M/S. J. J. Grihanirman Private ... vs Nirmal Kumar Khemka And Others
2023 Latest Caselaw 4295 Cal

July 19, 2023

Court No.19 s.biswas CO 2051 of 2023 M/s. J. J. Grihanirman Private Limited vs.

Nirmal Kumar Khemka and others

WITH

CO 4546 of 2016 M/s. J. J. Grihanirman Private Limited vs.

Parvati Devi Khemka and others

Mr. Debasish Kundu, Sr. Adv.

Mr. Abhishek Haldar Mr. Subhankar Chakraborty Mr. A. Kundu Mr. Saptarshi Bhattacharjee ... for the petitioner in both the revisional applications Mr. V. V. V. Sastry ... for the opposite party nos.1 & 2 in CO 2051 of 2023 Mr. Arijit Bardhan Mr. Rishabh Dutta Gupta ... for the opposite party nos.3 to 14 in CO 2051 of 2023 and opposite party nos.30 to 34 in CO 4546 of 2016 Mr. Vinay Kumar Purohit ... for the opposite party nos.4, 6 to 29 in CO 4546 of 2016

Three major parties are involved in the present

dispute, namely, the petitioner, who is the developer

engaged by the Khemkas, the Khemkas, who had

been granted lease in respect of the property situated

at premises No.23 Rustomjee Street, Kolkata 700019

by the sebaits of the property and the Modis, who

were sold the property, allegedly, behind the back of

the petitioner. The property is a debuttar property.

Both the revisional applications are taken up

together as the issues are interrelated.

On the prayer of the petitioner, CO 4546 of

2016 has been assigned to this court upon being

released by a learned Co-ordinate Bench, before

whom the matter was pending.

The subject matter of challenge in this

revisional application is an order dated September 5,

2016, passed in Title Suit No.44 of 2014, by the

learned Civil Judge (Senior Division), Tenth Court at

Alipore, South 24 Parganas.

The reliefs claimed in the civil suit, are quoted

below:-

"a) Decree for declaration that the suit property described in schedule "A" is a Debutter Estate of the defendant no. 4 and it cannot be encumbered by way of sale, gift, mortgage, long-term lease or otherwise without permission from Principal Court of Civil Jurisdiction;

b) Decree for declaration that the impugned deed of indenture of conveyance dated 12th October, 2010 described in schedule "B" executed by the defendant nos. 4 to 29 in favour of the defendant nos. 30 to 34 without obtaining prior permission from Court is void ab initio, inoperative and not binding upon the plaintiff and it should be treated as cancelled and delivered up;

The Additional District Sub- Registrar South 24 Parganas at Alipore is informed by sending a copy of the judgment of this suit to note that the order of cancellation in the concerned volume.

c) Decree for declaration that the defendant nos. 5 to 29 for their personal gain collusively obtained decree on compromise from the Hon'ble High Court in F.A. No. 246 of 1972 and F.A. 204 of 1974 by practicing fraud upon the Court thereby cheated the Debutter Estate of the defendant no. 4;

d) Decree for declaration that the defendant nos. 5 to 29 have executed the impugned deed misappropriated the sale proceeds detrimental to the interest of the defendant no. 4;

e) A decree of perpetual injunction restraining the defendants as their men, servants, agents and assigns from taking any steps and/or further steps

pursuant to and in terms of the impugned deed dated 12th October, 2010;

f) A decree for specific performance of contract directing the defendant nos.1 to 29 to execute deed of sub-lease in respect of the suit property described in schedule "A" in favour of the plaintiff for a period of 99 years on and from 1st May, 1965; Or alternatively, decree for mandatory injunction directing the Defendant Nos. 1 to 34 to execute and register the Sale Deed in favour of the plaintiff in respect of the suit property on obtaining permission either from the Hon'ble High Court or from the Learned District Judge, South 24 Parganas at Alipore at a price the impugned deed was executed and registered;

g) A decree for confirmation of possession of the plaintiff in respect of the suit property described in Schedule "A";

h) A decree of perpetual injunction restraining the defendants and their men, servants, agents and assigns from interfering with the plaintiff's peaceful possession and enjoyment of the suit property described in schedule "A";

i) A decree for damages against the defendants and each of them to be paid to the plaintiff to the tune of Rs. 2,35,02,718/- ( Rupees Two Crore Thirty Five Lakh Two Thousand Seven Hundred Eighteen) Only for causing extreme hardship, mental pain and agony, loss and/or damage to the avocation/business of its Directors for not executing deed of sublease for 99 years in favour of the plaintiff in respect of the suit property and for executing the impugned deed described in schedule-B without Court's permission thereby permanently creating cloud over the plaintiff's right and enjoyment in respect of the suit property;

j) Injunction;

k) Receiver;

1) Attachment;

m) Such further or other reliefs."

