P.K Jaiswal, J.:— Since the common question of law is involved in these petitions to decide, therefore, they are heard together and disposed of by this common order. For the sake of convenience the facts are borrowed from W.P.2581/2014.
2. Brief facts of the case are that a contract for construction of “Sewerage System and Allied Work” in Indore was executed between the respondent No. 1 - Simplex Infrastructures Ltd., and the petitioner - Indore Municipal Corporation, Indore. During the existence of the contract, certain dispute arose between the parties and as per arbitration clause nos. 24 and 25 contained in the agreement, the respondent No. 1 filed an application before the Indian Council for Arbitration for appointment of arbitral tribunal. On the said application arbitral tribunal was constituted by the Indian Council of Arbitration.
3. The petitioner immediately after receipt of the notice from the arbitral tribunal filed an application under Section 16 of the Arbitration and Conciliation Act, 1996 (in short ‘the 1996 Act’), challenging the jurisdiction of arbitral tribunal on the ground that in view of the provisions of Sections 2(d)2(I) and Section 7 of M.P Madhyastham Adhikaran Adhiniyam, 1983 (in short ‘the 1983 Adhiniyam’), the dispute between the parties are adjudicable only by the statutory tribunal constituted under the 1983 Adhiniyam. The learned arbitral tribunal by impugned order dated 30.12.2013, rejected the application by holding that to bring the case within the purview of 1983 Adhiniyam one of the parties should be the State Government or a public undertaking as defined in Section 2(1)(g) and the works contract should fall within the definition of “Works Contract” as defined under Section 2(1)(i) of the 1983 Adhiniyam. In absence of the either of the two requirements, the case would not fall within the purview of 1983 Adhiniyam. In the present case the petitioner - Indore Municipal Corporation is neither a State nor a public undertaking within the meaning of Section 2(1)(g) of the 1983 Adhiniyam. The case therefore, does not fall within the ambit of the 1983 Adhiniyam, so as to oust the applicability of 1996 Act. The arbitral tribunal therefore, has the jurisdiction to try and adjudicate the disputes between the parties and by impugned order dated 30.12.2013, rejected the application filed under Section 16 of the 1996 Act.
4. It is this action, which has been impugned in this writ petition filed under Article 226/227 of the Constitution.
5. A preliminary objection has been raised by the respondent (s) - claimant on the ground that a writ petition under Article 226 filed by the petitioner against the respondent (s) is not maintainable because the respondent (s) is a private limited company incorporated under the Companies Act, 1956 and not a state within the meaning of Article 12 of the Constitution of India and does not discharge any public functions or duties. In the event the writ petition is construed to be a petition under Article 227 of the Constitution, the petitioner is not entitled to get any relief of interlocutory nature inasmuch as, Chapter 10 Rule 31 of the M.P High Court Rules 2008, provides that “no relief of an interlocutory nature shall be granted unless a separate application in this behalf is made”. In any case, the petitioner is not entitled to any relief in writ petition under Article 227 of the Constitution.
6. Learned Senior counsel for the respondent (s) has drawn our attention to the decision of the Apex Court in the case of A.P.S Kushwaha (SSI Unit) v. Municipal Corporation, Gwalior, reported as (2011) 13 SCC 258 wherein, it has been held that the provisions of the 1996 Act would apply where there was an Arbitration Clause and the provisions of the 1983 Adhiniyam would apply where there was no Arbitration Clause and dispute between the parties has to be resolved under the provisions of 1996 Act.
7. In SPB & Company v. Patel Engineering reported as (2005) 8 SCC 618, a constitution Bench of the Apex Court held that once the Chief Justice or his designate appoints an arbitrator in an application under Section 11 of the Act, after satisfying himself that the conditions for exercise of power to appoint an arbitrator are present, the Arbitral Tribunal could not go behind such decision and rules on its own jurisdiction or an existence of an arbitration clause.
8. In SPB & Company v. Patel Engineering (supra) the Constitutional Bench has held that the power exercised by Chief Justice of High Court or Chief Justice of India under Section 11(6) of 1996 Act, is a judicial power and not an administrative power. Para 44, 45, 46 and 47 are relevant which reads as under:—
“44. Once we arrive at the conclusion that the proceeding before the Chief Justice while entertaining an application under Section 11(6) of the Act is adjudicatory, then obviously, the outcome of that adjudication is a judicial order. Once it is a judicial order, the same, as far as the High Court is concerned would be final and the only avenue open to a party feeling aggrieved by the order of the Chief Justice would be to approach to the Supreme Court under Article 136 of the Constitution of India. If it were an order by the Chief Justice of India, the party will not have any further remedy in respect of the matters covered by the order of the Chief Justice of India or the Judge of the Supreme Court designated by him and he will have to participate in the arbitration before the Tribunal only on the merits of the claim. Obviously, the dispensation in our country, does not contemplate any further appeal from the decision of the Supreme Court and there appears to be nothing objectionable in taking the view that the order of the Chief Justice of India would be final on the matters which are within his purview, while called upon to exercise his jurisdiction under Section 11 of the Act. It is also necessary to notice in this context that this conclusion of ours would really be in aid of quick disposal of arbitration claims and would avoid considerable delay in the process, an object that is sought to be achieved by the Act.
45. It is seen that some High Courts have proceeded on the basis that any order passed by an arbitral tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution of India. We see no warrant for such an approach. Section 37 makes certain orders of the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating his grievances against the award including any in-between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the occasion arises, the Chief Justice may constitute it based on the contract between 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 of India. 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 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.
