TaxTMI 
TaxTMI 
2013 (6) TMI 871
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....ade by the appellants. Some of the relevant facts for the purpose of deciding this appeal and cross objections as emerge from the pleadings and documents filed by both parties are as under:- FACTUAL MATRIX The Appellants and Respondent Nos. 1 to 5 ("the Respondents") are all members of the Malhotra family of Pune. Appellant No. 1 is the father of Appellant Nos. 4 and 7 and Respondent No. 1 and the grand-father of Appellant Nos. 6, 9 and 10 and Respondent Nos. 2, 3 and 5. Appellant No. 3 is the brother of Appellant No. 1 and is the paternal uncle of the aforesaid persons. The Malhotra family owned, controlled and managed a company known as Weikfield Products Company (I) Private Limited and several other businesses, assets and properties including a partnership firm known as Weikfield Ventures International. Disputes arose within the family. It is the case of the appellants that in order to resolve all the family disputes and differences, the parties appointed one Mr. Rustam S. Gae, an old family friend of over 35 years who was well-known to all the family members and who was the former Law Secretary to the Government of India and who practiced as a Senior Advocate in the Supre....
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....ural lands are located in the villages of Bhavadi, Lonikand and Wagholi (for short "the said agricultural lands"). 5. The Respondents also filed their Statement of Case/Reply dated 14th November, 2005 and their reply dated 17th November, 2005 before the Learned Arbitrator. It is the case of the appellants that the Respondents did not deny therein (i) that the agricultural lands described in paragraphs 6(s), (t) and (u) were part of "the family businesses and assets"; and (ii) that the same had been purchased out of funds lent by various other family members. According to the appellants the only response to the said claim was that the Group "A" (later Group "A" and "B") had not made any claim and were not parties to the dispute and hence, the Group "C" (later Groups "C" and "D") could not raise these disputes relating to the agricultural lands. 6. It is the case of the appellants that at the first arbitration meeting on 3rd December, 2005, it was agreed that the arbitration proceedings would be conducted by the parties in person, without the presence of advocates or lawyers, and that the parties would not lead any evidence, oral or written and that the arbitrator would decide ....
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....97-398 of the Companies Act, 1956 with respect to the said Weikfield Products Company Private Limited. The respondents also filed a petition before the District Judge, Pune under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the said interim award made by the learned arbitrator and also sought removal of the learned arbitrator on various grounds. 10. It is the case of the appellants that while the said arbitration petition was pending before the learned District Judge at Pune, the Chairman of the Company Law Board, held discussions with the family members for settlement of all disputes between them, which culminated in a Consent Order dated 15th December, 2006, of the Hon'ble Company Law Board, which recorded inter alia that the parties had reached an agreement for separation of all family businesses, assets and properties, except the said agricultural lands referred to above. The said order also recorded inter alia that the respondents were not agreeable to the appellants' proposal for transfer of the said property to the other family members and instead, the respondents were willing to pay three times the value of the said lands as recorded....
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....ontemplated. It is held by the learned District Judge that there was no substance in the allegations made by the respondents herein and even from the record it was not found that any prejudice was caused to them on the ground of grouping of the parties. As far as issue of bias raised by the applicants to the said proceedings is concerned, the learned District Judge rejected the said plea and refused to remove the learned arbitrator. The learned District Judge rejected the plea raised by the respondents herein about the independence, impartiality and incapacity of the learned arbitrator. The respondents herein did not challenge the said order and judgment dated 3rd April, 2007 passed by the learned District Judge rejecting the said application filed under section 34 of the Arbitration Act, 1996. The said interim award as well as the said order and judgment rejecting the arbitration application have become final and binding on the parties. 13. By a letter dated 4th May, 2007, the appellants referred to the pending arbitration and informed the learned arbitrator that the only outstanding disputes and differences pertaining to the said agricultural lands and the partnership firm of ....
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.... original Statement of Case dated 11th November, 2005 and not part of the interim award. It was also stated that the agricultural lands stood in the name of and belonged to Ankush who had purchased them by taking a "loan" from the family firm (in which all the family groups were partners with equal shares). On that basis, it was also contended that these disputes were not within the scope of the arbitrator's mandate or of the reference. 20. The respondents attended the arbitration meeting held on 11th June, 2007 alongwith their advocate. It is the case of the appellants that the appellants objected to representation by an advocate stating that it had been agreed at the first meeting that no lawyer would represent any party. The learned arbitrator then checked the minutes of the first meeting and however found that the said agreement had not been recorded in the minutes. It is the case of the appellants that the learned arbitrator recalled that he had directed that no lawyer should be engaged at the very first meeting itself. The respondents thereafter made a written application before the learned arbitrator seeking permission to represent the respondents by a lawyer which ap....
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...., 1996 and set aside the final award with a clarification that it would not affect implementation of the interim award dated 31st December, 2005. By the said judgment, the learned District Judge rendered a finding that the said agricultural lands were covered under the mandate of the arbitration proceedings and thus the learned arbitrator was justified in considering the said issue. The learned Judge however held that the arbitration agreement did not indicate that the arbitrator was assigned with the work of distribution of properties of different family members and that by doing so, the learned arbitrator had acted beyond the scope of the arbitration agreement and beyond the scope of the arbitral mandate. As regards the dissolution of the partnership firm of Weikfield Ventures International, the learned District Judge held that the learned arbitrator could not have directed dissolution of the firm when the suit was pending before the District Court "for the same relief" and that only the Court could legally order dissolution (and not an arbitrator). The learned Judge also held that the respondents had been denied fair opportunity to present their case by denial of representation ....
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....and appellant No. 3 respectively. It was prayed that the learned arbitrator considered a fair, equitable and amicable division and separation of family businesses and assets as per the proposals set out therein. In paragraph 6(s) proposals and claims relating to certain agricultural lands standing in the name of Ankush Malhotra (Group E) and purchased from family funds provided by the family partnership firm/grand mother/grand aunt for the benefit of the family was made. In paragraph 6(t) and (u) of the Statement of claim, similar proposals and claims with regard to agricultural lands standing in the name of Akshay Malhotra (Group C) and Shikha Malhotra, daughter of Mukesh Malhotra (Group C) were mentioned. In their Statement of Case/Reply dated 14th November 2005 and also reply dated 17th November, 2005 before the learned arbitrator, the respondents did not deny that agricultural lands referred in paragraph 6(s), (t) and (u) were part of the family businesses and assets and that the same had been purchased out of funds lent by various other family members. The only response to the said claim was that Group A had not made any claim and were not parties to the dispute and thus Group....
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....tanding in the name of Ankush, there would be no pending dispute and that it would enable them to release the arbitrator. The said settlement recorded before the CLB has been carried out. iv) It is submitted that parties agreed on another Valuation report in respect of the real estate of the family including the agricultural lands from M/s. Bapat Valuers & Consultants Pvt. Ltd. It is submitted that name of the said Valuers was suggested by the respondents who submitted its report on 22nd December 2006. Reliance is placed on the letter dated 23rd December 2006 recording these facts addressed by Mr. Mukesh Malhotra to Mr. Puneet Malhotra. The said Valuation Report included the valuation of agricultural land standing in the name of Ankush. Reliance is placed on paragraph 18 of the order dated 3rd April 2007 passed by the learned District Judge dismissing arbitration application filed by the respondents challenging the interim award in which it was recorded that the respondents conceded that the only surviving dispute between the parties related to the said agricultural lands. It is submitted that this was in respect of the pending dispute regarding agricultural lands before t....
