M. L. Gupta and Associates v. H. P. Housing & Urban Development Authority
2011-09-12
DEEPAK GUPTA
body2011
DigiLaw.ai
JUDGEMENT Deepak Gupta, J. 1.The following interesting question arises for decision in this petition:- “Whether the High Court can exercise the powers of superintendence vested in it under Article 227 of the Constitution of India over arbitral tribunals constituted under the provisions of the Arbitration and Conciliation Act, 1996.” 2. Shri Ajay Vaidya, learned counsel for the petitioner, has strongly urged that the arbitral tribunal is a tribunal for all intents and purposes. It exercises judicial powers and has all the trappings of a Court and is, therefore, subject to the superintendence of the High Court. 3. On the other hand, Shri Dinesh Thakur, learned counsel for respondents 1 and 2, urged that powers vested in the High Court under Article 227 can only be exercised against Courts and Tribunals which are statutorily established and cannot be exercised in case of arbitral tribunals or other tribunals which are not subordinate to the High Court. 4. To appreciate the rival contention of the parties, it will be appropriate to refer to Article 227 of the Constitution of India, which reads as follows:- “Power of Superintendence over all Courts by the High Court-(1) Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction.(2) Without prejudice to the generality of the foregoing provisions, the High Court may- (a) call for returns from such Courts; (b) make and issue general rules and prescribe forms for regulating the practice and proceedings of such courts; and (c) prescribe forms in which books, entries and accounts shall be kept by the officers of any such courts.(3) The High Court may also settle tables of fees to be allowed to the sheriff and all clerks and officers of such courts and to attorneys, advocates and pleaders practicing therein: Provided that any rules made, forms prescribed or tables settled under clause (2) or clause (3) shall not be inconsistent with the provision of any law for the time being in force, and shall require the previous approval of the Governor.(4) Nothing in this article shall be deemed to confer on a High Court powers of superintendence over any court or tribunal constituted by or under any law relating to the Armed Forces.” 5.
A bare perusal of clause (1) of Article 227 of the Constitution of India shows that every High Court exercises the power of superintendence over all courts or tribunals operating in the territories over which it exercises jurisdiction. The only exception laid down is in clause (4) wherein it has been specifically provided that the High Court shall not exercise such powers of superintendence over any Court or tribunal constituted by or under any law relating to the Armed Forces. In the present case, we are not concerned with the Armed Forces at all. 6. The only question is what meaning is to be given to the word ‘tribunal’ occurring in Article 227 because there is no difficulty with regard to understanding the meaning of the word ‘Courts’. When the founding father of the Constitution used the words ‘courts and tribunals’ they obviously intended that this power of superintendence would not only be exercised over courts but over other authorities and tribunals exercising quasi judicial powers. 7. The law is extremely well settled that the powers of superintendence vested in the High Courts under Article 227 are not confined to administrative superintendence but include the power of judicial review also. Reference in this behalf may be made to the decision of the Apex Court in D.N.Banerjee vs. P.R.Mukherjee AIR 1953 SC 58, which is the locus classicus on the subject and has been followed in a large number of cases, the latest of which is Jasbir Singh vs. State of Punjab (2006) 8 SCC 294. 8. Supervisory jurisdiction under Article 227 is exercised for keeping the subordinate courts and tribunals within the bounds of their jurisdiction. When a subordinate Court or Tribunal assumes jurisdiction which it does not have or fails to exercise jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a manner not permitted by law and leads to failure of justice, or grave injustice has occasioned thereby, then the High Court must step in to exercise its supervisory jurisdiction. The High Court cannot convert itself into a Court of appeal and start reappreciating the evidence but can only interfere when there is an error of jurisdiction. The powers under Article 227 are very wide and can be used to secure the ends of justice and to ensure that people have faith in the judicial system.
