Supreme Court of India
DALPAT SINGH NARUKA & ANR. versus KARUNA BANSAL & ORS. on 21 April 2022
[2022] 3 S.C.R. 139
DALPAT SINGH NARUKA & ANR.
v.
KARUNA BANSAL & ORS.
(Civil Appeal Nos. 3651-3653 of 2022)
April 21, 2022
[N. V. RAMANA, CJI, KRISHNA MURARI ANDHIMA KOHLI, JJ.]
Arbitration and Conciliation Act, 1996 – ss.9 and 37 – Scopeof appeal – Limited jurisdiction vested u/s.37 – Interim orders passedby High Court in appeals preferred by respondents u/s.37, beingaggrieved by order passed by the Commercial Court, dismissingapplication for interim relief filed by the respondents u/s.9 – Held:By passing the impugned orders, the High Court acted in excess ofthe limited jurisdiction vested in it u/s.37 – The scope of the appealpreferred by the respondents u/s.37 ought to be confined toexamining the merits of the order passed by the Commercial Courtthat refused to grant any interim measures in favour of respondentson the application moved by them u/s.9 – However, respondentshave managed to take appeal proceedings on an entirely differenttrajectory – As a result, the Appellate Court conducted a rovingand fishing inquiry relating to the manner in which investigationwas being conducted in respect of FIR registered at the instance ofthe respondents, to the point that not only was a status report andthe case diary called for, the Investigating Officer was alsosummoned and subsequently, the investigation was been transferredto the Special Operation Group – None of the three impugned orderscould have been passed by the Appellate Court in proceedingsarising from an order passed u/s.9 – If the respondents have anygrievance regarding the unfair or partial manner of the investigationconducted in respect of the FIR registered on their complaint, it isfor them to seek appropriate legal recourse before the competentcourt on the criminal side – However, the proceedings initiated bythe respondents u/s.37 can certainly not be permitted to be misusedand virtually highjacked towards this end – Impugned orders ofHigh Court are accordingly quashed and set aside – High Court todecide appeal preferred by the respondents strictly in accordancewith law and well within the parameters contemplated u/s.37.
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ACIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3651-3653 of 2022.
From the Judgment and Order dated 24.02.2022, 11.03.2022 and29.03.2022 of the High Court of Judicature at Rajasthan at Jaipur Benchin CMA No.431 of 2021.B
Dr. A. M. Singhvi, Sr. Adv., Abhishek Gupta, Ms. Megha Karnwal,Ajat Shatru, Nidhi Ram Sharma, Advs. for the Appellants.
Sidharth Luthra, Sr. Adv., Ms. Archana Pathak Dave, Ms. VanyaGupta, Aditya Bohra, Kaustubh Seth, Ayush Kaushik, Advs. for theRespondents.C
The following Order of the Court was passed:
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ORDER
1. Leave granted.
1.1 The present appeals by way of special leave are directedDagainst three interim orders dated 24[th] February, 2022, 11[th] March, 2022and 29[th] March, 2022 passed by the Division Bench of the High Court ofRajasthan, Jaipur Bench in appeals preferred by the respondents underSection 37 of the Arbitration and Conciliation Act, 1996[1], being aggrievedby an order dated 11[th] February 2021 passed by the Commercial CourtENo.1, Jaipur-II dismissing an application for interim relief filed by therespondents under Section 9 of the 1996 Act.
2. On 26[th] February, 2021, while issuing notice in the appealpreferred by the respondents and summoning the records of theCommercial Court, the appellants herein were restrained by the HighFCourt from alienating the property described as “Hotel Grand Uniara”,subject matter of dispute between the parties. Vide order dated 13[th]August, 2021, the High Court directed the appellants to produce theoriginal stamp papers on which a Supplementary Partnership Deed hadallegedly been executed by them in view of the plea taken by therespondents that the said Deed had been antedated to deprive them ofGtheir rights over the subject property. One day before 13[th] August, 2021,on the complaint of the respondent No.3 relating to the aforementionedSupplementary Partnership Deed, FIR No.293/2021 was registeredagainst the appellants and some others at PS Vaishali Nagar, Jaipur.
1 in short ‘1996 Act’H
3. It is not in dispute that the investigation in respect of FIR 293/2021 was subsequently transferred to the CID-CB and the AdditionalDirector General of Police, Crime Branch has constituted a SpecialInvestigating Team (SIT) to investigate FIR No.211/2019, registeredagainst the respondents on the complaint of the appellants as well asFIR No.293/2021.
