Delhi District Court
Sunil Kumar Sharma vs Sushila Sharma on 31 October, 2023
IN THE COURT OF SH. SANJEEV AGGARWAL,
DISTRICT JUDGE (COMMERCIAL)-02, PATIALA HOUSE
COURTS, NEW DELHI
OMP (COMM) 49/2022
CNR NO. DLND010024542022
SUNIL KUMAR SHARMA
S/O SHRI SANT RAM
R/O D-110/5, STREET NO. 12,
GAMRI EXTENSION,
(NORTH-EAST), DELHI-110053
...PETITIONER
Versus
1. SUSHILA SHARMA
W/O SHRI JAGDISH KUMAR SHARMA
R/O 151, GALI BATASHAN,
CHAWRI BAZAR, DELHI-110006
2. ANIL KUMAR SHARMA
S/O SHRI SANT RAM
R/O D-110/3, STREET NO. 12,
GAMRI EXTENSION, (NORTH-EAST),
DELHI-110053
3. SUBHASH MISHRA, ADVOCATE
SOLE ARBITRATOR AT
DELHI INTERNATIONAL ARBITRATION CENTRE (DIAC),
DELHI HIGH COURT, NEW DELHI
...RESPONDENTS
Date of institution of petition : 24.03.2022
Date of reserving judgment : 20.10.2023
Date of pronouncement : 31.10.2023
JUDGMENT
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 1 of 45
1. Vide this judgment, I shall dispose off the present petition / objections filed u/S. 34 of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as an Act) by the petitioner against the arbitration award dated 16.12.2021, passed by Ld. Sole Arbitrator Sh. Subhash Kumar Mishra.
2. Brief facts which can be taken out from the relevant para(s) of the award dated 16.12.2021 are as under :
This Arbitral Tribunal was constituted by the Hon'ble High Court of Delhi vide order dated 15.09.2017 in ARB.P. 262/2017 to adjudicate dispute between the parties. The disputes arise out of the Partnership Deed dated 03.10.1994 entered into between the claimant and respondent no.2 and 3 (hereinafter referred to as the "Parties'). The facts pertaining to the adjudication of the present disputes, in brief, are as follows:
BRIEF FACTS
1. Respondent No. 2 and 3 on 25.02 1985 constituted a Partnership Firm in the name of respondent no.1 i.e., M/s Bhardwaj Enterprises having it's office/place of business at 199/2, Gali Batashan, Chawri Bazar, Delhi- 110006.
The main business of the partnership firm was OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 2 of 45 manufacturing and sale of paper products and it's allied lines etc.
2. On 06.04.1992 respondent no. 2 and 3 incorporated certain amendments in the partnership firm and another partnership deed was signed between respondent no. 2 and 3 which was registered.
3. It is the case of the claimant that on 03.10.1994 she was inducted as a partner in the existing partnership firm and a partnership deed was signed between the parties. The claimant made a capital contribution of Rs.40,000/- for her induction as a partner in the partnership firm and as per the partnership deed she was admitted to 1/3rd share in the profit/loss of the partnership firm.
4. Respondent no.2 disputes the partnership deed dated 03.10.1994 and maintains that the claimant was never inducted as a partner and that although the partnership deed dated 03.10.1994 was signed between the claimant and respondent no.2 and 3, it was never acted upon as the claimant did not pay her promised capital contribution of Rs.40,000/- which was a pre requisite and a pre-condition for her induction as a partner. In Short, whereas the claimant maintains that she paid the said amount of Rs.40,000/-, respondent no.2 disputes the same.
5. The claimant claims that the partnership firm since her induction as a partner on 03.10.1994 was having a OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 3 of 45 monthly sale of Rs.5 to 6 lacs on which the parnership firm was earning a profit of 15% to 20% on the total monthly sale. On the basis of her entitlement to 1/3"
share in profit of the firm, the claimant has quantified and claiming an amount of Rs. 60 lacs.
CLAIMANT'S SUBMISSIONS
6. The case of the claimant as per her Statement of Claim is that respondent no.2 and 3 on 25.02.1985 constituted a partnership firm in the name of respondent no.1, namely, M/s Bhardwaj Enterprises. The main business of the partnership firm was manufacturing and resale of paper board products and it's allied lines. On 06.04.1992 respondent no. 2 and 3 incorporated certain amendments in the partnership firm and that another partnership deed was signed between respondent no. 2 and 3.
7. The claimant claims that on 03.10.1994 she was inducted as a partner in the already existing partnership firm and that a partnership deed was signed between the claimant and respondent no.2 and 3 on 03.10.1994 (Ex. CW1/1). The claimant further claims that on her induction as a partner, as per the partnership deed, she was admitted into 1/3" profit sharing ratio on the profit of the firm. The claimant contends and claims that on request of respondent no. 2 and 3 she contributed Rs.40,000/- as her capital contribution by way of cheque OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 4 of 45 bearing no.593886 dated 08.10.1994 drawn on Punjab National Bank, Chawri Bazar, Delhi-110006 in favour of the partnership firm (Mark "X").The claimant claims that the said cheque was duly encashed by the firm and the same was utilized for running business of the firm smoothly.
8. It is claimed by the claimant that the business of the firm on the active participation of the claimant and respondent no. 2 and 3 was running smoothly and in a profitable manner. It is claimed by the claimant that the monthly sale of the firm was Rs.5 to 6 lacs and that on that monthly sale the firm was earning 15% to 20% profit. Further, it is contended that the account statement was maintained by respondent no. 2 and 3. At the end of the financial year the claimant asked about the account statement of the business of the firm and her share of profit. But she was told by respondent no. 2 and 3 that the firm was earning profit and her share was accumulating in the account statement and that the same will be treated as her capital contribution. The Claimant has contended that she never questioned the integrity of both respondent no.2 and 3 because they were related to her being the real brothers of her husband and that she never doubted their version.
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 5 of 45
9. The claimant submits that the business of the firm was running successfully. However, at the end of December, 2015, the claimant asked respondent no. 2 and 3 to show the entire account statement of the firm since her induction as a partner. On hearing this, respondent no. 2 and 3 threatened her that she was not entitled to any profit nor she was associated with the firm.