The High Court cannot convert itself into a Court of appeal and start reappreciating the evidence but can only interfere when there is an error of jurisdiction. The powers under Article 227 are very wide and can be used to secure the ends of justice and to ensure that people have faith in the judicial system. However, this power must be exercised sparingly to keep the subordinate Courts and tribunals within the bounds of their authority and not to correct mere errors committed by them. With regard to the inferior tribunals, it has been held in a number of cases that the High Court can quash or set-aside the decision of an inferior tribunal in case the order has been passed without jurisdiction or is against the principles of natural justice or the tribunal fails to exercise jurisdiction vested in it by law. Though every error is not to be corrected but if there is dereliction of duty or flagrant violation of law then the High Court must exercise its jurisdiction. Therefore, when a Tribunal does not exercise jurisdiction or acts in a manner which will sully the image of the judicial process or gives findings which are perverse then the High Court can and must exercise its powers of superintendence. 9. Coming to the main issue in hand as to what is meant by the word ‘tribunal’, a large number of decisions have been referred to by both sides. 10. Article 136(1) and Article 227 of the Constitution of India make reference to tribunals in contradistinction to Courts. A Court in a sense is also a Tribunal constituted by the State to exercise the inherent judicial powers vested in a State. Tribunals also exercise judicial powers and decide matters brought before it judicially or quasi judicially. However, they are not identical to courts. A tribunal is also a seat of justice and in discharge of its function has some of the characteristics and trappings of a Court. They may compel witnesses to appear. They can administer oath. They are required to follow certain rules or procedure. The proceedings before them are bound to comply with the rules of natural justice.
A tribunal is also a seat of justice and in discharge of its function has some of the characteristics and trappings of a Court. They may compel witnesses to appear. They can administer oath. They are required to follow certain rules or procedure. The proceedings before them are bound to comply with the rules of natural justice. Even though tribunals are normally not bound by the technical rules of evidence but they must decide disputes on the basis of the evidence adduced before them and the decision must be in accordance with the settled principles of law. 11. A seven Judge Bench of the Apex Court in Hari Vishnu Kamath vs. Ahmad Ishaque and others AIR 1955 SC 233 held that the election tribunals were subject to the powers of superintendence of the High Court under Article 227 of the Constitution of India and further that the powers of superintendence were both judicial as well as administrative. 12. As held by the Apex Court in Engineering Mazdoor Sabha and another vs. Hind Cycles Ltd AIR 1963 SC 874 the Tribunals have to act judicially and reach their decisions in an objective manner and they cannot proceed purely administratively or base their conclusions on subjective tests or inclinations. The procedural rules which regulate the proceedings before the Tribunals and the powers conferred on them in dealing with matters brought before them are sometimes described as the ‘trappings of a court’ and in determining the question as to whether a particular body or authority is a Tribunal or not, sometimes a rough and ready test is applied by enquiring whether the said body or authority is clothed with the trapping of a court. 13. In Associated Cement Companies Ltd. vs. P.N.Sharma and another AIR 1965 SC 1595, a Constitution Bench of the Apex Court while dealing with the word ‘Tribunal’ as occurring in Article 136(1) held as follows:- “9. Judicial functions and judicial powers are one of the essential attributes of a sovereign State and on considerations of policy, the State transfers its judicial functions and powers mainly to the Courts established by the Constitution but that does not affect the competence of the State by appropriate measures to transfer a part of its judicial powers and functions to tribunals by entrusting to them the task of adjudicating upon special matters and disputes between parties.
It is really not possible or even expedient to attempt to describe exhaustively the features which are common to the tribunals and the Courts and features which are distinct and separate. The basic and the fundamental feature which is common to both the Courts and the tribunals is that they discharge judicial functions and exercise judicial powers which inherently vest in a sovereign State.” 14. The Apex Court in Manmohan Singh Jaitla vs. Commissioner, Union Territory, Chandigarh and others AIR 1985 SC 364 was dealing with the question as to whether the statutory authorities vested with the quasi judicial powers of deciding the service appeals of the teachers under the Punjab Aided Schools (Security of Service) Act are amenable to the powers of superintendence under Article 227. The Apex Court held as follows:- “7. The High Court declined to grant any relief on the ground that an aided school is not ‘other authority’ under Article 12 of the Constitution and is therefore not amenable to the writ jurisdiction of the High Court. The High Court clearly overlooked the point that Deputy Commissioner and Commissioner are statutory authorities operating under the 1969 Act. They are quasi judicial authorities and that was not disputed. Therefore, they will be comprehended in the expression ‘Tribunal’ as used in Article 227 of the Constitution which confers power of superintendence over all courts and tribunals by the High Court throughout the territory in relation to which it exercises jurisdiction. Obviously, therefore, the decision of the statutory quasi judicial authorities which can be appropriately described as tribunal will be subject to judicial review namely a writ of certiorari by the High Court under Article 227 of the Constitution.” 15. The grievance of the petitioner is that respondent No.3, who is an arbitrator in this case, has not taken any steps to dispose of the case and this Court exercising its power of superintendence should issue a direction to respondent No.3 to decide the petition within a specified period. The specific issue whether an arbitral tribunal constituted under the Arbitration and Conciliation Act, 1996 is subject to the powers of superintendence of the High Court came up for consideration before the Calcutta High Court in Unik Accurates Pvt. Ltd. vs. Sumedha Fiscal Services Ltd. 2000(Suppl.) Arb. LR 220 (Calcutta).