On an application under Section 8 of the

Arbitration and Conciliation Act, 1996 (hereinafter

referred to as the said Act) filed by the Khemkas, the

suit was dismissed as barred under the provision of

the said Act.

This civil revisional application has been

pending since long and the issues raised by the

petitioner have not been decided.

Mr. Kundu submits that Title Suit No.4546 of

2016 was a composite suit. Other reliefs were

claimed against the sebaits, who sold the property to

Mr. Bardhan's clients i.e. the Modis (the opposite

party nos.3 to 14 in CO 2051 of 2023). As such,

under the settled principles of law, the suit could not

have been dismissed. The suit should have been

heard as a whole. Moreover, the court did not have

the jurisdiction to dismiss the suit on an application

under Section8 of the said Act.

Further contention of Mr. Kundu is that the

challenge to the deed of conveyance executed by the

sebaits, behind the back of the petitioner herein (the

developers), was not a part of the arbitration

agreement. The rights of the petitioners in the suit

for declaration and permanent injunction and the

challenge to the deed of sale executed between the

sebaits and Modis, had gone unadjudicated.

Declarations that the Khemkas were to execute a

deed of sub-lease as per the decision of the Hon'ble

High Court, in an earlier suit, had also gone

unadjudicated. The arbitration clause was between

the Khemkas and the petitioner with regard to the

development agreement, in respect of the premises.

The arbitration clause was incorporated in a contract

which was insufficiently stamped. Thus, according to

Mr. Kundu, the revisional application should be

allowed and the order dated September 5, 2016

passed in Title Suit No.44 of 2014, should be set

aside.

The submissions of Mr. Kundu have been

rebutted by the learned advocates for Khemkas and

the Modis on the ground that when the suit was

dismissed as being barred under the provisions of

Arbitration Act, the same would amount to a deemed

decree. The proper remedy of the petitioner would be

in an appeal.

The issue to be decided by this court, in this

revisional application is whether the order impugned

would be amenable to the jurisdiction of this court

under Article 227 of the Constitution of India and if

such question is answered in the positive, whether

the learned court below erred in dismissing the

entire suit, in which reliefs had been claimed against

other persons who were not parties to the arbitration

agreement, entered into between the Khemkas and

the petitioner.

CO 2051 of 2023 is an application challenging

the order dated June 17, 2023 by which the learned

Additional District Judge, 15th Court, Alipore, South

24 Parganas, allowed the misc. arbitration execution

case no. 58 of 2020, thereby rejecting an application

filed by the petitioner under Section 151 of the Code

of Civil Procedure.

By the said application, the petitioner prayed for

dismissal of the execution case on the ground that

the arbitration award was a nullity. The contract

which incorporated the arbitration agreement was

void, as it was not sufficiently stamped.

Mr. Kundu submits that the learned court failed

to take into consideration the following:

a) As per the ratio in Hon'ble Apex Court in N.

N. Global Mercantile Private Limited vs.

Indo Unique Flame Limited & Ors.

reported in (2023) SCC OnLine SC 495, the

award was a nullity. The Hon'ble Apex

Court in paragraph 119 had held that if the

arbitration clause was incorporated in a

contract which was insufficiently stamped,

the same would be a void contract and the

courts could not look into the same.

b) Four Hon'ble Judges Bench of the Hon'ble

Apex Court in the matter of Kiran Singh

and others vs. Chaman Paswan and others

reported in AIR 1954 SC 340, held that the

question with regard to nullity of a decree,

could be raised at any time, even at the

stage of execution or in collateral

proceedings.

c) The application under Section 151 of the

Code of Civil Procedure, was rightly filed

before the learned Executing Court

challenging the executability of the decree,

after the law was declared in N.N Global

(supra)

d) The ratio of the said judgment would have a

retrospective effect.

e) Without adjudication of the validity of the

order by which the Title Suit No.44 of 2014

had been dismissed, the arbitration between

the Khemkas and the petitioner could not be

reached to its logical conclusion.

Mr. Kundu, further submits that this court

must interfere with the order passed in the execution

proceeding on the ground that the learned executing

court misconstrued the provisions of Section 36 of

the Indian Stamp Act. The learned executing court

erroneously held that once the contract had been

accepted in evidence and marked as an Exhibit, the

admissibility of the same could not be questioned.

The decision in N. N. Global (supra), could not be

looked into for the reason that the executing court

could not go behind the award.

Mr. Sastry, learned advocate for the Khemkas

(the opposite party nos.1 and 2 in CO 2051 of 2023),

submits that the validity of the contract on account

of the same being insufficiently stamped, had been

raised in an application under Section 16 of the

Arbitration and Conciliation Act, 1996 before the

learned Arbitrator and the said application was

dismissed.

