Madhya Pradesh High Court
Smt. Narinder Kaur vs Apollo Creation Pvt. Ltd Through Its ... on 15 April, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 15th OF APRIL, 2025
MISC. PETITION No. 1842 of 2025
SMT. NARINDER KAUR AND OTHERS
Versus
APOLLO CREATION PVT. LTD THROUGH ITS DIRECTOR MR.
NIRMAL AGRAWAL
Appearance:
Shri Abhinav Dhanodkar - Advocate for the petitioners.
ORDER
Per: Justice Vivek Rusia
Petitioners have filed the present petition challenging the
validity of order dated 29.03.2025 passed by Arbitral Tribunal
comprising Hon'ble Shri Justice Mohammad Rafiq (Retired Chief
Justice of High Court of M.P.) the Sole Arbitrator, whereby both the
parties were directed to file their evidence, in first instance, only before
the Tribunal in soft copy by e-mail on 09.04.2025 and thereafter, copies
each other's evidence affidavits shall be endorsed to the parties by the
Tribunal.
02. The petitioners are the owner of the land bearing khasra
No.414/2 area 2.221 hectare situated at Village Niranjanpura, Tehsil and
District Indore (M.P.) which is a subject matter of an MOU dated
26.02.2022 entered with the respondent for development of commercial-
cum-residential purpose. A dispute arose between the parties hence,
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same has been referred to the sole Arbitrator Hon'ble Shri Justice
Mohammad Rafiq (Retired Chief Justice of High Court of M.P.) vide
order dated 12.03.2024 passed by this Court in AC No.3/2024.
03. The respondent submitted a statement of claim in order to seek
a decree of specific performance. The petitioners have also filed a
written statement. Thereafter, vide order dated 25.02.2025, the learned
Arbitrator has framed as many as 20 issues for adjudication and directed
parties to submit their respective evidence affidavits within 4 weeks. On
29.03.2025, the petitioners argued that as per the provisions of Section
138 of Indian Evidence Act, 1872 the respondent / claimant be directed
to submit the evidence affidavit and after cross-examination of the
witnesses, the petitioners shall file their evidence affidavit. The filing of
evidence affidavit simultaneously by both the parties would create
prejudice and further amounting to revealing the defence prior to
the cross-examination of claimant's witnesses. In support of the
contention, learned counsel has placed reliance on a judgment passed by
this Court in case of Magadh Precision Equipment Limited v/s Yuken
India Limited in M.P. No.5108 of 2022 decided on 17.01.2023.
04. The aforesaid submission was opposed by the counsel
appearing for the claimant and vide order dated 29.03.2025, the learned
Arbitrator has rejected said contention by directing parties to file their
evidence affidavit in first instance only before the Tribunal in soft copy
by e-mail on 09.04.2025 hence, this petition before this Court.
05. Shri Abhinav Dhanodkar, learned counsel appearing for the
petitioners submits that under Section 138 of Indian Evidence Act, 1872
it is for the claimant to file an affidavit and after cross-examination of
the witnesses and re-examination the petitioner being a respondent
before the arbitrator shall file evidence. This is a proper and normal
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procedure which could be adopted by the learned Arbitrator. The
learned Arbitrator has wrongly discarded the judgment passed by this
Court in case of Magadh Precision Equipment Limited (supra).
I have heard learned counsel for the petitioners at length and
perused the entire record.
06. We are unable to accept the aforesaid contention. Under Section
19(1) of the Arbitration and Conciliation Act, 1996, the Arbitral
Tribunal shall not be bound by the Code of Civil Procedure, 1908 or the
Indian Evidence Act, 1872. Under sub-section (2) of the Act the parties
are free to agree on the procedure to be followed by the Arbitral
Tribunal in conducting its proceedings. As per sub-section (3) Failing
any agreement arrived at between the parties the Arbitral Tribunal may,
subject to this part, conduct the proceedings in the manner it considers
appropriate which includes the power to determine the admissability,
relevance, materiality and weight of any evidence as per sub-section (4).
Therefore, the learned Arbitral Tribunal is not bound to follow the
procedure prescribed under the Code of Civil Procedure, 1908 by the
Indian Evidence Act, 1872.
