State Of Orissa & Ors vs Gokulananda Jena

State of Orissa in this appeal has challenged the order of

the High Court of Orissa at Cuttack dated 8.4.2002 made in

O.J.C.No.1483 of 2002. In the said writ petition, the State of

Orissa had challenged the validity of an order made by the

Judge designated by the Chief Justice of the said court for

appointing an Arbitrator under Section 11(6) of the Arbitration

and Conciliation Act, 1996 (the 'Act').

The High Court after referring to a judgment of this

Court delivered by a Constitution Bench in the case of M/s.

Konkan Railways Corporation Ltd. & Anr. vs. M/s. Rani

Construction Pvt. Ltd. (2002 2 SCC 388) came to the

conclusion that a writ petition under Article 226 of the

Constitution of India questioning the correctness of an order

made by the Designated Judge under Section 11(6) of the Act is

not maintainable because the said order is an administrative

order and this Court in the case of M/s. Konkan Railway

(supra) has held that such an order cannot be challenged before

this Court under Article 136 of the Constitution of India.

Drawing an analogy from the said judgment, the High Court

came to the conclusion that even a writ petition under Article

226 of the Constitution of India will not be maintainable.

We think this view of the High Court as to the non-

maintainability of a writ petition against an order made by the

Designated Judge under Section 11(6) of the Act cannot be

sustained.

It is to be noted that an administrative order is amenable

to the writ jurisdiction under Article 226 of the Constitution of

India and we find such an order made by the Designated Judge

under Section 11(6) of the Act is not an exception to this rule.

The power of the High Court under Article 226 to entertain a

writ petition cannot be equated with the power of the Supreme

Court to entertain an appeal under Article 136 of the

Constitution of India. The power of the High Court to entertain

a writ petition is an original power while power of this Court

while entertaining an appeal under Article 136 of the

Constitution is an appellate power.

The Constitution Bench in the case of M/s. Konkan

Railway (supra) itself has held that an order which is the subject

of the petition for special leave to appeal under Article 136

must be an adjudicatory order, that is, an order which has

adjudicated upon the rival contentions of the parties. In that

context, this Court in M/s.Konkan Railways case has held that

an order made by the Designated Judge under Section 11(6) of

the Act is not an order in which the Designated Judge

adjudicates parties rights, hence, it is in the nature of an

administrative order against which an appeal under Article 136

does not lie. This Court in that judgment has not stated that an

order being an administrative order, same cannot also be

challenged under Article 226 of the Constitution for good and

valid reasons. Therefore, in our opinion, the High Court was

wrong in coming to the conclusion that an order made by the

Designated Judge under Section 11(6) of the Act is not

amenable to the writ jurisdiction of the High Court.

However, we must notice that in view of Section 16 read

with Sections 12 and 13 of the Act as interpreted by the

Constitution Bench of this Court in the M/s. Konkan Railway

(supra) almost all disputes which could be presently

contemplated can be raised and agitated before the Arbitrator

appointed by the Designated Judge under Section 11(6) of the

Act. From the perusal of the said provisions of the Act, it is

clear that there is hardly any area of dispute which cannot be

decided by the Arbitrator appointed by the Designated Judge. If

that be so, since an alternative efficacious remedy is available

before the Arbitrator, writ court normally would not entertain a

challenge to an order of the Designated Judge made under

Section 11(6) of the Act which includes considering the

question of jurisdiction of the Arbitrator himself. Therefore, in

our view even though a writ petition under Article 226 of the

Constitution is available to an aggrieved party ground available

for challenge in such a petition is limited because of the

alternative remedy available under the Act itself.

Having come to the conclusion that a writ petition under

Article 226 is maintainable as against the order made by the

Designated Judge under Section 11(6) of the Act on limited

grounds, we will now consider whether such grounds are

available to the petitioner to challenge the order of the

designated court in the case in hand. For this purpose, we have

noticed the grounds raised in the said writ petition, a copy of

which has been enclosed with this petition.

The challenge of the appellant in the writ petition against

the order of the Designated Judge is based on the following

facts :

(i) The contract between the parties was executed

before the Act came into force, hence, the act does

not apply;

(ii) Dispute is a stale one having arisen nearly 20 years

ago.;

(iii) Clause 23 of the agreement contemplates the

adjudication of a dispute by a company arbitrator.

(iv) No person other than an arbitrator nominated in

Clause 23 of the argument has any jurisdiction to

entertain the disputes.

All these grounds of attack, in our opinion, can very well

be raised before the Arbitrator appointed by the Designated

Judge, hence, on the facts of the case, we find the writ petition

of the appellant was liable to be dismissed by the High Court.

For this reason, we do not think it appropriate to remand the

matter back to the High Court. Therefore, we dismiss this

appeal permitting the appellant to raise all its contentions before

the Arbitrator appointed by the Designated Judge.

C.A.No………./2003 (Arising out of SLP©No.592/2003).

Leave granted

Heard learned counsel for the parties.

The issues involved in this appeal both on facts and in

law being identical with the issues involved in the

C.A.No………./2003 @ SLP©No.478/2003, this appeal is also

liable to be dismissed for the reasons mentioned in the said civil

appeal. The appeal is dismissed. No costs.