Bombay High Court
Azizur Rehman Gulam And Anr vs Radio Restaurant And 7 Ors on 25 October, 2023
Bench: Shri Arif Doctor
Digitally signed
2023:BHC-OS:12607-DB
LAXMIKANT by LAXMIKANT
GOPAL
GOPAL CHANDAN
CHANDAN Date: 2023.10.25
18:49:48 +0530 1 COMAP-18.23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL NO.18 OF 2023
IN
COMM. ARBITRATION PETITION NO.1286 OF 2019
1] Azizur Rehman Gulam ]
Rasool of Mumbai ]
Indian Inhabitant ]
residing at 317A ]
Lokhandwala Building, ]
1st Floor, 30 Bapty ]
Road, Mumbai-400 003 ]
]
2] Jabbar Gulam Rassol ]
Jamal of Mumbai, ]
Indian Inhabitant, ]
residing at 317A ]
Lokhandwala Building, ]
1st Floor, 30 Bapty ]..... Appellants
Road, Mumbai-400 003 ] (Org. Petitioners)
Vs.
1] M/s. Radio Restaurant, ]
a Partnership firm, ]
registered under the ]
Indian Partnership Act, ]
1932, having its place ]
of Business at 10, ]
Musafirkhana Road, ]
Off: Carnac Road, ]
Mumbai-400 001. ]
]
2] Saira Abdul Wahid ]
Sheru, (Since deceased) ]
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(through legal heirs ]
Respondent Nos.3 to 8) ]
]
3] Maaz Abdul Wahid ]
Sheru of Mumbai, Indian ]
inhabitant, residing at ]
802, Paramount Tower, ]
Sahakar Road, Bandivli ]
Village, Jogeshwari (West), ]
Mumbai - 400 102 ]
]
4] Huzefa Abdul Wahid ]
Sheru of Mumbai Indian ]
inhabitant, residing at ]
802, Paramount Tower, ]
Sahakar Road, Bandivli ]
Village, Jogeshwari (West), ]
Mumbai - 400 102 ]
]
5] Mariyam Abdul Wahid ]
Sheru of Mumbai Indian ]
inhabitant, residing at ]
802, Paramount Tower, ]
Sahakar Road, Bandivli ]
Village, Jogeshwari (West), ]
Mumbai - 400 102 ]
]
6] Romana Zahid Lal ]
of Mumbai Indian ]
inhabitant, residing at ]
802, Paramount Tower, ]
Sahakar Road, Bandivli ]
Village, Jogeshwari (West), ]
Mumbai - 400 102 ]
]
7] Mariya Sadiq Sunesara ]
of Mumbai Indian ]
inhabitant, residing at ]
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802, Paramount Tower, ]
Sahakar Road, Bandivli ]
Village, Jogeshwari (West), ]
Mumbai - 400 102 ]
]
8] Maesra Abdul Wahid ]
Sheru of Mumbai Indian ]
inhabitant, residing at ]
802, Paramount Tower, ]
Sahakar Road, Bandivli ]
Village, Jogeshwari (West), ]..... Respondents
Mumbai - 400 102 ] (Org. Respondents)
-----
Mr. Subhash Jha a/w Mr. Harekrishna Mishra, Mr. Siddharth Jha,
Ms. Linisha Seth, Mr. Clifford Gonsalves, Ms. Shraddha Kataria,
Mr. Ritesh Kesarwani, Mr. Krunal Jadhav, Ms.Praveena
Venkatraman and Ms. Alka Pandey i/by Law Global Advocates for
the Appellants.
Mr. Karl Tamboly a/w Mr. Anuj Desai, Ms. Rujuta Patil, Mr. Yohaan
Shah and Mr. Hasan Mushabeer i/by Negandhi Shah &
Himayatullah for Respondent No.1.
Mr. Ghanshyam Upadhyay a/w Mr. Ankit Upadhyay and Mr. Vijay
Jha i/by Law Juris for Respondent Nos.2 to 8.
Mrs. Rucha Ambekar, Section Officer for Court Receiver present.
-----
CORAM : DEVENDRA KUMAR UPADHYAYA, CJ. &
ARIF S. DOCTOR, J.
Reserved on : 11th September 2023
Pronounced on : 25th October 2023.
-----
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JUDGMENT (PER ARIF S. DOCTOR, J.)
1. The present Appeal is filed under Section 37 of the
Arbitration and Conciliation Act, 1996 ("Arbitration Act") and
impugns an order dated 30th August 2019 ("Impugned Order")
by which the Learned Single Judge has dismissed the Appellants'
challenge to an Arbitral Award dated 7th January 2019 ("Arbitral
Award").
2. Before, however, adverting to the rival contentions, it
is necessary to set out the following facts, viz.
i. The Appellants are the sons of one Gulam Rasool Jamal
Sheru ("Sheru"). It is not in dispute that Sheru along with
one Yusuf Miyaji ("Miyaji") and one Gulam Rasool Suleman
("Suleman") were partners of Respondent No. 1 ("the
Firm"). The Firm carried on the restaurant business from 10
Musafirkhana Road, off. Carnac Road, Mumbai, 400 001
("the Restaurant Premises"). The First Deed of Partnership
by which the said Firm was constituted was dated 7 th
November 1960 ("the First Deed").
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ii. It is also not in dispute that thereafter, the partners of the
Firm periodically executed various Deeds of Partnership,
inter alia revising the shares of the partners in the Firm. On
21st January 1965, a Second Deed of Partnership (Second
Deed) was executed by which the share of Sheru was 25%.
On 1st July 1970, a Third Deed of Partnership (Third Deed)
was also executed between the partners.
iii. On 15th March 1975, the Partners executed (a) a Fourth
Deed of Partnership (Fourth Deed) and (b) a Conducting
Agreement. By the Fourth Deed, the share of Sheru in the
Firm was reduced to 12% and by the Conducting Agreement
it was inter alia agreed that Sheru would conduct the
business of the Firm for a period of one year from the date
of execution of the said Conducting Agreement, i.e.,
between 15 March 1975 and 14 March 1976. In terms of the
said Conducting Agreement, Sheru was to pay an amount of
Rs. 16,000/- as royalty/hire charge to Miyaji and Suleman.
iv. It is not in dispute that Sheru thereafter infact continued to
conduct the business of the Firm up to 1 April 1992. The
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said arrangement was ended by mutual consent and the
Firm thereafter from 1 April 1992, started conducting the
business on its own as it had been prior to the execution of
the Conducting Agreement in terms of the Fourth deed.
v. On 10th July 1992, a Fifth Deed of Partnership (Fifth Deed)
was executed in which the share of Sheru continued to be
12%. The Fifth Deed also provided that, in case of the death
of a partner, the surviving partners would continue the
Firm's business, with or without inducting the heirs of the
deceased partner as partners into the Firm.
