TaxTMI 
TaxTMI 
2013 (6) TMI 871
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....evant 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 Supreme Court of India. It is the cas....
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....e 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 ....
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....aw Board under the provisions of Section 397-398 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....
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....s herein that separation of business and assets were never contemplated. 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 t....
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.... new claims which were not part of the 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 ....
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....s herein under section 34 of the Arbitration Act, 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 oppo....
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....appellant No. 1 and 2 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 ....
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.... lands standing 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 ....
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....epping 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 the powe....
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....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 before the learned arbitrator....
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....spute 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 family properties and once it was held that the same forme....
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....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 directed joint valuation only of joint properties. What was directed by the learned arbitrator regarding valuation is relevan....
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.... 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. It is nobody's case that in the present case it is HUF property. In fact there is no HUF at all. It is submitted that a fiduciary capa....
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....ded 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 have availed himself of loan facilities from banks to make up purchase money. Could it be said that since th....
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....n 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 claim which findings were not challenged by the respondents. The arguments of the respondents in the first arbitrat....
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....aid 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, the learned senior counsel appearing on behalf of appellants made following submissions on this issue. (i) It is an undisp....
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....ates 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 to dispose of the present petitions. Admittedly the petitioners in both the petitions had placed purchase orders on the respondents. The d....
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....l 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 subsequently bills were raised on the petitioners. Clause 5 of the printed conditions reads as under: If any dispute arises regarding the goods sold under this bill the same shall have to be referred for d....
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....nterfered 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 the respondents was not permitted to engage lawyer. Considering the nature of the proceedings, the learned arbitrator did not allow either party to engage a lawyer to represent their case. It is thus submitted that there was no violat....
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....ing 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) Assuming without admitting that there is no such agreement, under Section 19(2) of the Act, the learned Arbitrator has therefore exercised his powers under Section 19(3) of the Act to determine the procedure to be followed before the ....
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....ceedings. 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 it so wishes to be represented by his authorised representative-including a legal practitioner. Enforcement of Section 30 (which incidentally has not yet been brought into force) of the Advocates Act is not necessary for this purpose. Section 30 ....
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....sel 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 parties in a civil dispute over a contract before the Arbitrators cannot, therefore, be regarded as an infraction of any constitutional provision. It was then argued that the arbitration infringed Article 19(1)(g), Constitution of India. The right there recognised, however, is con....
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.... 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 senior counsel made an attempt to distinguish the judgment in case of Skanska Cementation India Limited (supra) and submits that rules of the Bharat Chamber of Commerce which was under consideration of this court in the said matter provided that no parties can be represented by an advocate in the chamber arbitrat....
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....lcutta 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 assistance to the respondents as the learned arbitrator had not permitted any party to engage a lawyer and had treated both parties equally. Learned senior counsel invited my attention to the Minutes of the Meeting at page 485 of the appeal paper book in support of his plea that even Group A to D wanted engagement of a....
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....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 formula in order to ensure a fair resolution of the disputes considering also the terms of the loan agreement. It is submitted that as no witnesses were examined, the contention of the respondents that they were denied an opportunity to cross examine the witnesses is false. It is submitted that in any event, the fin....
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....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 excess of jurisdiction in as much as it pertains to the properties which are the subject matter of the suit, which admittedly did not belong to the firm and the dispute of the said suit was never referred to the Arbitral Tribunal, which is evident from the reference at page 87 and 89 of the appeal paper book. The conte....
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....& 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 right of appeal and form of exercise of that right is by way of cross objection. Right of filing cross objection also must be provided under the statute and is not inherent right. Appeal would lie where statute permits. Cross objection is not against the order refusing to set aside or setting aside the award. Cross objection does not fall under any of the appealable order p....
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....00 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 did not award future interest on the decretal amount to the respondents and the only relief sought for in the review petition was to suitably modify the operative part of the judgment and the decree so as to include therein a direction for payment of interest from the date of decree till realization of the decretal amount. On 25.9.2001, the learned single Judge directed the review petiti....
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....) 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 12th July, 2002. SLP(C) No. 20511/2002 impugns the decision dated 12.7.2002 of the High Court. 10. It is not disputed by the learned senior counsel for the parties that so far as appeal filed by the respondents before the Division Bench is concerned, the same was not maintainable under Section 39 of the Act and has, therefore, been rightly dismissed as not maintainable. Two questions arise for decision in these ap....