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....the limits of Section 34 by substituting its own interpretation for that of the arbitrator and re-appreciating the entire material. vii) Findings of the learned District Judge is contradictory. On one hand it has been held that the agricultural land in question was covered by the mandate of the arbitration proceedings and the arbitrator was justified in considering that issue and on the other hand, it is held that it was outside the arbitrator's scope to distribute those properties. It is submitted that the very issue had been raised in the arbitration application challenging interim award and the same was rejected by the learned District Judge in Order dated 3rd April 2007 thereby repelling the challenge on the ground that the arbitrator had no jurisdiction to distribute the businesses, assets and properties of the family. The learned District Judge therefore, could not have taken a different view than a view already taken by his predecessor by an order dated 3rd April 2007. viii) Finding of the learned District Judge that property was self acquired property of the respondents was by overruling the finding of the learned arbitrator which exercise was beyond t....
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....efor. It is submitted that the learned arbitrator had thus jurisdiction to decide the distribution of the said agricultural lands. 27. Mr. S.U. Kamdar, the learned senior counsel appearing for respondents on the other hand makes following submissions on this issue: (i) The dispute in respect of the agricultural land situated at Wagholi, Lonikand and Bhavadi villages was not the subject matter of reference before the learned arbitrator. This claim was made for the first time in the additional statement of the claim for a declaration that Group A and B had a exclusive right, title and interest in the said properties and standing in the name of respondent No. 2. The mandate and undertaking of the learned arbitrator was restricted to settle all the disputes and differences that had arisen amongst the parties regarding the business and properties owned by the family. In the Annexure 1 to the original statement of claim of Group C and D, details of seven jointly owned properties were setout. There was no specific details or particulars of three agricultural properties therein. The respondents had challenged the inclusion of disputes relating to these three properties....
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....ns made therein would not amount to reference on dispute in respect of those three properties to arbitration. The existence of disputes between two parties does not ipso facto mean that those disputes are actually being agitated before same forum. The question as to whether the said three properties were individual or jointly owned properties was a jurisdictional fact that required determination in order to ascertain whether the Arbitral Tribunal did in fact have the jurisdiction to decide the disputes as to the said three properties. (v) The learned District Judge having found that the learned arbitrator had incorrectly determined the jurisdictional fact and had incorrectly assumed jurisdiction, held that the learned arbitrator did not have jurisdiction to separate/distribute those properties which it found stood in the name of any individual family members. It is submitted that the Learned District Judge rendered a finding that those three properties were individual properties based on admitted facts. It is submitted that the learned arbitrator had jurisdiction to first determine whether the nature of the said three properties was as independent individual properties or ....
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....id, generally for a specified time and often at an agreed rate of interest. {Advanced law Lexicon at page 2776}. A 'loan' is defined as delivery by one party to and receipt by another party of sum of money upon agreement, express or implied, to repay it with or without interest. {Legal & Commercial Dictionary author Mitra at pg. 539} A grant of something for temporary use. {Black's Law Lexicon-pg. 954}. (x) Jurisdiction of arbitrator is determined by terms of reference and not by submission of claim. There cannot be two arbitration agreements i.e. one under two writings entered into between the parties referring certain disputes to arbitration and another under section 7(4)(c) of the Arbitration and Conciliation Act. Different eventualities of arbitration agreements are provided under section 7(4)(a) to (c). If one eventuality applies, the other is excluded. (xi) There was no direction issued by the arbitrator for valuation for properties mentioned in paragraphs (s), (t), (u) of the statement of claim. However, the valuer made valuation also in respect of those three properties. In the interim award, the learned arbitrator had directe....
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....two circumstances viz. (i) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family or (ii) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity. It is submitted that the said three properties purchased by loans from the grandparent/grandaunt would not fall within the exceptions created under Section 4 of the Benami Properties Act, 1988 and consequently the said three properties can never be treated or considered as benami property i.e. being held by a person by or on behalf of another person. In the present case the property held by Respondent No. 2 could never be treated as property of the Malhotra family as doing so would be clearly and patently contrary to the provisions of the Benami Act, 1988. It is submitted that the provisions of Section 4(3)(a) applies only in case of HUF property where the coparcener is holding the property in his individual name for and on behalf of the HUF.....
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....29. Section 2(a) of the Benami Act defines benami transaction as "any transaction in which property is transferred to one person for a consideration paid or provided by another person." The word "provided" in the said clause cannot be construed in relation to the source or sources from which the real transferee made up funds for buying the sale consideration. The words "paid or provided" are disjunctively employed in the clause and each has to be tagged with the word "consideration". The correct interpretation would be to read it as "consideration paid or consideration provided". If consideration was paid to the transferor then the word provided has no application as for the said sale. Only if the consideration was not paid in regard to a sale transaction the question of providing the consideration would arise. In some cases of sale transaction ready payment of consideration might not have been effected and the provision would be made for such consideration. The word "provided" in Section 2(a) of Benami Act cannot be understood in a different sense. Any other interpretation is likely to harm the interest of persons involved in genuine transactions, e.g., a purchaser of land might h....
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..... No such issue was raised under section 34 by the respondents. The learned District Judge in the earlier petition filed by the respondents had already rejected the plea of the respondents that the arbitrator had no jurisdiction to distribute the family properties and assets and this finding of the learned District Judge is binding on parties. The finding of the learned District Judge in the second arbitration application challenging the final award on this issue is inconsistent with the finding of the learned District Judge in the first proceedings filed under section 34. The learned District Judge in the second proceedings could not have taken a different view on this issue than view of the learned District Judge in the first proceedings which had become final. 29. It is submitted that the learned arbitrator had rendered a finding that the claims in respect of these three properties were not new claims but were supplemental to the original claims which findings were not perverse and thus no interference could be made by the learned District Judge under section 34 of the Act. The learned arbitrator rendered a finding that three properties were part of the original statement of ....
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....ts and evidence which is not permissible under section 34 of the Act. Even if arbitrator had committed any error, the said error was within his jurisdiction and not outside his jurisdiction. The learned arbitrator could not have shut his eyes on reality. 32. On the plea of benami transaction, Mr. D'vitre, the learned senior counsel placed reliance upon the exception under section 4(3) (a) and (b) and submits that it includes constructive trust. It is submitted that Ankush Malhotra had held the property in trust for family and on separation, he was liable to return the said property to the family. It is submitted that view taken by the learned arbitrator was possible view and was correct view on jurisdiction and on merits, it could not have interfered with by the learned District Judge. The award is not contrary to the provisions of Benami Prohibition Act. Whether refusal on the part of the learned arbitrator to permit the respondents to represent themselves by an advocate at the time of hearing of claims culminating in final award was hit by section 34(2)(a)(iii) of the Act or the respondents were deprived of full opportunity to present their case? 33. Mr. D'vitre,....
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....s appropriate, unless the parties have agreed. The respondents' case that there was an "agreement" between the parties that advocates should be permitted, is totally incorrect and is negated by the minutes of the meeting dated 11th June, 2007 and the respondents' own version of events as no such "agreement" was ever pleaded or urged by the respondents. A new case cannot now be made out for the first time. In the present case, given the informal nature of the proceedings, the fact that the arbitrator was an old family friend, of over 35 years, that it involved family disputes and the parties themselves throughout the arbitration proceedings (upto 11th June, 2007) never felt the need for being represented by advocates, the arbitrator's decision is based on cogent reasons and is a possible view which did not warrant any interference by this Hon'ble Court. (iv) The learned senior counsel placed reliance upon the judgment of this court in case of Skanska Cementation India Limited vs. Bajranglal Agarwal and others reported in (2004) 2 Arb. LR 67 and in particular paragraphs 2 and 5 which reads thus:- 2. A few facts may be now noted to enable this Court t....
