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Gautam Packaging Industries, Bangalore and ors. Vs. Gold Crest Finance (India) Limited, Mumbai - Court Judgment

SooperKanoon Citation
SubjectArbitration
CourtKarnataka High Court
Decided On
Case NumberWrit Petition No. 37780 of 2000
Judge
Reported inAIR2001Kant510; 2002(3)KarLJ430
ActsArbitration and Conciliation Act, 1996 - Sections 11, 11(6), 13 and 16; Constitution of India - Article 226
AppellantGautam Packaging Industries, Bangalore and ors.
RespondentGold Crest Finance (India) Limited, Mumbai
Appellant AdvocateManorama Kulkarni, Adv. for ;Navkesh Batra, Adv.
Respondent AdvocateCariyappa and Company
DispositionPetition dismissed
Excerpt:
.....basis. - 3. the basis for such an application appears to be that the respondent-firm had advanced certain monies under a loan agreement in favour of petitioner-firm and its partners and there being failure in repayment of the said amount, disputes had arisen between the parties and in the context of agreement between the parties, the respondent had sought for appointment of an arbitrator by filing the application. petitioner is aggrieved by the order appointing an arbitrator on several grounds and as contended by the learned counsel for the petitioner and when the very existence of the agreement for appointment of the arbitrator is disputed, the appointment of the arbitrator being not in accordance with the terms of the agreement, and other related matters like fixing the..........arbitrators and had taken time for such purpose, having not come forward with any names, the learned judge had passed the order appointing the arbitrator.5. smt. manorama kulkarni, learned counsel appearing for the petitioners has contended that the impugned order is not in terms of the arbitration agreement; that the petitioners had disputed the very existence of the agreement under which the arbitration clause is invoked seeking tor the appointment of the arbitrator; that the petitioner is not even aware of existence of such an agreement; that the petitioner had no occasion to look into or get copies of the agreement and the petitioners did not have an adequate opportunity to represent their case before the learned judge before the impugned order has been passed and as such the.....
Judgment:
ORDER

D.V. Shylendra Kumar, J.

1. In this writ petition, the petitioner, a partnership firm who had been arrayed as a respondent in an application filed under Section 11 of the Arbitration Act by the respondent in this writ petition and which application had been ordered by the learned Single Judge of this Court as per order dated 14-7-2000 in C.M.P. No. 23 of 2000 has called in question the validity of this order.

2. The brief facts leading to the petition are that the respondent-firm had presented an application under Section 11(5) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' for short) which had come to be numbered as C.M.P. No. 23 of 2000 before this Court and had in that petition, sought for appointment of one Mr. M.C. Ravi Kumar as sole Arbitrator to adjudicate certain disputes between the applicant and the above petitioner-firm and its partners.

3. The basis for such an application appears to be that the respondent-firm had advanced certain monies under a Loan Agreement in favour of petitioner-firm and its partners and there being failure in repayment of the said amount, disputes had arisen between the parties and in the context of agreement between the parties, the respondent had sought for appointment of an Arbitrator by filing the application.

4. The learned Judge who heard the application after notice to the respondent and after hearing the learned Counsel for the parties, had passed the order dated 14-7-2000 appointing Sri R.G. Vaidyanatha, a retired Judge of Bombay High Court, as a sole Arbitrator. The order had been passed in the background of the earlier development namely, that though the parties had been given time to suggest the names of suitable Arbitrators and had taken time for such purpose, having not come forward with any names, the learned Judge had passed the order appointing the Arbitrator.

5. Smt. Manorama Kulkarni, learned Counsel appearing for the petitioners has contended that the impugned order is not in terms of the arbitration agreement; that the petitioners had disputed the very existence of the agreement under which the arbitration clause is invoked seeking tor the appointment of the Arbitrator; that the petitioner is not even aware of existence of such an agreement; that the petitioner had no occasion to look into or get copies of the agreement and the petitioners did not have an adequate opportunity to represent their case before the learned Judge before the impugned order has been passed and as such the order is required to be quashed.

6. An application has also been filed on behalf of the petitioners seeking for amendment of the petition which had been presented under Article 227 of the Constitution of India to read as a petition presented under Article 226 of the Constitution of India.

7. The learned Counsel has also relied upon the decision of the Supreme Court in the case of Konkan Railway Corporation Limited and Ors. v. Mehul Construction Company, : AIR2000SC2821 and has submitted that on the ratio laid down by this decision, this Court has jurisdiction to entertain a petition under Article 226 of the Constitution of India to look into the validity or otherwise of an order passed on the administrative side by the Chief Justice or a person of the institution designated by the Chief Justice in exercise of the powers under Section 11 of the Act. It is the submission of the learned Counsel that this Court can quash an order of this nature if it is found that the said order is not in terms of arbitration agreement or in any way affects the rights of the petitioners.

8. The learned Counsel has also taken me through the said decision. The Apex Court has, while discussing the scope of Section 11 of the Act and the nature of an order that is passed under Section 11 of the Act, has held that, that an order passed under Section 11 of the Act by the Chief Justice of the High Court or a designate, is one passed on the administrative side and as an administrative order and it is not an order which was amenable to the jurisdiction of the Supreme Court under Article 136 of the Constitution or can such an order be made subject-matter of a petition under Article 32 of the Constitution. The Supreme Court has held that there is no scope for judicial review in respect of an order passed under Section 11 of the Act and has further held that if at all there is any scope in respect of an order under Section 11, it is to the limited extent of exercising jurisdiction under Article 226 of the Constitution for the purpose of issuing a writ of mandamus when by the impugned order the power is not utilised for appointing an Arbitrator, but the application is rejected without appointing an Arbitrator though the circumstances justify the appointment of an Arbitrator.

9. In the light of this decision of the Supreme Court which has been relied upon by the learned Counsel for the respondent also, I am of the view that there is absolutely no scope for this Court in exercise of its writ jurisdiction, to review the order passed under Section 11 of the Act to make it subject-matter for issue of a writ of certiorari. The supreme Court has also indicated in the said decision that just because an order of this nature is not subject-matter for issue of a writ of certiorari, it does not mean that the aggrieved parties are left with no remedy to redress their grievance. It has been pointed out in the said decision that under the provisions of Sections 13 and 16 of the Act, the question as to the qualifications, impartiality and jurisdiction of the Arbitrator who has been appointed under the impugned order, can be raised before the very Arbitrator and in the opinion of the Supreme Court, this was a sufficient opportunity to an aggrieved person.

10. In the instant case, the situation is no different. Petitioner is aggrieved by the order appointing an Arbitrator on several grounds and as contended by the learned Counsel for the petitioner and when the very existence of the agreement for appointment of the Arbitrator is disputed, the appointment of the Arbitrator being not in accordance with the terms of the agreement, and other related matters like fixing the venue or the sittings where the arbitration proceedings are to be conducted etc. In the light of the law laid down by the Apex Court, it is always open to the petitioners to raise such of those questions as are open to the petitioners before the very Arbitrator and in accordance with the provisions of the Act and cannot be made a ground for judicial review of the order appointing an Arbitrator and for issue of a writ of certiorari under Article 226 of the Constitution of India.

11. Accordingly, the writ of certiorari cannot be granted and prayer for issue of a writ of certiorari for quashing the order is declined.

12. The application seeking for amendment is entertained. The learned Counsel for the respondent also has no objection for the same and the petition is to be treated as one under Article 226 of the Constitution. However, it is ruled that a petition of this nature cannot be entertained by this Court in exercise of jurisdiction either under Article 226 or under Article 227 of the Constitution of India.

13. In the light of the position indicated above, this petition isrejected.


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