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2008(6) Supreme 332
Supreme Court of india
R.V. Raveendran and P. Sathasivam, JJ.
Punjab Agro Industries Corpn. Ltd. — Appellant
versus
Kewal Singh Dhillon — Respondent
Civil Appeal No. 5226 of 2008
(Arising out of SLP [C] No.1569 of 2007)
Decided on : 25-08-2008
(b)Constitution of India,1950 – Article 227 r/w section 11(4) and (7), Arbitration and Conciliation Act, 1996 – Though the order under section 11(4) is a judicial order, having regard to section 11(7) relating to finality of such orders, and the absence of any provision for appeal, the order of the Civil Judge was open to challenge in a writ petition under Article 227 – The decision in SBP does not bar such a writ petition. (Para 8)
(2005)8 SCC 618 – Relied upon.
(c)Constitution of India,1950 – Article 16 – When an order is made u/s 11 of Arbitration and Conciliation Act, 1996 by the Chief Justice of a High Court or by the designate Judge of that High Court, an appeal under Article 136 of the Constitution would lie – However this does not apply to a subordinate court functioning as Designate of the Chief Justice of High Court – Article 136 is not intended to permit direct access to Supreme Court where other equally efficacious remedy is available and the question involved is not of any public importance – Therefore the contention that the order of the Subordinate Designate Court rejecting a petition under section 11 of the Act could only be challenged, by recourse to Article 136, is untenable – The decision in SBP did not affect the maintainability of the writ petition filed by Appellant before the High Court. (Para 8)
(2005)8 SCC 618 – Relied upon.
Facts of the case :
1.The appellant entered into a collaboration agreement dated 23.7.1986 with the respondent for setting up of a project through a company to be jointly promoted by them. Clause 36 of the agreement provided for reference of all disputes and differences arising out of or in relation to the said agreement to an arbitral tribunal consisting of three members that is one to be appointed by each party and an umpire to be appointed by the two arbitrators.
2.Certain disputes arose between the parties and the appellant by notice dated 19.3.1997 appointed its arbitrator and called upon the respondent to appoint his arbitrator.
3.As respondent failed to comply, the appellant filed a petition in the court of the Principal Civil Judge, Senior Division, Chandigarh.
4.The said Designate by order dated 16.2.2002 dismissed the petition holding that appointment of arbitrator was not called for as the matter had already been decided by the Board for Industrial and Financial Reconstruction (for short ‘BIFR’).
5.Being aggrieved, the appellant approached the High Court in C.W.P. No. 9889 of 2002, for quashing the order of the Designate and for appointment of an arbitrator in terms of the agreement dated 23.7.1986. A Division Bench of the High Court by its order dated 7.7.2006 disposed of the said writ petition.
Finding of the Court :
The appellant’s writ in the High Court was maintainable.
Result : Appeal allowed.
Judgment
R.V. Raveendran, J. —
1.Leave granted. Heard the learned counsel for parties.
2.The appellant entered into a collaboration agreement dated 23.7.1986 with the respondent for setting up of a project through a company to be jointly promoted by them. Clause 36 of the agreement provided for reference of all disputes and differences arising out of or in relation to the said agreement to an arbitral tribunal consisting of three members that is one to be appointed by each party and an umpire to be appointed by the two arbitrators.
3.Certain disputes arose between the parties and the appellant by notice dated 19.3.1997 appointed its arbitrator and called upon the respondent to appoint his arbitrator. As respondent failed to comply, the appellant filed a petition under section 11(4) of the Arbitration & Conciliation Act, 1996 (‘Act’ for short) on 13.6.1997 in the court of the Principal Civil Judge, Senior Division, Chandigarh (a designate of the Chief Justice of Punjab & Haryana High Court and hereinafter referred to as the ‘Designate’).
4.The said Designate by Order dated 16.2.2002 dismissed the petition holding that appointment of arbitrator was not called for as the matter had already been decided by the Board for Industrial and Financial Reconstruction (for short ‘BIFR’). Being aggrieved, the appellant approached the High Court in C.W.P. No. 9889 of 2002, for quashing the Order of the Designate and for appointment of an arbitrator in terms of the agreement dated 23.7.1986. A Division Bench of the High Court by its Order dated 7.7.2006 disposed of the said writ petition by the following short Order:
“The Petitioner is aggrieved by rejection of application for appointment of arbitrator under Section 11(4) of Arbitration and Conciliation Act, 1996. Learned Counsel for the Respondent raises a preliminary objection that Writ Petition is not maintainable in view of Judgment of Seven Judges of the Hon’ble Supreme Court in S.B.P. & Co. Vs. Patel Engineering Ltd.,1 2005 (8) SCC 618 wherein it has been held that power of deciding an application for appointment of an arbitrator is judicial power and is not amenable to writ jurisdiction.
After hearing learned counsel for the parties, we uphold the preliminary objection and dismiss the Writ Petition. It is made clear that this will not debar the Petitioner from taking such other remedy as may be available under the law.”
The said decision is challenged in this appeal by special leave, on the following grounds :
(a)The Order of the High Court is a non speaking Order and it upholds the preliminary objection of the respondent without assigning any reason.
(b)A writ petition under Article 227 was maintainable against the Order of the Civil Judge, Senior Division (designate of the Chief Justice) and the High Court was wrong in assuming that the writ petition was not maintainable in view of the decision of this Court in SBP.
5.Before considering the contentions raised, we may usefully refer to the following relevant provisions of section 11 of the said Act :
“(4)If the appointment procedure in sub-section (3) applies and-
(a)a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or
(b)the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief justice or any person or institution designated by him.
x x x x
(7)A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final.
x x x x
(10)The Chief justice may make such scheme as he may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6) to him.”
The Chief Justice of High Court of Punjab & Haryana in exercise of his power under sub-section (10) of section 11 of the Act made a scheme under which the
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