[Cites 32, Cited by 0]
Orissa High Court
2 Of Order 47 Of The Civil Procedure Code vs M/S Blueline Resorts Pvt. Ltd on 29 November, 2025
Author: Sanjeeb K Panigrahi
Bench: Sanjeeb K Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 04-Dec-2025 18:50:39
IN THE HIGH COURT OF ORISSA AT CUTTACK
REVIEW PETITION No.149 of 2025
(In the matter of a petition under Section 114 read with Rules 1 and
2 of Order 47 of the Civil Procedure Code, 1908).
M/s Hotel Sea Point Pvt. Ltd., .... Petitioner (s)
Bhubaneswar
-versus-
M/s Blueline Resorts Pvt. Ltd., .... Opposite Party (s)
Bhubaneswar
Advocates appeared in the case through Hybrid Mode:
For Petitioner (s) : Mr. Surendra Routray, Adv.
For Opposite Party (s) : Mr. Avijit Pal. Adv.
CORAM:
DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-18.11.2025
DATE OF JUDGMENT:-29.11.2025
Dr. Sanjeeb K Panigrahi, J.
1. In this Review Petition, the Petitioner seeks a direction from this
Court to recall that portion of the order dated 11.04.2025 permitting
continuation of arbitration after stamping, and to hold that the
disputes be adjudicated exclusively in Civil Suit No. 462/2017 before
the competent civil court.
I. FACTUAL MATRIX OF THE CASE:
2. The brief facts of the case are as follows:
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(i) Two parallel civil suits between the same parties were instituted
before the Puri Civil Court concerning disputes under a lease dated
01.05.2012: Civil Suit No. 598/2015 filed by the Opposite Party on
11.09.2015, and Civil Suit No. 462/2017 filed by the Review Petitioner
on 21.06.2017. In C.S. 598/2015 the Review Petitioner filed a written
statement on 20.09.2017, issues were framed, and the court directed
evidence by affidavit, demonstrating active submission to the civil
court's jurisdiction by both sides.
(ii) The lease agreement forming the foundation of the dispute is
unstamped and unregistered; this defect was noticed judicially. The
High Court in W.P.(C) No. 7893/2017 on 08.05.2017 directed
impounding, and the Opposite Party itself pleaded in paras 32 and 40
of C.S. 598/2015 that arbitration was not maintainable for want of
stamping and registration. Clause 19 allegedly put the stamp burden
on the Opposite Party, which remained unpaid for years.
(iii) While arbitration machinery had earlier been set in motion, the
Review Petitioner by letter dated 28.07.2017 expressly informed the
learned Arbitrator that both parties had waived arbitration since they
had filed and were pursuing their respective civil suits. In parallel,
this High Court, by orders dated 03.11.2017 and 09.04.2021 in ARBP-
39/2013, refused to extend arbitral time and directed parties to act
strictly in accordance with law, which the Review Petitioner says
reinforced continuation before the civil court.
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(iv) The Opposite Party filed a Section 8 application on 20.11.2017 in C.S.
462/2017 seeking reference to arbitration even as its own earlier suit
C.S. 598/2015 was pending; the Civil Judge (Sr. Division), Puri rejected
that Section 8 application on 17.05.2018. No Section 37 challenge was
filed and, according to the Review Petitioner, that rejection attained
finality, affirming the civil court's jurisdiction over the subject matter.
(v) Subsequently, the Opposite Party withdrew its own suit C.S. 598/2015
on 05.12.2019 under Order XXIII Rule 1 CPC after the Review
Petitioner had already filed written statement and the court had
framed issues. Meanwhile, C.S. 462/2017 continues; on 06.05.2025 the
Opposite Party orally sought impounding of the lease deed and the
Review Petitioner consented, with an impounding application filed.
The Opposite Party also pursued CRP No. 23/2023 and CRP No.
35/2023 arising from orders within C.S. 462/2017, which were
dismissed by this High Court on 03.04.2023 and 03.04.2025
respectively.
(vi) In W.P.(C) No. 32426/2022, by order dated 11.04.2025, this High Court
quashed the Arbitrator's order dated 01.08.2022 on the ground that it
was founded on an unstamped and unregistered lease, but
simultaneously allowed continuation of arbitration upon payment of
stamp duty and penalty as assessed by the Collector under Section 42
of the Stamp Act. The Review Petitioner confines the present review
to assailing only this relegation to arbitration.
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(vii) The Review Petitioner alleges persistent suppression and concealment
by the Opposite Party across fora: non-disclosure of the 08.05.2017
impounding order; its own anti-arbitration pleadings in C.S. 598/2015;
the Review Petitioner's written statement and continued civil
participation; the pendency of C.S. 462/2017; and most critically, the
rejection on 17.05.2018 of the Section 8 application. These events, the
Review Petitioner says, were either not disclosed or were
mischaracterized while seeking extensions or reliefs.