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....l has come to a finding that there is an Arbitral clause. Once that be the case, it is contended, considering that there was a, contract between the parties and the Arbitral Tribunal had decided the dispute this Court should not interfere with the said finding on the issue of jurisdiction. It is then contended that even assuming Clause 11 of the terms and conditions of the purchase order, the respondents had dispatched the goods under the delivery challan. The delivery challan contains clauses of which those relevant for discussion read as under: Subject to Mumbai jurisdiction and/or if any dispute arises regarding the goods sold under this challan the same have to be referred for decision to Bharat Merchants Chamber or Arbitration under the Rules of the said Chamber Membership No. 600. Additionally Clause 4 reads as under: That acceptance of this bill/invoice overrules conditions of the purchase order wherever it clashes with the purchase order. It is contended that the goods were received by the petitioners under this challan without protest. Moneys for the goods received have been paid from time to time without protest. Apart from that subsequ....
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....ercised discretion not to permit any parties to engage lawyers and both parties were treated equally, the learned District Judge could not have interfered with such discretion exercised by learned arbitrator and could not have interfered with arbitration award on that ground. (v) It is submitted that both parties were allowed to file written arguments and such written arguments clearly indicates that the same were drafted by lawyers. It is submitted that refusal to permit respondents to engage lawyer was thus not attracted to the award and then award could not have been set aside on that ground. It is submitted that both parties were treated equally and full opportunity was given to both parties. The learned senior counsel placed reliance upon sections 19(2) and (3) of the Arbitration Act, 1996 in support of his plea that the parties were free to agree on procedure to be followed by the arbitral tribunal in conducting its proceedings and filing any such agreement, the arbitral tribunal was empowered to conduct the proceedings in the manner it consider appropriate. It is submitted that it is not case of the respondents that the appellants were permitted to engage lawyer and....
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.... discretion to decide procedure arises only in those cases where there was no agreement as to an aspect of procedure between the parties under Section 19(2) of the Act. The Arbitral Tribunal had already verified, by perusing the minutes of the first meeting, that no agreement preventing representation by lawyers was arrived at between the parties. However, he proceeded to direct that no representation by lawyers would be permitted for either party on the footing that from his recollection of the first meeting, the parties had in fact agreed to the same. It is submitted that the mere recollection of the learned arbitrator, contrary to the written record of the Minutes, as prepared by him, cannot be the basis on which such a decision is made. Where such an agreement does in fact exist, the Arbitral Tribunal cannot exercise its powers under Section 19(3) of the Act to establish procedure contrary to the agreement between the parties. It is submitted that the decision of the arbitral Tribunal to refuse representation by an advocate in spite of a clear agreement between the parties under Section 19(2) of the Act is totally without jurisdiction and wholly erroneous. (iii) Assumi....
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....- 9. The arbitral tribunal appears to have declined the request of the petitioner to be represented by a legal practitioner on the principal ground that allowing of advocate's presence would result in delay and protraction of the proceedings. The advocates and lawyers delay the proceedings is myth. Sooner the myth is exploded the better it is. May be on stray occasions, a litigant and sometimes even a Judge may feel that a particular proceeding could be disposed of quickly without the assistance of legal practitioners of either side on account of triviality of the dispute or otherwise. But, that is an exception. By and large, advocates and lawyers assist the Courts and Tribunals in limiting the scope of enquiry to the relevant overlooking the irrelevant, separating grain from the chaff and focusing on the real relevant issues. Generalisation that advocates and lawyers delay the proceedings is incorrect. Every Court and Tribunal which is endowed with the duty to act judicially or to determine any issues affecting the rights of the parties in a judicial or quasi judicial enquiry must, in the absence of a statutory provision to the contrary, allow the party before it, if ....
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....arbitrators were present at the arbitral meeting on 14th August, 2002 and they told the petitioner that they would convey him what transpired at the hearing. No affidavit in reply has been filed by the respondents denying this. Even before me, the learned counsel for the respondent did not dispute that the third arbitrator was not present at the arbitral meeting held on 14th August, 2002. Mr. Kamdar, learned senior counsel placed reliance upon the judgment of Calcutta High Court in case of Nanalal M. Varma & CO. vs. G. Ambalal (Export) reported in AIR 1956 Cal. 476 on this issue. Paragraphs 4, 15 and 16 of the judgment of the Calcutta High Court in case of Nanalal M. Varma & CO. (supra) reads thus:- 4. Right to be represented by a lawyer is not expressly recognised by the Indian Constitution with perhaps one exception. It is not a fundamental right under the Constitution of India except under Article 22 of the Constitution in the case of preventive detention where personal liberty is involved. As the Constitution does not recognise the right of a citizen to be represented by a lawyer, except in that particular case, refusal to permit lawyers representing ....
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....sel, Attorney, Advocate or other lawyer. If they want to appear, they can only appear with the permission of the Arbitrators. It is for the Arbitrators to permit or refuse. In this case the Arbitrators have refused the applicant's claim to be represented by lawyer. In so refusing, therefore, there cannot be any misconduct because they acted within their powers expressly conferred under the Rules of Arbitration. The parties had agreed in the clause of arbitration set out above, that the arbitration should be according to the Rules of the Bengal Chamber of Commerce. That being so, it is not, for the applicants now to complain that they were not allowed to be represented by lawyers. The discretion lies entirely with the Arbitrators, and I do not find any fact shown on the records of this case which can even remotely suggest that such discretion was not rightly exercised by the Arbitrators. In fact, neither party was represented or allowed to be represented by any lawyer. The questions that were raised before the Arbitrators in this case are very common questions which Arbitrators in commercial arbitrations are deciding everyday in this city. (vi) Mr. Kamdar, learned senio....
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....India Limited (supra) though relied upon by the appellants and the learned District Judge relied upon only the later judgment of this court in case of Faze Three Exports Ltd. (supra) which did not even consider the previous judgment in case of Skanska Cementation India Limited (supra). As far as judgment of Calcutta High Court of Nanalal M. Varma & CO. (supra) is concerned, Mr. D'vitre, submits that this case is not based on any rules but involves an undertaking between the parties and/or direction of the arbitration regarding procedure in the proceedings before him. The learned senior counsel placed reliance upon para (15) of the said judgment in case of Nanalal M. Varma & CO. (supra) which holds that no party has right to be represented by advocate in arbitration proceedings. The learned senior counsel submits that the learned District Judge was bound by the judgment of this court in case of Skanska Cementation India Limited (supra) and could not have set aside the impugned award on this ground. The learned senior counsel submits that section 18 of the Arbitration Act, relied upon by Mr. Kamdar, the learned senior counsel appearing for the respondents would be of no assistanc....
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....pellants further submit that the learned arbitrator had considered the tax return of Ankush for the relevant years which clearly showed his limited financial resources at the relevant time. It was also considered that the loan was on the basis of the family understanding which was reflected in the terms of loan agreement of 1996. Identical agreements were also executed between the firm and Mr. Akshay, the other grandson and Shikha, the granddaughter. It is submitted that after considering all those material placed for his consideration by the parties, the learned arbitrator rendered various findings and rejected the submissions made by the respondents that Ankush merely received interest free loans of large amount from the elders without any conditions whatsoever. It is submitted that the arbitrator was within his rights to arrive at any fair resolution of the dispute. The learned arbitrator was right in accepting oral submissions of the grandfather/granduncle to adopt 1/6th share formula for separation and such sharing formula was not required to be formally proved before the learned arbitrator by leading evidence. The arbitrator was justified and entitled to accept the 1/6th form....
