Bombay High Court
Padmsey Khimji Chheda And Anr vs Kesarben Laxmichand Dedhia And 24 ... on 27 April, 2016
Bench: Anoop V. Mohta
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION (L) NO. 80 OF 2016
IN
APPEAL NO. 569 OF 2014
IN
ARBITRATION PETITION NO. 380 OF 2005
WITH
APPEAL NO. 569 OF 2014
IN
ARBITRATION PETITION NO. 380 OF 2005
Padmsey Khimji Chheda & Anr.
ig ....Applicants.
Vs.
Kesarben Laxmichand Dedhia & Ors. ....Respondents.
Mr. Bhavin H. Gada a/w Ms. Yogini Gada, Mr. N.B. Merchant i/b M/s.
Harakchand & Co. for Applicants.
Mr. Gaurav Joshi, Senior Advocate a/w Mr. Sankalp Anantwar, Mr.
Rishabh Vora i/b M/s. Hariani & Co. for Respondent Nos.1(A) to 1(F),
1(G) (II) to (III), 2(B) to 2(G).
CORAM : ANOOP V. MOHTA &
A.A. SAYED, JJ.
RESERVED ON : 30 MARCH 2016
PRONOUNCED ON : 27 APRIL 2016
JUDGMENT (PER ANOOP V. MOHTA, J.):-
The Applicants/Appellants have taken out this Notice of
Motion dated 6 January 2016 for a condonation of delay of 3014 days
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in filing Appeal (Lodging) No. 569 of 2014, against the Judgment and
order dated 14 November 2005 passed in Arbitration Petition No. 380
of 2005.
2 The prayers are as under:-
"(a) that this Hon'ble Court be pleased to condone the
delay of 3014 days in filing the present Appeal
which delay has occurred as following manner:-
(i) Delay of 360 days in filing the Appeal No.210
of 2008 (lodging No. 1056 of 2006) in this
Hon'ble Court from Impugned Order dated 14 th
of 2005 which Appeal was disposed off as
withdrawn with liberty on 1st April 2008.
(ii) Delay of 467 days in prosecuting the Appeal
No. 210 of 2008 which was filed on
19.12.2006 before Division Bench of this
Hon'ble Court and withdrawn with liberty on
1st April, 2008.
(iii) Delay of 2187 days in prosecuting the following
proceedings:-
(a) the Chamber Summons No. 1649 of 2006
in Arbitration Petition No. 66 of 1991 for
setting aside the order of abatement dated
13th September, 2005 and 26th September,
2005 disposing off the Petition No.66 of
1991 which Chamber Summons was
disposed off as dismissed on 15th February,
2013.
(b) the Appeal No. 195 of 2013 filed before
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Division Bench of this Hon'ble Court to set
aside the order dated 15th February, 2013
which Appeal was disposed off on 22 nd
July, 2013.
(c) SLP No. 15519 of 2013 filed in Supreme
Court of India to set aside the order dated
15th February, 2013 and 22nd July, 2013
which was dismissed on 11 th November,
2013.
(d) Two Review Petitions No. 327 of 2014 and
328 of 2014 filed in Supreme Court of
India which were dismissed on 25th
February, 2014."
3 The Notice of Motion and averments made in the
supporting affidavit with documents, are resisted by the Respondents
by filing reply dated 16 February 2016.
4 The case of the Appellants is as under:-
On 31 May 1984, Memorandum of Understanding (for
short, "MOU") was executed between Ravji Khimji Chheda and Shamji
Khimji Chheda agreeing to sell 9 Lac sq.ft. area on a piece of land
situated at Peston Sagar, Chembur, bearing old Survey No.316 and
New Survey No.320 admeasuring 140 acres and 12½ gunthas or
thereabouts in favour of Keshavji Palan Shah and Laxmichand Liladhar
Shah (Original Respondent Nos. 1 and 2). The MOU contain
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terms and conditions to be complied by original Respondent Nos.1
and 2. The said MOU was witnessed by Visanji Khimji Chheda,
Appellant Nos.1 and 2. Ravji Khimji Chheda, Shamji Khimji Chheda
and Visanji Khimji Chheda, Appellant Nos.1 and 2 are hereinafter
collectively referred to as "the Brothers".
