2017 Supreme(MP) 50
IN THE HIGH COURT OF MADHYA PRADESH
Prakash Shrivastava, J.
Rajiv Dham v. Anil Kumar Garg
Writ Petition No.8166 of 2016 (I); Decided on 1.2.2017.*
K. S. Raghuvanshi for petitioner.
Headnote:Arbitration and Conciliation Act, 1996 -- S.5 -- Civil P.C., 1908 -- O.7 R.11 -- Constitution of India -- Art.227 -- Arbitrator rejected petitioner’s application under O.7 rule 11, CPC -- challenged in writ petition -- intervention by the High Court under Article 227 of the Constitution in arbitration proceedings not permissible. (2005)8 SCC 618, (2014)7 SCC 255 and (2003)12 SCC 140 followed. [Paras 4, 6 & 8
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1. This writ petition under Article 227 of the Constitution has been filed by the petitioner challenging the interlocutory order dated 23.11.2016 whereby the Arbitrator has rejected the petitioner's application under Order 7 rule 11 of the CPC.
2. In brief, the case of the petitioner is that the agreement dated 10.11.2010 was executed between the parties, thereafter some dispute had arisen, therefore, the matter was referred to the Arbitrator and before the Arbitrator, an application was filed by the petitioner under Order 7 rule 11 of the CPC raising an objection that the arbitration agreement is executed on insufficient stamp, but the arbitrator had rejected the said application by the impugned order.
3. Having heard learned counsel for the petitioner, it is noticed that section 5 of the Arbitration and Conciliation Act, 1996 restricts the judicial intervention in the arbitration matter except as provided in Part I of the Act. Section 5 reads as under :-
“5]Extent of judicial intervention - Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.
4. Arbitration Tribunal is a forum chosen by the parties by agreement. Section 5 restricts the scope of interference in such matter except in the manner provided in Part I of the Act, which contains the provision of filing objection against the award, appellate provision as also the provision for granting interim relief before, during or after the arbitration. As per the Scheme of the Act, an interlocutory order unless appealable under section 37 of the Act can be questioned while objecting to the award. Hence, against an interlocutory order passed by the private arbitrator, the interference in exercise of writ or supervisory jurisdiction under Articles 226 and 227 is not warranted.
5. The same issue had come up before the Supreme Court in the matter of SBP and Co. v. Patel Engineering Ltd. and another, reported in (2005)8 SCC 618, wherein the Supreme Court has in clear terms laid down that an order passed by the Arbitral Tribunal during the arbitration is not capable of being challenged under Article 226 or 227 of the Constitution and such an intervention by the High Court is not permissible by expressly holding that :-
“45] It is seen that some High Courts have proceeded on the basis that any order passed by an Arbitral Tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution. We see no warrant for such an approach. section 37 makes certain orders of the Arbitral Tribunal appealable. Under section 34, the aggrieved party has an avenue for ventilating its grievances against the award including any in between orders that might have been passed by the Arbitral Tribunal acting under section 16 of the Act. The party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The Arbitral Tribunal is, after all, a creature of a contract between the parties, the arbitration agreement, even though, if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the Arbitral Tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible”.
6. Following the judgment in the matter of SBP and Co. (supra), the three Judges Bench of the Supreme Court in the matter of Lalitkumar v. Sanghavi (Dead) through LRs Neeta Lalit Kumar Sanghavi and another v. Dharamdas v. Sanghavi and others, reported in (2014)7 SCC 255, has