10.It has been contended that the claimant was shocked and felt cheated by respondent no. 2 and 3. Thereafter, the Claimant served a legal notice dated 05.01.2016 (EX. CW1/5) to respondent no.2 and 3 thereby calling upon them to produce complete books of accounts, bank statements, stock register and other relevant books and documents of the firm. Respondent no.3 sent his reply dated 22.01.2016 (EX. CW1/6) to the notice wherein it was stated that the partnership firm was dissolved and it was converted into sole proprietorship firm in the name of Sunil & Co. It has been further submitted by the Claimant that thereafter the claimant initiated both civil and criminal cases/proceedings against respondent no.2 and 3. The claimant has prayed for passing of an award directing respondent no. 2 and 3 to release the proportionate share of her profit of the firm since 03.10.1994 till date as per the partnership dated 03.10.1994 with interest.
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 6 of 45
11.The claimant in her Statement of Claim did not quantify the claim amount. However, upon direction by the Arbitral Tribunal vide order dated 04.11.2019 the claimant quantified her claim tentatively at Rs. 60 lacs vide communication dated 24.01.2020 by the counsel for the claimant to DIAC.
SUBMISSIONS BY RESPONDENT NO.2
12. Notice was issued by the Arbitral Tribunal in it's first hearing to respondent no.3 Mr. Anil Sharma who was a partner of the firm. However, despite service there was no representation on behalf of respondent no.3. Hence, vide order dated 08.10.2018 the Tribunal proceeded ex-parte against Respondent No.3 Mr. Anil Sharma.
13. Respondent no.2 filed his reply to the statement of claim. In his reply respondent no.2 pleaded that the statement of claim was barred by limitation. Respondent no.2 has contended that the claimant desired to be inducted as a partner in the already existing partnership firm and as such the partnership deed dated 03.10.1994 was executed. It has been submitted by the respondent no. 2 that it was agreed that the claimant had to invest Rs.40,000/- towards her share in the said partnership but she failed to make the payment of the said amount of Rs.40,000/- when the partnership deed was signed. It has been further contended by respondent no. 2 that it was OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 7 of 45 agreed between the parties that as and when the claimant invests the said amount, the said partnership deed was to be registered or in the alternative the name of the new partner was to be incorporated in Form A under the provisions of the Indian Partnership Act. However, after a wait of day or two since the amount was not invested by the claimant, the partnership deed dated 03.10.1994-was not brought into effect nor it was brought into existence and that the name of the claimant as the new partner was not incorporated in Form A, nor did the claimant insist her name to be incorporated in Form A. Respondent no. 2 claims that the claimant retained with herself the original partnership deed dated 03.10.1994. It has been further claimed by respondent no.2 that the amount of Rs.40,000/- was never paid by the claimant. In short, respondent no. 2 claims in his reply that the partnership deed dated 03.10.1994 never came into existence at any point of time nor any bank account was ever opened nor was the alleged partnership deed ever filed before any government agency at any point of time.
14.It has been contended by respondent No.2 that respondent no.1 partnership firm has been dissolved vide dissolution deed dated 23.06.2014 (EX.RW1/3). The partnership which existed between respondent no. 2 and 3 on the basis of two partnership deeds dated 25.02.1985 OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 8 of 45 and 06.04.1992 stands dissolved on 23.06.2014 and that this fact was well known to the claimant.
15.Respondent no.2 claims in his reply that the statement of claim before the Arbitral Tribunal by the claimant is an effort to grab the property of the firm, namely, 199/2, Gali Batashan, Chawri Bazar, Delhi.
REJOINDER BY THE CLAIMANT
16. The rejoinder by the claimant to the reply of respondent no.2 is reiteration of her submissions made in the statement of claim. However, the claimant denies that the claim is barred by limitation. The claimant contends that since her induction as a partner till the end of December 2015, she was assured by both respondent no.2 and 3 that her share of profit was accumulating as her capital contribution in the firm. It was only after the Claimant insisted upon to see the accounts of the firm sometime in December, 2015 and the subsequent denial by the respondents of her existence as a partner that the claimant came to know that she was taken for a ride. Thereafter, the claimant served upon the legal notice to the respondents. Hence, the statement of claim is not barred by limitation. The claimant in her rejoinder has further contended that the dissolution deed of the firm dated 23.06.2014 is a manipulated document and that it cannot debar the claimant from claiming her legal rights.
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 9 of 45
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75.Clause 7 of the partnership dated 03.10.1994 provides for 1/3rd share to each partner to profit/loss of the firm. Clause 7 reads as follows:
"7. That after providing for the interest as well as remuneration paid to the working partners, the residual profit/loss of the business shall be shared and borne by the partners as under:
1. Shri. Anil Kumar Sharma : 1/3rd Party of the first part
2. Shri. Sunil Kumar Sharma : 1/3rd Party of the second part
3. Smt. Sushila Sharma : 1/3rd Party of the third part Therefore, in accordance with the provisions of the partnership deed each partner is entitled for 1/3rd share in the profit of the firm and hence, the claimant is entitled to her proportionate 1/3rd share in the profit of the firm w.e.f. 03.10.1994."
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 10 of 45
76. The claimant in her statement of claim as well in her evidence has claimed that the monthly sales/business of the firm was 5 lacs to 6 lacs on which on which the firm was earning 15% to 20% profit on the total monthly sale. But unfortunately there is no evidence on record of this Tribunal to substantiate this claim. However, since Issue no.2 has been decided in favor of the claimant, it is onerous upon this Tribunal to take a considerate and rational approach and award the claimant her share of profit.
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79. The claimant is entitled to 1/3rd share in the profit of the firm as per the partnership deed dated 03.10.1994. On the basis of the above finding, the claimant is entitled to her proportionate 1/3rd share in 10% profit on the amount of Rs 3 lacs monthly sale of the firm. The claimant is, therefore, entitled to Rs.10,000/- (Rupees Ten Thousand) per month as her share of profit. Based on this calculation, the claimant is entitled to Rs.1,20,000/- ( Rupees One Lac Twenty Thousand) per annum as her share of profit.
80. The claimant was inducted as a partner in October, 1994 and the partnership was dissolved in June, 2014.
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 11 of 45 The claimant is, therefore, entitled to and is awarded her share of profit for the period October, 1994 to June,2014 as under:
(i)October, 1994 to June, 2014: 19 Years 9 Months
(ii)Share of Profit for 19 Years:Rs.1,20,000x19= Rs.22,80,000/-
(iii) Share of Profit for 9 Months: Rs. 90,000/- (@Rs. 10,000/- per month)
(iv) Total Share of Profit(ii+ iii) : Rs. 23,70,000/-
81.In view of the above, the claimant is awarded an amount of Rs.23,70,000/- (Rupees Twenty Three Lacs Seventy Thousand Only) in her favor and against the respondents.