5 On 30 June 1984, a letter was executed by Appellant
Nos.1 and 2 confirming the execution of the said MOU. On 21
September 1984, a receipt acknowledging payment of Rs.5,00,000/-
was received by the Brothers from original Respondent Nos.1 and 2.
On 18 August 1986, Supplemental Memorandum of Understanding
("Supplemental MOU") was executed by the Brothers in favour of
Original Respondent Nos.1 and 2 whereby, certain terms of the said
MOU were amended and/or modified.
6 On 2 January 1989, disputes and differences arose
between the Brothers and Original Respondent Nos.1 and 2. The said
disputes and differences were referred to arbitration, consisting of two
Arbitrators viz, Mr. Ravilal Sanghoi and Mr. Shantilal Meckoni (the
Arbitrators). On 25 April 1989, an Award was passed and published
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by the Arbitrators.
7 On 31 May 1990, a letter issued by the Advocates of the
Brothers to Respondent Nos.1 and 2, interalia, stating that the award
travels beyond the scope of the reference and instead of determining
the breaches under the MOU and Supplemental MOU, the Award tries
to rewrite terms between the parties and actually stipulates
conditions, which were not agreed to between the parties and/or
requires the parties to act as per the contract drawn-up by the
Arbitrators. It was also stated that the MOU was not in nature of
MOU for Sale but, in the nature of development rights. It was also
stated that Original Respondent Nos.1 and 2 have not complied with
their obligations under the MOU and the Supplemental MOU and
therefore, the MOU and the Supplemental MOU were terminated.
8 On 14 June 1990, reply was filed by original Respondent
Nos.1 and 2 to the Brothers' Advocates' letter. None of the contentions
raised by them, were dealt with in the letter according to the Brothers.
9 On 1 February 1991, a letter given to Messrs Singaporia &
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Dalvi by Advocate of Shri Shantilal Nemji Mackoni (one of the
Arbitrators), inter alia, stating that their client the Arbitrator
Mr. Meckoni, was not aware that the Award was made and declared
by the Arbitrators and the same was filed in this Court. It was also
stated that the Arbitrator (Mr. Meckoni) denies that the Award was
filed under his instructions. Moreover, it was stated that no
instructions were given by their client Mr. Meckoni nor has their client
ever met the Advocates or even appointed them in the matter. It is
also that their client Mr. Meckoni has not declared any Affidavit
relating to the filing of the Award and/or service of the copy of the
Award upon the parties to the Award and that the Affidavits are a
fraud.
10 On 1 April 1991, the Brothers filed Petition No.66 of 1991
to set aside the Award. On 13 September 2005, an order was passed
by this Court by observing that the Petition in respect of Ravji Khimji
Chheda, Shamji Khimji Chheda and Visanji Khimji Chheda stands
abated. On 23 September 2005, the heirs and legal representatives of
the said Ravji, Khimji and Visanji preferred Chamber Summons
No.1245 of 2005 for setting aside order dated 13 September 2005 for
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abatement and for bringing the heirs of Ravji, Khimji, Visanji and of
original Respondent No.2 on record.
11 On 26 September 2005, an order passed by this Court
disposing of the Petition on the ground that the Petition stood abated
as a whole. On 17 October 2005, original Respondent Nos.1 and 2
filed Arbitration Petition No.380 of 2005 in this Court praying that
Award dated 25 April 1989 be made rule of the Court. On 14
November 2005, the Arbitration Petition was decreed on the ground
that the Petition to set aside the Award was abated.
12 On 14 November 2005, the heirs and legal representatives
of Ravji, Khimji and Visanji preferred Appeal No.1058 of 2005 for
setting aside order dated 26 September 2005. Appellant Nos.1 and 2
preferred Appeal No.1057 of 2005 against order dated 26 September
2005.