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....f trustee or fiduciary qua the other family members. 38. In so far as issue pertaining to the partnership firm of Weikfield Ventures International is concerned, Mr. Kamdar submits that the Award of the Arbitral Tribunal is totally without jurisdiction and bad in law. The Arbitral Tribunal has taken cognizance of the fact that a suit was pending before the District Court, being suit number 1458/2006. The said suit pertains to challenge of certain sale of the plots purported to have been carried out by the appellant, which belonging to the respondents, without any power of attorney, and by misusing the power of attorney given to them by the respondent through the firm. The plots did not belong to the firm, but the Arbitral Tribunal while purporting to decide the disputes pertaining to the firm has decided the pending suit, pending before the District Court, though such suit was never referred to the Arbitral Tribunal by any of the parties. The aforesaid finding of the Arbitral Tribunal making the suit redundant and ineffective is totally contrary to law and in excess of the jurisdiction conferred on the Arbitral Tribunal. The award pertaining to the said partnership firm is in exc....
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....with the properties under the power of attorney would cease. The fact that the award was made during the pendency of the suit was within the powers of the arbitration and is a course sanctioned by the law under Section 8(3) of the Arbitration Act. The learned senior counsel again placed reliance upon the judgment of the Supreme Court in case of M/s. V.H. Patel & Co. and others vs. Hirubhai Himabhai Patel & Ors. Reported in (2000) 4 SCC 368 in support of his plea that arbitrator has jurisdiction to order dissolution of the firm. WHETHER CROSS OBJECTION FILED BY THE RESPONDENTS IS MAINTAINABLE AND IF SO, WHETHER RESPONDENTS HAVE MADE OUT A CASE FOR ENTERTAINING SUCH CROSS EXAMINATION ON MERITS ? 41. Mr. D'vitre, learned senior counsel appearing for the appellants raised preliminary objection about the maintainability of cross objection filed by the respondents challenging certain findings rendered by the learned District Judge in arbitration application filed by the respondents under section 34 of the Act. Mr. D'vitre made following submissions on this issue:- (i) Cross objection is not maintainable under section 37 of the Act. Cross objection is substantive ri....
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....ns were filed by the appellants seeking setting aside of the award. Though the objection petition is styled as one under Sections 30 and 33 (both) of the Act, a perusal of the contents of the objection petition shows that all the objections raised therein fall within the scope of Section 30 of the Act. During the pendency of the hearing on the said objection petition, on 20.1.2000 the appellants filed another objection petition styled as one under Section 33 of the Act wherein for the first time a plea was raised that so far as the respondents company is concerned it was not a party to the contract and therefore appointment of arbitrator at its instance and all the subsequent proceedings upto the date of making of the award were without jurisdiction and nullity and were liable to be adjudged so. By judgment dated 17.1.2001, the Court directed the objection raised on behalf of the appellants to be dismissed and the award to be made a rule of the Court. A decree in terms of the award as upheld by the judgment was later drawn up and dated as 17.1.2001. 5. On 20.2.2001, the respondents moved an application seeking review of the judgment. The judgment and the decree drawn up di....
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....ation of Delhi. 8. Subsequently by an order dated 20th September, 2002, the first appeal filed by the respondents has been directed to be dismissed by the Division Bench as not maintainable on the Division Bench forming an opinion that the order put in issue by the respondents (herein and appellant in the High Court) and the relief sought for in appeal did not fall within the purview of clauses (i) to (vi) of sub-Section(1) of Section 39 of the Act and, therefore, the appeal was not maintainable and was incompetent. 9. On the respondents taking out execution of the decree based on award, the appellants preferred an objection petition under Section 47 of the Code of Civil Procedure before the Executing Court submitting that in the absence of any arbitration agreement between the parties, the reference to arbitration, the award and the decree incorporating the award were all invalid and hence the decree was not executable. By order dated 5.3.2002 the Executing Court over ruled the objection. Feeling aggrieved thereby, the appellants preferred an appeal before the High Court which has been dismissed by the High Court as devoid of any merit vide its decision dated 12t....
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....der passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court. Sec. 41. Procedure and powers of court. Subject to the provisions of this Act and of rules made thereunder. (a) the provisions of the Code of Civil Procedure, 1908 (5 of 1908), shall apply to all proceedings before the Court, and to all appeals, under this Act; and (b) the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court: Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect of any of such matters. Order XLI Rule 22 of CPC: 22. Upon hearing respondent may object to decree as if he had preferred separate appeal.- (1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Cou....
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....er the Act. However, the applicability of such of the provisions of the Code of Civil Procedure shall be excluded as may be inconsistent with the provisions of the Act and/or of rules made thereunder. A bare reading of these provisions show that in all the appeals filed under Section 39, the provisions of the Code of Civil Procedure, 1908 would be applicable. This would include the applicability of Order 41 including the right to take any cross objection under Rule 22 thereof to appeals under Section 39 of the Act. 15. Right to prefer cross objection partakes of the right to prefer an appeal. When the impugned decree or order is partly in favour of one party and partly in favour of the other, one party may rest contended by his partial success with a view to giving a quietus to the litigation. However, he may like to exercise his right of appeal if he finds that the other party was not interested in burying the hatchet and proposed to keep the lis alive by pursuing the same before the appellate forum. He too may in such circumstances exercise his right to file appeal by taking cross objection. Thus taking any cross objection to the decree or order impugned is the exercise ....
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....f of award of interest at a higher rate was maintainable though such an order did not fall within the purview of Section 39(1) of the Act. 20. Once we hold that by taking cross objection what is being exercised is the right of appeal itself, it follows that the subject-matter of cross objection and the relief sought therein must conform to the requirement of Section 39(1). In other words, a cross objection can be preferred if the applicant could have sought for the same relief by filing an appeal in conformity with the provisions of Section 39(1) of the Act. If the subject-matter of the cross objection is to impugn such an order which does not fall within the purview of any of the categories contemplated by clauses (i) to (vi) of sub-Section (1) of Section 39 of the Act, the cross objection shall not be maintainable. Effect on cross objection if the appeal itself is held not competent or not maintainable? 21. What happens to cross objections if the appeal itself is found to be incompetent or not maintainable? Sub-Rule (4) of Order 22 of the CPC provides for only two situations in which the cross objection may be heard in spite of the original appeal havin....
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....calls for consideration on its merits. It is such an appeal the pendency of which would entitle the respondent to file a cross objection. An appeal which is barred by time is not a valid appeal and the cross objections too shall have to be rejected. In Chanchalgauri Ramanlal & Ors. Vs. Narendrakumar Chandulal & Ors., AIR 1986 Guj. 55, a Division Bench presided over by Hon'ble the Chief Justice held that a cross objection filed in a validly instituted appeal against a decree is as good as an appeal and shall have to be disposed of on merits but if an appeal does not lie any cross objection in such an appeal would not call for adjudication on merits. In Charity Commissioner Vs. Padmavati & Ors., AIR 1956 Bom. 86, Chagla, CJ speaking for the Division Bench held that in a time-barred appeal where the delay was refused to be condoned the appeal itself was rendered not maintainable and the cross objection would not survive for consideration. In A.L.A. Alagappa Chettiar Vs. Chockalingam Chetty & Ors. (supra), Wallis, C.J. opined that the right of respondent to proceed by way of memorandum of objections is strictly incidental to the filing of the original appeal in time and it is open ....