82. The claimant is also claiming and entitled to interest on her total outstanding proportionate share of profit. This Tribunal awards interest @ 6% (Six per cent) per annum on the amount of Rs.23,70.000/- w.e.f. 23.06.2014 till realization in favor of the claimant and against the respondents.
AWARD (1) An Award of Rs.23,70,000/- (Rupees Twenty Three Lacs Seventy Thousand Only) along with interest @ 6% per annum w.e.f 23.06.2014 till realization is passed in favor of the Claimant and against Respondent No. 1, 2 and 3.
3. The said arbitration award dated 16.12.2021 has been challenged on the following main grounds :
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 12 of 45 a. Because the Impugned Award is patently illegal and against the laws of India and as such deserves to be set aside. b. Because the Impugned Award, being contrary to and outside the Partnership deed, and so being contrary to law, is against the public policy of India.
c. Because the Impugned Award is bereft of reasons and as much deserves to be set aside.
d. Because the Impugned Award is bereft of reasons and as much deserves to be set aside.
e. Because the Impugned Award has been passed in violation of natural laws of justice and equity and is liable to be set aside under Section 34 of the Act as being opposed to public policy.
f. Because the Ld. Arbitral Tribunal erred in holding that the respondent never fulfilled the precondition of her partnership as stated in the deed and hence, was never inducted as a partner within the firm.
g. Because the Ld. Arbitral Tribunal erred in holding that the said application for arbitration was not barred by limitation.
h. Because the Ld. Arbitral Tribunal erred in appreciating the facts of the case in as much as recognizing that the partnership firm was already dissolved in 2014. i. Because the Ld. Arbitral Tribunal erred in holding that the respondent was never a partner with the firm and hence OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 13 of 45 she is not entitled to any share in the profits of the firm j. Because that the Ld. Arbitral Tribunal has shown non- application of mind wherein although no proof of loss has been led by the Respondent, the Ld. Arbitral Tribunal has allowed calculation of profits merely on its calculation that to without any proof of such calculation.
k. Because the Ld. Tribunal has put the negative onus of proof on the Petitioner. Once the Petitioners has asserted that amount of Rs. 40,000/- has not been contributed by the Respondent. Then onus of proof would lie on the respondents that she actually contributed such amount. l. Because it is crystal clear on record that respondent have failed to prove submission of Rs.40,000/- as paid up capital in the partnership firm.
Therefore, it is stated that the arbitration award dated 16.12.2021 is liable to be set aside.
4. Reply has been filed by respondent no. 1 to the said petition u/S. 34 of the The Arbitration and Conciliation Act, 1996, in which in sum and substance, it is stated as under:
REPLY ON MERITS TO THE FACTUAL BACKGROUND:
1. That the contents of para no.2 of the petition are wrong and vehemently denied. It is respectfully submitted that OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 14 of 45 petitioner no.2 and respondent no.2 constituted the partnership firm on 25.02.1985 in the name of petitioner no1.
2. That the contents of para no.3 of the petition are wrong and vehemently denied if the same are not emanating from records. It is respectfully submitted that petitioner no.2 and respondent no.2 constituted the partnership firm therefore, it would be incorrect to assume that petitioners had signed the deed.
3. That the contents of para no 4 of the petition needs no reply so far as the contents emanate from records.
4.That the contents of para no.5 of the petition are wrong and vehemently denied. It is respectfully submitted that the respondent no. 1/claimant, Mrs. Sushila Sharma was inducted as a partner on 1/3 ratio in the profit sharing vide partnership deed dated 03.10.1994 and the there was no pre-
requisite for her to make the capital contribution of Rs 40,000/- as per the terms of the deed dated 03.04.1994.
6. That the contents of para no.7-8 of the petition are wrong and vehemently denied. It is respectfully submitted that induction of respondent no.1/claimant, Mrs. Sushila Sharma in to the firm is totally different from the capital contribution of partners. On perusal of the partnership deed dated 03.10.1994 it is nowhere mentioned that the partners' contribution is a pre-requisite for admitting the partner in the firm nor it mentions the consequences for not depositing OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 15 of 45 the capital contribution. The answering respondent has argued at length and have cited judgments before the Arbitral Tribunal in this regard.
It is submitted that the petitioner no.2 at no point of time had filed the counter claim before the Arbitral Tribunal and the claims of the answering respondent have been rightly decided by the Arbitral Tribunal.
7. That the contents of para no.9 of the petition are wrong and vehemently denied so far as the facts are not emanating from records. It is respectfully submitted that the answering respondent/claimant vide deed dated 03.10.1994 was inducted as a partner in the existing partnership firm- petitioner no.1 which was constituted on 25.02.1985 between petitioner no.2 and respondent no.2. That on perusal of the Dissolution deed dated 23.06.2014 which was brought on record it nowhere stated that the petitioner no.1 firm which was constituted on 25.02.1995 has been dissolved vide Dissolution deed date 23.06.2014. The partnership firm which was constituted on 25.02.1985 and the answering respondent/claimant was inducted as a partner vide deed dated 03.10.1994 continues to exist till date. The limitation does not apply on an existing partnership firm and still continuing the same has been well settled in a pronouncement by the Calcutta High Court in Rajendra Bajoria & Ors. And Chiranjilal Bajoria & Ors vs Sudhir OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 16 of 45 Jalan & Ors (MANU/WB/0784/2017) on 22 September, 2017 that, "...Moreover, a suit for taking the accounts of a partnership would not be barred unless the defendant makes out that there has been a dissolution of the partnership more than three years prior to the institution of the suit. The onus of making out such dissolution is upon the defendant and the mere fact that after a particular date no further business was done will not amount to a dissolution of partnership. (See Samuel Nadar Vs. Thangayya Nadar, AIR 1942 Madras 104) For rejection-of-plaint under Order 7 Rule 11 only contents of the plaint have to be seen and read as a whole and nothing else. As long as the plaint discloses cause of action, mere fact that plaintiff may not succeed in suit cannot be ground for rejection of plaint. The decisions cited by the applicant with regard to the non-production of the agreement in support of Paragraph 6 of the Plaint, is a matter of proof and evidence which has to be assessed at the trial of the suit. A plaint cannot be defeated due to lack of proof at this stage since in deciding an application in the nature of demurrer, the Court is not supposed to assess as to whether the plaintiff would be ultimately able to prove its case. There is a distinction between lack of pleading and lack of proof. A plaint must fail if there is a lack of pleading leading to non-disclosure of a cause of action...."
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 17 of 45 Therefore, in view of the above submissions the claim of the answering respondent/claimant is within limitation as the same has been held by the Arbitral Tribunal.