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....ers 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 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 month 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. (2) Form of objection and provisions applicable thereto. Such cross-objection shall be in the form of a memorandum, and the provisions of rule 1, so far as they rel....
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....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 of right of appeal though such right is exercised in the form of taking cross objection. The substantive right is the right of appeal; the form of cross objection is a matter of procedure. 18. We have, therefore, no doubt in our mind that right to take a cross objection is the exercise of substantive right of appeal conferred by a statute. Available grounds of challenge against the judgment, decree or order impugned remain the same whether it is an appeal or a cross-objection. The difference lies in the form and manner of exercising the right; the terminus a quo (the starting point) of limitation als....
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....s 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 having not been heard on merits. These situations are two: (i) the original appeal being dismissed as withdrawn, (ii) the original appeal being dismissed for default (default in appearance or any other default). Just as the enabling provisions of cross objection contained in sub-Rule (1) of Order 22 of the CPC are applicable to appeals under Section 39 of the Act the disabling provision contained in sub-Rule (4) too would apply to appeals under Section 39 of the Act in view of the generality of the provisions contained in Section 41 of the Act. To put it briefly, if the Appellate Court forms an opinion that the original appeal itse....
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....dication 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 to a party against whom a memorandum of objections has been filed to set up the bar that the original appeal was filed out of time. We are in respectful agreement with the view of the law taken by several High Courts and noticed hereinabove. The cross objection is available to be heard if the original appeal is available for hearing on merits. A view to the contrary has been taken by a Division Bench of Allahabad High Court in Shankar Lal & Anr. Vs. Sarup Lal & Anr., (1912) 34 ILR All. 140, and Nanak Bakhsh & Ors. Vs. Wazir Singh & Ors., (1909) 4 IC 625 (Punjab Chief Court). Both the decisions are not supported by any convincing reas....
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....ion 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, 1996 and not the provisions of the Companies Act, 1956. In my view, CLB did not adjudicate any disputes between the parties under section 397 and 398 of the Companies Act, 1956 while referring the parties to Arbitration under section 8 of the Arbitration Act, 1996. In my view, remedy of appeal if any, thus has to be traced out from within the provisions of the Arbitration Act, 1996 and not under any other provisions of law including Companies Act, 1956. From the perusal of the pleadings including appeal memo in the present proceedings, it is clear that the order passed by CLB is under section 8 of the Arbitration Act, 1996 and not under the provisions of ....
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....upervisory 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 Section 37(3), the revision under Section 115 of the Code of Civil Procedure is still maintainable, is misplaced. In my view from reading of Section 37(3), it is clear that no second appeal is maintainable against the order passed by the Court under Section 37(1) or 37(2) of the Arbitration Act, 1996. In my view the expression "and from no other orders", used in Section 37(1) of the Arbitration Act, indicates that the court is not authorised to hear appeals other than which are specifically appealable and provided under Section 37(1)(a) and (b) and 37(2)(a) and (b). The Supreme Court was not considering the issue of maintainability of the appeal ....
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....dum 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 trial court. 44. The learned senior counsel distinguished the judgment of the Supreme Court in case of Municipal Corporation of Delhi and others (supra) relied upon by Mr. D'vitre, the learned senior counsel appearing for the appellants. The learned senior counsel also placed reliance upon the judgment of the Supreme Court in case of Ravinder Kumar Sharma vs. State of Assam and others reported in (1999) 7 SCC 435 and in particular paragraphs 19 to 23 which reads thus:- 19. In connection with Order 41 Rule 22, CPC after the 1976 Amendment, we may first refer to the judgment of the Calcutta High Court in Nishambhu Jana vs. Sova Guha (1982) 89 ....
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....ecree 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) that "the amended Rule 22 of Order 41 of the Code has not brought any substantial change in the settled principles of law" (i.e. as accepted in Venkata Rao's case) and clarified (p. 691) that. it would be incorrect to hold that the Explanation now inserted by Act 104 of 1976 has made it obligatory to file cross-objections even when the respondent supports the decree by stating that the findings against him in the court below in respect of any issue ought to have been in his favour. 22. A similar view was expressed by U.N. Bachawat, J. in Tej Kumar vs. Purshottam [AIR 1981 MP 55] that after the 1976 Amendment, it was not obligatory to file cross-objec....
