2. This miscellaneous first appeal is filed under Section
other reliefs as deemed fit under the circumstances of the case.
3. The appellant sought the following reliefs before the
C. RESTRAIN the 1st and 2nd Respondents and
anybody claiming through or under them by granting a
permanent injunction from interfering with the peaceful
possession of the Schedule properties by Mr. Jabir
Asghar.
4. While seeking such reliefs described the schedule A
to D of the claim statement. It is contended that one Meeran
Mohamed Abdul Gafoor who had purchased the Schedule 'A'
property on 09.03.1939, gifted it to his daughter one
Khurshidunnisa under two gift deeds dated 23.09.1946 and
05.02.1951. The said Khurshidnunnisa, in turn gifted it in favour
of her three daughters i.e., respondent Nos.1 and 2 and one
Najma Jabir - late wife of one Jabir Asghar - the proprietor of
the claimant concern and mother of respondent Nos.3 to 5, by
separate deeds dated 11.01.1988. During the year 2003,
respondent Nos.1 and 2 approached the claimants' proprietor-
Jabir Asghar and expressed their interest to develop the 'A'
schedule property by constructing a residential or commercial
complex thereon; after holding several meetings between and
amongst the said Khurshidunnisa, respondent Nos.1 and 2 and
also late Nazma Jabir and the claimant, respondent Nos.1 and 2
and late Najma Jabir offered the claimant to undertake at its cost
the construction of a building on the 'A' schedule property
comprising basement, ground, first and second floors and to give
50% built up area in the building along with 50% undivided
interest in the schedule 'A' property apart from exclusive right to
own the terrace portion of the 'B' schedule property, on its
paying them certain money also. It was further agreed that the
claimant in exercise of its exclusive terrace rights, may also put
up any construction thereon. The claimant's proprietor-Jabir
Asghar accepted that offer and consequently there came to be a
Joint Development Agreement (JDA) executed between and
amongst them on 17.01.2004 and it was registered also.
Simultaneously with the execution of JDA, respondent Nos.1 and
2 and their sister late Najma Jabir also executed a power of
attorney in favour of the claimant so to enable it to do various
acts and deeds, inter-alia to construct a multi
storied/commercial and to sell, convey or transfer their 50% of
the undivided interest in the 'A' Schedule property. Under that
power of attorney respondent Nos.1 and 2 along with late Najma
Jabir received monetary consideration in terms of Clause 10 of
JDA and hence, the sane was coupled with interest and was not
revocable.
5. The claimant's (developer's) portion, i.e., 50% of the
total built up area shall be its property as and when the
construction was completed. In the event of any dispute or
difference arising between the parties thereto, which cannot
resolved amicably, the parties were required to appoint an
arbitrator each of their choice and such arbitrators shall with
mutual consent appoint an umpire and the said arbitrator/umpire
shall together resolve the disputes or differences in accordance
with the Arbitration and Conciliation Act, 1996. With a view to
assure proper title to the claimant in respect of its entitlement of
50% undivided share in the 'A' schedule property pursuant to
the execution of Joint Development Agreement and the power of
attorney, Khurshidunnisa, respondent Nos.1 and 2 and their
sister late Najma Jabir all executed a registered deed on
25.07.2005 confirming the HIBA made in their favour. Pursuant
to the execution of JDA and power of attorney, the claimant
undertook several acts and works, which are extracted
hereinbelow:
• Borrowed a loan of Rs.75,00,000/- (Rupees Seventy
Five Lakhs) from SBI, Shivajinagar, for the purpose of
construction of the Schedule 'B' property,
• Engaged M/s. Architects Inc Architects for preparation
of various drawings for the construction of Schedule
'B' property,
• Applied for and obtained the plan sanctions from BBMP
for construction of the schedule 'B' property,
• Engaged engineers and contractors for the
construction of Schedule 'D' property.
• Invested its own funds to the extent of Rs.2,00,000/-
(Rupees Two Crore only) towards the construction of
Schedule 'B' property.
• Regularly inspected the project site and monitored the
progress of construction.
• Applied for and obtained amalgamation of khata in
respect of Schedule 'A' property.
• Applied for and obtained necessary sanction and
permission for water and electricity supply to Schedule
'B' property.
• Repaid substantial portion of the loan amount along
with interest.
6. It is the contention of the claimant that he has spent
a great deal of time, energy and money in ensuring construction
of the 'B' schedule property as planned. In the JDA though it
was stated that residential apartment would be constructed but,
at the time of commencement of construction the claimant, the
respondent Nos.1 and 2 and also late Najma Jabir jointly decided
to construct a commercial building on the 'A' schedule property
with a right to the claimant to construct a residential pent house
on the terrace portion of the 'B' schedule property. Accordingly,
the claimant got the construction plan revised and sanctioned by
BBMP. The respondent Nos.1 and 2 not only were aware of such
a change of the use of the land/construction, but also actively
consenting for it used to visit the construction site regularly. It
is also the contention that after the completion of the
construction of 'B' schedule property in the year 2006, the
claimant, respondent Nos.1 and 2 along with Najma Jabir having
decided to let out the 'B' schedule property, authorized the
claimant to look for a potential lessee; the claimant, met the
representatives of M/s. Great Wholesale Club Limited (now
known as M/s. Spencers Retail Pvt. Ltd.) and after several
meetings, the claimant, respondent Nos.1 and 2 and late Najma
Jabir entered into an agreement of lease and leased them the 'B'
schedule property on monthly rent. Along with lease agreement,
the parties also entered into an agreement of hire, where under
certain movables were also rented. As per the said agreements,
the lessee was required to pay 50% of the rent to the claimant
and 16.66% each to the respondent Nos.1 and 2 and late Najma
Jabir.
7. M/s. Spencers who occupied the 'B' schedule
property as lessees started paying rental as per the ratio
aforesaid. In the meanwhile, Jabir Asghar-proprietor of the
claimant-Concern, moved into schedule 'D' property along with
his family and has been residing there, by paying all the
necessary taxes. Najma Jabir-wife of Jabir Asghar-claimants'
proprietor passed away on 12.03.2010 leaving behind him
(husband) and three daughters i.e., respondent Nos.3 to 5; so,
the claimant, on his behalf himself and also on behalf of
respondent Nos.3 to 5 issued a letter to M/s. Spencers informing
them to pay it the share of the rental of late Najma Jabir and
consequently M/s. Spencers were paying so. In exercise of the
powers given to it under the power of attorney dated
17.01.2004, the claimant executed a sale deed on 08.09.2011 in
favour of itself i.e., Jabir Asghar to convey himself the 'C' and 'D'
schedule properties and consequently, got the khata of that
property also changed to his name. That being so, claimant was
shocked to receive a notice caused by respondent Nos.1 and 2
claiming among others that they had cancelled the power of
attorney issued in its favour. Further, they and Khurshidunnisa
all had also revoked the confirmation deed dated 25.07.2005.