vi. On 26th August 2002 Sheru passed away. It is not disputed
that, the surviving partners of the Firm did not induct the
legal heirs of Sheru i.e., the Appellants and one Abdul Wahid
as partners of the Firm. The disputes and differences appear
to have arisen between the surviving partners and the sons
of Sheru from this point in time. The parties are at variance
as to the events as transpired post the demise of Sheru as
also qua the conduct of the business of the Firm and
possession of the said Restaurant Premises. It is the
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Appellants' contention that the business was continued by
them, and it is the contention of the Firm that the business
was shut down with effect from 2 nd May 2003 after the dues
of all the employees of the Firm were settled. It is the
Appellants' contention that the surviving partners caused
the doors of the Restaurant Premises to be broken open and
have certain articles stolen. It is not in dispute that
thereafter, an FIR was filed against the surviving Partners,
i.e. Miyaji and Suleman.
vii. The Firm thereafter, on 4th June 2003 filed a Suit (Suit
No.1557 of 2003) against the Appellants and Abdul Wahid
(sons of Sheru), inter alia seeking an injunction restraining
them from entering upon and/or remaining and/or
continuing to remain upon the Restaurant Premises and
further restraining them from dealing with or damaging the
Restaurant Premises or part thereof in any manner. By an
order dated 10th June 2003, this Court was pleased to
appoint a Court Commissioner, to visit the Restaurant
Premises and submit a report as to whether the business of
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the Firm was running and who was running the same. On 5 th
August 2005, this Court was pleased to dismiss the Notice of
Motion taken out by the Firm on the ground that the
surviving Partners had failed to produce independent
evidence to prove their actual possession of the Restaurant
Premises.
viii. The Firm thereafter filed a Second Suit (Suit No. 1668 of
2006) inter alia seeking recovery of possession of the
Restaurant Premises from the Appellants and Abdul Wahid
as also for mesne profits.
ix. On 12th September 2006, this Court after recording the
consent of the parties, referred the disputes and differences
forming part of both suits along with all other disputes and
differences of the parties to arbitration. The Arbitral
Tribunal, by the Arbitral Award disposed of the reference,
inter alia by ordering that vacant and peaceful possession of
the Restaurant Premises be handed over to the Firm as also
payment of compensation be made to the Firm by the
Appellants for wrongful use and occupation of the
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Restaurant Premises by the Appellants, as more particularly
detailed in the Arbitral Award.
x. The Appellants challenged the Arbitral Award by filing
Commercial Arbitration Petition (L) No. 746 of 2019
("Arbitration Petition") which came to be dismissed by the
Impugned Order.
xi. It is thus that the present Appeal has been filed.
Submissions of Mr. Jha on behalf of the Appellants :-
3. Mr. Jha first assailed the Arbitral Award on the ground
that the same was patently illegal, perverse, arbitrary, and
whimsical. He invited our attention to the order of reference
dated 12th September 2006 and pointed out that while the same
had specifically referred "all the disputes and differences " to
arbitration, the Arbitral Tribunal had completely ignored the
written statement filed by the Appellants (who were the
Defendants in both the Suits). He submitted that the Arbitral
Tribunal had framed issues only taking into consideration the
claim of the Firm i.e., the Plaintiff in both the Suits and not a
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single issue had been framed pertaining to the claims,
contentions and/or disputes raised by the Appellants in the
written statement. It was thus he submitted that the Arbitral
Award was patently illegal, perverse, arbitrary, and whimsical
and was liable to be set aside on this ground alone. In support of
his contention, he placed reliance upon the following
judgements, namely Patel Engineering Limited Vs North
Eastern Electric Power Corporation Limited1, Associate
Builders Vs. Delhi Development Authority 2, and Oil &
Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd.3
4. Mr. Jha's second ground of challenge to the Arbitral
Award was that the same reflected a complete non-application of
mind on the part of the Arbitral Tribunal, which he submitted
amounts to legal misconduct. He pointed out from the Arbitral
Award that there was no reference therein to any of the Deeds
of Partnership, much less the Fifth Deed or to the Conducting
Agreement which formed the basis of the Arbitral Award. He
1 (2020) 7 SCC 167
2 (2015) 3 SCC 49
3 (2003) 5 SCC 705
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submitted that neither the fact that the Firm had been in
existence since 7th July 1960, or that the Second Deed was the
only one which was registered found mention in the Arbitral
Award. Basis this he submitted that the Arbitral Award was
completely unexplained and unreasoned inasmuch as in the
Arbitral Award, there was no intelligible basis to explain how the
Arbitral Tribunal had arrived at the conclusion that the
Appellants were entitled to the 12% share of Sheru or that the
share of Sheru was 12% and not 25%. He submitted that
though the Arbitral Award was a speaking Award, since the same
did not consider the previous Deeds of Partnership, the Arbitral
Award could be termed as a `hybrid award' in which the error
was apparent on the face of the Award. Basis this he submitted
that the Award was susceptible to challenge. In support of his
contention that such an Award was liable to be set aside, he
placed reliance upon the following judgements, namely, Bharat
Coking Coal Ltd Vs. L.K. Ahuja & Co. 4, Oil and Natural Gas
Corporation Limited Vs. Western Geco International
4 (2001) 4 SCC 86
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Limited5 and SsangYong Engineering and Construction
Company Limited Vs. National Highways Authority of
India (NHAI)6.
5. Mr. Jha's third ground of challenge to the Arbitral
Award was that no evidence had been led by the Firm in respect
of any of the Deeds of Partnership. He submitted that only those
documents in respect of which evidence had been led could be
read in evidence. He therefore submitted that the Arbitral
Tribunal could not have based the Arbitral Award on any of the
Deeds of Partnership since the same were of no evidentiary
value. Mr. Jha also submitted that the Arbitral Tribunal had
permitted cross-examination of Appellant No. 2 in the absence of
any Evidence in Chief of Appellant No.2 first being led. He then
placed reliance upon Section 138 of the Indian Evidence Act,
1872 (Evidence Act) to submit that cross-examination must
necessarily be preceded by Examination-in-Chief. In support of
his contention that there could be no cross examination without
first having Examination-in-Chief, he placed reliance upon the
5 (2014) 9 SCC 263
6 (2019) 15 SCC 131
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judgement of the Hon'ble Supreme Court in the case of Ashok
Debbarma Vs State of Tripura7. He submitted that since there
was no cross-examination of Appellant No.2, the entire
proceedings before the Arbitral Tribunal stood vitiated.
6. The fourth ground of challenge on which Mr. Jha
assailed the Arbitral Award was that none of the Deeds of
Partnership except for the Second Deed were registered. In
support of his contention that the Deeds of Partnership were
required to be registered, he first invited our attention to Section
17 of the Registration Act, 1908 ("Registration Act") and then to
Section 63 (1) and (2) and Section 69 of the Indian Partnership
Act, 1932 ("Partnership Act"). Mr. Jha similarly submitted that
none of the Deeds of Partnership had also been stamped and
thus by virtue of Section 33 and 34 of the Maharashtra Stamp
Act 1958 ("Stamp Act"), the same were also not admissible in
evidence. In support of his contention, that in the absence of
proper stamping, the very reference to the arbitration clause in
the said Deed was bad in law, he placed reliance upon the
7 (2014) 4 SCC 747
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judgements of the Hon'ble Supreme Court in the case of
Garware Wall Ropes Limited Vs. Coastal Marine
Constructions and Engineering Limited8, NN Global
Mercantile Private Ltd Vs. Indo Unique Flame Ltd. and
Ors.9, U. P. State Sugar Corporation Ltd. Vs. Jain
Construction Co. and Another10, Geeta Marine Services
Pvt. Ltd. and Anr. Vs. State and another 11. Mr. Jha then
submitted that since the Arbitral Tribunal had relied upon a
document which was not admissible in evidence, the Arbitral
Tribunal had passed an Arbitral Award with total non-application
of mind. In support of his contention that such an Award would
therefore be vulnerable to challenge, he placed reliance upon the
following judgements namely Dandasi Sahu Vs. State of
Orissa12 and Gati Limited Vs. Union of India 13. Basis this, he
submitted that since the basis of the Arbitral Award was the Fifth
Deed which was both unregistered and unstamped, the Arbitral
Award was ex facie bad in law.