(viii) The review is presented as within limitation and narrowly targeted to
the "arbitration-after-stamping" direction, asserting that both parties
had long since elected the civil forum, that the civil court's Section 8
rejection stands final, and that C.S. 462/2017 remains pending before
the Additional Civil Judge (Sr. Division), Puri.
II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
3. Learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions:
(i) By filing and actively prosecuting C.S. No.598/2015 and C.S.
No.462/2017, both parties submitted their "first statements on the
substance of the dispute" within the meaning of Section 8(1) of the
Arbitration and Conciliation Act, 1996, thereby waiving the right to
arbitrate under Section 4; participation by way of written statement,
issue-framing, and evidentiary directions amounts to clear election of
the civil forum and abandonment of the arbitral route.
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(ii) The Section 8 application filed by the Opposite Party in C.S. 462/2017
was rejected on 17.05.2018 by the Civil Judge (Sr. Division), Puri;
absent any Section 37 challenge, that order has attained finality and
conclusively affirms the civil court's jurisdiction over the subject
matter. Any later direction to proceed with arbitration collides with
that finality and amounts to conferring jurisdiction on the arbitrator
where it stands already negatived.
(iii) The arbitrator lacked competence to ignore the judicial rejection under
Section 8 and to proceed on an unstamped and unregistered lease;
Kompetenz-Kompetenz under Section 16 cannot override a prior,
binding adjudication under Sections 8 or 11. Consequently, the prior
arbitral proceedings and orders are asserted to be coram non judice,
rendering them non est and liable to be treated as nullities.
(iv) The lease deed's stamping and registration defects were not mere
curable irregularities within arbitration because the foundational
document was inadmissible until impounded and duty paid; further,
the Opposite Party's own pleadings repudiated arbitrability on this
very ground. Permitting arbitration now, after years of non-payment
despite opportunities, rewards dilatory conduct and undermines the
civil court's seisin.
(v) The Opposite Party's institution of C.S. 598/2015, subsequent pursuit
of Section 8 in the Review Petitioner's suit while its own suit was
alive, and eventual unilateral withdrawal under Order XXIII Rule 1
are characterized as forum shopping and approbation-reprobation.
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The Review Petitioner invokes estoppel, including Section 121 of the
Bharatiya Sakshya Adhiniyam, 2023, to preclude the Opposite Party
from shifting positions after inducing the Review Petitioner to litigate
in the civil forum.
(vi) Reviving or re-agitating claims abandoned by withdrawal of C.S.
598/2015 through arbitration offends the principles of constructive res
judicata and the discipline of Order XXIII Rule 1 CPC. The High
Court's direction for arbitration, if read to permit such revival,
inadvertently disregards settled Supreme Court authority extending
these principles even to writs, and should therefore be corrected in
review.
(vii) The High Court's order dated 11.04.2025 correctly quashed the
Arbitrator's order for relying on an unstamped and unregistered
instrument but, by allowing arbitration upon stamping, inadvertently
overlooked the parties' waiver, the final rejection under Section 8 of
the Act and the continuing pendency of C.S. 462/2017. This is
projected as an error apparent on the face of the record warranting
review under Section 114 read with Order XLVII Rule 1 CPC, without
need for evidentiary reappraisal.
(viii) Given the parties' conscious election of the civil forum, the finality of
the Section 8 rejection, allegations of suppression, and the subsisting
seisin of the civil court over C.S. 462/2017 with impounding steps now
underway, the Review Petitioner prays that relegation to arbitration
be recalled and that adjudication proceed exclusively before the civil
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court, preventing prejudice from further delay and foreclosing
parallel or duplicative arbitral proceedings.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
4. The Learned Counsel for the Opposite Parties was conspicuously
remained absent when the matter was listed on a few occasions.
Hence, this Court deems it appropriate to proceed with the matter.
IV. COURT'S REASONING AND ANALYSIS:
5. Heard Learned Counsel for the parties and perused the documents
placed before this Court.
6. The present judgment is structured around seven distinct issues,
namely: (1) the scope of review jurisdiction under Order XLVII Rule 1
CPC, (2) election of the civil forum and waiver of arbitration, (3)
finality of the civil court's order rejecting reference under Section 8 of
the Arbitration and Conciliation Act, 1996, (4) the arbitrator's
jurisdiction vis-à-vis prior judicial adjudication under the doctrine of
Kompetenz-Kompetenz, (5) the effect of the unstamped and
unregistered lease: curability of the defect and the consequences of
prolonged delay, (6) the bar against revival of abandoned claims
under Order XXIII Rule 1 CPC and the principle of constructive res
judicata, and (7) the alleged suppression of material facts by the
opposite party and the conduct of the parties. This Court shall
examine each of these issues sequentially.
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A. SCOPE OF REVIEW JURISDICTION UNDER ORDER XLVII RULE 1 CPC.
