THE EMPIRE JUTE CO. LTD. & ORS. v. THE JUTE CORPORATION OF INDIA LTD. AND ANR

Citation: [2007] 11 S.C.R. 388

Court: Supreme Court of India

Bench: S.B. SINHA, H.S. BEDI

Case summary

THE EMPIRE JUTE CO. LTD. & ORS. v. THE JUTE CORPORATION OF INDIA LTD. AND ANR.pdf

Judgment text

THE EMPIRE JUTE CO. LTD. & ORS. V. THE JUTE CORPORATION OF INDIA LTD. AND ANR. OCTOBER 12, 2007 [S. B. SINHA AND HARJIT SINGH BEDI, JJ. ) Arbitration and Conciliation Act, 1996: s. 5-Arbitration agreement-Extent ofjudicial review- Contract for supply ofraw jute-Dispute between parties regarding liability to pay carrying cost andquantum thereof-High Court though held that there existed arbitration clause, however, determined the question ofliability to pay carrying charges, and referred the quantum to be decided in arbitration-HELD: Power ofjudicial review vested in the superior courts undoubtedly has wide amplitude but same should not be exercised when there exists an arbitration clause-Division ,,.

\-, ~ Bench ofHigh Court having opined that dispute between the parties was covered under the arbitration clause, it should not have proceeded to determine apart ofdispute itself-As disputed questions offact and law are required to be determined by arbitrator, all disputes between parties are, in exercise ofpower under Article 142 ofthe Constitution, directed to be referred to arbitration in terms ofclause 9. 0 ofthe Sale Order andas indicatedin thejudgment-Constitution ofIndia, 1950r. Article 142. .. The Jute Commissioner, pursuant to Jute and Textile Control Order,2000 made by Governmentoflndia in exercise ofpowers under s. 3 ofthe Essential Commodities Act, 1955, issued Production Control Orders to various jute mills including the appellant Company directing them to manufacture 'B' Twill Gunny Bags ofspecified quality upon compulsory purchase of raw jute from the Corporation. The ~.

Commissioner fixed the price ofthe Gunny Bags to be supplied by the appellant-Company as per the Schedule. Thereafter a contract for sale f INDIA LTD. . __" ofraw jute was entered into between the appellant-Company and the respondent Jute Corporation of India Ltd. The appellant did not purchase raw jutefrom the Corporation allegingthe same as ofinferior quality, and filed a writ petition before the High Court, inter alia, challenging the power of the Commissioner to order compulsory purchase ofraw jute, and prayed for a direction to him to desist from forcing the companyto supply the gunny bags at the pricefixed by him. -1 However, before the single Judge the appellant made an offer to clear the backlog. An interim orderwas passed. The respondent issued a letter T to the appellantto make thepaymentalongwith the carryingcost,which was objected to by the appellant.

The matterwas taken to the Division Bench,which upheld the liability ofthe respondent to pay the carrying charges and directed the parties to settle the quantum through arbitration. Aggrieved, the Company filed the instant appeal. Partly allowing the appeal the Court HELD: 1. 1. The power ofjudicial review vested in the superior -~ Courts undoubtedly has wide amplitude but the same should not be exercised when there exists an arbitration clause. In the instant case, in clause 9. 0 ofthe contract for sale ofjute, there exists an arbitration agreement. The arbitration agreement is ofwide amplitude, by reason ' whereofnot only the dispute relating to quality ofthe jute sought to be supplied by respondentno. 1 may begoneinto,butconstruction,meaning and operation and effectofthe contract or breach thereof, ifany,would have also fallen for determination ofthe arbitrator. [Paras 14and18) [399-D; 400-C) _-,.. - Central Banko/India Ltd, Amritsarv. The Hartford Fire Insurance Co.