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.... 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 submissions:- (i) The findings of the learned District Judge that the arbitrator had jurisdiction to decide three properties was incorrect. (ii) The learned arbitrator became functus officio on signing of the award. Once the award was already signed under section 31(1) of the Act, the said award could not be altered. The said award was published under section 31(5) in presence of parties and copy thereof was to be furnished to the parties. If there was any error as prescribed under section 33 of the Act in the impugned award, the same could be corrected only by following procedure prescribed under section 33(1)(a), (b), (2) or (3). It is submitted that none of the party had requested the Arbit....
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....he 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-section (1), on its own initiative, within thirty days from the date of the arbitral award. 48. Mr. Kamdar, learned senior counsel placed reliance upon the judgment of the Supreme Court in case of Rikhabdass vs. Ballabhdas and others reported in AIR 1962 SC 551 and in particular paragraphs 6 to 10 thereof on the issue that the learned arbitrator could not make any alterations having become functus officio. Paragraphs 6 to 10 of the said judgment reads thus:- 6. We think that the Division Bench of the High Court was clearly in error. Under s. 16 of the Arbitration Act an award can be remitted to the arbitrators only for reconsideration. When it is remitted for re-writing it on a stamped paper, it is not remitted for reconsideration. Recons....
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.... 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 includes stamp. But on this question it is not necessary for us to express any final opinion in this case. 8. Mr. Pathak contended that even if the case did not come within s. 16(1)(c) of the Arbitration Act, the order in the present case can be supported under s. 151 of the Code of Civil Procedure which preserves the inherent power of a court to make such orders as may be necessary for the ends of justice. It is true that s. 41 of the Arbitration Act makes the provisions of the code of Civil Procedure applicable to proceedings before a court under the Arbitration Act. But it is well known that after making his award the arbitrator is functus officio. To cite one authority for this proposition we may quote the observations of Mellish, L.J., in Mordue v. Palmer (....
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....or 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 and in particular paragraphs 5 and 9 thereof on the same issue which paragraphs reads thus:- 5. The main question that has been argued before us is that the first award was set aside on May 25, 1953, the reference was exhausted and the arbitrator had become functus officio and it was therefore not possible without a fresh arbitration agreement to have the same dispute decided again by the arbitrator, irrespective of whether the letter of September 7, 1953, amounted to a second reference or was a mere request for continuation of the proceedings in the original reference, which had proved abortive as the award originally made had been set aside. Reliance in this connection is placed on what are called certain fundamental principles governing all arbitrations. It is urged that once an award is wholly set aside, the arbit....
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....her 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 under s. 16 or to refuse to supersede the reference even though the award is set aside leaving it to the parties to take such further action under the arbitration agreement for further arbitration if it is possible so to do under the terms of a particular arbitration agreement. We are therefore of opinion that whatever may be the position in the absence of a provision similar to s. 19 of the Act there can be no doubt that s. 19 gives power to the court not to supersede the reference and so leave the arbitration agreement effective even when it sets aside award and thereupon, it will depend upon the terms of the arbitration agreement whether arbitration proceedings can go on with respect to the same dispute or with respect to some other disputes arising under the arbitration agreement. This was the view taken in the Ba....
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....ept 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 award and it will cease to have effect after the final award is made. If, on the other hand, the interim award is intended to finally determine the rights of the parties it will have the force of a complete award and will have effect even after the final award is delivered. The terms of the award dated November 26, 1992 do not indicate that the same is of interim nature. 8. On this aspect of the matter we may refer to some of the decisions on the aspect as to when an award becomes final. In Janardhan Prasad vs. Chandrashekhar, AIR 1951 Nag 198, after examining the scope of Section 14 of the Act, it was held as follows: The award becomes valid and final so far as the arbitrators or umpire are concerned the moment it is made and signed by them. The provision for giving notice in writing to the parties of the making and sign....