7. At the outset, it is necessary to delineate the limited scope of review
jurisdiction. A review petition is not a disguised appeal and can only
be entertained on grounds such as discovery of new evidence, an
error apparent on the face of the record, or other analogous sufficient
reasons. In other words, the error must be manifest and not one that
requires elaborate argument to uncover. Re-appreciation of evidence
or repetition of arguments on merits is impermissible in review.
8. This principle has been emphasized in multiple judicial precedents
including Kamlesh Verma v. Mayawati1where it was held that a
review lies only for a patent error which materially undermines the
order's soundness or causes a miscarriage of justice. The relevant
excerpts are produced below:
"16. Thus, in view of the above, the following grounds of
review are maintainable as stipulated by the statute:
(A) When the review will be maintainable:
(i) Discovery of new and important matter or evidence
which, after the exercise of due diligence, was not within
knowledge of the petitioner or could not be produced by him;
(ii) Mistake or error apparent on the face of the record;
(iii) Any other sufficient reason."
9. Applying these principles, the present review is maintainable to the
extent it points out a manifest error in the judgment dated 11.04.2025.
The review petitioner does not seek a rehearing on merits, but
correction of an oversight: namely, that this Court's direction
permitting continuation of the arbitration after stamp duty payment
(2013) 8 SCC 320.
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overlooked crucial, undisputed facts and binding orders on record.
These include the final rejection of a prior Section 8 application
between the parties, and the parties' long-standing election to submit
to the civil court's jurisdiction. Non-consideration of these material
facts, which were part of the case history, is an error apparent on the
face of the record.
10. It is well-settled that overlooking a binding judicial proceeding or a
clear statutory bar constitutes an error warranting review. Moreover,
if a party obtained the impugned order by suppressing or not
disclosing material events (as is alleged here), the Court in review can
remedy the resulting prejudice under the rubric of "any other sufficient
reason," that reason being analogous to correcting an apparent error or
misrepresentation.
11. In this context, the review petitioner has demonstrated that certain
material developments, notably the final refusal of arbitration by the
civil court on 17.05.2018 and the continued pendency of Civil Suit
No. 462/2017, were not brought to the Court's attention when passing
the order under review. These are not disputed facts requiring fresh
evidence; they are part of the record of judicial proceedings between
the parties. Their omission has a direct bearing on the correctness of
relegating the parties to arbitration.
12. Therefore, this Court is satisfied that the review petition is within the
narrow confines of Order XLVII Rule 1 CPC, as it highlights an
apparent error and seeks to prevent a miscarriage of justice. This
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Court, accordingly, proceeds to examine the merits in light of the true
factual and legal position, mindful that our jurisdiction is only to
correct the specific error pointed out without rearguing the entire
case.
B. ELECTION OF CIVIL FORUM AND WAIVER OF ARBITRATION.
13. On merits, the foremost consideration is whether the parties, by their
own conduct, waived or abandoned the arbitral forum in favour of the
civil court. Section 8(1) of the Arbitration and Conciliation Act, 1996
(as amended) is peremptory that a judicial authority "shall" refer the
matter to arbitration only if the party seeking reference applies "not
later than the date of submitting his first statement on the substance of the
dispute".
14. In other words, the defendant must invoke the arbitration clause
before or at the time of filing the written statement or any other
pleading on merits. If a party fails to do so and instead submits to the
court's jurisdiction by filing its statement on the dispute, the right to
arbitrate is deemed waived.
15. The Supreme Court in the case of P. Anand Gajapathi Raju v. P.V.G.
Raju2authoritatively laid down that reference to arbitration is
obligatory only when the application is made prior to the first
substantive defence in the lawsuit. Once a party has filed a written
statement (or equivalent reply on merits) without insisting on
AIR 2000 SUPREME COURT 1886.
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arbitration, the court proceedings can continue and nothing remains
to be decided under the arbitration agreement in that action. The
relevant excerpts are produced below:
"A further question arises whether the Court is in these
circumstances obliged to refer the parties to arbitration and
if so with what effect. In the matter before us, the arbitration
agreement covers all the disputes between the parties in the
proceedings before us and even more than that. As already
noted, the arbitration agreement satisfies the requirements
of Section 7 of the new Act. The language of Section 8 is
peremptory. It is, therefore, obligatory for the Court to refer
the parties to arbitration in terms of their arbitration
agreement. Nothing remains to be decided in the original
action or the appeal arising therefrom. There is no question
of stay of the proceedings till the arbitration proceedings
conclude and the Award becomes final in terms of the
provisions of the new Act."