The specific issue whether an arbitral tribunal constituted under the Arbitration and Conciliation Act, 1996 is subject to the powers of superintendence of the High Court came up for consideration before the Calcutta High Court in Unik Accurates Pvt. Ltd. vs. Sumedha Fiscal Services Ltd. 2000(Suppl.) Arb. LR 220 (Calcutta). A learned Single Judge of the Calcutta High Court after considering the relevant law on the subject held as follows:- “17. At this stage, I am quite conscious that an Arbitrator under 1940 Act or an Arbitrator under Section 10A of the Industrial Disputes Act could not pass through the aforesaid tests in the eyes of the Apex Court. But in my view, the position of an arbitral Tribunal under the Act is quite different. Under the Act, an award, if not challenged by taking recourse to Section 34 and if consequently not set aside, attains the character of decree without any further approval of the Court. Such was not the position of an award under 1940 Act. Thus, the statute, viz., the Act has empowered an arbitral Tribunal, an outside authority, to conclusively determine the controversy if referred to if by the parties and the State is lending its support to enforce such award through assistance of the Civil Court subject of course to the provision contained in Section 34 of the Act if availed of by the dissatisfied party. 18.
18. But the most glaring provisions of the Act which manifest the intention of the State of delegate its inherent judicial function to an arbitral Tribunal are Section 17 of the Act, conferring right upon such Tribunal to take “any interim measures” before passing of the award and Section 37 of the Act, giving ‘right of appeal’ against an order of Tribunal under Section 17 or accepting the plea referred to in Section 16(2) or Section 16(3) of the Act to a Court meaning a principal Civil Court of original jurisdiction in a District or High Court in exercise of its ordinary original jurisdiction in a case where the latter has jurisdiction to decide the subject matter of arbitration if the same has been the subject matter of a suit.19.Bestowal of a power to pass “any interim measure” has a far reaching implication upon the rights of a citizen and that is why the Act has adequately protected the rights of the people by making provision of an appeal before the Court against any such order passed by the Tribunal. 20. The true nature of right of appeal, as pointed out by the Apex Court in the case of Sankar Ramchandra Abhyankar vs. Krishnaji Dattatroya Bapat is one of entering a superior Tribunal and invoking its aid and interposition to redress the error of the Tribunal below. Two things, Gover, J. was of the view which are required to constitute appellate jurisdiction are the existence of superior and inferior Tribunal and the power of the former to review the decision of the latter. Moreover, the doctrine of merger immediately comes into play. 21.Therefore to confer an appellate power upon the Court against an order of the arbitral Tribunal means such Tribunal is under the supervision of the Principal Court of civil jurisdiction in a District or High Court, as the case may be and upon conclusion of the appeal, the initial order merges with the order of such Court. Now, the moment a principal Civil Court in a district disposes of such an appeal, the order of such Court becomes a ‘case decided’ within the meaning of Section 115 of the Code of Civil Procedure and will be amenable to the revisional jurisdiction of High Court subject to the restriction imposed in Section 115 of the Code as no second appeal lies. 22.