8 (2019) 9 SCC 209
9 2023 SCC OnLine SC 495
10 (2004) 7 SCC 332
11 2009 (2) Mh.LJ 410
12 (1990) 1 SCC 214
13 2019 SCC OnLine Bom 4068
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7. Mr. Jha's fifth submission was that the Arbitral
Tribunal was required to adopt a judicial approach when deciding
a reference and failure to do so would render an Award
vulnerable to challenge. He submitted that an Arbitral Tribunal
was required to pass an Award based on the same principles by
which a Court would pass a decree in a Suit. He submitted that
in the present case, the Arbitral Tribunal had failed to adopt a
judicial approach since (i) the issues as framed were only one-
sided (ii) the written Statement/defense of the Appellants was
not considered and (iii) cross examination had been permitted
without any evidence being led etc. Basis this he submitted that
the Arbitral Tribunal had failed to decide the reference in a
judicial manner.
8. Mr. Jha's sixth submission was that it was well settled
that an Arbitral Tribunal was required to decide a reference in
accordance with the terms of the contract which were to be read
as a whole and not piecemeal. He therefore submitted that even
assuming the Award was based upon the Fifth Deed, it was
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incumbent upon the Arbitral Tribunal to have read and construed
the Fifth Deed as a whole and not in isolation as had been done.
He submitted that the fact that the Arbitral Tribunal had
determined the share of Sheru to be 12% dehors the provision
of equitable distribution in the goodwill of the Firm as also
ignoring that clause 16 of the Fifth Deed which provided for
giving the partners an equal opportunity to inter alia bid for the
tenancy rights as also to purchase the running business of the
Firm, had also not been complied with. He submitted that this
made manifest the fact that the Arbitral Tribunal had acted with
complete non-application of mind, perversity, and arbitrariness.
He placed reliance upon a judgement of the Hon'ble Supreme
Court in the case of Continental Construction Co. Ltd. Vs.
State of Madhya Pradesh14 in support of his contention that
failure to consider the clauses of a contract by an Arbitral
Tribunal amounted to misconduct which rendered an Award
liable to be set aside. He also placed reliance upon a judgement
of the Hon'ble Supreme Court in the case of Delhi
Development Authority Vs. R. S. Sharma and Company,
14 (1988) 3 SCC 82
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New Delhi15 to submit that since arbitration is a creation of
contract, if under the guise of doing justice an Award is found to
be contrary to the terms of the contract then it would result in
misconduct by the arbitrator. In this case, he submitted that
clause 16 of the Fifth Deed provided that in case of dissolution of
the Firm or in the case of dispute among the partners, the
running business including the tenancy rights and goodwill of the
Firm were to be first auctioned among the partners and each
partner would have the right to bid for the same. He submitted
that despite this, no such opportunity was given to the
Appellants. He therefore submitted that the Arbitral Tribunal
having failed to act in accordance with the terms the Fifth Deed
had committed an error of jurisdiction resulting in a decision
which was perverse and patently illegal.
9. Mr. Jha's seventh submission was that there was
judicial misconduct on the part of the Arbitral Tribunal since
according to him, the Arbitral Tribunal had failed to consider
evidence of an unimpeachable character to the effect that the
15 (2008) 13 SCC 80
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Appellants father i.e., Sheru was running the business of the
Firm without interruption from the year 1975 and after his
demise, the Appellants and Abdul Wahid continued to conduct
the business of the Firm. He submitted that the Arbitral
Tribunal's failure to take into consideration such a glaring fact
which was evident from the record as also from the documents
and the report of the Court Commissioner dated 3 rd July 2003
amounted to judicial misconduct. Mr. Jha then placed reliance
upon the following judgements in support of his contention that
an Arbitral Award could be set aside on the ground of judicial
misconduct, namely, M.D., Army Welfare Housing
Organisation Vs. Sumangal Services (P) Ltd.16, Union of
India Vs. V. Pundarikakshudu and Sons and Another 17 and
State of Rajasthan Vs. Nav Bharat Construction Co.18
10. Mr. Jha then submitted that the Second Suit filed by
the Firm i.e., Suit No. 1668 of 2006 was based on the same
cause of action as the First Suit i.e., Suit No. 1557 of 2003 and
16 (2004) 9 SCC 619
17 (2003) 8 SCC 168
18 (2006) 1 SCC 86
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was filed without seeking leave of the Court under the provisions
of Order II Rule 2 of the Code of Civil Procedure, 1908 (CPC). He
pointed out that there was no fresh cause of action that had
arisen between the filing of the First and the Second Suit, and
therefore nothing had prevented the Firm from including in the
First Suit, the reliefs sought for in the Second Suit. He submitted
that the Firm having omitted to include the reliefs in the First
Suit was barred from doing so in the Second Suit without first
obtaining the leave of the Court under the provisions of Order II
Rule 2 of the CPC. In support of his contention that failure to
obtain leave under Order II Rule 2 of the CPC would render the
Second Suit not maintainable, he placed reliance upon the
judgement of the Hon'ble Supreme Court in the case of State
Bank of India Vs. Gracure Pharmaceuticals Limited19
11. Basis the above, Mr. Jha submitted that the Arbitral
Award, being bad in law and patently illegal was thus liable to be
set aside.
19 (2014) 3 SCC 595
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Submissions of Mr. Upadhyay on behalf of Respondent
Nos. 2 to 8 :-
12. Before Mr. Upadhyay could commence his
submissions, Mr. Tamboly Learned Counsel appearing on behalf
of the Firm, raised a preliminary objection. He pointed out that
Respondent No's 2 to 8 had neither challenged the Arbitral
Award by filing a Petition under Section 34 of the Arbitration Act
nor had they challenged the Impugned Order by filing an Appeal
under Section 37 from the Impugned Order. He thus submitted
that the Arbitral Award had become final and binding upon
Respondent No. 2 to 8 and therefore there was no question of
any submissions being made on behalf of Respondent No. 2 to
and 8 to assail either the Arbitral Award or the Impugned Order.
He then invited our attention to Section 34 of the Arbitration Act
and pointed out therefrom that a challenge to an Arbitral Award
could only be by way of an application filed under Section 34 of
the Arbitration Act. He submitted that if a party chose not to file
an Application as contemplated under Section 34 of the
Arbitration Act, then the question of countenancing any
challenge to the Arbitral Award by such a party did not arise.
