State of M.P. vs Udai Pratap Sharma

Sujoy Paul, J.—This petition filed under Article 227 of the Constitution challenges the order dated 17.2.2014 passed by Seventh Additional District Judge, Gwalior in Case No. 34/2012/Arbitration.

Shri Shekhar Bhargava, learned senior counsel submits that the petitioner filed an application u/s 151 of CPC, read with rule 9 of Arbitration and Conciliation Rules, 1997 (for brevity, the "Rules") for seeking stay of the proceedings before the court below, which is illegally rejected by impugned order.

It is submitted that during the proceedings of Arbitration Case No. 34/2012, the petitioner filed the said application, Annexure P/3, and raised two issues of (a) legality of a two-tier arbitration (as was done in the instant case), and (b) lack of jurisdiction of arbitrator in view of the exclusive jurisdiction of Madhya Pradesh Madhyastham Adhikaran, established under the M.P. Madhyastham Adhikaran Adhiniyam, 1982 (the Act of 82) in respect of works contract. The petitioner submits that instead of deciding both the issues raised in the petitioner''s application (Annexure P/3), the court below decided the first question only, i.e., regarding legality of the two-tier arbitration but on the other question the court below has failed to give any opinion, which amounts to failure of exercise of jurisdiction. On these grounds, it is prayed that the interference be made.

Shri Shekhar Bhargava, learned senior counsel submits that there was a difference of opinion amongst the Judges of Supreme Court in two cases Centrotrade Minerals and Metal Inc. Vs. Hindustan Copper Limited, and M.P. Rural Road Development Authority and Another Vs. L.G. Chaudhary Engineers and Cont., He submits that the matter in dispute in said cases was referred to Larger Bench. The decision of Larger Bench is yet to come. At present, there is no binding judgment which holds the field. Putting it differently, it is argued that awaiting constitution and decision of Larger Bench, the issues involved in the matter before the trial court are not covered by any binding judgment of Supreme Court. Thus, the court below should have allowed the application, Annexure P-3, and should have kept the matter in abeyance till the decision of Larger Bench of the Supreme Court. In alternatively, it is argued that the court below should have referred the question before this Bench of High Court for its decision. It is submitted that the court below has erred in rejecting the said application.

Shri K.B. Chaturvedi, learned senior counsel, assisted by Shri M.L. Swarnkar, in turn submits that the court below has not committed any error of law which warrants interference by this Court. He submits that there is no provision, which compels the court below to stay the proceedings till the decision of the Larger Bench of Apex Court. He relied on Manager, National Insurance Company Ltd. Vs. Saju P. Paul and Another, and P. Sudhakar Rao and Others Vs. U. Govinda Rao and Others, in this regard.

Learned counsel for the parties although made efforts to raise the points of merits involved in Case No. 34/2012 Arbitration, however, in my opinion, at this interlocutory stage the said exercise is unnecessary and unwarranted. Merits and demerits of the matter is yet to be decided by the court below. At present the questions, which need consideration are, firstly whether court below was justified in rejecting the prayer of the petitioner for keeping the matter in abeyance till decision of Larger Bench of Supreme Court, secondly whether the court below has committed any error of law in not referring the matter for decision to the High Court.

Despite specific question from the Bench, Shri Bhargava, learned senior counsel is unable to show any provision or legal authority to show that if a legal question is referred to a Larger Bench of Supreme Court, the trial court should have kept the matter in abeyance. In other words, no provision/judgment is shown to bolster the submission that pending final decision by Larger Bench of Supreme Court, the court below was required to defer the hearing of the case in question. Thus, I am unable to hold that the court below has committed any jurisdictional error in not staying the proceedings pending before it. Similarly, no provision or authority is shown to this Court which mandates that the court below should have referred the matter for decision to this Court. In absence thereto, it cannot be said that the court below has either failed to exercise its jurisdiction or exceeded its jurisdiction.

In view of rival contentions advanced before the court below, the court below has given certain findings on merits. However, this Court is not oblivious of the fact that the order dated 17.2.2014 is ultimately a decision taken on an application preferred u/s 151, CPC (Annexure P/3). In the course of taking such decision, the court below has given certain findings on merits. The grievance put forth by Shri Shekhar Bhargava, learned senior counsel is that if the proceedings continue before the court below, such findings will come in the way of the petitioner. To this extent, in my opinion, petitioner''s grievance is genuine. In my view, the court below has given such findings only in order to deal with rival contentions of the parties for the purpose of staying the proceedings or for referring the matter to the High Court. Thus, this grievance can be sorted out by holding that any finding in the impugned order, which deals with the merits of the matter, shall not be binding on the court below at the time of final hearing. It will be open for the parties to argue on all the points relating to the merits of the matter and court below will not be influenced by its findings on merits, as mentioned in the order dated 17.2.2014. The Court below will take decision dispassionately in accordance with law.

Scope of interference under Article 227 of the Constitution is limited. The interference can be made if the order is shown to be passed by a court having no jurisdiction, it suffers from any procedural impropriety or palpable perversity. The main reason to exercise these powers is to keep the courts below within the bounds of their authority. This Court is not obliged to sit as an appellate court to reweigh or reappreciate the material/evidence. Another view is possible is also not a ground for interference. (See, Shalini Shyam Shetty and Another Vs. Rajendra Shankar Patil, . In the present case, there is no ingredient on which interference can be made. Thus, interference is declined. The court below is free to proceed with the matter by keeping into account the aforesaid finding/observation of this Court.

Petition is disposed of. No cost.