22. Thus, once it is established that an arbitral Tribunal is subject to the supervision of a principal Civil Court of original jurisdiction in a District or of High Court in exercise of ordinary original jurisdiction it will be preposterous to contend that such Tribunal does not come within the preview of Article 227 of the Constitution.xxxx...xxxx....xxxx26.Counsel for the parties could not place any decision where notwithstanding the provision of appeal before a principal Civil Court of original jurisdiction of High Court against an order passed by an authority, such authority has not been held to be Tribunal within the meaning of Article 136 or 227 of the Constitution particularly when an award passed by such authority has the force of a decree without approval of such award by a Court.27.In view of my findings above I hold that an arbitral Tribunal under the Act is a Tribunal within the meaning of Article 227 of the Constitution as the Act has conferred upon such Tribunal inherent judicial power of the State.” 16. Another Single Judge of the Calcutta High Court in Rabneshwar Sharma vs. Shrachi Securities Limited 2007(3) CHN 372 held as follows:- “28. It is, perhaps, not necessary to discuss about such constitutional power under Article 226 and Article 227 which have been time and again held to be basic features of the Constitution. But the supervisory rule is certainly to be confined to the minimum level and only for the purpose of serving the objects of the Act in a useful manner.29.In the present case the allegation against the learned Arbitrator is his painful non response over a protracted period of time. No order has been passed by the learned Arbitrator. Petitioner by filing such application under Article 227 just sought for a direction upon the learned Arbitrator for passing an order on the application filed before the Tribunal.30.Having regard to the various provisions of the Act as well as its objects and reasons, this Court takes it as its constitutional obligation in directing the learned Arbitrator to pass order in respect of the said application.” 17. The scope of powers of superintendence vested in the High Court under Article 227 of the Constitution of India again came up for consideration in Shalini Shyam Shetty and another vs. Rajendra Shankar Patil (2010) 8 SCC 329.
The scope of powers of superintendence vested in the High Court under Article 227 of the Constitution of India again came up for consideration in Shalini Shyam Shetty and another vs. Rajendra Shankar Patil (2010) 8 SCC 329. The Apex Court after detailed exposition of the entire law on the subject held as follows:- “47. The jurisdiction under Article 227 on the other hand is not original nor is it appellate. This jurisdiction of superintendence under Article 227 is for both administrative and judicial superintendence. Therefore, the powers conferred under Articles 226 and 227 are separate and distinct and operate in different fields. Another distinction between these two jurisdictions is that under Article 226, High Court normally annuls or quashes an order or proceeding but in exercise of its jurisdiction under Article 227, the High Court, apart from annulling the proceeding, can also substitute the impugned order by the order which the inferior tribunal should have made. {See Surya Dev Rai, SCC page 690, para 25 and also the decision of the Constitution Bench of this Court in Hari Vishnu Kamath vs. Ahmad Ishaque and others - [AIR 1955 SC 233, para 20 page 243]}.48.The jurisdiction under Article 226 normally is exercised where a party is affected but power under Article 227 can be exercised by the High Court suo motu as a custodian of justice. In fact, the power under Article 226 is exercised in favour of persons or citizens for vindication of their fundamental rights or other statutory rights. The jurisdiction under Article 227 is exercised by the High Court for vindication of its position as the highest judicial authority in the State. In certain cases where there is infringement of fundamental right, the relief under Article 226 of the Constitution can be claimed ex-debito justicia or as a matter of right. But in cases where the High Court exercises its jurisdiction under Article 227, such exercise is entirely discretionary and no person can claim it as a matter of right. From an order of a Single Judge passed under Article 226, a Letters Patent Appeal or an intra Court Appeal is maintainable. But no such appeal is maintainable from an order passed by a Single Judge of a High Court in exercise of power under Article 227. In almost all High Courts, rules have been framed for regulating the exercise of jurisdiction under Article 226.
But no such appeal is maintainable from an order passed by a Single Judge of a High Court in exercise of power under Article 227. In almost all High Courts, rules have been framed for regulating the exercise of jurisdiction under Article 226. No such rule appears to have been framed for exercise of High Court’s power under Article 227 possibly to keep such exercise entirely in the domain of the discretion of High Court.49. On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court’s jurisdiction under Article 227 of the Constitution may be formulated: (a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by High Court under these two Articles is also different. (b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is substantially different from the history of conferment of the power of Superintendence on the High Courts under Article 227 and have been discussed above. (c) High Courts cannot, at the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of Court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court. (d) The parameters of interference by High Courts in exercise of their power of superintendence have been repeatedly laid down by this Court. In this regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh (supra) and the principles in Waryam Singh (supra) have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court. (e)According to the ratio in Waryam Singh (supra), followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and Courts subordinate to it, ‘within the bounds of their authority’.