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....ara 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 Lala Makund Lal, that Lala Nihal Chand remained all along at Ferozepore during the time that the award was under preparation, that he had an inkling into the award being in his favour before it had been delivered and that he filled in his handwriting a black space in the copy of the award which was sent to the plaintiff' with a quotation from the agreement in Urdu. There is nothing to show that the arbitrator did not exercise his own judgment on the matters referred to him. The writing of a part of the award by Lachhman Das at the dictation of the arbitrator was an act of a ministerial character which could be delegated to a third party: Buta v. Municipal Committee of Lahore (1902) 29 Cal 854 : 29 IA 168-7 CWN 82: 8 Sar 327 (PC) In the absence of any evidence showing that the arbitrator in any way took the defendant into his confidence, no misconduct can....
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....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 e-mail dated 18th/19th July, 2007, the learned arbitrator however cancelled his visit to Pune and sent the impugned award by courier to Mr. Sodhi. Mr. Sodhi received the said award on 20th July, 2007 who showed that award to Mukesh. Mukesh made some suggestions by preparing a note which suggestions were in the nature of the minor corrections and not of any substantial nature on 21st July, 2007. Mr. Sodhi went to Delhi and returned on 21st July, 2007 itself with corrections in date and initial on each page of award on 27th July, 2007. 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 which was non-sequitur and insignificant. Under section 20(2) of the Act this place of arbitration was to be mentioned for the purpose of showing that the arbitration proceedings was held at Pune....
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....s 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 on any of the points mentioned in this section within 30 days of the receipt of the arbitral award; in the alternative, if a written request is received within time, the arbitral tribunal has given its interpretation or made the additional award. 54. Mr. D'vitre distinguishes the judgment of the Supreme Court reported in Juggilal vs. General Fibre Dealers Ltd., reported in AIR 1962 S.C. 1123 relied upon by Mr. Kamdar. Mr. D'vitre also placed reliance upon para 5 of the said judgment in support of his plea. Even in that judgment, it has been held that there is no power left in the arbitrator to make change of substance except in the circumstances provided in law. It is submitted that in the said judgment, the Supreme Court had considered section 13(d) of the Arbitration Act, 1940. The learned senior counsel submits that there was no miscarriage of justice by such correctio....
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....g 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 of any nature whatsoever was caused to any of the parties and the award thus could not be set aside on such hyper technical plea raised by the respondents. 57. On issue of jurisdiction, Mr. D'vitre submitted that the learned arbitrator had jurisdiction to decide those issues in respect of three properties. The respondents had never raised these issues earlier. The learned arbitrator had rendered interim award earlier, itself would indicate that the learned arbitrator had not become functus officio and was empowered to make final award. The findings of the learned District Judge on the issue of jurisdiction is totally contradictory and perverse. REASONS AND CONCLUSIONS: 58. For the purpose of deciding whether the learned District Judge was right in his findings on the issue in respect of the agricultural properties or not, it will be necessary to refer to the agreements entered int....
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....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 case of Group C and D. In the said reply, it was categorically stated that the learned arbitrator had been appointed to settle all the disputes and differences arising amongst signatories to his appointment. In so far as reply in respect of the averments made in paragraph 6(s), (t) and (u) of the claim filed by the appellants it was stated by the respondents that since the dispute sought to be resolved as stated by Mukesh Malhotra was only between that Group and Group C and grand parents forming part of Group A and B were not party to the said dispute could not insist any change in its status in ownership of the lands owned by Ankush of Group C. In respect of the properties mentioned in para 6(t) and 6(u), it is submitted that, the same was not the matter for the learned arbitrator to decide because the dispute sought to be resolved as stated by Mukesh was only between Group B and Group C. On peru....
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....s. 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 family. Accordingly the learned arbitrator rendered interim award in respect of the separation of business of the company, family business etc. The learned arbitrator directed appointment of two private valuers subject to the consent of the parties, one for the business of the company and other for the real estate and investment of the company and other jointly owned real estate properties. The respondents had impugned the said interim award by filing arbitration Application No. 149 of 2006 in the court of the learned District Judge Pune. By order and judgment dated 3rd April, 2007, the leaned District Judge, Pune rejected the said arbitration application. The learned District Judge rejected the plea of bias raised by the respondents against the learned arbitrator. In so far as the issue of jurisdiction raised by the respondents in the said arbitration application is concerned the learned District....
