Shri R.S. Gambhir vs Shri S.S. Gambhir
2002 Latest Caselaw 1154 Del

JUDGMENT

S. Mukerjee, J.

1. This appeal has been preferred against the judgment of the learned Single Judge dated 21.12.2000 holding that the original petitioner/respondent is entitled to seek a reference to arbitration of certain disputes between the parties and to that extent allowed arbitration application AA 61/96.

2. Before naming the Sole Arbitrator, the learned Single Judge deferred the matter for two weeks, for ascertaining whether the parties would be agreeable to name a person of their mutual choice.

3. Before the matter could crystalise along those lines viz. of there being an agreed name, the present appeal was preferred by the appellant who was respondent before the learned Single Judge.

4. The prayer of the respondent/petitioner in the Arbitration Application No. 61/96 was to refer certain disputes between the parties relating to firm Camy Enterprises, for adjudication by arbitration in terms of Clause 17 of the agreement between the parties.

5. It may be worthwhile to note at this stage that in all there were three firms having at least one member of each of the contesting families/groups, as a partner. M/s. Camy Enterprises, it is agreed, was having the maximum turn over. As regards the other two firms viz. Venus Electronics and Citizen Electronics, there is no prayer or submission made regarding reference of any dispute to arbitration, in relation to either of those two firms.

6. At this stage, for the purposes of completing the narration, it may be mentioned that there was an earlier litigation between some of the parties, relations, also in the form of an application under Section 20 of the Arbitration Act which had been instituted in the District Court, being Suit No. 602/95.

7. The said application had been filed by the wife of the present appellant. That application was subsequently withdrawn upon a statement made by the wife of the appellant (petitioner-therein) to the effect that in view of alleged settlement between the parties, she is not interested in pursing with that application.

8. It ma also be mentioned that by the same very impugned order dated 21.2.2002, the learned Single Judge had also allowed OMP 23/97, being the objections filed by the present respondent (original petitioner). As a result of the allowing of the objections, the Award dated 11.8.95 stood set aside.

9. After initially hearing the parties briefly on their respective contentions, we had made efforts to see if the matter could be resolved by the parties agreeing to the matter being referred to the arbitration of an agreed arbitrator from amongst the retired Judges, or anyone else mutually acceptable to both the parties. Various possibilities were discussed including the reference of the disputes regarding the other two firms, which were suggested to be also existing, or would be arising in case the Award dated 11.8.95 was to stand as set aside.

10. However for one reason or the other, despite every effort on our part and notwithstanding the cooperation of the learned counsel to the extent possible in the face of otherwise rigid attitude of their respective clients, no settlement could be arrived at and ultimately the matter was heard on merits for which purpose, we heard them at length.

11. The appellant who was the respondent before the learned Single Judge, has set up the case that the two families of R.S. Gambhir and S.S. Gambhir had been carrying on business in partnership. Three firms bad been set up by them in each of which one member of each family was a partner.

12. During the course of their business together, the appellant and the respondent also acquired certain property jointly, being shops and other properties.

13. Some of these properties were acquired under agreement to sell, while other properties were acquired in the name of the firm "Venus Electronics".

14. It is the case of the appellant that after disputes arose between the parties, the wife of the appellant Smt. Satwant Kaur filed Suit No. 602/95 in the Court of Sh. P.S. Teji, Additional District Judge seeking appointment of an arbitrator to adjudicate upon the disputes. During pendency of those proceedings the parties agreed on arbitration by one Sh. Trilochan Singh, popularly known as "Veerji". It is further the case of the appellant that by the good offices of Sh. Trilochan Singh, the matters were resolved, and in terms of the same an Award dated 11.8.95 was drawn up by the said agreed arbitrator, as corroborated by several "writings" between the parties, as also by their "conduct" in separating themselves into different businesses as well appellant, the document in the form of Award of Sh. Trilochan Singh, as well as other contemporaneous writings, as well as conduct of the parties, establishes the fact that there was an Award converging all the firms and properties and that thereafter no occasion survived for another arbitration application to be filed by the respondent (original petitioner) in the form of AA 61/99.

15. As regards the other aspect viz. the objections against the Award preferred under Section 30 and 33 of the Arbitration Act (OMP 23/97), which have been allowed by the learned Single Judge who has thereby set aside the Award dated 8.11.95, the alleged grounds on which the same have been set aside are contended to be not at all valid, or proper, or lawful grounds in law to set aside such an Award.

