Bombay High Court
Caprihans India Limited vs Hindoostan Mills Limited on 7 April, 2017
Bench: R.M. Savant
CARBP-37.17
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM. ARBITRATION PETITION NO.37 OF 2017
Caprihans India Limited, ]
a public limited company, ]
incorporated under the Companies ]
Act, 1956 and having its registered ]
office at Shiv Sagar Estate, Dr. ]
Annie Besant Road, Worli, ]
Mumbai-400 018. ]..Petitioner
Versus
Hindoostan Mills ]
Limited, formerly known as ]
'Hindoostan Spinning & Weaving ]
Mills Limited' a public limited ]
company, incorporated under the ]
Companies Act, 1956, and having its ]
registered office at Sir Vithaldas ]
Chambers, 16, Bombay Samachar ]
Marg, Mumbai-400 001 ]..Respondent
Mr. Pravin Samdani, Senior Advocate a/w Ms. Bindi Dave, Mr. Arpit
Singhvi, Mr. Ieshan Sinha, Mr. Suneet K. Tyagi, Ms. Nidhi Malhotra,
Ms. Aditi Chavan i/by Wadia Ghandy & Co., for the Petitioner.
Mr. Mustafa Doctor, Senior Advocate a/w Mr. U. Anklesaria, Mr. S.
Ghosh, Mr. Rahul Hingmiri, Mr. S. Chowdhary i/by M/s. Hariani and
Co., for the Respondent.
CORAM : R. M. SAVANT, J.
Reserved on : 03rd APRIL 2017
Pronounced on : 07th APRIL 2017
ORAL ORDER
1 The above Arbitration Petition has been filed challenging the
Award dated 20/10/2016 passed by the Arbitral Tribunal.
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2 On behalf of the Respondent a preliminary issue is raised as
regards the maintainability of the above Arbitration Petition on the
ground that the Petition has been filed by the Power of Attorney of the
Petitioner one Mofatraj Munot who is not authorized to do so having
regard to the terms of the Power of Attorney dated 24/09/1997 executed
by the Petitioner Company in his favour.
3 The Award dated 20/10/2016 has been passed in the arbitral
proceedings arising out of the dispute between the Petitioner and the
Respondent which dispute revolves around the terms of the Development
Agreement dated 29/10/1993. The dispute in the said arbitration
proceedings was in respect of the claim of the Petitioner against the
Respondent in respect of the payment to be made by the Respondent in
respect of the cost of construction which was to the tune of Rs.7.26
crores. In the said arbitration proceedings the Respondent had made a
Counter Claim on the basis that the relationship of the parties was that of
being Joint Venture Partners and that in the said circumstances the
Respondent did not have to reimburse any pro-rata cost of construction
and instead was entitled to 50% share in the profits in the development
project. Under the said Development Agreement, the building known as
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"Kalpataru Heights" has been constructed.
4 The Petitioner, who is engaged in the business of
manufacture and sale of PVC Films, Extruded Plastic Products, Laminates,
Paper, Trading and Real Estate at various locations in Maharashtra and in
the Union Territories of Daman and Diu, had taken a decision of focusing
and concentrating on its core business of manufacturing and sale of PVC
Films and Extruded Plastic Products and therefore decided to dispose of
the Assets of its non-core business. It had accordingly authorized
Kalpataru Homes Limited to dispose of and/or liquidate all the said
Assets, as are more particularly specified in the Agreement dated
24/09/1997 entered into between the Petitioner and the said Kalpataru
Homes Limited for sale, liquidation, disposal and realization of the
aforesaid Assets. Under the said Agreement, the said Kalpataru Homes
Limited have agreed and undertaken to sell, dispose of and liquidate the
said Assets and realize to the Petitioner specified overall amount
underwritten by them. It is under the said Agreement that the Petitioner
inter-alia agreed to grant certain powers and authority to its two
Directors viz. Mr. Mofatraj Pukhraj Munot and Mr. Suresh Amritlal
Gandhi so as to facilitate the smooth implementation of the said
Agreement. It is in terms of the said Agreement that the Petitioner
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irrevocably nominated, constituted and appointed its two Directors i.e.
the said Mofatraj Munot and Suresh Gandhi jointly and each of them
severally Attorney/s in its name and for and on its behalf and on its
account to do all or any of the acts mentioned in the said Power of
Attorney. A reference to the terms of the said Power of Attorney would
be made a bit later.
