Orissa High Court
Odisha Hydro Power Corporation vs Traflgar House Construction (T) on 8 March, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.20908 of 2020
(Through hybrid mode)
Odisha Hydro Power Corporation .... Petitioner
Ltd.
Mr. Sanjit Mohanty, Sr. Advocate
Mr. D.P. Nanda, Sr. Advocate
Mr. Pradeep Rout, Advocate
-versus-
Traflgar House Construction (T), .... Opposite Party
(TSSJV)
Mr. G.M. Rath, Advocate
CORAM: JUSTICE ARINDAM SINHA
ORDER
Order No. 08.03.2022
7. 1. Mr. Mohanty, learned senior advocate appears on behalf of
petitioner and submits, impugned is order dated 10th August, 2020,
whereby parties were directed to comply with directions contained in
order dated 6th March, 2020 and 10th July, 2020. He submits, the
reconstituted tribunal cannot compel, in exercise of discretion,
repetition of pleadings. The discretion of the reconstituted tribunal to
cause repetition relates only to hearings. He relies on sub-sections (3)
and (4) in section 15, Arbitration and Conciliation Act, 1996.
2. Mr. Rath, learned advocate appears on behalf of opposite party
and submits, the direction to file statement of claim, made by the
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reconstituted Tribunal, was accepted by petitioner in seeking further
time to do so. It is thereafter that this purported objection was raised.
His client's security is held up. Petitioner, being claimant, does not
have a claim and therefore does not want adjudication, to be able to
hold on to his client's security.
3. Mr. Rath submits, judicial review is not possible in matters of
arbitration. Section 5 limits interference to except where provided in
Part-I of the Act. The intervention is provided for in, inter alia,
sections 34 and 37. He relies on judgments of the Supreme Court in -
(i) SBP & Co. v. Patel Engineering Ltd., reported in (2005) 8
SCC 618, paragraphs 44 and 45;
(ii) Lalitkumar V.Sanghavi v. Dharamdas Sanghavi,
reported in (2014) 7 SCC 255, paragraph 8;
(iii) Deep Industries Ltd. v. Oil and Natural Gas
Corporation Ltd., reported in (2020) 15 SCC 706, paragraphs 19, 20
and 22; and
(iv) Order dated 5th March, 2021 in Civil Appeal nos.1098-
1099 of 2021 (Navayuga Engineering Company v. Bangalore
Metro Rail Corporation Ltd.)
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4. In reply Mr. Mohanty also relies on Deep Industries Ltd.
(supra). He then relies on judgment dated 6th January, 2021 of the
Supreme Court in Civil Appeal no.14665 of 2015 (Bhaven
Construction v. Executive Engineer Sardar Sarovar Narmada
Nigam Ltd. to submit, said Court declared the law to be that
interference in writ jurisdiction must only be in rarest of rare cases of
exceptional or cases, which are stated to be patently lacking in
inherent jurisdiction [Navayuga Egineering Company (supra)].
5. It appears that opposite party had filed a writ petition against
order passed on the section 14 petition. Appeal was thereafter
preferred by said party. Meanwhile both parties submitted to
appointment of arbitrator pursuant to request made under sub-section
(6) in section 11. By order dated 13th December, 2019, parties agreed
to have their respective nominated arbitrators be appointed and
thereafter the appointees to agree on the presiding arbitrator. As such,
the reconstituted tribunal can be said to have been appointed pursuant
to agreement of parties as under clause-(b) in section 15(1).
6. In impugned order there is discussion on section 15. That it
relates to an arbitrator as well as an arbitral tribunal, has been found
thereby. Also found is that the reconstituted tribunal can, in the facts
and circumstances, exercise discretion as done by it.
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7. Sub-sections (3) and (4) in section 15 are reproduced below.
"15. Termination of mandate and substitution
of arbitrator-
(1) xx xx xx
(2) xx xx xx
(3) Unless otherwise agreed by the parties,
where an arbitrator is replaced under sub-section
(2), any hearings previously held may be repeated at
the discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the parties, an
order or ruling of the arbitral tribunal made prior to
the replacement of an arbitrator under this section
shall not be invalid solely because there has been a
change in the composition of the arbitral tribunal."
Sub-section (3) makes it clear that the discretion to be exercised is in
respect of hearings in previous reference. The provision does not
include pleadings. Sub-section (4) has obviously been relied upon by
petitioner to show that the earlier direction for pleadings, complied
with, do not stand invalidated because of replacement of the tribunal.
8. Section 4 provides for waiver. Here petitioner, being claimant,
cannot be said to be a party, who knows that the provisions in sub-
sections (3) or (4) of section 15 are something, from which it may
derogate. The provisions relate to discretion of the substituted tribunal
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and the consequence of substitution. As such, petitioner cannot be said
to have waived under provisions of section 4. Petitioner cannot also be
barred by estoppel on having sought enlargement of time to comply
with the direction to file pleadings before the reconstituted tribunal
because estoppel does not operate against law.
9. The position on declaration of law by the Supreme Court
regarding interference in writ jurisdiction appears to be as has been
submitted by Mr. Mohanty. This is a case where there has been
demonstration, of the substituted tribunal having exercised discretion
not provided by relevant provision in the statute. As such it appears to
be a case where the exercise of discretion was lacking in inherent
jurisdiction, as not sourced from the power to exercise discretion given
or conferred by sub-sections (3) and (4) in section 15. The case
consequently qualifies as an exceptionally rare case since challenge to
the award that may ultimately be passed, under section 34, cannot
include a ground that may arise on the working of section 15.
10. The writ petition is allowed. Impugned order is set aside and
quashed. The parties are to proceed in the reference on the pleadings
already exchanged.
11. Mr. Mohanty submits, the direction should also include issues
earlier framed. Mr. Rath submits, framing of issues is commencement
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of hearing. There is no bar upon the reconstituted tribunal to exercise
discretion in framing issues afresh. This submission is accepted.
12. The writ petition is disposed of.
(Arindam Sinha)
Judge
Sks
