TMI Blog2016 (10) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenging the award under Section 34 of the 1996 Act. Issuance of a previous notice and filing of an affidavit cannot be claimed to be prevented under any situation. The requirement is simple and can always be followed. Whether the present appeal is maintainable and whether the original petition was under Article 227 or 226 of the Constitution of India? - Held that:- Since the filing of the proceeding under Section 34 of the 1996 Act before the learned District Judge is against the statute, the subsequent order, dated 18.07.2016, cannot cure the initial illegality - Patent appeal not maintainable. Appeal allowed. - Letters Patent Appeal No. 1841 of 2016 in Civil Writ Jurisdiction Case No. 746 of 2016 - - - Dated:- 28-10-2016 - I.A. Ansari, C.J. and Dr. Ravi Ranjan, J. For the Appellant : Y.V. Giri, Senior Advocate, Rajesh Prasad Choudhary and Ashish Giri, Advocates For the Respondents : Ravi Ranjan, AC to SC 22 JUDGMENT I.A. Ansari, C.J. 1. The core issue, which this appeal has raised, is: whether issuance of a notice, under sub-Section (5) of Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the 1996 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 Act, to the appellant bank before making of the application under Section 34(5) of the 1996 Act, seeking to get the award set aside, the decision of the learned District Judge to proceed with the application, made under Section 34 of the 1996 Act, is untenable in law. It is contended that by the order under appeal, the very purpose of the amendment, brought in to the 1996 Act by the Arbitration and Conciliation (Amendment) Act, 2015, by way of Section 18, with effect from 23.10.2015, has been made redundant. 3. Aggrieved by the order, dated 18.07.2016, aforementioned, the appellant bank impugned the said order in a petition filed under Article 227 of the Constitution of India. A learned single Judge of this Court has, disagreeing with the contention of the appellant bank that the decision of the learned District Judge, Patna, of issuing notice through his order, dated 18.07.2016, was bad since there was non-adherence to the requirement of issuance of a prior notice as per the provisions embodied in Section 34(5) of the 1996 Act, which, according to learned counsel for the appellant, is mandatory in nature, and held that Section 34(5) of the 1996 Act is merely directory and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised in the present appeal, as already indicated above, is whether a notice, under Section 34(5) of the 1996 Act, is mandatory or directory in nature. 8. The two questions, so posed, bring us to yet another question and the question is: Whether a District Judge, while exercising power under Section 34(5) of the Act, functions as a Civil Court or merely as a Court or a tribunal? SCOPE OF ARTICLE 226 VIS-@-VIS. ARTICLE 227 9. There is no dispute before us that as against an order, made under Article 226 of the Constitution of India, and intra-Court appeal, under Clause 10 of the Letters Patent of Patna High Court, lies. There is also no dispute that whereas an order, made under Article 226 of the Constitution of India, is an appealable order under Clause 10 of the Letters Patent of Patna High Court, no intra-Court appeal lies as against an order, which has been passed in exercise of power under Article 227 of the Constitution of India. 10. Articles 226 and 227 of the Constitution of India stand on distinctly different footing. Every High Court has been conferred with the power to issue writs under Article 226 of the Constitution of India and these are original proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory rights. The jurisdiction, under Article 227 of the Constitution of India, is exercised by the High Court for vindication of its position as the highest judicial authority in the State. 17. In certain cases, where there is infringement of fundamental right, the relief, under Article 226 of the Constitution, can be claimed ex debito justitiae or as a matter of right. But, in the cases, where the High Court exercises its jurisdiction under Article 227 of the Constitution of India, such exercise is entirely discretionary and no person can claim it as a matter of right. From an order of a single Judge passed under Article 226 of the Constitution of India, a letters patent appeal or an intra Court appeal is maintainable; but no such appeal is maintainable from an order passed by a Single Judge of a High Court in exercise of power under Article 227 of the Constitution of India. (See Shalini Shyam Shetty v. Rajendra Shankar Patil, reported in (2010) 8 SCC 329). 