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TMI Blog2010 (3) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... e operation of the Exchange can be conducted strictly in compliance with the said Rules, Bye-laws and Regulations of the Exchange. The petitioners, being a Cooperative Society they were required under the provisions of the Banking Regulations Act, 1949 to invest upto 25% of the Net Time and Demand Liability into Government Securities to fulfill requirements of Statutory liquidity amount. The petitioners for that purpose required the services of a broker of Stock Exchange and that is how the petitioners came in touch with respondent No.4. Petitioners from February, 2000 started placing orders for purchase of Government Securities as well as sale of Government Securities with respondent No.4. Respondent No.4 according to the petitioners, in compliance with provisions of Clause 8 of Chapter IX of the Bylaws of respondent No.1 in conformity with provisions of SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 issued various contract notes between the period from February, 2000 to March 2002 confirming the transaction for purchase and sale of government securities. 2 The respondent No.4 issued the contract notes in the form and in the manner provided by respondent No.1 with the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment securities, for which a consideration has been paid, the petitioners retained the services of M/s Deer Investor's Grievance Services Ltd., to represent their case with respondent No.1 and also to take other issues as the petitioners realized that respondent No.4 had failed to fulfill their contractual obligations to a number of other banks and investors. The petitioners decided to invoke arbitration clause of the agreement between the petitioners and respondent No.4 so as to adjudicate the claim against respondent No.4. Though they had followed the requirements of byelaws, the office in charge of respondent No.1 for the period between 29-5-2002 to 16-7-2002 refused to accept the documents including arbitration application on the ground that they have no power under the Rules, Bylaws and Regulations of respondent No.1. It is not necessary to set out the reasons for the order to be passed. The petitioner received a letter dated 16-8-2002 from respondent No. 1 returning the arbitration application and pay order without registration by giving reasons that respondent No.4 was not enabled to trade on the Wholesale Debt Market segment of the Exchange and as such no transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions could have been executed by Home Trade Ltd. on the WDM segment and since the claim /dispute do not arise out of the transaction executed on the NSEIL i.e. respondent No.1, it was not possible to process the Arbitration Application and hence the arbitration application received was returned to the petitioner as it could not be entertained. It is not necessary to refer to the other aspects of the application. 6 The petitioners have filed Additional rejoinder, to which the additional reply affidavit has been filed on behalf of respondent No.1. It may also be pointed out that a reply has also been filed on behalf of respondent No.2. 7 The first question before us is whether a writ petition at the instance of petitioners against respondent No.1 to invoke the arbitration clause in the written agreement between the petitioners and respondent No.4, which is a Constituent of respondent no.1, is maintainable. 8 The Arbitration and Conciliation Act, 1996 is an Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards. Section 11(6)(c), is relevant and is reproduced as under :- "11(6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is also placed on the Judgment in Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and Ors. (1998) 8 SCC 1, the Court was pleased to observe that the High Court can entertain a writ petition under Article 226 of Constitution of India in spite of the alternative statutory remedies and it is not affected, specially in a case where the authority against whom the writ is filed is shown to have had no jurisdiction over and has purported to usurp jurisdiction without any legal foundation. In State of UP. Vs. Mohd. Nooh AIR 1958 SC 86 the Court has observed as under:- This rule requiring the exhaustion of statutory remedies before the Writ will be granted is a rule of policy convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies. " In Harbanslal Sahnia and another VS. Indian Oil Corporation Ltd. and others, (2003) 2 SCC 197, the Supreme Court once again reiterated the Rule of exclusion of writ jurisdiction on account of availability of an alternative remedy by holding that it a rule of discretion and not one of compulsion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion clause. In other words section 11 is a complete mechanism by itself when there be an arbitration agreement. 12 In the instant case, we find that it is the case of the petitioners themselves that they invoked the arbitration clause and respondent No.2 failed to refer the parties to arbitration. In such an event section 11(6)(c), which we have reproduced earlier, would clearly give the jurisdiction to the Chief Justice or delegate under section 11, to decide the issue. Bearing in mind the provision of section 5 of the Arbitration and Conciliation Act, 1996 no other Court should interfere in the arbitral procedure. In our opinion that would not exclude the jurisdiction of the High Court to exercise the jurisdiction under Article 226 of the Constitution of India, if respondent No.1 falls within Article 12 of the Constitution of India. Without going into the issue as to whether the writ Court should go into the matter considering that the petition is pending in this Court since the year 2002, in our opinion in the facts of the case we cannot direct the parties to arbitration, more so considering the contention raised by the respondent No. 1 that the subject matter of the dispute ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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