Karnataka High Court
Sri Aurel D'Souza vs Sri Arun D'Souza on 14 June, 2023
Bench: H.P.Sandesh
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MFA No. 4287 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF JUNE, 2023
BEFORE
THE HON'BLE MR JUSTICE H.P.SANDESH
MISCELLANEOUS FIRST APPEAL NO.4287 OF 2014 (AA)
BETWEEN:
SRI AUREL D'SOUZA,
S/O SRI MARCEL D'SOUZA,
AGED ABOUT 41 YEARS,
ANGEL HOUSE,
NEAR RAILWAY BRIDGE,
ULLAL HOIGE, PERMANNUR POST,
MANGALORE TALUK-575 001.
...APPELLANT
(BY SRI B.L. ACHARYA, SENIOR COUNSEL ALONG WITH
SRI KISHOR B.K., ADVOCATE)
AND:
1. SRI ARUN D'SOUZA,
Digitally signed
by SHARANYA T S/O SRI MARCEL D'SOUZA,
Location: HIGH AGED ABOUT 39 YEARS,
COURT OF
KARNATAKA
1ST CROSS, PANDITH HOUSE,
SANTHOSHNAGAR,
MUNNOOR POST AND VILLAGE,
MANGALORE -575 001
2. SRI UMESH SHETTY (ARBITRATOR),
RETIRED DISTRICT & SESSIONS JUDGE,
NO.205, IBROSE APARTMENT,
JAIL ROAD, MANGALORE-575003.
...RESPONDENTS
(BY MS. BINDUSHREE, ADVOCATE FOR
SRI B.V. KRISHNA, ADVOCATE FOR R1,
R2 SERVED)
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MFA No. 4287 of 2014
THIS MFA IS FILED UNDER SECTION 37(1)(b) OF
ARBITRATION AND CONCILIATION ACT, AGAINST THE
JUDGMENT AND DECREE DATED 20.03.2014, PASSED ON A.S
NO.3/2011 ON THE FILE OF THE I ADDITIONAL DISTRICT
JUDGE, D.K, MANGALORE, DISMISSING THE PETITION UNDER
SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT.
THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Heard the learned counsel for the appellant and the
learned counsel for respondent No.1.
2. This appeal is filed challenging the judgment and
decree dated 20.03.2014, passed in A.S.No.3/2011, on the
file of the I Additional District Judge, Dakshina Kannada,
Mangalore.
3. The main contention of the learned counsel for
the appellant is that according to the claimant before the
arbitrator, there was a partnership firm i.e., Seabird
Enterprises and the said partnership came into existence
for fishing activities by using the boat which has been
purchased in the year 1994 on cost of Rs.5,80,000/- and
investment is 50% each. The learned counsel would
submit that the purchase as well as partnership deed is
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disputed by the appellant and contend that there is no such
partnership deed and the same was registered in individual
capacity. The learned counsel submits that nothing is
placed on record before the arbitrator for proving of
partnership and no books of accounts are maintained and
also no office at all and nothing is placed before the
arbitrator as well as before the Court below while
considering A.S.No.3/2011. The learned counsel submits
that the appellant has produced the document to show that
it was in his individual capacity and not partnership.
Inspite of the documents are placed on record, the same
has been disbelieved by the arbitrator. The Trial Court also
failed to take note that the arbitral award is in conflict with
Public Policy of India. The reasonings and conclusion of the
arbitrator were not in accordance with the evidence and the
probabilities. The very admission given by the claimant is
also not considered by the arbitrator with regard to the
payment is concerned. The documents of Exs.R.6 and 3
i.e., registration certificate and policy and identity card
issued by the Deputy Director of Fisheries at Ex.R.1, are
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not considered by the arbitrator and committed an error in
passing such an award and the Trial Court also erroneously
confirmed the same and hence it requires interference of
this Court.
4. Per contra, the learned counsel for respondent
No.1 would contend that there was no dispute with regard
to the business from 1994 to 2004, but denied the very
execution of Exs.P.1 and 2. When the appellant asserts
that those documents are not executed, he has not taken
any steps to prove that the signature does not belong to
him. The dispute was arisen in 2004 when the demand
was made to furnish the accounts and share the profit.
The learned counsel would contend that the arbitrator
taken note of Exs.P.1 and 2 i.e., sale agreement with
regard to the purchase of boat and partnership deed
entered into in the year 1995. When there was no dispute
between the parties with regard to the business and
sharing, the question of disputing the same does not arise.
When the appellant turned hostile to the business, then
made the claim and the same has been considered by the
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arbitrator as well as the Trial Court in A.S.No.3/2011. In
the suit also, the Trial Court comes to the conclusion that
scope of Section 34 of the Arbitration and Conciliation Act,
1996 ('the Act' for short) is very limited and given the
reasoning for dismissal of the suit and sound reasons are
given in A.S.No.3/2011 and hence it does not require
interference of this Court. The learned counsel submits
that scope of Section 37(1)(b) of the Act is very limited and
while challenging an appealable order, the question of
entertaining the same does not arise.
