Raj International Vs. Tripura Jute Mills Ltd. - Court Judgment

Excerpt:
- - 4. the said agreement, according to the petitioner, was determined/terminated/cancelled in or about december, 1994 as the said agreement was unworkable and incapable of execution as well as implementation, and the petitioner left the jute mill with an understanding that the agreement in question was cancelled. the claim before the arbitrator by the respondent jute mill was replied by the petitioner on 10.1.2004 with a copy to the sole arbitrator expressing doubts as to the independence and impartiality of the arbitrator in deciding the alleged disputes and claims, and also claiming that the purported arbitration proceeding is not maintainable and the same is barred by laws of limitation as well as the appointment of mr. the relevant paragraph of the said letter dated 6.2.2004 of..... u.b. saha, j.1. this revision petition under article 227 of the constitution has been filed calling in question the legality, correctness and validity of the order dated 25th september, 2007 passed by the sole arbitrator in an arbitration proceeding between the parties.2. heard mr. s. n. mitra, learned counsel who appeared along with mr. d. jain, learned counsel and mr. r. dutta, learned counsel for the petitioner. also heard mr. g s. das, learned counsel for the respondent tripura jute mills.3. the brief facts leading to the filing of this writ petition are briefly stated as under:on 7th july, 1994, the petitioner had entered into an agreement with the respondent, tripura jute mills ltd. a government co. (hereinafter referred to as respondent-jute mill) which unless extended was to be.....

Judgment:

U.B. Saha, J.

1. This revision petition under Article 227 of the Constitution has been filed calling in question the legality, correctness and validity of the order dated 25th September, 2007 passed by the Sole Arbitrator in an arbitration proceeding between the parties.

2. Heard Mr. S. N. Mitra, learned Counsel who appeared along with Mr. D. Jain, learned Counsel and Mr. R. Dutta, learned Counsel for the petitioner. Also heard Mr. G S. Das, learned Counsel for the respondent Tripura Jute Mills.

3. The brief facts leading to the filing of this writ petition are briefly stated as under:

On 7th July, 1994, the petitioner had entered into an Agreement with the respondent, Tripura Jute Mills Ltd. a Government Co. (hereinafter referred to as respondent-Jute Mill) which unless extended was to be expired on 31.7.1999. However, either party to the Agreement is/was at liberty to determine the agreement by giving three months notice. Clause No. 49 of the said agreement is reproduced hereunder:

49. All differences and disputes of any kind whatsover between the parties to this agreement including disputes and differences in respect of the construction of this agreement or the breach of any terms thereof by any commission on commission or of any compensation claimed or payable thereof or in any mariner whatsoever in connection with or in relation to this agreement shall be referred to the sole arbitration of a single Arbitrator to be appointed by the Secretary/Commissioner. Industries Department. Government of Tripura. Both the Company and Second Party hereby mutually agree to obey and perform the award of such arbitrator. The company and the second party both have further agreed that only the Courts localled in Agartala shall have jurisdiction to any each and every proceeding relating to such Arbitration and all matters arising out of this agreement.

4. The said agreement, according to the petitioner, was determined/terminated/cancelled in or about December, 1994 as the said agreement was unworkable and incapable of execution as well as implementation, and the petitioner left the Jute Mill with an understanding that the agreement in question was cancelled. Since 1994 to till August 2003, the respondent Jute Mill did not raise its voice, rather agreed and understood such cancellation of agreement including the terms of Arbitration clause.

5. On 28.8.2003, all on a sudden, the respondent-Mill wrote a letter to the Director, Directorate of Industries & Commerce, Government ofTripura, Gurkhabasti, Agartala for appointment of Arbitrator in the matter of dispute between TJML, the respondent herein and M/s Raj International, the petitioner, which is quoted hereunder:

To

The DirectorDirectorate of Industries & CommerceGoverment of TripuraGurkhabasti, Agartala

Sub: Appointment of Arbitrator in the matter of dispute between TJML and M/s Raj International.

Sir,

I am to refer your letter vide No. F. VI-5(3)/LPG/DI/89-II/7651-53 dated 7.8.1996 regarding appointment of Arbitrator for settling the dispute in connection with the agreement dated 7.7.95 signed between Tripura Jute Mills Ltd. Agartala and M/s Raj International, Kolkata.

As desired by the appropriate authority, TJML was to work out exact claim in terms of money for violation of each and every clause separately for furnishing the same to you. TJML arranged to get the claim worked out through a Chartered Firm, but could not furnish the report due to misplaced of the records.

Now, the Assessment report is available with us and we are sending herewith a copy of the same. We already furnished the details of the agreement and disputed issues along with mention of the relevant clauses of the agreement which TJML wanted to bring before the Arbitrator for settlement vide letter No. TJ/ FI(68)/957 dated 7.10.95 and TJ/FI(50) Vol-IV/543 dated 27.5.96.