18. Having analyzed a number of its decisions, the Supreme Court in Shalini Shyam Shetty v. Rajendra Shankar Patil, reported in (2010) 8 SCC 329), has culled out following principles with regard to exercise of power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eep strict administrative and judicial control by the High Court on the administration of justice within its territory. (g) The power of interference, under Article 227 of the Constitution of India, is to be kept to the minimum to ensure that the wheels of justice do not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and courts subordinate to the High Court. 19. This power of superintendence, therefore, under Article 227 of the Constitution of India, is not to be exercised just for grant of relief in individual cases, but should be directed for promotion of public confidence in the administration of justice in the larger public interest; whereas Article 226 of the Constitution of India is meant for protection of individual grievance. 20. Thus, though the power, under Article 227 of the Constitution of India, may be unfettered, its exercise is subject to high degree of judicial discipline pointed out above. An improper and a frequent exercise of this power will be counter-productive and will divest this extraordinary power of its strength and vitality. (See, Shalini Shyam Shet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h powers. (See Ashok K. Jha v. Garden Silk Mills Ltd., reported in (2009) 10 SCC 584). 25. In Ramesh Chandra Sankla v. Vikram Cement, reported in (2008) 14 SCC 58, the Supreme Court has held that a statement, made by a learned Single Judge, that he has exercised power under Article 227 of the Constitution of India, cannot take away right of appeal against such a judgment if power is, otherwise, found to have been exercised under Article 226 of the Constitution of India. 26. Clarified the Supreme Court, in MMTC v. CCT, reported in, (2009) 1 SCC 8, that a High Court shall consider the nature of the controversy, the nature of relief, which is sought for, and the nature of the order, which might have been passed by a single Judge of the High Court in order to decide if the order has been made under Article 226 or 227 of the Constitution of India. 27. Let us, first, consider the question as to whether the petition, in the present case, filed under Article 227 of the Constitution of India, was essentially an application under Article 227 of the Constitution of India or was an application essentially made under Article 226 of the Constitution of India. This can be culled out from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivered a separate, but concurring judgment. He observed that all tribunals were not courts, though all courts were tribunals. The expression ^courts' was used to designate those tribunals, which were set up in an organized State for the administration of justice. By administration of justice was meant the exercise of the judicial power of the State to maintain and uphold rights and to punish wrongs. Whenever there was an infringement of a right or an injury, the courts were there to restore the vinculum juris . When rights were infringed or invaded, the aggrieved party could go and commence a 'querela' before the ordinary civil courts. These courts were invested with the judicial power of the State and their authority was derived from the Constitution or some Act of legislature constituting them. Their number was ordinarily fixed and they were ordinarily permanent and could try any suit or cause within their jurisdiction. Their numbers might be increased or decreased, but they were almost always permanent and went under the compendious name of Courts of Civil Judicature . There could be no doubt that the Central Government did not come within this class. With the grow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andard of conduct and was free from bias or interest. Courts and tribunals acted judicially in both senses and in the term 'courts' were included the ordinary and permanent tribunals and in the term 'tribunals' were included all others which were not so included. The matter would have been simple if the Companies Act had designated a person or persons, whether by name or by office, for the purpose of hearing an appeal under Section 111. It would then have been clear that though such person or persons were not 'courts' in the sense explained, they were clearly 'tribunals'. The Companies Act said that an appeal would lie to the Central Government. The court was, therefore, faced with the question whether the Central Government could be said to be a tribunal. The function that the Central Government performed under the Companies Act and Rules was to hear an appeal against the action of the directors. For that purpose a memorandum of appeal setting out the grounds had to be filed and the company, on notice, was required to make representations, if any, and so also the other side, and both sides were allowed to tender evidence to support their representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a tribunal if it did not have all the trappings of a court. In other words, certain special matters go to tribunals and the residue goes to the ordinary courts of civil judicature. 