Such revocation, prima facie is illegal and a unsustainable in law
as power of attorney being one coupled with interest in the 'A'
schedule property on which the claimant substantially has acted
upon. Further, in view of the existing Mohammadan Law and
particularly having regard to the fact that once the donee viz.,
Najma Jabir since had been expired, deed of confirmation could
not have been revoked.
8. It is contended that respondent Nos.1 and 2 met
M/s. Spencers and misled them to believe that the claimant had
no right to receive the rental of the 'B' schedule property in view
of the revocation deed; therefore, M/s. Spencers since stopped
paying rental to the claimant that necessitated it to cause a
notice on 22.10.2011 calling upon M/s. Spencers to pay the
rental and to which as there was no response and hence it was
constrained to file a suit in O.S.No.25266/2013 before the City
Civil Court, Bengaluru and the same is pending for disposal. It is
contended that the claimant has invested more than Rs.2 Crores
in constructing the 'B' schedule property; in view of the terms of
JDA and power of attorney followed by the deed of confirmation
and the conveyance deed dated 08.09.2011, claimant has
become the lawful and absolute owner of the 'C' and 'D' schedule
properties; however, on account of the untenable stand taken by
respondent Nos.1 and 2 that the claimant had no right to
execute the sale deed, it treated that there arose dispute under
the JDA and so issued notice of reference of the dispute to
arbitration; eventually, the claimant also filed a petition before
the Hon'ble High Court of Karnataka in CMP No.114/2014 and
the matter was referred to arbitration. The respondent Nos.1
and 2 are interfering with the peaceful enjoyment of 'C' and 'D'
properties by the claimant in many ways including by influencing
M/s. Spencer's not to pay the rental lawfully due to it. In view of
referring the matter to the arbitration, notice was issued and
respondent Nos.1 and 2 have opposed the claim of the claimant
by registering a joint statement of objections and have also
made the counter claim wherein it is contended that the very
claim is not maintainable either in law of on facts. The claimant
was required to build a residential apartment on the 'A' schedule
property and the question of construction of commercial complex
has no bearing and the claimant is misrepresenting the facts and
misleading the authority. It is contended that the alleged JDA
was not enforced and the covenants therein at Clauses 2, 3.3,
4.1, 4.3., 8.1, 14.1, 14.3 and 16.4, which the claimant has not
extracted in his pleading, would certainly throw light on the
factual position of the parties concerned.
9. The claimant has swindled the money borrowed from
the Bank by mortgaging the properties of respondent Nos.1 and
2. In the notice dated 21.07.2011 or in the notice of ejectment
dated 10.10.2011 and further, in the reply caused thereto by the
claimant on 22.10.2011 and also in the rejoinder caused by the
respondent Nos.1 and 2 to the reply notice dated 10.01.2012,
the contention of the arbitration clause in JDA had not been
raised. Therefore, in view of Section 8 of the Arbitration Act, the
claimant cannot raise such a contention later on in the
proceedings initiated subsequently. The notice issued by the
claimant on 31.01.2012 which was not warranted, is not
maintainable. It is contended that in the JDA, it is clearly stated
that, residential apartment was to be constructed in the 'A'
schedule property and which the claimant since did not, the
agreement did not take-off. Khurshidunnisa was not a party to
the JDA which was not put into operation; therefore, the specific
power of attorney which was of any consequence was revoked
and more so, Najma Jabir since had passed away, the question
of executing any document with regard to 'A' schedule property
does not arise. The construction of multi-storied commercial
building since was not the subject matter of the JDA, that was
not enforced and so, the specific power of attorney was revoked.
It is contended that the JDA since was not executed (enforced),
the question of invoking the arbitration Clause therein did not
arise. Further, revocation of the confirmation deed was also of
any consequence when the JDA itself was not enforced. The
respondent Nos.1 and 2 have almost cleared the loan of Rs.75
lakhs accorded to them by SBI, Shivajinagar Branch and
therefore, the question of its repayment as claimed by the
claimant does not sustain. The claimant is a registered fraud
and who has been duping the mother-in-law and sister-in-laws,
has cheated them and has taken money to an extent of
Rs.2,50,00,000/-. There was no question of jointly deciding to
construct a commercial building in 'A' schedule property and a
residential pent house on the terrace of the portion of 'B'
schedule property. If at all there were to be any alteration or
amendment or change of plan from residential construction to
commercial, as per Clause 16.4 of the JDA mandatorily, there
ought to have been a supplementary deed of agreement and
that was also required to be registered. But in the case herein,
there was no such supplementary agreement and therefore, in
its absence, the claimant cannot take the contention of its choice
with the malafide intention to knock-off the property. Further,
the claimants' proprietor being the brother-in-law of respondent
Nos.1 and 2 and also being a powerful person in the Congress -
a political party, is giving them threats and so was to his
mother-in-law also.
10. The claimant has not incurred any expenditure or
brought-in any capital to put up any construction as per the
terms of JDA. The Municipal numbers furnished in the claim
statement have been fraudulently obtained by misrepresenting
the facts and the letter issued by the Bank is very clear to show
that the loan sanctioned on 29.04.2006 was on the collateral
security and on the guarantee of mortgaging their property by
way of deposit of title deeds. Thus, it would make clear that the
JDA executed on 17.01.2004 was given up and not enforced.
They have not executed any lease deed and therefore, the
question of sharing the rents does not arise. The claimant had no
right or authority to execute sale deed on 08.09.2011 in respect
of 'C' and 'D' schedule properties and it would only demonstrate
the fraudulent act to cheat them and to knock-off the property
and money. In the suit in O.S. No.25266/2013 filed against M/S
Spencers, they have filed an impleading application and are
contesting it. The claimants' proprietor is a dubious person and
when their sister was alive, he was having affair with his
neighbor - a widow staying in Blessing Apartments, Serpentine
Street, Richmond Town, Bengaluru-560 015, and it was in that
context their sister was found dead under mysterious
circumstances and thereafter, he married that neighbor.
11. The wife of the claimants' proprietor, who was no
other than their own sister and was residing in a rented house in
Richmond Town along with the claimant had requested them for
accommodation till they make alternate arrangement. In the
meanwhile, their sister died under mysterious circumstances.
The claim, that the terrace portion is the exclusive property of
the claimant is not true; they and their deceased sister are the
absolute owners of the property in question; the question of co-
ownership does not arise, the claimant is not entitled to claim
any rent; the claimant has not made any payment to the bank
towards the loan. It is also contended that the Hon'ble High
Court of Karnataka dismissed the CMP filed in No.70/2012 on
06.09.1013 reserving liberty to appoint another Arbitrator.