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13. Mr. Upadhyay, then replied by submitting that as long
as there was a challenge subsisting to the Arbitral Award,
submissions, in support of why the same was bad in law, could
always be canvassed. He submitted that in the present case, the
very reference to arbitration was bad since the same fell foul of
the provisions contained in Section 89 of the CPC. He submitted
that the order of reference dated 12 th September 2006 was not
in terms of Section 89 and thus the very reference to arbitration
was non est. He submitted that for there to be a valid reference
under Section 89 of CPC the same must (a) formulate the terms
of reference and (b) be signed by the Parties. He then invited
our attention to the order of reference and pointed out that the
same did not formulate any terms of reference nor had the same
been signed by the parties. Basis this he submitted that the
same was not in conformity with the provisions of the
requirements of Section 89 of the CPC and thus the reference to
arbitration was ex facie bad in law. In support of his contention
that the Court could not refer parties to arbitration absent strict
compliance with the provisions of Section 89 of the CPC, he
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placed reliance upon the judgement of the Hon'ble Supreme
Court in the case of Kerala State Electricity Board and
Another Vs. Kurien E. Kalathil and Another 20. He submitted
that simply on the oral consent given by Counsel without written
instructions from the parties there could be no valid reference to
arbitration. Basis this, he submitted that since there was no valid
reference to arbitration the entire proceedings stood vitiated as
being without jurisdiction.
14. He then invited our attention to the prayers in the
Second Suit and pointed out that the same were not arbitrable
since the same were in the nature of a landlord and tenant
dispute. He submitted that such a dispute was by its very nature
non-arbitrable. He therefore submitted that such a lis could
never have been referred to arbitration and could only be
decided by the appropriate Civil Court, which in this case was
the Small Causes Court. He submitted that the Learned Judge
when referring the dispute to arbitration, was required to apply
his mind and consider as to whether the dispute being referred
20 (2018) 4 SCC 793
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to arbitration was one which was arbitrable. He submitted that in
the present case the Learned Judge had at the time of passing of
the order of reference, failed and neglected in considering this
aspect, thus rendering the very reference bad in law and non-
est.
15. Mr. Upadhyay then essentially repeated the
submissions made by Mr. Jha on behalf of the Appellants and
submitted that the Arbitral Award ignored important clauses of
the Fifth Deed and thus suffered from non-application of mind
that amounted to judicial misconduct. He also submitted that the
Arbitral Award was passed without referring to any of the
documents which were before the Arbitral Tribunal. Mr.
Upadhyay submitted that once it was shown that an Arbitral
Award falls foul of Section 34 (2A), a Court was obliged to set
aside the same even if a ground of challenge was not raised. He
submitted that in the present case, the Arbitral Tribunal lacked
inherent jurisdiction and thus the entire Arbitral Award stood
vitiated on that ground alone. Mr. Upadhyay placed reliance upon
the following judgements, in support of the various contentions
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raised by him, viz.
1] Jivarajbhai Ujamshi Sheth and Others Vs.
Chintamanrao Balaji and others21
2] Associated Engineering Co. Vs. Government of
Andhra Pradesh and another22
3] State of Rajasthan and another Vs. Ferro
Concrete Construction Private Limited23
4] General Manager, Northern Railway and another
Vs. Sarvesh Chopra24
5] Inder Sain Mittal Vs. Housing Board, Haryana
and others25
6] N. Radhakrishnan Vs. Maestro Engineers and
others26
7] Pawan Kumar Gupta and Anr. Vs. Vinay Malani 27
8] Dodsal Private Ltd. Vs. Delhi Electric Supply
Undertaking of the Municipal Corporation of
Delhi28
9] The State of Tamil Nadu rep. By the
Superintending Engineer, P.W.D./W.R.O. Vs. R.
Sundaram29
10] Workmen of Cochin Port Trust Vs. Board of
21 (1964) 5 SCR 480
22 (1991) 4 SCC 93
23 (2009) 12 SCC 1
24 (2002) 4 SCC 45
25 (2002) 3 SCC 175
26 (2010) 1 SCC 72
27 2014 SCC OnLine Del 3370
28 (2001) 9 SCC 339
29 2006 (1) CTC 178
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Trustees of the Cochin Port Trust and Another30
11] State of U.P. Vs. Nawab Hussain31
12] Ahmedabad Manufacturing & Calico Printing Co.
Ltd. Vs. Workmen and Another32
13] The Union of India Vs. Shri Om Prakash33
14] Chhabba Lal Vs. Kallu Lal and Others34
15] Chief General Manager (IPC), Madhya Pradesh
Power Trading Company Limited and Another
Vs. Narmada Equipments Private Limited 35
16] Kurein E. Kalathil Vs. State of Kerala and
others36
17] Kerala State Electricity Board and Another Vs.
Kurien E. Kalathil and Another37
Submissions of Mr. Tamboly on behalf of Respondent No.
1 :-
16. Mr. Tamboly, at the very outset submitted that the
Appellants had in the present Appeal canvassed issues which
were not only never raised before the Arbitral Tribunal but also
30 (1978) 3 SCC 119
31 (1977) 2 SCC 806
32 (1981) 2 SCC 663
33 (1976) 4 SCC 32
34 AIR 1946 PC 72
35 (2021) 14 SCC 548
36 Unreported Judgment dated 28/01/2009 in WP(C) No.31108 of 2007
37 2009 SCC OnLine Ker 6769
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never raised before the Learned Single Judge in the Petition filed
under Section 34.
17. He then submitted that the contentions raised on
behalf of the Appellants were entirely without merit. He
submitted that the Appellants contention that the Arbitral Award
was based on no evidence or that the Partnership Deed had not
been introduced in evidence was both factually as also legally
untenable. He pointed out that the Appellants had not only
admitted all the Deeds of Partnership as also the Conducting
Agreement but had infact themselves produced and relied upon
the Fourth Deed and Fifth Deed as also the Conducting
Agreement along with the Memo of Appeal. He pointed out from
the Written Statement filed by the Appellants in both Suits and
Arbitration Petition filed by the Appellants, that the Appellants
had specifically admitted the said Deeds of Partnership and the
Conducting Agreement. Basis this he submitted that the
question of the Appellants now contending that the Deeds of
Partnership were not proved or raising any issue as to the
LGC 26 of 56
27 COMAP-18.23.doc
existence, validity or otherwise of the said Deeds did not arise.
He submitted that given this factual scenario, the Arbitral
Tribunal was well within its jurisdiction to consider the said
documents and arrive at a finding based thereon. He submitted
that this was precisely what the Arbitral Tribunal had infact done
and that no finding which was contrary to what the Fifth Deed
provided for had been rendered.
18. He then invited our attention to the Conducting
Agreement and pointed out therefrom that, it was an admitted
position as recorded therein that Sheru was only conducting the
business of the Firm for and on behalf of the Firm and nothing
more. He submitted that though the Conducting Agreement
contemplated that Sheru would conduct the business of the Firm
for only one year and it was not in dispute that he had infact
done so until 1992. He then pointed out from the Fifth Deed that
Sheru had specifically therein recognized that his right to
conduct the said business of the Firm had come to an end in the
year 1992 and that the Restaurant Premises belonged to the
LGC 27 of 56
28 COMAP-18.23.doc
Firm. Mr. Tamboly further pointed out from the Fifth Deed that
the same inter alia made two things clear, viz. (i) that Sheru's
share in the Firm was 12% and (ii) that on the death of any of
the Partners of the Firm, the surviving partners were not
obligated to take on as partners the legal heirs of the deceased
partner. Basis this he submitted that the Appellants having not
only admitted the Fifth Deed but also relied upon the same. It
was an undisputed position that (a) the Restaurant Premises
belonged to the Firm (b) Sheru had admitted he was only
conducting the business of the Firm (c) his right to conduct the
business had come to an end in the year 1992 and (d) the said
Firm was entitled to possession of the said Restaurant Premises.
