TANGIRALA SRINIVASA GANGADHARA BALADITYA Vs. SANJAY AGGARWAL

JUDGEMENT

(1.) The appellant has challenged an order dated 22.05.2019 passed by the learned Single Judge, dismissing a writ petition filed by him praying inter alia for setting aside an order dated 08.04.2019, passed by the respondent No.1/Sole Arbitrator, turning down an application moved by him under Section 16 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'A&C Act') in the arbitration proceedings initiated by the respondent No.2/company against him and one Shri Chandra Shekhar Varanasi and holding that the said proceedings are maintainable against him. Vide order dated 22.05.2019, the appellant's petition has been dismissed on twin grounds; firstly that even if his application under Section 16 of the A&C Act stood rejected by the Sole Arbitrator, he would have to wait for an award to be made and could only thereafter invoke the provisions of Section 34 of the A&C Act and secondly, that a writ petition does not lie in respect of arbitral proceedings, as contemplated in Section 5 of the A&C Act.

(2.) In the instant case, the appellant had appeared before the learned Sole Arbitrator/respondent No.1 and moved an application under Section 16 of the A&C Act stating inter alia that he is not a party to the Loan Agreement executed between the respondent No.2/Company and one Shri Chandra Shekhar Varanasi, who had taken a loan from the respondent No.2/Company for purchasing a BMW car and therefore, the arbitration proceedings were not maintainable against him. The said application was contested by the respondent No.2/Company, who stated that the appellant having stood as a guarantor in the Loan Agreement and having executed a Deed of Guarantee dated 15.09.2016 in respect of the Loan Agreement, had rightly been impleaded as a co-respondent in the claim petition. After hearing the parties and examining the documents submitted by both sides, the learned Sole Arbitrator passed an order dated 8.4.2019, dismissing the application moved by the appellant and proceeded further in the matter.

(3.) Learned counsel for the appellant has argued that Section 5 of the A&C Act is not a bar on the High Court to invoke the extra ordinary powers vested in it under Articles 226 and 227 of the Constitution of India. In support of the said submission, he has cited Smt. Lila Vati Bai vs. State of Bombay, 1957 AIR(SC) 521. To urge that the order dated 08.04.2019 passed by the Sole Arbitrator, rejecting the appellant's application under Section 16 of the A&C Act is unsustainable, learned counsel has referred to a decision of the Supreme Court in S.N. Prasad vs. M/s Monnet Finance Ltd.& Ors., 2011 AIR(SC) 442.