4. It has been submitted by the learned counsel for the appellantsthat when the appellant No.1 had filed an application before the HighCourt to bring on record the original stamp papers on which theSupplementary Partnership Deed had been executed along with anaffidavit, by the first impugned order dated 24[th] February, 2022, the HighCourt directed the investigating agency to file a status report pertainingto FIR No.293/2021 and produce the case diary of the said FIR for itsperusal. By the second impugned order dated 11[th] March, 2022, uponperusing the status report and the case diary produced before it, theHigh Court summoned the Investigating Officer on the next date ofhearing. By the third impugned order passed on 29[th] March, 2022, opiningthat investigation in FIR No.293/2021 was not being conducted in a fairand impartial manner, the High Court has directed that said FIR betransferred to the Special Operation Group (SOG), Jaipur with a furtherdirection that the said investigation shall be supervised by an Officer ofthe rank of Superintendent of Police, who has been called upon to submita report within three weeks.
5. Learned counsel for the appellants states that the aforesaidimpugned orders travel far beyond the scope and parameters ofinterference, contemplated under Section 37 of the 1996 Act. All thatwas required of the High Court to examine in the said proceedings is theorder dated 11[th] February, 2021, passed by the Commercial Court,rejecting the Section 9 application for interim relief moved by therespondents under the 1996 Act. He states that within one week ofpreferring the appeal under Section 37 of the 1996 Act, the respondentshad approached the learned Sole Arbitrator appointed by the High Courtin a Section 11 petition filed by them and had filed an application underSection 17 for seeking interim relief, thus rendering the appeal preferredby them under Section 37, as infructuous. It is thus contended that theHigh Court has acted in excess of its jurisdiction by passing the impugnedorders and has virtually taken over the task of supervising the criminalinvestigation subject matter of FIR No.213/2021, registered on the A
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Acomplaint of the respondents, thereby seriously prejudicing the rights ofthe appellants.
6. Mr. Sidharth Luthra, learned Senior Advocate appearing onbehalf of the respondents has stoutly defended the impugned interimorders. He submits that the appellants have left no stone unturned toBoust the respondents from the business under the Partnership Deedconstituted on 3[rd] January, 2008 though substantial monetary investmenthas been made by them besides the hard work and efforts put in bythem to develop the hotel business.
7. On hearing the arguments advanced by learned counsel for theCparties and carefully perusing the records, we are of the firm view thatby passing the impugned orders, the High Court has acted in excess ofthe limited jurisdiction vested in it under Section 37 of the 1996 Act. Thescope of the appeal preferred by the respondents under Section 37 ofthe 1996 Act ought to be confined to examining the merits of the orderdated 11[th] February, 2021, passed by the Commercial Court that hasDrefused to grant any interim measures in favour of the respondents onthe application moved by them under Section 9 of the 1996 Act. However,it appears that the respondents have managed to take appeal proceedingson an entirely different trajectory. As a result, the Appellate Court isconducting a roving and fishing inquiry relating to the manner in whichEinvestigation is being conducted in respect of FIR No.293/2021 registeredat the instance of the respondents, to the point that not only has a statusreport and the case diary been called for, the Investigating Officer hasalso been summoned and subsequently, the investigation has beentransferred to the Special Operation Group, Jaipur.F8. We are afraid, none of the three impugned orders could havebeen passed by the Appellate Court in proceedings arising from an orderpassed under Section 9 of the 1996 Act. If the respondents have anygrievance regarding the unfair or partial manner of the investigationconducted in respect of the FIR registered on their complaint, it is forthem to seek appropriate legal recourse before the competent court onGthe criminal side. However, the proceedings initiated by the respondentsunder Section 37 of the 1996 Act can certainly not be permitted to bemisused and virtually highjacked towards this end.
9. For the reasons stated above, the impugned orders dated 24[th]February, 2022, 11[th] March, 2022 and 29[th] March, 2022 are notH
sustainable and are accordingly quashed and set aside. The High Courtis requested to decide D.B. Civil Misc. Appeal No.431/2021 preferredby the respondents strictly in accordance with law and well within theparameters contemplated under Section 37 of the 1996 Act. It is, however,clarified that this Court has not interfered with or overturned the interimorder dated 26[th] February, 2021, passed by the High Court in the aboveproceedings, restraining the appellants herein from alienating the subjectproperty.
10. The appeals are allowed and disposed of, along with pendingapplications, in the above terms, while leaving the parties to bear theirown costs.
Bibhuti Bhushan Bose
Appeals allowed.
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