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.... 41. I have heard the learned counsel appearing for the parties at length on the issue of maintainability of the present appeal and have given my anxious consideration to the rival submissions made by the learned counsel. 44. Perusal of the order passed by CLB and the pleadings filed by the parties indicates that the appellant had filed petition under section 397 and 398 read with 402 of the companies Act, 1956 before CLB on the ground of alleged oppression and mismanagement in the affairs of the first respondent company by the other respondents. In the said proceedings one of the respondent had moved an application under section 8 of the Arbitration Act, 1996 before CLB under section 8 of the Arbitration Act, 1996. From the perusal of the order it is clear that CLB while allowing the application filed by the respondent decided the said application exercising powers under section 8 of the Arbitration Act as judicial authority and did not exercise any jurisdiction under section 397 and 398 read with section 402 of the Companies Act, 1956. It is clear that by the impugned order CLB has determined the rights of the parties flowing out of the provisions of the Arbitration Act,....
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....domestic arbitration "except where so provided". In my view, an order passed under Section 8 of the Arbitration Act, not having been provided as appealable order under Section 37, recourse to Section 10F of the Companies Act is not permissible. 55. Supreme Court in case of ITI Ltd. vs. Siemens Public Communications Network Ltd. (supra) has considered the revisional jurisdiction of the superior court while interpreting Section 37(3) of the Arbitration Act, 1996. The Supreme Court has held that under Section 37(3) of the Arbitration Act, second appeal is barred from the order passed in appeal under Section 37(1) or 37(2). It is held that the supervisory and revisional jurisdiction of the High Court under Section 115 of the Code of Civil Procedure is neither expressly nor impliedly barred either by the provisions of Section 37 or Section 19(1) of the Arbitration Act, 1996. In my view, reliance placed by the Learned Senior Counsel Mr. Dwarkadas appearing for the Appellant on this judgment in support of his proposition that after considering Section 5 of the Arbitration Act, 1996, the Supreme Court still took a view that though the second appeal is not maintainable under Sectio....
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....morandum of cross-objections in terms of Order XLI Rule 22 of the Code, could not challenge the finding of the trial court that the suit was not barred by Order II Rule 2 of the Code. The respondent in an appeal is entitled to support the decree of the trial court even by challenging any of the findings that might have been rendered by the trial court against himself. For supporting the decree passed by the trial court, it is not necessary for a respondent in the appeal, to file a memorandum of cross-objections challenging a particular finding that is rendered by the trial court against him when the ultimate decree itself is in his favour. A memorandum of cross-objections is needed only if the respondent claims any relief which had been negatived to him by the trial court and in addition to what he has already been given by the decree under challenge. We have therefore no hesitation in accepting the submission of the learned counsel for the appellant that the High Court was in error in proceeding on the basis that the appellant not having filed a memorandum of cross-objections, was not entitled to canvass the correctness of the finding on the bar of Order II Rule 2 rendered by the ....
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....ted in the Statement of Objections and Reasons for the Amendment. They read as follows: Rule 22(i.e. as it stood before 1976) gives two distinct rights to the respondent in appeal. The first is the right of upholding the decree of the Court of first instance on any of the grounds on which that court decided against him; and the second right is that of taking any cross-objection to the decree which the respondent might have taken by way of appeal. In the first case, the respondent supports the decree and in the second case, he attacks the decree. The language of the rule, however, requires some modifications because a person cannot support a decree on a ground decided against him. What is meant is that he may support the decree by asserting that the matters decided against him should have been decided in his favour. The rule is being amended to make it clear. An Explanation is also being added to Rule 22 empowering the respondent to file cross-objection in respect to a finding adverse to him notwithstanding that the ultimate decision is wholly or partly in his favour. (emphasis supplied) Mookerjee, J. observed in Nishambhu Jana's case (see p. 689) t....
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....Court' referred to in the said provision is defined under Section 2(e) of the Act. From the said definition, it is clear that the appeal is not to any designated person but to a civil court. In such a situation, the proceedings before such court will have to be controlled by the provisions of the Code, therefore, the remedy by way of a revision under Section 115 of the Code will not amount to a judicial intervention not provided for by Part I of the Act. To put it in other words, when the Act under Section 37 provided for an appeal to the civil court and the application of Code not having been expressly barred, the revisional jurisdiction of the High Court gets attracted. If that be so, the bar under Section 5 will not be attracted because conferment of appellate power on the civil court in Part I of the Act attracts the provisions of the Code also. 46. Mr. D'vitre, the learned counsel appearing for the appellants distinguished the judgment of the Supreme Court in case of S. Nazeer Ahmed (supra) and Ravinder Kumar Sharma (supra). Both the counsel also made submissions on merits of the cross objections. 47. Mr. Kamdar, the learned senior counsel made following submi....
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....1(5) on the arbitrator signing, putting date on award and place and on furnishing copy thereof to the parties. The learned counsel placed reliance upon section 33(1) to (3) of the Act which reads thus:- 33. Correction and interpretation of award; additional award. (1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties- (a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award; (b) if go agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award. (2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form pan of the arbitral award. (3) The arbitral tribunal way correct any error of the type referred to in clause (a) of sub-sect....
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.... in respect of the arbitration and award. We are unable to see how this section can provide the basis for the order made in this case. It only says that the arbitrators shall inform the parties of the fees and charges payable. Even assuming that the word 'charges' includes duty payable for the stamp to be affixed to the award, at best, this section would support an order directing the arbitrators to supply this information. It would not justify an order requiring the arbitrators to inscribe the award afresh on a stamped paper and re-submit it to court. As at present advised, we have grave doubts if the fees and charges mentioned in s. 14(1) include the stamp duty payable on the award. Section 17 of the Stamp Act requires that stamping should be at the time of execution. Under s. 14(1) of the Arbitration Act it is only after the singing of the award that is its execution, that the arbitrators are required to supply the information about the fees and charges. It is, of course, no part of the duty of the arbitrators under the Act or otherwise to find the costs of stamp themselves. Therefore it is difficult to appreciate how the word 'charges' mentioned in this section ....
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....Sched. 8, of the Finance Act, 1949, which was passed after the 14th edition was published. 9. Lastly, Mr. Pathak tried to support the order under ss. 13(d) and 15(b) and (c) of the Arbitration Act. A bare perusal of the provisions mentioned would show that the order made in this case cannot be based on any of them. Section 13(d) deals with correction of clerical mistakes or accidental slips in the award, neither of which we think an omission to stamp is. Further more, s. 13 is only an enabling section giving certain powers to the arbitrator. The arbitrator cannot be compelled to exercise these powers. Section 15 deals with a court's power to modify or correct an award. In the present case, the Court did not purport to exercise that power. 10. We, therefore, think that the Division Bench was in error in thinking that an order could be made remitting the award to the arbitrator with a direction to re-write it on a stamped paper and resubmit it to court. That is the only point that we decide in this case. 49. Mr. Kamdar then placed reliance upon the judgment of the Supreme Court in case of Juggilal vs. General Fibre Dealers Ltd., reported in AIR 1962 S.C. 1123....
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....e have to see however are the scheme and the provisions of the Arbitration Act, No. X of 1940 (hereinafter called the Act), which govern the proceedings in arbitration in this case. These provisions are to be found in Chap. II of the Act which deal with "arbitration without intervention of Court." 9. We have already said that generally speaking, the arbitrator becomes functus officio after he has given the award; but that does not in our opinion mean that in no circumstances can there be further arbitration proceedings where an award is set aside or that the same arbitrator can never have anything to do with the award with respect to the same dispute. Section 13(d), for example, gives power to the arbitrator to correct in an award any clerical mistake or error arising from any accidental slip or omission. Further s. 16 gives power to the court; to remit the award to the arbitrator for reconsideration. Therefore, when it is said that the arbitrator is generally functus officio after he has made the award, it only means that he cannot change that award in any matter of substance himself. But that does not take away the court's power to remit the award for reconsideration....
