New Delhi: The Supreme Court on May 27, 2026 dismissed a civil appeal challenging the Orissa High Court Division Bench’s decision to set aside a Single Judge order that had entertained a writ petition against an arbitral tribunal’s ruling on a stamping objection under Section 16 of the Arbitration and Conciliation Act, 1996 [M/s Tarini Prasad Mohanty v. M/s Sunflag Iron and Steel Company Limited, 2026 INSC 566].
A Bench of Justice J.K. Maheshwari and Justice Atul S. Chandurkar held that a writ court cannot enter into the merits of a dispute while exercising jurisdiction under Articles 226 and 227 of the Constitution of India to examine a challenge to an order passed under Section 16 of the Arbitration and Conciliation Act, 1996 (A&C Act). The Court further held that a stamping objection, having been held by the Constitution Bench in Re: Interplay Between Arbitration Agreements Under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 (2023 INSC 1066) to fall within the ambit of the arbitral tribunal, cannot furnish a ground for writ interference at an interlocutory stage.
An agreement for the sale of iron ore was executed on February 12, 2004, between the appellant mine owner, M/s Tarini Prasad Mohanty, and the respondent, M/s Sunflag Iron and Steel Company Limited (SISCO). Disputes arising from their contractual engagement were referred to a Sole Arbitrator in accordance with the arbitration clause in the agreement. SISCO, as claimant, made various claims against the mine owner, who filed a counterclaim in response.
On February 5, 2024, the mine owner filed an application under Section 16 of the A&C Act contending that the agreement for sale dated February 12, 2004, along with various supplementary agreements, had been insufficiently stamped. According to the mine owner, the contracts were in the nature of a “conveyance” within the meaning of Section 2(10) of the Indian Stamp Act, 1899, and were therefore required to be stamped in accordance with Article 23 of Schedule I to the Stamp Act. The mine owner urged that unless the agreements were impounded and properly stamped, the arbitration proceedings could not continue.
The learned Arbitrator, by order dated May 30, 2024, rejected the objection and held that the agreement was “an agreement to sell” and not a conveyance or sale, and that it had been properly stamped under Article 5(c) of Schedule I to the Stamp Act.
The mine owner challenged this order by filing a writ petition under Articles 226 and 227 of the Constitution before the Orissa High Court. The learned Single Judge, after finding that an “exceptional” case for interference had been made out, entertained the writ petition, set aside the arbitrator’s order, and directed impounding of the agreements. SISCO challenged this in a writ appeal before the Division Bench, which set aside the Single Judge’s order as being in excess of jurisdiction. The mine owner then approached the Supreme Court.
Before the Supreme Court, the mine owner contended that the writ petition had, in substance, been one under Article 227 of the Constitution alone, as it challenged an interlocutory order of the arbitral tribunal, and that therefore the writ appeal before the Division Bench was not maintainable. The Court rejected this submission.
The Court held that the writ petition had expressly invoked jurisdiction under Articles 226 and 227 of the Constitution, and that the mine owner, having himself succeeded before the Single Judge on that basis, could not subsequently contend that the petition was only under Article 227 so as to question the maintainability of the writ appeal. Relying on Lokmat Newspapers Pvt. Ltd. v. Shankar Prasad (1999 INSC 279) and Sh Jogendrasinhji Vijaysinghji v. State of Gujarat and Others (2015 INSC 485), the Court held that where a writ petition invokes both Articles 226 and 227, a writ appeal before the Division Bench is maintainable. The writ appeal filed by SISCO was therefore maintainable.
The Court examined the scheme of the A&C Act and its consistent judicial interpretation regarding the limited scope for writ interference in arbitral proceedings. It referred to the Constitution Bench decision in M/s S.B.P. and Company v. M/s Patel Engineering Ltd. and Another (2005 INSC 526), which had emphasised the object of minimal judicial intervention during arbitral proceedings and held that parties must, in general, await the award before challenging interlocutory orders, save where a right of appeal exists under Section 37.
