Haider Khan (Deceased) Thr Lrs vs Anjuman-E-Haideri & Anr
2018 Latest Caselaw 2510 Del

$~27 & 28
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                         Judgment delivered on: 23.04.2018
+                    FAO 401/2012
       HAIDER KHAN (DECEASED) THR LRS            ..... Appellant
                    Through: Mr. Shekhar Dasi, Advocate.
                          versus

       ANJUMAN-E-HAIDERI & ANR                ..... Respondents

Through: Ms. Tasneem Ahmadi and Ms. Mahima Rathi, Advs.

Mr. Mehmood Pracha, Mr. R.H.A. Sikander and Mr.Prateek Gupta, Advs. for R-2/Delhi Waqf Board.

+                    FAO 403/2012
       ABDUL MOID KHAN                           ..... Appellant
                    Through: Mr. Shekhar Dasi, Advocate.
                          versus

    ANJUMAN-E-HAIDERI & ANR                  ..... Respondents
                  Through: Ms. Tasneem Ahmadi and Ms. Mahima
                  Rathi, Advs.
                  Mr. Mehmood Pracha, Mr. R.H.A. Sikander and
                  Mr.Prateek Gupta, Advs. for R-2/Delhi Waqf
                  Board.
CORAM:
HON'BLE MR. JUSTICE NAJMI WAZIRI

NAJMI WAZIRI, J (Oral)

CM Nos. 12861/2017 (by R-1 for extension of time), 12937/2017 (by R-1 for vacation of orders dt. 12.09.2012 & 17.12.2013), 40267/2017 (by R-1 for vacation of order dt. 12.09.2012) and 6821/2018 (for modification of order dt. 17.12.2013 and substitution of arbitrator) in FAO 401/2012 CM Nos. 12859/2017 (by R-1 for extension of time), 12939/2017 (by R-1

for vacation of orders dt. 12.09.2012 & 17.12.2013), 40264/2017 (by R-1 for vacation of order dt. 12.09.2012) and 6819/2018 (for modification of order dt. 17.12.2013 and substitution of arbitrator) in FAO 403/2012

1. These applications have been filed under Section 151 of the Code of Civil Procedure, 1908 seeking: (i) modification of the order dated 17.12.2013, and (ii) substitution of the learned Arbitrator to complete the arbitral proceedings in terms of the said order. The facts are that on 22.01.2009 an arbitral Award was passed against the appellant which was impugned under Section 34 of the Arbitration & Conciliation Act, 1996 (the Act). The appellant's petition was dismissed on 01.09.2012. The appeal under Section 37 of the Act against the said impugned order was disposed off by a consent order on 17.12.2013 recording that: (i) the Award dated 22.01.2009 would not be given effect to, and (ii) the order dated 01.09.2012 upholding the said Award would be set aside. The case was remanded for a fresh arbitration with a direction that:

".....the matter be remanded to a newly appointed agreed arbitrator with a direction that the disputes between the parties shall be decided afresh by the learned arbitrator after giving an opportunity to the parties to lead their respective evidence...".

The Court further recorded that:

"...The learned counsel for the parties have agreed to this modality on the condition that the learned arbitrator will make every endeavour to dispose of the matter as expeditiously as possible preferably before 30.04.2014.....".

2. Thereafter, since the arbitral proceedings could not be completed within the aforesaid indicated time, due to the repeated requests, either jointly or otherwise with the consent of the parties, the time was extended by

this Court via orders dated 25.02.2015, 29.01.2016, 27.04.2016, 27.07.2016, 25.10.2016 and 07.02.2017. In the order dated 29.01.2016 the contention of the applicant is recorded that the appellants were not co-operating in the expeditious disposal of the arbitral proceedings. The appellant had not appeared in the proceedings on 28.01.2016 and 29.01.2016. Again when time was extended on 27.04.2016 the appellant had not appeared despite advance copy of the application having been served upon them. When the fourth extension was granted on 27.07.2016, the appellant was again not present. The Court noted:

"...Earlier similar applications were jointly moved but this time only respondent No.1 is coming forward. The reason put-forth for not filing the joint application is that counsel for appellants in these appeals has withdrawn his vakalatnama and at present, there is no counsel for appellants in this appeal...."

.... .............

"....At this stage, learned counsel for applicant-respondent No.1 submits that since appellants are in possession, therefore, they will make all efforts to delay the arbitral proceedings and if it is indicated that if oral arguments are not advanced by appellants herein on the date fixed or at a short date thereafter, then on the basis of written arguments, if so filed, the arbitration proceedings be concluded. Let such a request be made before the learned Arbitrator. It is expected that the appellants would not be allowed to procrastinate the arbitral proceeding......".

