DALPAT SINGH NARUKA & ANR.versusKARUNA BANSAL & ORS.

                          [2022] 3 S.C.R. 139                            139


               DALPAT SINGH NARUKA & ANR.                                A
                                  v.
                   KARUNA BANSAL & ORS.
               (Civil Appeal Nos. 3651-3653 of 2022)
                            April 21, 2022                               B
       [N. V. RAMANA, CJI, KRISHNA MURARI AND
                   HIMA KOHLI, JJ.]
       Arbitration and Conciliation Act, 1996 – ss.9 and 37 – Scope
of appeal – Limited jurisdiction vested u/s.37 – Interim orders passed
by High Court in appeals preferred by respondents u/s.37, being          C
aggrieved by order passed by the Commercial Court, dismissing
application for interim relief filed by the respondents u/s.9 – Held:
By passing the impugned orders, the High Court acted in excess of
the limited jurisdiction vested in it u/s.37 – The scope of the appeal
preferred by the respondents u/s.37 ought to be confined to
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examining the merits of the order passed by the Commercial Court
that refused to grant any interim measures in favour of respondents
on the application moved by them u/s.9 – However, respondents
have managed to take appeal proceedings on an entirely different
trajectory – As a result, the Appellate Court conducted a roving
and fishing inquiry relating to the manner in which investigation        E
was being conducted in respect of FIR registered at the instance of
the respondents, to the point that not only was a status report and
the case diary called for, the Investigating Officer was also
summoned and subsequently, the investigation was been transferred
to the Special Operation Group – None of the three impugned orders
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could have been passed by the Appellate Court in proceedings
arising from an order passed u/s.9 – If the respondents have any
grievance regarding the unfair or partial manner of the investigation
conducted in respect of the FIR registered on their complaint, it is
for them to seek appropriate legal recourse before the competent
court on the criminal side – However, the proceedings initiated by       G
the respondents u/s.37 can certainly not be permitted to be misused
and virtually highjacked towards this end – Impugned orders of
High Court are accordingly quashed and set aside – High Court to
decide appeal preferred by the respondents strictly in accordance
with law and well within the parameters contemplated u/s.37.
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                                 139
140                 SUPREME COURT REPORTS                      [2022] 3 S.C.R.


A           CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3651-
      3653 of 2022.
            From the Judgment and Order dated 24.02.2022, 11.03.2022 and
      29.03.2022 of the High Court of Judicature at Rajasthan at Jaipur Bench
      in 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. Vanya
      Gupta, Aditya Bohra, Kaustubh Seth, Ayush Kaushik, Advs. for the
      Respondents.
C
                The following Order of the Court was passed:
                                       ORDER
                1. Leave granted.
            1.1 The present appeals by way of special leave are directed
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      against three interim orders dated 24th February, 2022, 11th March, 2022
      and 29th March, 2022 passed by the Division Bench of the High Court of
      Rajasthan, Jaipur Bench in appeals preferred by the respondents under
      Section 37 of the Arbitration and Conciliation Act, 19961, being aggrieved
      by an order dated 11th February 2021 passed by the Commercial Court
E     No.1, Jaipur-II dismissing an application for interim relief filed by the
      respondents under Section 9 of the 1996 Act.
              2. On 26th February, 2021, while issuing notice in the appeal
      preferred by the respondents and summoning the records of the
      Commercial Court, the appellants herein were restrained by the High
F     Court 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 the
      original stamp papers on which a Supplementary Partnership Deed had
      allegedly been executed by them in view of the plea taken by the
      respondents that the said Deed had been antedated to deprive them of
G     their rights over the subject property. One day before 13th August, 2021,
      on the complaint of the respondent No.3 relating to the aforementioned
      Supplementary Partnership Deed, FIR No.293/2021 was registered
      against the appellants and some others at PS Vaishali Nagar, Jaipur.
      1
          in short ‘1996 Act’
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   DALPAT SINGH NARUKA & ANR. v. KARUNA BANSAL                                141
                     & ORS.