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....Section 14 of the Arbitration Act, 1940 (hereinafter referred to as the Act) for making the awards dated November 26, 1992 and January 28, 1994 as the rule of the court. The trial court made the award as the rule of the court holding that the interim award in regard to Item No. 1 should be made the rule of the court and that award having covered Item No. 1 should not be taken note of in the award made on January 28, 1994. Thereby the trial court took the view that interim award made on November 26, 1992 is liable to be made the rule of the court with regard to Item No. 1 and that Item No. 1 of the award made on January 28, 1994 will merge in the same deciding that aspect of the matter against the respondents and in favour of the appellant. The award dated January 28, 1994 was ordered to be made the rule of the court except for Item No. 1 for which interim award has already been granted. 6. The question whether interim award is final to the extent it goes or has effect till the final award is delivered will depend upon the form of the award. If the interim award is intended to have effect only so long as the final award is not delivered it will have the force of the interim....
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....isconduct. No equal opportunity was rendered by the learned arbitrator to the respondents as required under section 18 of the Act. The award is thus in violation of principles of natural justice. It is submitted that the learned arbitrator was totally biased as is apparent from his conduct. The learned arbitrator was in contact with the appellants. Note prepared by Mukesh was found attached to the copy of the award furnished to the respondents by the private secretary of the learned arbitrator. The learned arbitrator could not have delegated his powers to a party before him. The learned senior counsel distinguished the judgment of Oudh High Court in case of Nihal Chand and another vs. Shanti Lal reported in AIR 36 1935 Oudh 349 which was relied upon by the learned District Judge. It is submitted that facts of that case are clearly distinguishable. Para 12 of the judgment of the Oudh High Court in case of Nihal Chand (supra) reads thus:- 12. Judicial misconduct.--As regards the ground of judicial misconduct, the only facts which have been made out are that Babu Lachhman Das, who works with Lala Makund Lal as his junior, wrote some portion of the award at the dictation of La....
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....as not in context of arbitrator having become functus officio. The issue of functus officio has been raised for the first time as a new ground in the cross objections in paragraphs (c) and (d) which cannot be permitted for the first time. The submissions considered by the learned District Judge made by the parties also does not refer to any such alleged submissions on arbitrator became functus officio. If the appeal could not lie on that ground, the cross objections also would not be maintainable on such ground. In the alternative, it is submitted that even if such objection could have been raised by the respondents, not having raised, such objections is deemed to have been waived by the respondents. It is submitted that Mr. Sodhi who was admittedly an employee of Weikfield was appointed by consent of all parties. This position has been admitted by the respondents themselves in para (n) of the arbitration application filed under section 34 before the learned District Judge. It is submitted that on 16th July, 2007, the learned arbitrator had indicated of his visit to Pune between 24th to 26th July 2007 and proposed to pronounce the award on 25th July, 2007. It is submitted that vide....
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....ed purposes for correcting any error described in section 33(1)(a). The learned senior counsel also placed reliance upon the commentary of Shri Dr. Justice B.P. Saraf (as His Lordship then was) and Shri Justice S.M. Jhunjhunwala, former judges of this Court on Arbitration and Conciliation Act, 1996 (2012 Edition) and in particular note (10) on section 33 which reads thus:- 10. Whether arbitral tribunal becomes functus officio after making an award. Under the provisions of Act of 1940, on making and publishing of an award, the arbitrator became functus officio. However, under the provisions of the Act, since the arbitral tribunal can of its own motion or on the application of any party to the arbitral agreement, correct any computation, clerical or typographical errors or any other errors of similar nature, occurring in the arbitral award within a period of 30 days from receipt of signed copy of the arbitral award, unless any other period has been agreed between the parties, the arbitral tribunal does not become functus officio even after making of an arbitral award. In any event, the arbitral tribunal would become functus officio if no written request is received ....
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....would be still valid. The learned senior counsel distinguished the judgment of the Supreme Court reported in (1999) 3 SCC 487. It is submitted that in the facts of that case, the different amount was awarded by the learned arbitrator by making two separate award. The learned arbitrator had redetermined on the matter which he had already pronounced. The Supreme Court thus ignored the award pronounced by arbitrator after he become functus officio and upheld the first award. 55. In so far as judgment of the Supreme Court in case of Rikhabdass (supra) relied upon by Mr. Kamdar is concerned, Mr. D'vitre submits that in that matter the Supreme Court held that the Court could not remit the matter to the arbitrator for stamping, for giving legal efficacy to the award and upheld the said award. The Supreme Court therefore set aside the order of High Court remitting the award for stamping and allowing the parties to cure the defects. 56. In the alternate, Mr. D'vitre, the learned senior counsel submits that the learned arbitrator could have corrected such clerical mistakes in better manner. However, in view of the fact that no change of substance was carried out, no prejudice o....
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....ther hand and requested the learned arbitrator to consider fair, equitable and amicable distribution and settlement of the family businesses and assets. In the said statement, the appellants made various proposals in respect of various properties. In Para 6(s) it was stated that the agricultural lands standing in the name of Ankush Malhotra (respondent No. 2) were purchased out of funds provided by other family members shall be valued by Government Valuer to be appointed by the learned arbitrator and based on such valuation, surplus be calculated and be allocated equally to Mr. Ankush Malhotra, Vidur Malhotra, Miss. Siya Malhotra and either Mr. S.P. Malhotra or Mr. B.R. Malhotra or Smt. Kanwal M. Malhotra. Similarly in Para 6(t), similar relief was sought in respect of the agricultural land standing in the name of Ankshay Malhotra. In paragraph 6(u), similar relief was sought in respect of the agricultural lands standing in the name of Ms. Shikha Malhotra, daughter of Mukesh Malhotra. The said statement was also duly signed by Mr. S.P. Malhotra and Bahri Malhotra. 60. On 17.11.2005, Mr. and Mrs. Punit Malhotra, Ankush Malhotra and Vidur Malhotra filed reply to the statement of c....
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....that there were many issues on which Group A and B had strong difference of opinion with group E. The Group A and B denied the statement of Punit Malhotra. Group A and B confirmed that there was written concurrence on their part to various statements made by Group C and D. Group A also rejected the contention of Punit Malhotra Group that Group A and B were not parties to that dispute and arbitration and could not express and/or lay down their contentions, conditions and claims. By the said individual statement, Mr. S.P. Malhotra and Mr. Bahri Malhotra requested the learned arbitrator to take due cognizance of the said statements in his deliberation. Though the respondents filed separate reply to these individual statements made by S.P. Malhotra and Bahri Malhotra, no objection regarding jurisdiction of the learned arbitrator in respect of these agricultural properties was raised by the respondents. On the contrary, it was pleaded that the arbitrator was appointed to resolve all the disputes and differences between the parties. 61. It is not in dispute that the respondents had applied for adjournment of the proceedings before the learned arbitrator in view of the wedding in their....
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.... in area to the grand parents or pay to the grand parents half of the present value of those three properties. Respondents did not agree to that suggestion but made counter suggestion that they were willing to pay three times of the value recorded in the registered document. The Company Law Board made suggestions to the parties to consider the proposal made by parties. In para 5 of the said order, the Company Law Board observed that if the parties could agree on the terms to settle the disputes in regard to the three properties in the name of Ankush, there would be no other dispute pending amongst the parties and which would enable them to release the arbitrator and would also enable the petitioners group to withdraw the suit (arbitration) filed by them. 63. On perusal of the further statement filed by the appellants read with email dated 29th May, 2007 sent by the learned arbitrator, it is clear that the learned arbitrator had communicated its decision that the application/statement filed by the appellants was not fresh statement of case as alleged by Punit Malhotra but was merely addendum to their earlier statement of case and there was no infirmity involved in the matter. On ....