Ltd, AIR (1965) SC 1288, cited. 1. 2. Construction of the agreement fell for consideration of the High Court. TheDivision Benchitselfopined that the arbitrationclause should be taken recourse to for the purpose of computation of the ~ quantum ofthe carrying cost. Thequestion ofpayment ofcarrying cost by the appellant in favour ofthe respondent would arise provided the same is payable. Payability ofsuch carrying costwould, thus, depend upon construction ofclause2. 0 read with clause 5. 0 ofthe sale contract The Division Bench ofthe High Court took recourse to the arbitration agreement in regard to one part of the dispute but proceeded to determine the other partitself. Oncethe High Courtwas ofthe opinion that the dispute between the parties being covered by the arbitration clause should be referred to arbitration, it should not have proceeded to determine a part ofthe dispute itself. [Paras 16and18) [399-G-H; 400'"A, C, DJ Mis. Bisra Stone Lime Co. Ltd etc. v.

Orissa State Electricity Board and Anr. , AIR (1976) SC 127 and Sanjana M Wig (Ms) v. Hindustan Petroleum Corpn. Ltd, [200S) 8 SCC 242, relied on. 1. 3. The legal position has undergone a substantial change, having regard to Section 5 ofthe Arbitration and Conciliation Act, 1996vis-avis provisions ofArbitration Act, 1940. Section 5of1996Act takes away the jurisdiction ofthe Court. There cannot be any doubt whatsoever, the provision ofthe 1996 Act must be given effect to. [Paras 22 and 23) [402-C, D, E] 1. 4. As the disputed questions offacts as also oflaw are required to be determined by arbitrator, all disputes between the parties are, in exercise ofjurisdiction under Article 142 ofthe Constitution, directed to be referred to the arbitration in terms of clause 9. 0 of Sale Order and as indicated in the judgment [Para 24) [402-E-F] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4877 of 2007. From the final Judgment and Order dated 15. 12.

2006 ofthe High Court of Calcutta at Calcutta in A. P. O. No. 291 of2006@ W. P. No. 962/2004, A. P. O. T. No. 401 of2006@ W. P. No. 969/2004, A. P. O. T. No. 402of2006@ W. P. No. 967/2004, A. P. O. T. No. 403 of2006 @ W. P. No. 966/2004, A. P. O. T. No. 404 of2006@ W. P. No. 972/ 2004. A. P. O. T. No. ~05 of2006@W. P. No. 971/2004 and A. P. QJ. _ No. 406 of2006@ W. P. No. 970/2004. WITH C. A. Nos. 4878 and 4879 of2007. S. Bagaria, Ashok Jain, Pankaj Jain and Bijoy Kumar Jain for the Appellants. Bikash Bhattacharya, Nandini Mitra, Subimal Mukherjee, Swati Sinha and Jayasree Singh (for Fox Mandal & Co. ) for the Respondent. The Judgment ofthe Court was delivered by S. B. SINHA, J. 1. Leave granted. 2. These appeals are directed against the judgment and order dated 15. 12. 2006 passed by a Division Bench ofthe Calcutta High Court in APO No. 291 of2006, A. P. O. T. No. 401to406 of2006 in WP Nos. 962, 966, 967, 969, 970, 971 & 972 of2004 and A. P. O. T. No. 399 of 2006 in W. P. No.

1566 of2004 and A. P. O. T. No. 400 of2006 in W. P. No. 973 of2004 respectively. Factual matrix being in narrow compass, we will notice the relevant facts. 3. First Appellant is owner of a jute mill. In exercise of power conferred upon it under Section 3 of the Essential Commodities Act, Government ofIndia made an Order in the year 2000 known as "Jute and Jute Textile Control Order, 2000". By reason ofthe said order, powers were conferred on the Jute Commissioner to regulate stock ofrawjute, fix price and control production thereof In exercise ofthe power conferred upon him under the said Order, the Jute Commissioner issued Production Control Orders (PCO) to various jute mill owners directing them to manufacture 'B'Twill Gunny Bags ofspecified quality upon compulsory purchase of raw jute from the Corporation. Non-compliance of the directions was to result in application ofpenal provisions. 4.