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....s 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 perusal of the record it is clear that this decision of the learned arbitrator holding that further statement filed by the appellants was merely addendum to their earlier statement of case has not been impugned by the respondents in the subsequent arbitration application filed impugning the final award rendered by the learned arbitrator. On perusal of the impugned award it is clear that on the issue of jurisdiction raised by the respondents regarding these three properties the learned arbitrator has rendered finding that he had jurisdiction to adjudicate upon in respect of those properties and rejected the objection raised by the respondents by holding that all these matters were covered within the four corners of the arbitration agreement dated 28th October, 2005. In their arbitration application filed under section 34 before the learned District Judge Pune, it was pleaded that properties ow....
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....rce. 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 which was not disputed by the respondents. The said valuation report included valuation of agricultural land standing in the name of Ankush. In my view, on perusal of the agreement entered into between the parties and on perusal of the written statement filed by the respondents, it is clear that both the parties were ad idem that learned arbitrator was appointed to adjudicate upon all the disputes and differences between the parties including distribution in respect of those properties which were found to be family properties by the learned arbitrator though was standing in the name of individual members of the family. 65. The respondents did not challenge the order passed by the learned arbitrator that the statement of case filed by the appellants was merely addendum to their earlier statement of case and was not a new statement of case. In any event, in view of section 23 of the Arbitration & C....
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....atement. 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 objection, Satpal and Bahri Malhotra had filed separate statement of claim by confirming their concurrence already granted in filing statement of Claim by Mukesh and group. 68. In my view, under section 7(4)(c) if the arbitration agreement is pleaded in the statement of claim and is not denied by the respondents, it would satisfy the conditions of arbitration agreement in terms of section 7(4)(c) of the Arbitration and Conciliation Act, 1996. There is no substance in this submission made by Mr. Kamdar, the learned Senior Counsel for the respondents that the appellant cannot seek reliance on section 7(4)(c) of the Act in support of the plea that the arbitration agreement existed between the parties, in view of the fact that the agreement to refer the particular disputes to arbitration already existed between the parties. In my view, the arbitration agreement to refer the disputes in respect of these th....
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....cessor 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 dispute in respect of the properties held by individual members of the family and the learned arbitrator having rendered a finding of fact based on interpretation of the agreements and other evidence that such properties were family properties, the learned District Judge in my view could not have arrived at different conclusion by re-appreciating the material produced by the parties before the learned arbitrator. The learned District Judge was not deciding the first appeal and could not have come to a different conclusion on re-appreciation of facts while deciding the arbitration application under section 34 of the Arbitration & Conciliation Act, 1996. The impugned order passed by the learned District Judge setting aside the impugned award by re-appreciating the evidence and by rendering different findings of fact under section 34 of the Arbitration & Conciliation Act, is impermissible and deserves to be set ....
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....gned 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 time while deciding the application under section 34 of the Arbitration & Conciliation Act, 1996. In my view, since the respondents did not raise any such plea in arbitration application and in cross objection, respondents cannot be allowed to raise that plea for the first time across the bar. 74. The learned District Judge in the impugned order has rendered a new finding that on the material produced on record it could not be said that the properties were family properties and that infact same were self-acquired/separate properties of the Ankush subject to rights of the lenders to recover loan amount with interest provided by them for purchase of the said property by him. While coming to this conclusion, the learned District Judge came to the conclusion that the agreement of repayment of loan which compelled the purchaser to sell the property purchased and to retain certain percentage of sale proceeds and to p....
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....cts 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 and that he had received loans from the elders and the firm, which were used for purchase of the lands under dispute. The learned arbitrator also observed that loan agreement showed the intention of the parties and the terms and conditions on which the loans were granted. In respect of other two properties, the learned arbitrator applied 1/6th formula based on the oral understanding between the parties. The learned arbitrator also considered affidavit dated 13th June, 2007 filed by Akshay. In my view, Mr. D'vitre the learned senior counsel appearing for the appellant is right in his submission that finding of the learned arbitrator was based on interpretation of the terms of the loan agreement and other documents on record demonstrates that it was not simpliciter loan transaction and the transaction was not at the arms length, as the loan agreement provided for compensation and share in the property and such find....