16. The flipside is that a belated invocation of arbitration, after engaging
with the merits in court, is not allowed, as the party's conduct
manifests an unequivocal intention to proceed with the suit and to
abandon the benefit of arbitration agreement. This principle was
delineated by the Supreme Court in the case of Food Corporation of
India and Anr. v. Yadav Engineer and Contractor3wherein it held as
follows:
"Each and every step taken in the proceedings cannot come
in the way of the party seeking to enforce the arbitration
agreement by obtaining stay of proceedings but the step
taken by the party must be such step as would clearly and
unmistakably indicate an intention on the part of such party
1983 SCR (1) 95.
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to give up the benefit of arbitration agreement and to
acquiesce in the proceedings commenced against the party
and to get the dispute resolved by the court. A step taken in
the suit which would disentitle the party from obtaining
stay of proceeding must be such step as would display an
unequivocal intention to proceed with the suit and to
abandon the benefit of the arbitration agreement or the right
to get the dispute resolved by arbitration."
17. In the present case, both parties unequivocally elected to have their
dispute decided in civil suits, thereby waiving any arbitral reference.
The undisputed chronology reveals that the opposite party itself
instituted Civil Suit No. 598/2015 in the Puri Civil Court, claiming
relief under the very same lease deed. The review petitioner (as
defendant in that suit) filed a comprehensive written statement on
20.09.2017, resisting the claims on merits. Issues were framed and the
civil court even directed the parties to lead evidence on affidavit,
which steps both sides complied with.
18. All of this amounted to each party submitting its first statement on the
substance of the dispute in the civil forum, without ever pressing for
arbitration at that stage. In fact, the opposite party's own plaint in C.S.
598/2015 did not reserve any right to arbitrate, to the contrary, it
pursued the suit as the chosen remedy. Likewise, when the review
petitioner later filed a separate suit (C.S. 462/2017) over the same lease
dispute, the opposite party initially participated in that suit too (by
seeking extensions, etc.), and only on 20.11.2017, several months into
the litigation, did it belatedly raise an application under Section 8 of
the Act in C.S. 462/2017. By that time, however, significant steps had
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already been taken in court by both sides. It is telling that even in C.S.
598/2015 (the opposite party's own suit), the opposite party itself
pleaded in the plaint (para 32 and 40) that arbitration was not
maintainable due to the lease being unstamped and unregistered.
Such a pleading in a first action is a clear representation that the
dispute should be decided by the court, the opposite party cannot
approbate and reprobate by later seeking arbitration on the same
dispute after having availed the court's jurisdiction to its advantage.
19. Given these facts, the legal effect is that the arbitration agreement
stood waived by conduct. Section 4 of the Act stipulates that a party
who proceeds with litigation without insisting on arbitration, despite
knowledge of the arbitration clause, is deemed to have waived the
right to arbitrate. Indian courts have consistently held that filing a
written statement on the merits, or otherwise submitting to the court's
jurisdiction, constitutes a waiver of the arbitration clause.
20. In fact, the Delhi High Court in the case of SSIPL Lifestyle Pvt. Ltd. v.
Vama Apparels (India) Pvt. Ltd.4 observed that an arbitration clause
can be waived in 2 ways: (1) by filing the statement of defence in the
suit and (2) by undue delay in seeking referral i.e. not filing the
Section 8 application before or by the time the defence is submitted.
21. Both these circumstances squarely apply here. The opposite party not
only filed a plaint (in one suit) and engaged in that suit until issues
were framed, but also missed the window in the review petitioner's
CS (COMM)No. 735 of 2018.
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suit by attempting Section 8 only after substantial participation.
Accordingly, by the combined operation of Section 8(1) and Section 4
of the Act, the right to arbitrate was forfeited.
C. FINALITY OF CIVIL COURT'S ORDER REJECTING ARBITRATION
(SECTION 8).
22. Reinforcing the above conclusion is the fact that the Civil Judge
(Senior Division), Puri has already passed a judicial order on
17.05.2018 rejecting the opposite party's Section 8 application in C.S.
462/2017. That order categorically declined to refer the parties to
arbitration. It is not contested that the opposite party chose not to
challenge the rejection by way of a Section 37 appeal. Consequently,
the order attained finality in law. The legal implication is that the
competent civil court has conclusively affirmed its own jurisdiction
over the subject matter, after considering and negating the plea of
arbitration. Once this determination has attained finality (no appeal
having been filed within the prescribed time), it binds the parties and
governs subsequent proceedings. Any direction by this Court to
nonetheless revive or continue arbitration would directly collide with
the binding decision of the civil court. It would, in effect, amount to
sitting in appeal over the unchallenged order of 17.05.2018 or
conferring jurisdiction on the arbitrator after the same was judicially
denied. Such an outcome is untenable in law and would violate the
principle of res judicata/issue-estoppel.
