1999 (8) TMI 743 - SC - Companies Law

Supreme Court: Section 11 Orders Administrative, Not Judicial

Ador Samia (P.) Ltd. Versus Peekay Holdings Ltd.

The Supreme Court held that orders by the Chief Justice under section 11(6) of the Arbitration and Conciliation Act are administrative, not judicial, and ... Special leave petition under article 136 of the Constitution of India challenging an order of the learned Chief Justice of the High Court of Bombay in Arbitration Petition Held that:- Appeal dismissed. In view of this settled legal position, therefore, there is no escape from the conclusion that orders passed by the learned Chief Justice under section 11(6) of the Act being of an administrative nature cannot be subjected to any challenge directly under article 136. Only on this short ground and without expressing any opinion on the merits of the controversy between the parties this special leave petition is disposed of as not maintainable. Issues:Challenge to order of the Chief Justice of the High Court in an arbitration petition under the Arbitration and Conciliation Act, 1996. Jurisdiction of the Supreme Court under Article 136 for orders under section 11 of the Act.Analysis:The petitioner moved a special leave petition under Article 136 challenging an order of the Chief Justice of the High Court in an arbitration petition under section 11(6) of the Arbitration and Conciliation Act, 1996. The Supreme Court referred to the case of Sundaram Finance Ltd. v. NEPC India Ltd. where it was established that orders under section 11 are not judicial orders. The Court emphasized that the appointment of arbitrators under the Act does not require the court to pass a judicial order. It was clarified that the Chief Justice or his designate acts in an administrative capacity under section 11(6) and not in a judicial function or as a tribunal with judicial authority. The maintainability of a petition under Article 136 was discussed, citing the case of Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh, where it was held that for an order to be challengeable under Article 136, it must be of a judicial or quasi-judicial character, not purely administrative or executive, and should be passed by a court or tribunal in India.The Supreme Court further referred to observations made by Gajendragadkar, CJ. in the Indo-China Steam Navigation case, emphasizing that even though certain actions may require a quasi-judicial approach, the entities involved, such as customs officers, are not courts or tribunals. The Court reiterated that for an order to be appealable under Article 136, it must meet the criteria of being of a judicial or quasi-judicial nature and not purely administrative or executive, and must have been passed by a court or tribunal in India. Based on these legal principles and precedents, the Court concluded that orders passed by the Chief Justice under section 11(6) of the Act are administrative in nature and cannot be directly challenged under Article 136. The special leave petition was disposed of as not maintainable, leaving other remedies available to the petitioner untouched.In summary, the judgment clarified the nature of orders under section 11 of the Arbitration and Conciliation Act, emphasizing their administrative rather than judicial character. It established the legal position that such orders cannot be directly challenged under Article 136 of the Constitution, citing relevant precedents and legal principles regarding the appealability of orders of a judicial or quasi-judicial nature. The Court's decision was based on the distinction between administrative and judicial functions, ensuring that the appropriate legal remedies are pursued for challenging orders in arbitration matters.