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TMI Blog2002 (4) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the respondent entered into a hire-purchase agreement dated 25-1-1996. As disputes have arisen, the respondent appointed Mr. Y.K. Rajagopal as the sole arbitrator in terms of the hire-purchase agreement dated 25-1-1996. The respondent filed a claim statement claiming that an award be passed directing the petitioner to pay the sum of Rs. 6,56,03,729 jointly and severally together with interest of 24 per cent per annum from 27-3-2001 till date of realisation and in default to claim without prejudice to the other modes of enforcing the award be permitted to seize the assets, the subject-matter of the hire-purchase agreement described in the schedule to the claim and sell the same by private auction and appropriate the sum realised towards the dues and in case the amounts realised is not sufficient, claimant be granted a personal award against all the petitioners to recover the short-fall and other consequential reliefs. 5. The very respondent herein has filed an application under section 9 of the Arbitration and Conciliation Act, 1996 ( the Act ) and proceeding is pending on the original side of this Court. Before the arbitrator, the petitioners herein filed a memo, dated 25-9- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld apply squarely and the rejection of the memo is illegal, besides biased. 10. The learned counsel further contended that the proceedings before the arbitrator also has to be stayed as held by the Delhi High Court in Lloyd Insulations (India) Ltd. v. Cement Corpn. of India [1997] 89 Comp. Cas. 483, Rishab Agro Industries Ltd. v. P.N.B. Capital Services Ltd. [2000] 5 SCC 515, and the judgment of the Calcutta High Court in Burn Standard v. Dermoit International 1997(2) CLJ 2. 11. Per contra, Mr. M.S. Krishnan, the learned counsel appearing for the respondent contended that no revision is maintainable under article 227, that arbitration proceeding is not liable to be stayed, that the judgment of the Single Judge of the Delhi High Court has been reversed and it is no longer good law and prayed for dismissal of the revision petition. 12. The learned counsel for the respondent also contended that the arbitrator has been appointed as per the contractual terms entered between the parties and not being a statutory arbitrator no revision under article 227 is maintainable. At any rate, Mr. M.S. Krishnan, the learned counsel appearing for the respondent relying upon se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated by the petitioner that the petitioner has already approached the BIFR under section 15(1) and a case No. 248 of 2001 has been registered on 25-6-2001. But there is nothing to show that the petitioner has impleaded the respondent as one of the parties or creditor in the said application filed under section 15. The respondent has raised the dispute before the Arbitrator and the Arbitrator entered into the arbitration by issuing notice on 22-12-2001. The application filed under section 15 is dated 4-6-2001. 17. Mr. Y.K. Rajagopal, a Member of the bar has been appointed as the arbitrator and he has entered into the arbitration proceedings by issuing notice and entertaining the claim statement dated 20-7-2001, besides serving a notice on the revision petitioner. The revision petitioner has filed a memo seeking for the stay of the proceedings under section 22 which memo has been rejected on merits by the said arbitrator. In this background, the present revision has been preferred. 18. It is to be pointed out that the arbitration proceedings in this case arose out of a hire-purchase contract, which is a commercial transaction between the two companies. The respondent arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial process. The powers which these courts exercise, are judicial powers, the functions they discharge are judicial functions and the decisions they reach and pronounce are judicial decisions. In every State there are administrative bodies or authorities which are required to deal with matters within their jurisdiction in an administrative manner and their decisions are described as administrative decisions. In reaching their administrative decisions, administrative bodies can and often to take into consideration questions of policy. It is not unlikely that even in this process of reaching administrative decisions, the administrative bodies or authorities are required to act fairly and objectively and would in many cases have to follow the principles of natural justice; but the authority to reach decisions conferred on such administrative bodies is clearly distinct and separate from the judicial power conferred on courts, and the decisions pronounced by administrative bodies are similarly distinct and separate in character from judicial decisions pronounced by courts. Tribunals which fall within the purview of Article 136(1) occupy a special position of their own under the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined was in regard to the character of the Industrial Tribunals constituted under the Act. The majority decision of this Court was that the functions and duties of the Industrial Tribunal are very much like those of a body discharging judicial functions and so, though the Tribunal is not a court, it is nevertheless a Tribunal for the purposes of article 136. In other words, the majority decision which, in a sense, was epoch-making, held that the appellate jurisdiction of this Court under article 136 can be invoked in proper cases against awards and other orders made by Industrial Tribunals under the Act. In discussing the question as to character of the Industrial Tribunal functioning under the Act, Mahajan, J., observed that the condition precedent for bringing a Tribunal within the ambit of article 136 is that it should be constituted by the State; and he added that a Tribunal would be outside the ambit of article 136 if it is not invested with any part of the judicial functions of the State but discharges purely administrative or executive duties. In the opinion of the learned Judge, Tribunals which are found invested with certain functions of a court of justice and have some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch an arbitrator now as part of the methodology of the sovereign s dispensation of justice, thus falling within the rainbow of statutory Tribunals amenable to judicial review. This observation made en passant by us is induced by the discussion at the Bar and turns on the amendments to section 10A and cognate provisions like section 23, by Act XXXVI of 1964." (p. 89) 22. The learned counsel for the respondent placed reliance upon the pronouncement of the Apex Court in Agio Countertrade P. Ltd. v. Punjab Iron Steel Co. Ltd., [1999] 5 SCC 734. 