Case: Alka Chandewar Vs. Shamshul Ishrar Khan

The facts necessary to appreciate the point involved in this appeal are that on 7th October, 2010, the sole Arbitrator appointed by the parties passed an interim order under Section 17 of the said Act, in which it was mentioned that no further flats were to be disposed of without the leave of the Arbitral Tribunal. In breach of this order, it is alleged that on 14th October, 2010 the respondent in fact transferred five such flats. By the order passed on 22nd March, 2012, it was held by the learned Arbitrator that the order of 7th October, 2010 had, in fact, been breached by the respondent and certain other interim directions were made by the aforesaid order. Ultimately, by an order dated 5th May, 2014, the learned Arbitrator referred the aforesaid contempt of the order dated 7th October, 2010 to the High Court to pass necessary orders thereon under Section 27(5) of the Act3. In the judgment under appeal, the High Court held:In view of the above discussion, Section 27(5) of the Arbitration and Conciliation Act, 1996 does not empower the Tribunal to make representation to the Court for contempt if the orders including the interim orders passed by the Arbitrator except in respect of taking evidence are violated by the party. The Contempt Petition being the representation made by the Tribunal is beyond the period of limitation and is not maintainable in law. Moreover, the final award of L 8 crores is granted in favour of the petitioner by the Arbitrator.

Reasoning: 7. If Section 27(5) is read literally, there is no difficulty in accepting the plea of learned senior advocate for the appellant, because persons failing to attend in accordance with the court process fall under a separate category from any other default. Further, the Section is not confined to a person being guilty of contempt only when failing to attend in accordance with such process. The Section specifically states that persons guilty of any contempt to the Arbitral Tribunal during the conduct of the Arbitral proceedings is within its ken. The aforesaid language is, in fact, in consonance with the Chapter heading of Chapter V, Conduct of arbitral proceedings. Further, it is well settled that a marginal note can be used as an internal aid to interpretation of statutes only in order to show what is the general drift of the section. It may also be resorted to when the plain meaning of the section is not clear. In the present case we must go by the plain meaning ofn (5). This being the case, we find it difficult to appreciate the reasoning of the High Court. Also, in consonance with the modern rule of interpretation of statutes, the entire object of providing that a party may approach the Arbitral Tribunal instead of the Court for interim reliefs would be stultified if interim orders passed by such Tribunal are toothless. It is to give teeth to such orders that an express provision is made in Section 27(5) of the Act9. Coming to Shri Rana Mukherjees submission thatn (2) of Section 17 introduced by the 2015 Amendment Act now provides for the necessary remedy against infraction of interim orders by Tribunal, suffice it to state that the Law Commission itself, in its 246th report, found the need to go one step further than what was provided in Section 27(5) as construed by the Delhi High Court (supra)10. Pursuant to this report,) to Section 17 was added by the Amendment Act 2015, so that the cumbersome procedure of an Arbitral Tribunal having to apply every time to the High Court for contempt of its orders would no longer be necessary. Such orders would now be deemed to be orders of the Court for all purposes and would be enforced under the Civil Procedure Code, 1908 in the same manner as if they were orders of the Court. Thus we do not find Shri Rana Mukherjees submission to be of any substance in view of the fact that Section 17(2) was enacted for the purpose of providing a complete solution to the problem