LexMALIK BROTHERS versus NARENDRA DADHICH AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
MALIK BROTHERS
v.
NARENDRA DADHICH AND ORS.
AUGUST 25, 1999
B
[S. SAGHIR AHMAD AND G.B. PATTANAIK, JJ.]
Constitution of India, Article 226-Public Interest Litigation-Public
Auction-Highest bid accepted-Dispute between parties referred to
arbitration-Award of arbitrator challenged by third party under writ
C jurisdiction in. PIL-Award not challenged under provisions of Arbitration
Act-Whether PIL maintainable-Held, under the facts and circumstances,
interest of public is not {II all involved and PIL not maintainable-Provisions
of the Arbitration Act cannot be frustrated by recourse to writ jurisdiction-
Arbitration Act, 1940.
D
E
Arbitration Act, 1940,-Section 2 I-Scope of-Parties referring dispute
to an arbitrator-Reference to arbitrator challenged in PIL by third party-
Extraneous consideration alleged-Allegations not supported by material
evidence-Held, Section 2 I of Arbitration Act does not debar parties to refer
dispute between them for arbitration.
Appellant was the highest bidder in a public auction held by the Indore
Development Authority. The bid of appellant was accepted but when the
appellant failed to deposit the balance amount within the stipulated period,
the Development Authority forfeited the initial premium deposited !:>y the
F appellant which was challenged by the appellant and the dispute was referred
to an arbitrator. The arbitrator passed an award in favour of the appellant.
Respondent No.I, a tax payer of the Indore Municipality, filed a public
interest litigation petition under Article 226 of the Constitution of India
challenging the reference of the dispute to the arbitrator by the Authority
G and the award of the arbitrator on the ground that valuable piece of Government
land was being sold for a small price which would be grossly prejudicial to
public interest. High Court allowed the PIL petition and quashed the auction,
the reference of dispute to arbitrator and the award of the arbitrator on the
ground that there was violation of Section 21 of the Arbitration Act in
H referring the dispute to the arbitrator, and that appellant was being benefitted
732
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MALIK BROTHERS v. N. DADHICH
733
at the cost of public revenue by sale of land at a low price. Aggrieved by the A
order of the High Court, appellant has filed the present appeal.
Allowing the appeal, the Court
HELD: 1.1. It is necessary to bear in mind that a public interest
litigation is usually entertained by a court for the purpose of redressing B
public injury, enforcing public duty, protecting social rights and vindicating
public interest. The real purpose of entertaining such application is the
vindication of the rule of law, effective access to justice to the economically
weaker class and meaningful realisation of the fundamental rights. The
directions and commands issued by the courts of law in a public interest
litigation are for the betterment of the society at large and not for benefitting C
any individual. But if the court finds that in the garb of a public interest
litigation actually an individual's interest is sought to be carried out or
protected, it would be the bounding duty of the court not to entertain such
petition as otherwise the very purpose of innovation of public interest litigation
would be frustrated. It is in fact a litigation in which a person is not D
aggrieved personally but bring an action on behalf of down-trodden mass for
the redressal of their grievance. (734-G-H; 7'35-A-B)
1.2. The respondent in the name of a tax payer of the municipality has
protracted a public interest litigation in which in fact really, interest of the
public is not at all involved and the High Court has entertained the petition E
and has not only set aside a public auction held at large but also quashed
an award of a competent arbitrator thereby frustrating the provisions of the
Arbitration Act fully. The very act of entertaining the application as a public
interest litigation at the behest of respondent No.I, who had absolutely no
interest in the transaction was improper. (736-A, B, C; 738-C, DJ
Sachidanand Pandey and Anr. v. State of West Bengal and Ors., (1987)
2 SCC 295 and Ramshwaran Autyanuprasi and Anr. v. Union of India and
Ors., (1989) Suppl. 1 SCC 251, relied on.
F
2. There is not an iota of material to indicate that the decision of the G
Improvement Trust in referring the dispute to the arbitrator was either for
extraneous consideration or had noExcerpt shown. Read the full judgment & AI analysis in Lexace.