19. Mr. Tamboly, then invited our attention to clause 15 of
the Fifth Deed and pointed out that the surviving partners had
the right to continue the business of the Firm, with, or without
inducting the legal heirs of the deceased partner as Partners of
the Firm. He therefore submitted that after Sheru passed away
in the year 2002 the surviving Partners admittedly did not induct
the legal heirs of Sheru, i.e., the Appellants and Abdul Wahid as
LGC 28 of 56
29 COMAP-18.23.doc
partners of the Firm. He submitted that therefore after the death
of Sheru the surviving Partners were well within their rights, to
continue to carry on the business of the Firm as also to occupy
the Restaurant Premises, without any interference and/or
hindrance from anyone including the legal heirs of Sheru. He
submitted that, therefore, without permission from the Firm, the
Appellants had no legal right to either be in possession of the
Restaurant Premises or for that matter run any business from
the Restaurant Premises. He thus submitted that the Firm was
entitled to recover possession of the Restaurant Premises from
the Appellants. He submitted that this was precisely the view
taken by the Arbitral Tribunal which had been upheld by the
Learned Single Judge in the Impugned Order. He thus submitted
that there was absolutely no infirmity of whatsoever nature in
the Impugned Order or the Order of the Arbitral Tribunal. Mr.
Tamboly, then placed reliance upon the following judgements of
the Hon'ble Supreme Court namely Associate Builders (supra)
SsangYong Engineering & Construction Co. Ltd (supra),
PSA SICAL Terminals Pvt. Ltd. Vs. Board of Trustees of
LGC 29 of 56
30 COMAP-18.23.doc
V.O. Chidambranar Port Trust Tuticorin and others 38 and
Reliance Infrastructure Ltd Vs. State of Goa 39 to submit that
an Arbitral Award could only be set aside if it is against the basic
notions of law, morality or justice or it is perverse, meaning
thereby that the view formed by Arbitral Tribunal was one which
could not have been taken by any right-thinking person and was
one which shocks the conscience of the Court. He submitted that
in the facts of the present case the view taken by the Arbitral
Tribunal was in fact the only legally tenable view, and it was for
this reason that the same was not disturbed by the Learned
Single Judge in the Impugned Order.
20. Mr. Tamboly then in dealing with the contention that
the Arbitral Tribunal had not fairly interpreted and dealt with the
said Fifth Deed, invited our attention to Clause 16 of the Fifth
Deed and pointed out that the same would operate only in case
of dissolution of the said Firm, and it was, admittedly, nobody's
case that the said Firm had been dissolved. He therefore
submitted that the Appellants contention that the Arbitral
38 2021 SCC OnLine SC 508
39 2023 SCC Online SC 604
LGC 30 of 56
31 COMAP-18.23.doc
Tribunal had acted in a manner which was contrary to the very
terms of the Fifth Deed was also plainly devoid of merit.
21. Mr. Tamboly, then submitted that even the contention
that the Arbitral Tribunal had permitted cross-examination of
Appellant No.2 without there being any Examination-in-Chief
was factually erroneous. He pointed out that the Appellants
themselves had produced the Notes of Evidence which
specifically recorded that Examination-in-Chief of Appellant No.2
had been conducted. He further pointed out from the Arbitral
Award that the same also recorded that the Examination-in-Chief
of Appellant No.2 had also been led. Basis this he submitted that
the contention of the Appellants that cross-examination of
Appellant No.2 was permitted in absence of Examination-in-Chief
being recorded was not only patently false but also contrary to
the Appellants' own pleaded case.
22. In dealing with the contention that the Partnership
Deeds were not stamped and registered he submitted that these
objections were also taken for the first time in the present
LGC 31 of 56
32 COMAP-18.23.doc
Appeal and were infact never raised before either the Arbitral
Tribunal or before the Learned Single Judge. He then pointed out
that both the contentions were devoid of merit. Firstly, he
submitted that the Partnership Deeds were not documents which
were compulsorily registrable within the scope of Section 17 of
the Registration Act. Secondly, insofar as the objection of
stamping was concerned, he submitted that the said objection
was both factually as also legally not tenable. He pointed out
that the Fourth and Fifth Deeds of Partnership were both on
stamp paper of Rupees One Hundred which was the requisite
amount of stamp duty payable as per the provisions of Article 47
of The Bombay Stamp Act, 1958. He then pointed out that an
objection of inadequacy/insufficiency of stamping had to be
raised at the first instance and not later. He pointed out that in
the present case this contention was taken for the first time in
the present Appeal and was never raised either before the
Arbitral Tribunal or before the Learned Single Judge. Without
prejudice to his submission, he invited our attention to Section
35 of the Stamp Act and pointed out that once a document had
LGC 32 of 56
33 COMAP-18.23.doc
been marked in evidence, the same could not be called into
question at any later stage of the same proceedings. In support
of his contention, he placed reliance upon a full bench
judgement of this Court in the case of Hemendra Rasiklal Ghia
Vs. Subodh Mody40 as also the judgement of the Hon'ble
Supreme Court in the case of Shyamal Kumar Roy Vs. Sushil
Kumar Agarwal41. He then, without prejudice to this pointed
out that the objection was wholly irrelevant since the reference
to arbitration in the present case was not under any of the
Deeds of Partnership but was by consent of the Parties as
recorded in the order dated 12th September 2006. He therefore
submitted that the judgement of the Hon'ble Supreme Court in
the case of N.N. Global Mercantile Pvt Ltd. (supra) and
Garware Wall Ropes Limited (Supra) U. P. State Sugar
Corporation Ltd. (supra) and Geeta Marine Services Pvt.
Ltd. and Anr. (supra) would have absolutely no application to
the facts of the present case.
40 2008 (6) Mh.L.J. 886
41 (2006) 11 SCC 331
LGC 33 of 56
34 COMAP-18.23.doc
23. Mr. Tamboly then submitted that the contention that
the Second Suit was barred by the provisions of Order II Rule 2
of the CPC was ex-facie untenable. He pointed out that both the
Suits were infact based on different and distinct causes of action.
He submitted that the First Suit i.e., Suit No. 1557 of 2003 was
filed by the Firm for protection of its possession and carriage of
business from the said Restaurant Premises whereas the Second
Suit, i.e., Suit No.1668 of 2006 was filed by the Firm on the
ground that the Appellants and Abdul Wahid had trespassed into
the Restaurant Premises and was thus for recovery of
possession. In support of his contention that both Suits were
based on distinct causes of action and therefore the Second Suit
would not be barred under Order II Rule 2 of the CPC, he placed
reliance upon a judgment of the Madras High Court in the case
of K. Palaniappa Gounder Vs. Valliammal42
24. Basis the above he submitted that the present Appeal
was entirely devoid of merit. He submitted that the Appellants
had absolutely no right, title and interest in the Restaurant
42 AIR 1988 Mad 156
LGC 34 of 56
35 COMAP-18.23.doc
Premises in their own right or as heirs of the late Sheru and
wrongfully continued to use, occupy and benefit from the same.