(e)According to the ratio in Waryam Singh (supra), followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and Courts subordinate to it, ‘within the bounds of their authority’. (f)In order to ensure that law is followed by such tribunals and Courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them. (g)Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent perversity in the orders of tribunals and Courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted. (h)In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or Courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised.(i)The High Court’s power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of the basic structure of the Constitution by the Constitution Bench of this Court in the case of L. Chandra Kumar vs. Union of India & others, and therefore abridgement by a Constitutional amendment is also very doubtful.(j)It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code (Amendment) Act, 1999 does not and cannot cut down the ambit of High Court’s power under Article 227. At the same time, it must be remembered that such statutory amendment does not correspondingly expand the High Court’s jurisdiction of superintendence under Article 227. (k)The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu. (l)On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this Article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory.
In an appropriate case, the power can be exercised suo motu. (l)On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this Article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory. (m)The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this Article is to be kept to the minimum to ensure that the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and Courts subordinate to High Court.(n)This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above.(o)An improper and a frequent exercise of this power will be counter-productive and will divest this extraordinary power of its strength and vitality.” 18. The Apex Court in SBP & Co. vs. Patel Engineering Ltd. and another (2005) 8 SCC 618 held that the Chief Justice or his delegatee exercising powers under Section 11(6) of the Arbitration and Conciliation Act exercises judicial powers and not administrative powers. The question whether the High Court can exercise power of superintendence or the writ jurisdiction in case of arbitral tribunal, was also considered in this case. The Apex Court held as follows:- “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.
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 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, 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 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.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 of India 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.” 19. Though the Apex Court clearly held that the High Court should not interfere with each and every order passed by the arbitral tribunal and judicial intervention should be minimal but the Apex Court did not lay down that the High Court had no power to intervene. 20.
Though the Apex Court clearly held that the High Court should not interfere with each and every order passed by the arbitral tribunal and judicial intervention should be minimal but the Apex Court did not lay down that the High Court had no power to intervene. 20. The Apex Court in NBCC Limited vs. J.G.Engineering Private Limited (2010) 2 SCC 385 while not directly dealing with the powers of the High Court under Article 226 went on to hold that the Court could fix and enlarge the time for concluding arbitration proceedings in exercise of the inherent powers vested in it. A single Judge of the Punjab and Haryana High Court has also taken the view that the arbitral tribunals are subject to the supervisory jurisdiction of the High Court in Subash Chugh & Co. vs. Girnar Fibres Ltd. 2001(1) Arb. LR 430. 21. It may be true that an arbitrator is appointed by consent of parties and may not be appointed by the State. It is urged relying upon the judgement of the Apex Court in Engineering Mazdoor Sabha case (supra) that since the arbitral tribunal is not constituted by the State this Court cannot exercise its powers of superintendence over it. In my view the law has undergone a sea change since the judgement was rendered in Engineering Mazdoor Sabha’s case. It may be true that the arbitral tribunals are appointed by the consent of the parties but they have to function in accordance with the provisions of the Arbitration and Conciliation Act, 1996. They must comply with the provisions of the said Act and in case they fail to do so then the award of the arbitrator can be set-aside by the Court. A perusal of the Arbitration and Conciliation Act also shows that the Courts have wide powers and can in a manner of speaking ensure that the arbitral tribunal functions in accordance with law. Under Section 9 even in a case covered by an arbitral clause both before and during the pendency of arbitral proceedings but before the award is made, a party can approach the concerned civil court for grant of interim measures under Section 9 of the Act. Section 11 entitles a party to approach the Hon’ble Chief Justice or his delegatee to take necessary measures for appointment of arbitrator if the other party does not agree.
