Railways lessee sought refund of excess lease payment via writ after his arbitral award rejecting the claim was set aside in Section 34 proceedings and subsequent appeal was dismissed for delay. The Court held writ jurisdiction was not warranted absent exceptional circumstances; alternative statutory remedies existed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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RAMCHANDER .....Petitioner Through: Mr. Anil Goel, Mr. Aditya Goel and Mr. Chanchal Sharma, Advocates.
versus
UNION OF INDIA & ANR .....Respondents Through: Mr. Om Prakash, SPC with Mr. Chandresh Pratap and Ms. Swati Mishra, Advocates with Mr. Digvijay Singh, CMI/Legal.
CORAM: HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J. (ORAL)
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years. The lease rate was Rs.5,114/- per day. Clause 18.1 of the Agreement provided for extension of the lease by two years at a lease rate of 25% more than the lumpsum lease freight rate.
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holding that the award of the learned Arbitrator was passed in ignorance of the judgment of this Court in OMP 754/2010 dated 04.08.2011, as also other judgments, directing renewal of lease under similar facts at an enhanced rate of 25% and suffered from patent illegality. Reliance was placed on the judgment of the Supreme Court in Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49.
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Supreme Court in Dakshin Haryana Bijli Vitran Nigam Limited v. Navigant Technologies Private Limited, (2021) 7 SCC 657, more particularly, paragraph 4(f) thereof where the Supreme Court observed that in law, where the Court sets aside the award passed by majority Members of the Arbitral Tribunal, the underlying disputes would require to be decided afresh in an appropriate proceeding. Under Section 34 of the 1996 Act, Court may either dismiss the objections filed and uphold the award or set aside the award, if the grounds contained in sub-Sections (2) and (2A) are made out but there is no power to modify an arbitral award.
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delay and consequently the appeal. After this prolonged litigation, Petitioner filed the present writ petition, which is a misconceived remedy after the arbitral award was set aside and cannot be entertained. Learned counsel relies on the judgment of the Supreme Court in Deep Industries Limited v. Oil and Natural Gas Corporation Limited and Another, (2020) 15 SCC 706 , where the Supreme Court held that though petitions can be filed under Article 227 of the Constitution of India against judgments allowing or dismissing first appeals under Section 37 of the 1996 Act yet the High Court will be extremely circumspect in interfering with the same taking into account the statutory policy as adumbrated that interference is restricted to orders that are patently lacking in inherent jurisdiction. 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.
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“17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act. In 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 hereinabove so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction.
18. In Nivedita Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947] , this Court referred to several judgments and held: (SCC pp. 343-45, paras 11-16)
“11. We have considered the respective arguments/submissions. There
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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 [L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 : 1997 SCC (L&S) 577] . 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 a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.
12. In Thansingh Nathmal v. Supt. of Taxes [Thansingh Nathmal v. Supt. of Taxes, AIR 1964 SC 1419] , this Court adverted to the rule of self-imposed restraint that the writ petition will not be entertained if an effective remedy is available to the aggrieved person and observed: (AIR p. 1423, para 7)
‘7. … The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up.’
13. In Titaghur Paper Mills Co. Ltd. v. State of Orissa [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131] , this Court observed:
‘11. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Waterworks Co. v. Hawkesford [Wolverhampton New Waterworks Co. v. Hawkesford, (1859) 6 CBNS 336 : 141 ER 486] in the following passage: (ER p. 495)
“… There are three classes of cases in which a liability may be
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established founded upon a statute. … But there is a third class viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. … the remedy provided by the statute must be followed, and it is not competent to the party 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. [Neville v. London Express Newspapers Ltd., 1919 AC 368 (HL)] and has been reaffirmed by the Privy Council in Attorney General of Trinidad & Tobago v. Gordon Grant & Co. Ltd. [Attorney General of Trinidad & Tobago v. Gordon Grant & Co. Ltd., 1935 AC 532 (PC)] and Secy. of State v. Mask & Co. [Secy. of State v. Mask & Co., 1940 SCC OnLine PC 10 : (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 [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: (SCC p. 607, para 77)
‘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 Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment.’
15. In the judgments relied upon by Shri Vaidyanathan, which, by and large, reiterate the proposition laid down in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Muzaffarnagar [Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Muzaffarnagar, AIR 1969 SC 556] , it has been held that an alternative remedy is not a bar to the entertaining of writ petition filed for the enforcement of any of the fundamental rights or where there has been a violation of the principles of natural justice or where the order under challenge is wholly without jurisdiction or the vires of the statute is under challenge.
16. It can, thus, be said that this Court has recognised some exceptions to the rule of alternative remedy. However, the proposition laid down in Thansingh Nathmal v. Supt. of Taxes [Thansingh Nathmal v. Supt. of Taxes, AIR 1964 SC 1419] and other similar
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judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field.”
“ 18. In any case, the hierarchy in our legal framework, mandates that a legislative enactment cannot curtail a constitutional right. In Nivedita Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947] , this Court referred to several judgments and held : (SCC p. 343, para 11)
“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 [L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 : 1997 SCC (L&S) 577] . 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 a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a
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quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.”
(emphasis supplied) It is therefore, prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure established under the enactment. This power needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear “bad faith” shown by one of the parties. This high standard set by this Court is in terms of the legislative intention to make the arbitration fair and efficient.