      3. It is not in dispute that the investigation in respect of FIR 293/   A
2021 was subsequently transferred to the CID-CB and the Additional
Director General of Police, Crime Branch has constituted a Special
Investigating Team (SIT) to investigate FIR No.211/2019, registered
against the respondents on the complaint of the appellants as well as
FIR No.293/2021.
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       4. It has been submitted by the learned counsel for the appellants
that when the appellant No.1 had filed an application before the High
Court to bring on record the original stamp papers on which the
Supplementary Partnership Deed had been executed along with an
affidavit, by the first impugned order dated 24th February, 2022, the High
Court directed the investigating agency to file a status report pertaining    C
to FIR No.293/2021 and produce the case diary of the said FIR for its
perusal. By the second impugned order dated 11th March, 2022, upon
perusing the status report and the case diary produced before it, the
High Court summoned the Investigating Officer on the next date of
hearing. By the third impugned order passed on 29th March, 2022, opining      D
that investigation in FIR No.293/2021 was not being conducted in a fair
and impartial manner, the High Court has directed that said FIR be
transferred to the Special Operation Group (SOG), Jaipur with a further
direction that the said investigation shall be supervised by an Officer of
the rank of Superintendent of Police, who has been called upon to submit
a report within three weeks.                                                  E

       5. Learned counsel for the appellants states that the aforesaid
impugned orders travel far beyond the scope and parameters of
interference, contemplated under Section 37 of the 1996 Act. All that
was required of the High Court to examine in the said proceedings is the
order dated 11th February, 2021, passed by the Commercial Court,              F
rejecting the Section 9 application for interim relief moved by the
respondents under the 1996 Act. He states that within one week of
preferring the appeal under Section 37 of the 1996 Act, the respondents
had approached the learned Sole Arbitrator appointed by the High Court
in a Section 11 petition filed by them and had filed an application under     G
Section 17 for seeking interim relief, thus rendering the appeal preferred
by them under Section 37, as infructuous. It is thus contended that the
High Court has acted in excess of its jurisdiction by passing the impugned
orders and has virtually taken over the task of supervising the criminal
investigation subject matter of FIR No.213/2021, registered on the
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142            SUPREME COURT REPORTS                           [2022] 3 S.C.R.


A     complaint of the respondents, thereby seriously prejudicing the rights of
      the appellants.
             6. Mr. Sidharth Luthra, learned Senior Advocate appearing on
      behalf of the respondents has stoutly defended the impugned interim
      orders. He submits that the appellants have left no stone unturned to
B     oust the respondents from the business under the Partnership Deed
      constituted on 3rd January, 2008 though substantial monetary investment
      has been made by them besides the hard work and efforts put in by
      them to develop the hotel business.
              7. On hearing the arguments advanced by learned counsel for the
C     parties and carefully perusing the records, we are of the firm view that
      by passing the impugned orders, the High Court has acted in excess of
      the limited jurisdiction vested in it under Section 37 of the 1996 Act. The
      scope of the appeal preferred by the respondents under Section 37 of
      the 1996 Act ought to be confined to examining the merits of the order
      dated 11th February, 2021, passed by the Commercial Court that has
D     refused to grant any interim measures in favour of the respondents on
      the application moved by them under Section 9 of the 1996 Act. However,
      it appears that the respondents have managed to take appeal proceedings
      on an entirely different trajectory. As a result, the Appellate Court is
      conducting a roving and fishing inquiry relating to the manner in which
E     investigation is being conducted in respect of FIR No.293/2021 registered
      at the instance of the respondents, to the point that not only has a status
      report and the case diary been called for, the Investigating Officer has
      also been summoned and subsequently, the investigation has been
      transferred to the Special Operation Group, Jaipur.

F            8. We are afraid, none of the three impugned orders could have
      been passed by the Appellate Court in proceedings arising from an order
      passed under Section 9 of the 1996 Act. If the respondents have any
      grievance regarding the unfair or partial manner of the investigation
      conducted in respect of the FIR registered on their complaint, it is for
      them to seek appropriate legal recourse before the competent court on
G     the criminal side. However, the proceedings initiated by the respondents
      under Section 37 of the 1996 Act can certainly not be permitted to be
      misused and virtually highjacked towards this end.
           9. For the reasons stated above, the impugned orders dated 24th
      February, 2022, 11 th March, 2022 and 29 th March, 2022 are not
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   DALPAT SINGH NARUKA & ANR. v. KARUNA BANSAL                                 143
                     & ORS.

sustainable and are accordingly quashed and set aside. The High Court          A
is requested to decide D.B. Civil Misc. Appeal No.431/2021 preferred
by the respondents strictly in accordance with law and well within the
parameters contemplated under Section 37 of the 1996 Act. It is, however,
clarified that this Court has not interfered with or overturned the interim
order dated 26th February, 2021, passed by the High Court in the above
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proceedings, restraining the appellants herein from alienating the subject
property.
      10. The appeals are allowed and disposed of, along with pending
applications, in the above terms, while leaving the parties to bear their
own costs.
                                                                               C
Bibhuti Bhushan Bose                                        Appeals allowed.




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