13 On 29 November 2005, both the above appeals were
disposed off and this Court was pleased to observe in its orders that
(a) the rights of the surviving parties were inseparable with the rights
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of the deceased parties, (b) if the learned Chamber Judge is pleased to
grant the Chamber Summons and the abatement is set aside, in that
event, order dated 26 September 2005 shall be rendered ineffective
and the Petition shall be restored to file for fresh consideration in
accordance with law.
14 On 19 December 2006, the heirs and legal representatives
of Ravji, Khimji and Visanji, Appellant Nos.1 and 2 preferred Appeal
No.1056 of 2006 against order dated 14 November 2005 passed in
Arbitration Petition No.380 of 2005. On 21 December 2005, the said
Chamber Summons was withdrawn with liberty.
15 On 27 December 2006, Appellant Nos.1 and 2 heirs and
legal representatives of Ravji, Khimji and Visanji filed Chamber
Summons No.1649 of 2006, in Arbitration Petition No. 66 of 1991.
By this Chamber Summons filed under Order 22 Rule 9 of the Code of
Civil Procedure, 1908 (for short, CPC), Applicants sought to set aside
abatement of Arbitration Petition dismissed by orders dated 13
September 2005 and 26 September 2005 and also sought condonation
of delay of 676 days in taking out Chamber Summons for bringing the
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heirs and legal representatives of deceased Petitioner No.2, 1707 days
delay in taking out Chamber Summons for bringing the heirs and legal
representatives of deceased Petitioner No.3 and 3200 days delay in
taking out Chamber Summons for bringing the heirs and legal
representatives of deceased Petitioner No.1 and 284 days delay in
taking out Chamber Summons for bringing on record the heirs and
legal representatives of deceased Respondent No.2. On 1 April 2008,
the heirs and legal representatives of Ravji, Khimji and Visanji,
Appellant Nos.1 and 2 withdrew the Appeal No.1056 of 2006, with
liberty to approach the Court again in case need arises in the matter.
16 On 15 February 2013, detailed order was passed
dismissing the Chamber Summons, by holding that "In my view, as the
record indicates that the applicants have not come to this court with
clean hand and have suppressed true and correct facts, this court shall
not exercise its discretionary power and shall not take any lenient view
in the matter.... In my view, no case is made out by the applicants for
setting aside abatement order passed by this court. Chamber summons
is therefore, dismissed. Order of abatement of the petition is restored....
In view of the dismissal of the Chamber Summons and in view of the
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dismissal of the Arbitration Petition, it is clarified that the decree already
passed by this Court would stand revived. There shall be no order as to
costs."
17 In March 2013, the heirs and legal representatives of Ravji,
Khimji and Visanji, Appellant Nos.1 and 2 preferred an Appeal against
order dated 15 February 2013 before this Court. On 22 July 2013, a
Division Bench of this Court held that the Appeal against the Single
Judge's order dismissing the Chamber Summons was not maintainable
in view of Section 39 of the Arbitration Act, 1940. It is observed that,
"An order refusing to set aside an award is an order passed by the Court
upon a consideration by the court of the challenges to the arbitral
award. Abatement of a proceeding results as an operation of law.
Where the proceeding has abated, this Court has no occasion to exercise
the jurisdiction to set aside or to refuse to set aside the award. There is
hence no merit in the submissions.
For these reasons, we hold that the Appeal in the present case is
not maintainable."
18 On 11 November 2013, Special Leave Petition No.35400-
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35401 preferred by the heirs and legal representatives of Ravji, Khimji
and Visanji, Appellant Nos.1 and 2 was dismissed. On 25 February
2013, the Review Petition preferred challenging the dismissal of the
said Special Leave Petition was dismissed. On 28 March 2014,
Appellant Nos.1 and 2 filed Appeal (L) No.195 of 2014.
19 We have read the affidavit and counter affidavit and
various orders as relied upon and noted the submissions of the learned
counsel appearing for the parties.
20 Admittedly, there is delay of 3014 days in filing the
Appeal. The Appeal under Section 37 is filed on 28 March 2014.