It is to be mentioned that opinion of the Law Department, Government of Tripura regarding the delay in the process of lodging claim is obtained, according to which 'there appears no legal bar in raising the claim by Tripura Jute Mills against M/s Raj International before the sole Arbitrator to be appointed by the Secretary cum Commissioner, Industries Department.

In view of the above, I would request you to kindly take appropriate steps for appointment of Arbitrator by the Secretary cum Commissioner, Industries Department for settlement of dispute with M/s Raj International.

6. In view of the aforesaid letter dated 28.8.2003, the appointment of Arbitrator was made by the Commissioner (I&C;), Government of Tripura, Department of Industries & Commerce vide Memorandum dated 29.9.2003. Para 4 of the Memorandum reads as under:

4. It is now decided that, Sri A. Dasgupta, Additional Director of this Directorate will function as the sole Arbitrator for settling the dispute in connection with the agreement signed between the TJML and Raj International and submit his report within 2(two) months.

7. On 1.1.2004, the Managing Director, Tripura Jute Mills made a letter to Sri A. Dasgupta, Addl. Director & Arbitrator, Directorate of Industries & Commerce, Government of Tripura, Gurkhabasti, Agartala to pass award of Rs. 2,07,28,785.00 payable by the petitioner M/s Raj International to the respondent Mill, with costs and interests as per the Interest Act, 1978 read with provisions of Arbitration and Conciliation Act, 1996, a copy thereof was sent to the petitioner M/s Raj International at its 70, Nalini Sett. Road, Kolkata for information. The said claim of Rs. 2,07,28,785.00 was got assessed by the respondent Jute Mill by one Sanat & Associates, Chartered Accountants Firm and submitted on the count of violation of clauses of the Agreement. The claim before the Arbitrator by the respondent Jute Mill was replied by the petitioner on 10.1.2004 with a copy to the Sole Arbitrator expressing doubts as to the independence and impartiality of the Arbitrator in deciding the alleged disputes and claims, and also claiming that the purported arbitration proceeding is not maintainable and the same is barred by laws of limitation as well as the appointment of Mr. A. Dasgupta, Addl. Director, Directorate of Commerce as an Arbitrator is not legal and valid and he cannot act as Arbitrator in the matter, and requested the respondent Jute Mill, to furnish all letters, correspondence, papers and documents relating to appointment of the said Arbitrator and further proceedings, if any. Request was also made by the petitioner to the Arbitrator to furnish copies of all relevant papers, document and correspondence in the matter. Thereafter, on 22.1.2004, the petitioner filed an application before the Arbitrator in the Arbitration Proceeding. A copy of the application was also served to the respondent Jute Mill. The prayer made in the said application is quoted below:

Your petitioner therefore, humbly prays that the learned Arbitrator by graciously pleased to adjudicate the question of validity of the existence of the arbitrator agreement between the parties, the validity of the appointment of the learned Arbitrator, the jurisdiction of the learned Arbitrator, the independence and impartiality of the learned Arbitrator and maintainability of the instant proceeding and upon such adjudication the instant proceeding be dismissed and to pass such further and other order or orders and/or direction or directions be given as to the learned Arbitrator may deem fit and proper.

8. On 6.2.2004, the Commissioner & Secretary, Government of Tripura replied to the letter of the petitioner dated 10.1.2004 wherein the petitioner stated that the said agreement was duly cancelled and/or terminated by the consent of the parties in or about December, 1994 and after expiry about 9 years of cancellation of the said agreement dated 7.7.1994, the respondent Jute Mill is trying to raise baseless dispute and false claims which is barred by limitation and also the appointment of Mr. A. Dasgupta, Additional Director as a Sole Arbitrator is not legal and valid and he cannot act as an Arbitrator in the matter. The relevant paragraph of the said letter dated 6.2.2004 of the Commissioner and Secretary, Government of Tripura, Department of Industries & Commerce are quoted hereunder for better appreciation:

3. It may be seen that the clause very clearly provides for refering all differences and disputes to the Sole Arbitration of a Single Arbitrator to be appointed by the Secretary/Commissioner, Industries & Commerce Department, Government of Tripura. Under this provision, the MD, TJML had made a reference to the undersigned to appoint the Arbitrator. A copy of the letter M.D. TJML is enclosed for ready reference. It is in this context that Shri A. Dasgupta, Additional Director, Directorate of Industries & Commerce, Government of Tripura was appointed as the Sole Arbitrator.

4. Regarding the issue of fairness or impartiality of Shri Dasgupta there should be no doubt. In fact, in a large number of agreements, Government officials have been appointed as Arbitrator and their awards have been duly accepted by all concerned. Further, this has been done strictly as per the provision of the Agreement, which you had signed with TJML.

