Case Note & Summary
The petitioners, Rajendra Baban Deshmukh and Sangita Rajendra Deshmukh, filed a writ petition under Article 227 of the Constitution of India before the Bombay High Court challenging an arbitral award dated 8th August 2017 and a recovery order dated 12th December 2017 passed by the Recovery Officer under Section 97 of the Multi State Co-operative Societies Act, 2002 (MSCS Act). The dispute arose from a co-operative bank recovery proceeding. The petitioners sought release of a bank guarantee furnished by respondent nos. 2 and 3. The court noted that the petitioners had not challenged the arbitral award or the recovery order under Section 34 of the Arbitration and Conciliation Act, 1996, which provides a statutory remedy for setting aside arbitral awards. The court held that the writ petition under Article 227 was not maintainable as the petitioners had an efficacious alternative remedy under Section 34 of the Arbitration Act, which they had not exhausted. The court dismissed the petition with liberty to the petitioners to file an application under Section 34 of the Arbitration Act within four weeks from the date of the order. The court also clarified that if such an application was filed, the same would be considered on its own merits without being barred by limitation, subject to the petitioners satisfying the court about the delay.
Headnote
A) Constitutional Law - Writ Jurisdiction - Article 227 of the Constitution of India - Alternative Remedy - The petitioners challenged an arbitral award and a recovery order under Article 227 without first availing the remedy under Section 34 of the Arbitration and Conciliation Act, 1996. The court held that the writ petition was not maintainable as the petitioners had an efficacious alternative remedy under Section 34 of the Arbitration Act, which they did not pursue. The petition was dismissed with liberty to file an application under Section 34. (Paras 1-4) B) Arbitration Law - Challenge to Arbitral Award - Section 34 of the Arbitration and Conciliation Act, 1996 - The court noted that the arbitral award dated 8th August 2017 and the recovery order dated 12th December 2017 were not challenged under Section 34 of the Arbitration Act. The court held that the petitioners must avail the remedy under Section 34 before approaching the High Court under Article 227. (Paras 2-4) C) Co-operative Societies - Recovery of Dues - Section 97 of the Multi State Co-operative Societies Act, 2002 - The Recovery Officer passed an order under Section 97 of the MSCS Act for recovery of the amount awarded. The court held that the recovery order was consequential to the arbitral award and could not be independently challenged under Article 227 without challenging the award under Section 34 of the Arbitration Act. (Paras 1-4)
Issue of Consideration
Whether a writ petition under Article 227 of the Constitution of India is maintainable to challenge an arbitral award and a recovery order when the petitioner has not availed the alternative remedy under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The writ petition is dismissed. The petitioners are at liberty to file an application under Section 34 of the Arbitration and Conciliation Act, 1996 within four weeks from today. If such an application is filed, the same shall be considered on its own merits without being barred by limitation, subject to the petitioners satisfying the court about the delay.
Law Points
- Writ petition under Article 227 not maintainable when alternative remedy under Section 34 of Arbitration and Conciliation Act
- 1996 is available and not exhausted
- Arbitral award under Multi State Co-operative Societies Act
- 2002 can be challenged under Section 34 of Arbitration Act
- Recovery Officer's order under Section 97 of MSCS Act is consequential to arbitral award
