List of Current Affairs

Source: Allahabad High Court 

Why in News? 

A bench of Justice Piyush Agarwal held that there is no automatic stay on award upon filing of Appeal under Section 34 of the Arbitration and Conciliation Act, 1996 (A & C Act). 

• The Allahabad High Court held this in the case of Matters Under Article 227(2025). 

What was the Background of Matters Under Article 227 (2025) Case?   

• The petitioner is a tenant of an industrial plot (C-156, Sector 10, NOIDA, ground floor) since July 1, 2008, with a monthly rent of Rs. 8,000. 
• The tenancy agreement was unregistered, for 11 months for manufacturing purposes, and continued after expiry. 
• A dispute arose between the petitioner and respondent no. 1 regarding rent payment, leading respondent no. 1 to file SCC Case no. 19 of 2011 for the petitioner's ejection. 
• The petitioner filed an application to reject the plaint under Order 7 Rule 11 Civil Procedure Code, 1908, citing an arbitration clause in the rent agreement. 
• The Additional Sessions Judge rejected respondent no. 1's plaint on September 19, 2015. 
• Respondent no. 1 then filed an Arbitration petition for the same relief, which was allowed by the Arbitrator through an award dated July 19, 2017. 
• The petitioner filed an objection under Section 34 of the Arbitration and Conciliation Act, 1996 (A & C Act), which was rejected on June 30, 2022. 
• The petitioner's subsequent Arbitration Appeal (Section 37) was rejected by the High Court on December 6, 2022, and their Special Leave Petition to the Supreme Court was also dismissed. 
• During the pendency of the Section 34 objection, respondent no. 1 sold the property to respondent no. 2 via a registered sale deed dated March 5, 2021. 
• The petitioner filed Suit No. 342 of 2021 to cancel this sale deed, which was rejected on May 29, 2023. 
• The petitioner challenged this rejection through First Appeal No. 1000 of 2023, which was admitted on April 10, 2024. 
• In Execution Case No. 108 of 2021, the decree holder filed an application on April 3, 2024, which the court allowed on June 24, 2024, directing the petitioner to pay Rs. 8,58,795. 
• The petitioner has now filed this petition under Article 227 to quash the court's order from June 24, 2024. 

What were the Court’s Observations? 

• The court determined that filing an application under Section 34 of the A & C Act does not automatically stay an arbitral award, as the petitioner had claimed. 
• The arbitration award was passed on 19th July 2017, directing the petitioner to vacate the premises within 30 days, but the petitioner only handed over possession in April 2024. 
• Section 34 application was filed by the petitioner in 2017, after the 2015 amendment to the Arbitration Act came into effect on 23rd October 2015. 
• The Supreme Court in Board of Control for Cricket in India and Shree Vishnu Constructions cases established that the Amendment Act applies prospectively to court proceedings commenced after it came into force. 
• The Court rejected the petitioner's argument regarding automatic stay of the award, noting that the Section 34 application was filed in 2017, well after the 2015 amendment was enacted. 
• The Court dismissed the petitioner's reliance on Small Scale Industrial Manufactures Association, finding that the case's facts were entirely different from the present matter. 
• The Court found that the petitioner had not proven that any competent court had stayed the arbitral award. 
• Based on State of Rajasthan v. J.K. Synthetics Ltd., the court determined that respondent no. 1 is entitled to mesne profits since the award was neither complied with nor stayed by any court. 
• The Supreme Court has established that parties must be restored to their original positions after dismissal of proceedings, meaning that interest or charges accrued during stay periods remain payable. 
• The court concluded that no interference is warranted in the impugned order that directed payment of mesne profits. 

What are the Provisions Regarding Stay under the A & C Act ? 

• Section 36 (2) of the A & C Act provides that: 
  • Filing an application under Section 34 to set aside an arbitral award does not automatically make the award unenforceable. 
  • The award remains enforceable despite the filing of a Section 34 application unless specifically stayed. 
  • To stay the operation of an arbitral award, a separate application must be filed specifically requesting a stay. 
  • The Court must explicitly grant an order of stay in accordance with sub-section (3) for the award to become unenforceable. 
  • Without such a specific stay order, the award continues to be valid and enforceable despite ongoing Section 34 proceedings. 
• Section 36 (3) of A & C Act provides: 
  • The Court may grant a stay of the arbitral award's operation upon filing an application under sub-section (2). 
  • Any stay granted must include reasons recorded in writing by the Court. 
  • The Court has discretion to impose conditions when granting such a stay. 
  • For arbitral awards involving payment of money, the Court must consider the provisions for staying money decrees under the Code of Civil Procedure. 
  • If the Court finds prima facie evidence that the arbitration agreement/contract or the making of the award was induced by fraud or corruption, it must grant an unconditional stay. 
  • The explanation clarifies that these provisions apply to all court cases related to arbitral proceedings, regardless of whether they began before or after the Arbitration and Conciliation (Amendment) Act, 2015. 

Source: Supreme Court 

Why in News? 

The Supreme Court that Article 32 of the Constitution of India, 1950 (COI) which serves as a remedial provision for enforcing fundamental rights, cannot be used to challenge the Court’s own judgment.  

• It was held in the case of Satish Chander Sharma & Ors. Versus State Of Himachal Pradesh & Ors. (2025).  

What was the Background of Satish Chander Sharma & Ors. Versus State Of Himachal Pradesh & Ors. (2025).