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.... 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 individual members of the family had no independent source of income so as to buy those properties at the relevant time and were members of the same family. In my view thus there is no substance in the submission of Mr. Kamdar that the award of the learned arbitrator was in the teeth of provisions of Benami Act. As far as the judgment of the Supreme Court in the case of Pavankumar (supra), relied upon by Mr. Kamdar on this issue is concerned, the Supreme Court has considered the definition under section 2(a) of the Benami Act. The Supreme Court took a view that even if the party had availed himself of the help rendered by his father for making up the sale consideration that would not make the sale deed a benami transaction. After considering the evidence recorded by the parties, the Supreme Court to that conclusion. However, in the facts of this case, none of the parties had led any oral evidence. The learned arbit....
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....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 be commenced or continued and the arbitration award can be made. There was no bar in the learned arbitrator making the award on that issue. In the case of V.H. Patel and Others (supra), the Supreme Court has held that under the terms of reference of disputes and differences arising between the parties referred to arbitration, the arbitrator will, in general, be able to deal with all matters including dissolution. In my view, as the said firm was carrying on family business and the dispute in respect of the family business was admittedly having been referred to arbitrator, the learned arbitrator rightly exercised his jurisdiction to dissolve the said firm and the same was not beyond his jurisdiction. The judgment of the Supreme Court in the case of V.H. Patel would squarely apply to the facts of this case. In my view there is no substance in the submission of Mr. Kamdar on this issue that the learned arbitrator ....
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....cluding 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 the parties to engage an advocate. 81. On perusal of section 19(2) and (3) of the Arbitration & Conciliation Act, it is clear that on failing in the agreement between the parties on the procedure to be followed by the arbitral tribunal in conducting the proceedings, the arbitral tribunal is empowered to conduct the proceedings in the manner it considers appropriate. As far as submission of Mr. Kamdar, the learned senior counsel that in the meeting held on 11th June, 2007, there was an agreement arrived at between the parties that both the parties were entitled to have representation by advocate, the learned arbitrator had no choice or discretion but to permit such representation if desired, under section 19(2) of the Act is concerned, reference to the minutes of the said meeting of 11th June, 2007, the application made in writing by the respondent on 11th June, 2007, the written arguments filed by the respondents bef....
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....harat 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 such exercise of discretion, surely could not be a subject matter of section 34 by contending that the petitioners were denied opportunity. It is held that the decision to permit engagement of lawyer was within the discretion of the tribunal. Both the parties had sought opportunity to engage lawyers. Both the parties had been dealt with equally. I am unable to accept the submission of Mr. Kamdar that this court in the said judgment had considered the provisions providing bar from allowing any party to engage an advocate to represent their case before the learned arbitrator. On perusal of the said judgment carefully, I do not find any such prohibition in the rules of Bharat Chamber of Commerce prohibiting any party from engaging any advocate considered in the said judgment. Though this issue was urged by the petitioner before the learned District Judge, on perusal of the impugned order passed by the learned District Judg....
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....en 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 advocate was against the principles of natural justice. In my view, the respondents cannot be thus permitted to raise this issue about the alleged agreement between the parties for the first time across the bar in this appeal. 86. The next question that arises for consideration of this court is whether cross objections filed by the respondents is maintainable or not and if so, whether the respondents have made out a case for entertaining such cross objections on merits. 87. It is not in dispute that the arbitration application filed by the respondents under section 34 of the Act impugning the final award was allowed and the said impugned award came to be set aside in toto. It is also not in dispute that this appeal filed by the appellants herein is maintainable under section 37(1)(b) of the Arbitration Act. Arbitration Appeal No. 12 of 2010 filed by the appellants has been admitted. Notice in respect of the admission of the....
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....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 by the findings of the court in the judgment on which the decree is appealed against is heard, the respondents may file cross objections in respect of the decree in so far as it is based on that findings. 90. In my view, the provisions of the Code of Civil Procedure, 1908 would apply to the arbitration proceedings filed in court to the extent, it is not inconsistent with any of the provisions of the Arbitration and Conciliation Act, 1996. There is no bar under the provisions of the Arbitration and Conciliation Act from applicability of the provisions of the Code of Civil Procedure, 1908 to the arbitration proceedings filed in court. Section 19 of the Arbitration Act provides that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908. The said provision does not apply to the proceedings filed in court including arbitration application filed under section 34 or even appeal under section 37 of the Arbitration and Conciliation Ac....