Thereafter, the claimant slept over the matter for a period of six
months and since did not name his Arbitrator, it is barred by
limitation and so also for the reason that the alleged JDA is
dated 17.01.2004. The claimant has also suppressed the fact of
pendency of the proceeding in Arbitration Petition in AA
No.150/2012 filed by him before the City Civil Court, Bengaluru
and during the pendency of that proceeding the adjudication for
arbitration is not maintainable. The bank having notified the
schedule property for auction under SARFASI Act for non-
payment of loan amount since had issued them notice on
01.12.2011 for an amount of Rs.62,15,985.54/-, and they are
repaying that entire amount and hence prayed for the following:
(a) dismiss the claim of the claimant as not
maintainable;
(b) allow the counter claim of the respondent Nos.1
and 2, in regard to 50% of the illegal claim of
the undivided interest in the respondents'
Rs.2,50,000/-(Rupees Two Crore Fifty lakhs
only) properties.
(c) Rs.2,50,00,000/- (Rupees Two Crore Fifty lakhs
only) as on January 2012 and a sum of
Rs.62,15,985.54 (Rupees Sixty Two Lakhs
Fifteen Thousand Nine Hundred Eight Five and
Fifty Four Paise only) of the bank loan paid by
them be paid along with interest at 14.75% per
annum.
(d) all costs and incidental to the proceedings and
such other relief/s as this Hon'ble Authority
deems fit in the facts and circumstances of the
case, in the interest of justice and equity.
12. Opposing the counter claim of respondent Nos.1 and
2, claimant has filed the rejoinder contending that respondent
Nos.1 and 2 by making several untenable and frivolous
allegations against him and his concern, have deviated beyond
the scope of the dispute. It is contended that while entering into
JDA, the parties initially had contemplated for construction of
residential apartment, however, due to change in thought and
for better commercial building; respondent Nos.1 and 2 having
taken the benefit of rents of the commercial building, now
cannot contend that the JDA was not enforced or that it was
invalid. The allegation that it has not invoked the arbitration
clause of the JDA at the first instance is totally misconceived. In
fact, it had initiated arbitral proceeding in accordance with the
arbitration Clause in the JDA by issuing a notice on 31.01.2012.
The contention of respondent Nos.1 and 2 that JDA was not put
into operation as the donor Kurshid Unnissa was not a party
thereto is opposed to basic tenets of law inasmuch as, once a
property is gifted without any conditions, the donor had no right
or interest in the property so gifted. The contention of
respondent Nos.1 and 2 that the JDA was not executed and as
such the question of invoking the arbitration clause therein does
not subsist, is absolutely false and self serving as they cannot
approbate and reprobate. It is contended that the allegation
that its proprietor is a registered fraud is not recognized in legal
parlance and further its proprietor has been duping his mother-
in-law and sisters-in-law and also by cheating them, has taken
away the money to an extent of Rs.2.5 crores are all false. It
has constructed schedule 'B' property by investing its own funds
and also from the loan borrowed to which, it is the principal
borrower and respondent Nos.1 and 2 are the guarantors. Its
proprietor being a law abiding citizen, has filed a civil suit to
recover the rent arrears due and in that suit, respondent Nos.1
and 2 got impleaded recently as parties. The counter claim of
respondent Nos.1 and 2 is vague and ambiguous as they have
not given the description of their properties, and further
respondent Nos.3 to 5 also have right in the schedule properties
and there is no cause of action of the counter claim which is also
time barred.
13. The respondent Nos.1 and 2 filed the statement of
objections to the rejoinder filed by the claimants contending that
it is the claimant which has deviated from the scope of dispute
and not they, since it is an admitted fact that if the JDA was to
be executed, the construction of the residential building was to
be completed within 18 months and it was not so; they have not
contended that JDA was not executed. The plan which was
sanctioned on 11.05.2004 and valid up to 10.5.2006 was not
enforced; it is they who have built the commercial complex with
their own funds. Their bank account in the State Bank of India,
Shivajinagar Branch, Bengaluru would disclose the true picture
as to the amount brought in by the claimant. There was any
agreement lest JDA entered with the claimant to put up
commercial complex, which they had taken up. Incidentally
proprietor of the claimant happened to be his second son-in-law
of their mother being the husband of their sister and in that
relation, he has used his authority over his wife and swindled the
money and it is in that context they have contended that the
claimant had no locus-standi to claim as rightful owner of the
schedule property. The special power of attorney was revoked
since the JDA did not take-off and as such it is invalid in law.
Kurshidunnissa-their mother, though was a party to JDA, but
neither she had confirmed it nor was consulted. The claimant has
neither invested any money to the residential property nor
constructed it instead, it was their property that was mortgaged
to raise the loan and it is they who are discharging it. The
respondent Nos.3 to 5, who are the daughters of the claimant
have chosen not to file any defence statement. Based on the
pleadings of the parties, the arbitrator has framed the following
issues and re-cast the issues, which are extracted hereinbelow:
ISSUES
(1) Whether the claimant proves that late Najma Jabir
and respondent Nos.1 and 2 executed Joint
Development Agreement dated 17.01.2004 in their
favour and also the Specific Power of Attorney
dated 17.01.2004 for consideration as averred?
(2) Whether the claimant proves that the Specific
Power of Attorney dated 17.01.2004 was coupled
with interest and hence irrevocable?
(3) Whether the claimant proves the revocation of
Special Power of Attorney dated 17.01.2004 by
the respondent Nos.1 and 2 by revocation deed
dated 18.07.2011 is illegal, void and not binding
by them?
(4) Whether the sale deed dated 08.09.2011 executed
by the claimant for himself and also being the GPA
holder of respondent Nos.1 and 2 in favour of
himself and his daughters (Respondent Nos.3 to 5)
is valid and lawful?
(5) Whether the claimant proves the execution of the
confirmation deed dated 25.07.2005?
(6) Whether the claimant proves that they have
invested money as averred by them?
(7) Whether the respondent Nos.1 and 2 proves that
Joint Development Agreement was not acted
upon?
(8) Whether the claimant proves the execution of the
registered Supplementary Agreement by
respondent Nos.1 and 2 and it was for
construction of commercial complex?
(Issue re-casted vide order dated 26.06.2015)
(9) Whether the respondent Nos.1 and 2 are entitled
to the counter claim of Rs.2.5 Crores and with
interest as prayed for?
(10) What Order or Award?
(re-casted issue No.8)
Whether the claimant proves that the parties to
the JDA agreed for construction of a commercial
complex instead of a residential complex"?
Additional issue Nos.1 and 2 raised as per order
dated 26.06.2015
1. "Whether the claim is barred by limitation?
