IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Civil Review No. 60 of 2009 Judgment reserved on: 30.4.2010 Date of decision: July 16, 2010 Amit Singla ….Petitioner Versus HP Agro Industries Corporation Ltd. & Anr. …Respondents Coram The Hon’ble Mr. Justice R.B. Misra, Judge. Whether approved for reporting ? For the Petitioner: Mr. Atul Jhingan, Advocate For Respondent No. 1: Mr. Gupreet Singh, Advocate For Respondent No. 2: Mr.R.K. Bawa, Advocate General, with Mr. J.K.Verma, Deputy Advocate General Justice R.B.Misra, J. Heard learned counsel for the parties. 2. Present review petition has been preferred on behalf of respondent No 1/review petitioner, H.P. Agro Industries Corporation for recalling the order, dated 9th October, 2009, passed in Arbitration Case No. 30 of 2009. In Arbitration Case No. 30 of 2009, following were the parties:- “M/s Amit Singla through its Sole Proprietor, Amit Singla, Booth No. 23, Sector 27-D, Chandigarh. ..Petitioner Versus 1. H.P.Agro Industries Corporation through its Managing Director, Ground Floor, Nigam Vihar Complex, Shimla- 171 002. 2 2. The Secretary (PW) to the Government of Himachal Pradesh, Shimla-171 002.” 3. The review of the order, dated 9th October, 2009, is being sought under ‘The Arbitration and Conciliation Act’ (in short called as the ‘Act’ hereinafter )on the ground that when the matter was taken up and heard on 9.10.2009, a bonafide impression was given by the parties to this court that the present parties have agreed for appointment of an Arbitrator and accordingly, the order dated 9th October, 2009 was passed. In fact, out of the parties arrayed as above, the review petitioner, namely H.P. Agro Industries Corporation, through its Managing Director, was not represented on the relevant day, as such was not heard, as the name of the counsel appearing for the said party was not even reflected in the cause list of 9.12.2009, as such, the learned counsel could not put in his appearance before the court for the review petitioner. The review petitioner came to know about the order, dated 9th October, 2009 only when a notice was received by the Corporation for initiation of arbitration proceeding on 4.11.2009. 4. Learned counsel for the petitioner while placing reliance on the decision of this court dated 9.10.2009 passed in OMP(M) 33 of 2008, preferred in Arbitration Case No. 10 of 2007, has submitted that this court i.e. learned Single Judge or Chief Justice may pass order in review petition and recall its earlier order. 3 5. Learned counsel for the review petitioner has also placed reliance on the decision of Supreme Court reported in BSNL and others Vs. Subhash Chandra Kanchan and another, (2006) 8 SCC 279 where the appellant ‘BSNL required under Arbitration Clause to communicate the appointment of Arbitrator, had failed to do so within the time specified under Section 11 of the ‘Act’ and the application was filed by the respondent under Section 11 of the ‘Act’ before the High Court . The appellant ‘BSNL’ and its officials consented the High Court to appoint one of the persons named by the respondent as Arbitrator and on such assumption, the High Court appointed a person as Arbitrator on consent. Subsequently, an application under Section 151 CPC was presented by the appellant/BSNL for modification of the above order on the ground that no such consent has been given. The High Court refused to recall its order. Hon’ble Supreme Court has observed in reference to the legality of the refusal order of the High Court that the appellant/BSNL by consenting to appoint Arbitrator, waived its right to make appointment. Therefore, it was not open to the appellant/BSNL to subsequently contend that no consent was given by for an on behalf of the appellant/BSNL. The contention of the BSNL/appellant that counsel engaged for the appellant, who gave consent before the High Court, had no instruction in that behalf, was not accepted, as such, the statement was never made before the High Court. For 4 convenience, relevant paragraphs are extracted hereinbelow:- “19. Moreover, the application filed under Section 151 of the Code of Civil Procedure by the Appellant did not contain such statements. The High Court, thus, did not commit any error in recording that such a concession had in fact been made by the learned counsel. In a matter of this nature again, the High Court’s decision subject to just exception must be held to be final. 20. Furthermore, it terms of Order III, Rule 1 of the Code of Civil Procedure, a litigant is represented by an advocate. A concession made by such an advocate is binding on the party whom he represents. If it is binding on the parties, again subject to just exceptions, they cannot at a later stage resile therefrom. The matter may, however, be different if a concession is made on a question of law. A wrong concession on legal question may not be binding upon his client. Here, however, despite the stand taken by the Appellant in its written statement before the High Court the learned Advocate consented to appointment of a person as an arbitrator by the High Court in exercise of its jurisdiction under Section 11 of the 1996 Act, in our considered view, the same should not be permitted to be resiled from. A person may 5 have a legal right but if the same is waived, enforcement thereof cannot be insisted.” 