M.S Sonak, J.:— The challenge in this Petition is to the order dated 10.04.2015 made by the Sole Arbitrator, allowing the Respondents application dated 03.07.2014 (01.07.2014) in terms of prayer Clause (b), which reads as follows.
“(b) That the Arbitral Tribunal pass an appropriate order declaring that its mandate has come to an end and hence the Arbitration proceedings stand terminated pursuant to the provisions of Section 25(a) of the Arbitration and Conciliation Act, 1996.”
2. Hon'ble Apex Court in the case of S.B.P & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618, at paragraph 45 has observed thus;
“45. 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 of the Constitution of India or under Article 226 of the Constitution of India 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.”
3. In view of the aforesaid, there is no question of entertaining the Writ Petition in a matter of this nature. However, the learned Counsel for the Petitioner, placed reliance on the decision of this Court in the case of Anuptech Equipments Private Limited v. Ganpati Co-Operative Housing Society Limited, reported in AIR 1999 BOMBAY 219 to contend that the termination in terms of Section 25(a) of the Arbitration and Conciliation Act, 1996 (said Act), constitutes termination in terms of Section 32(2)(c) of the said Act. And, since this is not an Award, the party affected by such termination will be entitled to maintain Writ Petition and Article 226 and 227 of the Constitution of India.
4. The decision in the case of Anuptech (Supra) was followed by this Court in the case of Lalitkumar V. Sanghavi v. Dharmadas V. Sanghavi, [Arbitration Application No. 44 of 2008, disposed on 24th September, 2010], wherein this Court took the view that the proper remedy in a situation of this nature would be to institute a Writ Petition and not an Application under Section 11 of the said Act. The relevant observations in paragraph 7 read thus;
“7. In view of the judgments of this Court in AIR 1999, Bombay 219 - Anuptech Equipments Pvt. Ltd. v. Ganpati Cooperative Hosing Society Ltd. and AIR 2003 BOMBAY 296, Harinarayan G. Bajaj v. Sharedeal Financial Consultants Pvt. Ltd., the remedy of the applicant is by filing a writ petition and not an application under section 11 of the said Act.”
5. The order dated 24 September, 2010 in the aforesaid Arbitration Application No. 44 of 2008 was challenged before the Hon'ble Apex Court in the decision, which is now reported in (2014) 7 SCC 255. Therein the Hon'ble Apex Court, has held that the appropriate remedy in a situation of this nature would be to institute proceedings under Section 14(2) of the said Act. The relevant observation in this regard are contained in paragraph 12, 13, 14 and 15, which reads thus.
“12. Section 32 of the Act on the other hand deals with the termination of arbitral proceedings.
Section 32- Termination of proceedings.
(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).
13. From the language of Section 32, it can be seen that arbitral proceedings get terminated either in the making of the final arbitral award or by an order of the arbitral tribunal under sub-Section 2. Sub-section (2) provides that the arbitral tribunal shall issue an order for the termination of the arbitral proceedings in the three contingencies mentioned in sub-clauses (a) to (c) thereof.
14. On the facts of the present case, the applicability of sub-clauses (a) and (b) of Section 32(2) is clearly ruled out and we are of the opinion that the order dated 29 October, 2007 by which the Tribunal terminated the arbitral proceedings could only fall within the scope of Section 32, sub-Section (2), sub-clause (c) i.e the continuation of the proceedings has become impossible. By virtue of Section 32(3), on the termination of the arbitral proceedings, the mandate of the arbitral tribunal also comes to an end. Having regard to the scheme of the Act and more particularly on a cumulative reading of Section 32 and Section 14, the question whether the mandate of the arbitrator stood legally terminated or not can be examined by the court “as provided under Section 14(2)”.
(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where-
(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in, obtaining a final settlement of the dispute,
(b) the parties agree on the termination of the proceedings, or
(c) the arbitral tribunal finds that the continuation of the proceedings has for any other mason become unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.
15. The expression “Court” is a defined expression under Section 2(1)(e) which reads as follows:-
“Section 2(1)(e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not-include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;””
6. It must be noted that though, Dr. Saraf had placed reliance upon the decision in case of Anuptech Equipments (supra), he also, pointed out the subsequent decisions of this Court and the Hon'ble Apex Court in case of Lalitkumar Sanghavi (supra), with a view to assist this Court in the resolution of the issues raised in this petition.
7. In view of the legal position arising out of the decisions in the case of Patel Engineering Ltd. (supra) and Lalitkumar Sanghavi (supra), it is not possible to entertain the present petition. The Petitioners are, however, at liberty to avail alternate remedy available to them under the law.
8. It is made clear that this Court has not examined the merits of the matter and, therefore, all contentions of all parties are kept open, to be adjudicated before the appropriate forum.
9. The Petition is accordingly disposed of. There shall be no order as to costs.