T.N.K. Singh, J.
1. By this writ petition, without following the procedures prescribed in the Arbitration & Conciliation Act, 1996, the petitioner is seeking a relief for quashing the award dated 26.8.2000 made by the Arbitrator, i.e., respondent No. 2 in Arbitration case No. D-1/99 and also the order of the Arbitrator dated 15.1.2000 passed in the said arbitration case.
2. Heard Mr. N. Ibotombi, learned Counsel for the petitioner and Mr. M. Gourahari Singh, learned Counsel for the respondents.
3. Learned counsel, Mr. M. Gourahari Singh appearing for the respondents raised a preliminary objection regarding the maintainability of the present writ petition in its factual context for the reason that in view of the specific provisions contained in the Arbitration & Conciliation Act, 1996, which is self contained, the writ petitioner, i.e., aggrieved party shall have the only option to challenge the award dated 26.8.2000 made by the Arbitrator in arbitration case No. D-1/99 under Section 34 of the Act. Accordingly, this writ petition was taken up for deciding the preliminary objection.
4. A short factual matrix of the present case will be sufficient for deciding the preliminary objection regarding the maintainability of the present writ petition.
The work 'Improvement of Thoubal Yairipok Road 0-8 Km.'. (SH : Strengthening pavement i/c premix carpeting for the portion 0/0 to 7.5 Kms.) was awarded to the respondent No. 1 vide Work Orders No. HS/Contract/166/82 dated 21.8.1982 of the Executive Engineer,' Highways South Division, P.W.D., Manipur. The time allowed for execution of the said contract work was 12 (twelve) months to be reckoned from 31.8.1982. The said contract work was rescinded vide order No. HS/131/CC/Vol-xi/1079-85 dated 31.3.1984 of the Executive Engineer, Highway South Division, P.W.D., Manipur. Because of some disputes? between the parties, respondent No. 1 filed O.S.(Arbitration) No. 31/98 in the Court of District Judge, Manipur West for appointing an Arbitrator under Section 11(6) of the Arbitration & Conciliation Act, read with Notification No. SC/XI01/96/1179/RC dated 25.3.1998 issued under the provision of Sub-section 4-10 of Section 11 of the said Act.
Under the order of District Judge Manipur West dated 15.5.1999 passed in O.S (Arbitration) No. 31/98 appointed Shri C. Kamal Singh, respondent No. 2, as sole Arbitrator for settling the dispute by framing two terms of reference, which reads as follows:
(a) What will be the final bill amount to be paid to the petitioner in respect of the work executed under the agreement?
(b) Whether the petitioner is entitled to interest of 20% per annum on the amount due to be paid to the petitioner on final settlement of the bill amount, if so, from what date the petitioner is entitled to interest?
The Executive Engineer, Thoubal Division filed written statement and counter claims on 23.10.99 before the learned Arbitrator, i.e., respondent No. 2. The respondent No. 2 (sole Arbitrator) took up-a preliminary issue 'whether the Arbitrator can take up the counter claims raised by the respondent without reference.' The learned sole Arbitrator, i.e., respondent No. 2 after hearing the parties passed an order on 15.1.2000 to the effect that the counter claim raised by the respondents i.e. present petitioner was not entertainable for want of second reference. The said order of the sole Arbitrator dated 15.1.2000 passed in Arbitration Case No. D-1/99 is also impugning in the present writ petition. The sole Arbitrator proceeded the said arbitration case No. D-1/99 and made the reasoned award dated 26.8.2000. The present petition is filed for quashing the impugned reasoned award dated 26.8.2000 only on the main thrusts that the sole Arbitrator did not consider the counter claim of the Executive Engineer, Thoubal Division by mis-conducting himself and also by unabling the executive Engineer to present his case in the proceedings of the said Arbitration case No. D-1/99 by passing the impugned order dated 15.1.2000 in making the impugned reasoned award dated 26.8.2000.