Indisputably, the Jute Commissioner sent the particulars ofthe said Production Control Order to the Jute Corporation oflndia Ltd. for the purpose of issuing necessary sale contract in order to enable the Jute manufacturers to take delivery of the requisite quantities of raw jute specified in the production control Order which the jute manufacturers H, ),"' " -'(A were required to compulsorily purchase from the Corporation. ~- 5. Indisputably, again the Commissioner in exercise ofits power conferred under Section 3(3) ofthe Control Order fixed the price of50 kg B-Twill jute bags for the delivery in the month of December 2002 provisionally at Rs. 1712. 77p per hundred bags. The price for the said bags was arrived at upon taking into account hundred percent JCI in raw rjute linkage i. e. the mills should compulsorily purchase rawjutes only from the Jute Corporation ofIndia. ""! ' 6.

The quality of raw jute supplied by the respondent under the contract ofsale was said to be ofmuch inferior quality. However, factum ofentering into a sale contract by the appellant with respondent No. l is not in dispute. Admittedly, Appellants did not purchase rawjute from the respondent No. l for the period of October 2003 to April, 2004. For fulfilling its undertakings, allegedly, they had to purchase rawjute on credit n from the open market. 7. Apprehending that no further raw material would be allotted to ~it, and/or punitive action will be taken against them, a writ petition was filed by the appellant before the Calcutta High Court inter alia praying for the following reliefs:- (a) A declaration be passed that the respondent no. 2 does not have any power, competence and/or authority to direct and/ or order the petitioners to compulsorily purchase rawjute from th~ respondent no. 1for effecting supply ofB-Twill gunny bags of665 gms.

'1- (b) A writ of and/or order and/or direction in the nature of mandamus be issued commanding the respondents not to·force the petitioners to compulsorily purchase raw jute from the respondent No. 1for effecting supply of B-Twill gunny bags of665 gms under the various production control orders. (c) A writ of and/or order and/or direction in the nature of ~ mandamus be issued commanding the respondents to allocate and supply consignment ofraw jute as per productivity norms ofJute Manufacturers Development Council for manufacture ofB-Twill Jute bags of665 gms. (d) A writ of and/or order and/or direction in the nature of mandamus be issued commanding the respondent no.

2 to desist from forcing the petitioners to supply B-Twill gunny bags at the lower of the price prevailing for the period/month as , mentioned in the individual Production Control Orders and that prevailing for the period subsequent thereto in the event your petitioners are otherwise unable to supply B-Twill gunny bags within the period as mentioned in the individual purchase order. 8. Despite, making the aforementioned prayers, the appellant , however, made an offer before a learned Single Judge ofthe High Court that the backlog would be cleared within six months in six equal installments after opening a letter ofcredit and ifany payment is to be made by them,, they will take necessary steps therefor. Pursuant to or in furtherance of the said interim order, the appellant deposited the amount, in question. , On or about 6. 7. 2004, the Corporation issued a letter to the which reads as under: "Re: T. No. 212 of2004 WP No.

962 & 966 to 973 of 2004 Dear Sirs, With reference to your letter nos. nil dated 30. 06. 2004 and 02. 07. 2004 on the above subject we would like to advise you to make payment arrangement of the 1/6 (one sixth) quantity of pending contracts along with the canying cost within 7 (seven) days from the date ofreceipt ofthis letter, as per Clause 5. 0 ofthe Sale Contracts which has already been intimated to you vide our letters dated 7. 1. 03, 17. 11. 03, 8. 10. 03, 4. 12. 03, 16. 12. 03, 26. 12. 03, 13. 1. 04, 16. 1. 04, 6. 2. 04, 19. 2. 04, 04. 03. 04, 19. 3. 04, 22. 3. 04 and 12. 4. 03. It may please be noted that since the relevant Sale Contracts have already been sent to you, the question ofissuance offresh contract does not arise. You are, therefore, advised to make payment arrangement along with carrying cost enabling us to take further A. --(4 • action in this regard. " ---- ... 9. The Division Bench by its order dated 15. 12.