He submitted that the Restaurant Premises were prime and
valuable real estate which the Firm had been deprived of due to
the patently illegal conduct of the Appellants. He thus submitted
that the Appeal be dismissed with a direction that the Appellants
hand over vacant, quiet, and peaceful possession of the
Restaurant Premises to the Firm, forthwith.
Reasons and Conclusions: -
25. We have heard learned counsel for the Parties as also
considered the various case law cited and after a careful
consideration of the same, we find that the present Appeal is
one that lacks merit in its entirety and deserves to be dismissed
on the following two fundamental grounds as set out in (A) and
(B) below as also on merits as set out in (C) below. Insofar as
the submissions made on behalf of Respondent Nos. 2 to 8, the
same are dealt with separately under (D) and (E) below.
LGC 35 of 56
36 COMAP-18.23.doc
A. The present Appeal is filed under Section 37 of the
Arbitration Act. Section 37 inter alia provides as follows, viz.
"37. Appealable orders.-- (1) Notwithstanding
anything contained in any other law for the
time being in force, an appeal shall lie from
the following orders (and from no others) to
the Court authorised by law to hear appeals
from original decrees of the Court passing the
order, namely:-
(a) .....
(b) .....
(c) setting aside or refusing to set aside
arbitral award under section 34."
An appeal is a creation of statute and scope of a statutory
appeal has to be found out within the contours of the
language it is couched in. Hence a plain reading of Section
37 (1)(c) leaves no manner of doubt that it is only the order
passed under Section 34 which is appealable and nothing
else. The Hon'ble Supreme Court in the case of UHL Power
Company Limited vs. State of Himachal Pradesh 43 had
occasion to consider the scope of Section 37 and in that
context, held as follows: -
"16. As it is, the jurisdiction conferred on Courts
under Section 34 of the Arbitration Act is fairly
43 (2022) 4 SCC 116
LGC 36 of 56
37 COMAP-18.23.doc
narrow, when it comes to the scope of an
appeal under Section 37 of the Arbitration Act,
the jurisdiction of an Appellate Court in
examining an order, setting aside or refusing
to set aside an award, is all the more
circumscribed."
Hence it is clear that the scope of Appeal under Section 37
is one which is extremely limited and narrow. In this context
we must note that in the present case not once were we
even shown the Impugned Order nor was a single
submission made to assail the Impugned Order on any
ground whatsoever. The Appellants' entire challenge in the
present Appeal was only to the Arbitral Award. Thus, the
Impugned Order has therefore infact remained entirely
unassailed in the present Appeal. Hence, in our view, the
Appeal must necessarily fail on this ground alone.
B. Additionally, we must note that every ground of challenge to
the Arbitral Award in the present Appeal was neither raised
as a ground of defense before the Arbitral Tribunal nor was
taken as a ground of challenge to the Arbitral Award in the
Petition filed under Section 34. The Hon'ble Supreme Court
LGC 37 of 56
38 COMAP-18.23.doc
in the case of MMTC Ltd. vs. M/s. Vedanta Ltd.44 has
specifically held as follows, viz.
"14. As far as interference with an order made
under Section 34, as per Section 37, is
concerned, it cannot be disputed that such
interference under Section 37 cannot travel
beyond the restrictions laid down under
Section 34. In other words, the Court cannot
undertake an independent assessment of the
merits of the award and must only ascertain
that the exercise of power by the Court under
Section 34 has not exceeded the scope of the
provision. Thus, it is evident that in case an
arbitral award has been confirmed by the
Court under Section 34 and by the Court in an
appeal under Section 37, this Court must be
extremely cautious and slow to disturb such
concurrent findings."
What the Appellants have therefore sought to do in the
present Appeal is to effectively challenge the Arbitral Award
afresh on grounds never taken before. We find that such a
course of arguments, apart from being in the teeth of the
law laid down by the Hon'ble Supreme Court in the case of
MMTC Ltd. (Supra), if allowed, would infact unsettle the
entire scheme of Chapters VII, VIII and IX of the Arbitration
44 2019 SCC OnLine SC 220
LGC 38 of 56
39 COMAP-18.23.doc
Act. Thus, equally on this ground alone, the present Appeal
must also fail.
C. Even considering the challenge on merit, we find that the
same is devoid of any worthiness. None of the grounds
canvassed, would in our view, amount to a patent illegality
which would render the Award liable to be set aside, even
assuming the same could be considered by this Court at this
stage. Each of the grounds canvassed on behalf of the
Appellants are dealt with as follows, viz.
(i) First, the contention that the Arbitral Award is
patently illegal, perverse, arbitrary, and whimsical,
and that the Arbitral Tribunal has completely ignored
the Written Statement of the Appellants and framed
issues that are one sided, to our mind is wholly
untenable. Mr. Jha, learned counsel for the
Appellants, was unable to show from the record
whether the Appellants had infact made any such
application to the Arbitral Tribunal to consider certain
LGC 39 of 56
40 COMAP-18.23.doc
issues which the Arbitral Tribunal had failed to
consider and/or rejected. There is absolutely no
material on record to substantiate such an allegation.
To sustain such an allegation, it was incumbent upon
the Appellants to have first shown that infact they had
called upon the Arbitral Tribunal to frame certain
issues, which the Arbitral Tribunal had not or
alternatively had expressed their reservation to the
issues as framed. The Appellants having failed to do
so, the question of the Appellants now raising a
grievance in respect of the same, much less a
contention that the Arbitral Tribunal had acted in
patently illegal, perverse, arbitrary, and whimsical
manner, does not arise, and therefore the same is
entirely without merit and baseless. In view thereof
reliance placed by the Appellants on the judgments in
the case of Patel Engineering Limited (supra),
Associate Builders (supra) and Oil & Natural Gas
Corporation Ltd. (supra) is wholly without merit.
LGC 40 of 56
41 COMAP-18.23.doc
(ii) The second ground of challenge to the Arbitral Award
namely that there is no reference to any of the Deeds
of Partnership and/or Conducting Agreement in the
Arbitral Award, which reflects a complete non-
application of mind on the part of the Arbitral Tribunal
amounting to legal misconduct, is equally devoid of
merit. The Appellants have themselves not only
admitted but relied upon the Deeds of Partnership and
Conducting Agreement, including the Fifth Deed which
sets out the share of Sheru in the Firm as being 12%.