Section 11 entitles a party to approach the Hon’ble Chief Justice or his delegatee to take necessary measures for appointment of arbitrator if the other party does not agree. Section 14 lays down that the mandate of the arbitrator shall be terminated if he fails to act without undue delay. Under Section 34 an arbitral award can be set-aside only by a Court. In case an arbitral award is not set-aside the same has to be executed as a decree of the Court by the Civil Court in terms of Section 36 of the Act. Certain orders of the arbitrator are appealable to the Civil Court in terms of Section 37. Therefore, it is apparent that the arbitral tribunals do function under the general supervision of the civil courts and some of their actions are liable to be set- aside by the Courts as per the statute itself. In my view this is a clear cut indicator of the fact that the arbitral tribunals are discharging statutory functions in terms of the Arbitration and Conciliation Act, 1996 and therefore, must be held amenable to the supervisory jurisdiction of the High Court. No doubt, as cautioned by the Apex Court, the High Court should not interfere in each and every order and the powers under article 227 of the Constitution of India should not be used to delay the arbitration proceedings but where there is patent illegality or delay is being caused by the Arbitral Tribunals, as in the present case, the Court must exercise such jurisdiction. 22. The Arbitration and Conciliation Act has been enacted with a view to provide an efficacious and alternative method of dispute resolution. No doubt the parties have been given the right to choose arbitrator of their choice but if they have not named the arbitrator by an agreement or cannot agree upon the name of the arbitrator then the Chief Justice or his nominee can appoint an arbitrator. The arbitrator so appointed is bound to follow the provisions of the Arbitration and Conciliation Act. Unfortunately, unlike the Arbitration Act, 1940, the Arbitration and Conciliation Act, 1996 does not lay down any time limit for concluding the arbitral proceedings. The very purpose of referring disputes to arbitration would be nullified if arbitral tribunals are permitted to proceed at a snail’s pace.
Unfortunately, unlike the Arbitration Act, 1940, the Arbitration and Conciliation Act, 1996 does not lay down any time limit for concluding the arbitral proceedings. The very purpose of referring disputes to arbitration would be nullified if arbitral tribunals are permitted to proceed at a snail’s pace. In case they do not show alacrity and delay the proceedings what is the remedy left with the party. Under the provisions of the Arbitration and Conciliation Act there is no remedy left to the aggrieved party. In case there is no time limit fixed in the agreement for making the award, nor any time limit is fixed by the Chief Justice or his nominee Judge while appointing the arbitrator or referring the dispute to the arbitration, can a party be left high and dry with no remedy. Can the aggrieved party approach the Court and pray that a direction be issued to the arbitral tribunal to perform its function? In my humble view, this power is not only vested in this Court but the Court could be failing in its duty if such directions are not given. The whole purpose of enacting the Arbitration and Conciliation Act was to bring it in line with the UNCITRAL Model Law on commercial arbitration with a view to ensure that such disputes are disposed of at the earliest and are not made subject matter of long civil disputes in the regular courts. True it is that as cautioned by the Apex Court the Court should not in exercise of its jurisdiction under Article 227 interfere in the day-to-day orders of the arbitral tribunal. On the other hand, when the tribunal fails to act and an aggrieved party approaches this Court praying that this Court should exercise its supervisory jurisdiction directing arbitrator to act and dispose of the matter expeditiously in such proceedings, in my considered opinion, this Court would have the jurisdiction to pass such orders in respect of functioning of arbitral tribunals within its territorial jurisdiction who fail to exercise their statutory duties which they are obliged to perform in accordance with the performance of the Arbitration and Conciliation Act, 1996. In terms of the said Act, an arbitrator must act with due diligence and in a prompt manner to dispose of the disputes referred to it at the earliest possible.
In terms of the said Act, an arbitrator must act with due diligence and in a prompt manner to dispose of the disputes referred to it at the earliest possible. The arbitral tribunal has been given wide powers and if it fails to perform its duty then this Court can issue a direction to the arbitral tribunal to do so. 23. In the present case, the arbitrator entered upon a reference on 3.11.2008. Almost three years have elapsed and the case is still at the preliminary stage. In case any of the parties is not present on a particular date of hearing it is for the arbitral tribunal to take action against the said party. Therefore, the petition is disposed of with a direction to the arbitral tribunal, respondent No.3, to decide the matter at the earliest and in any event not later than 31st December, 2012. If necessary day to day hearing can be conducted by the arbitral tribunal.