16. According to the appellant one of the facts which weighed with the learned Single Judge, is a discrepancy regarding the stamp paper being not genuinely procured, in relation to which aspect the appellant submits that there was no allegation at all to the effect that Sh. Trilochan Singh Arbitrator had himself procured the said stamp paper. In fact the suggestion of the appellant is that as per informal arrangement between the parties, it was the respondent who had procured the stamp paper and both the appellant as well as the Arbitrator, had verily believed the respondent that he must have properly procured the same, little knowing that the respondent deliberately allowed this technical flaw to remain with the idea of taking unjust benefit subsequently (i.e. if in case the matter goes against him).

17. The contention of the appellant is that the only allegation of misconduct, if at all, against the arbitrator Sh. Trilochan Singh, is that he did not give a copy of the Award to the respondent. This contention, according to the respondent, is also irrelevant and extraneous to the determination of the question as to whether an Award has to be set aside or not.

18. Yet another grievance of the appellant, is that after spending a good deal of effort, and on the basis of his personal credibility, the arbitrator Sh. Trilochan Singh was able to persuade the parties to divide their joint business and properties, and all parties having accepted such division and partition, had signed various documents voluntarily and as such since there is not even an allegation that the documents were signed under mistake or duress of coercion, therefore the Award was liable to be upheld and the learned Single Judge committed a grave error of law in setting aside the Award.

19. It is also grievance of the appellant that the setting aside of the Award, is resulting in miscarriage of justice since it is enabling the respondent, who is allegedly a party playing mischief and carrying out manipulation, to get a premium from the mischief and manipulation, whereas the innocent persons viz. appellants are suffering.

20. Yet another grievance of the plaintiff, is that the learned Single Judge delivered the final judgment in the case before him, without even deciding the applications filed by him. The relief claimed in these IAs was such that it allegedly went to the root of the matter. One of these IAs (IA No. 477/2000 in OMP NO. 23/97) was regarding prayer for framing of additional issues. Had the learned Single Judge framed the issues, admission/denial of documents would have taken place and objections by way of evidence could have also been filed. However, learned Single Judge did not decide this application. The second application (IA No. 502/2000) was filed under Order 13 Rule 2 for placing certain additional documents on record, which application was also not decided by the learned Single Judge. By not taking any decision either way on any of these applications, according to the appellant, there has resulted miscarriage of justice.

21. A further grievance of the appellant, is that the learned Single Judge erred in observing that the effect of the documents which allegedly were witnessing dissolution of the partnership and the division of properties, shall be decided by way of appropriate proceedings. According to the appellant, the learned Single Judge failed to appreciate that once the partnership itself stood dissolved thereafter there was no question of making any reference to arbitration.

22. The appellant is also aggrieved of the finding of the learned Single Judge that all the disputes had not been referred for arbitration. According to the appellant, the said finding is directly contrary to the documents on record, execution of which has not been denied by the respondent.

23. Finally, the grievance of the appellant is that the learned Single Judge has drawn an adverse inference against the arbitrator, on the ground of language adopted by the said arbitrator Shri Trilochan Singh, not being that of a layman. According to learned counsel for the appellant, the Award cannot be set aside on such a hyper-technical plea. In any case it was urged on behalf of the appellant, that the arbitrator was a literate person, who was also a qualified engineer, and the choice of language adopted by the arbitrator certainly does not warrant setting aside of the Award of drawing of any adverse inference against the same, as has been done by way of the impugned order.

24. As regards the stand of the respondent, in relation to the alleged Award dated 11.8.1995, it was contended that the same is vitiated by misconduct, and otherwise also is liable to be set aside since the stamp paper on which the Award is engrossed, is bearing certain serial numbers, which do not co-relate with the actual entries in the Sale register. Not only the name

of Shri Trilochan Singh is not mentioned in the Register, but also there are no serial numbers 1088A and 1088B at all. While Sl.No. 1088, pertains to a stamp paper of Rs. 2/- purchased by one M/s. Sunder Engineering Ltd. a Criminal complaint was also lodged with the police pursuant to which FIR No. 71/97 has been registered against the stamp vendor and Shri Trilochan Singh. The disclosure statement by stamp vendor and one Shri Om Prakash (his accomplice), before the police has established that the appellant Along with his brother-in-law Surinder Singh and the Arbitrator Trilochan Singh, allegedly concocted a back-dated Award on a stamp paper, date of purchase of which had been ante-dated. According to the respondent, the Award having been so procured by playing a fraud, is thereby vitiated and a nullity in the eyes of law.