5. Regarding various other points raised by you, you may place the matter before Shri A. Dasgupta Sole Arbitrator during the course of arbitration proceedings.

6. We hope this will clarify the matter.

9. The Arbitrator without giving any decision to the letter of the petitioner dated 22.1.2004 wherein the jurisdiction of the Arbitrator was challenged passed an order on 5.4.2004 to the effect that he has no other alternative, but to proceed with the said arbitration proceeding since the petitioner did not respond to the notice issued by him on 15.11.2003 and 26.12.03. The said order is quoted hereunder:.Being appointed by the Government as Sole Arbitrator of the disputes arising out of the agreement between Tripura Jute Mills Limited, Agartala and the Raj International, Kolkata, the undersigned issued notices upon the parties to the instant proceedings to file their respective statements relating their claims and counter claims along with relevant documents in support of their claims/counter claims.

2. The Tripura Jute Mills Ltd., Agartala responded on 1st January, 2004 by way of submitting claim of Rs. 2,07,28,785/- (Rupees two crores seven lakhs twenty eight thousand seven hundred eighty five) only with costs of interest as per the Interest Act, 1978, read with provisions of Arbitrator and Conciliation Act, 1996 endorsing copy to M/s Raj International, Kolkata.

3. But unfortunately. Raj International did not respond to the Notices issued by the undersigned as a Sole Arbitrator on 15th November. 2003 and 26th December. 2003. Of course, it appears that on receipt of the aforesaid notices, the Raj International. Kolkata started writing letters to the Managing Director. Tripura Jute Mills. Agartala and the Commissioner & Secretary. Government of Tripura endorsing copies to the undersigned. Endorsement of copies of such letters would be of no use to the undersigned as Sole Arbitrator.

4. However, on perusal of the context of those letters of the Raj International, Kolkata it appeared that the concern expressed no confidence in a passive manner upon the undersigned.

5. The matter, thereafter, has been reviewed by the appointing authority i.e. Commissioner & Secretary, Government of Tripura and rejected out right vide his letter No. F. VI-5(3)/ PLG/DI/89-11 /2438-40 dated 9th February, 2004 mainly in respect of appointment of Sole Arbitrator and also suggested in regard to other points stated in their letters to place before the Arbitrator during course of arbitration proceedings. A copy of which was also endorsed to the undersigned.

6. So, the undersigned has no other alternative than to proceed with the instant Arbitration proceedings. The undersigned also of the view that sufficient time and scopes were given to both the parties to the instant proceedings to file their written claim and counter claim statements along with relevant documents in support of the same.

7. Now, the undersigned is hereby asking both the parties to attend in the chamber of the undersigned at the Directorate of Industries & Commerce, Pandit Neheru Complex, Gurkhabasti on 23rd April, 2004 at 3.00 P.M.

10. On 14.5.2004, the respondents Jute Mills filed their counter-objection before the Arbitrator with a copy to the petitioner. To the counter-objection of the respondent, a letter dated 2.12.2004 of the petitioner was also enclosed whereupon they denied that the respondent Jute Mills was handed over by the petitioner to the respondents on 3.12.1994 by Fax Message to the petitioner and by way of subsequent correspondence also requested the petitioner to solve the dispute between the parties.

11. The petitioner made another application on 15.5.2004 stating inter alia that the agreement between the parties was cancelled and as such there remained no arbitration agreement between the parties and even assuming though not admitting that the purported reference is in accordance with the Arbitration agreement, the Arbitrator has not been appointed in accordance with the Arbitration Agreement and failure to act in accorrance with the arbitration agreement between the parties vtitiated the appointment of the Arbitrator and hence the arbitrator has no jurisdiction to try, entertain and determine the instant proceeding as well as the arbitrator being failed to submit his report/award within two months from 29.9.2003 has become dejure.

12. On 25.4.2005, the petitioner filed rejoinder in the arbitration proceeding denying the contention made in the counter objection of the respondent Jute Mill and on 20.8.2005, the learned Arbitrator heard the respondent Jute Mill and the petitioner on their two applications wherein question of jurisdiction was raised, but did not give any decision.

13. On 29.8.2005, the petitioner made another letter to the sole Arbitrator through its Advocate referring its two application dated 22.1.2004 and 15.5.2004 and requesting him to furnish the copies of the minutes of hearing of the arbitration proceeding dated 20.8.2005.

