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TMI Blog2019 (11) TMI 1632X X X X Extracts X X X X X X X X Extracts X X X X ..... cking in inherent jurisdiction. If the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lulcid expression of Tulzapurkar,J., that it carries with it a negative import that only such acts as are mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done - The legislative policy is that no revision lies if an alternative remedy of appeal is available. Further, even when a revision does lie, it lies only against a final disposal of the entire matter and not against interlocutory orders. The High Court does not seem to have adverted to the limitation imposed on its power under Section 115 of the Code. Merely because the High Court would have felt inclined, had it dealt with the matter initially, to come to a different conclusion on the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After this claim petition was filed, on 15.02.2018, the appellant was blacklisted by an order passed by the ONGC with effect from 11.10.2017 for a period of two years. Meanwhile, a Section 17 application was also been moved before the learned Arbitrator. Applications were then moved by the appellant to amend both the petition as well as the Section 17 application to challenge this order dated 15.02.2018, which amendments were granted by the learned Arbitrator on 10.03.2018. (5) Meanwhile, a Section 16 application was before the learned Arbitrator basically on the ground that since the arbitration notice was confined only to termination of the agreement, blacklisting would be outside the Arbitrator s ken. This Section 16 application was dismissed on 09.05.2018 by the learned Arbitrator, in which the learned Arbitrator held that the notice dated 02.11.2017 was not merely confined to termination of the contract but was also in respect of the two year ban that was sought to be imposed at that time. He further held that the ban order was relatable to Clause 18 of the contract and that therefore the validity of the 15.02.2018 office order could be decided by him, and consequently di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the denial of the right of second appeal, that a second bite at the cherry would not be permissible under any circumstances, and that despite the fact that Section 5 of the Act could not possibly interdict a constitutional provision, namely, Article 227, yet the statutory scheme ought to be taken into account in order to deny relief in almost every case. For this purpose, he relied upon this Court s judgment in SBP Co. vs. Patel Engineering Ltd. Another, (2005) 8 SCC 618. He also relied upon Fuerst Day Lawson Limited vs. Jindal Exports Limited, (2011) 8 SCC 333 for the proposition that the Act is a self-contained Code as a result of which not only would second appeals be interdicted expressly under Section 37(2) of the Act but appeals filed under the Letters Patent would also be so interdicted. He was at pains to point out that even under Section 115 C.P.C. as amended, a revision would lie only in cases where no appeal lies, and under the proviso inserted with effect from 2002, no revision petition would be maintainable against interlocutory orders. He then took us through the impugned judgment, and stated that the observations made on merits were themselves erroneous and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd learned counsel for both parties, it is first necessary to set out certain provisions of the Arbitration Conciliation Act, 1996. Section 5 states:- 5. Extent of judicial intervention.- Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. Section 37 which is also material states as follows:- 37. Appealable orders.- (1) An appeal 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) refusing to refer the parties to arbitration under section 8; (b) granting or refusing to grant any measure under section 9; (c) setting aside or refusing to set aside an arbitral award under section 34. (2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal.- (a) accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under section 17. (3) No second appeal shall lie from an order passed in appeal unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us herein above so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction. (14) In Nivedita Sharma vs. Cellular Operators Association of India and Others, (2011) 14 SCC 337, this Court referred to several judgments and held: 11. We have considered the respective arguments/submissions. There cannot be any dispute that the power of the High Courts to issue directions, orders or writs including writs in the nature of habeas corpus, certiorari, mandamus, quo warranto and prohibition under Article 226 of the Constitution is a basic feature of the Constitution and cannot be curtailed by parliamentary legislation - L. Chandra Kumar v. Union of India (1997) 3 SCC 261. However, it is one thing to say that in exercise of the power vested in it under Article 226 of the Constitution, the High Court can entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to. The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspapers Ltd. 1919 AC 368 : (1918-19) 10 All ER Rep. 61 (HL) and has been reaffirmed by the Privy Council in Attorney General of Trinidad and Tobago v. Gordon Grant and Co. Ltd 1935 AC 532 (PC) and Secy. of State v. Mask and Co. (1939-40) 67 IA 222 : AIR 1940 PC 105. It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine. 14. In Mafatlal Industries Ltd. v. Union of India (1997) 5 SCC 536, B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) observed: 77. So far as the jurisdiction of the High Court under Article 226 - or for that matter, the jurisdiction of this Court under Article 32 - is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the parties. But that would not alter the status of the arbitral tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible. 46. The object of 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. Therefore, it is necessary to indicate 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. While the learned Additional Solicitor General is correct in stating that this statement of the law does not directly apply on the facts of the present case, yet it is important to notice that the seven-Judge Bench has ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going into exactly the same matter as was gone into by the arbitrator in the Section 16 application, and then decided that the two year ban was no part of the notice for arbitration issued on 02.11.2017, a finding which is directly contrary to the finding of the learned Arbitrator dismissing the Section 16 application. For this reason alone, the judgment under appeal needs to be set aside. Even otherwise, as has been correctly pointed out by Mr. Rohatgi, the judgment under appeal goes into the merits of the case and states that the action of putting the Contractor and his Directors on holiday is not a consequence of the termination of the agreement. This is wholly incorrect as it is only because of the termination that the show cause notice dated 18.10.2017 proposing to impose a two year ban was sent. Even otherwise, entering into the general thicket of disputes between the parties does not behove a court exercising jurisdiction under Article 227, where only jurisdictional errors can be corrected. Therefore to state that the ban order was passed under a General Contract Manual and not Clause 18 of the Agreement, besides being incorrect, would also be incorrect for the reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be impliedly excluded. What becomes clear is that had the High Court itself disposed of the first appeal in the present case, no article 227 petition could possibly lie - all that could perhaps have been done was to file an LPA before a Division Bench of the same High Court. This, as we have seen, has specifically been interdicted by Fuerst Day Lawson Limited (supra). Merely because, on the facts of this case, the first appeal was disposed of by a court subordinate to the High Court, an article 227 petition ought not to have been entertained. (18) Mr. Rohatgi is also correct in pointing out that the legislative policy qua the general revisional jurisdiction that is contained by the amendments made to Section 115 C.P.C. should also be kept in mind when High Courts dispose of petitions filed under under article 227. The legislative policy is that no revision lies if an alternative remedy of appeal is available. Further, even when a revision does lie, it lies only against a final disposal of the entire matter and not against interlocutory orders. These amendments were considered in Tek Singh vs. Shashi Verma and Another, 2019 SCC OnLine SC 168 in which this Court adverted to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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