37. Mr. Y.V. Giri, learned Senior counsel, for the appellant has argued that the 'principal Civil Court', under Section 2(e) of the 1996 Act, is not a Civil Court in real sense. He has relied upon the decision of the Supreme Court, in Nahar Industrial Enterprises Limited v. Hong Kong and Shanghai Banking Corporation and others, reported in (2009) 8 SCC 646, to support his contention. In Nahar Industrial Enterprises Limited (supra), the Supreme Court has pointed out the essentials of a civil court by indicating that the court must be able to pass a decree as also must be capable of undertaking a full-fledged trial in terms of the provisions of the Code of Civil Procedure and/or the Evidence Act. Only because a court is competent to adjudicate an issue of civil nature does not necessarily lead to the inference, nor can it be held, that the court, so dealing with a case, is a civil court. 38. Learned Counsel for the State, on the other hand, argues that the District Judge, exercising jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputes of civil nature. Only because a court or tribunal is entitled to determine an issue involving civil nature, the same by itself would not lead to the conclusion that it is a civil court. For the said purpose, as noticed hereinbefore a legal fiction is required to be created before it would have all attributes of a civil court. 89. The tribunal could have been treated to be a civil court provided it would pass a decree and it had all the attributes of a civil court including undertaking of a full-fledged trial in terms of the provisions if the Code of Civil Procedure/or the Evidence Act. It is now trite law that jurisdiction of a court must be determined having regard to the purpose and object of the Act. If parliament, keeping in view the purpose and object there of thought it fit to create separate Tribunal so as to enable the banks and the financial contained in the code of Civil Procedure as also the Evidence Act need not necessarily be restored to, in our opinion, by taking recourse to the doctrine of purposive construction, in another jurisdiction account be conferred upon it so as to enable this court to transfer the case from the civil court to a Tribunal. 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 44. Cautioning that jurisdiction under Article 226 is not in the nature of appellate jurisdiction, the Supreme Court, in G. Veerappa Pillai (supra), held that however extensive the jurisdiction under Article 226 may be, it is not so wide or large as to enable the High Court to convert itself into a court of appeal and examine for itself the correctness of the decision impugned and decide what is the proper view to be taken or the order to be made. 45. In this context, it would be pertinent to mention that in Radhey Shyam v. Chhabi Nath, reported in (2015) 5 SCC 423, the Supreme Court, while dealing with the validity of the ratio, laid down in the case of Surya Dev Rai v. Ram Chander Rai, reported in (2003) 6 SCC 675 whether a writ of certiorari would lie against an order of the civil court observed as follows; 11. It is necessary to clarify that the expression judicial acts is not meant to refer to judicial orders of civil courts as the matter before this Court arose out of the order of the Election Tribunal and no direct decision of this Court, except Surya Dev Rai, has been brought to our notice where writ of certiorari may have been issued against an order of a j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC 128), too, the Supreme Court has made it clear that ....nomenclature under which petition is filed is not quite relevant and that does not debar the court from exercising its jurisdiction, which, otherwise, it possesses unless there is special procedure prescribed, which procedure is mandatory . 50. If a judgment under appeal falls squarely within the four corners of Article 227, an 'intra court' appeal from such a judgment would not, under the rules of the High Court, be maintainable. If, on the other hand, the petitioner has invoked the jurisdiction of the High Court for issuing a writ under Article 226, although Article 227, too, is mentioned, and, principally, the judgment, appealed against, falls under Article 226, the appeal would be maintainable. What is important to be ascertained is the true nature of the order and not what provisions have been mentioned, while passing the order by a learned Single Judge. (See Ashok K. Jha and other v. Garden Silk Mills Limited and another, reported in (2009) 10 SCC 584. This apart, what must also be borne in mind is that exercise of power, under Article 226 or even under Article 227, depends upon what facts have been broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceable to, Article 226. The vital factor for determination of maintainability of an 'intra court' appeal, arising out of a writ proceeding, is the nature of jurisdiction invoked by the party, the true nature of order passed by a Single Judge and the nature of