2. Whether by renting out the commercial complex
and by receiving rents thereof the respondent
Nos.1 and 2 are not entitled to question the
validity of JDA?"
14. At the trial, Jabir Asghar - the proprietor of the
claimant concern got examined himself as P.W.1 and produced
the documents at Exs.P.1 to 27. In his cross-examination, the
learned counsel for respondent Nos.1 and 2 also got marked
Exs.R.1 to 13, Exs.P4(a) to (c), P-5(a) to (c) and Exs.P-7(a) and
(b) the portions of the respective documents. On the side of the
respondents and in particular of respondent Nos.1 and 2, the
respondent No.1 deposed herself as R.W.1 and also produced
the documents at Exs.R14 to 48. One more witness Khalid
Mohd. Modi, the husband of respondent No.2 was examined as
R.W.2. The learned counsel for the claimant got marked Ex.P28
in the cross examination of R.W.1. Exs.P29 and 30 and Exs.R49
and 50 came to be marked by consent. The respondent Nos.3 to
5 have not offered any evidence on their side.
15. The arbitrator having considered the pleadings and
the evidence on record, answered issue Nos.1 to 4 in the
negative and answered issue No.5 that the claimant proves the
execution of the confirmation deed dated 25.07.2005 and also
answered issue No.7 that respondent Nos.1 and 2 prove that
JDA was not acted upon. Having considered the material on
record, the arbitrator dismissed the claim petition and also the
counter claim of respondent Nos.1 and 2.
16. Being aggrieved by the said order, A.S.No.46/2017
was filed before the XX Additional City Civil and Sessions Judge
(CCH-32), Bangalore City. Having considered the grounds urged
in the arbitration suit, framed the points for consideration as to
whether the arbitral award dated 05.01.2017 passed in
A.C.No.114/2014 by the Arbitration Tribunal is liable to be set
aside and the same was answered in the negative and dismissed
the suit.
17. Being aggrieved by the said concurrent finding of the
Arbitration Tribunal and also findings given in A.S.No.46/2017,
the present miscellaneous first appeal is filed before this Court.
18. The learned counsel for the appellant in his
argument would vehemently contend that the order passed by
the Arbitration Tribunal and also the suit while exercising the
power under Section 34 of the Arbitration and Conciliation Act
committed an error and the same suffers from legal infirmities.
It is also contended that the arbitration award is without any
basis and the same is passed on assumptions and presumptions
and the learned Judge while acting under Section 34 of the Act
has completely ignored the mandate therein. It is also
contended that the finding of the learned arbitrator that the
registered JDA dated 17.01.2004, is not acted at all is much
against the contents of the very same document and the learned
Arbitrator has completely overlooked the contents of the very
document and the exhibited documents before the Tribunal.
Though the JDA was initially for putting up construction of a
residential apartment and during the course of commencement,
it was mutually agreed to take up construction of a commercial
complex. This mutual agreement coupled with the conduct of
the parties therein as per the terms of the agreement, the
learned arbitrator could not have concluded that the said JDA
dated 17.01.2004 is not acted at all. Conveniently, the learned
arbitrator has not dealt with the other clauses which speaks
volumes on the conduct of respondent Nos.1 and 2 and late Mrs.
Najma Jabir. It is contended that it is not the case of
respondent Nos.1 and 2 that they are illiterates who do not know
reading, writing and understanding of the nature of the
transaction. While they knowingly entered into several
transactions and now for malafide reasons have disowned the
same on some untenable and frivolous grounds. It is trite that
non-consideration of the terms of the contract, exhibited
documents and contractual obligations before the Trial Court by
the learned arbitrator and gathering the intention of the parties
judiciously is a ground for setting aside of the award by the
Court under Section 34 of the Act and committed an error in the
suit also. The entire arbitral award is in conflict with the public
policy of India and also vitiated by patent illegality and that the
arbitrator who ought to drawn conclusions which he ought to
have drawn under the circumstances, the learned Judge has also
ignored the same and has refused to interfere without even
going into the legalities in it. It is contended that it is a clear
case of novation or alteration of a contract which falls within the
meaning of Section 62 of the Contract Act, as the parties to the
original agreement who had specifically agreed to put up
residential apartments, then came to a mutual understanding
that they should go for a commercial complex and accordingly,
the same was also put up and benefits enjoined therein by all
the parties and fails to take note of the subsequent event and
understanding and collecting the rent. It is contended that both
the Arbitral Tribunal and learned Judge failed to consider the
plethora of documents, which have been produced and entire
pleadings and proof of the respondents were against the doctrine
of estoppel and that by their conduct have acquiesced
themselves.
19. It is contended that the entire revocation of the
Specific Power of Attorney is much against the basic tenets of
law, which contemplates that a registered document cannot be
revoked unilaterally by the affected parties. In the instant case
on hand, the Specific Power of Attorney which is coupled with
interest was unilaterally revoked by respondent Nos.1 and 2,
that too much after the completion of the construction as desired
and that too without following due procedure as contemplated
under Section 202 of the Contract Act. No notice was issued
before taking the drastic step calling upon the appellant to
explain the same by giving an opportunity of being heard in the
matter, as such, the most common principles of law are being
completely violated in the instant case on hand. However, the
learned Judge and the learned arbitrator have completely
ignored the same and proceeded erroneously. The learned
counsel contend that the respondents cannot approbate and
reprobate and residential construction was modified for
commercial complex and completed the construction for
commercial purpose and even entered into an agreement while
letting out the property for the commercial purpose and
collecting rent, which was rented out to the commercial purpose.
It is contended that all of them have executed the rent
agreement Ex.P.7 and collected rent from 2006 to 2015 and
hence cannot approbate and reprobate. The Arbitral Tribunal as
well as the learned Judge committed an error in rejecting the
counter claim made by the appellant herein and the fact that
M/s. Spencers is tenant of all of them is not in dispute.
20. The learned counsel contend that an application is
filed under Order 41 Rule 27 of CPC along with documents and
the same also to be considered. The learned counsel contend
that these documents also clinches the very issue i.e., copy of
the MOU dated 23.11.2005/ 28.11.2005, copy of Form No.16-A
submitted to the Income Tax Department and copy of the
statement of income submitted by respondent Nos.1 and 2 to
the Income Tax Department. It was the contention of the
appellant that though the JDA referred to the putting up of
residential apartment and sanction was accorded at the first
instance and it was subsequently modified under Ex.P.27
sanction plan. The appellant has produced Ex.P.26 the earlier
sanction plan and Ex.P27, which is the modified plan. It is
contended that a MOU was entered by the appellant, respondent
Nos.1 and 2 and the deceased Najma Jabir as second party with
M/s. Great Wholesale Club Ltd., wherein it was agreed to let the
schedule premises consisting of ground, first and second floor.