19. In this context we may observe Deep Industries Ltd. v. ONGC [Deep Industries Ltd. v. ONGC, (2020) 15 SCC 706] , wherein interplay of Section 5 of the Arbitration Act and Article 227 of the Constitution was analysed as under : (SCC p. 714, paras 16-17)
“16. Most significant of all is the non obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed [see Section 37(2) of the Act].
17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act. In 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 hereinabove so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction.”
(emphasis supplied)
20. In the instant case, Respondent 1 has not been able to show exceptional circumstance or “bad faith” on the part of the appellant, to invoke the remedy under Article 227 of the Constitution. No doubt the
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ambit of Article 227 is broad and pervasive, however, the High Court should not have used its inherent power to interject the arbitral process at this stage. It is brought to our notice that subsequent to the impugned order of the sole arbitrator, a final award was rendered by him on merits, which is challenged by Respondent 1 in a separate Section 34 application, which is pending .
21. Viewed from a different perspective, the arbitral process is strictly conditioned upon time limitation and modelled on the “principle of unbreakability”. This Court in P. Radha Bai v. P. Ashok Kumar [P. Radha Bai v. P. Ashok Kumar, (2019) 13 SCC 445 : (2018) 5 SCC (Civ) 773] , observed : (SCC p. 459, paras 36-37)
“36.3. Third, Section 34(3) reflects the principle of unbreakability. Dr Peter Binder in International Commercial Arbitration and Conciliation in Uncitral Model Law Jurisdictions, 2nd Edn., observed:
‘An application for setting aside an award can only be made during the three months following the date on which the party making the application has received the award. Only if a party has made a request for correction or interpretation of the award under Article 33 does the time-limit of three months begin after the tribunal has disposed of the request. This exception from the three month time-limit was subject to criticism in the working group due to fears that it could be used as a delaying tactics. However, although “an unbreakable time-limit for applications for setting aside” was sought as being desirable for the sake of “certainty and expediency” the prevailing view was that the words ought to be retained “since they presented the reasonable consequence of Article 33.’
According to this “unbreakability” of time-limit and true to the “certainty and expediency” of the arbitral awards, any grounds for setting aside the award that emerge after the three month time-limit has expired cannot be raised.
37. Extending Section 17 of the Limitation Act would go contrary to the principle of “unbreakability” enshrined under Section 34(3) of the Arbitration Act.”
(emphasis in original) If the courts are allowed to interfere with the arbitral process beyond the ambit of the enactment, then the efficiency of the process will be diminished.
22. The High Court did not appreciate the limitations under Articles 226 and 227 of the Constitution and reasoned that the appellant had undertaken to appoint an arbitrator unilaterally, thereby rendering Respondent 1 remediless. However, a plain reading of the arbitration agreement points to the fact that the appellant herein had actually acted in
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accordance with the procedure laid down without any mala fides.
23. Respondent 1 did not take legal recourse against the appointment of the sole arbitrator, and rather submitted themselves before the tribunal to adjudicate on the jurisdiction issue as well as on the merits. In this situation, Respondent 1 has to endure the natural consequences of submitting themselves to the jurisdiction of the sole arbitrator, which can be challenged, through an application under Section 34. It may be noted that in the present case, the award has already been passed during the pendency of this appeal, and Respondent 1 has already preferred a challenge under Section 34 to the same. Respondent 1 has not been able to show any exceptional circumstance, which mandates the exercise of jurisdiction under Articles 226 and 227 of the Constitution . ”
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proceedings. The expression ‘appropriate proceedings’, in my view, would mean proceedings under the arbitration regime and cannot mean or connote a writ petition under Article 226 of the Constitution of India, an interpretation the Petitioner seeks to place on the said expression. Likewise, the order passed by this Court in the case of the Petitioner on 04.08.2011, when Petitioner had filed a petition under Section 9 of the 1996 Act cannot help the Petitioner. This was a petition seeking interim relief and the Court held the Petitioner entitled to operate the lease for two years on expiry of earlier lease of three years with enhancement of rent by 25% over the earlier paid rent plus development charges and while relegating the Petitioner to invoking the arbitration agreement within six weeks, the Court observed that the overpayment, if any, made by the Petitioner shall be adjusted in future. In fact, the case of the Petitioner has proceeded far beyond, as the arbitral award rejecting his claim for excess payment, was set aside by this Court. The order relied upon, at the highest inures to the advantage of the Petitioner to the extent of facilitating in seeking refund of overpayment. This cannot however be a reason to invoke the writ jurisdiction of this Court.
JYOTI SINGH, J
MARCH 11, 2025/shivam
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2 issues framed by the court
Is a writ petition under Article 226 maintainable to enforce refund after an arbitral award was set aside under Section 34?
Does the Supreme Court ruling in Dakshin Haryana Bijli Vitran Nigam permit a writ petition as the 'appropriate proceeding' after setting aside an award?
Colour shows how this judgement treated each authority
Deep Industries Limited v. Oil and Natural Gas Corporation Limited and AnotherRelied on¶14
(2020) 15 SCC 706 · Who else cites this
Dakshin Haryana Bijli Vitran Nigam Limited v. Navigant Technologies Private LimitedDistinguished¶17
(2021) 7 SCC 657 · Who else cites this
6 provisions across 2 enactments
Ramchander
Union of India
Jyoti Singh
As recorded by the court registry
A petition under Article 226 of the Constitution asking a High Court to issue a writ against the State or a public authority in a civil matter.
Judgements on the same questions, provisions and authorities, from every court
