The Delhi High Court has held that the bar on a second arbitration appeal does not extinguish its constitutional supervisory jurisdiction under Article 227. However, it dismissed a challenge to an appellate order limiting an arbitrator’s direction for business-account disclosures, finding no jurisdictional defect or perversity warranting interference.
New Delhi: A petition under Article 227 challenging an order passed in an arbitration appeal cannot be rejected solely as an impermissible second appeal, the Delhi High Court has held, while emphasising that the power to intervene remains tightly confined [Dayanand Pal v. Mr. Dharmendra Kumar Bhati & Ors.].
Justice Ajay Digpaul, in a judgment delivered on October 29, 2026, rejected the respondents’ objection to maintainability but dismissed Dayanand Pal’s petition on merits. The underlying partnership claims remain undecided; the judgment concerns judicial review of an interim-measures dispute.
The accounts-disclosure dispute
The litigation arose from disputes involving the partnership firm Alwin DMD Pharmaceuticals. Pal sought, among other reliefs in arbitration, a declaration concerning his status as a partner, dissolution of the firm and settlement of accounts. His alleged retirement or expulsion remained contested.
In a separate interim application under Section 17 of the Arbitration and Conciliation Act, 1996, he sought to restrain the other partners from manufacturing or selling products using the firm’s name and goodwill.
On September 6, 2022, the arbitrator deferred determination of the requested reliefs pending evidence, but directed the respondents to disclose business transactions and profits from November 14, 2017 and continue filing monthly records while the arbitration remained pending.
The Commercial Court partly allowed an appeal under Section 37(2)(b). It retained disclosure up to April 5, 2019, when arbitration was invoked, but removed the continuing obligation from April 6, 2019 onwards. Pal challenged that restriction before the High Court.
Maintainability and grounds for interference are different
The respondents argued that Sections 5 and 37(3) of the Arbitration Act barred the petition. The High Court disagreed: Article 227 is a constitutional supervisory power, distinct from a second appeal. It does not permit the High Court to reassess the evidence or substitute its own view for the lower court’s.
Relying on Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd., (2020) 15 SCC 706, the Court distinguished the existence of supervisory jurisdiction from the narrow circumstances in which it should be exercised. Paragraphs 23–25 explain that a maintainable petition does not automatically establish a case for intervention.
The Court also distinguished cases involving direct challenges to an arbitrator’s orders without using the statutory remedy. Here, the challenge was to a judicial order already passed in a Section 37 appeal.
No ground to restore continuing disclosures
On the merits, the Court found that Pal’s Section 17 application sought an injunction against use of the firm’s name and goodwill. It contained no prayer for continuing disclosure of business transactions or rendition of accounts during the arbitration.
Pal relied on the accounts-related prayers in his statement of claim and argued that the appellate court had interfered with the arbitrator’s discretion. The High Court nevertheless held that checking whether an interim direction was traceable to the relief sought fell within the appellate court’s authority.
In paragraph 32, the Court treated the appellate view as plausible. The possibility of another view did not justify interference under Article 227. It found no lack of jurisdiction, apparent error or perversity in the Commercial Court’s decision.
Partnership claims remain open
The High Court dismissed the petition and pending applications. It expressly clarified that its observations were confined to this controversy and expressed no opinion on the substantive claims pending before the arbitrator or another appropriate forum. The parties’ rights and contentions on those claims were preserved.
The ruling illustrates the distinction between access to constitutional supervision and entitlement to relief: the statutory bar on a second appeal does not itself remove Article 227 jurisdiction, but that jurisdiction cannot be used for an ordinary rehearing of an arbitration appeal.
Case Title: Dayanand Pal v. Mr. Dharmendra Kumar Bhati & Ors.
Case Number: CM(M) 474/2025 and CM APPL. 69889/2025
Court and Bench: Delhi High Court; Justice Ajay Digpaul
Decision Date: October 29, 2026
Outcome: Article 227 petition dismissed on merits; Commercial Court’s order limiting interim disclosure remains in place; underlying arbitral claims left open.