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....d and observed that the suggestions for amicable settlement with respect to immovable properties given by the Company Law Board were not agreed by the parties and were kept aside and had observed that it would be decided by the arbitrator. The learned District Judge also referred to observations made by the learned District Judge in the earlier arbitration application filed by the respondent under section 34 challenging the interim award on this issue. In Para 59 of the impugned order, the learned District Judge recorded a finding that the mandate of the arbitration agreement as well as in the two previous proceedings, one before the company Law Board and the another before that Court, the parties had virtually agreed to the said dispute being considered by the Arbitrator and rejected the contention about jurisdiction raised by the respondents in the said arbitration application, having no force. 64. On perusal of the record, it is clear that the parties had agreed on another valuation in respect of the real estate of the family including agricultural lands from M/s. Bapat Valuers and Consultants Pvt. Ltd. Mukesh in his letter dated 23rd December, 2006 had recorded this fact whi....
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....of the properties including agricultural lands. The appointment of the valuer for the purposes of valuation of agricultural lands and the parties having acted upon the said decision of the learned arbitrator to appoint valuer would also indicate that the learned arbitrator had jurisdiction to decide the dispute in respect of those agricultural lands. 67. In my view, Mr. D'Vitre the learned senior counsel appearing for the appellants is right in placing reliance upon section 7(4)(c) of the Arbitration & Conciliation Act, 1996 in support of his plea that though there was reference in respect of these three properties in para 6(s)(t) and (u) of the statement of claim, with prayer to adjudicate upon these properties and to declare the same as family properties and for distribution thereof amongst the family members, no issue of jurisdiction was raised by the respondents in their earlier written statement. Perusal of the earlier written statement clearly indicates that the only objection raised by the respondent was that such proposal/claim could not be made by Mukesh group as the said statement of claim was not filed by the grand parents. On the respondents having raised such ob....
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....tion of the learned arbitrator to transfer and execute documents about the landed property was beyond the scope of arbitral mandate or that the said agreement did not indicate any work of assignment of distribution of the properties of different family members. In my view once the learned arbitrator had jurisdiction to decide the dispute pertaining to the properties owned by the members of the family and for separation thereof, it would include direction to distribute the said properties including direction to execute the requisite documents to transfer and to implement the direction to execute the requisite documents to effectuate the transfer thereof. The impugned order passed by the learned District Judge shows patent contradiction and illegality on the face of the order. In my view, the learned District Judge in the impugned order could not have taken a view different than the view taken by his predecessor in the earlier order dismissing the arbitration application impugning the impugned award which was filed by the respondents on this issue. 70. In my view the learned District Judge having come to the conclusion that the learned arbitrator had jurisdiction to decide the dis....
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....under section 34, cannot be allowed to be raised for the first time across the bar. Even in the cross objection filed by the respondents no such plea has been raised by the respondents regarding bifurcation of the jurisdiction of the learned arbitrator regarding jurisdictional fact or distribution of properties. 72. There is no dispute that once the plea of jurisdiction was raised before the learned arbitrator by the respondents under section 16, the order of the learned arbitrator rejecting such plea can be challenged under section 34 of the Arbitration & Conciliation Act, 1996 while challenging the final award. 73. On Perusal of the cross objection filed by the respondents, it is clear that the respondents did not raise any plea about the view of the learned District Judge that the properties were self acquired properties and were not family properties were based on admitted facts. On perusal of the impugned order passed by the learned District Judge, it nowhere indicates that the said findings of fact recorded by the District Judge is based on any admitted facts. In any view of the matter, no such findings of fact can be recorded by the learned District Judge for the fist ....
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....n that the properties were family properties and not self acquired properties in the impugned award, the learned District Judge has reversed those findings by recording new finding that all those observations made by the learned arbitrator were based on assumptions that the landed properties of three villages were in fact joint family properties. This part of the finding of the learned District Judge is beyond his powers under section 34 of the Arbitration Act, 1996. In my view on the basis of the documents produced by the parties and on interpretation of the loan agreement, the learned arbitrator had rendered finding of fact that such properties were family properties and not self acquired properties of the individual members of the family. The learned arbitrator had also considered income tax returns of Ankush, bank statements of the grand parents and other family members and the agreements between Weikfield Products Company India Pvt. Ltd. Ankush and Akshay showing the nature of understanding on which the loans were advanced. The learned arbitrator rendered a finding that the tax returns of Ankush clearly showed the meager nature of his financial resources at the relevant time a....
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....ed by the learned District Judge, there appears to be no such argument having advanced by the respondents appears to be correct. In any event, the only ground raised in the cross objection on this issue is that the learned District Judge failed to appreciate that the award passed by the learned arbitrator was directly hit by the provisions of section 3 of the said Act. As far as argument of Mr. Kamdar that the award is hit by the provisions of Benami Act and the learned arbitrator could not have treated the property held by respondent No. 2 as the property of Malhotra family in the teeth of section 4(3)(a) of the said Act is concerned, in my view, Mr. D'Vitre, the learned senior counsel appearing for respondent is right in his submission that though the properties were standing in the name of individual members of the family, the same was with the understanding and also on the terms and conditions of the agreement. The learned arbitrator was right in rendering a finding on interpretation of the agreement and considering the documents that the said properties were family properties and the same were held in trust by the individual members. It was not in dispute that such individ....
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....s the intent of that arbitration before him. The learned arbitrator accordingly held that the dissolution of the said firm would render all the agreements and special power of attorney null and void and would remove the very cause of action of the suit filed by Puneet Malhotra and also satisfy his desire who did not wish to permit Mukesh or Ashwini or the firm to continue sales of the plots standing in his name and allow him to independently carry out the sales of all the plots standing in his name at Malhotra Forest Valley without any interference from Mukesh or Groups A to D. The learned arbitrator accordingly directed that the said firm be dissolved and appropriate steps be taken for that purpose forthwith. 78. On perusal of the copy of the plaint produced for perusal of this court by the appellants indicates that there was no dissolution of partnership firm sought by Puneet Malhotra in the said suit. The issue of dissolution of partnership was not subjudice before the learned District Judge in the said suit filed by Puneet. On perusal of section 8(3) of the Arbitration Act, it is clear that even if the application is pending before the Judicial authority, the arbitration may....
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....ction 18 of the Arbitration & Conciliation Act, 1996, it is provided that the parties shall be treated with equality and each party shall be given full opportunity to present his case. The record would indicate that the learned arbitrator did not allow either party to engage any advocate to represent them before him. If the learned arbitrator would have allowed the appellants to engage an advocate to represent them and would have rejected the application of the respondents to engage advocate, section 18 of the Act would have attracted in that situation. In my view, refusing to permit a party to engage an advocate in the arbitration proceedings by the arbitrator would not violate section 18 of the Arbitration & Conciliation Act, 1996. There was no violation of any equal treatment being given to both the parties by the learned arbitrator. Both the parties were given full opportunity to present their respective case including filing of written arguments. The learned arbitrator being family friend for 35 years and the dispute being family dispute and to avoid any further delay in the matter, in my view the learned arbitrator was right in exercising his discretion not to allow any of th....