14. After more than two years of such hearing of the said two applications, the petitioner's firm on 5.10.2007 received a copy of the order dated 25.9.2007 passed by the Arbitrator on the said two applications of the petitioner wherein the Arbitrator stated inter alia that on perusal of the said prayers of the second party, the undersigned referred the matter to the authority for consideration of the same for changing the Arbitrator as the second party has expressed no confidence and on perusal of the reference from the undersigned, the authority has considered over the prayer of the second party and rejected it and directed the undersigned to proceed with the instant arbitration proceedings. In the said order, it is also contended that the second party did not file written objection against the prayer of the first party who sought arbitration of the instant dispute though sufficient time and scopes were given to him and ultimately fixed the case on 9.10.2007. The aforesaid order being challenged in this revision petition needs to be quoted for proper appreciation. Accordingly, the same is quoted here-under:

The record put up today suo-motu for necessary order over the instant arbitration proceedings.

On careful scrutiny of the case record, it appears to me that the instant proceedings has been pending before the undersigned for a long period for disposal. It was dragged because of the petition filed by the second party expressing their no-confidence over the undersigned. The time of several hearing in office of the undersigned.

On perusal of the said prayer of the second party, the undersigned referred the matter to the Authority for consideration of the same for changing the arbitrator as the second party has expressed no- confidence.

On perusal of the reference from the undersigned, the Authority has considered over the paryer of the second party and rejected it outright and directed the undersigned to proceed with the instant arbitration proceedings.

It further transpires from the case record that the second party did not file his written objection against the proper of the first party who sought arbitration of the instant dispute though sufficient time and scopes were given to him. I am of the opinion that the second party has adopted dilatory tactics to avoid the speedy disposal of the arbitration proceedings. I am also of the view that both the parties to the proceedings should not get further chance to lengthen the proceedings without any rhyme and reason.

Considering all aspects, I fixed the next date on 9th October, 2007 at 3.00 PM in TIDAHall, Directorate of Industries & Commerce for filing of written objection if any, from the side of the second party. If the second party fails to file the written objection, the proceedings will be disposed of exparte without considering their obejction....

15. Assailing the impugned order dated 25.9.2007, Mr. Mitra, learned Counsel for the petitioner condends that the Arbitrator did not pass the impugned order from its own. The Arbitrator, by the instant order, communicated the desire/decision of the appointing authority of him and as such, he has not disposed of the applications of the petitioner dated 22.1.2004 and 15.5.2004 wherein the petitioner raised the question of jurisdiction of the present Arbitrator, rather he referred the matter to the appointing authority and in return, communicated the order/decision of the said appointing authority by the impugned order, for which itself, the said order is required to be interfered with. Referring to Sub-section (2)(3)(5) of Section 16 of the Arbitration Act, 1996, he submits that the statute casts the duty on the Arbitrator to rule on the point of jurisdiction raised by the petitioner first and then proceed with the Arbitration proceeding for passing award and the decision is to be given by him alone as a statutory authority, he cannot act in the doted line of his appointing authority but which he did in the instant case. Referring to Para-3 and 4 of the impugned order, he submits that it is explicitly clear that the Arbitrator did not exercise the jurisdiction vested on him by the statute and also did not apply his mind and thus passed an order, when the petitioner expressed no confidence on him and prayed for changing the Arbitrator in the present arbitration proceeding. According to him, the plea of the petitioner was considered by the appointing authority and rejection of such plea was also made by the authority, not by the Arbitrator. He also contended that when the Legislature within its competence made the specific law prescribing the specific procedure to be followed by the statutory authority, the said authority is bound to follow the procedure as prescribed or not at all and in the instant case, it is admited position that the Arbitrator failed to rule on his jurisdiction as raised by the petitioner exercise, ration, rather the appointing authority took the decision regarding the plea of jurisdiction of the Arbitrator raised by the petitioner and the learned Arbitrator communicated the same in the impugned order for which also the impugned order is liable to be quashed.

16. Mr. Mitra further submits that the contract between the parties was made in July 7, 1994 to run the Jute Mill, but in December, 1994, the petitioner-company left the Jute Mill which is an admitted fact and would appear from the pleadings of the respondent Jute Mill. According to him, to appoint an arbitrator, notice was to be given to either side, but that notice was not issued, which interestingly, in their Counter, the respondent Jute Mill did not deny this fact. He also submits that the instant arbitration proceeding is also barred by limilation and as per Limitation Act, an arbitration proceeding should be initiated within three years and the instant arbitration proceeding was initiated after about nine years.