6. The scope of reviewing an order, in the ‘Act’, in question, has to be seen in view of the decisions of Supreme Court and High Court made from time to time.: (A) In Patel Chunibhai Dajibha Vs. Narayanrao Khanderao Jambekar, AIR 1965 SC 1457, the Supreme Court has held that in absence of any power of review, learned Tribunal could not have subsequently reconsidered its previous decision and the subsequent order re-opening the matter was illegal, ultra-vires and without jurisdiction. (B) In Harbhajan Singh Vs. Karam Singh, AIR 1966 SC 641, the Apex Court has held that in absence of any provision in the Act granting express power of review, it is manifest that review could not be made and the order in review was ultra-vires, illegal and without jurisdiction and the High Court has rightly quashed it by the grant of writ under Article 226 of the Constitution. (C) While deciding the said case, the Supreme Court placed reliance on a large number of judgments, particularly in Drew Vs. Mills, 1891 (1) QB 450; Hession Vs. Johns, 1914 (2) KB 421; in Re: St. Nazaire Company, (1879) 12 Ch.D.. 88; and Baijnath Ram Goyanka Vs. Nand Kumar Singh, 14 Indian Appeal 54 (PC), wherein it had categorically 6 been held that the power of setting-aside an order, which has been made after hearing the arguments, does not lie unless it is given by the Statute. The Court, under the Statute, cannot review an order deliberately made after arguments and entertain a fresh argument upon it with a view to ultimately confirming or reversing it. The Courts may have limited power only to make a necessary correction if the order, as drawn up, did not express the intention of the Court. A party is entitled to assail the judgment only by the mode as indicated in the Statute and in absence of express provision of review, it cannot be entertained for the reason that review is practically the hearing of an appeal by the same Officer who decided the case. (D) In Patel Narshi Thakershi & Ors. Vs. Pradyumansinghji, Arjunsinghji, AIR 1970 SC 1273, the Apex Court has held that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication and in absence of any provision in the Act, review of an earlier order is impermissible. (E) In Maj. Chandra Bhan Singh Vs. Latafat Ullah Khan & Ors., AiR 1978 SC 1814, the Apex Court followed its earlier referred two judgments in Patel Chunnibhai Dajibhai (supra) and in Harbhajan Singh (supra) and has observed that it is well settled that 7 review is a creature of Statute and cannot be entertained in absence of a provision therefore. (F) In Dr. Smt. Kuntesh Gupta Vs. Management of Hindu Kanya Mahavidhyalaya, Sitapur, AIR 1987 SC 2186, the Supreme Court has observed as under:- “It is now established that a quasi-judicial authority cannot review its own order, unless the power of review is expressly conferred on it by the statute under which it derives its jurisdiction…. In the circumstances, it must be held that Vice Chancellor acted wholly without jurisdiction…. The said order of the Vice Chancellor dated March 7, 1987 was a nullity.” Similar view has been reitereated by the Supreme Court in State of Oissa & Ors. Vs. Commissioner of Land Records and Settlement, (1998) 7 SCC 162. (G) In Krishna Ashram Educational Trust Vs. District Judge, AIR 1995 All. 415, after placing reliance upon a large number of judgments of the Supreme Court, the Allahabad High Court held that in absence of a provision for review, the Authority becomes functus officio after deciding the case and it has no competence to entertain review application and change the order passed by it earlier. Nor the order/Award be review under the garb of clarification/rectification/correction. 7 It is necessary to give refer the decisions of Grindlays Bank v. Central Government Industrial Tribunal AIR 1981 SC 606. That was a case where the Tribunal made an ex parte award. The Respondents had 8 applied for setting aside the ex parte award on the ground that they were prevented by sufficient cause from appearing when the reference was called for hearing. The Tribunal set aside the exparte order on being satisfied that there was sufficient cause within the meaning of Order 9 Rule 13 of the Civil Procedure Code and accordingly set aside the exparte award. That award was upheld by the High Court and thereafter by the Supreme Court. The observations of the Supreme Court made in para 13 are relevant for thepurpose. The Court specifically referred to the judgment in Patel Narshi Thakershi's case (supra) in this paragraph. It noted the proposition that the power of review is not an inherent power, but it must be conferred either specifically or by necessary implication. The Court held that the Tribunal does not become functus officio once the exparte award is passed. An application, so long as it is filed within thirty days of the publication of the award, would be maintainable. Then it observed in this paragraph making a distinction between a procedural review and a review on merits. The pertinent observations are as follows: “13. ....Furthermore, different considerations arise on review. The expression "review" is used in two distinct senses, namely, (1) a procedural review which is either inherent or implied in a court or Tribunal to set aside a palpably erroneous order passed under a misapprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the record. It is in the latter 9 sense that the Court in Narshi Thakershi's case held that no review lies on merits unless a statute specifically provides for it, obviously when a review is sought due to a procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process, and such power inheres in every Court or Tribunal.” 