The High Court of Sikkim reaffirms that when parties are bound by an arbitration clause, High Courts should exercise extreme circumspection before invoking their extraordinary writ jurisdiction under Article 226, absent mala fides. The decision upholds existing Supreme Court precedent, specifically distinguishing situations where arbitration clauses exist, and clarifies the limited scope of interference in intra-court mandamus appeals. This judgment serves as binding authority within Sikkim and as persuasive authority elsewhere.
Summary
| Category | Data |
|---|---|
| Case Name | WA/4/2025 of Swadhi Health Management LLP and Ano. Vs State of Sikkim and Ors. |
| CNR | SKHC010001922025 |
| Date of Registration | 18-10-2025 |
| Decision Date | 28-10-2025 |
| Disposal Nature | Dismissed |
| Judgment Author | HON’BLE THE CHIEF JUSTICE SHRI BISWANATH SOMADDER |
| Concurring or Dissenting Judges | HON’BLE MR. JUSTICE BHASKAR RAJ PRADHAN (concurring) |
| Court | High Court of Sikkim |
| Bench | HON’BLE MR. JUSTICE BISWANATH SOMADDER, CHIEF JUSTICE; HON’BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE |
| Precedent Value | Binding in Sikkim; persuasive value elsewhere |
| Overrules / Affirms | Affirms existing Supreme Court precedent |
| Type of Law | Constitutional Law (Article 226), Arbitration Law |
| Questions of Law | Whether the presence of an arbitration clause bars or restricts writ jurisdiction under Article 226 in contractual disputes between parties. |
| Ratio Decidendi |
The High Court reaffirmed that, while its jurisdiction under Article 226 is expansive, writ petitions should not be entertained when there is an agreed arbitration clause between parties and no mala fides are alleged. The existence of an arbitration clause requires the writ court to exercise restraint, directing the parties to the contractually agreed remedy unless exceptional circumstances exist. The judgment distinguished Supreme Court precedent (Gunwant Kaur) based on the absence of an arbitration clause and affirmed principles set out in Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd. The appellate court found no perversity or error in the single judge’s decision declining writ relief and directing recourse to arbitration. The intra-court appeal is dismissed as there was no infirmity in the reasoning of the single judge. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Supreme Court precedents emphasizing the circumspect use of Article 226 in contractual disputes where an arbitration clause exists. Distinction between cases with and without arbitration clauses. |
| Facts as Summarised by the Court | The dispute arose from facts involving contesting views over the merits, but the existence of an arbitration clause between the parties was undisputed. The single judge determined that disputed factual issues were best resolved through the contractual arbitration process, granting liberty for such recourse and declining to entertain the writ petition on merits. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Sikkim; panels of the Sikkim High Court |
| Persuasive For | Other High Courts and litigants in jurisdictions outside Sikkim |
| Follows |
|
What’s New / What Lawyers Should Note
- Explicit clarification that mere existence of disputed factual questions in a contractual dispute, where an arbitration clause exists, is not sufficient ground for writ courts to exercise Article 226 jurisdiction.
- Distinguishes Supreme Court precedent (Gunwant Kaur) where no arbitration clause existed—hence, reliance on such judgments in writ petitions may be misplaced if an arbitration clause governs the parties.
- Reinforces the principle that only in the presence of mala fides or other exceptional circumstances would writ jurisdiction be exercised when arbitration is contractually prescribed.
- The judgment confirms that intra-court appeals in such circumstances will succeed only where palpable perversity or infirmity is discernible in the order impugned.
Summary of Legal Reasoning
- The division bench examined the single judge’s decision refusing to exercise writ jurisdiction due to the existence of an arbitration clause and directing parties to resolve disputes through arbitration.
- The appellant attempted to rely on the Supreme Court decision in Smt. Gunwant Kaur, arguing its applicability. The court, however, noted the absence of an arbitration clause in Gunwant Kaur and flagged this as a material factual and legal distinction.
- The bench emphasized that the writ jurisdiction under Article 226 is indeed broad and expansive but should be exercised with extreme circumspection, especially in contractual matters with a binding arbitration clause and absent allegations of mala fides.
- The decision cited Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd., reiterating that when alternative statutory remedies like arbitration are available and agreed upon, courts should ordinarily decline to intervene under Article 226.
- The division bench found no palpable infirmity or perversity in the reasoned order of the single judge, noting that the judgment was comprehensive and justified in law.
- The appeal was dismissed accordingly.
Arguments by the Parties
Petitioner (Appellant):
- Contended that the learned Single Judge erroneously disregarded the applicability of Smt. Gunwant Kaur v. Municipal Committee, Bhatinda.
- Placed reliance on paragraph 14 of Gunwant Kaur, asserting factual similarity.
Respondent (State):
- Maintained that the case was distinguishable from Gunwant Kaur, as an undisputed arbitration clause existed between the parties.
- Emphasized the binding nature of the arbitration agreement and the absence of any mala fides.
Factual Background
The matter involved a contractual dispute between the appellants and the State of Sikkim, with the presence of disputed factual issues. An undisputed arbitration clause formed part of the agreement between the parties. The learned single judge, upon recognizing the disputed factual matrix and the presence of the arbitration clause, declined to decide the merits of the petition and granted liberty to pursue arbitration. The appellants, aggrieved by this, filed an intra-court mandamus appeal.
Statutory Analysis
The judgment discussed the scope of Article 226 of the Constitution of India, particularly its application to contractual disputes where parties are bound by an arbitration clause. The court reaffirmed that while Article 226 is a wide and plenary jurisdiction, it should not be readily invoked in matters governed by binding arbitration agreements, especially in the absence of mala fides.
Dissenting / Concurring Opinion Summary
The judgment was unanimous. Both judges concurred; no dissenting opinion is present.
Procedural Innovations
No new procedural innovations or departures are recorded in the judgment.
Alert Indicators
- ✔ Precedent Followed – The judgment affirms existing legal principles as laid down by the Supreme Court, particularly the circumspect use of writ jurisdiction where arbitration is contractually agreed.