3. While granting the fifth extension on 25.10.2016, the Court again noted:

"...On four earlier occasions, similar applications have been allowed and time has been extended. Learned counsel

for respondent No.1 submits that appellants herein are unduly prolonging the proceedings before the learned Arbitrator as they have an interim order operating in their favour, which is to continue till the arbitration proceedings last. Vide last order of 27th July, 2016, the time for completing the arbitration proceedings was extended upto 31st August, 2016. Learned counsel for respondent No.1 informs that the arbitration proceedings are now pending for final hearing. In the last order, it was indicated that the arbitration proceedings be not allowed to procrastinate. It is for the learned Arbitrator to see that the timeline granted on various occasions is respected....".

4. The Court would note that there was no appearance on behalf of the appellant on the said date. The sixth extension was granted on 07.02.2017 and both the parties were represented in the Court. It was recorded that the arbitration proceedings were at the stage of final hearing. The Court directed the learned Arbitrator to endeavour to complete the arbitration proceedings by 31.03.2017. However, it was not done. Hence another extension of time was sought.

5. On 17.04.2017, vide CM Nos. 12861/2017 & 12859/2017 filed in FAO Nos. 401/2012 & 403/2012 respectively an extension was sought, while vide CM Nos. 12937/2017 & 12939/2017 filed in FAO Nos. 401/2012 & 403/2012 respectively, vacation of the order dated 12.09.2012 was sought by respondent no.1.

6. The respondents state that pursuant to the order of the Supreme Court on 08.12.2017 in SLP(C) No. 21165/2017 titled Kartike Enterprises v. Delhi Jal Board, a change of the arbitrator would be necessary. Therefore, the captioned applications seeking modification of the order dated

17.12.2013 and substitution of the arbitrator to complete the arbitral proceedings in terms of the aforesaid order have been filed.

7. The non-applicant/ appellant resists the change of the arbitrator on the ground that: (i) such an application would not lie before this Court, and (ii) if at all the substitution of the arbitrator is to be done, it could be done only by the commercial court in an application under Section 11(6) of the Act. The appellant emphasise on the principle that, when the law provides for a thing to be done in a particular manner, it has to be done in that manner only. In support of his contentions, the appellant relied upon the judgment of the Supreme Court in A.K. Roy & Anr. Vs State of Punjab & Ors. 1986 (4) SCC 326, which held:

"....... 10. A careful analysis of the language of S. 20(1) of the Act clearly shows that it inhibits institution of prosecutions for an offence under the Act except on fulfillment of one or the other or the two conditions. Either the prosecutions must be instituted by the Central Government or the State Government or a person authorised in that behalf by the Central Government or the State Government, or the prosecutions should be instituted with the written consent of any of the four specified categories of authorities or persons. If either of these two conditions is satisfied, there would be sufficient authority for the institution of such a prosecution for an offence under the Act. The provision contained in S. 20(1) of the Act does not contemplate the institution of a prosecution by any person other than those designated. The terms of S. 20(1) do not envisage further delegation of powers by the person authorised, except that such prosecution may be instituted with the written consent of the Central Government or the State Government or the person authorised. The use of the negative words in S. 20(1) "No prosecution for an offence under this Act shall be instituted except by or with the

written consent of" plainly make the requirements of the section imperative. That conclusion of ours must necessarily follow from the well- known rule of construction of inference to be drawn from the negative language used in a statute stated by Craies on Statute Law, 6th edn., p. 263 in his own terse language:

"If the requirements of a statute which prescribe the manner in which something is to be done are expressed in negative language, that is to say, if the statute enacts that it shall be done in such a manner and in no other manner, it has been laid down that those requirements are in all cases absolute, and that neglect to attend to them will invalidate the whole proceeding."

Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. Other modes of performance are necessarily forbidden. The intention of the Legislature in enacting Section 20(1) was to confer a power on the authorities specified therein which power had to be exercised in the manner provided and not otherwise...."

8. He also relies upon a judgment of this Court in Devashis Bharracharya vs Union of India 159 (2009) DLT 780 which held:

"..... 25. The well settled principle that where law mandates something to be done in a particular way, then it has to be done in that way or not at all is so well settled that it needs no elaboration....."

9. The appellant submits that after this Court appointed the arbitrator by its order dated 17.12.2013 it became functus officio, therefore, it cannot substitute or change the arbitrator; that the termination of the mandate of an arbitrator and the procedure for appointment of a substituted arbitrator would have to be only by consent, or if there was an agreement between the

parties or otherwise then in terms thereof, in terms of the procedure prescribed in law. The appellant relies upon the following judgments: Union of India & Ors. Vs Dhanwanti Devi & Ors. 1996 (6) SCC 44, Nimet Resources Inc. & Anr. Vs. Essar Steels Ltd. 2009 (17) SCC 313 and Huawei Technologies Company ltd. Vs Sterlite Technologies Ltd. 2016 (1) SCC 721.