However, the Notice of Motion is filed on 6 January 2016, for
condonation of delay. The case of the Appellants is reproduced, in
paragraph 17, as under:-
"17. I say that this, coupled with the aforesaid facts and
circumstances, constitutes sufficient cause. For all these
reasons, the Appellants say and submit that they have made
out sufficient cause for condonation of delay of 3014 days in
filing the present Appeal which delay has occurred as follows in
the following manner:-
(i) Delay of 360 days in filing the Appeal No.210 of
2008 (lodging No. 1056 of 2006) in this Hon'ble
Court from Impugned Order dated 14th November
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2005 in Arbitration Petition No. 380 of 2005 which
Appeal was disposed off as withdrawn with liberty
on 1st April 2008.
(ii) Delay of 467 days in prosecuting the Appeal No.
210 of 2008 which was filed on 19.12.2006 before
Division Bench of this Hon'ble Court and withdrawn
with liberty on 1st April, 2008.
(iii) Delay of 2187 days in prosecuting the following
proceedings:-
(a) the Chamber Summons No. 1649 of 2006
in Arbitration Petition No. 66 of 1991 for
setting aside the order of abatement dated
13th September, 2005 and 26th September,
2005 disposing off the Petition No.66 of
1991 which Chamber Summons was
disposed off as dismissed on 15th February,
2013.
(b) the Appeal No. 195 of 2013 filed before
Division Bench of this Hon'ble Court to set
aside the order dated 15th February, 2013
which Appeal was disposed off on 22 nd
July, 2013.
(c) SLP No. 15519 of 2013 filed in Supreme
Court of India to set aside the order dated
15th February, 2013 and 22nd July, 2013
which was dismissed on 11 th November,
2013.
(d) Two Review Petitions No. 327 of 2014 and
328 of 2014 filed in Supreme Court of
India which were dismissed on 25th
February, 2014."
All the above proceedings were preferred by the Appellants out
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of prudence or activity expected from and ordinarily exercised
by a reasonable and prudent person under particular
circumstances as mentioned hereinabove. It is submitted that
the Appellants herein took sufficient care so far as
circumstances demanded and there was absence of negligence.
The Appellants submit that all the above proceedings were
preferred with due care and attention. The Appellants state
that none of the prior proceedings were intentionally preferred
with a view to delay the proceedings or harass any of the
Respondents. In fact the Appellants state that it was in its
interest that it preferred the appropriate proceedings to get
reliefs and justice in the matter. It is, therefore, submitted that
the Appellants preferred the above proceedings in good faith
and with due diligence. I say that in the interest of justice and
fair play as mentioned herein the delay of 3014 days in filing
the present Appeal be condoned."
21 Reliance was also placed on ONGC Vs. Jagson
International Limited1. The Division Bench of this Court in ONGC Vs.
Dinamic Corporation2, has reversed the Judgment Jagson
International (supra) and confirmed the position with regard to the
intra Court Appeal, even under Section 37 of the Arbitration and
Conciliation Act, 1996 from the order passed by the learned Single
Judge to the Division Bench and reinforced the principle of Article 117
of the Limitation Act, thereby the Original position of 30 days
limitation in filing the intra Court Appeal, has been brought into force.
This law of limitation in this regard was settled. The Respondents, in
1 2005(3) Mh.L.J. 1141
2 2013 (1) Mh.L.J. 94
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the affidavit, apart from resistance of delay on the grounds so raised in
the reply, opposed the same stating that there is no sufficient cause
and/or reason made out for condonation of delay. Now, the limitation
of filing such Arbitration Appeal will be governed by the Commercial
Courts, Commercial Division and Commercial Appellate Division of
High Courts Act, 2015.
22 The ignorance of law and the Division Bench Judgment in
Dinamic Corporation (supra), itself cannot be a reason for condonation
of delay in the matters. The issue of ignorance of law, specifically
about the limitation in the intra Court Appeal, ought not to have been
overlooked. The case of negligence and deliberate inaction, therefore,
as sought to be contended by the Respondents, is made out. There is
no justification for the delay of 3014 days (more than 8 years) in filing
the present Appeal.
23 The present Notice of Motion is also taken out by the
Appellants in January 2016, after two years of filing of the Appeal.
