Judicial orders must be obeyed unless set aside, and reliance on them may justify non-appearance in arbitration proceedings

A judicial order cannot be treated as void or ignored by an arbitrator merely because a party believes civil court jurisdiction is excluded; until set aside by the issuing court, it must be obeyed and given effect. Applying that principle, the respondent society had sufficient cause for non-appearance because it had obtained an interim restraint order and could reasonably expect the arbitration not to proceed. The ex parte proceedings were therefore unfair, and the award was liable to be set aside. Fresh bi-parte hearing before a newly appointed arbitrator was required, and the appeal failed.

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Issues: (i) Whether an interim restraint order passed by a civil court could be treated as a nullity and ignored by the arbitral authority under the Delhi Cooperative Societies Act, 1972; (ii) Whether the respondent society had sufficient cause for its non-appearance before the arbitrator and whether the ex parte proceedings and award deserved to be set aside.

Issue (i): Whether an interim restraint order passed by a civil court could be treated as a nullity and ignored by the arbitral authority under the Delhi Cooperative Societies Act, 1972.

Analysis: The existence of statutory provisions excluding civil court jurisdiction does not, by itself, justify disregarding a judicial order. A party or authority cannot assume for itself that a civil court order is coram non judice and therefore inoperative. So long as the order is not set aside by the court that passed it, it must be obeyed and given effect. The proper course is to approach the court that issued the order and seek recall or clarification on jurisdictional grounds.

Conclusion: The civil court's restraint order could not be treated as a nullity to be ignored by the arbitrator.

Issue (ii): Whether the respondent society had sufficient cause for its non-appearance before the arbitrator and whether the ex parte proceedings and award deserved to be set aside.

Analysis: The society had obtained an interim restraint order from the civil court and could reasonably have believed that the arbitrator would not proceed further. In that situation, the absence of the society before the arbitrator was not treated as a wilful default. The ex parte proceeding was therefore considered unfair, and the proper course was to afford both sides a bi-parte hearing before a fresh arbitrator, especially as the original arbitrator had died in the meantime.

Conclusion: The ex parte proceedings and award were liable to be set aside and the matter required fresh hearing before a newly appointed arbitrator.

Final Conclusion: The appeal failed, and the High Court's direction for a fresh bi-parte adjudication before a newly appointed arbitrator was maintained with clarification as to the stage from which the proceedings would resume.

Ratio Decidendi: A judicial order, unless set aside by the issuing court, cannot be treated as void and ignored by a party or authority on its own assessment of jurisdiction; and a party acting on such an order may have sufficient cause for non-appearance in subsequent proceedings.

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