5 The authority of the said Mofatraj Pukhraj Munot - the
Constituted Attorney of the Petitioner, to file the above Arbitration
Petition is questioned on the ground that the said Power of Attorney does
not authorize the said Mofatraj Munot to file an Arbitration Petition. A
reference is made to clause (G) of the Schedule of the Assets as also
clause (7) of the said Power of Attorney to buttress the said contention.
6 At this stage it would be relevant to reproduce the relevant
clauses of the said Power of Attorney and the same are reproduced herein
under :-
Recitals in the Preamble
(v) Under the said Agreement it was inter alia
agreed by us to grant certain powers and authorities to
our Directors, MR.MOFATRAJ PUKHRAJ MUNOT and
MR.SURESH AMRITLAL GANDHI to facilitate the
smooth implementation of the said Agreement, as
hereinafter appearing :
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NOW KNOW YE AND ALL THESE PRESENTS
WITNESSETH THAT, WE, CAPRIHANS INDIA LIMITED,
do hereby irrevocably nominate, constitute and appoint
the said MR. MOFATRAJ PUKHRAJ MUNOT and MR.
SURESH AMRITLAL GANDHI jointly and each of them
severally (hereinafter called 'the Attorney/s) as our true
and lawful Attorney/s in our name and for and on our
behalf and on our account to do all or any of the
following acts, deeds, matters and things and to exercise
all or any of the following powers and authorities in
relation to the maintenance, protection, sale, transfer,
alienation, disposal, liquidation and realization of all the
said Assets belonging to us which the said Assets are
briefly described hereunder and/or in the Schedules and
Annexures forming part of these presents, that is :"
Schedule of Assets
(G) 'KALPATARU HEIGHTS' AT BOMBAY CENTRAL,
MUMBAI
Kalpataru Heights is a highrise residential building
under construction at Bombay Central, Mumbai, being
constructed in terms of Development Agreement dated
28th October, 1993, entered into between Hindoostan
Spinning & Weaving Mills Ltd. and Ourselves (the
Principals herein) for construction and completion of
the said Building till receipt of occupation/completion
certificate thereof from the concerned authorities, and
sale and realisation of the proceeds on sale of
apartments and other premises comprising 'Kalpataru
Heights'.
Recitals in the Operative Part
(5) In connection with any matters relating to the
said Assets to accept service of any writ, summons or
other legal process or notice and to appear and to
represent us in any proceedings before any court,
tribunal or other authority heretofore and hereafter
instituted by or against the Principals including before
any Revenue Officer or before any other Officer of any
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Government, Municipality or other Local Government,
Body or Authority in all matters in any manner
connected with or pertaining to the said Assets and also
to appoint Advocates, Solicitors and Legal Advisers to
prosecute or defend in the premises aforesaid or any of
them as occasion may require and from time to time to
remove any of them and to appoint others in their place
and to pay them such fess and remuneration as the
Attorney's shall think fit and for any of the purposes
aforesaid to make, sign, execute, affirm and declare
appearances, warrants, Vakalatnamas, Plaints, Petitions,
applications, defences, statements, forms, affidavits,
pleadings, undertakings, consent terms, accounts,
documents, papers and writings, as may be necessary or
thought proper."
(emphasis supplied)
(7) In connection with any matters relating to the
said Assets, and any dispute/s or difference/s or
disagreement/s between any parties concerned therein
and ourselves, to refer to arbitration any such dispute/s,
difference/s or disagreement/s either to a sole
Arbitrator or to a panel of arbitrators, and to appear and
represent us in such arbitration proceedings and file
references, claims and defences on our behalf and to
accept and implement award/s made in any such
proceedings."
7 The learned Senior Counsel appearing on behalf of the Respondent
Shri Doctor would, in support of his preliminary objection, contend that
having regard to the schedule of the Assets as also having regard to
Clause (7) of the Power of Attorney, the said Mofatraj Munot does not
have the authority to file the above Arbitration Petition challenging the
Award dated 20/10/2016. It was the submission of the learned Senior
Counsel that since a challenge to an Arbitration Award can be raised
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under Section 34 of the Arbitration and Conciliation Act, 1996, the Power
of Attorney should have specifically conferred the power on the said
Mofatraj Munot to file an Arbitration Petition. It was the submission of
the learned Senior Counsel that since there is no reference to the
"challenge of an Award" in the said Clause (7) of the Power of Attorney
in the absence of a specific power being conferred on the said Mofatraj
Munot, the above Arbitration Petition could not have been filed by him.
