M/S DEEP INDUSTRIES LIMITED versus OIL AND NATURAL GAS CORPORATION LIMITED & ANR.

Citation: [2019] 17 S.C.R. 995 · Decided: 28-11-2019 · Supreme Court of India · Bench: R.F. NARIMAN, ANIRUDDHA BOSE, V. RAMASUBRAMANIAN · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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M/S DEEP INDUSTRIES LIMITED
v.
OIL AND NATURAL GAS CORPORATION LIMITED & ANR.
(Civil Appeal No. 9106 of 2019)
NOVEMBER 28, 2019
[ROHINTON FALI NARIMAN, ANIRUDDHA BOSE
AND V. RAMASUBRAMANIAN, JJ.]
Constitution of India: Art. 227 – Exercise of jurisdiction by
the High Court u/Art. 227 – In matters decided under the
Arbitration and Conciliation Act, 1996 – On facts, termination of
contract by respondent due to supply of second hand product by
the appellant – Commencement of arbitration proceedings –
Meanwhile, respondent blacklisted appellant for a period of two
years – Appellant filed application u/s. 17 before the arbitrator
against the ban – Appellant also filed application u/s. 16 which
was dismissed – Thereafter, disposal of s. 17 application by the
arbitrator with the condition that the two year ban will only operate
if appellant ultimately loses the final arbitration proceedings – Said
order upheld in appeal – First appeal filed u/s. 37 dismissed by
the civil court – Application u/Art. 227 filed before the High Court
by the respondent – High Court allowed the petition – On appeal,
held: Art. 227 is a constitutional provision which remains untouched
by the non-obstante clause of s. 5 of the Act – Though petitions
can be filed u/Art.227 against judgments allowing or dismissing
first appeals u/s. 37 of the Act, yet the High Court would be
extremely circumspect in interfering with the same, taking into
account the statutory policy as adumbrated so that interference is
restricted to orders that are passed which are patently lacking in
inherent jurisdiction – High Court inverted this statutory scheme
by going into exactly the same matter as was gone into by the
arbitrator in s.16 application – Entering into the general thicket
of disputes between the parties does not behove a court exercising
jurisdiction u/Art. 227, where only jurisdictional errors can be
corrected – Arbitral tribunal was well within its jurisdiction in
referring to the contract and the ban order and then applying the
law and finally issuing the stay order – More so, merely because,
the first appeal was disposed of by a court subordinate to the High
   [2019] 17 S.C.R. 995
995
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SUPREME COURT REPORTS
[2019] 17 S.C.R.
Court, an Art. 227 petition ought not to have been entertained –
Arbitration and Conciliation Act, 1996 – ss. 5, 37,
Arbitration and Conciliation Act, 1996: Policy and object
of – Held: Policy of the Act is speedy disposal of arbitration cases
– Object of the Act is that of minimizing judicial intervention which
should always be kept in the forefront when Art. 227 petition is
being disposed of against proceedings decided under the Act.
Allowing the appeal, the Court
HELD: 1.1 The Arbitration Act is a special act and a self
contained code dealing with arbitration. The policy of the Act is
speedy disposal of arbitration cases. The object of the Act being
that of minimizing judicial intervention. This object should always
be kept in the forefront when a 227 petition is being disposed
of against proceedings that are decided under the Act. [Para 14,
17] [1008-H; 1010-F]
SBP & Co. v. Patel Engineering Ltd. & Another
(2005) 8 SCC 618 : [2005] 4 Suppl. SCR 688 –
followed.
Fuerst Day Lawson Limited v. Jindal Exports Limited,
(2011) 8 SCC 333 : [2011] 11 SCR 1 – referred to.
1.2 Section 29A of the Arbitration and Conciliation Act,
1996 which was inserted by the Amendment Act, 2016 a time
limit was made within which arbitral awards must be made,
namely, 12 months from the date the arbitral tribunal enters
upon the reference. Even so far as Section 34 applications are
concerned, Section 34(6) added by the same amendment states
that these applications are to be disposed of expeditiously, and
in any event, within a period of one year from the date on which
the notice referred to in sub–section (5) is served upon the other
parties. Given the said statutory provision and given the fact that
the 1996 Act repealed three previous enactments in order that
there be speedy disposal of all matters covered by it, it is clear
that the statutory policy of the Act is that not only are time limits
set down for disposal of the arbitral proceedings themselves but
time limits have also been set down for Section 34 references
to be decided. [Para 10, 11] [1004-D-F]
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Union of India v. M/s Varindera Const. Ltd. (2020) 2
SCC 111 – referred to.
1.3 Most significant of all is the non–obstante clause
contained in Sectio

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