The Law of Precedence: Valid or Not when dubious in Nature

By:- Devanshi

Whether subordinate courts should follow a Supreme Court judgement is questionable [Bhagwati Devi Gupta v. Star Infra Tech Private Ltd].

Justice C Hari Shankar made the remark while hearing a case under Section 11(5) of the Arbitration and Conciliation Act, 1996.

The respondent argued that the arbitration agreement was not properly stamped and that the Court cannot send the matter to arbitration until that is corrected. The arbitration agreement would not be deemed illegal, unenforceable, or non-existent, even if the substantive contract is not admissible in evidence, or cannot be acted upon due to non-payment of Stamp Duty.”

A Constitution Bench of five judges was appointed to hear Vidya Drolia & Ors v. Durga Trading Corporation.

In this context, the Delhi High Court observed that “whether subordinate courts should continue to accept an earlier judgement after a Supreme Court panel has questioned the validity of an earlier bench of similar size and referred the matter to a bigger bench seems questionable.”

The Court directed the case to the Delhi International Arbitration Centre (DIAC), which will select an appropriate arbitrator.

This was due to the fact that there were contradictory apex court judgments on the subject.

“All questions of fact and law, including non-stamping of the parties’ agreement and its implications on arbitrability of the dispute, are left up for debate before the learned Arbitrator. This Court does not express a view “it said.

The petitioner’s lawyer was Shalabh Singhal, while the respondent was Rakesh Saini.