Davinder Singh vs Surjeet Singh
2009 Latest Caselaw 3963 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                Date of Reserve: August 31, 2009
                                               Date of Order: September 25, 2009

+OMP 377/2008
%                                                                     25.09.2009
    Davinder Singh                                             ...Petitioner
    Through: Mr. Harish Pandey, Advocate

       Versus

       Surjeet Singh                                            ...Respondent
       Through: Ms. Ruchita Datta, Advocate

       JUSTICE SHIV NARAYAN DHINGRA

1.     Whether reporters of local papers may be allowed to see the judgment?

2.     To be referred to the reporter or not?

3.     Whether judgment should be reported in Digest?



       JUDGMENT

1. By this petition, the petitioner has assailed the award given by majority

of Members of the Tribunal in favour of respondent.

2. The presiding arbitrator Shri Mahinder Pal and Mr. Madan Singh passed

separate awards in favour of respondent and Mr. Ranjit Singh Khalsa gave a

dissenting award in favour of petitioner. The award passed by Mr. Madan

Singh is dated 1st September 2007 and that of the presiding arbitrator is

dated 20th February, 2008.

3. The disputes between the parties was in respect of an agreement

dated 5th November, 1999 which contained an arbitration clause whereunder

the petitioner had agreed to make a payment of Rs.30 lac to respondent on

or before December 1999 and if he failed to make payment of this amount

OMP No.377 of 2008 Davinder Singh vs. Surjeet Singh Page 1 Of 6 within the stipulated time, he had agreed that in lieu thereof he will transfer

the title of four shops on the ground floor and one hall on top floor of the

premises bearing number DD Complex, R-63, Ramesh Park, Laxmi Nagar,

Delhi in favour of respondent. This agreement was in Gurumukhi script duly

signed by the parties. The parties had business dealings and the amount of

Rs.30 lac had become due and payable to the respondent by the petitioner

and it is apparent from the record that the petitioner had agreed to pay this

amount within specified time period and executed the agreement dated 5th

November 1999. Respondent raised claim in terms of the agreement. The

petitioner, however, disputed the validity and genuineness of the agreement

dated 5th November 1999 and subsequent agreement dated 27th July, 2000.

He took the stand that he had no knowledge of Gurumukhi script and the

agreement was in Gurumukhi. He also raised an issue of limitation and the

issue of jurisdiction of the arbitral tribunal. The arbitral tribunal addressed all

these four issues and on the basis of evidence and documents, the arbitral

tribunal held that the agreement was valid and genuine. The petitioner had

knowledge of Gurumukhi. The petitioner, during evidence, admitted the other

letter in Gurumukhi written by him, although he claimed that he had got this

letter written but that showed that he was corresponding in Gurumukhi. The

tribunal also held that the claim was within the period of limitation and the

arbitral tribunal had jurisdiction to adjudicate the disputes between the

parties. Mr. Madan Singh passed an award for a sum of Rs.15.60 lac in favour

of respondent with pendent lite and future interest @ 18% per annum and

costs of proceedings to the tune of Rs.4 lac. The presiding arbitrator vide

separate award agreed with the award passed by Mr. Madan Singh but stated

that since there was no finding qua interest in the award passed by Mr.

Madan Singh so he was awarding interest for pendent lite and subsequent

OMP No.377 of 2008 Davinder Singh vs. Surjeet Singh Page 2 Of 6 period also. However, it seems that the presiding arbitrator had not seen last

paragraph of the award given by Mr. Madan Singh where future interest was

also awarded.

4. The award has been challenged by the petitioner on various grounds.

The brief summary of the grounds is as under:

(i) The conduct of both the arbitrators was tainted.

(ii) The reliance of arbitrators on report of handwriting expert to conclude that the agreement was genuine was fanciful.

(iii) The agreement should have been sent to CFSL Laboratory for opinion .

(iv) The signatures of petitioner on the agreement had not been proved.

(v) The agreement dated 5 th November 1999 itself was a void agreement since it amounted to paundering of black money into white money.

(vi) The respondent was not an honest citizen since it had not disclosed its income to the income tax authorities and, therefore, no relief should have been given to such a respondent.

(vii) the respondent had failed to establish and prove the execution of the agreement dated 5th November 1999 which was the very basis of the entire award. Thus, the award must fail.

(viii) The arbitral tribunal failed to appreciate the facts and the evidence led by the petitioner and wrongly relied upon the evidence of handwriting expert Mr. B.N. Srivastava. The arbitral tribunal committed gross violation of principles of natural justice in not appreciating the material and the evidence before them in proper perspective.