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23. It is also noteworthy that even this High Court, in earlier proceedings
between these same parties, appeared to acknowledge the primacy of
the court process. By orders dated 03.11.2017 and 09.04.2021 in ARBP
No. 39/2013 (an earlier arbitration-related petition), this Court refused
to extend the arbitral time and directed the parties "to act strictly in
accordance with law". The review petitioner understood this as the
Court tacitly recognizing that the disputes should continue in the civil
court (which was already seized of them) rather than be resuscitated
in arbitration. While the interpretation of those orders may be
debatable, the fact remains that after April 2021, neither party was
pursuing arbitration, the opposite party had not taken any steps to
revive the arbitrator's mandate at that time. Instead, both sides
focused on the ongoing civil litigation. All these factors cement the
position that the civil court's jurisdiction had been irrevocably elected
and affirmed.
D. ARBITRATOR'S JURISDICTION VS. PRIOR COURT ADJUDICATION
(KOMPETENZ-KOMPETENZ).
24. The opposite party's attempt to continue with arbitration despite the
above circumstances also raises an important jurisdictional issue. It is
argued by the review petitioner that the arbitral tribunal lacked
competence to override or ignore the civil court's binding decision
rejecting the reference to arbitration. We find considerable merit in
this submission. While Section 16 of the 1996 Act embodies the
principle of "Kompetenz-Kompetenz" (allowing the arbitrator to rule on
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his own jurisdiction), that principle cannot be stretched to confer upon
an arbitrator the power to sit in appeal over, or neglect, a prior judicial
determination on arbitrability between the same parties. Kompetenz-
Kompetenz operates primarily in the first instance, where no court
has decided the issue, to allow the tribunal to consider objections to its
jurisdiction. But once a competent court has already decided that a
dispute is not referable to arbitration (as in the present case, via the
Section 8 order), that decision is binding unless overturned by a
higher court. The arbitrator cannot resurrect the arbitration by
purporting to re-decide the very question of arbitrability that a court
of law has settled.
25. The Supreme Court has underscored that certain findings at the
reference stage are not open to re-litigation before the arbitrator. In
S.B.P. Co. v. Patel Engineering Ltd.5, a seven-judge bench held that
the issue of existence and validity of the arbitration agreement, when
decided by the court in a Section 11 petition, is binding on the arbitral
tribunal which cannot re-examine those findings under Section 16. By
parity of reasoning, an order under Section 8 (especially one that has
attained finality) binds the parties and the arbitrator cannot ignore it
under the guise of Kompetenz-Kompetenz. In order to do so would be
to countenance conflicting jurisdictions, with the arbitrator
effectively undoing a judicial order, an impermissible scenario. In the
present case, the civil court's order of 17.05.2018 implicitly (if not
(2005) 8 SCC 618.
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expressly) held either that no valid arbitration agreement
existed/applicable (perhaps due to the stamping issue or waiver) or
that the right to arbitrate was lost by submission to the court.
26. It is clear that the findings strike at the arbitrator's jurisdiction. The
arbitrator could not simply proceed as if that court order did not exist.
Any such proceedings before the arbitrator were coram non judice,
without jurisdiction, and any resultant orders would be nullities in the
eyes of law. In fact, this Court itself, in the writ petition (W.P.(C) No.
32426 of 2022), recognized one aspect of the arbitrator's lack of
jurisdiction by quashing the arbitrator's order dated 01.08.2022 on the
ground that it relied on an inadmissible (unstamped, unregistered)
lease deed. Thus, the Court intervened upon finding a "patent
illegality" in the arbitrator's decision, which is one of the limited
grounds justifying interference even before an award.
27. At this juncture, it is relevant to address the opposite party's
contention that orders of an arbitral tribunal are not amenable to writ
jurisdiction and that the High Court should exercise extreme restraint
under Articles 226/227 in matters governed by the Arbitration Act.
There is no quarrel with the general principle invoked - indeed,
Section 5 of the 1996 Act mandates minimal judicial intervention, and
the Supreme Court in Deep Industries Ltd. v. ONGC Ltd.6 has
cautioned that the High Courts' supervisory jurisdiction should be
used sparingly in arbitral cases. Routine or second bite challenges
AIRONLINE 2019 SC 1958.
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through writ petitions are discouraged, especially when statutory
remedies (like Section 34/37) are available. Routine or second bite
challenges through writ petitions are discouraged, especially when
statutory remedies (like Section 34/37) are available. However, the
same authorities also clarify that Articles 226/227 remain available in
exceptional situations, such as when the tribunal has acted without
jurisdiction or in bad faith, or where there is a gross patent error of
law that strikes at the root of the matter. The relevant excerpts are
produced below:
"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."
28. The constitutional powers cannot be nullified by Section 5, and a clear
injustice is not left remediless. In Deep Industries (Supra)for instance,
the Supreme Court acknowledged that a petition under Article 227
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could be maintained to correct jurisdictional errors, albeit with
circumspection.