10. The appellant contends that extracting a sentence from the short order of the Supreme Court in Kartike Enterprises (supra), would not be profitable or correct interpretation of judicial precedents, to be a precedent the judgment has to be reasoned and the reasoning only would have the binding force of that law; such reasoning cannot be seen in the order in Kartike Enterprises (supra). Instead, the reasoning in the judgments in Nimet Resources (supra) and Huawei Technologies (supra) would be binding, because they lay down the law that when the mandate of an arbitrator terminates, then a substituted arbitrator can be appointed only in accordance with the provisions for appointment contained either in the arbitration agreement, or in any rules of an institution under which the disputes are to be referred to for arbitration.

11. The appellant further contends that the dispute itself is not arbitrable under section 83 of the Waqf Act, 1995 as it reserves certain category of proceedings to be exclusively determined by the Waqf Tribunal; one such category is the eviction/ tenancy matters. The appellant relies upon the judgment in Booz Allen & Hamilton Inc. vs SBI Home Finance Ltd. & Ors. 2011 (5) SCC 532, which reads as under:

"..... 35. Arbitral tribunals are private fora chosen voluntarily by the parties to the dispute, to adjudicate their disputes in place of courts and tribunals which are public fora constituted under the laws of the country. Every civil or commercial dispute, either contractual or non-contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of arbitral tribunals is excluded either expressly or by necessary implication. Adjudication of certain categories of proceedings are reserved by the Legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not expressly reserved for adjudication by a public fora (courts and Tribunals), may by necessary implication stand excluded from the purview of private fora. Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending, will refuse to refer the parties to arbitration, under Section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes.

36. The well recognized examples of non-arbitrable disputes are : (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes...."

12. The Court is, however, unable to see how this argument can even be raised at this stage because, the appellant had participated in the first round of arbitration proceedings, suffered an arbitral Award as well as dismissal of his petition under section 34 of the Act; the Award and the latter order were

set aside by mutual consent in his section 37 petition. He also agreed to participate in the subsequent fresh arbitration proceedings; and indeed has done so for the past four and a half years, as mandated by this court's order dated 17.12.2013. He cannot now object to the mechanism of resolution of the dispute by arbitration. Furthermore, the scheme of section 83 of the Waqf Act is the establishment of Tribunals to look into matters of eviction of a tenancy or determination of rights and obligation of the lessor and the lessee of such property, but it does not preclude settlement of disputes through arbitration. Therefore, the aforesaid contention is untenable.

13. The appellant states that some of the extensions of time were granted ex parte, and the last extension given on 07.02.2017 for one and a half months, in the presence of both the parties. This period has come to the end. Therefore, the mandate of the arbitrator too terminates under section 29A of the Act, because the arbitration proceedings were to be concluded within a period of two years whereas it has gone on for more than four and a half years, hence no further extension can be granted. The appellant refutes the argument of the applicant that the extensions of time granted earlier amounted to modification of the order dated 17.12.2013, because the extensions were merely a grant by the Court for more time to conclude what was agreed between the parties, i.e. the terms of the agreement remained the same; its substance and essence remained untouched and only time for resolution of the dispute was enhanced by a specifically agreed upon arbitrator. Lastly, it is argued that jurisdiction cannot be conferred on courts/ forums/ Tribunals by a mere consent of parties, or acquiescence or waiver. Reliance for this proposition is placed upon the following judgment:

(i) Jagmittar Sain Bhagat & Ors. Vs Dir. Health Services 2013 (10) SCC 136 which held:

".... 9.. Indisputably, it is a settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior Court, and if the Court passes a decree having no jurisdiction over the matter, it would amount to nullity as the matter goes to the roots of the cause. Such an issue can be raised at any stage of the proceedings. The finding of a Court or Tribunal becomes irrelevant and unenforceable/ inexecutable once the forum is found to have no jurisdiction. Similarly, if a Court/Tribunal inherently lacks jurisdiction, acquiescence of party equally should not be permitted to perpetuate and perpetrate, defeating the legislative animation. The Court cannot derive jurisdiction apart from the Statute. In such eventuality the doctrine of waiver also does not apply......"