23. In Jaswant Sugar Mills v. Lakshmi Chand AIR 1963 SC 677, a Five Judges Bench of the Apex Court held thus : "18. The essential characteristics of a Tribunal within the meaning of article 136 were examined by Mahajan, J., in the Bharat Bank Ltd. v. Employees of Bharat Bank Ltd., 1950 SCR 459 and it was observed that, Tribunals which do not derive authority from the sovereign power cannot fall within the ambit of article 136. The condition precedent for bringing a Tribunal within the ambit of article 136 is that it should be constituted by the State. Again a Tribunal would be outside the ambit of article 136 if it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "98. .....All Tribunals are not courts, though all courts are Tribunals". The word "courts" is used to designate those Tribunals which are set up in an organised State for the Administration of Justice. By Administration of Justice is meant the exercise of judicial power of the State to maintain and uphold rights and to punish wrongs . Whenever there is an infringement of a right or an injury, the courts are there to restore the vinculum juris , which is disturbed. ( See Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala ). In that case Hidayatullah, J. said : (SCR p. 362) ".....By courts is meant courts of civil judicature and by Tribunals , those bodies of men who are appointed to decide controversies arising under certain special laws. Among the powers of the State is included the power to decide such controversies. This is undoubtedly one of the attributes of the State, and is aptly called the judicial power of the State. In the exercise of this power, a clear division is thus noticeable. Broadly speaking, certain special matters go before Tribunals, and the residue goes before the ordinary courts of civil judicature. Their procedures may differ but the functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greed to between the independent parties, though referred to as arbitral Tribunal, they are not other authorities , nor they are amenable to writ jurisdiction, nor this court under article 226/227 could exercise supervisory jurisdiction in respect of those arbitrators. A private arbitration is governed by the terms of the agreement and in case of any grievance, the provisions of the Arbitration and Conciliation Act could be invoked to redress the grievance in respect of the proceedings before the private arbitrator or any proceedings which are not in exercise of statutory arbitration or statutory confirmation, but by virtue of private arbitration, a contractual stipulation agreed to between the parties. 27. In the light of the above pronouncements of the Apex Court, referred to already, this court is of the considered view that the petitioner cannot maintain an action by invoking the powers of judicial review under article 226 or article 227 with respect to the order passed by the arbitrator in a private arbitration or a non-statutory arbitration arising out of a commercial transaction. As the Act provides for remedies besides it also restricts invocation of the jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the facts of an inferior court or Tribunal, if there is no evidence at all to justify or the finding is so perverse, that no reasonable person can possibly come to such a conclusion, which the court or Tribunal has come to." (p. 101) 31. In Achutananda Baidya v. Prafullya Kumar Gayen 1997(5) SCC 76 the Apex Court held thus : "10. The power of superintendence of the High Court under Article 227 of the Constitution is not confined to administrative superintendence only but such power includes within its sweep the power of judicial review. The power and duty of the High Court under Article 227 is essentially to ensure that the courts and Tribunals, inferior to High Court, have done what they were required to do. Law is well settled by various decisions of this Court that the High Court can interfere under Article 227 of the Constitution in cases of erroneous assumption or acting beyond its jurisdiction, refusal to exercise jurisdiction, error of law apparent on record as distinguished from a mere mistake of law, arbitrary or capricious exercise of authority or discretion, a patent error in procedure, arriving at a finding which is perverse or based on no material, or resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empt to recover the hire-purchase machinery and the action taken thereof is not stayed under section 22 as it is not a recovery against the Sick Company s properties. The Arbitration Proceeding is not a proceeding for winding up, nor it is a proceeding for execution, distress or like, nor it is a proceeding for appointment of Receiver, nor it is a suit for recovery of money or enforcement of any security. Therefore, section 22(1) cannot be invoked, nor the proceedings are stayed. 37. The object of the Act is to afford the maximum protection of employment, optimise the use of financial resources, salvaging the assets of production, realising the amounts due to the banks and to replace the existing time consuming and inadequate machinery by efficient machinery for expeditious determination by a body of experts to safeguard the economy of the country and protect viably sick units. 38. In Maharashtra Tubes v. State Industrial Investment Corpn. of Maharashtra Ltd. [1993] 2 SCC 144, the Apex Court held that section 29 permits coercive action against the defaulting industrial of the type which will be taken in execution or distress proceedings, the only difference being that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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