Research › Search › Judgment

Orissa High Court · body

2026 DAILYLAW 27155 (ORI)

T. R. Chemical Ltd. v. Bajrang Metallics Ltd.

2026-01-09

Sanjeeb K Panigrahi

body2026
JUDGMENT : SANJEEB K. PANIGRAHI, J. 1. The present Writ Petition arises out of an order dated 04.07.2025 passed by the learned Civil Judge, Senior Division, Commercial Court, Rourkela in ARBP No.03/31 of 2024-2025, whereby an application filed under Section 34 of the Arbitration and Conciliation Act, 1996 was dismissed. I. F ACTUAL M ATRIX OF THE C ASE 2. The brief facts of the case are as follows: (i) The Section 34 application before the Commercial Court was directed against an arbitral award dated 31.08.2016 passed in MSEFC Case No. 04 under the Micro, Small and Medium Enterprises Development Act. (ii) The dispute between the parties originates from a transaction relating to supply of iron ore fines and iron weighing for a value of Rs. 22,89,553, in respect of which deductions were made by the petitioner on the ground of sub-standard quality. (iii) Bajrang Metallic Ltd invoked Section 18 of the MSMED Act before the Micro and Small Enterprises Facilitation Council, registering MSEFC Case No. 04 of 2014 for a total claim of Rs.27,95,520.18, to which the petitioner filed its response. (iv) The Facilitation Council initially passed an order dated 10.09.2015 directing payment of principal and interest, which was challenged by the petitioner before this Court in W.P.(C) No. 18902 of 2015. (v) By order dated 19.07.2016, this Court remanded the matter to the Facilitation Council with directions to afford an opportunity of hearing to the petitioner, particularly on the issue of interest, and to conclude the proceedings within a stipulated time. (vi) Pursuant to the remand, the Facilitation Council passed a fresh award dated 31.08.2016, recording that the principal amount stood paid, but directing payment of enhanced interest and future compound interest. (vii) After receipt of the award, the petitioner moved an application dated 03.10.2016 before the Facilitation Council seeking modification of the award, and thereafter challenged the award dated 31.08.2016 before this Court in W.P.(C) No. 20768 of 2016. (viii) W.P.(C) No. 20768 of 2016 was disposed of on 26.04.2017 with a direction to the petitioner to avail the statutory remedy provided under law, which led to the filing of Writ Appeal No. 128 of 2017. (ix) By order dated 30.11.2023, the Division Bench dismissed Writ Appeal No.128 of 2017, affirming that the petitioner should pursue the statutory remedy available for challenging the award. (ix) By order dated 30.11.2023, the Division Bench dismissed Writ Appeal No.128 of 2017, affirming that the petitioner should pursue the statutory remedy available for challenging the award. (x) Thereafter, the petitioner filed an application under Section 34 of the Arbitration and Conciliation Act before the District Judge, Sundargarh, which was registered as ARBP No. 3 of 2024 and subsequently transferred to the Commercial Court, Rourkela. (xi) The Commercial Court, at the stage of admission, confined its consideration to the question of limitation and by the impugned order dated 04.07.2025 dismissed the Section 34 application holding it to be barred by limitation under Section 34(3) of the Arbitration and Conciliation Act. (xii) The petitioner asserts that statutory deposits were made as required under the MSMED Act and that execution proceedings have been initiated on the basis of the award. (xiii) The petitioner challenges the impugned order on the ground that the period spent in earlier proceedings, including an application for modification before the Facilitation Council, ought to have been excluded while computing limitation. (xiv) The opposite party maintains that once the Section 34 application was found to be barred by limitation, the Commercial Court was justified in not examining the merits of the challenge to the award. (xv) The opposite party further asserts that an efficacious statutory appeal lies against the impugned order under Section 13 of the Commercial Courts Act, 2015 before the District Judge, Sundargarh. (xvi) In the above background, the petitioner has approached this Court under Article 226 of the Constitution seeking interference with the order dated 04.07.2025 passed by the Commercial Court. II. S UBMISSIONS O N B EHALF O F T HE P ETITIONER 3. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions: (i) The impugned order is assailed as illegal because it dismissed the Section 34 petition purely on limitation and denied adjudication on merits, despite the petitioner being before the court pursuant to the High Court’s direction in W.A. No. 128 of 2017. (ii) The Commercial Court is said to have overreached by adopting a pedantic limitation approach, allegedly ignoring that time spent in pursuing a Section 33-type modification application before the MSEFC must be excluded while computing limitation for Section 34. (ii) The Commercial Court is said to have overreached by adopting a pedantic limitation approach, allegedly ignoring that time spent in pursuing a Section 33-type modification application before the MSEFC must be excluded while computing limitation for Section 34. (iii) The petitioner’s central legal contention is that under Geojit Financial Services Ltd. v. Sandeep Gaurav , 2025 INSC 1021 the limitation clock for Section 34 excludes the period during which a Section 33 application remained pending, and