2006 directed: "There is no dispute that within the time mentioned in the said clause the writ petitioners did not take delivery ofthe goods and complained before the Court that for not taking such delivery, they should not be deprived of future allotment. We have already ~ indicated that they themselves realized their fault and decided to '-T' take late delivery by installments on payment ofthe price fixed under the contract and prayed for a direction upon the appellant to allot further raw jutes in terms ofthe agreement. After getting benefit of the interim order, they cannot now refuse to pay the carrying cost for taking late delivery. The learned Single Judge wrongly inteipreted the said clause by holding that the present case was not one offurnishing defective Letters ofCredit and that Clause 5. 0 can be. invoked only in cases offurnishing defective letters of credit. In the case before us, Wldisputedly the writ petitioners had ,,.....

_ the responsibility for taking delivery ofthe goods within the period mentioned in the said clause. There is no dispute that within the same period delivery was not taken. Subsequently, by viltue ofthe interim order, they got delivery and also prayed for a fresh allotment on opening Letters ofCredit. It is preposterous to suggest that the purchasers who are Wlder obligation in terms ofagreement to lift the goods within a specified period and for not taking delivery they are required to pay carrying cost and delayed surcharges, will not be required to pay such penalty unless defect is found in the Letters ofCredit even though they lifted the goods beyond the stipulated '1time. Ifwe accept the aforesaid proposition, the purchasers can avoid that clause by not taking delivery ofgoods or without opening any Letters ofcredit in favour ofthe appellant by contending that there was no defect in the Letters ofCredit.

We, thus, find that the learned Singlejudge erred in law in holding ~ that the writ petitioners were under no obligation to pay the carryfug cost and other charges mentioned in clause 5. 0 ofthe agreement even ifthey do not lift the goods within the time stipulated therein or if they do not furnish any letters of Credit in favour of the appellant. We, therefore, set aside the order impugned and hold that the appellant is entitled to get the carrying costs and other charges mentioned in Clause 5. 0 ofthe agreement for breach ofthe tenns B ofthe agreement at the instance ofthe writ petitioners and that in this case, there has been violation ofthat clause at the instance of the writ petitioners. We, accordingly, allow these appeals and direct the learned advocate for the writ petitioners to handover the entire amount lying in the bank account pursuant to the interim order passed by the learned Single Judge inclusive ofinterest accrued thereon within , fortnight from today. " 10.

Having said so, the Division Bench directed the parties to settle the aniount through Arbitration in tenns ofagreement in regard to the quantum of the carrying charges payable by the appellant to the' respondents stating; "It appears from the agreement between the parties that in case of any dispute arising out ofthe said agreement there is an arbitration clause. Whether the amount deposited with the learned advocate for the writ petitioners was sufficient to coverthe canying cost and other charges in tem1s ofclause 5. 0, is a question offact and for resolving such disputes detailed investigation is necessary which is beyond the scope of the original writ applications. We were compelled to decide the question ofapplicability ofthe Clause s:o only because ofthe interim order granted by the learned Single Judge in favour ofthe writ petitioners although they ultimately did not press their grievance taken in the writ application.

In such a situation, the learned Single Judge ought not to have granted any interim order in favour ofthe writ petitioners. Interim orders are granted in aid ofthe final reliefclaimed in judicial proceedings so that for not passing the interim relief, the final reliefmay not becmp. e inappropriate. But the law is equally settled that if the judicial proceedings fail in the long run, the Court granting interim order in favour of the losing party should undo the hann, ifdone to the successful party, in view ofthe interim order. By deciding the question ofapplicability ofClause 5. 0 and passing direction for return ofthe money, we have merely undone the loss suffered by the appellant for the interim order passed by the learned Single Judge. \. -· We, therefore, direct the parties to settle the amount through arbitration in terms ofthe agreement.

