Supreme Court Orders Arbitration in Rajasthan Criminal Dispute: Interim Protection Granted

The case of Geeta Devi & Anr. vs. State of Rajasthan revolved around a criminal dispute where the Supreme Court had to decide whether arbitration proceedings could be initiated to resolve the underlying issues. The case also involved granting interim protection to one of the accused during the pendency of arbitration.

The dispute originated from allegations that led to criminal charges against the petitioners. However, both parties agreed to appoint an arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996, to mediate and attempt to settle the matter amicably. Given that arbitration proceedings had already been initiated, the Supreme Court intervened to ensure a fair resolution while granting interim relief to the petitioners.

Background of the Case

The petitioners, Geeta Devi and another individual, had approached the Supreme Court seeking relief in a criminal case. During the proceedings, it was brought to the Court’s notice that both parties had agreed to resolve the dispute through arbitration. The arbitrator was tasked with mediating between the parties and submitting a report on whether a settlement could be reached.

The Supreme Court took cognizance of this development and directed that the arbitration process be completed before any further legal action was taken in the criminal case.

Arguments by the Petitioners (Geeta Devi & Anr.)

• The dispute primarily involved financial transactions and contractual obligations that could be settled through arbitration.
• Since an arbitrator had already been appointed, the criminal proceedings should not proceed until the arbitration process was concluded.
• The petitioners sought interim protection from arrest while the arbitration proceedings were ongoing.

Arguments by the Respondents (State of Rajasthan)

• The criminal case involved serious allegations that could not be simply resolved through arbitration.
• Allowing arbitration to dictate the outcome of criminal proceedings could set a wrong precedent.
• The state opposed any interim relief for the accused, arguing that legal action should proceed as per criminal law.

Supreme Court’s Judgment

The Supreme Court ruled in favor of allowing arbitration proceedings to continue while granting interim relief to one of the accused. The key rulings of the Court were:

• The appointed arbitrator should mediate between the parties and submit a report on whether a settlement had been reached.
• “If that be so, then the Arbitrator would mediate between the parties and submit his report by the next date of hearing on the disputes as to whether the parties have amicably settled the same or not, and if so, on what grounds.”
• Petitioner No. 1, Naresh Kumar, was granted interim protection from arrest in connection with the criminal case.
• The interim order passed on 11.10.2018 in SLP(Crl.) No. 8271 of 2018 would continue until the next date of hearing.
• The matter was scheduled for further review on 16.11.2018.

The Court observed:

“In the meantime and till next date of hearing, petitioner No. 1 – Naresh Kumar of SLP(Crl.) No. 8336/2018 shall not be arrested in connection with the offences in question.”

Implementation of the Judgment

The Supreme Court directed the following steps to ensure implementation of its ruling:

• The arbitrator was to conduct mediation and submit a report to the Court.
• Petitioner No. 1 was granted interim protection from arrest until the arbitration outcome was reviewed.
• The matter was scheduled for the next hearing on 16.11.2018.

Significance of the Judgment

This judgment highlights the Supreme Court’s approach to integrating arbitration as a dispute resolution mechanism, even in cases where criminal proceedings are involved. While criminal law remains separate from civil dispute resolution, the Court acknowledged the possibility of an amicable settlement through arbitration.

The ruling also underscores the importance of judicial intervention in preventing undue hardship to the accused while ensuring that arbitration proceedings are conducted fairly.

Conclusion

The Supreme Court’s decision in this case sets a precedent for balancing arbitration with ongoing criminal proceedings. By allowing mediation while granting interim relief, the Court demonstrated its commitment to alternative dispute resolution mechanisms without undermining criminal justice.

Future cases involving similar conflicts between arbitration and criminal law can draw guidance from this ruling, ensuring that disputes are resolved in a manner that upholds legal fairness and efficiency.

Petitioner Name: Geeta Devi & Anr..
Respondent Name: State of Rajasthan.
Judgment By: Justice Abhay Manohar Sapre, Justice Indu Malhotra.
Place Of Incident: Rajasthan.
Judgment Date: 01-11-2018.

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