Case Note & Summary
The petitioners, Emgee Housing Private Limited and others, filed a writ petition under Article 226 of the Constitution of India before the High Court of Bombay at Goa, challenging an order dated 09.08.2012 passed by the Company Law Board (CLB), Mumbai Bench. The CLB had dismissed Company Application No. 27/2012 in Company Petition No. 8/397-398/CLB/MB/2012, thereby refusing to refer the dispute to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. The respondent, ELS Developers Private Limited, had filed the company petition before the CLB alleging mismanagement by the petitioners. The petitioners sought to have the dispute referred to arbitration based on an arbitration agreement between the parties. The CLB rejected the application, leading to the present writ petition. The High Court examined the maintainability of the writ petition in light of the availability of an alternative remedy. The court noted that the CLB is a judicial authority under Section 8 of the Arbitration Act and has jurisdiction to decide on such applications. The court further held that an order passed by the CLB under Section 8 is appealable under Section 10F of the Companies Act, 1956, which provides for an appeal to the High Court on questions of law. Since the petitioners had an efficacious alternative remedy by way of appeal, and no exceptional circumstances were shown to justify bypassing that remedy, the High Court declined to entertain the writ petition. The court dismissed the petition, leaving it open to the petitioners to pursue the remedy of appeal under Section 10F of the Companies Act.
Headnote
A) Company Law - Arbitration - Section 8 of Arbitration and Conciliation Act, 1996 - Jurisdiction of CLB - The Company Law Board has jurisdiction to decide an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking reference of a dispute to arbitration. The CLB is a judicial authority within the meaning of Section 8. (Para 6) B) Company Law - Appeal - Section 10F of Companies Act, 1956 - Alternative Remedy - An order passed by the Company Law Board under Section 8 of the Arbitration and Conciliation Act, 1996, refusing to refer a dispute to arbitration is appealable under Section 10F of the Companies Act, 1956. The availability of an efficacious alternative remedy is a ground for the High Court to decline to exercise its writ jurisdiction under Article 226 of the Constitution. (Paras 7-9) C) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - Alternative Remedy - The High Court may not entertain a writ petition under Article 226 when an alternative remedy of appeal is available, unless exceptional circumstances are shown. In the present case, no exceptional circumstances were demonstrated. (Paras 10-11)
Issue of Consideration
Whether the High Court should entertain a writ petition under Article 226 of the Constitution challenging an order of the Company Law Board refusing to refer a dispute to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, when an alternative remedy of appeal under Section 10F of the Companies Act, 1956 is available.
Final Decision
The High Court dismissed the writ petition, holding that the petitioners have an alternative remedy of appeal under Section 10F of the Companies Act, 1956, and no exceptional circumstances were shown to warrant exercise of writ jurisdiction.
Law Points
- Jurisdiction of Company Law Board to decide application under Section 8 of Arbitration Act
- Availability of alternative remedy under Section 10F of Companies Act
- Maintainability of writ petition against CLB order