the Commercial Court failed to apply this binding principle. (iv) On petitioner’s computation applying exclusion, the Section 34 petition was within three months and filed on the 88th day, making the proviso grace period of 30 days unnecessary, and therefore the dismissal as beyond 3 months plus 30 days is asserted to be plainly erroneous. (v) The petitioner contends that the Commercial Court itself noted the existence of the modification application dated 03.10.2016, but still did not exclude the relevant period and thus acted in direct contradiction of the controlling legal position. (vi) The petitioner contends it was never confronted with a limitation defect at the filing or registration stage; there was allegedly no scrutiny objection pointing out delay, and the dismissal on limitation at admission is pleaded as unfair and as a denial of proper opportunity. (vii) The petitioner frames the MSEFC’s conduct as arbitrary and biased: despite High Court remand in W.P.(C) No. 18902 of 2015 requiring fresh hearing and opportunity particularly on interest, the Council allegedly proceeded ex parte on 31.08.2016 and falsely recorded hearing. (viii) The petitioner asserts the interest component is extortionate and unjustified because the principal was admittedly paid on 05.02.2014, and once principal is discharged, continued interest escalation under Section 16 of the MSMED Act is attacked as legally unsustainable in the given factual setting. (ix) The petitioner argues it has suffered a gross injustice as the dispute has continued for over a decade after principal payment, and the execution figure of Rs. 83 lakh is projected as a “travesty of justice” stemming from unlawful MSEFC functioning and denial of merits adjudication under Section 34. (x) On maintainability, the petitioner contests the objection of alternative remedy by asserting that writ jurisdiction remains available where the issue is a pure question of law on undisputed facts, relying on authorities on entertainability versus maintainability. 83 lakh is projected as a “travesty of justice” stemming from unlawful MSEFC functioning and denial of merits adjudication under Section 34. (x) On maintainability, the petitioner contests the objection of alternative remedy by asserting that writ jurisdiction remains available where the issue is a pure question of law on undisputed facts, relying on authorities on entertainability versus maintainability. (xi) The petitioner asserts the controversy is pristinely legal: whether the pendency of a Section 33 application must be excluded for Section 34(3) limitation, and because no fact dispute arises, the High Court should exercise jurisdiction rather than push the petitioner into statutory appeals. (xii) The petitioner also contends that forcing it to a Section 37 remedy is not efficacious because Section 34 is the first and indispensable forum for merits review of an award, whereas Section 37 is narrower and the appellate court cannot remand back to Section 34. (xiii) The petitioner’s relief case is framed as limited and non-prejudicial to the opposite party: the prayer is only to quash the limitation-based dismissal and remand the Section 34 petition for merits adjudication; the opposite party retains full opportunity to contest on merits after remand. (xiv) The petitioner presents bona fides to support discretionary relief: principal already paid since 2014, statutory deposit made under Section 19, and the writ is only to restore the statutory merits forum allegedly denied by an erroneous limitation approach. III. S UBMISSIONS O N B EHALF O F T HE O PPOSITE P ARTY 4. The Learned Counsel for the Opposite Party earnestly made the following submissions in support of his contentions: (i) The writ petition is not maintainable because an efficacious alternative statutory remedy is available against the impugned order, namely an appeal under Section 13 of the Commercial Courts Act, 2015. (ii) The opposite party contends that Article 226 jurisdiction is not meant for challenging orders arising out of civil and commercial disputes when the statute provides a complete appellate hierarchy, and therefore the writ petition deserves dismissal at the threshold. (iii) The opposite party asserts that writ jurisdiction is meant to address infringement of constitutional or public law rights, whereas the present writ is merely an attempt to settle private civil rights arising out of a commercial dispute. (iii) The opposite party asserts that writ jurisdiction is meant to address infringement of constitutional or public law rights, whereas the present writ is merely an attempt to settle private civil rights arising out of a commercial dispute. (iv) The opposite party argues that the petitioner has a repeated pattern of bypassing statutory remedies, as seen earlier when it filed W.P.(C) No. 20768 of 2016 instead of pursuing the alternate remedy and complying with the statutory pre deposit requirement linked to MSMED disputes. (v) The opposite party relies on the prior dismissal of W.P.