It is further contended by Mr. Sastry that an

award had been passed directing that 50% of the

constructed area should be handed over to the

Khemkas and the 50% of the same would remain

with the petitioner. Further, cost of Rs.32 lakhs

along with interest at the rate of 6% per annum, was

also imposed upon the petitioner/award debtor. An

application under Section 34 of the said Act was filed

by the petitioner, for setting aside the award. The

said application was dismissed. Against the order of

dismissal, an appeal was filed under Section 37 of

the Act, which is pending hearing.

Mr. Bardhan, learned advocate appears on

behalf of the Modis. The Modis were added in the

execution proceedings. The Modis came in to the

picture when the sebaits of the said debuttar

property, which had been leased to the Khemkas had

sold the property to them. Mr. Bardhan submits that

right title and interest in respect of the entire

property, including the structure raised by the

petitioners, had passed on to the Modis. Mr.

Bardhan submits that the ratio of N. N. Global

(supra) would be applicable in this case. The award

was a nullity. Hence, the execution case should be

dismissed.

Mr. Sastry opposes the submissions of Mr.

Bardhan.

Mr. Kundu , learned Advocate for the petitioner

submits that the contentions of Mr. Sastry were

based on facts, but the legal implication of the ratio

of N. N. Global (supra) was yet to be decided. Also,

the challenge to the initial order of dismissal of the

suit which was a composite suit against the vendors

and Mr. Bardhan's clients had remained undecided.

Neither the sebaits nor Mr. Bardhan's clients were

parties to the arbitration. The arbitration proceeding

was not with regard to such issues.

Heard the parties.

Mr. Sastry hands over an order passed by

another Judge of this court, dated July 13, 2015 in

which, the existence of the arbitration agreement

was noted and the parties were referred to the

arbitration. The petitioner was a party to the said

proceeding.

It also appears that the points raised in CO

4546 of 2016 were raised in an application under

Section 47 of the Code of Civil Procedure filed by the

petitioner, in this execution proceeding. It was

contended that the award was not executable in view

of the fact that the order of dismissal of the suit was

under challenge before the High Court. The validity

of the order of dismissal and the irregularities in the

same, were pleaded in the objection with regard to

the executability of the award.

The application under Section 47 of the Code of

Civil Procedure was withdrawn by the petitioner,

without seeking any liberty to file afresh.

Once again, the petitioner filed an application

under Section 151 of the Code of Civil Procedure

alleging the award to be a nullity, by relying upon

the decision in N. N. Global (supra).

Thus, the objection with regard to executability

of the award, on the ground of pendency of CO 4546

of 2016 was not proceeded with. Such challenge was

abandoned, with the withdrawal of the application

filed under Section 47 of the Code of Civil Procedure.

The application under Section 34 of the said

Act, filed by the petitioner was also rejected on the

ground that award had provided for both the

Khemkas and the petitioner. 50% of the constructed

area was to be retained by the petitioner. No

illegality was found in the award. An appeal

therefrom is pending.

This court is of the view that the orders passed

in different stages of the arbitration and the

challenges to the arbitration proceedings as also the

award, have all gone against the petitioner.

CO 4546 of 2016 was not persuaded with

diligence. The revisional application had been

pending since 2016 and had been listed before

different courts. It had also been dismissed for

default and thereafter restored. Even if, the

submissions of Mr. Kundu that the learned civil

court did not have jurisdiction to dismiss the suit

while deciding an application under Section 8 of the

Arbitration and Conciliation Act and the suit should

have been heard as a composite court by the learned

civil court in view of the decision in Sukanya

Holdings (P) Ltd. v. Jayesh H. Pandya & anr.,

reported in (2003) 5 SCC 531, merit consideration,

this court is of the view that the ultimate decision of

the learned civil court was dismissal of the suit and

such order is an appealable order. Moreover, the

cause of action against the khemkas do not survive

after completion of the arbitration proceedings.

The learned civil court passed the following

order:-

T.S 44/2014 05.09.2016 Both parties are present. Today is fixed for hearing of the petition filed u/s 8 of Arbitration Act filed by defendant no. 1 to 3.

Defendant no. 1 to 3 has filed an adjournment petition which is considered and rejected and the petition filed u/S 8 of Arbitration Act is taken up for hearing. However before Ld. Advocate appearing for defendant no. 1 to 3 begins his submission, Ld. Advocate representing defendant no. 4 to 29 submits that he concedes with the contention of the instant petition filed by defendant no. 1 to 3 and though he has not filed any petition in that regard, the oral submission may be considered by the Court in this regard and both the Ld. Advocates representing defendants submits that the plaintiff is also taking part in the arbitration proceedings and Ld. Advocate appearing for the plaintiff also admits in the open Court in presence of Ld. Advocate representing the defendants that the plaintiff is taking part in the Arbitration proceedings and considering the submission and admission of Ld. Advocates appearing for the plaintiff and defendants, it appears to the Court that the proceedings u/S 8 of Arbitration Act is going on and as such this Court cannot proceed in the instant suit when there is an arbitration clause between the parties and arbitration proceedings is going on according to the said clause and accordingly the suit is dismissed the jurisdiction being barred under Arbitration Act.

