Erroneous Findings By Courts Below Not Ground To Invoke Article 227, "Manifest Miscarriage Of Justice" Required: Jammu & Kashmir High Court

The Jammu and Kashmir and Ladakh High Court has recently dismissed a petition filed under Article 227 of the Constitution of India against an order passed by the trial court, which referred a dispute for arbitration. It observed that erroneous finding by the courts below on facts and law cannot justify for approaching the court under Article 227 unless manifest miscarriage of justice has occurred due to the order passed by the courts below.

Article 227 empowers the High Court to exercise superintendence over all courts and tribunals in the territory in relation to which it has jurisdiction, but it is not an appellate or revisional jurisdiction. The High Court can only intervene if there is a manifest error of law or a manifest miscarriage of justice, and not on the mere interpretation of a document or agreement.

Justice Puneet Gupta made this observation in a case pertained to a suit filed by the petitioner seeking permanent prohibitory injunction against the defendants, who were allegedly appointing a third party as the authorized main dealer for a company's products.

The defendants had filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking the referral of the dispute to arbitration, which was upheld by the trial court. Aggrieved of the same the petitioner filed an appeal which also came to be dismissed. Consequently, the petitioner then filed a petition under Article 227 of the Constitution of India, challenging both the trial court and appellate court's orders.

In his plea the petitioner submitted that the courts below have misread the arbitration agreement executed between the parties and the arbitration clause which is contained in the said agreement on the basis of which the case has been decided by the courts.

It is also pleaded that the trial court should have framed the issue of maintainability of the suit instead of disposing of the main suit itself on the application filed by the defendants in terms of Section 8 of the Arbitration and Conciliation Act.

Dismissing the petition on the grounds that the jurisdiction of the court cannot be invoked under Article 227 of the Constitution of India in the present case, the bench noted that the petitioner's remedy lies elsewhere, and that the court cannot interpret the clauses of the agreement and the applicability of the same with respect to the dispute raised by the party in the suit.

The court further emphasized that the circumstances in which the jurisdiction of the court under Article 227 can be invoked are well-settled and that the erroneous findings by the courts below on facts and law cannot justify approaching the High Court under Article 227 unless a manifest miscarriage of justice has occurred due to the order passed by the courts below.

The bench also pointed out that the parties had tried to interpret the agreement in their own way to convince the court about its applicability, which was not the court's role. The court, therefore, dismissed the petition as misconceived, but gave the petitioner the liberty to avail of the remedy available to them under law.

Case Title: M/s Ajay Auto Mobiles Vs TVS Motor Company Ltd. and others

Citation: 2023 LiveLaw (JKL) 97

Click Here To Read/Download Judgement