5. The-relevant portion of Sections 12, 13, 16 and 34 of the Arbitration & Conciliation Act, 1966 are quoted hereunder:
12. GROUNDS FOR CHALLENGE-
(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.
(2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall without delay, disclose to the parties in writing any circumstances referred to in Sub-section (1) unless they have already been informed of them by him.
(3) An arbitrator may be challenged only if-
(a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or
(b) he does not possess the qualifications agreed to by the parties.
(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.
13. CHALLENGE PROCEDURE-
(1) Subject to Sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.
(2) Failing any agreement referred to in Sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in Sub-section (3) of Section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.
(3) Unless the arbitrator challenged under Sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
(4) If a challenge under any procedure agreed upon by the parties or under the procedure under Sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.
(5) Where an arbitral award is made under Sub-section (4) the party challenging the arbitrator may make an application for setting aside, such an arbitral award in accordance with Section 34.
(6) Where an arbitral award is set aside on an application made under Sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees.
16. COMPRTENCE OF ARBITRAL TRIBUNAL TO RULE ON ITS JURISDICTION-
(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose-
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence, however, a party shall not be precluded from raising such a plea merely because that lie has appointed, or participated in the appointment of an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in Sub-section (2) or Sub-section (3) admit a later plea if it considers the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in Sub-section (2) or Sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with Section 34.
34. APPLICATION FOR SETTING ASIDE ARBITRAL AWARD-
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with Sub-section (2) and Sub-section (3).
(2) An arbitral award may be set aside by the court, only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or failing any indication thereon, under the law for the time being in force ; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration;
Provided that, if the decisions on matters submitted to
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the court finds that-
(i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India..
From the conjoined reading of Sections 12, 13, 16 and 34 of the Act the following points are clear that:
(a) if a challenge under any procedure agreed upon parties or under the procedures under Sub-section (2) of Section 13 is not successful, the Arbitral Tribunal shall continue arbitral proceedings and made an award and when an award is made under Sub-section (4) of Section 13, the parties challenging the Arbitrator may make an application for setting aside such arbitral award in accordance with Section 34 of the Act;
(b) any party, whose plea is that, arbitral tribunal is exceeding his authority in the arbitral proceedings; is rejected and made an award against him, may make an application for setting aside such award in accordance with Section 34 of the Act: and
(c) the aggrieved party may make an application for setting aside the award-made under Section 34 of the Act for the reasons that:
(i) arbitral proceedings was proceeded without giving opportunity to present ills case properly or in other words, the arbitral proceedings was proceeded in such a manner that the aggrieved party was unable to present his case. [Ref: Section 34(2)(iii)]; &
(ii) that the arbitral award contains decisions on matters beyond the scope of the submission to arbitration. [Ref: Section 34(2)(iv)]
6. From the factual matrix of the present case, the petitioner's case is that the sole Arbitrator proceeded the arbitration case No. D-1/99 without giving proper opportunity to the petitioner to put up his case mentioned in the counter claim or/in other words the arbitral proceeding of the arbitration case No. D-1/99 was proceeded in such a manner that it was unable on the part of the writ petitioner to present his case because of non consideration of their counter claim, and also that the impugned reasoned arbitral award dated 26.8.2000 did not deal with all the disputes within the terms of reference. These two grounds for filing the present writ petition for quashing the impugned reasoned award dated 26.8.2000, are covered by Section 34(2)(iii) & (iv) of the Act.