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...., the learned arbitrator was fully justified in exercising his discretion to conduct the proceedings in the manner he considers appropriate and by refusing to permit either parties to engage advocate. In my view there is no denial of equal opportunity or violation of principles of natural justice by refusing to engage an advocate to both the parties. In my view, once the learned arbitrator has exercised that discretion, considering the facts of that case, the learned District Judge could not have interfered with such discretion exercised by the learned arbitrator by exercising powers under section 19(3) of the Arbitration Act. The impugned order passed by the District Judge setting aside the impugned award on this ground is thus perverse and untenable in law. 82. In the case of Skanska Cementation India Ltd. (supra) delivered by this court on 13th December, 2002 this court while considering the arbitration rules of Bharat Chamber of Commerce held that the arbitral tribunal had dealt with the application of the petitioner considering the rules and had exercised its discretion while choosing to reject the application of both, petitioner and respondents for engaging the lawyer and ....
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....l hearing, no party shall without the permission of the Court be entitled to appear by counsel, attorney, advocate or other lawyer adviser. Considering that provisions, it is held that the learned arbitrator in refusing the permission would not have committed any misconduct as they acted within their powers expressly conferred under the rules of arbitration. Even in the said judgment, the Calcutta High Court held that ordinarily in India, person certainly has a right to engage any qualified lawyer to represent his case but that is contractual right and not constitutional right. In my view the judgment of the Calcutta High Court thus relied upon by Mr. Kamdar is of no assistance to the respondents. 85. On perusal of the arbitration application filed by the respondents challenging the impugned final award, it is clear that the ground raised in the said application by the respondent was not that inspite of the agreement between the parties to engage advocate or to be represented by their lawyer before the learned arbitrator, the learned arbitrator acted contrary to that agreement. The only ground raised is that the order refusing the respondents to present their case through their ....
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....parate appeal.-(1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the court below in respect of any issue ought to have been In his favour; and may also take any cross objection] to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one months from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow: Explanation: A respondent aggrieved by a finding of the court in the judgment on which the decree appealed against is based may, under this rule, file cross objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or In part, in favour of that respondent. On perusal of the said explanation, it is clear that even if the decision is wholly or in part in favour of the respondents but if the respondents is aggrieved....
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.... refusing to set aside award on that particular ground is devoid of merits. This submission of Mr. Kamdar in my view is contrary to section 37(1)(b). It is not in dispute that on application of the respondents, the learned District Judge had set aside the impugned award on some of the grounds raised by the respondents in application under section 34 of the Act. No such eventuality is provided under section 37(1)(b) permitting the respondents to challenge the order setting aside an award on the ground that the award was not set aside on all the grounds raised by the respondents. However, the respondents are not precluded from challenging the adverse findings recorded in such order by filing cross objections under Order 41 Rule 22 of the Code of Civil Procedure in arbitration appeal filed by the opponent impugning such order setting aside arbitral award. 92. In my view, in absence of any express and/or implied bar under the provisions of the Arbitration Act 1996, provisions of Code of Civil Procedure, 1908 are applicable to the arbitration proceedings in court to the extent any of such provisions are not inconsistent with the provisions of the Arbitration and Conciliation Act, 199....
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....t aside the arbitration award and passing an order that the award be made rule of the Court, the respondents filed an appeal under section 39 of the Arbitration Act, 1940 seeking suitable modification in the decree so as to include therein direction to pay future interest from the date of decree till realization. Though the applicant whose application under section 30 read with section 33 impugning the award filed an appeal against the same judgment and decree, there was gross delay in filing the said appeal. The Division Bench rejected the said appeal filed by the applicant consequently upon the dismissal of condonation application filed under section 5 of the Limitation Act. It was submission of the applicant that Memo of Appeal filed by the applicant if was barred by time though maintainable, the same could be treated as cross objections under Order 41 Rule 22 of the Code of Civil Procedure in appeal filed by the respondents which having was filed within the prescribed period of limitation and the same shall be heard on merits alongwith appeal filed by the respondents. Against the Order of the Division Bench dismissing the appeal filed by the original applicant, the applicants f....
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....ion Act or any of the provisions of the Arbitration Act, 1996 is maintainable. In my view, the judgment of this court (R.D. Dhanuka, J.) in Company Appeal NO. 47 of 2012 in case of Masusmi Sa Investment Llc (supra) is of no assistance to the appellants. 97. Mr. Kamdar, the learned senior counsel placed reliance upon the judgment of the Supreme Court in case of ITI Ltd. (supra) in which it has been held by the Supreme Court that the proceedings before the court will have to be controlled by the Code of Civil Procedure. It has been held that bar under section 5 will not be attracted because conferment of appellate power on the civil court in Part I of the Act attracts the provisions of the Code also. In my view as there is no bar from applicability of Code of Civil Procedure to arbitration proceedings in court, the provisions of Order 41 Rule 22 can be invoked by the respondents on the satisfying the conditions mentioned therein. 98. Next question that arises for consideration of this court is whether the respondents have made out a case for interference with the findings rendered by the learned District Judge against the respondents in this cross objections filed by the respon....
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....eld was appointed by consent of all parties as Registrar of the learned arbitrator. On 16th July, 2007, the learned arbitrator had indicated of his visit to Pune between 24th to 26th July 2007 and proposed to pronounce the award on 25th July, 2007. The learned arbitrator had already put the date of 25th July, 2007 in the award and sent the said award by courier to Mr. Sodhi at Pune. It appears that Mr. Sodhi had shown that award to Mukesh. It is not in dispute that Mukesh had prepared a note suggesting few minor corrections to Mr. Sodhi. Mr. Sodhi went to Delhi and returned on 21st July, 2007 itself with corrections in date and initial on each page of award. The arbitrator signed final award and corrected the date and put his initial on every page. Place of the award mentioned at Pune was deleted. The learned arbitrator changed the date from 25th July to 21st July as he had cancelled his personal visit to Pune which was proposed on 25th July. On perusal of the record, it is also clear that it was case of the respondents themselves that they were in contact with the learned arbitrator who had informed the respondents that the learned arbitrator was in process of correcting few mista....
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....ward. Section 33(7) provided that Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section. 105. While deciding these issues reference to section 32 of the Arbitration and Conciliation Act, also would be useful. On perusal of section 32 of the Act, it is clear that the arbitral proceedings are terminated by the final arbitral award or by an order of the arbitral tribunal passing order for termination of proceedings on the claimants withdrawing his claim, parties agree on the termination of the proceedings, or if the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible. Section 32(3) provides that subject to section 33 and subsection (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings. On conjoint reading of sections 32, 33 and section 34(4) of the Arbitration Act, it is clear that the mandate of the arbitral tribunal is not terminated if any application for correction is made under section 33(1)(a) by the parties till an order thereon is passed by the learned arb....
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....rd, or even if the place i.e. Pune was deleted or not mentioned in the award would not make the award illegal. Change of date from 25th July to 21st July 2007 was obviously made in view of the cancellation of the proposed visit to Pune by the learned arbitrator which in my view would not affect the merits of the matter. 108. None of these corrections carried out by the learned arbitrator would be of any substance in nature and were absolutely clerical which could be carried out by the learned arbitrator on his own initiative by exercising powers under section 33(3) of the Act. On perusal of section 33(3) of the Arbitration Act, it is clear that the learned arbitrator could carry out such corrections prescribed under section 33(1)(a) within 30 days from the date of the award even without giving any notice to the parties before carrying out any such corrections. In my view, the learned arbitrator had not become functus officio. It is true that the learned arbitrator could have followed proper procedure or would have acted in better way before carrying out such corrections which were of clerical in nature as provided under section 33(1)(a) of the Arbitration Act. In my view, no mal....