2023 Supreme(Del) 2577

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
Antique Art Export Pvt. Ltd. – Appellant
Versus
United India Insurance Company Limited – Respondent
Arb.P. 163 of 2022 & ARB.P. 164 of 2022
Decided On : 22-02-2023

Headnote:

ARBITRATION - APPOINTMENT OF ARBITRATOR - SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 - RES JUDICATA - MAINTAINABILITY OF PETITIONS - WHETHER THE PRESENT PETITIONS ARE MAINTAINABLE IN VIEW OF THE FACT THAT THE PETITIONER HAD ALREADY FILED PETITIONS SEEKING APPOINTMENT OF ARBITRATOR, WHICH THOUGH ALLOWED BY THIS COURT VIDE ORDER DATED MAY 30, 2017 BUT ON A CHALLENGE BY THE RESPONDENT HEREIN, BEFORE THE SUPREME COURT BY WAY OF SPECIAL LEAVE PETITIONS (WHICH WERE CONVERTED INTO CIVIL APPEALS BEING CA NO. 3284/2019 AND 3285/2019, NAMELY, ANTIQUE ART EXPORT (SUPRA)) HAVE BEEN ALLOWED, VIDE A COMMON JUDGMENT AND ORDER DATED MARCH 28, 2019, WHEREIN IT WAS HELD THAT, NO ARBITRABLE DISPUTE SUBSISTS BETWEEN THE PARTIES, RESULTING IN THE SUPREME COURT SETTING ASIDE THE ORDER OF THIS COURT APPOINTING THE ARBITRATOR. EVEN THE REVIEW PETITIONS FILED BY THE PETITIONER HEREIN SEEKING REVIEW OF COMMON JUDGMENT AND ORDER OF THE SUPREME COURT DATED MARCH 28, 2019, WERE DISMISSED BY THE SUPREME COURT ON JULY 10, 2019.

Fact of the Case:

The petitioner is a Company namely Antique Art Export Private Limited, engaged in the business of manufacturing, selling and exporting carpets, rugs etc. The petitioner has been availing insurance policies from respondent, United India Insurance Company Limited (herein "respondent Company"). It is the case of the petitioner that it was approached by the respondent company through its Administrative Officer, Mr. Pramod Arora for renewal of expiring policies on terms and conditions to cover its Factory situated at 78, Kilo Mile Stone, Karhans Village, Main Gt Road, Samalakha, Panipat. The insurance policies since inception in 1991 are being renewed and the applicable premium were being paid regularly.

Finding of the Court:

The Court held that the present petitions filed by the petitioner are not maintainable as inter se parties, the issue of appointment of an arbitrator has attained finality with the orders passed by the Supreme Court in Antique Art Export (supra) and Antique Art Export 2 (supra). The petitions are liable to be dismissed without going into other submissions and Judgments made and relied upon by Mr. Kaushik. The petitions are dismissed. No costs.

Issues: 1. Whether the present petitions are maintainable in view of the fact that the petitioner had already filed petitions seeking appointment of Arbitrator, which though allowed by this Court vide order dated May 30, 2017 but on a challenge by the respondent herein, before the Supreme Court by way of Special Leave Petitions (which were converted into Civil Appeals being CA No. 3284/2019 and 3285/2019, namely, Antique Art Export (supra)) have been allowed, vide a common judgment and order dated March 28, 2019, wherein it was held that, no arbitrable dispute subsists between the parties, resulting in the Supreme Court setting aside the order of this Court appointing the Arbitrator. 2. Whether the principle of res judicata is applicable to a petition under Section 11 of the Act of 1996.

Ratio Decidendi: 1. The Court held that the proceedings under Section 11 of the Act of 1996, shall be governed by the principle of res judicata, in view of the judgment of the Supreme Court in the case of Anil, S/o Jagannath Rana & Ors. v. Rajendra. S/o Radhakrishan Rana and Ors., (2015) 2 SCC 583. 2. The Court further held that the Supreme Court in the case of Neelima Srivastava v. State of Uttar Pradesh and Ors., 2021 SCC OnLine SC 610:, has reiterated the principle in identical fact situation, wherein, in Paragraphs 34 to 36, it held as under: "34. In Satyadhyan Ghosal v. Deorajin Debi [AIR 1960 SC 941], this principle was discussed in detail and it has been settled as follows. To quote: (AIR pp. 943-44, paras 7-8) "7. The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a res is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation. When a matter--whether on a question of fact or a question of law--has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again. This principle of res judicata is embodied in relation to suits in Section 11 of the Code of Civil Procedure; but even where Section 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation proceed on the basis that the previous decision was correct. 8. The principle of res judicata applies also as between two stages in the same litigation to this extent that a court, whether the trial court or a higher court having at an earlier stage decided a matter in one way will not allow the parties to reagitate the matter again at a subsequent stage of the same proceedings. xxxx xxxx xxxx 15. The principles as discussed above on res judicata have been consistently followed by this Court. And the recent judgments in that regard are in Subramanian Swamy v. State of T.N and in Surjit Singh v. Gurwant Kaur. Thus, once the judicial authority takes a decision not to refer the parties to arbitration, and the said decision having become final, thereafter Section 11(6) route before the Chief Justice is not available to either party. 16. With great respect, the Designated Judge has gone wholly wrong in passing the order under Section 11 of the Act when the civil court is in seisin of the dispute and where arbitration has already been declined by the said court."

Final Decision: The petitions are dismissed. No costs.