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2023 Supreme(Cal) 182

IN THE HIGH COURT AT CALCUTTA
BIVAS PATTANAYAK, J.
M.D. Creations & Others - Petitioners
Versus
Ashok Kumar Gupta - Respondent
C.O. No. 2545 of 2022 CAN 1 of 2022 CAN 2 of 2023
Decided On : 09-06-2023

Advocates Appeared:
For the Petitioners: Mr. Rahul Karmakar, Mr. S.K. Podder, Mr. Sounak Mukherjee.
For the Opposite Party : Mr. Farhan Gaffar, Ms. Sagufta Saba Yasmin, Mr. Pathik Bandhu Banerjee.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 16 - Constitution of India,1950 - Article 227 - Raising objection to the jurisdiction of the arbitrator and for dismissal of the arbitral reference and alternatively for impounding of agreement and sending the said agreement for stamping and registration before the concerned authority - Whether it has jurisdiction to adjudicate dispute or not - Held, Principle which culls out from decisions of Hon’ble Court is that application Article 227 of the Constitution of India can be invoked on ground of patent lack in inherent jurisdiction or exceptional circumstances or bad faith of opposite party - It is already found that none of grounds exist so far as present case is concerned - Since petitioner is not left remediless and has a chance of appeal Section 34 of the Act court find substance in submissions of advocate for opposite party in this context relying on that though no hurdle can be put against exercise of Constitutional powers of High Court it is well recognised principle which gained judicial recognition that the parties should avail alternative remedies before resorting to constitutional remedies - Petition Dismissed

JUDGMENT :

Bivas Pattanayak, J. :

1. This revisional application is filed under Article 227 of the Constitution of India challenging order dated 2 August 2022 passed by sole arbitrator in Ashok Kumar Gupta versus M.D creations and others (arising out of AP No. 320 of 2021) dismissing the prayer of the petitioner under Section 16 of the Arbitration and Conciliation Act, 1996.

2. The brief fact of the case is that the opposite party-claimant is the owner in respect of a commercial space being shop No.4 lying and situated within premises No. 28/2, Shakespeare Sarani, Kolkata -700017 measuring more or less 600 Sq ft. The petitioner no.2 and 3 carries a partnership business of ready-made garments and accessories under the name and style of M.D. Creations (Petitioner no.1). The petitioners where inducted by the opposite party-claimant in the aforesaid premises for carrying on their business of ready-made garments under a leave and license agreement which was renewed from time to time since 30th May 2016 and lastly renewed on 27th June 2019. Invoking the arbitration clause in the agreement dated 27th June 2019, the opposite party filed an application under Section 11 of the Arbitration and Conciliation act, 1996 which was allowed vide order dated 7th October 2021 passed in AP No. 320 of 2021 and sole arbitrator was appointed. The opposite party-claimant filed statement of claim before the arbitrator as well as an application under Section 17 of the Arbitration and Conciliation Act. The petitioners also filed their statement in defence along with counter claim. In the proceedings before the learned arbitrator the petitioners filed an application under Section 16 of the Arbitration and Conciliation Act raising objection to the jurisdiction of the arbitrator and for dismissal of the arbitral reference and alternatively for impounding of agreement dated 27th June 2019 and sending the said agreement for stamping and registration before the concerned authority. Upon considering the materials on record and hearing the parties the application of the petitioners under Section 16 of the Act was dismissed.

3. Being aggrieved by and dissatisfied with the impugned order of the learned arbitrator, the petitioners have filed the present revision.

4. Mr. Farhan Gaffar, learned advocate for the opposite party submitted that the impugned order under challenge passed by learned arbitrator in connection with an application under Section 16 of the Act relating to jurisdictional competency of the arbitrator can be a subject matter of challenge under Section 34 of the Act and therefore cannot be assailed by filing application under Article 227 of the Constitution of India. To buttress his contention, he relied on the decision of Hon’ble Supreme Court passed in Mcdermott International INC Versus Burn Standard Co. Limited and others reported in (2006) 11 SCC 181. He further submitted that since the petitioners have a remedy against the order passed by the arbitrator within the Act itself, the rule of alternative remedy comes into operation and the petitioners’ application under Article 227 of the Constitution of India is not maintainable and in such event this court can direct the party to avail the remedies available within the framework of the Act before invoking constitutional remedy. In support of his contention he relied on the decision of Hon’ble Supreme Court passed in A. Venkatasubbiah Naidu Versus S. Chellappan and Others reported in (2000) 7 SCC 695. In light of his aforesaid submissions, he prayed that the revisional application of the petitioners is liable to be dismissed on the ground of it being not maintainable.

5. In reply to the contentions raised on behalf of the opposite party, Mr Rahul Karmakar, learned advocate for the petitioners submitted that the petitioners filed application under Section 16 of the Act on the precise issue that the agreement containing the arbitration clause is an unstamped and unregistered one due to which reason the same

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