29. Here, as already discussed, the arbitral proceedings suffered from
multiple jurisdictional infirmities: the arbitrator was entertaining a
dispute on the basis of a document that was legally inadmissible and
on issues that the civil court had reserved for itself. These are
precisely the kind of "patent lack of jurisdiction" scenarios where writ
intervention is justified. Moreover, the posture of the present case is a
step removed, the High Court has already exercised writ jurisdiction
to quash the arbitrator's order, and this Courtis now in review of its
own order. In doing so, this Courtis not trenching upon the arbitral
tribunal's domain; rather, itis ensuring that our earlier direction
conforms to the law and facts that ought to have been considered. The
review petitioner does not ask the Court to decide the merits of the
dispute, only to honour the prior court decisions and the parties'
election of forum. This Court finds this request not only permissible
but compelled by law, to prevent an arbitral proceeding from being
used in a manner that subverts binding judicial orders and the rights
accrued thereunder.
E. EFFECT OF UNSTAMPED/UNREGISTERED LEASE: CURABILITY VS.
CONSEQUENCES OF DELAY.
30. It is undisputed that the lease deed dated 01.05.2012, which contains
the arbitration clause (Clause 19), was neither stamped nor registered
at the time of its execution. This defect has significant legal
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consequences. Under the Indian Stamp Act, an instrument that is not
duly stamped is inadmissible in evidence and cannot be acted upon
by any authority until the requisite duty and penalty are paid
(Sections 35 and 38 of the Stamp Act). The arbitration clause in such
an instrument does not legally "exist" for the purposes of appointing
an arbitrator until the instrument is impounded and stamped.
31. The Supreme Court in Garware Wall Ropes Ltd. v. Coastal Marine
Constructions an Engg. Ltd.7firmly held that a court must ensure
stamping before referring a matter to arbitration, because an
arbitration agreement in an unstamped contract is unenforceable in
law. In fact, it was explicitly observed that an arbitration clause in an
unstamped agreement does not exist in law until the stamp duty is
paid, since an agreement not enforceable by law (for want of stamp)
cannot give rise to any valid arbitration. The relevant excerpts are
produced below:
"A close look at Section 11(6A) would show that when the
Supreme Court or the High Court considers an application
under Section 11(4) to 11(6), and comes across an
arbitration clause in an agreement or conveyance which is
unstamped, it is enjoined by the provisions of the Indian
Stamp Act to first impound the agreement or conveyance
and see that stamp duty and penalty (if any) is paid before
the agreement, as a whole, can be acted upon. It is important
to remember that the Indian Stamp Act applies to the
agreement or conveyance as a whole. Therefore, it is not
possible to bifurcate the arbitration clause contained in such
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agreement or conveyance so as to give it an independent
existence, as has been contended for by the respondent."
32. Applying this principle, when the opposite party invoked arbitration
back in 2013 (by appointing an arbitrator through ARBP No. 39/2013),
that arbitration was premature and defective in law, because the lease
deed had not been stamped or registered. It is precisely for this reason
that in a parallel proceeding, W.P.(C) No. 7893/2017, this High Court
on 08.05.2017 directed the lease deed to be impounded for stamp duty
assessment. Tellingly, the opposite party itself had taken the position
in its pleadings (para 32 and 40 of the plaint in C.S. 598/2015) that the
arbitration clause could not be acted upon due to the document's
unstamped and unregistered nature. This stance is an admission of
the legal bar at that time. The arbitrator's order of 01.08.2022 (which
presumably proceeded to decide issues without the stamp having
been paid) was therefore in clear breach of the Stamp Act, and was
rightly quashed by this Court on 11.04.2025 as coram non judice. The
arbitration could not validly continue on the strength of an
inadmissible document.
33. Subsequently, in compliance with this Court's directions in the writ
judgment, the Collector has undertaken the statutory assessment of
stamp duty and penalty under Section 40 of the Indian Stamp Act.
The opposite party has thereafter taken steps to tender the assessed
amount, as reflected in the impounding application dated 06.05.2025.
In law, upon payment of the deficit duty and penalty, the bar on
admissibility attaching to the instrument stands lifted, and the
Location: ORISSA HIGH COURT, CUTTACK
document becomes capable of being acted upon for the purposes of
adjudication.
34. However, the issue before this Court is not confined to the technical
admissibility of the lease document. The core question is whether,
after the passage of time and in light of the parties' conduct, the
dispute can now be diverted back to arbitration at all. The fact that the
stamp defect is curable does not, by itself, mandate a referral to
arbitration, particularly in the face of supervening circumstances of
waiver, submission to civil jurisdiction, and prior adjudication already
discussed.
35. It is undisputed that the opposite party delayed the payment of stamp
duty for nearly eight years, from 2017 until 2025, despite being fully
aware of the defect. This lapse is not a mere oversight but a material
equitable factor. It indicates that the opposite party treated the
arbitration agreement as inoperative for a prolonged period and only
sought to revive it when it became advantageous to do so. A party
cannot be allowed to derive benefit from its own default.
36. Further, Clause 19 of the lease places the burden of stamping upon the
lessee, i.e., the opposite party. If arbitration was truly intended, the
opposite party ought to have ensured proper stamping at the outset.
