Writ Petition Is Not An Appropriate Remedy To Seek Enforcement Of Arbitral Award: Delhi High Court

The Delhi High Court bench of Justice Jyoti Singh held that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. The court found merit in the preliminary objection of the Railways that a writ is not the appropriate remedy for the petitioner to seek enforcement of the arbitral award. Further, the court held that it is prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure under the enactment and this power under Article 226 needs to be exercised in exceptional rarity, wherein one party is left remediless under the Statute, or a clear 'bad faith' is shown by one of the parties. Brief Facts of the case: The dispute arose with respect to a Lease Agreement for leasing parcel space in brake vans in train for a period of 3 years. After the expiry of the lease the petitioner sent a request to the Railways for extension of 2 years, but they declined. Then, the petitioner filed a petition under Section 9 of the Arbitration & Conciliation Act, 1996 and the court allowed the petitioner to operate the lease at the highest bid amount. The petitioner invoked the arbitration clause, and Railways appointed a sole Arbitrator. The Arbitrator passed an award rejecting the claim of the petitioner for refund of Rs.5,54,079/. Aggrieved by this, the petitioner challenged the award under Section 34 of the Act and the court set aside the award but didn't provide any relief to the petitioner in the judgment. Thus, the petitioner filed an application under Section 151 and 152 of CPC rectification/clarification of judgment. But the court rejected the application contending that t as the award had been set aside, necessary consequences would follow as per law, and it was not for the court to give directions and to accept the claims of the petitioner. Aggrieved by this, the petitioner filed an appeal under Section 37 of the Act, but the court dismissed the appeal as it was barred by limitation as it was filed after a delay of 621 days without giving any sufficient cause. After this, the petitioner filed a writ petition seeking a direction to the respondents to refund an amount of Rs.5,54,079/- along with interest @ 18 per cent per annum. Observation of the Court: The court observed that the question that this Court is first called upon to decide is whether this writ petition is maintainable for enforcement/execution of the arbitral award. In my view, there is merit in the preliminary objection of the Railways that writ is not the appropriate remedy for the petitioner to seek enforcement of the arbitral award. Further, the court held that while the jurisdiction of the High Court under Article 226 cannot be ousted as this is an inviolable part of the Constitution of India yet it is a matter of prudence for the High Court to not exercise the discretion when the remedy lies in a statutory regime and as observed by the Supreme Court in Bhaven Construction through Authorized Signatory Premjibhai K. Shah v. Executive Engineer, Sardar Sarovar Narmada Nigam Limited and Another, (2022), the exercise of writ jurisdiction must be in 'exceptional rarity'. Additionally, the court noted that the petitioner has succeeded in his challenge to the arbitral award and as held by the Single Judge setting aside the award, in a clarification application, the natural consequences of setting aside the award would flow. The petitioner did not take recourse to appropriate remedies despite the observations of the Court and in the facts and circumstances of this case where no case of exceptional rarity is pointed out, there is no cause warranting interference in a writ jurisdiction. Moving further the court referred the judgment in Nivedita Sharma v. Cellular Operators Association of India and Others, (2011), wherein the court held that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. Also, the court held that it is prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure under the enactment and this power under Article 226 needs to be exercised in exceptional rarity, wherein one party is left remediless under the Statute, or a clear 'bad faith' is shown by one of the parties. Then, the court analysed the judgement in Dakshin Haryana Bijli Vitran Nigam Limited v. Navigant Technologies Private Limited, (2021) relied by the petitioner and held that this judgment was of no avail to the petitioner. As in that judgment, the Supreme Court has held that where the court sets aside the award passed by majority Members of the Tribunal, the underlying disputes would require to be decided afresh in appropriate proceedings. The expression 'appropriate proceedings', would...

Writ Petition Is Not An Appropriate Remedy To Seek Enforcement Of Arbitral Award: Delhi High Court

Soumya Chakrabarti

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Writ Petition Is Not An Appropriate Remedy To Seek Enforcement Of Arbitral Award: Delhi High Court

Soumya Chakrabarti

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