It is further, submitted that the Arbitral Tribunal had nightly held that sufficient notice has been fulfilled prior to invocation of the Arbitration clause and the same was never raised before the Hon'ble High Court at the time of appointment of arbitrator or even during the proceedings before the Arbitral Tribunal.
9. REPLY TO THE GROUNDS OF THE PETITION That the contents of para no.11 of the petition containing the grounds are wrong and vehemently denied. That the contents of para no.(a) to (1) of the grounds of petition are wrong and vehemently denied. It is respectfully submitted that the petition filed by the petitioners is liable to be dismissed with heavy exemplary cost. It is respectfully submitted that the Arbitral Tribunal had disposed the arbitration proceedings rightly and the same does not call for interference by this Hon'ble court.
10. That the contents of para no. 12 and 13 of the petition needs no reply. It is respectfully submitted that the pecuniary jurisdiction of the Commercial courts is Rs.1,00,00,000/- only and not Rs.2,00,00,000/-
11. That the contents of para no.14 of the petition are wrong and vehemently denied. It is respectfully submitted that the OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 18 of 45 petitioner no.2 has not affixed the appropriate court fees. 12 That the contents of para no.15 of the petition needs no reply.
13. That the contents of para no. 16 of the petition is denied for want of knowledge.
14. That the contents of para no. 17 and 18 of the petition needs no reply.
5. Separate reply has also been filed by respondent no. 2 to the said petition u/S. 34 of the The Arbitration and Conciliation Act, 1996, in which in sum and substance, it is stated as under:
1. That in the above noted matter, the Hon'ble High Court of Delhi passed a direction order dated 15.09.2017 in Arbitration Petition No. 262/2017 title as Smt. Sushila Sharma Vs. Bhardwaj Enterprises and others, where through the said Hon'ble Court has appointed Shri Subhash Kumar Mishra as sole Arbitrator to decide the dispute arises between the Petitioner Ms. Sushila Sharma with other partners of the firm i.e. the partner of Ms. Bhardwaj Enterprises namely Shri Anil Kumar Sharma and Sunil Sharma.
2. That on 16.12.2021, the said Ld. Sole Arbitrator Shri Subhash Kumar Mishra has pronounced the arbitral award against the respondent no.2 namely Anil Kumar Sharma and against the petitioner Shri Sunil Sharma whereby the OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 19 of 45 said Ld. Arbitrator has wrongly, falsely and baselessly directed to the said respondent Anil Kumar Sharma and petitioner Sunil Sharma both to pay Rs.23,70,000/-
alongwith interest @ 6% per annum w.e.f. 23.06.2014 till realization to the said respondent no.1 Smt. Sushila Sharma.
3. That the said Arbitral Ex-Partee Award dated 16.12.2021 passed against the said respondent Anil Kumar Sharma and others is completely false, bogus, baseless, illegal, concocted and the same is liable to be set-aside against the said respondent others. Anil Kumar Sharma and others.
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GROUNDS
i) Because no notice or summon from the said Ld. Arbitrator Shri Subhash Kumar Mishra Advocate was served upon the said respondent no.2 and the said Ex-parte Arbitral Award was/is obtained fraudulently against the said respondent No.2 and Anr.
ii) Because the Ld. Arbitrator has failed to consider the fact that the said Respondent No.1 was telling a lie to the court with regard to make the payment by cheque of Rs.40,000/- (Rupees Forty Thousand only) as capital contribution and there was no such cheque was encased from any bank to make her as partner in the said firm.
iii) Because the said Ld. Arbitrator Shri Subhash Kumar OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 20 of 45 Mishra did not apply his mind and ability to consider the fact that the said partnership deed dated 03.10.1994 was/is neither registered nor attested and the same is not admissible in evidence under the Registration Act.
iv) Because the said Ld. Arbitrator has failed to consider the fact that (No Suit is to be filed unless and un-till the said partnership deed is to be registered and therefore the said Award passed for recovery of money against Respondent No.2 is null and void ab-initio as the same is barred Under Section 69 of the Partnership Act.
v) Because the Ld. Arbitrator has failed to serve a notice of passing Award against the said Respondent No.2 and no copy of such award was given or served upon the said Respondent No.2.
vi) Because the said Ld. Arbitrator has illegally and unlawfully accepted the claim of Respondent No.1 and passed an Award of Rs.23,70,000/- (Rupees Twenty Three Lakh Seventy Thousand only) alongwith interest @ 6% per annum w.e.f. 23.06.2014 till its realization against the said Respondent No.2 & others.
vii) Because the Ld. Arbitrator has failed to consider the fact that since the date i.e. on 03.10.1994 the date when the said partnership deed was allegedly came into existence between the said Respondent No.1 and the and till 16.12.2021 i.e. the date when the said Arbitral Award was OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 21 of 45 passed there was/is nothing on record to prove the fact that said amount of Rs.23,70,000/- was due against the said Respondent No.2 of the said decree holder.
viii) Because the said Ld. Arbitrator has failed to consider the fact that no single complaint of the Respondent No.1 of any nature was filed or pending since 03.10.1994 to December 2014 against the said Respondent No.2 and the said false and bogus litigation in the shape of arbitral proceedings were started due to the fact that the said Jagdish Kumar Sharma the husband of the Respondent No.1 was fought with the Respondent No.2 on petty matters and due to the said reasons the illegal and unlawful award was obtained by the Respondent No.1 from the said Ld. Arbitrator.
ix) Because the Ld. Arbitrator has failed to consider the fact that the said Respondent No.1 and her husband both are already involved in filing false and baseless suit against the said Respondent No.2 and which was already dismissed by the Ld. District and Sessions Judge, North-East Karkardooma Courts, New Delhi on 20.06.2020.
x) Because the Ld. Arbitrator has failed to consider the fact that the said Jagdish Kumar the husband of the Respondent No.1has already taken its share from the properties of Late Sant Ram on 12.06.2014, including the said shop where upon the said partnership firm was carried on and the same OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 22 of 45 was dissolved on 23.06.2014.
xi) Because the Ld. Arbitrator has failed to consider the fact that the said property where upon the said firm was carried is in exclusive possession of the said Respondent No.1 as well as in possession of the Petitioner No.2 i.e. Sunil Sharma and the Respondent No.2 has no concern with the said property since the year.
xii) Because the Ld. Arbitrator has failed to consider the fact that the said Respondent No.1 Smt. Shushila Sharma was/is neither incorporated in the Books of Registrar companies nor she has shown herself a partner in the firm except that the such partnership deed dated 03.10.1994 and which itself is neither registered nor attested as required mandatory under the Registration Act 1908.