It is basis this that the Arbitral Tribunal has
considered and arrived at the finding inter-alia that
the share of the Appellants' father i.e., Sheru was
12%. In view thereof and since the Appellants had
themselves specifically admitted all the Partnership
Deeds, the absence of any specific mention of any or
all the Deeds in the Arbitral Award cannot be stated to
be non-application of mind, much less legal
LGC 41 of 56
42 COMAP-18.23.doc
misconduct on the part of the Arbitral Tribunal. The
Arbitral Tribunal has admittedly not fixed Sheru's
share to be one which was outside what was provided
for in the Fifth Deed, which is an admitted document
and hence the question of any misconduct let alone
legal misconduct on this ground does not arise. On
perusing the Arbitral Award, we find that the same is
a well-reasoned and speaking Award and is not a
'hybrid award' as contended by the Appellants. There
is absolutely no error or non-application of mind in
passing the Arbitral Award much less an error which is
apparent on the face of the Arbitral Award. Thus, the
judgments in the case of Bharat Coking Coal Ltd
(supra), Oil and Natural Gas Corporation Limited
(supra) and SsangYong Engineering and
Construction Company Limited (supra) have
absolutely no application to the facts of the present
case.
LGC 42 of 56
43 COMAP-18.23.doc
(iii) The third ground of challenge to the Arbitral Award
namely that the same has been passed in absence of
any evidence qua proof of the said Deeds of
Partnership is as untenable as the contention that
cross examination was conducted without there being
any evidence led in chief. Firstly, the Appellants
having specifically admitted the Deeds of Partnership
and Conducting Agreement, the contention that the
Firm has failed to prove the same does not arise,
aside from the fact that such a contention/objection
was never taken either before the Arbitral Tribunal or
the Learned Single Judge. Secondly, the contention
that cross examination of the Appellants' witness was
permitted in absence of evidence in chief being led is
factually incorrect, as is evident from the Appellants'
own admission in Arbitration Petition as also from the
Notes of Evidence produced by the Appellants
themselves in the Appeal, which makes clear that the
Examination-in-Chief of Appellant No.2 was infact
LGC 43 of 56
44 COMAP-18.23.doc
conducted. The Arbitral Award also mentions that the
Examination-in-Chief of Appellant No. 2 was infact
recorded. Hence, the contention of lack of evidence is
entirely without substance and misconceived.
(iv) The fourth ground of challenge of the Appellants i.e.,
that none of the Deeds of Partnership (except the
Second Deed) were registered is also equally of no
substance and wholly irrelevant for two reasons. First,
we find that a plain reading of Section 17(1)(c) of the
Registration Act does not mandate registration of any
of the Deeds of Partnership and the same are not
documents which must be registered. Secondly, it is
well settled that such an objection where valid, must
be taken at the first instance. In the present case, it
is not in dispute that no such objection was ever
taken by the Appellants at any stage prior to the
present Appeal. Equally, we find that the issue of the
Deeds of Partnership not being stamped and thus
LGC 44 of 56
45 COMAP-18.23.doc
being inadmissible in evidence is also untenable since
(a) in the facts of the present case infact it was
shown to us that the Deeds of Partnership were on
stamp paper of Rs.100/- which was the relevant
stamp duty payable under the provisions of The
Bombay Stamp Act, 1958 and (b) the reference to
arbitration in the present case was not on the basis of
the Partnership Deeds but was by consent of the
parties pursuant to an order of this Court and (c) the
issue was never raised at any stage either before the
Arbitral Tribunal or before the Learned Single Judge.
Hence, the judgments in the case of Garware Wall
Ropes Limited (supra), NN Global Mercantile
Private Ltd (supra), U. P. State Sugar Corporation
Ltd. (supra) and Geeta Marine Services Pvt. Ltd.
and Anr. (supra) would have absolutely no
application to the facts of the present case. Also, we
must note that even assuming the contention of
insufficiency of stamp was a valid one, we find that
LGC 45 of 56
46 COMAP-18.23.doc
since the same was never raised before the Arbitral
Tribunal, the judgment of this Court in the case of
Hemendra Rasiklal Ghia (supra) would squarely
apply, in which this Court has held as follows:-
72. In the first case, the Court, before which
the objection is taken about admissibility of
document on the ground that it is not duly stamped,
has to judicially determine the matter as soon as the
document is tendered in evidence and before it is
marked as an exhibit in the case as held by the
Constitution Bench in Zaver Chand v. Pukhraj Surana
(supra). Once a document has been marked as an
exhibit in the case and has been used by the parties
in examination and cross-examination of their
witnesses, section 36 comes into operation. Once a
document has been admitted in evidence, as
aforesaid, it is not open either to the trial Court itself
or to a Court of Appeal or Revision to go behind that
order. Such an order is not one of those judicial
orders which are liable to be reviewed or revised by
the same Court or a Court of superior jurisdiction.
Similar view is expressed by the Supreme Court in
the case of Bipin Shantilal Panchal (supra); wherein
it is made clear that if the objection relates to
deficiency of stamp duty of a document, the Court
has to decide the objection before proceeding
further.
73. In the case of Ram Ratan v. Bajarang Lal
(supra) the Apex Court reiterating the above view
has observed that the Court, as of necessity it would
be trial Court, before which the objection is taken
about admissibility of document on the ground that it
is not duly stamped, has to judicially determine the
matter as soon as the document is tendered in
evidence and before it is marked as an exhibit in the
case. So the objection relating to deficiency of duty
cannot be raised or decided at the later stage of the
LGC 46 of 56
47 COMAP-18.23.doc
suit. It has to be decided there and then unless
taken on record subject to objection so as to avoid
the rigour of section 36 of the Stamp Act.
Equally, reliance placed upon Section 63 (1) and (2) and
Section 69 of the Indian Partnership Act 1932 is also
entirely untenable since apart from the fact that no such
contention was ever raised before the Arbitral Tribunal,
the same would only apply in cases arising from a
contract. In the present case neither of the said Suits
were filed either arising from or to enforce any contract
but were filed inter alia for injunction and possession of
the Restaurant Premises.
(v) The fifth submission to assail the Arbitral Award i.e.,
that the Arbitral Tribunal had failed to adopt a judicial
approach in deciding the reference is also wholly
untenable and entirely devoid of merit. We find that in
the present case the Arbitral Tribunal has decided the
reference within the four corners of the order of this
Court dated 12th September 2006 and in accordance
LGC 47 of 56
48 COMAP-18.23.doc
with the Deeds of Partnership and the Conducting
Agreement all of which were admitted by the
Appellants. We find that the Arbitral Tribunal has
taken all the requisite steps inter alia for ascertaining
valuation of the Firm's premises by appointing a
Valuer etc. It was basis this that the Arbitral Tribunal
has decided the reference based on documents as
also report of the expert/valuer appointed. Thus, we
find that the Arbitral Tribunal has acted both
judiciously and meticulously in the discharge of its
duties and passed an Arbitral Award entirely within
the realm of its jurisdiction.
(vi) The Appellants' sixth submission that the Arbitral
Tribunal had failed to decide the reference in
accordance with the terms of the contract is also one
which is entirely without substance and infact of no
relevance in the facts of the present case. A plain
reading of clause 16 of the Fifth Deed makes it clear
that the same was to apply either upon dissolution of
LGC 48 of 56
49 COMAP-18.23.doc
the Firm or in the event of there being a dispute
between the Partners. In the present case, neither of
these contingencies had arisen as (a) it is not in
dispute that there was no dissolution of the said Firm
and (b) that neither the Appellants nor Abdul Wahid
were partners of the said Firm, nor had they ever
claimed to be. Hence the question of clause 16 being
applicable does not arise. Thus, there is absolutely
no merit in the contention that the Arbitral Tribunal
has acted with complete non-application of mind,
perversity, and arbitrariness. Hence, the judgment in
the case of Continental Construction Co. Ltd.