In terms of this MOU, the modification of the plan was sought
which was accorded as per Ex.P.27. The MOU dated
28.11.2005, which was entered between the appellant,
respondent Nos.1 and 2 and the deceased Smt.Najma Jabir, is
prior to the execution of the lease deed at Ex.P.7 dated
01.09.2006. Therefore, the MOU referred above is the vital
document which will clear the cloud of the dispute between the
parties. It is contended that the MOU referred above could not
be produced earlier as it was misplaced. It was traced recently
during the verification of the documents, which his advocate has
sought for the preparation of cross-examination in the event of
respondent Nos.1 and 2 lead their evidence in
O.S.No.25266/2013 and O.S.No.25267/2013. It is contended
that though respondent Nos.1 and 2 before the arbitration
accepted that they received the rents from the tenant towards
their share, however there was no clinching evidence to support
the said plea. The documents now sought to be produced are
the copies of Form No.16-A, which was the payment of the tax
which was deducted by the tenant and remitted to the Income
Tax Department. In pursuant to the deposit of the tax made by
the tenant, respondent Nos.1 and 2 declared their income by
relying upon the payment made by the tenant. The copies of the
income tax return and Form No.16-A was with the auditor which
was obtained recently and the same could not be produced
earlier and hence the same may be received as additional
documents.
21. The learned counsel for the appellant in support of
his arguments relied upon the order passed by this Court in
M.F.A.No.101959/2024 decided on 03.12.2024. Referring
this judgment, the learned counsel would contend that in this
judgment scope of Section 34 of the Arbitration and Conciliation
Act is discussed, wherein the order was set aside and the matter
was remanded to pass appropriate orders in accordance with law
keeping in mind the discussion made therein. It was held that
having regard to the position of law as laid down in the case of
Project Director National Highways v. M. Hakeem reported
in AIR 2021 SC 3471 also case of Union of India and
Another v. Tarsem Singh and others reported in (2019) 9
SCC 304, the District Court is required to pass suitable orders in
accordance with law.
22. The learned counsel also relied upon the judgment of
the Apex Court in the case of NAGUBAI AMMAL AND OTHERS
v. B. SHAMA RAO AND OTHERS reported in AIR 1956 SC
593, wherein discussion is made with regard to the doctrine of
election and approbate and reprobate. The Larger Bench in
paragraph No.23 held that the doctrine of election is not
however confined to instruments. A person cannot say at one
time that a transaction is valid and thereby obtain some
advantage, to which he could only be entitled on the footing that
it is valid, and then turn around and say if is void for the purpose
of securing some other advantage. That is to approbate and
reprobate the transaction.
23. The learned counsel also relied upon the judgment of
the Apex Court in the case of NATIONAL INSURANCE CO.
LTD. v. MASTAN AND ANOTHER reported in (2006) 2 SCC
641 and brought to the notice of this Court paragraph No.23
wherein it is held that the "doctrine of election" is a branch of
"rule of estoppel", in terms whereof a person may be precluded
by his actions or conduct or silence when it is his duty to speak,
from asserting a right which he otherwise would have had.
24. The learned counsel also relied upon the judgment of
the Apex Court in the case of UNION OF INDIA v. N.
MURUGESAN reported in SCC-2022-2-25 and brought to the
notice of this Court paragraph No.26, wherein it is held that
these phrases are borrowed from the Scott's law. They would
only mean that no party can be allowed to accept and reject the
same thing, and thus one cannot blow hot and cold. The
principle behind the doctrine of election is inbuilt in the concept
of approbate and reprobate. Once again, it is a principle of
equity coming under the contours of common law. Therefore, he
who knows that if he objects to an instrument, he will not get
the benefit he wants cannot be allowed to do so while enjoying
the fruits. One cannot take advantage of one part while
rejecting the rest. A person cannot be allowed to have the
benefit of an instrument while questioning the same. Such a
party either has to affirm or disaffirm the transaction. This
principle has to be applied with more vigour as a common law
principle, if such a party actually enjoys the one part fully and on
near completion of the said enjoyment, thereafter questions the
other part. An element of fair play is inbuilt in this principle. It
is also a species of estoppel dealing with the conduct of a party.
25. The learned counsel also relied upon the judgment of
the Apex Court in the case of INDIAN OIL CORPORATION
LIMITED v. SHREE GANESH PETROLEUM RAJGURUNAGAR
reported in (2022) 4 SCC 463, wherein in paragraph No.42
after considering various judgments held that an award could be
said to be against the public policy of India in, inter alia, the
following circumstances:
42.1. When an award is, on its face, in patent
violation of a statutory provision.
42.2. When the Arbitrator/Arbitral Tribunal has failed
to adopt a judicial approach in deciding the
dispute.
42.3 When an award is in violation of the principles
of natural justice.
42.4 When an award is unreasonable or perverse.
42.5 When an award is patently illegal, which would
include an award in patent contravention of
any substantive law of India or in patent
breach of the 1996 Act.
42.6 When an award is contrary to the interest of
India, or against justice or morality, in the
sense that it shocks the conscience of the
Court.
26. The learned counsel also relied upon the judgment of
the Apex Court in the case of S.V. SAMUDRAM v. STATE OF
KARNATAKA AND ANOTHER reported in (2024) 3 SCC 623
wherein in paragraph No.43 it has held that accounting for the
legal position, the Court could have at best set aside the award
and could not modify the same.
27. The learned counsel also relied upon the judgment of
the Apex Court passed in Special Leave to Appeal (C)
Nos.15336-15337/2021 dated 20.02.2024, wherein five
questions were formulated, which are as follows:
1. Whether the powers of the Court under Section
34 and 37 of the Arbitration and Conciliation
Act, 1996 will include the power to modify an
arbitral award?
2. If the power to modify the award is available,
whether such power can be exercised only
where the award is severable and a part
thereof can be modified?
3. Whether the power to set aside an award
under Section 34 of the Act, being a larger
power, will include the power to modify an
arbitral award and if so, to what extent?
4. Whether the power to modify an award can be
read into the power to set aside an award
under Section 34 of the Act?
5. Whether the judgment of this Court in Project
Director NHAI vs. M. Hakeem, followed in
Larsen Air Conditioning and Refrigeration
Company vs. Union on India and S.V.
Samudram vs. State of Karnataka lay down
the correct law, as other benches of two
Judges (in Vedanta Limited vs. Shenzden
Shandong Nuclear Power Construction
Company Limited, Oriental Structural
Engineers Pvt. Ltd vs. State of Kerala and
M.P. Power Generation Co. Ltd. vs.