7. It is now a well settled position in law that jurisdiction of Supreme Court and High Court under Articles 32 and 226 of the Constitution respectively are sacrosanct, is undisputedly a part of basic structure of the Constitution. The power of judicial review of the constitutional court, i.e. Supreme Court and High Court include the power to pronounce upon the validity of statutes, action taken and order passed by the individuals and body falling within the ambit and scope of 'State' under Article 12 of the Constitution. If the courts are totally deprived of that power, the fundamental right conferred upon the people will become a mere adornment because right without remedy are/is writ in water. It is also equally well settled that the principles treating the existence of alternate remedy as a bar to the exercise of jurisdiction under Articles 226/227, has been a rule of self imposed restriction, a rule of policy, convenience and discretion rather than a rule of law. And further, the rule requiring exhaustion of statutory remedies, before the grant of writ had nothing to do with jurisdiction of the court but it was a rule of policy and convenience. The Arbitration & Conciliation Act, 1996 does not confine the power of judicial review of the High Court under Articles 226/227, which the basic structure of our constitution but only prescribe the procedures for judicial review against the award of the arbitral tribunal. In this regard, we may refer the decision of the Apex Court in Barbar Ali v. Union of India and Ors. reported in : (2000)2SCC178 . In a case, i.e., State of Rajasthan and Anr. v. Nav Bharat Construction Co. reported in : AIR2002SC258 , the Arbitrator had not considered the counter claim which sought to be raised after the lapse 4 years of reference. The Apex Court in State of Rajasthan and Anr. (supra) held that the scope of setting aside the award is limited to the grounds available under the Act, i.e. Section 34 of the Act. Such action of consideration or non-consideration of counter claim is one of the grounds covered by Section 34 of the Arbitration Act. The relevant extract of paras 5, 6 and 7 of the SCC in State of Rajasthan (supra) are quoted hereunder:
5. In our view, it has been rightly pointed out that in the written statement, appellants have not claimed any set-off or filed counter-claim for the alleged amount due and payable by the contractor on the alleged ground that Accountant General's office has raised objection for payment of labour charges at accelerated rate. In our view as no such set-off or claim nor any counter-claim was filed by the appellant, the arbitrator has rightly not considered the same which was sought to be raised after lapse of 4 years of reference. Further the High Court has noted that the learned Additional Advocate-General was unable to point out any legal basis to support the contention that the arbitrator was required to go into the counter-claim in the circumstances of the present case.
6. ...It appears that no such contention was raised on behalf of the State of Rajasthan in this view of the matter, it cannot be held that arbitrator has committed any error apparent on the face of record or has mis-conducted himself in passing the impugned award. It is settled law that the scope for setting aside the award is limited to the ground available under the Arbitration Act which had been well defined by long line of decided cases.
(emphasis supplied)
7. Lastly, in the present case, the award passed by the arbitrator is a reasoned one. The contention raised by the learned Counsel for the appellant that under Clause 23 of the agreement between the parties, the contractor was not entitled to recover any interest on delayed payment was neither raised before the arbitrator, the District Court or before the High Court. This question depends upon the evidence which may be led by the parties as well as interpretation of Clause 23 by the parties and the arbitrator. The parties have under stood that there is no bar on granting interest on delayed payments. It appears that no such contention was raised on behalf of the State of Rajasthan. In this view of the matter, it canoe be held that the arbitrator has committed any error apparent on the face of the record or has mis-conducted himself in passing the impugned award. It is settled law that scope for setting aside the award is limited to the grounds available under the Arbitration Act which have been well defined by long line of decided cases. In this view of the matter, it is not necessary for us to consider the contention of the contractor that similar, clause is interpreted by this Court in Harish Chandra and Co. case and it is held that there is no bar on granting interest. In our view as the contention was not raised before the arbitrator or at any stage thereafter, it is not necessary for us to deal with or decide the same in this appeal.'