(C) No. 20768 of 2016 and the dismissal of Writ Appeal No. 128 of 2017 to contend that the petitioner is barred in principle from again invoking writ jurisdiction to avoid the statutory route. (vi) The opposite party invokes the authority of the Supreme Court ratio cited as in M/s India Glycols Limited versus Micro and Small Enterprises , AIR 2024 SC 285 to support the proposition that writ jurisdiction should not be entertained where the statute provides an alternative remedy. (vii) The opposite party argues that the petitioner’s grievance that the Section 34 petition was not decided on merits is misconceived because the Commercial Court dismissed the matter on limitation as a preliminary issue, and once limitation barred the petition, the court rightly did not enter merits. (viii) The opposite party asserts that the Commercial Court’s approach was legally correct because a time barred Section 34 challenge is incompetent in law, and therefore examining the merits or factual grounds would have been redundant. (ix) The opposite party characterises the petitioner’s plea that the court should have decided merits despite limitation as untenable and labels the challenge as baseless because the impugned order is not erroneous on the limitation finding. (x) The opposite party contends that the correct and exclusive course for the petitioner is to file a statutory appeal before the District Judge, Sundargarh under Section 13(1) of the Commercial Courts Act, and not invoke Article 226. (xi) The opposite party ultimately submits that the writ petition should be dismissed as not maintainable, and also on the ground that it raises no legal infirmity in the impugned order which dismissed the Section 34 petition as time barred. IV. J UDGMENT AND ANALYSIS 5. Heard Learned Counsel for the parties and perused the documents placed before this Court. 6. IV. J UDGMENT AND ANALYSIS 5. Heard Learned Counsel for the parties and perused the documents placed before this Court. 6. The petitioner has invoked Article 226 of the Constitution to set aside the order dated 04.07.2025, by which the Commercial Court (Rourkela) dismissed its Section 34 petition as barred by limitation. The petitioner’s grievance is that the Court took a pedantic view of limitation, ignoring that an application under Section 33 of the Arbitration Act was pending, and thus time spent on that proceeding should have been excluded. The petitioner contends that all statutory preconditions (including the 75% deposit under Section 19 of the MSMED Act) were fulfilled, yet its Section 34 petition was not adjudicated on merits. The respondent invokes the availability of statutory remedies, in particular an appeal under Section 13 of the Commercial Courts Act, 2015, to oppose exercise of writ jurisdiction, and justifies the limitation finding as a legal bar rendering the petition incompetent. 7. It is imperative to first examine whether the writ petition is maintainable given the alternate remedies. The Commercial Courts Act provides an appeal to the designated Commercial Appellate Court (District Judge) against the impugned order. Under Article 226, however, the High Court’s authority to issue prerogative writs is “plenary in nature” and is not fettered by the mere existence of statutory appeals. 8. It is well settled that the availability of an alternative remedy does not operate as an absolute bar to writ jurisdiction; rather, the rule that a party must first exhaust statutory remedies is one of policy and discretion, not an inflexible rule of law. In fact, the Supreme Court in the case of Godrej Sara Ltd. v. Excise and Taxation Officer , 2023 SCC Online SC 95 emphasized that an appellate remedy’s existence alone cannot “mechanically” oust the High Court’s jurisdiction. The relevant excerpts are produced below: “4. Before answering the questions, we feel the urge to say a few words on the exercise of writ powers conferred by Article 226 of the Constitution having come across certain orders passed by the high courts holding writ petitions as “not maintainable” merely because the alternative remedy provided by the relevant statutes has not been pursued by the parties desirous of invocation of the writ jurisdiction. The power to issue prerogative writs under Article 226 is plenary in nature. The power to issue prerogative writs under Article 226 is plenary in nature. Any limitation on the exercise of such power must be traceable in the Constitution itself. Profitable reference in this regard may be made to Article 329 and ordainments of other similarly worded articles in the Constitution. Article 226 does not, in terms, impose any limitation or restraint on the exercise of power to issue writs. While it is true that exercise of writ powers despite availability of a remedy under the very statute which has been invoked and has given rise to the action impugned in the writ petition ought not to be made in a routine manner, yet, the mere fact that the petitioner before the high court, in a given case, has not pursued the alternative remedy available to him/it cannot mechanically be construed as a ground for its dismissal. It is axiomatic that the high courts (bearing in mind the facts of each particular case) have a discretion whether to entertain a writ petition or not. One of the self-imposed restrictions on the exercise of power under Article 226 that has evolved through judicial precedents is that the high courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. At the same time, it must be remembered that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the high court under Article 226 has not pursued, would not oust the jurisdiction of the high court and render a writ petition “not maintainable”. In a long line of decisions, this Court has made it clear that availability of an alternative remedy does not operate as an absolute bar to the “maintainability” of a writ petition and that