• 26.03.1974: 
  • The Himachal Pradesh State Forest Development Corporation Ltd. was incorporated under the Companies Act, 1956. The State of Himachal Pradesh owns 100% of the Corporation’s share capital. 
• Appointments of Petitioners: 
  • Petitioner 1: Appointed on 29.10.1975, superannuated on 31.01.2013. 
  • Petitioner 2: Appointed on 15.02.1988, superannuated on 30.09.2016. 
  • Petitioner 3: Appointed on 05.12.1981, superannuated on 30.11.2014. 
• 29.10.1999: 
  • The Himachal Pradesh Government notified the Corporate Sector Employees Pension Scheme, 1999, effective from 01.04.1999, granting pensionary benefits on par with state government employees. 
  • Employees opting for the scheme forfeited employer’s contribution to the CPF. 
  • The scheme followed the Central Civil Services (Pension and Commutation) Rules. 
• 21.01.2003:
  
  • A High-Level Committee was constituted to assess the financial viability of the 1999 Scheme. 
• 28.10.2003: 
  • The Committee submitted a report stating the scheme was financially unsustainable, due to: 
    • Uncertainty in interest rates. 
    • Declining recruitment in the public sector. 
    • Inability of the corpus fund to sustain pension payments equivalent to government employees. 
• 02.12.2004: 
  • The Government repealed the 1999 Scheme prospectively. 
  • Protected employees who had retired between 01.04.1999 and 02.12.2004 and opted for the scheme. 
  • Employees retiring after 02.12.2004 were excluded from pension benefits. 
• Post-2004: 
  • The Corporation amended its byelaws and implemented the repeal; the petitioners, though opted for the scheme, were denied pension. 
• 2009 – 2013: 
  • A batch of writ petitions was filed before the Himachal Pradesh High Court (lead case: P.D. Nanda v. State of H.P.). 
  • 19.12.2013: High Court allowed the petitions, declared the cut-off date ultra vires, and read down the repeal to include post-02.12.2004 retirees. 
• 28.09.2016: 
  • The Supreme Court reversed the High Court judgment in State of H.P. v. Rajesh Chander Sood and upheld the cut-off date and validity of the repeal. 
• 20.03.2018: 
  • A two-judge Bench of the Supreme Court, while issuing notice on the present petition, referred it to a three-judge Bench questioning the correctness of the Rajesh Chander Sood judgment. 
• Present Petition Filed: 
  • The three petitioners filed a writ under Article 32, claiming the Rajesh Chander Sood judgment was rendered per incuriam, and seeking parity with pre-2004 retirees

What were the Court’s Observations? 

The bench comprising Justices Surya Kant, Dipankar Datta and Ujjal Bhuyan made the following observations: 

• Maintainability and Res Judicata: 
  • The petition under Article 32 was held not maintainable. 
  • The issue had already been conclusively decided by the Supreme Court in Rajesh Chander Sood. 
• Finality of Supreme Court Decisions: 
  • Supreme Court judgments cannot be reopened via a writ petition under Article 32. 
  • The correct legal remedy is through a review petition, followed if needed by a curative petition. 
  • Allowing such writs would create judicial chaos and undermine the finality of litigation. 
• Per Incuriam Argument Rejected: 
  • The petitioners’ claim that Rajesh Chander Sood was per incuriam was firmly rejected. 
  • The Court found no binding precedent was overlooked, and the judgment was well-reasoned.
• State Policy and Valid Classification: 
  • The Court upheld the State’s authority to alter policies based on financial feasibility. 
  • The cut-off date of 02.12.2004 was found to be reasonable, justified, and not arbitrary. 
• Pension Scheme Not a Fundamental Right: 
  • The 1999 Scheme was introduced as a welfare measure, not a statutory right. 
  • The petitioners, being employees of a public sector undertaking and not state government employees, could not claim parity in service benefits. 
• Dismissal of Petition and Final Remarks: 
  • The writ petition was found to be wholly misconceived and was dismissed. 
  • No costs were imposed due to the petitioners being retired and elderly. 

What is Article 32 of the COI? 

Nature and Significance of Article 32: 

• Article 32 is referred to by Dr. B.R. Ambedkar as the "heart and soul of the Constitution." 
• It grants citizens the right to approach the Supreme Court directly for the enforcement of Fundamental Rights. 
• This is a remedial fundamental right, not substantive—it provides a mechanism to enforce other rights under Part III of the Constitution. 
• It is part of the basic structure of the Constitution and cannot be taken away, except in cases like emergencies under Article 359.

Legal Basis and Text of Article 32: 

Writs under Article 32: 

Key Principles and Doctrines Related to Article 32 

Locus Standi & PIL: 

• Initially, only an aggrieved person could move the Court. 
• Evolved into Public Interest Litigation (PIL) to allow filing on behalf of those unable to access justice. 
• Recognized in: 
  • A.B.S.K. Sangh v. Union of India (1981) 
  • S.P. Gupta v. Union of India (1982) 

Res Judicata: 

• Doctrine of finality: Once a matter is decided under Article 32, it cannot be reopened. 
• Exception: Not applicable to habeas corpus or if rejected by High Court, SC can be approached. 

Rule of Laches: 

• Delay in filing can be a ground for dismissal. 
• No fixed limitation period; courts decide case-by-case (as held in Trilokchand Motichand v. H.B. Munshi, 1970). 

Article 32 vs Article 226 

Judicial Views & Important Observations: 

• Romesh Thappar Case: SC emphasized its duty as the protector and guarantor of Fundamental Rights. 
• SC has discretionary power under Article 32—can even entertain a letter as a petition if rights of poor/marginalized are violated. 
• No fixed procedural format for invoking Article 32; Courts may use inquisitorial approach over adversarial. 

Limitations and Misuse Concerns: 

• Cannot be used for: 
  • Contractual rights, private disputes, or rights covered under other laws. 
• During emergency (Article 359), rights under Article 32 can be suspended. 
• Supreme Court has expressed concerns over misuse and has sought to discourage frivolous petitions under Article 32.