Supreme Court To Examine If It Can Invoke Article 142 To Enable Arbitral-Style Dispute Resolution Where Existing Remedies Fail

The Supreme Court on Tuesday issued notice on applications filed by an intervenor raising the question of whether, in exceptional cases involving complex disputes where existing remedies are incapable of producing effective and expeditious resolution, the top court can create a court-supervised dispute resolution mechanism with arbitral characteristics. The question particularly concerns matters involving State instrumentalities.

A Bench of Justices Prashant Kumar Mishra and N V Anjaria issued notice on the applications. The Bench directed that they be listed along with the main matter on August 12, while clarifying that the hearing of the special leave petition would not be delayed because of the intervening applications.

“If in exceptional situations involving complex factual controversies, where common law procedures or writ remedies are rendered incapable of producing effective and expedient dispute resolution, where arbitration mechanism is not provided, whether Article 142 can be invoked by this Hon'ble Court to fill remedial gaps to enable a court-supervised time bound disputeresolution reference mechanism having arbitral characteristics, particularly when interests of State or any State Instrumentality (like MMRDA in the instant case) are also involved?”

The issue arose during proceedings in a dispute involving Ambernath Sahakari Samudayik Shetki Society Ltd. The dispute concerns more than 210 acres of land in Ambernath that had been granted by the Maharashtra government in the 1960s without occupancy price for collective farming and agricultural use.

The State alleged that instead of using the land for cultivation as required, the society permitted unauthorized constructions, encroachments, chawls, farmhouses, and commercial activities on substantial portions of the land.

In January, the Bombay High Court rejected the society's challenge. It held that the society had grossly violated the conditions of allotment and failed to use the land for the agricultural purpose for which it had been granted as a State largesse.

The High Court directed the State government to resume the entire land within three months. It also directed action against illegal encroachments in accordance with law.