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2025 Supreme(Pat) 556
IN THE HIGH COURT OF JUDICATURE AT PATNA
ARUN KUMAR JHA, J.
Civil Misc. Jur. No.585 of 2025
(25.7.2025)
Branch Manager, SBI General Insurance Company Limited. & Anr. ... Petitioners
vs.
Smt. Shashi Bala Singh ... Respondents
For the Petitioners: M/s Saurav Agrawal, Kundan Kumar Ojha, Anshuman Choudhary, Kiran Devrani, Shivam Chaudhary, Radhik Chawda, Ajay Sharma, Mehak Joshi.
For the Respondents: M/s Apurv Yash, Nand Kishore Singh, B. K. Sharma, Jitendar Kumar.
Headnote:
Arbitration and Conciliation Act, 1996 – Section 16 read with Constitution of India – Article 227 – Objection to the jurisdiction of Tribunal raised by the petitioner on the ground that the dispute exclusively fell within the ambit of the Bihar Building (Lease, Rent & Eviction) Control Act, 1982 and appropriate Civil Court would have jurisdiction – Objection by the impugned order the Arbitral Tribunal holding that the Arbitral Proceeding is not without jurisdiction in relation to the reliefs claimed – Maintainability of civil miscellaneous petition – Provision of law has been made very much clear that an interlocutory order passed in arbitration proceeding can become subject matter of challenge under Article 227 of the Constitution only when the petitioner has no other remedy available against such order or in exceptional cases of patent lack of inherent jurisdiction or "bad faith" being shown – The facts of the present case does not show any patent lack of inherent jurisdiction because there is no perversity staring one in the face – Similarly, no 'bad faith' has been shown by the petitioner to make the impugned order amenable to the jurisdiction of the High Court under Article 227 of the Constitution – Moreover, the petitioner is not left remediless as statutory appeal under Section 34 of the Arbitration Act has been provided and the petitioner has a recourse of law to agitate of his grievance in the appeal provided by the Statute – When the Arbitral Award is announced or any interim appealable order is passed, the petitioner can always challenge such award or order, as the case may be, under Section 34 or 37 of the Act and the petitioner would be at liberty to raise the ground taken in the present petition in the appeal – Present civil miscellaneous petition is not maintainable and hence, is dismissed – However, while disposing of the application under Section 16 of the Act, if any comments on merits of the has been made by the learned Arbitrator, the same would not cause any prejudice to the case of the parties at the time of final disposal of the arbitration proceeding. (Paras 18, 19, 21 & 22)
Deep Industries Ltd. Vs. ONGC, (2020) 15 SCC 706; Punjab State Power Corporation Ltd. Vs. Emta Coal Ltd., (2020) 17 SCC 93; Bhaven Construction Vs. Executive Engineer, Sardar Srovar Narmada Nigam Ltd., 2021 (2) BLJ 40 (SC) : (2022) 1 SCC 75—Relied.
A. N. Traders (P) Ltd. Vs. Shriram Distribution Services (P) Ltd., 2018 SCC OnLine Del. 12416; Penumalli Sulochana Vs. Harish Rawtani, 2013 SCC OnLine AP 667; M/s Eigen Technical Services Pvt. Ltd. Vs. M/s Vatika Ltd., 2015(1) ILR Punb. & Haryana; Ravinder Nath Vs. Best Entertainment (P) Ltd., 2011 SCC OnLine Del 2637; Vidya Drolia Vs. Durga Trading Corporation, (2021) 2 SCC 1—Referred.
Arun Kumar Jha, J. – Heard the learned counsels for the respective parties on the point of maintainability.
2. The petitioners have approached this Court for quashing the order dated 24.09.2024 passed by the learned Arbitral Tribunal comprising of a sole Arbitrator in an arbitration case arising out of Request Case no. 65 of 2023, whereby and whereunder an application filed by the petitioner under Section 16 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’), challenging the jurisdiction of the Tribunal, has been rejected and the learned Tribunal proceeded to dispose of the matter on its merit.
3. Shorn of unnecessary details, the facts of the case are that petitioner no. 2 is an Insurance Company (a company registered under the Companies Act, 1956) and petitioner no. 1 is its Branch Manager and for the sake of convenience, both of them would hereinafter be referred to as ‘the petitioner’. The petitioner entered into a lease agreement with husband of respondent for its office premises and, accordingly, a registered agreement for lease dated 22.02.2011 was executed between the petitioner and one Anchit Kumar, the deceased husband of respondent, in respect of the subject unit (Unit No. 4002) which lease period starting from 16.02.2011 till 15.02.2017. The lease period was further extended in respect of said subject unit from 16.02.2017 to 15.02.2026 by executing an agreement for lease between the petitioner and respondent. Another registered agreement for lease dated 22.02.2011 was also executed between the petitioner and one Ajay Kumar in respect of Unit No. 4001, beginning from the period 16.02.2011 till 15.02.2017. This lease agreement was also extended in the same manner from 16.02.2017 to 15.02.2026 by execution of an agreement between the parties. The lease deed so entered between the parties had a termination clause which allowed the petitioner to terminate the lease deed without assigning any reason by giving the lessor prior notice of 90 days in writing of its intention to terminate the lease. It was further stipulated that the petitioner would pay the lease rent regularly to the lessor during the notice period and after expiry of the said period, the petitioner was required to vacate the premises along with its movables and handover the peaceful possession to the lessor. The lessor was required to return the security deposit against the vacant possession. Under the termination Clause, the lessee/petitioner gave a termination notice to the lessor on 14.12.2020 to refund the security deposit of Rs. 3,31,688/-. On 13th March, 2021, a joint inspection was carried out by the parties. On 09.04.2021, the petitioner received a letter from the Advocates of the respondent, calling upon the petitioner to pay the sum of Rs. 27,78,672/- towards compensation for the purported structural damage caused to the subject unit and towards rent for the subject unit after termination of the lease deed by the petitioner. The petitioner replied to the said letter on 22.04.2021, denying the allegations made by the respondent. It further transpires that dispute arose between the parties over repair work in the subject unit and refund of the security deposit and the respondent refused to take possession of the subject unit. The respondent had been asking the petitioner to handover the possession of the subject unit after carrying out certain repairs and a number of meetings were held between the parties but the issues remained unresolved. In this manner, the keys of the subject unit were handed over to the respondent on 06.10.2021, but the respondent did not refund the security deposit to the petitioner. Thereafter, the respondent filed a petitioner under Section 12A of the Commercial Courts Act, 2015, which was subsequently withdrawn. On 22.04.2023, the respondent raised a dispute with regard to structural changes being carried out by the petitioner in the subject unit and invoked Arbitration Clause of the lease deed. As the petit
