SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2023 Supreme(Online)(Bom) 3035

HIGH COURT OF BOMBAY
MANISH PITALE, J
Ramchandra Udaysinh Jadhavrao – Appellant
Versus
Girishnavnathrao Avhad and another – Respondent
CIVIL APPELLATE JURISDICTION ARBITRATION APPEAL NO.23 OF 2021



Advocates:
For the Appellants/Petitioners: Mr. Prathamesh Bhargude, Mr. Sharad Dhore, Mr. Sumit Sonare
For the Respondents: Mr. Dormaan J. Dalal, Ms. Kritika Sethi

An order terminating arbitral proceedings under Section 32(2)(c) of the Act is not an arbitral award and cannot be challenged under Section 34; the proper recourse is through Section 14.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 32, 34, and 14 - Appeal against dismissal of application under Section 34 - The District Court ruled that the application to challenge the arbitrator's termination of proceedings was not maintainable because the order did not qualify as an arbitral award - The appellant challenged this on the grounds of incorrect interpretation of terminations of mandate versus proceedings. (Paras 2, 10, 34, 59)

(B) Legal standing of arbitral orders - The court emphasized that an order terminating arbitration proceedings under Section 32(2)(c) does not constitute an arbitral award; thus, appeal under Section 34 is not sustainable. (Paras 22, 24, 31)

(C) Consistency in judicial interpretation - The court aligned its reasoning with prior rulings, reinforcing that appropriate remedies lie under Section 14 following the termination of arbitral proceedings. (Paras 59, 60)

Facts of the case:
Appellant filed an application under Section 34 after the arbitrator terminated proceedings based on inability to act further due to pending writs. The appellant asserted valid claims concerning the lease agreement regarding rental payment defaults. (Paras 3, 8)

Findings of Court:
The court upheld the District Court's ruling that the application under Section 34 was not maintainable, clarifying the nature of the arbitrator's order and rightful recourse under Section 14 for grievances against arbitrators. (Paras 59, 60)

Issues: The main issues included the interpretation of whether an arbitrator's order terminating proceedings constitutes an arbitral award and the appropriate recourse available to the aggrieved parties. (Paras 12, 22)

Ratio Decidendi: The court reasoned that termination orders do not resolve the dispute on merits, thus cannot be challenged under Section 34. Challenges should instead proceed under Section 14 for termination of the arbitrator's mandate. (Paras 28, 34)

Result: Appeal dismissed with liberty to the appellant to pursue appropriate proceedings under Section 14 of the Arbitration and Conciliation Act.

Table of Content
1. context of appeal and parties involved. (Para 1 , 4 , 5 , 6)
2. arguments on jurisdiction under section 34. (Para 2 , 12 , 13 , 14)
3. court's finding on termination of arbitration. (Para 7 , 8 , 17 , 21)
4. grounds for the district court's order. (Para 9 , 10)
5. reference to relevant case law. (Para 18 , 19 , 20)
6. distinction between awards and orders. (Para 22 , 23 , 24 , 25)
7. legal interpretation of section 32. (Para 26 , 27 , 28 , 29 , 30)
8. legal precedents on arbitral awards. (Para 31 , 32 , 33 , 34)

ORDER :

. The present appeal raises a question as regards remedy available to the appellant herein, in respect of an order dated 09.01.2014 passed by a sole arbitrator, for the reason that by the impugned judgement and order, the District Court has held that an application filed under Section 34 of the Arbitration and Conciliation Act, 1996 , by the appellant was not maintainable. Since the District Court rendered a finding that the application under Section 34 of the said Act itself was not maintainable, there was no discussion on the correctness or otherwise of the order passed by the arbitrator.

2. The learned counsel for the parties have made submissions with regard to the scope of jurisdiction under Section 34 of the said Act, in the backdrop of the aspect of termination of arbitral proceedings under Section 32 thereof, with particular reference to the concept of termination of mandate of the arbitrator touching upon Sections 14 and 15 of the said Act. The learned counsel for the parties have referred to various judgements in the said context pertaining to termination of the mandate of an arbitrator, as opposed to the termination of the arbitral proceedings themselves, which has become a bone of contention between the parties. This Court is called upon to consider the same and a finding on the said aspect would result in the present appeal being either allowed and the matter being remanded to the District Court, or the appellant being advised to resort to appropriate proceedings, particularly under Section 14 of the said Act. 3. A brief reference to facts would be necessary. The appellant, being the original claimant, is the owner of a piece of land at Village Wagholi, District Pune, Maharashtra. Respondent No.1 was a dealer of respondent No.2 - Indian Oil Corporation Limited. Respondent No.2 Corporation had granted the dealership to respondent No.1 for running a petrol pump at Wagholi. In that context, respondent No.1 approached the appellant and a lease deed was executed in favour of respondent No.1 for a period of 30 years, with an option for renewal of 10 years. As per the terms of the lease, respondent No.1 was to execute a sub-lease in favour of respondent No.2. Accordingly, in terms of the registered lease deed dated 29.09.2001, executed in favour of respondent No.1, he executed a registered sub-lease dated 15.03.2002 in favour of respondent No.2.

4. According to the appellant, respondent Nos.1 and 2 were never punctual in payment of rent and they also failed to pay taxes within time to the government, as also the grampanchayat. As a result of the default, the grampanchayat issued a demand notice to the appellant. In this backdrop, the appellant sent a letter to the respondents to remedy their breaches. Despite notice, the respondents failed to comply with the demands made in the said notice and in that light, as disputes had arisen between the parties, the appellant invoked the arbitration clause contained in the lease deed.

5. In the exchange of communications between the parties in that context, the respondent No.1 informed the appellant that respondent No.2 had appointed another person as a dealer of the petrol pump and effectively, respondent No.1 had been evicted from the premises. According to the appellant, this was also a serious breach of the lease deed as well as the sub-lease deed. The arbitrator, being an officer of respondent No.2, took up the proceedings and the appellant filed his

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top