IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MANISH PITALE, J.
SHAILESH RANKA – Appellant
Versus
WINDSOR MACHINES LTD – Respondent
Review Petition (L) No. 12665 Of 2024
Decided On : 12-11-2024
(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Review of order dismissing application for appointment of arbitrator - Error apparent on the face of the record identified regarding the status of R-Cube Energy as a private limited company rather than a partnership firm - The court held the review petition maintainable, allowing the application to be revived for appropriate proceedings. (Paras 19, 24)
(B) Maintainability of Review - The court recognized its inherent power under Article 215 of the Constitution to correct errors in its record, distinguishing between powers before and after the amendment of Section 11(6) of the Arbitration Act. (Paras 13, 18)
Important Point : The High Court has the inherent power to review its orders under the Arbitration Act, especially when an error apparent on the face of the record is established.
ORDER :
(Manish Pitale, J.)
1. By this petition, the petitioners seek review of order dated 19.12.2023 passed by this Court, dismissing application filed by the applicants for appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Arbitration Act').
2. The petitioners submit that in the aforesaid order, there is an error apparent on the face of the record, for the reason that an objection taken by the respondent No.1 in the said application and upheld by this Court, while dismissing the application, is based on a factual error. It is submitted that while the Court proceeded on the basis that the petitioners and respondent No.2 were partners of a partnership firm R-Cube Energy Storage Systems LLP (R-Cube Energy), as a matter of fact, the said RCube Energy was earlier a limited liability partnership, but it stood registered as a private limited company in June 2019. It is submitted that this takes away the very basis of the order passed by this Court, dismissing the application filed under Section 11 of the Arbitration Act.
3. The contesting respondent No.1 has resisted the present review petition, claiming that such a petition for review is not maintainable as the original order, of which review is sought, is an order passed under Section 11 of the Arbitration Act. Since the Arbitration Act does not provide for a statutory remedy of review, the Court is denuded of the power to even entertain such a petition for review. Apart from this, it is claimed that the ground for review is not tenable because arguments were advanced on behalf of the applicants when the application under Section 11 of the Arbitration Act was decided, on the basis that the aforesaid R-Cube Energy was indeed a partnership firm. Before adverting to the rival submissions in detail, a brief reference to the chronology of events leading upto filing of the present review petition would be necessary.
4. The original application under Section 11 of the Arbitration Act bearing Commercial Arbitration Application (L) No.38198 of 2022 was filed on the basis of an arbitration clause contained in an investment agreement dated 02.02.2018 executed between the said R-Cube Energy and the contesting respondent No.1 - Windsor Machines Limited. Since disputes arose concerning the said agreement, the petitioners herein, concerned with R-Cube Energy, issued notice on 20.08.2022 invoking arbitration. The respondent No.1 sent reply on 19.09.2022 and since an arbitrator could not be appointed as per the arbitration clause, the petitioners invoked Section 11(6) of the Arbitration Act. One of the objections raised on behalf of the respondent No.1 to the said application was that, since applicants and respondent No.2 were partners of the said R-Cube Energy and respondent No.2, as a partner, had not joined the other partners i.e. the applicants in invoking arbitration, the said notice to invoke arbitration was defective and consequently, the application under Section 11 of the Arbitration Act deserved to be dismissed.
5. By order dated 19.12.2023, this Court accepted the said objection based on Section 19(2)(a) of the Indian Partnership Act, 1932 (Partnership Act) and consequently, it was held that the application deserved to be dismissed and accordingly, it was dismissed.
6. The applicants challenged the said order before the Supreme Court by filing Special Leave to Appeal (C) No.5329 of 2024. On 07.03.2024, the Supreme Court disposed of the Special Leave Petition by passing the following order:-
2. Permission, as prayed for, is granted.
3. Liberty is also given to the petitioner to file the Special Leave Petition against the order impugned herein as well as the order that may be passed in the review petition by the High Court.
4. With these observations, the Special Leave Petition is dismissed as withdrawn.”
7. As a consequ
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