It further relied upon M/s Deep Industries Ltd. v. Oil and Natural Gas Corporation Limited and Another, wherein the Court had held that where a Section 16 application is dismissed, no appeal is provided and any challenge must await the passing of a final award to be raised under Section 34. The Court had also held that a foray to the writ court from a dismissed Section 16 application is permissible only where the order is so perverse that it amounts to a patent lack of inherent jurisdiction—a perversity that must stare one in the face.
The Court further noted the Constitution Bench ruling in Re: Interplay (supra), which had held that the doctrine of competence-competence, as enacted in Section 16, is intended to give the arbitral tribunal full authority to determine all questions pertaining to its jurisdiction, with courts permitted to intervene only after an award is made. The Constitution Bench had also recorded in paragraph 224 that any objection in relation to the stamping of an agreement falls within the ambit of the arbitral tribunal, and that non-stamping or inadequate stamping is merely a curable defect that does not render the agreement void.
The Court rejected the mine owner’s submission that relegating the stamping objection to the post-award stage under Section 34 was an inadequate remedy. It held that this argument derived its force only from the premise that non-stamping or inadequate stamping was a fatal, jurisdictional infirmity vitiating the agreement at inception—a premise that no longer holds good in law in view of Re: Interplay. The Court held that allowing the arbitral tribunal to determine the stamping issue under Section 16, while preserving the right to challenge the award under Section 34, did not render the remedy inadequate.
The Court observed that the learned Single Judge had, despite correctly identifying the contours of the jurisdiction under Articles 226 and 227 of the Constitution, proceeded to examine the intention of the parties and determine the true nature of the agreements, concluding that they amounted to a “conveyance”, while exercising writ jurisdiction over an order passed under Section 16 during pending arbitration proceedings.
The Court held that the learned Arbitrator had jurisdiction to decide the stamping objection as confirmed by Re: Interplay, and that even if the Arbitrator had erred on the merits, such error would not constitute a case exceptional enough to warrant writ interference. The Court held that jurisdiction to decide a matter cannot mean jurisdiction to decide it only in a particular manner, and that an error on merits is not the same as an inherent lack of jurisdiction.
The Court further held that it was impermissible for the learned Single Judge to interpret the agreements and determine the true nature of the transaction while exercising writ jurisdiction. Relying on Bhaven Construction through Authorised Signatory Premjibhai K. Shah (2021 INSC 9), the Court noted that interpretation of contracts should not generally be undertaken in writ jurisdiction, particularly where the parties had taken contradictory positions on the nature of the agreement and evidence was yet to be led before the arbitrator.
The Court also drew a distinction between the “entertainability” and “maintainability” of a writ petition, citing M/s Godrej Sara Lee Ltd. v. The Excise and Taxation Officer-cum-Assessing Authority and Others (2023 INSC 92), and noted that the threshold for entertaining a writ petition against an order of an arbitral tribunal is necessarily high given the legislative intent of minimal judicial interference as expressed in Section 5 of the A&C Act.
The Court upheld the Division Bench’s decision and dismissed the civil appeal with no order as to costs. It clarified that the issue regarding stamping of the agreement for sale dated February 12, 2004, and the subsequent agreements was kept open to be raised by the aggrieved party under Section 34 of the A&C Act, if the need arose. The Court expressly declined to adjudicate on the question of whether the agreements amounted to a “conveyance” or an “agreement to sell”, noting that such a determination would require a meaningful interpretation of the agreements and touched the merits of the dispute, which remained pending before the learned Arbitrator.
Case Details
- Case Title: M/s Tarini Prasad Mohanty v. M/s Sunflag Iron and Steel Company Limited
- Citation: 2026 INSC 566; Civil Appeal arising out of SLP (C) No. 27534 of 2025
- Court: Supreme Court of India
- Bench: Justice J.K. Maheshwari and Justice Atul S. Chandurkar
- Date of Judgment: May 27, 2026
- Outcome: Civil appeal dismissed; Division Bench’s order setting aside the Single Judge’s writ court interference with a Section 16 arbitration order upheld; stamping objection kept open for challenge under Section 34 at the conclusion of arbitral proceedings.
Appearances:
- For Appellant (Mine Owner): Senior Advocate Shashank Garg
- For Respondent (SISCO): Senior Advocates Gopal Subramanium, N.K. Mody, and Ms. Malvika Trivedi.