The learned Senior Counsel sought to place reliance on the judgment of a
Learned Single Judge of this Court reported in 1993 (Bom) 253 in the
matter of Shantilal Khushaldas & Bros. Pvt. Ltd. v/s. Smt.
Chandanbala Sughir Shah and another, and the judgment of a learned
Single Judge of of the Madras High Court reported in AIR 1952 Madras
559 in the matter of P.M. Desappa Nayanim Varu & ors. V/s.
Ramabhaktula Ramiah & ors.
8 Per contra, it was the submission of the learned Senior
Counsel appearing on behalf of the Petitioner Shri Pravin Samdani that
Kalpataru Heights being one of the Assets mentioned in the Schedules
and since Clause (5) and Clause (7) of the Power of Attorney specifically
refer to "Petitions" and "arbitration", the Power of Attorney Shri Mofatraj
Muniot is authorized to file the above Arbitration Petition. The learned
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Senior Counsel for the Petitioner sought to place reliance on the
judgment of a Division Bench of this Court reported in (1983) Bom.
C.R.631 in the matter of Killick Nixon Ltd. and ors. v/s. Bank of India
and ors. and another judgment of the Division Bench of this Court
reported in AIR 1959 Bom. 386 in the matter of Western India Theaters
Ltd. v/s. Ishwarbhai Somabhai Patel. It was the submission of the
learned Senior Counsel that since the Power of Attorney executed in
favour of the said Mofatraj Munot is a General Power of Attorney, mere
absence of the words "challenge to an Award" would not take away the
right of the Power of Attorney to file the above Arbitration Petition
considering the width of the general power which is conferred by the said
Power of Attorney and especially having regard to Clause (5) thereof.
9 It is in context of the aforesaid submissions that this Court is
required to adjudicate upon whether the said Mofatraj Munot had the
authority to file the above Arbitration Petition. As indicated in the earlier
part of this Order, the Petitioner had taken a decision to dispose of and/or
liquidate all its Assets which were of its non-core business. The said
Power of Attorney dated 24/09/1997 is a General Power of Attorney
executed in favour of the said Mofatraj Munot which Power of Attorney
has been executed pursuant to the Agreement dated 24/09/1997
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executed between the Petitioner and the said Kalpataru Homes who as
indicated above was authorized to dispose of and/or liquidate the said
Assets. The said Power of Attorney therefore conferred powers on the
said Shri Mofatraj Munot and one Suresh Amritlal Gandhi to do all or any
of the acts mentioned therein on behalf of the Petitioner towards
liquidation and realization of all said Assets. In the said Power of
Attorney, Schedule of the Assets have been mentioned and Clause (G) of
the said Assets refers to "Kalpataru Heights" which is a building
constructed by the Petitioner under the Joint Venture Agreement. In so
far as the said Clause (G) is concerned, the said clause postulates that
various acts to be done in respect of the said building which inter-alia
includes sale and realization of the proceeds, sale of apartments and
other premises comprising "Kalpataru Heights". The said Power of
Attorney confers a general power on the Attorneys Shri Mofatraj Munot
and Suresh Gandhi to do all acts, matters, deeds and things relevant or
pertaining to all or any of the items of the 'said Assets".
10 At this stage it would be relevant to refer to Clause (5) of the
said Power of Attorney. The said Clause (5) has already been reproduced
herein above. The said Clause (5) confers power on the Attorneys to file
various proceedings mentioned therein which include Petitions,
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Applications etc., in all matters in any manner connected with or
pertaining to the said Assets. Hence Clause (5) also confers a wide
power on the Attorneys to file various proceedings in Courts of law or
Tribunal or Authorities pertaining to the said Assets and also to appoint
Advocates, Solicitors etc. It is on the basis of the said power conferred on
the Attorneys that the written statement came to be filed by the Attorney
of the Petitioner Shri Mofatraj Munot in the Arbitral proceedings and also
the Counter Claim. Hence the Power of Attorney cannot be construed to
mean that though the attorney has the power to file a written statement
and a counterclaim he is not vested with the power to institute
proceedings to challenge the Award.