17. Against the aforesaid contention of Mr. Mitra, Mr. Das while supporting the impugned order of the Arbitrator raised the question of maintainability of the instant revision petition under Article 227 of the Constitution, submits that the instant order is an order of sole Arbitrator in the arbitration proceeding and it cannot be said that the impugned order is the order of the Appointing authority of the Arbitrator. The Arbitrator in his order only referred the order of the Appointing authority. He also submits that the impugned order though is an order of the Arbitrator, but not an order under Section 16(5) of the Arbitration Act. Hence, the petitioner cannot approach this Court byway of the instant revision petition. He also urges that even for the argument sake, if it is conceded that the impugned order is not passed by the Arbitrator, on that count also, the instant revision petition is not maintainable as the applications filed by the petitioner raising the question of jurisdiction of the Arbitrator are yet to be decided, the remedy is before the Arbitrator not to the Court, and if it is considered that the impugned order is the decision of the Arbitrator in exercising of his power under Section 16(5) on an application under Section 16(2) of the Act, then also the petitioner is to wait till the final award is passed by the Arbitrator in the proceeding. On the question of maintainability of the petition, he placed reliance to the Para-graph-46 of the decision of the Apex Court in the case of SBP & Co. v. Patel Engineering Ltd. reported in (2005) 8 SCC 618.

18. So points for consideration come as to whether the arbitrator can pass the impugned order without deciding the preliminary objection raised by the petitioner under Sub-section (2) of Section 16 at the instance of the appointing authority, if not what should be the consequence and whether against such an order, a petition under Article 227 is maintainable.

19. After going through the provisions in the Act, 1996, this Court is of considered opinion that the statute casts duty on the arbitrator to act independently and decide the preliminary objection raised by the party to him under Sub-section (2)(3) of Section 16 of the Act and only after taking such decision, he can continue the arbitration proceeding and pass an arbitral award. Without giving decision on the question of jurisdiction, the Arbitrator has no right to proceed for making an arbitral award. He may accept or reject the plea as raised before him, but he cannot be abstained from giving any decision on such question of j urisdiction. In the instant case, there is no dispute that the petitioner raised a preliminary objection as to the jurisdiction of the arbitrator to try the dispute referred to him by the appointing authority.

20. For better appreciation, Section 16 (2) (3) and (5) of the Arbitration and Conciliation Act, 1996 is quoted hereunder:

16. Competence of arbitral tribunal to rule on its jurisdiction:

(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 he 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)

(5)**

(6) 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 a arbitral award.

21. Arbitration proceeding is nothing but an alternative dispute redressal Forum and the general people should not lose faith in this alternative dispute redressal Forum. In ordinary situation, the Court should not exercise its power under Article 227 of the Constitution, but in exceptional circumstances, when the statutory authority like the arbitrator did not exercise his power vested on him, then a petition under Article 227 of the Constitution should not be thrown away.

22. Having considered the rival submissions of the learned Counsel of the parties and the law reports, the question arises for decision is that whether the learned Arbitrator is liable to rule on the preliminary objection raised by the petitioner as to his j urisdiction to try the dispute and if so whether failure to give decision on the objection and acted at the instance of appointing authority would vitiate the impugned order.

23. From the above contention of the petitioner in its objection, it is very clear that the petitioner wanted to decide the preliminary objection as to the jurisdiction of the Arbitrator first before deciding the matter on merit as provided under Section 16 of the Act, 1996 and the petitioner also reserved their right to place their defence in so far as the merits of the case and in such circumstances, the Arbitrator is to decide the question of preliminary objection as to his jurisdiction and if the objection is over ruled, an opportunity should be extended to consider the matter on merit which is the requirement of the procedure contemplated under Section 16 of the Act, 1996.

24. It appears from the impugned order dated 25.9.2007 that the arbitrator has not at all followed the provisions of Section 16 of the Act even though the petitioner reminded him vide .its letter dated 15.5.2004 to consider the preliminary objection dated 21.1.2004. It also appears from the said impunged order that the Arbitrator when referred the matter to the Appointing authority, he expressed his unwillingness to act as an Arbitrator and also requested for appointment of any other Arbitrator in his place as the second party, petitioner herein, expressed no confidence, meaning thereby the Arbitrator tendered his resignation to the Appointing authority. But the said authority did not accept the same. Not only that, the said authority has considered the prayer of the 2nd party, petitioner herein, and rejected it outright and directed the Arbitrator to proceed with the instant arbitration proceeding and the arbitrator acted on direction of his appointing authority and asked the petitioner to file written objection on 9.10.2007 i.e. the date fixed for next hearing. On perusal of the impunged order, this Court cannot restrain itself from saying that the learned arbitrator failed to act in accordance with the prescription of law as expressed by the legislature, rather tried to frustrate the legislative intent so far as to take a decision on the plea of jurisdiction is considered by way of forwarding the letter of objection to the Appointing authority, the Commissioner of Industries & Commerce, and forced the petitioner to participate in the arbitral proceeding. The Arbitrator is actually acted as an purported Agent of the appointing authority and by this time it is settled that the Arbitrator is not a conciliator and his duty is to decide the dispute submitted before him as statutory authority in accordance with the provisions of law and according to the legal rights of the parties and not according to what he considered to be fair and reasonable by the authority. It is reiterated that the arbitration proceeding is nothing but a forum for alternative dispute redressal and Arbitrator is to act as an independent authority to settle up the dispute between the parties as the Arbitrator is the decision making authority of such dispute and he is also bound to see that the general people should not lose faith in the alternative dispute redressal forum. But in the instant case, he failed to exercise the jurisdiction vested on him and acted as an purported agent of the Appointing authority. Without deciding the plea of jurisdiction raised before him, he passed the impugned order which is perverse, illegal and also nullity and calls for interference by the Court of law.