5. Having heard the learned counsel for the
appellant and the learned counsel for respondent No.1 and
considering the material on record, the point that arise for
the consideration of this Court is:
"Whether this Court can invoke Section 37 of
the Act to set aside the order passed in
A.S.No.3/2011 and consequently the order
passed by the arbitrator?"
6. Having heard the respective learned counsel and
considering the grounds urged in the appeal as against the
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order of arbitrator and the order passed in A.S.No.3/2011,
this Court would like to extract the very proviso of Section
37 of the Act, which reads as follows:
"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) refusing to refer the parties to arbitration
under Section 8;
(b) granting or refusing to grant any measure
under section 9;
(c) setting aside or refusing to set aside an
arbitral award under section 34.
(2) An appeal shall also lie to a Court from an
order of the arbitral tribunal--
(a) accepting the plea referred to in sub-section
(2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim
measure under section 17.
(3) No second appeal shall lie from an order
passed in appeal under this section, but nothing in
this section shall affect or take away any right to
appeal to the Supreme Court."
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7. Having considered Section 37 of the Act, the
scope is very clear. This appeal is filed invoking Section
37(1)(b) of the Act, but actually the provision applicable is
Section 37(1)(c) of the Act, i.e., setting aside or refusing to
set aside an arbitral award under Section 34. The main
contention of the learned counsel for the appellant is that in
order to prove the factum of existence of partnership and
both of them have done the partnership business, no
document is placed on record i.e., bank account and also
no office at all. The learned counsel brought to the notice
of this Court the terms and conditions of the partnership
deed. The learned counsel would contend that the very
documents of Exs.P.1 and 2 are disputed. The arbitrator
relied upon the documents of Exs.P.1 and 2 for having
purchased the boat and while purchasing the boat, both the
appellant and respondent No.1 are parties i.e., in the year
1994 and sale consideration is Rs.5,80,000/- in respect of
the said boat. It is the contention that it was a partnership
firm in the name of Seabird Enterprises and the same is for
fishing activities by using the boat. It is important to note
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that the document of Ex.P.2 is of the year 1995 with regard
to the partnership between both of them. It has to be
noted that when the appellant has disputed the documents
of Exs.P.1 and 2, no steps were taken before the arbitrator
or in A.S.No.3/2011 with regard to the contention of denial
of the documents and when the party asserts that he is not
a party to the document, ought to have taken steps to
prove the contention and the person who asserts he has to
prove the same and the burden lies on him and no such an
attempt is made. The arbitrator relied upon Exs.P.1 and 2
and the Court in A.S.No.3/2011 taking note of the scope of
Section 34 of the Act discussed in paragraph No.32 in
coming to the conclusion that the arbitrator has
appreciated both oral and documentary evidence placed
before him and discussed regarding the dispute between
the parties and arrived at a conclusion assigning the
reasons. The Trial Court comes to the conclusion that the
Court cannot re-appreciate all such materials to arrive at a
different conclusion. The scope of the present suit filed
under Section 34 of the Act is very limited and the burden
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is upon the plaintiff to bring the suit within four corners of
Section 34(2) of the Act. When he fails to make out a
ground as specified under sub-Section (2) of Section 34 of
the Act, the plaintiff will have to fail.
8. The learned counsel for the appellant also
contend that there was no existence of partnership and
both the arbitrator as well as the Court in A.S.No.3/2011
while exercising the power under Section 34 of the Act,
committed an error. There is a definite finding with regard
to the existence of the partnership and also an agreement
for purchase of boat in the year 1994 and dispute was
arisen in 2004 onward when the demand was made and
there was no dispute between 1994 to 2004. This Court
cannot exercise the powers under Section 37(1)(c) of the
Act, unless a case is made out that both the arbitrator as
well as the Court in A.S.No.3/2011 has passed any
perverse order. The arbitrator has considered both oral
and documentary evidence placed on record and the Court
in A.S.No.3/2011, within purview of Section 34 of the Act,
considered the matter and hence this Court cannot come to
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a conclusion that the partnership has not been proved
when the documents Exs.P.1 and 2 is relied upon by the
arbitrator and the same has been accepted by the Court.
When the appellant disputed the very documents, he has
not taken any steps to prove his contention that he is not a
party to those documents. Under the circumstances, I do
not find any merit in the appeal to come to a other
conclusion by exercising the powers under Section 37(1)(c)
of the Act.
9. In view of the discussions made above, I pass
the following:
ORDER
The appeal is dismissed.
Sd/-
JUDGE
MD