xiii) Because the Ld. Arbitrator has failed to consider the fact that under the Limitation Act there is specific provisions of Recovery of amount from last three years and nothing more except that the said Respondent No.1 clear shows the continuity of transactions since the year 1994 till passing Award and therefore, the said claim of the claimant is barred under the Limitation Act.
xiv) Because the Ld. Arbitrator has failed to summon the record of income tax paid either by the firm or by its partners specifically to summon the record of Income Tax paid by Respondent No.2 since the year 1994 to the year OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 23 of 45 2021 when the said award was passed against the Respondent No.2 which the said record specifically shown that the said respondent never ever paid more than Rs.802/- as the income tax and that too was paid in the year 1996 upon the total income incurred from the said Bhardwaj Enterprises the Petitioner No.1 herein.
xv) Because the Ld. Arbitrator did not consider the factual position of the said Respondent No.2 who was/is continuously ill with mental disorder since the year 2017 and till date and passed the said ex-parte order against him without heard him on merits.
xvi) Because the Ld. Arbitrator did not consider the fact that the said Respondent No.2 Anil Kumar Sharma has no source of income for his livelihood and he is completely dependent upon his son who is doing a private job and not earned more than Rs.15,000/- per month.
xvii) Because the said Ld. Arbitrator did not consider the fact that the said Bhardwaj Enterprises the petitioner no.1 herein has already been dissolved in the year 2014 permanently due to the reason of going it in the complete loss as the personal disturbances started going on in the said firm between the said Respondent No.2.
Therefore, it is stated on behalf of the respondent no. 1 that the present petition u/S. 34 of the Act has no merits and is liable to be OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 24 of 45 dismissed.
6. I have heard Sh. Aditya Bakshi along with Sh. Pushkar Khanna, Ld. Counsel(s) for the petitioner, Sh. Pratap Sahani along with Sh. Manish Badal, Ld. Counsel(s) for respondent no. 1, Sh. M. S. Saini, Ld. Counsel for respondent no. 2 and also gone through the record. I have also gone through the written submissions / arguments filed on behalf of all the parties.
7. Ld. Counsel for the petitioner has relied upon the following judgment(s) in support of his contentions :
a) Alupro Building Systems Pvt. Ltd. vs. Ozone Overseas Pvt. Ltd., (2017) SCC OnLine Del 7228;
b) Amit Guglani & Anr. L and T Housing VS. Finance Ltd.", ARB. P. 1317/2022 (Neutral Citation 2023:DHC:5979), judgment dated 22.08.2023;
c) Web Overseas Limited vs. Universal Industrial Plants Manufacturing Company Pvt. Ltd., 2022 SCC OnLine Del 4111;
d)NHPC Limited vs. Jaiprakash Associates Ltd., 2023 SCC OnLine Del 3294;
e) M/s Indian Oil Corporation vs. M/S IL&FS Pradip Refineries Water Ltd. OMP (Comm.) 110/2018, Neutral Citation 2023:DHC:3032, judgment dated 03.05.2023;
f) Associate Builders vs. DDA (2015) SCC 3 SCC 49;
g) Ssangyong Engineering and Construction Company Limited v. National Highways Authority of India (NHAI) (2019) 15 SCC 131;
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 25 of 45
h) Delhi Airport Metro Express Pvt. Ltd. vs. Delhi Metro Rail Corporation (2022) 1 SCC 131;
i) Section 44AB of the Income Tax, Act 1961.
8. Ld. Counsel for respondent no. 2 has relied upon the following judgment(s) / order(s) in support of his contentions :
a) Daisy Trading Corporation Vs. Union of India 2001 (6) DRJ 846;
b) Indian Iron & Steel Co. Ltd. Vs. The Sutna Stone & Lime Co. ltd.
AIR 1991 CALCUTTA 3;
c) Union of India VS. Tecco Trichy Engineers & Contractors (2005) 4 Supreme Court Cases 239;
d) Smt. Sushila Sharma Vs. M/s. Bhardwaj Enterprises & Ors. OMP (MISC) 45/2019, decided on 13.12.2019;
e) Smt. Sushila Sharma Vs. M/s. Bhardwaj Enterprises & Ors. OMP (MISC) 3/2021 & IA 5419/2021.
9. With regard to the plea taken by Ld. Counsel for the petitioner that the claim of the petitioner was barred by limitation, the Ld. Arbitrator in relevant paras 30 and 31 of the impugned award has held as under :
30.It is trite to examine the provisions of the arbitration and conciliation Act for the purpose of limitation. Section 11 of the Act does not provide any time period for filing an application under sub-
section (6) for appointment of an arbitrator.
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 26 of 45 According to section 43 of the Arbitration and Conciliation Act, the Act shall apply to arbitrators as it applies to proceedings in court. The provisions of the Limitation Act, 1963 does not provide a time period for filing of an application for appointment of an arbitrator. Being it so, a reliance has to be placed upon the residual provision Article 137 of the Limitation Act, 1963 which provides a period of 3 years from the day when the right to apply accrues for any other application for which no period of limitation is provided elsewhere in this division
31.In the present case the right to the claimant accrued in December, 2015 when respondent no. 2 and 3 denied that the claimant was the partner of the firm and that she was entitled to her proportionate share of the profit and loss of the firm. Thereafter a legal notice was issued on behalf of the claimant to the respondents on 05.01.2016. Later, the claimant filed a suit for permanent injunction against respondent no. 2 and 3 in the year 2016 in which the respondent no. 2 himself filed an application under section 8 of the Arbitration and Conciliation Act. Subsequently, the claimant on 17.04.2017 filed an application before the Hon'ble Delhi High Court being Arb. No.-
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 27 of 45 252/2017 under section 11(6) of Arbitration and Conciliation Act where upon the Hon'ble High Court vide order dated 15.09.2017 constituted this Arbitral Tribunal and the statement of claim was filed by the claimant on 16.10.2017 before DIAC.
10. The findings given by the Ld. Arbitrator cannot be faulted, as he has rightly added that Section 11 of the Act does not provide any time period for filing an application sub-section (6) of the Act for appointment of the Arbitrator. As per Section 43 of the Act, the same shall apply to the arbitrators, as it applies to the proceedings in Court. He has further held that the provisions of The Limitation Act, 1963 does not provide a time period for filing of an application for appointment of an arbitrator. Therefore, in this scenario, reliance can be placed upon the residual provision Article 137 of The Limitation Act, 1963, which provides a period of 3 years from the day when the right to apply accrues for any other application for which no period of limitation has been provided elsewhere.