the rule, which requires a party to pursue the alternative remedy provided by a statute, is a rule of policy, convenience and discretion rather than a rule of law. Though elementary, it needs to be restated that “entertainability” and “maintainability” of a writ petition are distinct concepts. The fine but real distinction between the two ought not to be lost sight of. The objection as to “maintainability” goes to the root of the matter and if such objection were found to be of substance, the courts would be rendered incapable of even receiving the lis for adjudication. The fine but real distinction between the two ought not to be lost sight of. The objection as to “maintainability” goes to the root of the matter and if such objection were found to be of substance, the courts would be rendered incapable of even receiving the lis for adjudication. On the other hand, the question of “entertainability” is entirely within the realm of discretion of the high courts, writ remedy being discretionary. A writ petition despite being maintainable may not be entertained by a high court for very many reasons or relief could even be refused to the petitioner, despite setting up a sound legal point, if grant of the claimed relief would not further public interest. Hence, dismissal of a writ petition by a high court on the ground that the petitioner has not availed the alternative remedy without, however, examining whether an exceptional case has been made out for such entertainment would not be proper.” 9. The abovementioned judicial precedents make it clear that a writ court retains discretion, and may entertain a petition despite alternate routes, especially where exceptional circumstances exist. 10. In the present case, the issue raised by the petitioner is essentially a purely legal question of statutory interpretation, not a dispute over complex facts. The petitioner’s argument centers on the effect of a Section 33 application on the computation of the limitation period under Section 34(3) of the Arbitration Act. There is no dispute over any factual matrix or evidence; the controversy is squarely one of law. As the Supreme Court held in Godrej Sara Lee (Supra), when a question is pristinely legal and does not involve contested facts, the High Court need not insist on exhausting the remedy of appeal. In that vein, the petitioner’s challenge, that the Section 34 petition was wrongly held time-barred, is precisely a legal issue warranting adjudication. 11. Moreover, it bears noting that the petitioner has fulfilled the 75% deposit requirement of Section 19 of MSMED Act. Once that condition is met, the statutory remedy under Section 34 of the Arbitration Act becomes available. The petitioner did invoke that remedy by filing the Section 34 petition (ARBP No.3/2024). It is not seeking to sidestep any deposit requirement by coming to the High Court; indeed, its writ petition merely seeks to set aside the limitation ruling and remand the case to the Section 34 forum. The petitioner did invoke that remedy by filing the Section 34 petition (ARBP No.3/2024). It is not seeking to sidestep any deposit requirement by coming to the High Court; indeed, its writ petition merely seeks to set aside the limitation ruling and remand the case to the Section 34 forum. The Single Judge’s reliance on an “efficacious alternate remedy” was pointedly rejected in India Glycols Ltd. (Supra) , but even there the factual canvas differed (the appellant had not availed of Section 34 with deposit). Here, since the deposit is made, the concern of bypassing an enforcement safeguard does not arise. 12. Finally, the petitioner seeks limited relief: quashing the limitation-based dismissal and restoring the Section 34 petition for merits. The respondent will have full opportunity to defend on merits thereafter. The respondent will have full opportunity to defend on merits thereafter. The High Court’s power under Article 226 can be exercised to prevent “travesty of justice” in such a situation. In light of these factors and the precedents, this Court holds that the writ petition is maintainable. The petitioner’s invocation of Article 226 is not a mere attempt to avoid appeal, but a valid recourse to correct an apparent misapplication of law. This Court proceeds, therefore, to the merits. 13. Section 34(3) of the Arbitration and Conciliation Act, 1996 prescribes that an application to set aside an award shall be brought within three months from the date the award was received or, “if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal”. This Court must give effect to that scheme. The petitioner made a request for modification of the facilitation council’s award by an application dated 03.10.2016. That plea (analogous to a Section 33 request) was considered and finally disposed of by the council. 14. In Geojit Financial Services Ltd. v. Sandeep Gaurav , 2025 INSC 1021 the Supreme Court clarified the law: where a valid application under Section 33 has been filed, the limitation period under Section 34 only starts to run from the date of the disposal of that application, irrespective of whether the application is allowed or rejected. The Court stressed that the words “disposed of” must be read objectively, embracing any final adjudication on a compliant Section 33 request. The Court stressed that the words “disposed of” must be read objectively, embracing any final adjudication on a compliant Section 33 request. The purpose is to avoid a hyper- technical or subjective approach and to peg limitation to an ascertainable event. The relevant excerpts are produced below: “29. If at all the intention of the legislature was that the date of disposal of only those applications under Section 33 of the 1996 Act which culminated into a correction or interpretation of the award or rendition of an additional award, would be of relevance for the purpose of computation of limitation under Section 34 of sub-section (3), then it would not have used the word “disposed” therein, and would have employed the word “allowed” instead. 