25. In the case of Rajasihan State Mines & Minerals Ltd. v. Eastern Engineering Enterprises : AIR1999SC3627 , their lordship observed that an arbitrator was held not entitled to ignore the law or misapply it and he cannot also act arbitrarily, irrationally or capriciously of the contract. In the instant case, the action of the arbitrator is arbitrary and irrational one as he acted at the instance of his appointing authority, the Commissioner (I&C;), Government of Tripura, when the respondents Jute Mill is the undertaking of the State.

26. Now question comes whether such order can be challenged by the petitioner under Article 227 of the Constitution. From the provisions of the Act, 1996, it appears that there is no such provisions for preferring the appeal against such an impugned order. In Sub-section (6) of Section 16, wherein it is stated, inter alia, that a party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with Section 34. Section 34 is the recourse to a Court against an arbitral award maybe made only by an application for setting aside such award in accordance with Sub-section (2) and Sub-section (3) of Section 34. Section 37 is the provisions for appeal which shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the court passing the order, namely:

(a) granting or refusing to grant any measure under Section 9,

(b) setting aside or refusing to set aside an arbitral award under Section 34.

The other provisions of appeal are Seefion 50 and 59 of the Act which are relating to foreign awards and Geneva Convention award. Therefore, it can be safely said that the impugned order is not appeal able order and there is no other option before the petitioner except to approach this Court.

27. In paragraph 46 of the Patel Engineering Ltd. (supra), the Apex Court held that the object of the minimizing judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 or under Article 226 of the Constitution against every order made by the Arbitral Tribunal. The Apex Court also indicated that once the arbitration has commenced in the Arbitral Tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage, meaning thereby the parties are not fully debarred from approaching the High Court under Article 227 of the Constitution when the Arbitrator failed to act under Sub-section (5) of Section 16 of the Act, which is an obligatory to him as intended by the legislature. Section 16 is self contained clause as regards to challenge the jurisdiction of the arbitral tribunal/Arbitrator before passing the award.

28. In the case of Surya Dev Rai v. Ram Chander Rai reported in : AIR2003SC3044 , their Lordship held that the power of superintendence conferred upon the High Court under Article 227 is administrative as well as judicial, and is capable of being invoked at the instance of any person aggrieved or may even be exercised suomotu. The paramount consideration behind vesting such wide power of superintendence in the High Court is paving the path of justice and removing any obstacles therein. The power under Article 227 is wider than one conferred on the High Court by Article 226 in the sense that the power of superintendence is not subject to those technicalities of procedure or traditional fetters which are to be found in certiorari jurisdiction. Not only that, their Lordship of the Apex Court in the aforesaid case also discussed the difference between the writ and the certiorari under Article 226 and the supervisory jurisdiction under Article 227 and also discussed in which circumstances, the Court can exercise its power under Article 227 of the Constitution. The relevant paragraph Nos. 24,25, 26 and 38 of Surya Dev Rai (supra) are quoted herein under:

24. The difference between Articles 226 and 227 of the Constitution was well brought out in Umaji Keshao Meshraram v. Radhikabai. Proceedings under Article 226 are in exercise of the original jurisdiction of the High Court while proceedings under Article 227 of the Constitution are not original but only supervisory. Article 227 substantially reproduces the provisions of sections 107 of the Government of India Act, 1915 excepting that the power of superintendence has been extended by this article to tribunals as well. Though the power is akin to that of an ordinary court of appeal, yet the power under Article 227 is intended to be used sparingly and only in appropriate cases for the purpose of keeping the subordinate courts and tribunals within the bounds of their authority and not for correcting mere errors. The power may be exercised in cases occasioning grave injustice or failure of justice such as then (i) the court or tribunal has assumed a jurisdiction which it does not have, (ii) has failed to exercise a jurisdiction which it does have, such failure occasioning a failure of justice, and (iii) the jurisdiction though available is being exercised in a manner which tantamounts to overstepping the limits of jurisdiction.

