Court Dismisses Writ Against Private Parties; Objections on Arbitral Award Enforcement Clarified

Rajendra Kamal Versus. A.B.M. Developers (P) Ltd. And Ors.

Rajendra Kamal Versus. A.B.M. Developers (P) Ltd. And Ors. - TMI Issues Involved:

1. Maintainability of the writ petition under Article 226 of the Constitution of India.
2. Legality of the arbitral award and its enforceability.
3. Jurisdiction of the civil court under Section 36 of the Arbitration and Conciliation Act, 1996.
4. Allegations of fraud and collusion in the development agreement and arbitral award.
5. Applicability of the Civil Procedure Code provisions in arbitral award enforcement.

Issue-wise Detailed Analysis:

1. Maintainability of the writ petition under Article 226 of the Constitution of India:

The petitioner sought relief under Article 226 and 227 of the Constitution of India. However, the court noted that a writ petition under Article 226 is mainly a remedy in public law against the state or its instrumentalities. The court highlighted that all respondents in the writ petition were private persons not discharging any public duty. The court referenced the Supreme Court ruling in Radhey Shyam v. Chhabi Nath, which clarified that judicial orders of civil courts are not amenable to a writ of certiorari under Article 226. Consequently, the court concluded that the application could only be accepted under Article 227, invoking the supervisory jurisdiction of the court.

2. Legality of the arbitral award and its enforceability:

The respondent No. 2, Baptist Church Trust Association (B.C.T.A.), entered into a registered development agreement with respondent No. 1, A.B.M. developers. Following a dispute, an arbitrator was appointed, and an award was passed upholding the development agreement. The B.C.T.A. filed an application under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the award, which was dismissed. Respondent No. 1 then filed Execution Case No. 41 of 2011 for enforcement of the award under Section 36 of the Act, 1996. The petitioner filed an objection under Section 47 of the Civil Procedure Code, claiming the award was obtained by fraud and collusion. The court below dismissed the objection, stating such objections were not permissible at the enforcement stage.

3. Jurisdiction of the civil court under Section 36 of the Arbitration and Conciliation Act, 1996:

The court examined whether the enforcement proceeding under Section 36 of the Act, 1996, is a proceeding under the Civil Procedure Code. It concluded that the proceeding for enforcement of an arbitral award is under the Act, 1996, and not under the Civil Procedure Code. The court referenced the Supreme Court ruling in Paramjeet Singh Patheja v. ICDS Ltd., which clarified that an arbitration award is not a decree and the deeming fiction for enforcement is limited to that purpose only. The court further reinforced this conclusion by referencing Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., which held that the Act, 1996, is a self-contained code, excluding the applicability of general law procedures.

4. Allegations of fraud and collusion in the development agreement and arbitral award:

The petitioner alleged that the B.C.T.A. fraudulently executed the development agreement and collusively obtained the arbitral award. The court noted that such allegations of fraud in transactions relating to immovable property are disputed questions of fact and beyond the jurisdiction of the court under Article 227. The court emphasized that the power of the court is referable to its actual power and that the provisions of the Civil Procedure Code for raising objections to the award's executability are excluded in proceedings under Section 36 of the Act, 1996.

5. Applicability of the Civil Procedure Code provisions in arbitral award enforcement:

The court examined whether the provisions of the Civil Procedure Code, including Section 47 and Order 21 Rule 97 to 101, apply to proceedings under Section 36 of the Act, 1996. It concluded that the express exclusion of judicial intervention under general law procedures, as envisaged in Section 5 of the Act, 1996, means that such provisions do not apply. The court held that the prayer to annul the award at the enforcement stage under the Civil Procedure Code is not tenable.

Conclusion:

The writ application under Article 227 was dismissed, with the court refraining from expressing an opinion on the merits of the petitioner's claims. The court observed that the petitioner's right to seek redressal of grievances in accordance with the law remains unaffected by this judgment.