11. Thereafter, Ld. Arbitrator has rightly held that the right to the claimant accrued in December 2015, when respondent no. 2 & 3 denied that the claimant was the partner of the firm and that she was entitled to her proportionate share of the profit and loss of the firm. Thereafter, a legal notice was issued by the claimant to the respondents on 05.01.2016, whereafter the claimant filed a suit for permanent injunction against OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 28 of 45 respondent no. 2 & 3 in the year 2016, in which respondent no. 2 had himself filed an application u/S. 8 of the Act and thereafter the claimant on 17.04.2017 filed an application before the Hon'ble Delhi High Court u/S. 11(6) of the Act. Therefore, it has been rightly held by the Ld. Arbitrator in these circumstances that the claim of the claimant was not barred by limitation.
12. Now with regard to the other plea of Ld. Counsel for the petitioner that there is violation of Section 21 of the Act, as no notice regarding the invocation of arbitral proceedings has ever been served upon the opposite parties i.e. the petitioner prior to the arbitral reference. From the perusal of the arbitral award, it appears that claimant who was respondent no. 1 before the Ld. Arbitrator had filed a civil suit bearing no. 220/2016 titled as Smt. Sushila Sharma Vs. Sunil Kumar Sharma & Anr., wherein the petitioner had moved an application u/S. 8 of the Act, which was allowed by the order of Ld. Civil Judge dated 23.03.2017, whereafter respondent no. 1 also preferred a petition u/S. 11(6) of the Act for appointment of the arbitrator before the Hon'ble High Court bearing ARB.P. 262/2017 titled as Sushila Sharma Vs. Sunil Kumar Sharma & Anr and the Hon'ble High Court vide order dated 15.09.2017 after the consent of the respondents i.e. the petitioners herein appointed Sh. Subhash Mishra, Advocate as the sole arbitrator. The order of the Hon'ble High Court as reflected in para 3 & 4 of the said order is reproduced as under :
3. Disputes having arisen between the parties, litigation arise OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 29 of 45 between the parties. A criminal complaint was also filed by the petitioner. The petitioner filed a suit for permanent injunction against respondent Nos. 1 and 2 to restrain them from creating any hindrance in her way to enter the partnership property. An application under Section 8 of the Act was filed by respondent No. 1 and the same was allowed by the trial court on 23.03.2017. Hence the present petition.
4. The learned counsel for the respondents at the outset submits that he has no objection in case a sole arbitrator is appointed.
However, he submits that he has filed his reply. Reply be taken on record.
13. Section 21 of the Act is reproduced as under :
21. Commencement of arbitral proceedings : Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.
14. The very reading of Section 21 of the Act starts with the proviso "unless otherwise agreed by the parties", since once the petitioner had moved an application u/S. 8 of the Act before the Civil Court, where the respondent no. 1 had filed a civil suit and subsequent thereto when the respondent no. 1 filed a petition u/S. 11(6) before the Hon'ble High Court, where the petitioner gave unconditional consent for appointment of the arbitrator, therefore, there is sufficient compliance of Section 21 of the Act regarding invocation of the arbitration proceedings, as contemplated under The Arbitration and Conciliation Act, 1996, as in such a scenario, it can be safely said that it was agreed between the parties OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 30 of 45 to refer their disputes to an Arbitrator.
15. It is evident from the conduct of the petitioner twice when he moved an application u/S. 8 of the Act for referring the dispute for arbitration and secondly when he gave no objection / consent for referring the matter to arbitrator before the Hon'ble Delhi High Court, when respondent no. 1 had moved an application for appointment of the arbitrator. Therefore, there is sufficient compliance of Section 21 of the Act.
In these facts and circumstances, the judgment(s) relied upon by Ld. Counsel for the petitioner (supra) are not applicable to the peculiar facts and circumstances of the present petition in my respectful view.
16. Regarding the another plea taken by Ld. Counsel for the petitioner that the account statements were not required to be audited, if the turnover is less than Rs. 1 Crore, as per the Income Tax Act, yet the arbitrator repeatedly asked him to file the audited account statements, which was not permissible and is contrary to law. In this regard, the Ld. Arbitrator in the impugned award dated 16.12.2021 has held in the following para(s) as under :
58. This Tribunal gave repeated directions to respondent no.2 to file the audited statement of account of the partnership firm from 03.10.1994 to 23.06.2014 vide OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 31 of 45 procedural orders dated 29.08.2018; 08.10.2018, 03.12.2018; 11.01.2019; 06.02.2019 and 28.02.2019.
However, despite these directions respondent no.2 failed to produce the same. On 03.12.2018, the counsel for respondents even undertook to file the same on or before the next date. On 06.02.2019, the matter was listed for the said compliance and framing of issues when the counsel for respondents took adjournment on the ground that respondent no.2 met a road accident recently and that the relevant papers were lying with him. These facts leaves no doubt that the relevant records i.e the audited statement of account of the firm was well within the knowledge and possession of respondent no.2 but he chose not to produce the same. Proceedings of this Tribunal on 03.12.2018 and 06.02.2019 leaves no doubt that the existence of the relevant documents of the firm was admitted by respondent.
59. It is interesting to note that it was only later on that respondent no2 through an application dated 27.02.2019 submitted to the Tribunal that no statutory audit of the firm was ever carried out since the turnover of the firm was not more than 10 lacs and, hence, statutory audit was not required. Here also the respondent has given conflicting reasons for non- production of documents, as apparent from their written arguments. In the written OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 32 of 45 arguments the respondent has submitted on one hand that since the turnover was less than 10 lacs no tax audit was required. While on other hand in same breath it is submitted by respondent that since no partnership came into existence, there was no necessity for respondent to produce the balance sheets or the audited statement of account of the firm, I have little hesitation to say that the reasons and grounds given by respondent for non- production of documents does not inspire confidence.
65. In the present matter, as discussed above in detail, the claimant has set up a case, the best evidence of which is in the books and accounts and the balance sheets of the partnership firm which is in the possession of respondent No.2. The conduct of respondent no.2 and the statements and undertaking given before the Tribunal by the said respondent shows that respondent no.2 had the knowledge and the possession of the relevant documents. Therefore, since the relevant documents have not been produced. I am of the considered view that the documents are being deliberately withheld and kept back by respondent 2 with the knowledge and design that if it were produced it would go against respondents. I therefore, hold that in view of the facts and circumstances of the present matter, this is a fit case for this Tribunal to draw adverse inference against respondents.