relief, which a party may be entitled to. 54. The discussions undertaken so far lead us to following conclusions; a) That the principal civil court, while exercising powers under Section 34 of the Arbitration and Conciliation Act, 1996, is not a Court of civil judicature; rather, it only a tribunal with the trappings of Court. b) Orders of the judicial courts stand on a different footing from the quasi-judicial orders of authorities or tribunals. c) A writ of certiorari can be issued, under Article 226, in grave cases, where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record, and such act, omission, error, or excess has resulted in manifest injustice. d) A statement, made by a learned single Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o section 23 of the Act in order to ensure that counter claims and set off can be adjudicated upon by an arbitrator without seeking a separate/new reference by the respondent, provided that the same falls within the scope of the arbitration agreement. The Commission has also recommended mandatory disclosures by the prospective arbitrators in relation to their ability to devote sufficient time to complete the arbitration and render the award expeditiously. 58. It is worth noting that the amendment to Section 34(5) of 1996 Act finds reference, at paragraph 25, in the 246th Report of the Law Commission, which has been brought in as Section 35(6) of 1996 Act. The original proposed amendment to Section 34(4) was, ultimately, brought in the 1996 Act by way of Section 34(5). Things would get clearer once both the amended Sections 34(5) and (6) of 1996 Act, are reproduced hereinbelow: Sec 34 (1) XX XX XX (2) xx xx xx (3) xx xx xx (4) xx xx xx (5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition of law that no universal rule can be formulated as to whether an enactment shall be considered directory or mandatory except that language alone most often is not decisive, and regard must be had to the context, subject-matter and object of the statutory provision, in question, in determining whether it is mandatory or directory. In an oft-quoted passage, Lord Campbell said No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be considered . Therefore the question, as to whether the statute is mandatory or directory, depends upon the intent of the legislature and not upon the language in which the intent is clothed. The meaning and intention of the legislature must govern and these are to be ascertained not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences, which would follow from construing it one way or the other. 64. We are reminded of a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant, has relied upon the decision of the Supreme Court, in Bihari Choudhary and Anr. v. The State of Bihar and Ors., reported in (1984) 2 SCC 627, to boost his argument that if a provision directs for doing a particular thing in a particular way, the same needs to be done in that way only and no variation in doing of thing can be condoned and accepted. The case relates to a suit with prayer for relief of declaration of title and for delivery of possession of the property with mesne profits sought against the State of Bihar. The plaintiffs, in that suit, had issued a notice, under Section 80 of the Code of Civil Procedure, prior to the institution of the suit, but filed the suit before the expiration of the statutory period of two months. The State of Bihar took a plea in that respect. The learned Munsif dismissed the suit, finding the statutory notice defective. The want of proper notice was upheld by both the first appellate court as well as by the second appellate court, i.e., by the High Court of Patna. The matter was carried, in appeal, before the Supreme Court and the Supreme Court has, in Bihari Choudhary (supra), held, at paragraph Nos. 4 and 6, as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of natural justice as per clause (4) of the Statement of Objects and Reasons. Which reads as under: To provide speedy and simple redressal to consumer disputes, quasi-judicial machinery is sought to be set up at the district, State and Central levels. These quasi-judicial bodies will observe the principles of natural justice and have been empowered to given relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for noncompliance of the orders given by the quasi-judicial bodies have also been provided. (emphasis supplied) 9. Thus the intention to provide a time frame to file reply, is really meant to expedite the hearing of such matters and to avoid unnecessary adjournments to linger on the proceedings on the pretext of filing reply. The provision however, as framed, does not indicate that it is mandatory in nature. In case the extended time exceeds 15 days, no penal consequences are prescribed therefor. The period of extension of time not exceeding 15 days, does not prescribe any kind of period of limitation. The provision appears to be directory in nature, which the consumer forums