Ansaldo Energia Spa) and three Judges (in
J.C. Budhraja vs. Chairman, Orissa Mining
Corporation Ltd., Tata Hydroelectric
Power Supply Co. Ltd. vs. Union of India
and Shakti Nath vs. Alpha Tiger Cyprus
Investment No.3 Ltd.) of this Court have
either modified or accepted modification of the
arbitral awards under consideration?
28. The learned counsel relied upon the judgment of the
High Court of Judicature at Madras in the case of AIRPORTS
AUTHORITY OF INDIA v. M/S. URC CONSTRUCTIONS
PVT.LTD. reported in 2024 Supreme (Mad) 1568, wherein it
is held that in the light of narrative thus far, the impugned order
is set aside solely for the purpose of facilitating a de novo
Section 34 legal drill. This means, we make it clear that we
have not expressed any view or opinion on the merits of the
matter and referred the judgment in the case of Hakeem
(supra) referred to a Larger Bench and also held that all
questions are left open and discussed with regard to Section
34(5), 34(6) and several judgments are referred. Insofar as the
submission of the learned counsel for the respondent that if
Section 34(5) is considered as directory, the entire purpose of
the amendments would be rendered otiose is concerned, is held
that there is no merit in the submission made by the learned
counsel for the respondent. It is held that the Court can always
direct the petitioner to issue notice along with papers and
proceedings upon other party before the matter is heard by the
Court for admission as well as for final hearing and discussed the
scope of Section 34.
29. The learned counsel referring these judgments would
vehemently contend that both the Arbitral Tribunal as well as
learned Judge committed an error in dismissing the claim
petition and hence it requires interference.
30. Per contra, the learned counsel for respondent Nos.1
and 2 in his argument would contend that the Arbitration
Tribunal as well as the learned Judge have taken note of that a
reasoned order has been passed and there was an interpolation
and brought to the notice of this Court page No.117 and clause
16.4. The learned counsel contend that Ex.P.4 ceases when not
aced upon and document Exs.P.4 and 5 is also drafted by him.
When there is an interpolation, the same has been considered
and also taken note of the recitals of Special Power of Attorney
and the document and when the document of Ex.P.4 not acted
upon, rightly comes to the conclusion that the same is not acted
upon. The learned counsel contend that the earlier document
executed by them were revoked. The learned counsel contend
that taken note of the conduct after revocation of the document,
sale deed was executed on 18.07.2011 in favour of the
daughters and the Court has to take note of the conduct. The
learned counsel contend that JDA is abandoned and interpolation
is also not signed and Exs.P.7 and 8 already produced and JDA is
not acted upon and there is an admission to that effect. The
Commercial complex built by the respondents only and not built
by the claimant/appellant and the conditions of Ex.P.4 has not
been complied.
31. The learned counsel relies upon the judgment of
the Apex Court in the case of ASSOCIATED ENGINEERING
CO. v. GOVERNMENT OF ANDHRA PRADESH AND ANOTHER
reported in (1991) 4 SCC 93. The learned counsel referring
this judgment would contend that in paragraph NoS.24 and 25
discussion was made that the arbitrator cannot act arbitrarily,
irrationally capriciously or independently of the contract. His
sole function is to arbitrate in terms of the contract. He has no
power apart from what the parties have given him under the
contract. If he has travelled outside the bounds of the contract,
he has acted without jurisdiction. But if he has remained inside
the parameters of the contract and has construed the provisions
of the contract, his award cannot be interfered with unless he
has given reasons for the award disclosing an error apparent on
the face of it. An arbitrator who acts in manifest disregard of the
contract acts without jurisdiction. His authority is derived from
the contract and is governed by the Arbitration Act which
embodies principles derived from a specialized branch of the law
of agency.
32. The learned counsel referring this judgment
would contend that the arbitrator has to act in terms of the
contract and accordingly he has given the reasons while
rejecting the claim and it does not require interference. The
learned counsel contend that the document clearly discloses that
the signatures are forged and having noticed the same, power of
attorney was revoked and when he did not put up any
construction and swindled the money, the same was paid by the
respondents when loan was availed from the bank and all these
aspects has been considered by the arbitrator and the learned
Judge and it hence does not require any interference.
33. The respondents also filed the statement of
objections to the main petition denying the averments made in
the appeal memo and contend that the findings of the award is
clear that Ex.P.5, I do not see any illegality in the revocation of
the power of attorney and to say that it does not bind the
claimant. The learned counsel contend that the appellant,
respondent Nos.1 and 2 along with late Mrs. Najma Jabir had
entered into a JDA and executed Special Power of Attorney for
construction of residential apartments, but the appellant did not
comply with any of the terms and conditions of the JDA and had
abandoned the JDA. The findings at paragraph No.22 of the
award is re-produced in the statement of objections. The
learned counsel contend that a bank loan of Rs.75,00,000/- was
availed from SBI by mortgaging the property of respondent
Nos.1 and 2 and respondent Nos.1 and 2 only repaid the entire
loan amount to the bank and the documents are in custody of
the bank till date. Such finding was also given by the Court
considering the material on record. The learned counsel contend
that the very contention that the Tribunal committed an error is
erroneous and in paragraph No.19 of the award, discussed
Clause No.16.4 of the JDA and a detailed discussion was made.
The learned counsel brought to the notice of this Court that the
JDA was not acted upon and another plan was obtained on
22.07.2006, which is not part of the JDA dated 17.01.2004 and
in this regard also, a detailed order has been passed and hence
it does not require any interference.
34. The learned counsel brought to the notice of this
Court the objections filed to the application filed under Order 41
Rule 27 of CPC and contend that there is no perversity in passing
the award. Therefore, the plaintiff cannot label the award as it
has been passed against the fundamental policy of Indian law
and there is no merit in the suit. When there is no merit, an
attempt is made to produce the documents. The documents
submitted at this belated stage are not vital or necessary
documents and moreover the corresponding document at Ex.P.7
has been marked before the Arbitral Tribunal and Ex.P.7
agreement for lease and Ex.P.8 agreement for hire, both dated
01.09.2006. In view of the documents, the said documents
referred does not sustain for any consideration and question of
invoking Order 41 Rule 27 of CPC does not arise.
35. In reply to the arguments of the learned counsel for
respondent Nos.1 and 2, the learned counsel for the appellant
would contend that Exs.P.4 and 5 both are to be considered
since there is a reference in Ex.P.5. The learned counsel
contend that the MOU between the parties is in existence and
residential apartment is converted for commercial purpose in
terms of the MOU. The learned counsel submit that an
application under Order 41 Rule 27 of CPC is filed seeking
permission of this Court to produce the documents as additional
evidence and both the tenants and the respondents agreed to
payment of rent and directly making payment and hence cannot
dispute the additional documents sought to the produced. The
learned counsel contend that the respondents cannot approbate
and reprobate. The learned counsel contend that in the cross-
examination R.W.1 admitted the construction made by the
appellant and now cannot contend that they have constructed
and they have cleared the bank loan.