The arbitration will adjust the amount that will be handed over to the appellant by the learned advocate for the writ petitioners by virtue of this order while assessing the actual amount payable by the writ petitioners to the appellant due to taking delayed delivery ofthe goods. " 11. Mr. S. Bagaria, learned senior counsel appearing on behalfof the appellant submitted that although there may not be any dispute with the legal proposition that a suitor cannot take advantage ofinterim order passed in his favour, but it is also trite that the interim order must be given )....... effect to in terms ofthe contractual obligations ofthe parties and, if in terms thereof, the appellant was not liable to pay the carrying cost, clause 5. 0 ofthe sale agreement being not applicable, they cannot be fastened with the said liability. Strong reliance in this behalfhas been placed on Central Bank ofIndia Ltd. , Amritsar v. The Hartford Fire Insurance Co. Ltd. , AIR (1965) SC 1288. 12. Mr.

Bikash Bhattacharyya, learned senior counsel appearing on behalfofthe first respondent, on the other hand, would submit that the appellant had filed a writ petition on the premise that the statutory order is not applicable. Such a prayer having been given a complete go-bye and the appellant having prayed for passing an interim order to its benefit, by undertaking to clear the backlog ofpurchases in six instalments, it was bound to pay the carrying charges. The Division Bench, Mr. Bikash Bhattacharyya, would submit has rightly opined that the carrying charges being payable, only quantum thereofwould be subject matter ofa dispute within the meaning of arbitration agreement entered into and by and between the parties. - 13. Before embarking upon the respective contentions ofthe learned counsel, we may notice the relevant tenns ofthe contract: 2. 0 Mode of delivery : For EX-GODOWN DELIVERY: The responsibility of lifting the goods at their own cost within: __ will lie with the buyers. 2.

1 In the event ofbuyer's failure to take godown delivery, within the delivery period indicated above, an amount of Rs. 25/per qtl. Per month shall be levied over and above the price indicated at Annexure-11. The Corporation shall have the option to cancel the contract for the failure ofthe buyer to lift the goods by __ and to exercise any and/or all the options as stipulated at (i), (ii), (iii) & (iv) ofClause No. 16. 0 ofthe contract. xxx xxx xxx 5. 0 Payment terms: Through confirmed and irrevocable Letter of Credit and/or Bank Draft/Pay Order preferably through '3nationalized bank at Kolkata covering the full value of the entire quantity of jute covered by is contract and other incidental costs to be signed by the buyers and furnished to us by 26. 03. 04 at the latest.

In case the Letter of Cre~it furnished by the buyer within the stipulated date as indicated above, was found to be not acceptable to JCI, the same would be returned to the buyer for amendment and for the period taken by the buyer for resubmission of the Letter of Credit after necessary amendment, the buyer shall be liable to pay carrying cost at the rate ofRs. 25/- per quintal per month or part thereof. xxx xxx xxx 8. 0 Procedure for claim settlement : All claims on account of quality shall be settled according to Bye-Laws & Rules of EIJ&HE. The allowable moisture regain percentage shall be 18% for July, August, September and October and 16 % for the remaining 8 months, November to June. The buyers shall clearly indicate the extent ofthe claims (in tenns ofpercentage) on quality and condition.

No joint inspection shall be arranged and no claim shall be entertained by the Corporation unless the buyers clearly indicate the extent ofclaim in the manner mentioned herein above and within the time specified in the bye-laws and rules of the EIL&HE. In case ofEX-GODOWN DELIVERY, the weight shall be detennined at the point ofdelivery ex-godown based on weight recorded on lorry challan or the certificate ofweighment signed by the authorized representative of the buyers and the Corporation. For this purpose the certificate to be given may be in the Fonn ofAnnexure-Ill. Based on the settlement ofclaim for quality, condition and weight ifthe buyers are found to be entitled to recover any amount from the Corporation, payment should be made within 15 days from the . date of receipt ofthe debit note. 9.

