SOLARIS CHEM TECH INDUSTRIES LTD versus ASSISTANT EXECUTIVE ENGINEER KARNATAKA URBAN WATER SUPPLY AND DRAINAGE BOARD & ANR.

Citation: [2023] 15 S.C.R. 463 · Decided: 10-10-2023 · Supreme Court of India · Bench: D.Y. CHANDRACHUD, J.B. PARDIWALA, MANOJ MISRA · Disposal: Disposed off

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Judgment (excerpt)

[2023] 15 S.C.R. 463 : 2023 INSC 916
463
CASE DETAILS
SOLARIS CHEM TECH INDUSTRIES LTD
v.
ASSISTANT EXECUTIVE ENGINEER KARNATAKA URBAN 
WATER SUPPLY AND DRAINAGE BOARD & ANR.
(Civil Appeal No. 6609 of 2023)
OCTOBER 10, 2023
[DR. DHANANJAYA Y. CHANDRACHUD, CJI, 
J.B. PARDIWALA AND MANOJ MISRA, JJ.]
HEADNOTES
Issue for consideration: Whether the High Court was justifi ed in 
dismissing the Writ Petition and the Writ Appeal on the strength of Clause 
11 of the agreements between the parties; and whether there was a valid 
arbitration agreement between the parties, justifying the referral to the Chief 
Engineer under Clause 11.
Arbitration and Conciliation Act, 1996 – ss. 7(1), 2(b) – Valid 
arbitration agreement – On facts, in terms of Clause 11 of the 
agreements, any dispute that would arise between the parties would be 
resolved fi rstly by mutual discussion and on a failure of the process, by 
referring the matter to the Chief Engineer whose decision would be fi nal 
and binding – Writ petition challenging the notice demanding arrears 
of tariff  for the supply of water – Single Judge declined to entertain the 
petition and relegated the petitioner to the contractual remedy in terms 
of the agreement – Division Bench upheld the same – Correctness:
Held: Clause 11 does not constitute an arbitration agreement – Clause 
11.2 of the agreement does not constitute the Chief Engineer as an arbitral 
tribunal – Agreements do not postulate that the Chief Engineer would 
adjudicate upon the disputes between the parties nor is there any provision 
to the eff ect that the Chief Engineer would resolve the dispute after letting in 
evidence or allowing the parties an opportunity of presenting their respective 
cases before them – Forum comprising the Chief Engineer lacks the trappings 
of an arbitral forum – Chief Engineer is an employee of the Board – Though 
464 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
the Single Judge was of the view that Clause 4 of the agreement empowered 
the Board to revise its rates, nonetheless, without dealing with the power 
and the manner of its exercise any further, the High Court relegated the 
appellant to the remedy under Clause 11 before the Chief Engineer – High 
Court ought not to have relegated the parties to the Chief Engineer on the 
strength of Clause 11 – It would have been appropriate if the High Court 
had fi nally determined the challenge addressed by the appellant in the writ 
proceedings u/Art. 226 of the Constitution – Division Bench exclusively 
relied on the provisions of Clause 11 while coming to the conclusion that the 
dispute between the parties fell within the ambit of the clause – Provision for 
settlement of disputes contained in Clause 11 does not constitute the Chief 
Engineer as an arbitral tribunal since he cannot be regarded as an impartial 
offi  cer nor do the provisions of Clause 11 incorporate the trappings of an 
arbitral tribunal – Both the judgment of the Single Judge and the Division 
Bench set aside. [Paras 16-18, 22-26]
Arbitration – Valid arbitration agreement – Conditions to be 
satisfi ed – Stated. [Para 19]
LIST OF CITATIONS AND OTHER REFERENCES
Jagdish Chander v. Ramesh Chander (2007) 5 SCC 719 : [2007] 5 
SCR 720; Jaipur Jila Dugdh Utpadak Sahkari Sangh Limited v. Ajay Sales 
and Suppliers 2021 SCC OnLine SC 730; Voestalpine Schienen GMBH v. 
Delhi Metro Rail Corporation Limited (2017) 4 SCC 665 : [2017] 1 SCR 
798; Ellora Paper Mills Ltd. v. State of M.P (2022) 3 SCC 1 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED 
ORDER AND APPEARANCES
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6609 of 2023.
From the Judgment and Order dated 18.06.2018 of the High Court of 
Karnataka Circuit Bench at Dharwad in WA No. 100073 of 2018.
Appearances:
Dalip Kumar Malhotra, Adv. for the Appellant.
Darpan KM, Ms. Amrita Sharma, Ms. Rashi Bansal, Rajat Jonathan 
Shaw, Advs. for the Respondents.
465
JUDGMENT / ORDER OF THE SUPREME COURT
ORDER
1. Leave granted.
2. This appeal arises from a judgment dated 18 June 2018 of a Division 
Bench of the High Court of Karnataka at the Dharwad Bench. The Division 
Bench has dismissed a Writ Appeal and thereby affi  rmed the correctness 
of an order dated 27 February 2018 of a Single Judge dismissing the writ 
petition fi led by the appellant.
3. The appellant set up a factory in 1975 for the manufacture of Caustic 
Soda at Village Binaga in North Kanara District, Mysore. On 5 July 1971, 
an agreement was entered into between the Government 

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