8. This distinction between a procedural review and review on merits has been maintained by the Supreme Court in the subsequent judgments. Thus, in Sangham Tape Co. v. Hans Raj (205) 9 SCC 331= AIR 2004 SC 9776, the judgment in Grindlays Bank has been referred to with approval and has been explained. That was also a matter where an application was made for setting aside the exparte award made by the Industrial Court. The Supreme Court has held that so long as such an application is made before the expiry of thirty days, which is the period provided for commencement of the award under Section 17A of the Industrial Disputes Act, it would be maintainable. We find the same proposition reiterated later on in Kapra Mazdoor Ekta Union v. Birla Cotton Spinning and Weaving Mills Ltd. [(2005) 13 SCC 777 AIR 2005 SC 178)]. In para 19 of this judgment, the Supreme Court has pointed out some of the circumstances, which could be said to be those which will justify a power of review in the event of procedural errors. Undoubtedly, a review where a substantive right is not 10 created, specifically or by implication, would not be available. Para 19 of this judgment reads as follows: “19. Applying these principles it is apparent that where a court or quasi-judicial authority having jurisdiction to adjudicate on merit proceeds to do so, its judgment or order can be reviewed on merit only if the court or the quasi-judicial authority is vested with power of review by express provision or by necessary implication. The procedural review belongs to a different category. In such a review, the court or quasi-judicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so commits (sic) ascertains whether it has committed a procedural illegality which goes to the root of the matter and invalidates the proceeding itself, and consequently, the order passed therein. Cases where a decision rendered by the court or quasi-judicial authority without notice to the opposite party or under a mistaken impression that the notice had been served upon the opposite party, or where a matter is taken up for hearing and decision on a date other than the date fixed for its hearing, are some illustrative cases in which the power of procedural review may be invoked. In such a case, the party seeking review or recall of the order does not have to substantiate the ground that the order passed suffers from an error apparent on the face of the record or any other ground which may justify a review. He has to establish that the procedure followed by the Court or the quasi-judicial authority suffered from such illegality that it vitiated the proceeding and invalidated the order made therein, inasmuch the opposite party concerned was not heard for no fault of his, so that the 11 matter was heard and decided on a date other than the one fixed for hearing of the matter which he could not attend for no fault of his. In such cases, therefore, the matter has to be reheard in accordance with law without going into the merit of the order passed. The order passed is liable to be recalled and reviewed not because it is found to be erroneous, but because it was passed in a proceeding which was itself vitiated by an error of procedure or mistake which went to the root of the matter and invalidated the entire proceeding. In Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal, it was held that once it is established that the respondents were prevented from appearing at the hearing due to sufficient cause, it followed that the matter must be reheard and decided again.” 9. In view of what is stated above, it is clear that there is a distinction between the procedural review and the review on merits. As far as the review on merits is concerned, it has got to be either specifically provided or will have to be read into the provision by necessary implication. As far as the procedural review is concerned, the applicant must establish that the procedure followed by the court or the quasi-judicial authority suffered from such illegality that it vitiated the proceeding and invalidated the order made therein such as that the party concerned was not heard for no fault of the party. 10. As far as the Arbitration and Conciliation Act, 1996 is concerned, the scheme of the Act and the scope of the power of the Chief Justice under Section 11 of the Act came 12 to be considered by a Bench of seven Judges of the Apex Court in SBP & Co. v. Patel Engineering Ltd. (supra). The majority judgment held that the power exercised by the Chief Justice under Section 11(6) of the Act is a judicial power and not an administrative power. The Court noted that Sub-section (7) of Section 11 gives finality to the decision rendered by the Chief Justice or the person or the Institution designated by him when moved under Sub-section (4), or Sub-section (5), or Sub-section (6) of Section 11 (See para 6 of the judgment). The Court held that the Chief Justice is not a persona designata. The Court explained as to why the high functionary like the Chief Justice has been mentioned as the appointing authority under this Act. The Act was intended to comprehensively cover international and commercial arbitration and conciliations as