25. Upon a review of decided cases and a survey of the occasion, wherein the High Courts have exercised jurisdiction to command a writ of certiorari or to exercise supervisory jurisdiction under Article 227 in the given facts and circumstances in a variety of cases. It seems that the distinctiert between the two jurisdiction stands almost obliterated in practice. Probably, that is the reason why it has become customary with the lawyers labeling their petitions as one common under Articles 226 and 227 of the Constitution, though such practice has been deprecated in some judicial pronouncement. Without entering into niceties and technicality of the subject, we venture to state the broad general difference between the two jurisdictions. Firstly, the writ of certiorari is an exercise of its original jurisdiction by the High Court; exercise of supervisory jurisdiction is not an original jurisdiction and in this sense it is akin to appellate, revisional or corrective jurisdiction. Secondly, in a writ of certiorari, the record of the proceedings having been clarified and sent up by the inferior court or tribunal to the High Court, the High Court it inclined to exercise its jurisdiction, may simply annul or quash the proceedings and then do no more. In exercise of supervisory jurisdiction, the High Court may not only quash or set aside the impugned proceedings, judgment or order but it may also make such direction as the facts and circumstances of the case may warrant, may be by way of guiding the inferior court or tribunal as to the manner in which it would not proceed further or afresh as commended to or guided by the High Court. In appropriate cases the High Court, while exercising supervisory jurisdiction, may substitute such a decision of its own in place of the impugned decision, as the inferior court or tribunal should have made. Lastly, the jurisdiction under Article 226 of the Constitution is capable of being exercised on a prayer made by or on behalf of the party aggrieved; the supervisory jurisdiction is capable of being exercised suo motu as well.

26. In order to safeguard against a mere appellate or revisional jurisdiction being exercised in the garb of exercise of supervisory jurisdiction under Article 227 of the Constitution, the Courts have devised self-imposed rules of discipline on their power. Supervisory jurisdiction may be refused to be exercised when an alternative efficacious remedy by way of appeal or revision is available to the person aggrived. The High Court may have regard to legislative policy formulated on experience and expressed by enactments where the legislature in exercise of its wisdom has deliberately chosen certain orders and proceedings to be kept away from exercise of appellate and revisional jurisdiction in the hope of accelerating the conclusion of the proceedings and avoiding delay and procrastination which is occasioned by subjecting every order at every stage of proceedings to judicial review by way of appeal or revision. So long as an error is capable of being corrected by a superior court in exercise of appellate or revisional jurisdiction, though available to be exercised only at the conclusion of the proceedings, it would be sound exercise of discretion on the part of the High Court to refuse to exercise the power of superintendence during the pendency of the proceedings. However, there may be cases where but for invoking the supervisory jurisdiction, the jurisdictional error committed by the inferior court or tribunal would be incapable of being remedied once the proceedings have concluded.

38.(1)***

(2) * * *

(3) * * *

4. Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When a subordinate court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.

29. Division Bench of this Court in the case of Bakul Debnath v. Orinetal Insurance Co. Ltd. reported in (2008) 2 GLR 49, in which lwas a party and held that the framers of the Constitution had conferred unfettered powers to every High Court of the country by way of inserting Articles 226, 227 and 228, without making them subject to any law to be made by the appropriate Legislature, and had put these Articles beyond the legislative reach of the Parliament and the State Legislatures with the result that the jurisdiction conferred by the aforesaid articles can only be curtailed or executed with respect to any matter by constitutional amendment and not by other ordinary legislation and/or in other way whatever may be the mode. Now, if the aforesaid articles can be considered as a part of the basic feature of the Constitution that cannot also be amended even by the Parliament. The reason behind this is that the framers of the Constitution considered that the people/citizens of the Nation be armed with certain powers to seek justice and for that purpose, the Constitution vested the High Courts with wide power of judicial review under Article 226 and power of judicial supervision and superintendence under Article 227 which enables the Court to act suo motu in the interest of justice. As the power is directly derived from the Constitution, which is the basic source and mother of all laws and statutes in the republic, the power given to High Court is sacred duty on it so as to enable to administer justice to the citizen(s) without any compromise. Such power is given to the people to get proper justice from the High Court in appropriate cases and duty of the Court is to nullify injustice to protect and provide justice. More so, if a Tribunal while acting even within its jurisdiction makes an error of law, which it reveals on the face of its recorded determination, then the Court in exercise of its supervisory function may correct the error unless there is some provisions in the statute itself preventing by a review by a Court of law.

30. The power of Article 227 of the Constitution of India is a power of superintendence only but includes the power of judicial revision also even where no appeal or revision lies to the High Court under ordinary law. This power is involved duty on the High Court to keep the inferior Courts and Tribunal 'within the bounds of their authority and to see that they do what their duty requires and they do it in a legal manner.

31. While discussing the power of superintendence, the Cacutta High Court in Bimal Sahoo, Secy., Basudebpur Girls' High School v. Gouri Rani Pahari : (1990)2CALLT425(HC) , it was held that:

It is urged that Article 227 of the Constitution is fettered with similar limitation. I am unable to subscribe this view. Power of supervision cannot be so equated with power of revision. As a matter of fact Court will strike down a patently illegal exercise of jurisdiction in exercise of the power of superintendence. I am therefore unable to uphold the contention of Mr. Roy chowdhury that the Court will not exercise this power of superintendence if an alternative remedy is available particularly when the Court finds inherently want of jurisdiction.