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 33 of 45
17. From the perusal of the above findings given by the Ld. Arbitrator, it appears that the said objection has also been taken before the Ld. Arbitrator by the petitioner that no statutory audit of the firm was carried out since the turn over of the firm was not more than Rs. 10 Lakhs, hence no statutory audit was required, yet the respondent gave conflicting reasons for not filed the tax documents. The petitioner on the one hand submitted that his turnover was less than Rs. 10 Lakhs, therefore, no audit was required, yet on the other other hand in the same breath, it was submitted by him that since no partnership came into existence, there was no necessity to produce the balance sheet or audited statement of account.
18. Therefore, it appears that the petitioner was taking contradictory stands before the Ld. Arbitrator and rather was reluctant to produce the balance sheet or the account statement(s) of the firm despite grant of various opportunities to him. Therefore, it appears that sufficient opportunities were granted to the petitioner to produce the relevant record i.e. the statement of account of the partnership firm, despite that he failed to produce so by giving contradictory reasons for the same.
19. The Ld. Arbitrator has also held that the claimant had set up a case, the best evidence of which was in the books of accounts and the balance sheets of the partnership firm, which was in possession of the petitioner and conduct of the petitioner was such, which shows that he OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 34 of 45 had knowledge and in possession of the relevant documents and still he did not produce the same deliberately with the knowledge and design that if the same would be produced, the same would go against him. Therefore, the Ld. Arbitrator has rightly raised adverse inference against him for withhelding such a vital piece of evidence u/S. 114(g) of the Indian Evidence Act.
20. Regarding the contention of Ld. Counsel for respondent no. 2 Sh. Anil Kumar Sharma that the respondent no. 2 Sh. Anil Kumar Sharma was never served by any notice or summons issued on 29.09.2018 by the Ld. Arbitrator in the arbitration proceedings and therefore, the ex parte order passed against him on 08.10.2018 is patently illegal, arbitrary and is liable to be set aside in view of the settled law, as he was never served upon with any summons and there is no proof regarding service of summons upon him.
21. I have perused the record. Regarding this contention, from the perusal of the order sheet of the Ld. Arbitrator i.e. the arbitral record in the present case titled as Ms. Sushila Sharma Vs. Sunil Kumar Sharma & Anr. In Case Ref. No. DAC/1779/09-17, dated 29.08.2018 it appears that notice was sent to the respondent no. 3 Sh. Sunil Kumar Sharma through Delhi International Arbitration Centre, the said order sheet is reproduced as under :
The pleadings are complete in the matter. However, the reply to the Statement of Claim filed by the OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 35 of 45 Respondent No. 1 through its partner respondent No. 2, is not available on record. The respondent No. 2 who is appearing in person has handed over the reply to the Statement of Claim, which is taken on record. Further, Respondent No. 3 who is also one of the partner of Respondent No. 1 has not put his appearance today. In the interest of justice, fresh notice be issued to the Respondent No. 3 through Centre for the next date of hearing after filing of extra copy of the statement of claim and application u/s. 17 of the Act, by the claimant. Respondent No. 3 may file his reply to the statement of claim and the application u/s. 17 of the Act within three weeks of the receipt of the notice from the Centre.
22. Therefore, it appears that since it was an institutional mediation carried out through Delhi International Arbitration Centre (DIAC), it was the duty of the DIAC to get the service of respondent no. 3 effected. As per DIAC Arbitration Rules 2007 in the Chapter commencing the arbitration, as per Rule 4.5, which is reproduced as under :
4.5 The Centre shall sent a copy of the Request and the documents annexed thereto the Respondent.
Therefore, in view of the above rule, it is apparent that it was the DIAC, who had to effect the service upon the respondent no. 3, who is the respondent no. 2 here.
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 36 of 45
23. In the next order sheet dated 08.10.2018, it is stated as under :
Notice was issued to respondent no. 3 Mr. Anil Sharma on the last date of hearing. However, despite service on 24th September 2018, there is no appearance on his behalf. Respondent no. 3 Mr. Anil Sharma is, accordingly proceeded ex-parte. Reply has been filed by respondent no. 2 to the application filed by the claimant under section 17 of the Arbitration & Conciliation Act.
24. Therefore, it appears that the Ld. Arbitrator relying upon the report of the DIAC in which the respondent no. 3 i.e. Anil Sharma, who is respondent no. 2 here was found him to be served and thereafter, he proceeded him ex-parte, as he failed to appear before the said Ld. Arbitrator despite due service. Therefore, there is due presumption of service upon the respondent no. 2, who was the respondent no. 3 therein, in view of the order sheets / arbitral proceedings of the Ld. Arbitrator, which are presumed to have been correctly recorded, unless otherwise proved to be so and there is no reason to doubt that the order sheet recorded by the Ld. Sole Arbitrator would be incorrect.
25. Even otherwise, Ld. Arbitrator had no axe to grind against the respondent no. 2. Therefore, in view of the fact that respondent no. 2 here, who was respondent no. 3 there had been found to have been duly OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 37 of 45 served before the Ld. Arbitrator. This contention regarding the non service of the summons of the arbitration proceedings upon the respondent no. 2 is without any substance and has no merits.
26. Regarding the other contention that no copy u/S. 31(5) of the The Arbitration and Conciliation Act, 1996 was ever supplied to the respondent no. 2 which is stated to be the mandatory provisions. Since as discussed above, respondent no. 2 chose not to appear before the Ld. Arbitrator, the Ld. Arbitrator had no means to supply the copy of the arbitral award after it was made and published to the respondent no. 2, as it appears that respondent no. 2 deliberately did not chose to appear and participate in the proceedings before the Ld. Arbitrator, as the Ld. Arbitrator had pronounced the award on 16.12.2021 and had supplied the copy of the arbitration award to the petitioner on the same day. There was no reason why the Ld. Arbitration would have not supplied the copy to respondent no. 2, if he had participated in the arbitral proceedings.
27. Regarding the next contention that the extension of time u/S. 29A of The Arbitration and Conciliation Act, 1996 was done in connivance with the petitioner, as petitioner had illegally and unlawfully gave consent to the Ld. Arbitrator for extension of period of six months on 16.05.2019 without the knowledge of respondent no. 2, by making respondent no.2 as party to the petitions i.e. OMP (MISC) No. 45/2019 and another petition no. OMP Misc. No.3/2021, both titled as Smt. Sushila Sharma Vs M/s. Bhardwaj Enterpries and others. The said OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 38 of 45 contention of Ld. Counsel for respondent no, 2 is without any merits, as admittedly as stated by respondent no. 2 himself the said extensions had been granted by the Hon'ble High court. Therefore, the ld. Counsel for respondent no. 2 cannot be allowed to raise such an frivolous contention.
