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2017 DIGILAW 155 (MP)

Rajiv Dham v. Anil Kumar Garg

2017-02-01

PRAKASH SHRIVASTAVA

body2017
ORDER 1. This writ petition under Article 227 of the Constitution has been filed by the petitioner challenging the interlocutory order dated 23.11.2016 whereby the Arbitrator has rejected the petitioner's application under Order 7 rule 11 of the CPC. 2. In brief, the case of the petitioner is that the agreement dated 10.11.2010 was executed between the parties, thereafter some dispute had arisen, therefore, the matter was referred to the Arbitrator and before the Arbitrator, an application was filed by the petitioner under Order 7 rule 11 of the CPC raising an objection that the arbitration agreement is executed on insufficient stamp, but the arbitrator had rejected the said application by the impugned order. 3. Having heard learned counsel for the petitioner, it is noticed that section 5 of the Arbitration and Conciliation Act, 1996 restricts the judicial intervention in the arbitration matter except as provided in Part I of the Act. Section 5 reads as under :- “5]Extent of judicial intervention - Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. 4. Arbitration Tribunal is a forum chosen by the parties by agreement. Section 5 restricts the scope of interference in such matter except in the manner provided in Part I of the Act, which contains the provision of filing objection against the award, appellate provision as also the provision for granting interim relief before, during or after the arbitration. As per the Scheme of the Act, an interlocutory order unless appealable under section 37 of the Act can be questioned while objecting to the award. Hence, against an interlocutory order passed by the private arbitrator, the interference in exercise of writ or supervisory jurisdiction under Articles 226 and 227 is not warranted. 5. The same issue had come up before the Supreme Court in the matter of SBP and Co. Hence, against an interlocutory order passed by the private arbitrator, the interference in exercise of writ or supervisory jurisdiction under Articles 226 and 227 is not warranted. 5. The same issue had come up before the Supreme Court in the matter of SBP and Co. v. Patel Engineering Ltd. and another, reported in (2005)8 SCC 618 , wherein the Supreme Court has in clear terms laid down that an order passed by the Arbitral Tribunal during the arbitration is not capable of being challenged under Article 226 or 227 of the Constitution and such an intervention by the High Court is not permissible by expressly holding that :- “45] It is seen that some High Courts have proceeded on the basis that any order passed by an Arbitral Tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution. We see no warrant for such an approach. section 37 makes certain orders of the Arbitral Tribunal appealable. Under section 34, the aggrieved party has an avenue for ventilating its grievances against the award including any in between orders that might have been passed by the Arbitral Tribunal acting under section 16 of the Act. The party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The Arbitral Tribunal is, after all, a creature of a contract between the parties, the arbitration agreement, even though, if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the Arbitral Tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible”. 6. Following the judgment in the matter of SBP and Co. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible”. 6. Following the judgment in the matter of SBP and Co. (supra), the three Judges Bench of the Supreme Court in the matter of Lalitkumar v. Sanghavi (Dead) through LRs Neeta Lalit Kumar Sanghavi and another v. Dharamdas v. Sanghavi and others, reported in (2014)7 SCC 255 , has reiterated that the intervention by the High Court under Article 227 of the Constitution in arbitration proceedings is not maintainable. 7. The Supreme Court in the matter of CDC Financial Services (Mauritius) Ltd. v. BPL Communications Ltd. and others, reported in (2003) 12 SCC 140, in a case wherein High Court had passed the interim order in writ petition thereby interfering with the arbitration has held it to be the violation of the mandate of section 5 of the Act and had restrained the party concerned from interfering with the continuance and conclusion of the arbitration proceedings by holding as under :- “14] Whatever may be the merits of the writ application, we are of the view and it has been fairly conceded by the learned senior counsel appearing on behalf of respondent 1 that the High Court should have had regard to section 5 of the 1996 Act before granting the reliefs it did.. Under section 5 of the 1996 Act, Courts are restrained from interfering with arbitration except in the manner provided in the 1996 Act. That the orders passed by the High Court would amount to a violation of this mandate is not seriously disputed by the respondents. We, accordingly, set aside the orders of the High Court without expressing our views on the merits of the contentions of the parties in any manner whatsoever. The orders dated 4.7.2002 and 23.7.2002 are accordingly, set aside. The respondents are restrained from moving any applications in the pending writ petition which would have the effect of interfering with the continuance and conclusion of the arbitration proceedings. The appeal of respondent 1 before the Division Bench being preferred from the refusal to grant an interim order, does not survive and is accordingly dismissed. The respondents are restrained from moving any applications in the pending writ petition which would have the effect of interfering with the continuance and conclusion of the arbitration proceedings. The appeal of respondent 1 before the Division Bench being preferred from the refusal to grant an interim order, does not survive and is accordingly dismissed. The matter shall now be heard by the learned Single Judge and disposed of in accordance with law”. 8. Keeping in view the aforesaid position in law, I am of the opinion that no case is made out to entertain the present writ petition under Article 227 of the Constitution against the interlocutory order passed by a private arbitrator. 9. The writ petition is accordingly dismissed.