also domestic arbitrations and conciliations. It envisages the making of arbitral procedure, which is fair, efficient and capable of meeting the needs of the arbitration concerned. Dragging a party to an arbitration when there existed no arbitration agreement or when there existed no arbitrable dispute, can certainly affect the right of that party, and, even on monetary terms, impose on him a serious liability for meeting the expenses of the arbitration, even if it be the preliminary expenses and his objection is upheld by the arbitral tribunal. Therefore, it is not possible to accept the position that no adjudication is involved in the constitution of an Arbitral Tribunal. The decision to appoint an Arbitrator has 13 been given a finality. The decision of Hon'ble Chief Justice of the High Court to appoint an Arbitrator can be challenged only in an appeal to the Supreme Court. The Court laid down that as to what the Chief Justice is supposed to decide when an application is made under Section 11 of the Act. In para 39 of the judgment, the Court observed as follows:- “39. It is necessary to define what exactly the Chief Justice, approached with an application under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own jurisdiction in the sense whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question whether the claim was a dead one; or a long-barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection.” 11. The Court in terms held that the order of the Chief Justice appointing an arbitrator could not be challenged by invoking the writ jurisdiction of the High Court since it was not an administrative decision. The Court gave its conclusions in para 47 as follows:- “47. We, therefore, sum up our conclusions as follows: (i). The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 14 11(6) of the Act is not an administrative power. It is a judicial power. (ii). The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another Judge of that Court and by the Chief Justice of India to another Judge of the Supreme Court. (iii). In case of designation of a Judge of a High Court or of the Supreme Court, the power that is exercised by the designated Judge would be that of the Chief Justice as conferred by the Statute. (iv). The Chief Justice or the designated Judge will have the right to decide the preliminary aspect as indicated in the earlier part of this judgment. These will be his own jurisdiction to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the designated Judge would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the designated Judge. (v). Designation of a District Judge as the authority under Section 11(6) of the Act by the Chief Justice of 15 the High Court is not warranted on the scheme of the Act. (vi) Once the matter reaches the Arbitral Tribunal or the sole arbitrator, the High Court would not interfere with the orders passed by the arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act or in terms of Section 34 of the Act. (vii) Since an order passed by the Chief Justice of the High Court or by the designated Judge of that Court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution to the Supreme Court. (viii) There can be no appeal against an order of the Chief Justice of India or a Judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act. (ix). In a case where an Arbitral Tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the Arbitral Tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act. (x). Since all were guided by the decision of this Court in Konkan Railway Corporation Ltd. v. Rani Construction (P) Ltd. and Ors. under Section 11(6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of 16 arbitrators or Arbitral Tribunals thus far made, are to be treated as valid, all objections being left to be decided under Section 16 of the Act. As and from this date, the position as adopted in this judgment will govern even pending applications under Section 11(6) of the Act. (xi). Where District Judges had been designated by the Chief Justice of the High Court under Section 11(6) of the Act, the appointment orders thus far made by them will be treated as valid; but applications if any pending before them as on this date will stand transferred, to be dealt with by the Chief Justice of the High Court concerned or a Judge of that Court designated by the Chief Justice. (xii). The decision in Konkan Rly. Corporation Ltd. v. Rani Construction (P) Ltd. is overruled. 12. As laid down by the aforesaid judgment, the decision to appoint an Arbitrator, arrived at by the Chief Justice, is a judicial decision. It has finality as specifically provided in Section 11(7) of the Act and it is appeal-able only to the Apex Court under Article 136 of the Constitution of India. In the scheme of the Act, there is no specific provision for review. 13. (i) The question of maintainability of an application for review of the order passed by the Chief Justice of India under Section 11 of the Act came up before the Court in Jain Studios Ltd. v. Shin Satellite Public Co. Ltd. reported at (2006) 5 17 SCC 501: AIR 2006 SC 2686. In paras 7 and 8 of the judgment, it was held as follows: “7. So far as the maintainability of review petition is concerned, in my opinion, the preliminary objection raised by the learned Counsel for the respondent is not well founded In Patel Engg. Ltd., this Court by a majority of 6:1 held the