(Emphasis supplied)

32. In the case of Miss Maneck Custodji Surjarji v. Sarafazali Nawabali Mirza reported in : AIR1976SC2446 , the Apex Court held thus:

6. It is very difficult to appreciate the reasoning behind the order made by the High Court. It is to say the least an extraordinary order which flies in the face of law and judicial procedure. The respondent had clearly a legal remedy available to him by way of an appeal against the decree of the City Civil Court and this remedy was not only adequate but more comprehensive than the one under Article.227 of the Constitution. Even so, for some inexplicable reasons, the respondent chose to prefer a Special Civil Application under Article 227 of the Constitution and Vaidya, J., entertained the Special Civil Application and granted relief to the respondent casting to the winds the well-settled principle that the High Court does not dinarily, in exercise of its discretion, entertain a special civil application under Article 227 of the Constitution where an adequate alternative legal remedy is available to the applicant. It is true that this principle is not rigid and inflexible and there can be extraordinary circumstances where despite the existence of an alternative legal remedy, the High Court may interfere in favour of an applicant.

(Emphasis supplied)

33. Inparagraph-12 of the Patel Engineering (supra), their Lordship discussed about Section 16 of the Act, taking into consideration the fact relating to appointment of arbitrator by the Chief Justice or person designated by him as an arbitrator after satisfying himself that the conditions for the exercise of power to appoint an arbitrator are present in the case and their lordship also held that prima facie it would be difficult to say that in spite of the finality conferred by Sub-section (7) of Section 11 of the act, to such a decision and rule on its own jurisdiction or on the existence of an arbitration clause. It also appeared to their Lordship to be incongruous to say that after the Chief Justice had appointed an Arbitral Tribunal, the Arbitral Tribunal can turn round and say that the Chief Justice had no jurisdiction or authority to appoint the Tribunal, the very creature brought into existence by the exercise of power by the Chief Justice. It is also held that Section 16 has full play only when an Arbitral Tribunal is constituted without intervention under Section 11(6) of the Act, is one way of reconciling that provision with Section 11 of the Act, especially in the context of Sub-section (7) thereof. Ultimately, the Apex Court held that the decision of the Chief Justice on the issue of jurisdiction and the existence of a valid arbitration agreement would be binding on the parties when the matter goes to the Arbitral Tribunal and at subsequent stages of the proceeding except in an appeal in the Supreme Court in the case of the decision being by the Chief Justice of the High Court or by a Judge of the High Court designated by him.

34. In the present case in hand, the order an question is not relating to appointment of Arbitrator and the fact of the case is different than the case of Patel Engineering Limited (supra). Reliance is to be placed on a decision only if factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are neither to be read as Euclid's theorems nor as provisions of statute as said by the Apex Court in the case of Union of India v. Major Bahadur Singh reported in 2005 AIR SCW 6113. An earlier case can be treated as precedent only if the facts and circumstances in such earlier cited case is in pari materia in all respects with facts and circumstances of the case in hand as stated by the Apex Court in the case of Ramesh Singh Photti v. State of A.R, reported in 2004 AIR SCW 3682.

35. After going through the decision of ' 4he Patel Engineering (supra) this Court is of the considered opinion that the factual situation of that case does not fit in with the factual situation of the case in hand and one additional and different fact may make a world of difference between two cases. Even if this Court considered the case of Patel Engineering (supra) as relied upon by the learned Counsel of the respondents, then also it can be easily said that their lordship in paragraph 46 held that each and every order made by the Tribunal should not be allowed to challenge under Article 227 or 226 of the Constitution for defeating the purpose of arbitration proceeding meaning thereby that in an extra ordinary situation, the Court can exercise the power under Articles 227 and 226 of the Constitution against the order made by the Arbitral Tribunal or Arbitrator, particularly when there is no provisions either for revision or for any appeal and it would not be proper for a Court to force the party in an arbitral proceeding like the present petitioner to appear before the arbitral tribunal/arbitrator, till the completion of whole proceeding and passing of award though prima facie it appears that the arbitrator did not act in accordance with the mandate of the provisions of the Act and acted as a purported agent of the appointing authority, herein the Commissioner, (I&C;), Government of Tripura while respondent is a Government undetaking.

In view of the aforesaid observation and discussion, this Court has no hesitation to hold that this is a fit case where the Court should exercise its power under Article 227 of the Constitution and accordingly, the impugned order is set aside and the matter is remitted back to the Arbitrator to decide the plea of jurisdiction raised before him by the petitioner and then proceed with the matter of arbitration in accordance with law. No order as to costs.