to make the arbitration fair and efficient.
18. In this context we may observe M/s. Deep Industries Limited v. Oil and Natural Gas Corporation Limited, (2019) SCC Online SC 1602, wherein interplay of Section 5 of the Arbitration Act and Article 227 of the Constitution was analyzed as under:
"15. Most significant of all is the non- obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no Page 20 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed (See Section 37(2) of the Act)
16. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non-obstante clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us herein above so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction."
25. This Court has also followed the above referred principles laid down by the Hon'ble Supreme Court in GTPL Hathway Ltd. Versus Strategic Marketing Pvt. Ltd. in paragraph Nos.14 and 15, which reads thus :-
"14. In view of aforesaid conspectus of law, and considering the provisions of the Page 21 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022 C/SCA/19530/2021 JUDGMENT DATED: 26/04/2022 Act, 1996, the order passed by the Arbitration Tribunal during the course of Arbitration cannot be challenged by the petitioner under Articles 226 and/or 227 of the Constitution of India when the constitution bench of the Apex Court in case of M/s. S.B.P. and Co. v. M/s. Patel Engineering Ltd. and Anr.(supra) has disapproved the stand that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Articles 226 and 227 of the Constitution of India and has categorically held that such intervention by the High Court is not permissible. The Apex Court in case of M/s. Deep Industries Limited v. Oil and Natural Gas Corporation (supra) has held that it is also important to notice that the seven−Judge Bench has referred to the object of the Act being that of minimizing judicial intervention and that this important object should always be kept in the forefront when a 227 petition is being disposed of against proceedings that are decided under the Act,1996 and that the policy of the Act is speedy disposal of arbitration cases as the Act,1996 is 'self−contained' Code and deals with all the cases.
15. In view of aforesaid settled legal proposition, considering the policy, object and the provisions of the Act,1996, an order passed during arbitration proceedings by the Arbitration Tribunal cannot be challenged under Articles 226 and 227 of the Constitution of India as the Act,1996 is a special act and a self−contained code dealing with arbitration. Therefore, the impugned order of the Arbitration Tribunal deciding the preliminary objection raised by the petitioner cannot be challenged under Article 226 or 227 of the Constitution of India."Page 22 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022
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26. In view of above, this Court is not inclined to entertain this petition by exercising its extra ordinary jurisdiction under Article 226/227 of the Constitution of India. In view of the aforesaid ratio as laid down by the Hon'ble Supreme Court and this Court and facts and circumstance of the present case, more particularly, when the tribunal is conscious with regard to the contention as raised by the petitioners and the tribunal has held in paragraph No.32, which reads thus :-
"32. It is further observed and clarified that the reasons and the observations made by the Tribunal in the present order below Applications Exh.106 and Exh.120, are for the limited purpose of consideration of the present applications only and the rights and contentions of both the sides shall not be prejudiced, in any manner, whatsoever at the time of final arguments while passing the final Award and suffice it to observe that the rights and contentions of both the sides as may be available in accordance with law shall remain open, to be considered at the time of final arguments for passing final Award."
27. In view of this Court, the petitioners have failed to point out any error of law much less any error of jurisdiction to have been committed by the tribunal. Thus in view of above the petitioners are not entitled to any reliefs as prayed for in the present petition. Accordingly, the petition deserves to be dismissed and the same stands dismissed.
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28. In view of above, no interference is called for in the order passed by the tribunal dated 16.11.2021. However, it is open for both the parties to assail all the points before the learned Arbitrator at the time of hearing. It is clarified that in view of the settled legal position of law as referred to hereinabove this Court has otherwise not examined the merits of the matter.
(VAIBHAVI D. NANAVATI,J) Pallavi Page 24 of 24 Downloaded on : Sat Dec 24 15:42:05 IST 2022