07. Learned counsel for the petitioners has placed heavy reliance on
Section 138 of the Indian Evidence Act, 1872 which lays down the
manner of examining a particular witness, according to which the
witnesses shall be first examined In Chief then cross-examined by
adverse party so desired, then re-examination if the party calling him so
desired irrespective to the facts that he is the plaintiff's or defendant's
witness. The relevant provision in the Indian Evidence Act is under
Section 135, which says that witnesses produced and examined, shall be
regulated by law and practice, in absence of any such law by the
discretion of the Court. Therefore, in a given facts and circumstances or
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looking to the burden of proof, onus of the proof of the case, the Court
can use its discretion to decide in which order the witnesses are to be
produced and examined by the parties. Thus, it is not hard and fast that
the claimant must begin his evidence and after exhausting all the
witnesses, the non-applicant shall start its evidence. In order to save the
time especially in arbitration proceedings, the learned Arbitrator can
direct all the parties to submit their evidence at one go.
08. So far as the apprehension of the petitioners that his defence
would be disclosed is concerned, the petitioners have already filed the
written statement and the issues have been framed. The learned
Arbitrator has taken one more precaution by directing both the parties to
submit the affidavit in soft copy by way of e-mail to him and thereafter,
the same will be distributed to the parties, therefore, the proper
precaution has been taken by the learned Arbitrator to protect the
interest of the parties hence, no case for interference is made out.
09. Shri Dhanodkar, learned counsel for the petitioners submits that
by way of this petition, the petitioners are also challenging the order
dated 01.12.2024 (Annexure P/3), whereby order dated 03.11.2024
regarding direction to register the MOU / Agreement dated 26.02.2022
has been modified. Shri Dhanodkar further submits that the learned
Arbitral Tribunal has no power to review its own interim order,
therefore, the direction to get the deed registered has wrongly been
modified, it is a case of specific performance of contract. While
modifying the award, the learned Arbitral Tribunal has held that it is a
mixed question of law and facts and shall be decided by framing a
specific issue there after the parties had led the evidence. However, the
direction with regard to the stamping of the said document has been
maintained.
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10. The Apex Court in case of Bhaven Construction vs. Executive
Engineer, Sardar Sarovar Narmada Nigam Ltd. And Anr., reported
in (2022) 1 SCC 75, has held as under :
17. Thereafter, Respondent No. 1 chose to impugn the order passed
by the arbitrator under Section 16(2) of the Arbitration Act through a
petition under Article 226/227 of the Indian Constitution. In the
usual course, the Arbitration Act provides for a mechanism of
challenge under Section 34. The opening phase of Section 34 reads
as
''34. Application for setting aside arbitra award. - (1)
Recourse to a Court against an arbitral award may be
made only by an application for setting aside such award
in accordance with sub-section (2) and subsection (3)'.
(emphasis supplied)
The use of term „only‟ as occurring under the provision serves
two purposes of making the enactment a complete code and lay
down the procedure.
18. In any case, the hierarchy in our legal framework, mandates that
a legislative enactment cannot curtail a Constitutional right. In
Nivedita Sharma v. Cellular Operators Association of India, (2011)
14 SCC 337, this Court referred to several judgments and held:
"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, (1997)
3 SCC 261. 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 quasijudicial 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
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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 Limited v. Oil
and Natural Gas Corporation Limited, (2019) SCC Online SC
1602, wherein interplay of Section 5 of the Arbitration Act and
Article 227 of the Constitution was analyzed as under:
"16. Most significant of all is the nonobstante
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 herein above 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 No. 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 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.......''
11. In arbitration proceedings every interlocutory order is not liable
to be challenged by way of writ petition. All these aforesaid objections
can be raised in a proceeding under Section 34 of the Arbitration and
Conciliation Act, 1996 to be initiated after the passing of final order by
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the aggrieved party which is a mandate of the Arbitration and
Conciliation Act, 1996, we are not inclined to interfere with the order.
12. With the aforesaid, this Miscellaneous Petition stands
dismissed.
(VIVEK RUSIA) (GAJENDRA SINGH)
JUDGE JUDGE
Divyansh
