Court rules Section 34(5) notice mandatory for arbitration cases; intra-court appeal permissible under Article 226. District Judge acts as tribunal.

The High Court allowed the appeal, determining that the issuance of a prior notice under Section 34(5) of the Arbitration and Conciliation Act, 1996, is mandatory. The court held that the intra-court appeal was maintainable under Article 226 of the Constitution of India, as it involved a question of law. Additionally, the court clarified that the District Judge, when exercising jurisdiction under Section 34, functions as a tribunal with court-like attributes.

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Issues Involved:
1. Whether issuance of a notice under Section 34(5) of the Arbitration and Conciliation Act, 1996, is mandatory or directory.
2. Whether an order made contrary to the provisions of Section 34(5) of the Act is amenable to Article 227 or 226 of the Constitution of India.
3. Whether a District Judge, while exercising power under Section 34 of the Act, functions as a Civil Court or a tribunal.

Issue-wise Detailed Analysis:

1. Issuance of Notice under Section 34(5) of the Arbitration and Conciliation Act, 1996:
The core issue is whether the issuance of a notice under Section 34(5) of the Arbitration and Conciliation Act, 1996, is mandatory or directory. The High Court analyzed the legislative intent behind the amendment introduced by the Arbitration and Conciliation (Amendment) Act, 2015, which aimed at expediting the disposal of arbitration matters. The court observed that the language of Section 34(5), which uses the words "shall" and "only," indicates a mandatory requirement. The court emphasized that the purpose of the amendment was to ensure that applications challenging arbitration awards are disposed of within a stipulated time frame, and non-compliance with the notice requirement would defeat this objective. The court concluded that the issuance of a prior notice is a condition precedent for filing an application under Section 34 and is mandatory in nature.

2. Amenability of Orders to Article 227 or 226 of the Constitution of India:
The court discussed the distinction between Articles 226 and 227 of the Constitution of India. Article 226 confers original jurisdiction on High Courts to issue writs, while Article 227 grants supervisory jurisdiction over subordinate courts and tribunals. The court noted that the nature of the jurisdiction invoked and the relief sought determine whether an order falls under Article 226 or 227. In this case, the appellant challenged the order of the District Judge under Article 227, but the court found that the application was essentially under Article 226, as it involved a question of law regarding the mandatory nature of the notice requirement under Section 34(5). Therefore, the court held that the present intra-court appeal was maintainable under Article 226.

3. Jurisdiction of District Judge under Section 34 of the Act:
The court examined whether a District Judge, while exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, functions as a Civil Court or a tribunal. The court referred to the definition of "Court" under Section 2(e) of the Act, which includes the principal Civil Court of original jurisdiction. However, the court distinguished between a civil court of ordinary jurisdiction and a tribunal. The court observed that while the principal civil court exercises judicial functions under Section 34, it does so with limited jurisdiction, akin to a tribunal. The court concluded that the District Judge, in this context, functions as a tribunal with the trappings of a court.

Conclusion:
The High Court allowed the appeal, holding that the issuance of a prior notice under Section 34(5) of the Arbitration and Conciliation Act, 1996, is mandatory. The court also held that the present intra-court appeal was maintainable under Article 226 of the Constitution of India, as the original application involved a question of law. The court further clarified that the District Judge, while exercising jurisdiction under Section 34, functions as a tribunal with the trappings of a court.

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