The Appellants therefore, never acted diligently and bonafidely in the
matter of Arbitration Appeal of this nature. There is force in the
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contention of the Respondents that the grounds so raised are devoid
of merits, as no detailed reasons given for the delay so occurred from
time to time. It is not the question of seeking even day explanation,
but in the present case, the delay is of more than 8 years, without
justification and/or reasons, which in our view, are not sufficient to
condone the delay.
24 This is also in the background that the initial challenge so
raised by the Appellants have already been rejected by the High Court
and the Apex Court. Chamber Summons No. 1245 of 2005 in the
Arbitration Petition for setting aside the abatement was taken out.
There was also delay of 2747 days in filing the same. The said
Chamber Summons was withdrawn with liberty. There was no order
of condonation of delay for the same. The issue of delay remained as
it is. The next Chamber Summons is taken out after 8 years. The
Appeal (L) No. 1056 of 2006 against order dated 14 November 2005
was also filed after a gross delay of 360 days. The Appeal was also
withdrawn on 1 April 2008, with liberty to approach the Court again.
The delay was not condoned there also. The issue of delay remained
as it is. Order dated 29 November 2005, whereby the rights of
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surviving Petitioners was held to be inseparable from the rights of the
deceased Petitioners and therefore, it was held that the Petition had
abated in its entirety.
25 Chamber Summons No. 1649 of 2006 was filed on 18
December 2006 after lapse of one year for seeking condonation of
delay of 676 days, 1707 days and 3200 days for filing and pursuing
the Chamber Summons for bringing Legal heirs of the Petitioner-
Appellant Nos. 2, 3 and 1 respectively. The learned Judge, by
reasoned order on 15 February 2013 dismissed the Chamber
Summons by rejecting the contention that the Appellants were not
aware of the pending proceedings in the Court. It is also observed
that the plea of Appellants were inconsistent and contradictory about
the date of knowledge of the Appellants with proceedings in the
Court. The order passed by the learned Judge was challenged before
the Division Bench. On 22 July 2013, that was dismissed as not
maintainable. The Appellants, therefore, approached the Hon'ble
Supreme Court by way of SLP. The said SLP was also rejected on 11
November 2013. The Review against the same, was also dismissed on
25 February 2014.
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26 Taking overall view of the matter, therefore, the
submission of the Appellants revolving around the liberty granted by
the Court in order dated 1 April 2008 is of no assistance. The
Appellants, are not entitled for the benefits of the said liberty, in the
facts and circumstances of the case, as the delay so caused was not
bonafide and was deliberate. Order dated 14 November 2005,
therefore has attained finality. The Appellants' challenge in the Appeal
along with this Notice of Motion for condonation of delay stating it to
be within time and/or not barred by law of limitation, is unacceptable.
27 The aspect of delay, as dealt with by the learned Judge in
detail and as the same reasons are also raised in the present Appeal
for condonation of delay, in our view, cannot be reopened. The delay
issue has attained finality, specifically in the Arbitration proceedings
like this. No sufficient case is made out. The law of limitation is
settled. This is not the case of reasonable delay, but the delay so made
and the grounds so raised in the present case, in our view, are not
liable to be condoned. The liberty to withdraw the Appeal, that itself
cannot be the reason to hold that the delay caused earlier, got
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condoned. The Appellants all the time are required to explain the
delay, which was recorded by the earlier orders and even otherwise,
unable to justify. The change of law and no knowledge of Judgment,
that itself cannot be the reason to condone the delay. The delay in
filing the earlier Appeal after 360 days, remained unexplained. The
explanation given are unacceptable. The mandate of filing Arbitration
Appeal in time and/or within a reasonable time, just cannot be
overlooked.
28 Considering the totality of the matter, therefore, no case is
made out to condone 3014 days delay in filing the Appeal. Notice of
Motion (L) No.80 of 2016 is accordingly dismissed. There shall be no
order as to costs.
29 In the result, Appeal No. 569 of 2014 is also dismissed.
No costs.
(A.A. SAYED, J.) (ANOOP V. MOHTA, J.)