36. As against this reply argument, the learned counsel
for respondent Nos.1 and 2 would contend that there is no
question of approbate and reprobate and Ex.P.4 is not in
dispute. The learned counsel contend that the maxim not
applies as held in the judgment of the Apex Court in the case of
Nagubai Ammal (supra). The learned counsel contend that the
judgment in the case of Indian Oil Corporation (supra) is also
not applicable since there is only one agreement of JDA and the
same is not disputed. The learned counsel contend that the
judgment in the case of S.V.Samudram (supra) is also not
applicable to the facts of the case and the citations given by the
respondents are applicable to the facts of the case and hence it
does not require interference of this Court.
37. Having heard the learned counsel for the appellant
and the learned counsel for respondent Nos.1 and 2 and also
considering the principles laid down in the judgments referred
supra, the points that arise for the consideration of this Court
are:
(i) Whether this Court can exercise the power
under Section 37(1) of the Arbitration and
Conciliation Act, 1996 and whether it requires
interference of this Court exercising such
powers?
(ii) Whether the appellant has made out a ground
to invoke Order 41 Rule 27 of CPC by allowing
I.A.No.2/2024 to produce the documents
sought for in the application?
(iii) What order?
Point No.(i) and (ii):
38. Having considered the material on record, this Court
has to take note of the relief sought by the claimant before the
arbitrator i.e., to declare that the registered specific power of
attorney dated 17.01.2004 executed by respondent Nos.1 and 2
along with Mrs.Najma Jabir, in terms of JDA dated 17.01.2004 is
coupled with interest and hence irrevocable. The relief is also
sought to declare that the revocation of specific power of
attorney dated 17.01.2004 by the revocation deed dated
18.07.2011 is illegal, void and not binding on the claimant and
declare that the sale deed executed by the claimant in favour of
Mr.Jabir Asghar is valid and lawful and that it conveys a proper
title and interest in respect of C and D properties and also relief
is sought for the declaration that Jabir Asghar is the absolute
owner of 'C' and 'D' schedule properties. Alternatively, relief is
also sought that if the Tribunal were to hold that the revocation
of the specific power of attorney is valid, direct respondent Nos.1
and 2 to execute a sale deed in favour of the nominee of the
claimant conveying 50% of the undivided interest in the
schedule 'A' property in terms of the JDA and for partition of 'B'
schedule properties by metes and bounds in terms of the JDA
excluding the schedule 'B' property and also to restrain
respondent Nos.1 and 2 and anybody claiming through or under
them by granting permanent injunction.
39. Having considered the relief sought by the appellant
before the arbitrator and also the reasons assigned by the
arbitrator, the arbitrator comes to the conclusion that the very
JDA was not acted upon and also comes to the conclusion that
there is no any supplementary agreement between the parties.
The learned Judge while exercising the power under Section 34
of the Act comes to the conclusion that it does not require any
interference. It has to be noted that there is no dispute that
there was an agreement, which is marked as Ex.P.4 dated
17.01.2004 between respondent Nos.1 and 2 and the deceased
Najma Jabir, who is the sister of respondent Nos.1 and 2 in
favour of the appellant. It is important to note that on the very
same day Ex.P.5 dated 17.01.2004 was also executed by them
in favour of the appellant. It is also not in dispute that in terms
of the agreement Ex.P.4 dated 17.01.2004 i.e., JDA, sanction
plan was obtained for construction of residential apartment and
the same was granted on 11.05.2004 and the same is marked
before the Trial Court as Ex.P.26. It is important to note that a
modified plan was also obtained for construction of the
commercial building and the same is marked as Ex.P.27 dated
22.07.2006. It has to be noted that the appellant sought to
produce the documents invoking Order 41 Rule 27 of CPC
contending that the document dated 23.11.2005/28.11.2005
MOU entered into between the appellant, respondent Nos.1 and
2 and the deceased Najma Jabir and M/s. Great Wholesale Club
Limited, clinches the issue between the parties. It is important
to note that subsequent to this document, there was an
agreement between the same parties in terms of Ex.P.7 dated
01.09.2006 and Ex.P.8 dated 01.09.2006 i.e., lease agreement
and hire agreement entered into between the appellant,
respondent Nos.1 and 2 and late Najma Jabir and M/s. Great
Wholesale Club Limited. It has to be noted that earlier there
was an agreement between the parties on 28.11.2005 and the
parties are one and the same. It is important to note that in
Ex.P.8 agreement of hire entered into between the appellant,
respondent Nos.1 and 2, late Najma Jabir and M/s. Great
Wholesale Club Limited, the details are mentioned with regard to
rent payable, time and rate of enhancement of rent, etc. It has
to be noted that the appellant prays the Court to produce the
additional documents.
40. Having perused the additional documents sought to
be produced, it is not in dispute that the parties are one and the
same. Clause 1(c) of the MOU stipulates that the original
planning permit and building licence for commercial usage as
department store, approved by Bangalore Mahanagara Palike
and the same is mentioned for having taken up a decision to put
up the commercial building. But the very contention of the
respondents is that though plan was obtained for the purpose of
construction of the residential building, the same was changed
for commercial usage and they have not given any consent.
When such document is placed before the Court as additional
evidence, there is a force in the contention of the learned
counsel for the appellant that this document clinches the very
issue involved between the parties since the Tribunal comes to
the conclusion that the earlier JDA was not acted upon. This
document is placed before the Court contending that
subsequently there was an agreement between the parties for
payment of rent and periodically enhancing the same and this
document was not placed before the arbitrator and this
document is dated 28.11.2005. Subsequently, Exs.P.7 and 8
came into existence after construction of commercial building. It
is important to note that in the additional document, duration is
also mentioned in clause 3, area is mentioned in clause 2,
commencement date of the proposed lease is mentioned in
clause 4 and rent details are mentioned in clause 5.
41. The learned counsel for the appellant in addition to
the said MOU also produced the documents of TDS certificates of
the respondents, which have been placed before this Court as
additional documents for having declared the rent received and
these documents also clinches the very issue involved between
the parties since the respondents claim that the appellant did not
construct the commercial building and they only constructed the
building. But the fact is that there was an agreement between
the parties and they are receiving rents from the tenant. There
are admissions on the part of D.W.1 when he was cross-
examined regarding construction and getting the rent through
the appellant. No doubt, this Court cannot re-appreciate the
evidence, but injustice should not be caused to any party when
there was an admitted document of JDA and subsequently an
agreement was also entered into between the parties for the
construction of commercial building. Now the said document is
intended to be produced as additional evidence.
