Rashmi Metaliks Limited vs Union Of India & Anr
2023 Latest Caselaw 2627 Cal/2

ODC-1

                             APOT/308/2023
                                   with
                              AP/482/2021
                            IA No. GA/1/2023

                 IN THE HIGH COURT AT CALCUTTA
                          In appeal from its
               ORDINARY ORIGINAL CIVIL JURISDICTION
                  CIVIL APPELLATE JURISDICTION
                        (Commercial Division)


                         Rashmi Metaliks Limited
                                 Versus
                          Union of India & Anr.


Before:
The Hon'ble Justice I. P. MUKERJI
            And
The Hon'ble Justice BISWAROOP CHOWDHURY
Date: 18th September, 2023.

                                                                    Appearance:
                                               Mr. Abhrajit Mitra, Sr. Advocate
                                               Mr. Soumabho Ghose, Advocate
                                           Mr. Sarvapriya Mukherjee, Advocate
                                                Mr. Biswajit Kumar, Advocate.
                                                            ...for the appellant.
                                               Mr. Siddhartha Lahiri, Advocate
                                                Mrs. Amrita Pandey, Advocate
                                                         ...for the respondent.

The Court: Order in terms of prayer (a) of the stay petition.

This is an appeal from a judgment and order dated 8th August,

2023 on an application by the Union of India under Section 36(2) of the

Arbitration and Conciliation Act, 1996. By the said order a learned

Single Judge has ordered inter alia unconditional stay of the award.

At the outset, Mr. Abhrajit Mitra, learned senior advocate

appearing for the appellant conceded that as far as this part of the

impugned judgment and order was concerned, it was not appealable.

However, there are other parts of the judgment and order which

very badly affected the interests of his client, the award-holder and is

also highly prejudicial to them.

In the impugned judgment and order directly or indirectly most

scurrilous remarks have been made against the character, honesty and

integrity of railway officials and, in our prima facie opinion also, against

the members of the arbitral Tribunal. Learned counsel submits that

the Court had no jurisdiction to make an enquiry into these areas in the

Section 36 application and that the part of the judgment and order

adjudicating upon the same and expressing the above harsh views was

totally without jurisdiction and is to be treated as non-est and expunged

from the judgment and order. Hence, an appeal lay from that part of the

order.

Mr. Lahiri, learned advocating appearing for the

respondent/railways submitted that the learned judge had the power to

make such enquiry and express such views and that this appeal was not

maintainable.

This appeal is admitted subject to the question of

maintainability. Prima facie whether the Court under Section 36 has the

jurisdiction to make this kind of an order has to be investigated. There is

no doubt that a High Court enjoys unlimited power to do justice between

the parties. This power includes in appropriate cases directing an

enquiry or investigation into alleged fraudulent or wrongful acts by a

specialised investigating agency. But before such an order is made, the

delinquent must have had some kind of a case or preliminary charge

before him to answer and he after having failed to do so, such an order

could have been passed. In a Section 36 application, unilaterally this

kind of an order, without even a chance to the concerned persons to

explain themselves, appears to be prima facie without jurisdiction.

This question can be fully decided on hearing the appeal.

We shall be able to decide whether the Court at all had

jurisdiction to pass such an order only upon hearing the appeal

Till disposal of the appeal or until further orders, whichever is

earlier, the direction in paragraph 48 of the impugned judgment and

order for constitution of a "multi- member high-level enquiry committee"

and "to complete the enquiry and submit a report before this Court

within three months from the date of this order" shall remain stayed.

However, we make it clear that the Section 34 application of the

railways may be heard out. Mr. Mitra once again reiterates that his client

is at the moment not interested in the execution of the award. We also

observe that the Hon'ble Court hearing the Section 34 application shall

not be guided by any of the remarks of the learned Judge in the

impugned judgment and order as tabulated in ground III of the

memorandum of appeal. Nevertheless, we also make it absolutely clear

that all grounds available to the railways to challenge the award

including fraud and corruption if any as made out in the Section 34

application are open before it. The learned Judge shall consider those

grounds as grounds of challenge to the award.

We expedite hearing of the appeal.

As the respondents are represented by learned counsel, issuance

and service of the notice of appeal are dispensed with.

Advocate on record for the appellant is directed to file an

informal paper book by 3rd October, 2023, serving a copy thereof upon

the advocate on record for the respondents, at least seven days before the

date of hearing of the appeal.

List the appeal for hearing on 11th October, 2023 .

The stay application (GA/1/2023) is disposed of.

As affidavits were not invited, allegations contained in the stay

application are deemed not to have been admitted.

(I. P. MUKERJI, J.)

(BISWAROOP CHOWDHURY, J.)

A/s.