11 Now coming to Clause (7) of the said Power of Attorney, the
said Clause confers power on the Attorneys to refer to arbitration any
such dispute/s or difference/s or disagreement/s which may arise in
connection with any matters relating to the said Assets. It is provided in
the said Clause (7) that arbitration might be either to the sole Arbitrator
or to a panel of Arbitrators, and to appear and represent the Petitioner in
such arbitration proceedings and file references, claims and defences on
behalf of the Petitioner and to accept and implement award/s made in
any such proceedings. Hence though there is an absence of any reference
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made in the said Clause (7) of the power conferred on the Attorneys to
challenge the Award, however, if Clause (5) and Clause (7) are read
together, they lead to an irresistible conclusion that the Attorneys of the
Petitioner have also the power to institute proceedings to challenge the
Award without which the Clause (5) conferring power on the Attorneys
to file Petitions, Applications etc, would be meaningless.
12 In my view, it is not possible to accept the submission of the
learned Senior Counsel appearing on behalf of the Respondent Shri
Doctor that since there is an absence of a specific reference to the
challenge to an Award in Clause (7), the Attorney of the Petitioner Shri
Mofatraj Munot was not authorized to file the above Arbitration Petition
challenging the Award dated 20/10/2016.
13 Now coming to the judgments relied upon on behalf of the
Respondent in support of the preliminary objection. In so far as the
judgment in Shantilal Khushaldas & Bros. Pvt. Ltd.'s case (supra) is
concerned, it is in the context of the Power of Attorney in the said case
that a learned Single Judge of this Court held that unless there is a
specific power authorizing the Attorney to file a company petition for
winding up in the Company Court, a mere authorization to file suits or
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proceedings for recovery of dues would not be sufficient for filing a
Company Petition for winding up the Company. In so far as the judgment
of the learned Single Judge of the Madras High Court in P.M.Desappa
Nayanim Varu's case (supra) is concerned, in the said case the Plaintiffs
had executed a Special Power of Attorney to file a suit for possession of
lands etc in the Court of District Munsif of Tirupathi as it was not possible
for them to personally conduct the said suit. Hence once the District
Munsif returned the plaint on the ground that it was beyond the
pecuniary jurisdiction of his Court. It was held that the Power of
Attorney had no power to institute or conduct the suit in a proper forum.
Since in the said case a special power was conferred on the agent for a
particular purpose i.e. to conduct a suit in a particular Court, it is in the
said context that the learned Single Judge of the Madras High Court held
that the agent could not file a suit in another Court. In the instant case,
having regard to Clause (5) and Clause (7) of the General Power of
Attorney, the said judgments (supra) would not aid the Respondent to
contend that the Power of Attorney did not give the authority to the said
Shri. Mofatraj Munot to file the above Arbitration Petition.
14 Now coming to the judgments cited on behalf of the
Petitioner, in the judgment of a Division Bench of this Court in Killick
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Nixon Ltd's case (supra) it has been held that where a general power is
given followed by specific powers, the specific powers do not curtail the
generality of the powers conferred by the earlier clauses. However where
a specific power is given followed by the conferring of general powers the
rule of ejusdem generis would apply and the general powers must be read
as being in furtherance of the specific power and not as enlarging the
specific power so given. It was further held that the rule is that specific
instances do not derogate from the width of the general power initially
conferred. Hence in the instance case when a general power has been
conferred on the attorneys by Clause (5) of the operative part, non-
mentioning of a challenge to a Award would not derogate from the width
of the general power which has been conferred on the attorneys which is
implicit in the said Clause (5) of the said Power of Attorney. In so far as
the judgment of the Division Bench of this Court in Western India
Theaters Ltd.'s case (supra) is concerned, the said Judgment holds that
legal consequence of a petition not being properly signed by the
Petitioner is a mere irregularity which can be cured at any time. Since, in
the instant case, this Court has come to a conclusion that the attorney or
agent of the Petitioner Shri Mofatraj Munot has been sufficiently
empowered under the said Power of Attorney to file the instant
Arbitration Petition, the application of the said judgment in Western
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India Theaters Ltd.'s case (supra) is not warranted. In my view,
therefore, the preliminary objection raised on behalf of the Respondent to
the filing of the above Arbitration Petition by the attorney of the
Petitioner Shri Mofatraj Pukhraj Munot would have to be rejected and is
accordingly rejected. The above Arbitration Petition to be placed for
admission on 11.04.2017.
[R.M.SAVANT, J]
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