It is clear from the above order, that the learned

court upon hearing the parties, came to the finding

that as the arbitration proceedings were continuing

and the plaintiff/petitioner was participating in the

said proceeding, the suit should be dismissed being

barred by the provisions of the Arbitration Act. It was

found to be barred by law.

The petitioner is at liberty to take appropriate

steps against the said order, in accordance with law,

by approaching the appropriate forum.

The issue which this court is required to decide

in CO 2051 of 2023, is whether the execution of the

award should be permitted, as directed by the

learned executing court, in view of the decision in

N.N. Global (supra).

Challenging the delay in the execution

proceedings, a special leave petition was filed by the

khemkas and a counter affidavit to the special leave

petition was filed by the petitioner. Upon hearing the

parties, the Hon'ble Apex Court passed the following

order on March 24, 2023:-

ORDER IA No. 56131/2023

Application seeking permission to file additional documents/facts/annexures is allowed.

As per the additional documents at Annexure P-14 at page 10 an order of the Executing Court has been brought to our notice dated 28.2.2023 adjourning the proceeding to 31.3.2023 on account of the matter pending before this Court.

It is quite obvious to us that the Court has not even understood the purport of the order dated 03.2.2023 after noticing the same. In terms of that order we had asked the execution proceedings to go on day to day. Instead of taking it day to day, an excuse has been set out that the present matter is pending before the Supreme Court of India! We would only like to say that the concerned Judge must be more cautious in ensuring that the orders of this Court are complied with after understanding the same. The matter has been kept before this Court to monitor and ensure that the execution proceedings come to an end and not that the

concerned Judge should be adjourning matters to avoid the matter.

The Court below to forthwith proceed on day to day basis and submit a report to this Court and conclude the proceedings by the next date and place the orders before this Court. List in the first miscellaneous week in July, 2023.

Thereafter, the execution proceeded and the

execution case was allowed by the learned executing

court by passing an elaborate order.

This revisional application has been filed

challenging such order. This court admitted the

revisional application, but refused to pass any stay

order, in view of the order passed by the Hon'ble

Apex Court dated March 24, 2023. By the said order,

the learned executing court had already been

directed to proceed with the execution case, on a day

to day basis and file to a report before the Hon'ble

Apex Court.

Thereafter, the matter appeared before the

Hon'ble Apex Court on July 4, 2023 and the Hon'ble

Apex Court did not make any observations with

regard to the pending revisional application. The

petitioner was represented by learned counsel before

the Hon'ble Apex Court. The Hon'ble Apex Court

directed the learned executing court to complete the

execution and held thus:-

"Learned counsel for the petitioner(s) also points out that the execution petition has more than one part in execution of the

decree. The first being issue of possession, the second is money decree passed. He further submits that in view of the continuing occupation of the petitioner(s), interim order should be passed for deposit of the appropriate damages for use and occupation by the respondent(s).

Insofar as the money decree is concerned, we direct the respondent(s) to deposit a decretal amount in the trial Court within a period of four weeks from today. The Trial Court will also pass an order determining the interim amount for use and occupation of the premises by the respondent(s) till the disposal of the execution proceedings.

The report received from the concerned Court suggests that the execution is being taken up on day to day basis and we expect the execution to be over by the next date."

In view of the aforementioned order passed by

the Hon'ble Apex Court, the execution case has

reached finality. An order has been passed for

completion of the entire execution, in discharge of

the award. Thus, the order impugned dated

November 12, 2018 passed in Execution Case

598/2018, cannot be scrutinized further by this

court. The execution case was allowed. The

observations of the Hon'ble Apex Court clearly

indicate that the execution proceeding arising out of

the award must be over by the next date and the

award must be satisfied.

Any attempt of this court to adjudicate the

revisional application, would be only an academic

exercise. This court cannot reopen the issue. The

execution proceeding has attained finality and the

same is being monitored by the Hon'ble Apex Court.

The challenge to the correctness of the award, is still pending decision in an appeal under Section 37 of the Act and the issues which have been raised in CO 4546 of 2016 and in CO 2051 of 2023 are available in the appeal.

Both the revisional applications are dismissed. There shall be no order as to costs.

Parties to act on the sever copy of this order.

(Shampa Sarkar, J.)