Instead, it used the unstamped status of the document first as a
weapon to oppose arbitration in court and prolong civil litigation and
later as a shield to assail the arbitrator's order. Such inconsistent and
dilatory conduct cannot be rewarded. Allowing a second attempt at
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arbitration at this late stage, when the civil suit has already
progressed, would undermine procedural discipline and incentivize
forum manipulation.
37. Our legal system frowns upon parties taking contrary stands to suit
their convenience, the doctrine of approbation and reprobation would
estopthe opposite party from now asserting the arbitration clause,
having earlier renounced it. Section 121 of the new BharatiyaSakshya
Adhiniyam, 2023 (Indian Evidence Act) encapsulates the principle of
estoppel: if a person by their declaration or conduct has caused
another to believe in a certain position and act on it, that person
"cannot later deny the truth of that matter in any legal proceeding involving
the same parties."
F. BAR AGAINST REVIVING ABANDONED CLAIMS: ORDER XXIII RULE 1
AND CONSTRUCTIVE RES JUDICATA.
38. A further material circumstance is the withdrawal of Civil Suit No.
598/2015 by the opposite party. On 05.12.2019, the opposite party
unilaterally sought to withdraw that suit under Order XXIII Rule 1 of
the Code of Civil Procedure, and there is nothing on record to indicate
that liberty to institute a fresh suit on the same cause of action was
either sought or granted. The learned Civil Judge accordingly
permitted the withdrawal and dismissed the suit as withdrawn.
39. By the express mandate of Order XXIII Rule 1(3) CPC, once a suit is
withdrawn without liberty, the plaintiff is barred from initiating any
fresh proceeding founded on the same cause of action. The underlying
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rationale is to prevent abuse of process and fragmented litigation: a
party who abandons its claim cannot reserve it for a second attempt
except with the court's permission, which is granted only in
exceptional circumstances.
40. The disputes raised in C.S. 598/2015 are substantially identical to those
which the opposite party now seeks to press by way of arbitration. To
pursue them in a different forum after voluntarily withdrawing the
suit amounts to an attempt at re-agitation of abandoned claims. Such
a course is impermissible, both under the CPC's prohibition against
claim revival after withdrawal and on the broader principle of
constructive res judicata.
41. The Supreme Court has recently extended the Order XXIII Rule 1
principle to arbitration petitions as well. In M/s HPCL Bio-Fuels Ltd.
v. M/s Shahaju Bhanudas Bhad8, the Court held that if a party
unconditionally withdraws an application for appointment of
arbitrator (Section 11) or abandons an arbitration proceeding without
reserving rights, it amounts to abandoning the arbitration itself,
barring a subsequent attempt on the same cause. The relevant
excerpts are produced below:
"If that is so, the unconditional withdrawal of a Section
11(6) petition amounts to abandoning not only the formal
prayer for appointing an arbitrator but also the substantive
prayer for commencing the actual arbitration proceedings. It
amounts to abandoning the arbitration itself. It results in
abandonment of the notional 'arbitration proceeding' that
2024 INSC 851.
Location: ORISSA HIGH COURT, CUTTACK
had commenced by virtue of Section 21 and thus amounts to
an abandonment of a significant nature. Therefore, it is all
the more important to import and apply the principles
underlying Order 23 Rule 1 of the CPC to abandonment of
applications under Section 11(6)."
42. The underlying rationale is that a cause of action cannot be pursued in
multiple innings once a party voluntarily abandons the first attempt.
In the abovementioned precedent, the Supreme Court applied the
logic of Order XXIII Rule 1 CPC to arbitral proceedings and held that
a second request for arbitration on the same disputes is barred where
the first has been withdrawn without liberty. The Court carved out a
narrow exception only for genuinely new disputes arising after the
earlier proceedings, an exception that is not attracted here, since the
dispute continues to arise from the same lease transaction of 2012.
43. Although the said judgment arose in the context of a Section 11
petition, its reasoning squarely applies to the present case. The
opposite party first instituted a civil suit and subsequently abandoned
it. It had also initiated arbitral proceedings earlier (in ARBP No.
39/2013) and allowed them to lapse, thereafter submitting to the civil
court's jurisdiction. These steps, taken cumulatively, signify an
unequivocal abandonment of the arbitral forum. In such
circumstances, the bar under Order XXIII operates with full force,
preventing a party from re-opening the same cause of action in a
different forum after having relinquished it once.
