Dalpat Singh Naruka & Anr. vs Karuna Bansal & Ors.
Background
A partnership dispute over "Hotel Grand Uniara" led the respondents to seek interim relief under Section 9 of the Arbitration Act before a Commercial Court, which was rejected. They appealed under Section 37 to the Rajasthan High Court. Alongside this, a criminal FIR had been registered against the appellants over an allegedly antedated partnership deed. In the Section 37 appeal, the High Court progressively expanded its inquiry, calling for the FIR's status report and case diary, summoning the investigating officer, and eventually transferring the FIR investigation to a Special Operation Group under a senior police officer, despite this being well outside a Section 9 interim-relief appeal.
Decision Breakdown
The Supreme Court held that the High Court, in a Section 37 appeal, had jurisdiction only to examine the correctness of the Commercial Court's refusal to grant interim relief under Section 9, nothing more. By instead conducting what the Court called a "roving and fishing inquiry" into a separate criminal investigation and transferring that investigation to a different police unit, the High Court had acted far in excess of its limited appellate jurisdiction. The three impugned orders were accordingly quashed, with the High Court directed to decide the actual Section 37 appeal strictly within its proper scope; any grievance about unfair investigation was to be pursued separately through appropriate criminal-side remedies. The Court clarified it was not disturbing the earlier restraint order preventing the appellants from alienating the disputed property.
Lesson Learnt
An appellate court hearing a narrow, statutorily-limited appeal (such as one under Section 37 of the Arbitration Act) cannot use that proceeding as a vehicle to supervise an unrelated criminal investigation: jurisdiction conferred for one specific purpose cannot be stretched to address separate grievances that belong in a different forum.