8. In the case of Commercial and Ors. v. Calicut Engineering Works Limited reported in (2004) 10 SCC 656, the petitioner, i.e. Commercial filed an application dated 2.7.2003 to the Arbitrator for setting aside the report of hand writing in respect of the question as to whether the petitioner has signed the document which purportedly contained arbitration clause and another hand writing expert be appointed. The said application was rejected by the Arbitrator. The Apex Court in Commercial and Ors. (supra) held that the said rejection by the Arbitrator would be a ground of challenge under Section 34 of the Act. In the case of Rajinder Krishna Khanna and Ors. v. Union of India and Ors. reported in : AIR1999SC463 ; a copy of inspection report basing on which the impugned arbitration award was made, was not available to the second respondent, as such, the second respondent had been unable to present its case thereon and principles of natural justice had been violated. The Apex Court in Rajinder Krishna Khanna (supra) held that denial of opportunity to present its case in the arbitration proceedings, would be one of the ground mentioned in Section 34(2)(iii) of the Act for setting aside the award made by the Arbitral Tribunal in such proceedings. In Punj Sons Pvt. Ltd. v. National Alluminium Co. Ltd and Anr. reported in AIR 1999 SC 1547, the arbitrator had denied to consider the counter claim which was filed before him on the ground that the party should secure a fresh reference, regarding the dispute, which are the subject matter of the counter claim and both the original reference and second reference could be consolidated and decided together, and as the counter claim was not included in the reference, it cannot be adjudicated upon. The Apex Court in para-3 of AIR in Punj Sons Pvt. Ltd. (supra) held as under:
We have heard learned Counsel for the parties. It appears to us that the learned Arbitrator had, in the facts and circumstances of this case, rightly opined that whereas respondent No. 1 was not justified to raise a 'counter claim' in the manner in which it was raised, but it could seek adjudication of the disputes involved in the 'counter claim' by asking for a second reference and that as and when the second reference is made, both the references could be heard together. Respondent No. 1 could have sought a reference thereafter in respect of the disputes which were covered by the 'counter claim' but he choose not to do so and in the bargain, almost ten years have gone by. According to Mr. Nariman, the view of the arbitrator was correct because the 'counterclaim' was outside the scope of the reference made on 10.12.1986.
This Court in Assam Urban Water Supply & Sewerage Board v. Subhas Project & Marketing Limited reported in AIR 2003 Guahati 146 held that writ petition challenging the order of the Arbitrator is not maintainable except as per the remedy available under the Arbitration & Conciliation Act. Paras 9, 10, 12 and 13 of the AIR in Assam Urban Water supply (supra) are quoted hereunder:
9. The Hon'ble Kerela High Court referred to various decisions and the English Courts took a similar view in the case of Hem v. D.F.O. 1988 (2) Arbitration LR 37 holding that no writ will lie to quash the award or to direct something to be done in relation to the arbitration award except as per the remedies available under the Act.
10. Division Bench of the Punjab and Haryana High Court had also the occasion to consider the above aspect of the matter in the case of Harike Rice Mills v. State of Punjab 1998 (1) RAJ 223 and the Court held:
However, Sub-sections (4) and (5) of Section 13 of the Act make a distinct departure in this regard, inasmuch as, with a view to prevent dilatory tactics the Parliament has not allowed the unsuccessful part to challenge the appointment immediately to when its challenge had been unsuccessful before the arbitrator and requires such a party to wait and challenge the same only after the arbitral award has been made. When an unsuccessful party cannot challenge the order of the arbitrator rejecting the challenge to his appointment even before a Civil Court before the award is made, how can a petition lie under Article 226 of the Constitution to challenge that Order when the award has yet to be made. Such a petition, in our view, is not maintainable even though one of the parties to the dispute may be an instrumentality of the State otherwise amenable to the writ jurisdiction of this Court. Even if the appointment of the arbitrator was invalid, as contended by the petitioner the same will have to be decided by the Court before which the validity of the award would be challenged.
12. In view of the provisions of Sub-sections (5) and (6) of Section 16 of the Act read with Section 13 and Section 37 of the Act, we are in respectful agreement with the view laid down by the Hon'ble Punjab and Haryana and the Bombay High Court and hold that the Arbitrator has the power to decide about its known jurisdiction and such decision is not amenable to writ jurisdiction and the aggrieved party may challenge the same as provided under Section 16(6) of the Act after the Arbitration proceeding is over and the award is made.
13. In view of what has been stated above, the present writ petition is not maintainable and the same is accordingly dismissed.
For the reasons discussed above, the present writ petition is not maintainable. Accordingly, the preliminary objection regarding the maintainability of the present writ petition is decided in favour of the respondents. Writ petition is dismissed. No order as to costs.