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44. Even in the writ jurisdiction, the Supreme Court in Sarguja Transport
Service v. State Transport Appellate Tribunal, Gwalior9 held that
allowing a second petition after the first has been withdrawn without
liberty would encourage forum-shopping and bench hunting. The
Court extended the principle underlying Order XXIII to writ
proceedings on grounds of public policy, and held that a petitioner
who withdraws a writ petition without permission should be deemed
to have abandoned that remedy in relation to the same cause of
action. The relevant excerpts are produced below:
"The point for consideration is whether a petitioner after
withdrawing a writ petition filed by him in the High Court
under Article 226 of the Constitution of India without the
permission to institute a fresh petition can file a fresh writ
petition in the High Court under that Article. On this point
the decision in Daryao's case (supra) is of no assistance. But
we are of the view that the principle underlying rule 1 of
Order XXIII of the Code should be extended in the interests
of administration of justice to cases of withdrawal of writ
petition also, not on the ground of res judicata but on the
ground of public policy as explained above. It would also
discourage the litigant from indulging in bench-hunting
tactics. In any event there is no justifiable reason in such a
case to permit a petitioner to invoke the extraordinary
jurisdiction of the High Court under Article 226 of the
Constitution once again. While the withdrawal of a writ
petition filed in a High Court without permission to file a
fresh writ petition may not bar other remedies like a suit or
a petition under Article 32 of the Constitution of India since
such withdraw- al does not amount to res judicata, the
remedy under Article 226 of the Constitution of India
1987 AIR 88.
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should be deemed to have been abandoned by the petitioner
in respect of the cause of action relied on in the writ petition
when he withdraws it without such permission."
45. By parity of reasoning, the opposite party here, having abandoned its
suit, cannot be allowed to pursue the same cause in a different forum
(arbitration) as that would defeat the policy against repetitive
litigation. The door to an arbitral adjudication of the lease dispute was
effectively shut by the opposite party's own procedural decisions in
the past.
G. BAR AGAINST REVIVING ABANDONED CLAIMS: ORDER XXIII RULE 1
AND CONSTRUCTIVE RES JUDICATA.
46. The review petitioner has alleged that the opposite party consistently
failed to disclose material facts across various proceedings, including
the rejection of the Section 8 application, the pendency of C.S.
462/2017, and its own earlier pleadings questioning arbitrability.
Without entering into findings of mala fides in these review
proceedings, it is sufficient to note that the record reflects a pattern of
shifting positions depending on the forum: before the civil court, the
opposite party challenged the arbitration clause on the ground of
insufficient stamping, whereas in arbitral proceedings and the related
writ, it downplayed the extent of its participation in the civil forum.
Significant orders, including that dated 17.05.2018 rejecting the
Section 8 application, were apparently not brought to the notice of the
arbitrator or to the learned Single Judge when extensions were sought.
Location: ORISSA HIGH COURT, CUTTACK
47. This conduct reinforces the view that equitable considerations do not
favour the opposite party's request to change forums at this stage. It is
settled law that a litigant must approach the court with clean hands
and must disclose all material facts. Non-disclosure of an adverse
order, such as the rejection under Section 8, is a serious omission. Had
that order been disclosed, the outcome of the writ petition permitting
continuation of arbitration may have been different. Now that the
complete factual matrix is before this Court in review, we are duty-
bound to give effect to its legal consequences, so that no party gains
an undue advantage by withholding material information.
V. CONCLUSION:
48. For the reasons set out above, this Court is satisfied that the portion of
the judgment dated 11.04.2025 passed in W.P.(C) No. 32426/2022,
which permitted continuation of arbitration upon payment of stamp
duty and penalty, suffers from an error apparent on the face of the
record. That direction was issued without consideration of material
facts and binding orders which, had they been brought to notice,
would have led to a different conclusion. The parties had already
elected the civil forum, and such election stood judicially affirmed
when the Civil Judge (Sr. Division), Puri rejected the Section 8
application on 17.05.2018. That rejection was never challenged under
Section 37 of the Arbitration and Conciliation Act, 1996 and has
therefore attained finality. Permitting arbitration at this stage would
run contrary to that judicial determination, disregard the bar against
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re-agitating abandoned claims, and disturb the settled course of the
proceedings. In these circumstances, the disputes arising from the
lease deed fall to be adjudicated to their logical end in the pending
civil suit, C.S. 462/2017, where evidence is underway, rather than
being bifurcated between parallel fora.
49. The Review Petition is, accordingly, allowed. The judgment dated
11.04.2025 is reviewed to the limited extent that the direction
permitting continuation of arbitral proceedings after stamping is
recalled and set aside. As a consequence, the arbitration initiated in
ARBP No.39/2013, along with all proceedings and orders of the
learned arbitrator, thereafter, shall stand terminated as non est in law.
The disputes between the parties shall be adjudicated in Civil Suit No.
462/2017 pending before the Court of the Additional Civil Judge
(Senior Division), Puri, which has rightly assumed jurisdiction. The
parties are directed to extend full cooperation for expeditious disposal
of the said suit, and no parallel proceedings shall be pursued with
respect to the subject matter.
50. Interim order, if any, passed earlier stands vacated.
(Dr. Sanjeeb K Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 29th November, 2025/