47. We, therefore, sum up our conclusions as follows:—
(i) The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11(6) of the Act is not an administrative power. It is a judicial power.
ii) The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another judge of that court and by the Chief Justice of India to another judge of the Supreme Court.
(iii) In case of designation of a judge of the High Court or of the Supreme Court, the power that is exercised by the designated, judge would be that of the Chief Justice as conferred by the statute.
(iv) The Chief Justice or the designated judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. These will be, his own jurisdiction, to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate.
(v) Designation of a district judge as the authority under Section 11(6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act.
(vi) Once the matter reaches the arbitral tribunal or the sole arbitrator, the High Court would not interfere with orders passed by the arbitrator or the arbitral tribunal during the course of the arbitration proceedings and the parties could approach the court only in terms of Section 37 of the Act or in terms of Section 34 of the Act.
(vii) Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court.
(viii) There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act.
(ix) In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act.
(x) Since all were guided by the decision of this Court in Konkan Railway Corpn. Ltd. v. Rani Construction Pvt. Ltd. [(2000) 8 SCC 159] and orders under Section 11(6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of arbitrators or arbitral tribunals thus far made, are to be treated as valid, all objections being left to be decided under Section 16 of the Act. As and from this date, the position as adopted in this judgment will govern even pending applications under Section 11(6) of the Act.
(xi) Where District Judges had been designated by the Chief Justice of the High Court under Section 11(6) of the Act, the appointment orders thus far made by them will be treated as valid; but applications if any pending before them as on this date will stand transferred, to be dealt with by the Chief Justice of the concerned High Court or a Judge of that court designated by the Chief Justice.
(xii) The decision in Konkan Railway Corpn. Ltd. v. Rani Construction Pvt. Ltd. [(2000) 8 SCC 159] is overruled.
9. The Apex Court in the aforesaid judgment has held that any order passed by the Arbitral Tribunal is not capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India. No Writ petition under Article 226/227 of the Constitution is maintainable against any order passed by the Arbitral Tribunal during arbitration proceedings and a remedy is available under Section 34 or 37 of the 1996 Act.
10. The Apex Court in the case of L. Chandra Kumar v. Union of India, reported as 1997 (1) MPLJ SC 621 has held that the High court have the power to exercise its superintendence over the tribunal through out the territories in relation to which it exercise the jurisdiction but only in respect of the tribunal constituted under Article 323A and 323B of the Constitution of India.
11. Shri A.K Chitle, learned Senior counsel with Shri R.K Sanghi, Advocate for the respondent (s) relying on the decision of SPB & Company v. Patel Engineering (supra) has submitted that the present writ petition (s) filed by the petitioner against the order passed by the Arbitral Tribunal, no writ petition lies because arbitration tribunal is not the tribunal constituted under Article 323A and 323B of the Constitution of India as long as the Constitution Bench holds field, both the writ petitions are liable to be dismissed on the ground of jurisdiction.
12. Per contra, Shri K.C Manana, Advocate and Shri Manoj Munshi, Advocate, for the Municipal Corporation has drawn our attention to the various decisions of the Apex Court in the case of M.P Rural Road Development Authority v. L.S Choudhary Engineers & Contractor, reported as (2012) 3 SCC 495, in the case of SPB & Company v. Patel Engineering (supra) and in the case of A.P.S Kushwaha (SSI Unit) v. Municipal Corporation, Gwalior and submitted that the writ petition is very much maintainable. His contention is that jurisdiction under the 1983 Adhiniyam shall prevail over the arbitration under the 1996 Act.
13. At present, we are deciding the question of maintainability of the writ petition. He has also supported the decision of SPB & Company v. Patel Engineering (supra) and submitted that the writ petition is very much maintainable.
14. As per Section 16(6) of 1996 Act, the remedy against the order passed under Section 16 is provided under Section 37 of the 1996 Act. Section 16 of 1996 Act reads as under:—
“16. Competence of arbitral tribunal to rule on its jurisdiction.-
(1)………….
(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)…………..
(4)…………..
(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or subsection (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.”
15. As per scheme Section 16, if a party is aggrieved by an order passed under Section 16(5) rejecting the application challenging the jurisdiction of the arbitral tribunal can only be challenged by way of filing of application under Section 34 of the 1996 Act. The Constitution Bench of the Apex Court while considering the scheme and scope of Section 16 of 1996 Act and the jurisdiction of this Court under Article 226 and 227 of the Constitution has held that against the order passed under Section 16 of 1996 Act, the writ is not maintainable and only remedy available to the aggrieved party is by filing the application under Section 34 and/or an appeal under Section 37 of the 1996 Act.
16. In view of the aforesaid, we are of the view that the writ petition filed by the petitioner against the impugned order dated 30.12.2013 whereby, the application under Section 16 of 1996 Act has been rejected is not maintainable. They have a remedy to ventilate their grievance by filing an application under Section 37 of 1996 Act. The writ petition/(s) is not maintainable.
17. For these reasons, we allow preliminary objection raised by the respondent (claimant) and I.A No. 4015 of 2016, filed by the respondent in W.P No. 4046 of 2016 and dismiss both the writ petitions as not maintainable. The question whether a Municipal Corporation is or not a public undertaking either owned or controlled by Government within the meaning under Section 2(1)(g) of the Adhiniyam is left open, since it is not necessary to decide the same at this stage while considering the preliminary objection raised by the respondent (s).
18. In the result, the writ petitions against the order of Arbitral Tribunal are dismissed as not maintainable with no order as to costs.