42. The learned counsel for respondent Nos.1 and 2
would contend that the application filed under Order 41 Rule 27
of CPC cannot be allowed in view of the marking of documents
Exs.P.7 and 8 and both the Tribunal as well as the learned Judge
fails to take note of the existence of Exs.P.7 and 8 i.e.,
agreement for lease and agreement for hire while considering
the material on record and the same also clinches the issue
between the parties and erroneously comes to the conclusion
that there was no any supplementary agreement. Now, the
appellant places the document along with an application filed
under Order 41 Rule 27 of CPC that subsequent to the JDA,
there was one more agreement which came into existence in
2005. I have already pointed out that in clause 1(c) of the MOU,
there is a recital for construction for commercial usage and when
such material is available on record, in the absence of
documents sought to be produced, the issue involved between
the parties cannot be decided. The said document would
determine the germane issue involved between the parties since
the respondents dispute that though there was a JDA in terms of
Ex.P.4, the same is not acted upon. But with regard to the same
was acted upon, the present documents which have been sought
to be produced clinches the issues involved between the parties
as contended by the appellant. The very contention of the
learned counsel for the respondents that additional documents
cannot be received cannot be accepted since the learned Judge
also affirmed the order of the Arbitration Tribunal in coming to
the conclusion that the same does not require any interference.
The Court has to take note of the relief sought in the arbitration
proceedings and also take note of the fact that the counter claim
made by the respondents was also rejected and the respondents
main contention is that they made the payment in favour of the
bank. There is no positive discussion with regard to the said
contention also. When such being the case, both the claim and
counter claim to be considered in view of the additional
documents sought to be placed before the Court. There is a
force in the contention of the learned counsel for the appellant
that doctrine of election and approbate and reprobate is
applicable to the facts of the case on hand in view of the
judgment of the Apex Court in the case of Nagubai ammal
(supra). In the case on hand, the respondents in one breath
says that there was no compliance of agreement Ex.P.4 and at
the same time, say that they are receiving the rent in terms of
Exs.P.7 and 8 and they contend that JDA was not acted upon.
Admittedly, the building was constructed and the same is for
commercial usage and lease agreement came into existence for
commercial purpose only and they are getting rent. Hence, it is
nothing but approbate and reprobate and they cannot blow hot
and cold.
43. The Apex Court in its judgment in the case of
Mastan (supra) discussed with regard to rule of estoppel and
doctrine of election. In the case of Murugusen (supra), the
Apex Court in detail discussed and held that principle has to be
applied with more vigour as a common law principle, if such a
party actually enjoys the one part fully and on near completion
of the said enjoyment, thereafter questions the other part. An
element of fair play is inbuilt in this principle. It is also a species
of estoppel dealing with the conduct of a party. The Court has to
take note of the conduct of the parties also. It is important to
note that the Apex Court in its judgment in the case of Indian
Oil Corporation (supra) in paragraph No.42.2, held that when
the Arbitrator/Arbitral Tribunal has failed to adopt a judicial
approach in deciding the dispute, the Court can interfere with
award if it is unreasonable or perverse and against the public
policy of India. In the case of Samudram (supra) referred by
the learned counsel for the appellant, it is held that accounting
for the legal position, the Court could have at best set aside the
award and could not modify the same. But the matter can be
considered afresh. The larger bench of the Apex Court by order
dated 20.02.2024 in Special Leave to Appeal (C) Nos.15336-
15337/2021 (supra), formulated five questions with regard to
the powers of the Court under Sections 34 and 37 of the Act will
include the power to modify an arbitral award?
44. Now this Court is not going to modify the award and
having placed the material before the Court, the fundamental
issue between the parties is that there was no any
supplementary agreement and that was the finding given by the
Arbitral Tribunal and now the document is placed before the
Court as additional evidence that there was a MOU in the year
2005 immediately after Ex.P.4 for construction of commercial
building in terms of Ex.P.27, which is the modified sanction plan.
The respondents are disputing that there was no supplementary
agreement and when this document is placed before the Court,
wherein the appellant is a party along with respondent Nos.1
and 2 and her sister and unless that document is considered by
the Tribunal, the fundamental issue between the parties with
regard to whether they have acted upon in terms of JDA or in
terms of the document, which is sought to be produced along
with additional documents the issue between the parties cannot
be decided. The documents discloses that all the parties have
signed the said document and the respondents dispute any such
supplementary document and unless the same is considered and
an opportunity is given to the parties to lead evidence on the
document, this Court cannot sit and decide the same exercising
the appellate jurisdiction. The Appellate Court jurisdiction power
is very limited whether to look into the material and the reasons
assigned by the Arbitral Tribunal as well as the Court which
exercises power under Section 34 of the Act are in consonance
with the material on record. The matter has to be considered
afresh in the light of production of additional documents of TDS
declaration made by the respondents as well as MOU, which
came into existence in 2005 and also to consider the material on
record in terms of Exs.P.27, Exs.P.7 and 8 and also the fact that
they are receiving the rent by letting out the premises for
commercial purpose. The very contention that the agreement is
only for construction of the building for residential and not for
commercial purpose also to be looked into whether there was a
provision made in the subsequent agreement which is now
produced before the Court.
45. It has to be noted that the said document is placed
before the Court in this proceedings and reasons assigned is also
that the document was misplaced and during the search they
found this document and the respondents have also not filed any
written objections and orally opposes the production of the
documents. This Court has already come to the conclusion that
the said document is a clinching material for deciding the issues
involved between the parties. Hence, the matter requires to be
considered afresh in the light of the additional documents, which
have been placed before the Court along with the application
under Order 41 Rule 27 of CPC. It has to be noted that
arbitration proceedings was started long back in 2014 and the
arbitration suit was filed in 2017 and at a belated stage, the
document is placed before the Court in exercise of power under
Section 37 of the Act. Hence, it is appropriate to award cost for
the delayed production for these documents and hence I answer
the points framed by this Court in the affirmative.
Point (iii):
46. In view of the discussions made above, I pass the
following:
ORDER
(i) The miscellaneous first appeal is allowed.
(ii) The application filed under Order 41 Rule 27 of
CPC is allowed on cost of Rs.50,000/- and out
of that, an amount of Rs.40,000/- is payable to
respondents and remaining Rs.10,000/- shall
vest with the State.
(iii) The Arbitral award dated 05.01.2017 passed in
A.C.No.114/2014 and the order dated
04.09.2020 passed in A.S.46/2017 are set
aside.
(iv) The matter is remitted back to the Arbitration
Tribunal to consider the matter afresh in view
of the allowing of the application filed under
Order 41 Rule 27 of CPC and permit the parties
to lead further evidence and decide the matter
afresh in view of the observations made by this
Court.
Sd/-
(H.P. SANDESH)
JUDGE
MD