30. The aforesaid may be looked at from one another angle. Even if we assume for a moment, that where an application under Section 33 of the 1996 Act, is not entertained for want of maintainability or for reason of falling beyond the parameters of the provision, the same, in such scenario, would not amount to passing of an award in terms of Section(s) 31 read with 33 of the 1996 Act, and thus there would be no distinct award in existence from what was originally passed by the arbitral tribunal prior to the making of the request under Section 33, even then, the interpretation that found favour with the High Court in the impugned order, to our minds, cannot be regarded to have laid down the correct proposition of law. 31. We say so because, the fundamental cannons of law of limitation demands, as a thumb rule, that any period of commencement and end of limitation should be determinable and ascertainable in an objective parameter. The law of limitation, at least insofar as the computation of the prescribed period of limitation is concerned, cannot be read in a hyper-technical or subjective manner. The same must in most cases, if not always, adorn a formulaic understanding that is comprehendible to the litigants. It however, cannot be tied or made contingent to the ultimate fate of the application under Section 33 of the 1996 Act.” 15. Applying that principle here, the limitation clock should run from the date the Council finally dealt with the petitioner’s request. It however, cannot be tied or made contingent to the ultimate fate of the application under Section 33 of the 1996 Act.” 15. Applying that principle here, the limitation clock should run from the date the Council finally dealt with the petitioner’s request. In the present facts, the facilitation council had remanded proceedings, conducted a fresh hearing, and on 31.08.2016 passed an award reflecting the disposal of the prior matter. The subsequent application of 03.10.2016 (though filed slightly beyond thirty days) was treated and disposed of. Even assuming arguendo it met the twin conditions of Section 33 (filed within thirty days of the award and with notice), then by Geojit (Supra) the three-month period for Section 34 would commence from the date of that disposal. 16. On the petitioner’s own calculation, after excluding the pendency of the Section 33 application, the Section 34 petition would have been filed on the 88th day from disposal, clearly within the prescribed three months. 17. The Commercial Court’s reasoning, that the petition was beyond three months plus 30 days from the award, fails to account for this legal position. By starting the clock at the date of the award’s receipt and ignoring the effect of the Section 33 request, the impugned order applied a rule contrary to the statute’s plain words as interpreted by the Supreme Court. In Geojit (Supra) the Court explicitly repelled a similar approach: it held that neither the date of the original award nor the receipt of any corrected award matters under Section 34(3), only the date of disposal of the Section 33 request does. 18. To the extent the Commercial Court treated the request for correction/interpretation as irrelevant for limitation, it applied the law on an incorrect premise. Where a proper, formal application for correction/interpretation has been filed before the arbitral tribunal in accordance with the statutory procedure, the period during which that application remains pending is material for computing limitation for a challenge to the award. In such a situation, the time spent in pursuing that application is required to be accounted for/excluded in limitation computation, and the Section 34 petition ought to be treated as within time. 19. In short, the limitation period for setting aside the award did not expire on its face within three months of 31.08.2016. In such a situation, the time spent in pursuing that application is required to be accounted for/excluded in limitation computation, and the Section 34 petition ought to be treated as within time. 19. In short, the limitation period for setting aside the award did not expire on its face within three months of 31.08.2016. The petitioner’s Section 34 challenge was properly brought, and the limitation objection in the impugned order is not sustainable in law. V. C ONCLUSION 20. For the reasons stated above, we find the impugned order to be legally untenable. The petitioner is entitled to have its Section 34 petition considered on merits. The Writ Petition is, accordingly, allowed. 21. The order dated 04.07.2025 is quashed, and the Section 34 petition (ARBP No.3/2024) is restored for fresh hearing on its merits. The petitioner and the respondent shall be at liberty to canvass all grounds on the law and facts before the Commercial Court as though limitation has been correctly computed. 22. Interim order, if any, passed earlier stands vacated.