Burmah Shell Society Wins as Supreme Court Upholds Certiorari Over No Evidence Award

The Supreme Court of India has firmly held that High Courts can exercise certiorari jurisdiction under Article 226 to quash tribunal or arbitral orders that rest on no evidence or perverse findings, affirming the Delhi High Court's intervention in a long-running cooperative society membership dispute. A bench of Justices Ujjal Bhuyan and Atul S. Chandurkar dismissed the appeals by the legal heir of deceased claimant Shri Prakash Narain Sharma, upholding the High Court's order that set aside an arbitrator's award which had ignored critical documentary evidence.

The Long Road to Justice

The dispute traces back to the 1950s when Shri S.N. Sharma claimed membership of M/s Burmah Shell Co-operative Housing Society (the Society). He sought allotment of a plot, but the Society contended that Sharma had resigned in 1951, transferred his share, and his subsequent application for membership in 1952 was rejected. After years of litigation and a remand from the Supreme Court in Prakash Narain Sharma vs. Burmah Shell Co-op. Housing Society Ltd. (2002), the Registrar of Cooperative Societies, acting as Arbitrator under Section 61 of the Delhi Co-operative Societies Act, 1972, passed an award in October 2003 directing allotment of a plot to Sharma's legal heir. The Delhi Co-operative Tribunal affirmed this award in a short order.

Society's Challenge and High Court's Intervention

The Society then moved the Delhi High Court under Articles 226 and 227, arguing that both the Arbitrator and the Tribunal had failed to consider crucial documentary evidence showing Sharma's membership had ceased in 1951 and never revived. The High Court agreed, noting that the orders were "not only cryptic but they fail to discuss the relevant facts and the issues," and if considered, the evidence "would have resulted in a decision in favour of the petitioner society." It set aside the award and dismissed the original claim.

Arguments Before the Apex Court

The appellant's senior counsel, Mr. Jitendra Mohan Sharma, contended that the High Court exceeded its limited certiorari jurisdiction by reappreciating evidence. He argued that the Arbitrator had correctly presumed Sharma's continuing membership based on his name appearing in membership lists, and that the availability of plots was not in dispute.

Responding for the Society, senior advocate Mr. Ashim Vachher submitted that the High Court rightly interfered because the authorities had ignored decisive documents — including the 1951 resignation, the transfer of shares, and the rejection of Sharma's 1952 application. He argued that without any supporting resolution or share certificate, the Arbitrator's finding was perverse and based on pure conjecture.

Legal Analysis: Certiorari Can Correct Perverse Findings

The Supreme Court extensively examined the scope of certiorari jurisdiction, drawing on precedents including General Manager, Electrical Rengali Hydro Electric Project v. Giridhari Sahu and Central Council for Research in Ayurvedic Sciences v. Bikartan Das . The Court reiterated that while certiorari is supervisory and not appellate, an error of law apparent on the face of the record — including a finding of fact based on no evidence or pure surmises — is always open to correction.

Applying this standard, the Court found that the Arbitrator's award suffered from "perversity" because it proceeded on an assumption unsupported by evidence. The Arbitrator had stated: " It has to be presumed that he continued to be a member of the society till the end of his life and his name continued to be shown in the list of members. " The Tribunal affirmed this in a cryptic six-paragraph order.

The Supreme Court observed that the documentary evidence — including the resignation acceptance, share transfer, and rejection of membership application — was completely overlooked. "If a finding is recorded without there being any evidence on record or a finding is recorded without any supporting document, whatsoever, a case for interference would be made out since such finding would amount to an error of law," the Court said.

Key Observations

  • "The High Court was fully justified in causing interference with these orders by observing that if the relevant documents had been taken into consideration, the same would have resulted in a decision in favour of the Society."
  • "The High Court also rightly, in our view, took into account equitable considerations while interfering in exercise of certiorari jurisdiction . In the light of the fact that there were four prior claimants seeking allotment of a plot, the claim of the original claimant was rightly disregarded."
  • "Since we have found that the original claimant was never admitted as a member of the Society and, thus, not entitled to seek allotment of a plot, it is not necessary to go into the issue as regards actual availability of a plot."

Final Decision

The Supreme Court dismissed the appeals with no order as to costs, upholding the Delhi High Court's quashing of the arbitrator's award. The decision reaffirms that High Courts can use their certiorari power to set aside orders that ignore compelling documentary evidence and rest on mere assumptions, thereby ensuring that quasi-judicial authorities do not act perversely. The ruling provides clear guidance on the boundaries of certiorari jurisdiction, particularly in cooperative society disputes where membership records are central.