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....t 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, 1996. In my view, there is no bar under the provisions of Arbitration and Conciliation Act, 1996 for maintainability of cross objections. Supreme Court in case of S. Nazeer Ahmed (supra) and Ravinder Kumar Sharma (supra) has held that for supporting the decree passed by the trial court, it is not necessary for the 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. It has been held that 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. 93. In my view, it is open to the respondents even if he has not filed any cross objections with respect to the portion of the impugned order which has gone against him while opposing the appeal filed by the opponent agains....
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.... 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 filed Special Leave Petition in Supreme Court. In that context, it is held by the Supreme Court that the original appeal filed by the respondents itself was found to be not maintainable as not covered by any of clause (i) to (vi) of sub section 1 of section 39 of the Arbitration Act, 1940 which was dismissed as incompetent, the question of memo of appeal filed by the applicant being treated as cross objections and being taken up for hearing on merits did not arise. On perusal of the said judgment, it is clear that there was no issue before the Supreme Court as to whether respondents could challenge adverse findings of fact by filing cross objections in case appeal under section 39 of the Arbitration Act, 1940 was maintainable under any of the clause (i) to (vi) of sub section 1 of Section 39 of the Arbitration Act, 1940. No reliance was placed on explanation inserted in sub rule 1 of Order 41 Rule 22 of the Code of Civil Procedure, 1908. In my view the facts bef....
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....onsideration 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 respondents. 99. On merits of cross objections Mr. Kamdar canvassed two submissions which are recorded in paragraph 48 of the aforesaid judgment. As far as submission of Mr. Kamdar that findings of the learned District Judge that arbitrator had jurisdiction to decide regarding three properties was incorrect has no merits. Even the respondents in their written statement had repeatedly asserted that the arbitrator had jurisdiction to decide all the disputes and differences between the parties. The learned District Judge on interpretation of the agreement and mandate had rightly taken a view that the learned arbitrator had jurisdiction to decide the dispute also in respect of individual properties of the family members. I am thus not inclined to accept that the said findings of the learned District Judge was faulty and/or warrants any interference in this cross objections. 100. Mr. Kamdar, the learned senior counsel appearing for the respondents laid emphasis more on the issu....
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....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 mistakes in the impugned award. It is not the case of the respondents that the learned arbitrator had directed Mr. Sodhi first to show the impugned award to Mukesh or to consult him for making any corrections. 102. Question that arises for consideration of this court is whether arbitrator become functus officio on the date when copy of the award was first signed by the learned arbitrator by putting the date of 25th July 2007 and Mr. Sodhi showing a copy thereof to Mukesh. Question also arises whether learned arbitrator has carried out corrections in the award contrary to section 33 and has committed misconduct or was biased. 103. Under section 31 of the Arbitration Act, an award is made when it is signed by the arbitrator. Section 31 provides for the form and contents of the arbitral award. Section 31(4) provides that the arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made a....
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.... 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 arbitrator within the time prescribed or if arbitrator exercises suo motu powers for correction till such period expires or if any request is made by parties for additional award till such additional award is made within the time prescribed under section 33(5) and extension if any under section 33(6). If court passes an order under section 34(4) by adjourning the proceedings, on a request made by the party in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award, arbitration proceedings revive for such limited purpose. In my view, the arbitral tribunal thus does not become functus officio after making an award for such time prescribed under section 33 for correcting any computation error clerical or typographical error or any other error of the similar nature occurring in the award or giving interpretation part of a specific....
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....roper 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 malafide or bias can be imputed by the respondents against the arbitrator on the basis of such corrections of clerical nature carried out by the learned arbitrator in the impugned award. None of the allegations of the bias were accepted by any of the learned District Judge while deciding application filed under section 34 of the Arbitration Act by the respondents. In my view, award in respect of which no fault can be found could not have been set aside by the learned District Judge. I am not inclined to accept the submission of Mr. Kamdar, the learned senior counsel appearing for the respondents that on this ground also the award ought to have been set aside by the learned District Judge. In my view, the view expressed by the former Judges of this Court in their treaties on Arbitration and Conciliation Act, 1996, on this issue relied upon by Mr. D'vitre are correct. 109. As far as judgment of the Supreme Court in case of Rikhabdass (supra) relied upon by Mr. Kamdar is concerned, Supreme....