0 Arbitration: All disputes or differences whatsoever arising between the parties put of/or relating to the construction, meaning and operation or effect ofthis contract or the breach thereofshall be settled by arbitration ofthe Indian Council of Arbitration and the award made in pursuance thereofshall be binding on both the parties. xxx xxx xxx 16. 0 In the event ofany delay or failure on the part ofthe buyer in making payment arrangement acceptable to JCI within the stipulated period under the contract and/or his/their failure/ refusal to take delivery ofthe contracted quantity as per Clause 4. 1 ofthe contract as also to perform any ofthe terms ofthe contract, the Corporation shall have the right to exercise any and/or all ofthe following options: (i) Canceling the contract; (ii) Canceling the contract and charging the buyers for difference, if any, between the contract prices and the A' market price on the date ofcanceling the contract.

(rii) Canceling the contract and selling the goods in any manner deemed fit by the Corporation and charging the buyer for the difference between the contract price and the not value realiz. ed from such after adjustment ofall expenses incurred by the Corporation in this regard; and (iv) To realize any other amount which the Corporation might have to pay for retaining the goods inclusive ofcanying charges wherever applicable. 14. Construction ofthe contract entered into by and between the parties is in question before us. There exists an arbitration agreement The Arbitration Agreement is ofwide amplitude; by reason whereofnot only the dispute relating to quality of the jute sought to be supplied by the respondent No. I may be gone into, the construction, meaning and .. -1 operation and effect ofthe contract or breach thereof, ifany, would have also fallen for determination ofan Arbitrator. 15. It is not correct to contend that clause 8. 0 provides for procedure for claim settlement.

The said provision in regard to the quality ofjute supplied has in our opinion nothing to do with clause 9. 0. The arbitration agreement entered into by and between the parties is independent of clause 8. 0. It is now well settled that when there exists an arbitration agreement, the writ court ordinarily would not exercise its discretionary jurisdiction to enter into the dispute. 16. The learned Single Judge embarked upon the question of construction ofthe agreement. In a sense, the Division Bench overturned the said decision. Construction of the agreement therefor fell for consideration ofthe High Court. Division Bench, as noticed hereinbefore, itselfopined that the arbitration clause should be taken recourse to for the purpose of computation of the quantum of the carrying cost. The question ofpayment of carrying cost by the appellant in favour ofthe respondent would arise provided the same is payable. Payability ofsuch carrying cost would, thus, depend upon construction ofclause 2.

0 read with clause 5. 0 ofthe sale contract. ~ ~ ' 17. Respondent, no doubt, could have taken recourse to clause 16. 0 Iofthe agreement in terms whereof it could realize any amount which the Corporation might have to pay. Disputed fact was required to be gone into before a definite opinion could be arrived at as to whether in the facts and circumstances, the obligation to·pay the carrying cost was applicable. \. - ' 18. The power of judicial review vested in the superior courts -~ ',. _ ' undoubtedly has wide amplitude but the same should not be exercised when there exists an arbitration clause. The Division Bench ofthe High Court took recourse to the arbitration agreement in regard to one part ) ofthe dispute but proceeded to determine the other part itself.

It could have refused to exercise its jurisdiction leaving the parties to avail their own remedies under the agreement but ifit was ofthe opinion that the 'dispute between the parties being covered by the arbitration clause should be referred to arbitration, it should not have proceeded to determine a part ofthe dispute itself ;-_ j. 19. Similar question arose for consideration in Mis. Bisra Stone Lime Co. Ltd. etc. v. Orissa State Electricity Board and Anr. , AIR (1976) SC 127 wherein it was held that the High Court may refuse to exercise its jurisdiction, ifthere exists a valid arbitration clause stating; J:: ''24. It is then submitted that this Court should not use its discretion in favour ofarbitration in a matter where it is a pure question of law as to the power of the Board to levy a surcharge.