(ii) Commissioner of Customs vs Singapore Airlines ltd. 2010 (259) ELT 742, which held:

"......Similarly, as pointed out above, against the order of the Commissioner (Appeals), Customs, only revision is provided that that too, this revision lies to the Central Government. CESTAT does not come into the picture at all in these Rules. Therefore, it is a case of inherent lack of jurisdiction on the part of CESTAT to entertain such an appeal and such an order would clearly be null and void in the eyes of law as also has been seen in the aforementioned cases. In Kiran Singh vs. Chaman Paswan AIR 1954 SC 340, it was observed by the Court that, "a defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of the parties." Therefore, even the consent of the parties cannot cure the inherent lack of jurisdiction. For this reason, even

if there was a misstatement in the covering letter of the Commissioner (Appeals), since there is no estoppels in law, the Respondent may not be allowed to take the plea of estoppels against the statute. It is a well settled principle of law which has been followed in a catena of judgments, that the principle of estoppels has no application against a statue. This principle was reiterated recently, in Vijay Narayan Thatte and Ors. Vs State of Maharashtra & Ors. (2009) 9 SCC 92. Similarly, the Bombay High Court in St. Francis Industrial Training Institute & Ors. Vs P. Jose and Ors. (2007) 1 Bom. CR 675 observed that:

There can neither be an estoppels against a statute nor can jurisdiction upon the Tribunal be confirmed by consent..."

14. The Court does not consider either of the said contentions tenable because: (i) section 29A(4) confers jurisdiction upon the Court to extend the time for completion of the arbitral proceedings and pronouncement of the award, and (ii) sub-section (6) empowers the Court as under:

"....(6) While extending the period referred to in sub- section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material..."

Lest the arbitral proceedings be rendered futile due to the incapacity, demise, disqualification, etc. of an arbitrator, the legislative scheme confers powers upon the Court to substitute the arbitrator. Therefore, insistence of completion of the arbitration only by the agreed arbitrator is untenable. He can be substituted if he is unable to continue as an arbitrator because of a statutory bar.

15. The appellant's contention that this Court has become functus officio after its order of 17.12.2013, too is untenable because in the afore-cited cases, the arbitrator was appointed under section 11(5) & (6) of the Act and it is in those specific circumstances that it had become functus officio; whereas in the present case, the arbitrator was appointed by agreement between the parties especially in the background of the setting aside of the arbitral award and the impugned order under Section 34 of the Act, and the continued occupation by the appellant of the lands belonging to the respondent. The Court had also ordered that the interim order dated 12.09.2012 in favour of the appellant would be continued and operated till the same was modified by the arbitrator. The reliance of the appellant upon Huawei Technologies (supra) too is misplaced because that case related to invocation of Section 11(6) of the Act without complying with the provisions of clause 22.3 of the contract between the parties, which was the subject matter of the said case. In the present case, however, there is no such agreement or terms similar to clause 22.3 of the contract, instead the parties had agreed that the disputes would be decided by fresh arbitration and by consent order dated 17.12.2013. The essence of the order dated 17.12.2013 is that the case be decided afresh by arbitration and it was not merely the appointment of a particular arbitrator.

16. The applicant argues that but for the bar under section 5 of the Jammu & Kashmir Accountability Commission Act, 2002 the arbitrator would have continued with the proceedings and would have possibly rendered an award by now. The substitution of the arbitrator has become necessary and the same cannot be objected so as to render the entire proceedings before the arbitrator as redundant, as that would result in great injustice to the

respondent/ applicant. It relies upon the judgment in Manoj Kumar Sonthalia vs Vivek Goenka & Ors. (1995) 2 MLJ 622, which held as under:

"....The objection next only to the above, on behalf of Mrs. Goenka and her daughters, has been that this Court should decline to review its judgment only because the parties have chosen to settle their differences, as no case for a review in terms of the requirements of Order 42, Rule 1, Code of Civil Procedure, is made out. We are afraid acceptance of such a contention to deny modification or review of a judgment or order on technicalities, which shall confine the court to the orders in Order 47, Rule 1 of the Code will amount to sanctioning in many cases injustice, for, there may be cases in which subsequent events to the judgment/order, may require a modification and such modification in any way shall cause no prejudice to the parties to the proceedings. Any modification/review of a judgment or order in the ends of justice is permissible even in cases where no specific provision of a law is available. Such a review can be done in the exercise of the inherent power of the court, which as regards this Court is found in its Letters Patent and the Rules framed by this Court read with Section 4 of the Code of Civil Procedure, and as shown in Section 151 thereof..."