(supra) and Delhi Development Authority (supra)
would not arise in the facts of the present case.
(vii) The seventh submission of Mr. Jha was that there was
judicial misconduct on the part of the Arbitral Tribunal
since the Arbitral Tribunal had failed to consider the
evidence of an unimpeachable character to the effect
that Sheru and the Appellants were running the
LGC 49 of 56
50 COMAP-18.23.doc
business of the Firm from the Restaurant Premises
without interruption since the year 1975. We find that
this contention is wholly immaterial for the purpose of
adjudicating the issues which were to be determined
by the Arbitral Tribunal. The very issue which fell for
determination before the Arbitral Tribunal was
unauthorized use, occupation and possession of the
Restaurant Premises by the Appellants and thus
merely because Sheru and/or the Appellants were
infact running the business of the Firm from the said
Restaurant Premises would not give the Appellants
any rights in the business of the said Firm or qua the
use, occupation and possession of the said Restaurant
Premises. The Appellants having admitted the said
Deeds of Partnership and Conducting Agreement
could not claim any higher rights than what was set
out therein. Hence, there is absolutely no question of
the Arbitral Tribunal taking into consideration these
facts. Therefore the question of failing to do so
LGC 50 of 56
51 COMAP-18.23.doc
amounting to judicial misconduct does not in any
manner arise. Hence, reliance placed by the
Appellants upon the judgments in the case of M.D.
Army Welfare Housing Organisation (supra),
Union of India (supra) and State of Rajasthan
(supra) is also without any basis.
(viii) As regards the last submission made on behalf of the
Appellants that the Second Suit i.e., Suit No.1668 of
2006 was barred since (a) it was based on the same
cause of action as the First Suit i.e., Suit No.1557 of
2003 and (b) was filed without seeking leave of the
Court under the provisions of Order II Rule 2 of CPC,
we find that this submission is also entirely devoid of
merit since (i) a plain reading of both Suits indicates
that the causes of action in both Suits are distinct and
separate and (ii) the order of reference refers all
disputes and differences between the Parties to
Arbitration. We find that in the facts of the present
case, the judgement of the Madras High Court in the
LGC 51 of 56
52 COMAP-18.23.doc
case of K. Palaniappa Gounder (supra) would
squarely apply since both Suits were based on distinct
and separate causes of action.
D. Insofar as the submissions made by Mr. Upadhyay on behalf
of Respondent Nos. 2 to 8, we are in total agreement with
the preliminary objection raised by Mr. Tamboly. Respondent
Nos. 2 to 8 have admittedly neither challenged the Arbitral
Award by filing a Petition under Section 34 of the Arbitration
Act, nor have they assailed the Impugned Order by filing an
Appeal under Section 37 of the Arbitration Act. In this
context, it is necessary to note that Section 34 (1) and (2)
(a) of the Arbitration Act specifically provides as follows, viz.
"34. Application for setting aside arbitral award .--
(1) Recourse to a Court against an arbitral award may be
made only by an application for setting aside such award
in accordance with sub-section (2) and sub-section (3).
"(2) An arbitral award may be set aside by the Court only
if --
(a) the party making the application establishes on the
basis of the record of the arbitral tribunal that--
LGC 52 of 56
53 COMAP-18.23.doc
(i) .....
(ii) .....
(iii) .....
(iv) .....
(v) .....
(emphasis supplied)
A plain reading of Section 34 of the Arbitration Act therefore
makes clear that an application for setting aside an arbitral
award can (i) only be by way of an application and (ii) by a
party who makes such an application. Therefore, it is clear
that Section 34 of the Arbitration Act does not contemplate
a challenge to an Arbitral Award in the absence of an
application or by a party who has not made any such
application. Hence, Respondent Nos. 2 to 8, who having
admittedly not filed an application under Section 34 cannot
now be permitted to assail the Arbitral Award on any
grounds whatsoever. The Arbitral Award has attained finality
qua Respondent Nos. 2 to 8. Thus, at this stage, to permit
the Respondent Nos. 2 to 8 to make submissions to assail
the Arbitral Award solely on the basis that the present
Appeal is pending, would effectively set to naught the entire
LGC 53 of 56
54 COMAP-18.23.doc
machinery for challenge to an arbitration award as also the
entire scheme of Chapters VII, VII and IX of the Arbitration
Act.
E. We must note, that even on merits, the submissions of Mr.
Upadhyay were, to put it mildly, entirely devoid of merit and
substance. The contention that the reference to arbitration
in the present case was not in conformity with Section 89 of
the CPC is highly misplaced. The judgment of the Hon'ble
Supreme Court in the case of Kerala State Electricity
Board (supra) relied upon by Mr. Upadhyay is also wholly
inapplicable to the facts of the present case since in the case
of Kerala State Electricity Board (supra) the very subject
matter of challenge was the order of reference under
Section 89. In the facts of the present case, Respondent
Nos. 2 to 8 have admittedly not challenged the said order of
reference but have infact thereafter participated in the
arbitral proceedings without any demur or protest including
on the ground of jurisdiction. It is thus we say that this
LGC 54 of 56
55 COMAP-18.23.doc
contention being raised for the first time and at this stage
by the Respondent Nos 2 to 8 is highly misplaced. Equally
the second contention of Mr. Upadhyay that the dispute
between the parties was one which was non arbitrable in
nature since the same was in the nature of a landlord and
tenant dispute is also entirely devoid of merit since
Respondent Nos. 2 to 8 were unable to establish on what
basis this submission was advanced aside from the fact that
such a contention was taken for the first time across the bar
in these proceedings. Also, reliance upon clause 16 of Fifth
Deed by Mr. Upadhyay is equally wholly misplaced since the
said clause was to take effect only (a) in case of dissolution
of the Firm or (b) in the case of a dispute among the
partners. In the present case admittedly, neither of these
eventualities had arisen and more importantly, Respondent
Nos. 2 to 8 and the late Abdul Wahid were never partners
of the Firm. Hence, the question of relying upon and/or the
applicability of clause 16 of the Fifth Deed does not arise at
all.
LGC 55 of 56
56 COMAP-18.23.doc
26. Hence, for the reasons stated aforesaid, we pass the
following order, viz.
a. Appeal Dismissed.
b. The Court Receiver, High Court Bombay, to handover
possession of the said Restaurant Premises to the
Respondent No.1 forthwith.
(ARIF S. DOCTOR, J.) (CHIEF JUSTICE)
AFTER PRONOUNCEMENT :-
At this stage, Mr.Jha, Learned Counsel appearing on
behalf of the Appellants, prays for stay of operation of this order
for a period of eight weeks. Mr.Tamboly, Learned Counsel
appearing on behalf of Respondent No.1, vehemently opposes
the said prayer.
Considering the facts and circumstances of the
present case as noticed above, the prayer for stay of operation
of this order is rejected.
(ARIF S. DOCTOR, J.) (CHIEF JUSTICE)
LGC 56 of 56