This submission would have great force ifthe sole question involved were the scope and ambit of the power of the Board under Sections 49 and 50 ofthe Act to levy a surcharge, as it was sought to be initially argued. The question in that event may not have been within the content ofclause 23 ofthe agreement. But all questions oflaw, one ofwhich may be interpretation ofthe agreement, need not necessarily be withdrawn from the domestic forum because >-~ the court has discretion under Section 34 of the Arbitration Act or under Article 226 ofthe Constitution and that the court is better posted to decide such questions. The arbitration clause 23 is a: clause ofwide amplitude taking in its sweep even interpretation of the agreement and necessarily, therefore, ofclause 13 therein. We are therefore, unable to accede to the submission that we should exercise our discretion to withhold the matter from arbitration and deal with it ourselves. ' B 20.

A similar view was taken by this Court in Sanjana M Wig (Ms) V. Hindustan Petroleum Corpn. Ltd. , [2005] 8 sec 242 holding; "12. The principal question which arises for consideration is as to 1 whether a discretionary jurisdiction would be refused to be exercised solely on the ground ofexistence ofan alternative remedy which is more efficacious. Ordinarily, when a dispute between the =I parties requires adjudication ofdisputed question offacts wherefor the parties are required to lead evidence both oral and documentary which can be determined by a domestic forum chosen by the! parties, the Court may not entertain a writ application (See Titagarh Paper Mills Ltd. v. Orissa SEB and Bisra Stone Lime Co. Ltd. v. Orissa SEB)" 13. However, access to justice by way ofpublic law remedy would not be denied when a lis involves public law character and when the forum e;hosen by the parties would not be in a position to grant appropriate relief 21.

Relying on some ofthe earlier decisions ofthis Court, this Court held: "It may be true that in a given case when an action ofthe party is dehors the tenns and conditions contained in an agreement as also beyond the scope and ambit of the domestic forum created therefore, the writ petition may be held to be maintainable; but indisputably therefore such a case has to be made out. It may also be true, as has been held by this Court in Amritsar Gas Service and E. Venkatakrishna that the arbitrator may not have the . requisite jurisdiction to direct restoration ofdistributorship havin~ regard to the provisions contained in Section 14 of the Specific ReliefAct, 1963; but while entertaining a writ petition even in such a case, the court may not lose sight ofthe fact that if a serious disputed question offact is involved arising out ofa contract qua contract, ordinarily a writ petition would not be entertained.

A writ petition, however, will be entertained when it involves a public law character or involves a question arising out ofpublic law functions on the part ofthe respondent. " 22. The legal position has undergone a substantial change, having regard to Section 5 ofthe Arbitration and Conciliation Act, 1996 vis-avis provisions ofArbitration Act, 1940. The said provision reads as under:- "5. Extent ofjudicial intervention - Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. " 23. In terms of 1940 Act, even a civil suit could have been entertained subject ofcourse to exercise ofthe court's jurisdiction under Section 21 thereof. Section 5 of 1996 Act takes away the jurisdiction of the Court. There cannot be any doubt whatsoever, the provision ofthe 1996 Act must be given effect to. 24.

As the disputed facts as also the law are required to be determined by the Arbitrator, we are of the opinion that all disputes between the parties should be directed to be resolved upon taking recourse to the arbitration agreement contained in clause 9. 0 ofthe Sale Order. 25. We therefore, direct; 'i- (a) In exercise ofajurisdiction under Article 142 ofthe Constitution, in the peculiar facts and circumstances of this case, all disputes and differences between the parties be referred to the arbitration in terms of clause 9. 0 of the contract. (b) Reference to arbitration would be deemed to be one under the >-. 1996 Act. (c) The parties would be at liberty to approach the High Court for any other or further direction(s). (d) The learned Arbitrator would make an Award within a period offour months from the date ofentering into reference.

(e) All amount deposited by the appellant with the learned advocate on record towards the carrying charges should be paid to the second respondent, wherefor an appropriate receipt would be given. (f) Such payment shall be without prejudice to the rights ofthe parties before the Arbitrator and shall be subject to any other or further order or direction that may be issued by the learned Arbitration in his Award. 26. These appeals are allowed to the aforementioned extent. In the facts and circumstances ofthis case, the parties shall pay and bear their own costs. RP. Appeal partly allowed. _:r