17. Apropos the appellant's contention that the respondent should have filed an application for change of an arbitrator before the Commercial court under Section 11 of the Act and/or in the pending objections filed by the appellant, the respondent states that it is untenable because the appellant has challenged the interim order of the arbitrator dated 31.12.2016 by way of OMP nos. 2/2017 & 3/2017 in which this Court, on 20.09.2017 ordered:

"..... The learned senior counsel appearing for the respondents has today placed on record an order of the learned arbitrator dated 22.07.2017 stating that the period of the proceedings fixed by the court in FAO No. 401/2012,

titled as Haider Khan (Deceased) Thr. LRs v Haider Khan (Deceased) Thr. Lrs. Has expired. I may note that the court in FAO 401./2012 had on 17.12.2013 fixed certain time limit for the arbitral proceedings. Subsequently, by the order of the same court, the time had been extended. Now no further date has been fixed in the arbitration proceedings.

I am also informed that the respondents have moved an application in said FAO seeking extension of time from the court for the learned arbitrator to complete the arbitral proceeding which is coming up on 08.11.2017.

The learned senior counsel appearing for the petitioners submits that the petitioners are opposing the said application.

To await the order in the said application adjourned to 30.11.2017...."

18. Interestingly, the appellant opposed the substitution of the arbitrator and has not set out any reasons as to why the Commercial Court hearing the OMPs would be an appropriate forum for seeking modification of the order passed in the present FAO. The applicant further contends that the argument that the dispute is not arbitrable under the Waqf Act, is a dishonest and baseless argument because the Act does not preclude/ prohibit settlement of dispute between the parties by way of an arbitration. The consent of the parties for decision of the lis between the parties by way of a fresh arbitration was clearly recorded and an arbitrator was appointed. Proceedings have continued since 2013. In the arbitration proceedings, all evidence has been recorded and the case awaits final arguments and thereafter the arbitral award. The appellant has throughout agreed to the extension of the time and is now resisting the arbitration merely because the arbitrator cannot continue because of the aforementioned statutory bar.

19. The applicant argues that the appellant is occupying the property of the respondents since 1976; he continued to enjoy a stay on dispossession from the said premises by an order of this Court dated 12.09.2012; he is now resisting the very arbitral proceedings under section 83 of the Waqf Act, after having participated in it and having enjoyed the stay of dispossession, for the last almost four and a half years; his conduct would clearly lend to the impression that the appellant does not wish the arbitration proceedings to be concluded. Be that as it may, in the light of the preceding discussions and the unstable arguments of the appellant, the Court is of the view that it can modify the order dated 17.12.2013, especially since the arbitral proceedings have continued in terms of its subsequent orders granting extensions, for completion of the consent order dated 17.12.2013. Therefore, the Court can substitute the arbitrator.

20. In Kartike Enterprises (supra) the Supreme Court has reasoned and ordered under:

"..... Hon'ble Mr. Justice B.A. Khan, former Chief Justice of the J & K High Court, has been appointed Sole Arbitrator by the High Court by an order dated 13th October, 2015. However, we have been informed that Hon'ble Mr. Justice B.A. Khan, former Chief Justice of the J & K High Court, has since taken over as Chairman of the Jammu & Kashmir Accountability Commission. Section 5(e) of the Jammu and Kashmir Accountability Commission Act, 2002 makes it clear that such Chairman cannot practice any profession and if he is practicing any profession, he must cease to practice such profession. In such circumstances, in the place of Hon'ble Mr. Justice B.A. Khan, former Chief Justice of the J & K High Court, we appoint Hon'ble Mr. Justice P.C. Pant, former

Judge of the Supreme Court of India, to be the Sole Arbitrator.

The special leave petitions are disposed of. Pending applications, if any, shall stand disposed of."

21. What is evident from the above, is that the Supreme Court substituted the erstwhile arbitrator Hon'ble Mr. Justice B.A. Khan with another arbitrator. The Court is informed that the order dated 08.12.2017 was subsequently modified by appointing another arbitrator, in lieu of arbitrator appointed on 08.12.2017.

22. Following the said approach, since Hon'ble Mr. Justice B.A. Khan cannot continue as the arbitrator because of the reason stated in Kartike Enterprises (supra) this Court also deems it appropriate to substitute him and accordingly appoints in his stead, Hon'ble Mr. Justice Badar Durrez Ahmed, former Judge of this Court and former Chief Justice of Jammu & Kashmir High Court as the sole arbitrator, to complete the remaining arbitral proceedings and pronounce the Award, preferably within a period of three months from the date of receipt of a copy of this order. The parties shall appear before the learned Arbitrator on 08.05.2018. The learned Arbitrator will fix his own fees.

23. The applications stand disposed off in the above terms.

24. Copy of this order be given dasti to the parties under the signature of the Court Master.

NAJMI WAZIRI, J APRIL 23, 2018/kk