are ordinarily supposed to apply, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court was regarding interpretation of entry under the U.P. Sales Tax Act for the purpose of taxation and whether the goods prepared by the appellant falls within the particular entry or not. The entry provided that if the goods are prepared by using copper, tin, nickel or zinc or any other alloy containing any of these metals only the tax would be assessed at 1% else the tax would be 3.5 per cent. The Supreme Court, in Saru Smelting (P) Ltd. (supra), held that the expression only is very material for understanding the meaning of the entry. Since the alloy, in dispute, contains Phosphorous, may be in a very small quantity, it cannot fall within Entry 2(a) of the aforesaid Notification. 70. It could be understood from the decision, in Saru Smelting (P) Ltd. (supra), that Supreme Court interpreted the expression only as conveying exclusivity. In other words as opposed to the doctrine of ejusdem generis, the expression only limits the implantation of the provision in the manner indicated and admits no other exception. 71. One may point out that the dictionary meaning of the word 'only' is 'no other'. The word 'only' is used for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lects exclusiveness and conveys negativity of the power meaning thereby that had a case, under the new Code, not been made over for trial to an Additional or Assistant Sessions Judge by the Sessions Judge of the division or had the State Government not directed a case to be tried by an Additional or Assistant Sessions Judge, such a Judge derived no jurisdiction to try such a case, under the old Code, as a Court of Session, for Sub-section (2) of Section 193 used the word 'only'. 75. Let us, now, turn to the case Bhatia International v. Bulk Trading S.A., reported in (2002) 2 SCR 411, wherein a three Judge Bench considered the effect of the omission of the word 'only' used in the UNCITRAL Model Law. Article 1(2) of the UNCITRAL Model Law reads, The provisions of this law, except Articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of this State. As against what Section 1(2) aforementioned reads, Sub-section (2) of Section 2 of the Arbitration and Conciliation Act, 1996 states, This part shall apply where the place of arbitration is in India. 76. From a bare reading of Section 1(2) of the UNCITRAL vis-`-vis. Section 2(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instance of the principal civil Court, is saved and the litigation can be brought to an end at the earliest possible time. If the provisions of Section 34(5) are held to be directory, then, the service of notice may also be done at the instance of principal civil Court, which would mean that if in a given case, the notice is served after three months, the length of litigation gets extended by three months more than the period envisaged under Section 34(6). 79. It may be pointed out that Section 34(6) also uses the expression and in any event . This means the period of litigation, in no circumstances, should exceed 1 (one) year. If the contrary view is adopted, then, the entire purpose of amendment would be rendered otiose. 80. Coupled with the above, it can be seen that the legislature intended to make Section 34(5) as a condition precedent before an application can be taken up for hearing. An analogy can be drawn with reference to Section 80 of Code of Civil Procedure, which provides that save as otherwise provided in sub-section (2), no suit shall be instituted against the Government (including the Government of the State of Jammu and Kashmir) or against a public offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient time of two months are served on the Government or its officials, as contemplated, there is no inherent right to file a suit against the Government; so is the case at hand. Unless there is compliance with the statutory need of sending a prior notice, there is no inherent right of filing the application, under Section 34 of the 1996 Act, challenging an award. If there is no right to initiate a proceeding, its continuation, if filed, ignoring the statutory provision, does not give right to its continuation. It cannot be regularized by subsequent issuance of notice by the learned Court below. The notice, as prescribed by Section 34 of the 1996 Act, is mandatory before proceeding with the filing of an application under Section 34 of the 1996 Act. 83. Viewed from another aspect, a party may be prevented for divergent reasons from filing its written statement in time. The reasoning, once put forwarded, and the court finds the same as exceptional, there is ground for accepting the written statement even when the same is found to have been filed beyond the time prescribed under the law. Here, the same analogy does not fit in or can be applied. The State has not cited any exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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