(ix) There was no legal evidence before the arbitral tribunal to pass the award.

(x) The agreement was for paying Rs.30 lac by December, 1999 or transfer of four shops on ground floor and a hall on the top floor of property bearing number DD Complex, R-63, Ramesh Park, Laxmi Nagar, Delhi.

(xi) The arbitrator has passed the award for recovery of Rs.50.60 lac with pendent lite and future interest and such an award could not have been passed. The interest as awarded by the arbitrator @ 9% per annum was on the higher side.

5. The grounds on which an award can be challenged have been specified

OMP No.377 of 2008 Davinder Singh vs. Surjeet Singh Page 3 Of 6 in Section 34 of the Arbitration & Conciliation Act, 1996 and have been

summarized by Supreme Court in DDA v R.S. Sharma ST 2008 (9) SC 362 as

under:

"12. From the above decisions, the following principles emerge:

               (a)     An Award, which is
               (i)     contrary to substantive provisions of law; or
               (ii)    the provisions of the Arbitration & Conciliation Act,
                       1996; or

(iii) against the terms of the respective contract; or

(iv) patently illegal, or

(v) prejudicial to the rights of the parties, is open to interference by the Court under Section 34(2) of the Act.

               (b)     Award could be set aside if it is contrary to:
               (a)     fundamental policy of Indian Law; or
               (b)     the interest of India; or
               (c)     justice or morality;

6. It is apparent that none of the grounds raised by petitioner fall within

the ambit and scope of Section 34. This Court while entertaining objections

under Section 34 does not act as a Court of appeal and have no jurisdiction to

re-appreciate the evidence and to come to different conclusion. The arbitral

tribunal is the sole judge of the quantity and quality of evidence. The arbitral

tribunal has authority to ignore the evidence which is not relevant and has

also authority to appreciate the evidence.

7. A perusal of award would show that a request was made to CFSL to

examine the documents in question but CFSL expressed its inability to

entertain the request. It is only under these circumstances that the arbitral

OMP No.377 of 2008 Davinder Singh vs. Surjeet Singh Page 4 Of 6 tribunal referred the documents to a professional handwriting expert and

finger print expert. No fault can be found with the tribunal for not considering

the CFSL report since there was no report of CFSL.

8. Learned counsel for petitioner argued that the petitioner had made an

application under Section 17 of the Arbitration & Conciliation Act, 1996 for

sending the documents to CFSL and this application was not decided by the

tribunal. I consider that this argument is fallacious. In fact, the tribunal had

specifically disallowed the request of sending the documents to CFSL as CFSL

had refused to entertain such a request when the document was earlier sent.

The tribunal observed that implication of this aspect would be considered at

the final stage and the Tribunal at final stage had considered that the

evidence provided by handwriting expert was good enough to come to the

conclusion that the document was a genuine document. This Court cannot

substitute the opinion rendered by the tribunal by its own opinion after

reconsidering the evidence.

9. The petitioner has failed to show as to how the claim of respondent was

barred by limitation or how the tribunal had no jurisdiction. The petitioner's

counsel contended that the award was contrary to public policy since the

agreement showed that the parties indulged into black money transactions. It

seems from the record and from the award that the parties, while doing

business, were not maintaining regular accounts and they were having

transactions/ dealings with each other on the basis of rough notes which used

to be destroyed and new notes used to be prepared. It seems that a violation

of the Income Tax Act was being done by both parties. I think the petitioner

can approach the Income Tax Authorities for taking appropriate action against

OMP No.377 of 2008 Davinder Singh vs. Surjeet Singh Page 5 Of 6 both the parties for violation of provisions of the Income Tax Act but the

petitioner now cannot take a plea that since both the parties were involved in

transactions without maintaining proper accounts, the award should be held

contrary to public policy. However, a notice of this award be sent to Income

Tax Authorities for taking appropriate action as per law. It is observed that

the amount of award shall be treated as income of respondent and

respondent shall be liable to pay income tax as applicable coupled with

penalty under the provisions of Income Tax Act to the Income Tax Authorities

within 60 days of receipt of the amount from the petitioner.

10. In view of my foregoing discussion, I find that none of objections raised

by petitioner is tenable in the eyes of law. The petition filed by the petitioner

is hereby dismissed. No orders as to costs.

September 25, 2009                                      SHIV NARAYAN DHINGRA J.
rd




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