25. The respondent had filed objections on various other as well viz. that the award, according to him, had not been registered whereas it purported to be dealing with immovable properties. The arbitrator it is further alleged, had travelled beyond his jurisdiction, and had tried to decide disputes about which there was not even a reference. The petition filed by Smt. Satwant Kaur wife of the appellant in the Court of Shri P.S. Teji, Additional District Judge, had been filed in respect of only one business concern and as such the Arbitrator could not have extended the scope of reference to the other two firms and other properties.

26. A further grievance of the respondent in his objections filed by learned Single Judge was that there was no material at all, nor any legal or factual basis for awarding of compensation of Rs. 25 lakhs in favor of the appellant, and the arbitrator had simply gifted that amount to the appellant without any valid right or entitlement.

27. It was respondent's objection that the purported Award has been made with undue haste since it came within twelve days of Shri Trilochan Singh being appointed, and that too without recording any proceedings or evidence.

28. The Award also does not contain any reasoning and reflected non-application of mind. Moreover the purported authority, if at all, was only to mediate, conciliate and to divide joint business and joint properties and not to enter adjudication by arbitration.

29. No copy of the Award was made available to the respondent nor was the same served upon the respondent/objector or published as per requirements of law. It was only while inspecting the Court record of AA.61/96, that the respondent/objector came to know about the same having been placed on the file of the Court.

30. We have duly considered the submissions of learned Counsel for the parties and have also gone through the impugned judgment of the learned Single Judge dated 21.12.2000. We entirely agree with the conclusion of the learned Single Judge, that the respondent (petitioner/objector before the learned Single Judge) is entitled to the relief of the award in question being set aside as invalid and as having no legal effect, and also qua the relief of reference of the disputes regarding Camy Enterprises being referred for adjudication by arbitration to any retired Judge of this Court in relation to disputes covered by AA.66/96.

31. However, for the reasons mentioned by us hereinbelow in the subsequent para of the judgment, we do not propose to enter into a discussion of each and every finding returned by the learned Single Judge, and/ or whether all those findings are to be upheld in toto; or for that matter whether some of those conclusions, can be sustained by some other reasoning in substitution or in addition to the finding son the basis of which the learned Single Judge had held in favor of the respondent, and against the appellant.

32. In our considered view, the appeal is required to be dismissed on the sole and basic ground that the impugned Award dated 11.8.1995 has not been properly filed, and rather was brought on the record of the proceedings of the learned Single Judge, in a totally invalid and non-est manner of being filed as a document by the appellant (respondent before the learned Single Judge), to contest the petition of the respondent/ original petitioner before the learned Single Judge.

33. It is well-settled that an Award can be filed either suo motu by the Arbitrator or on direction made by the Court upon an application being made by either of the parties. Thirdly, either of the parties may on being so authorised by the Arbitrator, file the Award in the Court. In the present case, none of these eventualities has taken place. ON the other hand, the so-called award was simply filed as a document by the appellant, who was respondent before the Court below. A document filed in this manner, even it was an award, would be a nullity in the eyes of law since by the manner of coming on record, the Award is non-est, and for this additional reason indicated by us, and also as we agree with the conclusion of the learned Single Judge, this appeal has necessarily to fail.

34. Consequently the appeal is dismissed. The order of the learned Single Judge dated 21.12.2002, is upheld.

35. Furthermore since the appellant, perhaps due to his challenging the said order by way of appeal, having not participated in the process of working out as an agreed person to act as a sole arbitrator, we direct that both parties shall within a period of two weeks from to-day exchange a list of three names each, to emanate from each side and to be simultaneously exchanged at a meeting to be held at 4.30 P.M. on 9th of August, 2002 in the lobby on the ground floor of the Delhi High Curt premises, for which purpose we direct that all the parties shall remain present Along with their counsel on the said date, time and venue indicated by us. The parties will discuss names contained in their respective lists and will make an endeavor to finalise the same. Unless extended by mutual consent in writing, if the discussions break down or remain inconclusive, it should be deemed that there has been no consensus on the agreed name. The parties are directed to appear before the learned Single Judge on 19.8.2002 when the case (AA.No.61/96) will be listed and on that date the parties will pint out the development taking place and in that eventuality, the learned Single Judge shall appoint the agreed Arbitrator or in the event of no consensus will proceed to appoint any retired High Court Judge as the sole arbitrator in terms of the order dated 21.12.2002.