28. Regarding the further contention that in the present case the total arbitrator fee was quantified Rs.2,07,750/- and each party's share comes to Rs.1,03,750/- and that too between the said petitioner i.e. Sh. Sunil Sharma and respondent no.1 Smt. Sushila Sharma respectively. However, as per order dated 15.02.2020, passed by the Ld. Arbitrator, it apparently shows that the said petitioner Sh. Sunil Sharma has paid only Rs.17,500/- and his remaining balance of Rs.86,250/- was paid by respondent no. 1 Smt. Sushila Sharma, which the same is prima facie suggested that the said impugned award was obtained by respondent no. 1 fraudulently, illegally and unlawfully and the same is to be set aside in the interest of justice.
29. The said contention of the Ld. Counsel for the respondent is also without any substance, as petitioner contested the said arbitration proceedings tooth and nail by taking every objection available, as per law. Merely because the respondent no. 1 deposited more fee(s) in the Arbitration Centre, it does not raise any presumption of the impugned award being obtained illegally and fraudulently, as already discussed above as petitioner has filed the present petition challenging the said impugned award and had participated fully in the arbitral proceedings, on OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 39 of 45 the mere apprehension of respondent no. 2, expressed above, the respondent no. 2 cannot be allowed to challenge the neutrality of the Ld. Arbitrator, who had been appointed by the Hon'ble High Court in a petition u/S. 11(6) of The Arbitration and Conciliation Act, 1996 or the illegality of the award by taking frivolous contentions.
30. It is settled law that the Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even by the Court as a Court of law could come to a different conclusion on the same facts. The Court cannot reappraise the evidence and it is not open to the Court to sit in appeal over the conclusion of the Arbitrator. It is not open to the Court to set aside a finding of fact arrived at by the Arbitrator and only grounds on which the award can be set aside are those mentioned in the Arbitration Act. Where the Arbitrator assigns cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the Court in exercise of the power vested in it. Where the Arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the Court would generally not interfere with the award passed by the Arbitrator.
31. In the judgment Bharat Lal Maurya Vs. Godrej & Boyce Mfg. Co. Ltd. ILR (2014) III DELHI 2188 OMP, it has been held as under :
OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 40 of 45 "22. The powers exercised by the Court while deciding objections under Section 34 of the Act are not appellate powers.
The Court does not sit as a Court of appeal. If the Arbitral Tribunal has taken a plausible view, the Court while dealing with objections under Section 34 would not substitute its view for the view of the Arbitral Tribunal even in a case where the Court were to come to a conclusion that a different view is possible from the view taken by the Arbitral Tribunal, provided the view taken by the Arbitral Tribunal was a plausible view. The Court entertaining objections under Section 34 is not to appreciate or re-appreciate the evidence for the purposes of returning a finding of fact. The findings of fact returned by the Arbitral Tribunal are not to be interfered with unless they are perverse or erroneous on the face of the record . No such perversity or error apparent has been pointed out in the present case. The finding s of the Arbitral Tribunal that the agreement being unregistered and insufficiently stamped and thus inadmissible in evidence and further that no clause of the said agreement can be enforced, are the finding s in accordance with the settled judicial principles.
23. The Supreme Court of India in the case of M C D ERMOTT IN TERNA TIONA L INC . VERSUS B URN S TANDARD CO.
LTD. : 2006 (11) SCC 181 has laid down as under:
"35. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court's jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it."
24. The Supreme Court of India in the case of ONGC LTD . VERSUS SAW PIPES LTD ., (2003) 5 SCC 705 has laid down as under:
"54. It is true that if the Arbitral Tribunal has OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 41 of 45 committed mere error of fact or law in reaching its conclusion on the disputed question submitted to it for adjudication then the court would have no jurisdiction to interfere with the award. But this would depend upon reference made to the arbitrator:
(a) if there is a general reference for deciding the contractual dispute between the parties and if the award is based on erroneous legal proposition, the court could interfere; (b) it is also settled law that in a case of reasoned award, the court can set aside the same if it is, on the face of it, erroneous on the proposition of law or its application; and (c) if a specific question of law is submitted to the arbitrator, erroneous decision in point of law does not make the award bad, so as to permit its being set aside, unless the court is satisfied that the arbitrator had proceeded illegally."
25. The Supreme Court of India in the case of M AHARASHTRA SEB V. S TERILITE INDUSTRIES (INDIA ) 2001 (8) SCC 482 has laid down as under:
"9. The position in law has been noticed by this Court in Union of India v. A.L. Rallia Ram [AIR 1963 SC 1685 : (1964) 3 SCR 164] and Madanlal Roshanlal Mahajan v. Hukumchand Mills Ltd. [AIR 1967 SC 1030 : (1967) 1 SCR 105] to the effect that the arbitrator's award both on facts and law is final; that there is no appeal from his verdict; that the court cannot review his award and correct any mistake in his adjudication, unless the objection to the legality of the award is apparent on the face of it. In understanding what would be an error of law on the face of the award, the following observations in Champsey Bhara & Co. v. Jivraj Balloo Spg. and Wvg. Co. Ltd. [(1922-23) 50 IA 324 : AIR 1923 PC 66] , a decision of the Privy Council, are relevant (IA p. 331) 'An error in law on the face of the award means, in Their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance a note OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 42 of 45 appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous.'
10. In Arosan Enterprises Ltd. v. Union of India [(1999) 9 SCC 449] this Court again examined this matter and stated that where the error of finding of fact having a bearing on the award is patent and is easily demonstrable without the necessity of carefully weighing the various possible viewpoints, the interference in the award based on an erroneous finding of fact is permissible and similarly, if an award is based by applying a principle of law which is patently erroneous, and but for such erroneous application of legal principle, the award could not have been made, such award is liable to be set aside by holding that there has been a legal misconduct on the part of the arbitrator."
26. The Arbitral Tribunal has returned a finding and rightly so, that as the Lease Agreement was unregistered and insufficiently stamped, the clause stipulating a lock -in- period could not be enforced. The Petitioners were rightly held not entitled to seek any amount for the unexpired lock-in-period. As regards the finding by the Arbitral Tribunal that the premises were vacated w.e.f. 01.04.2009, the findings are factual and not an error apparent on the face of the record. The same are not perverse and cannot be interfered with."
32. In this case, the Ld. Arbitrator was a qualified Lawyer /Advocate, who was appointed as sole arbitrator by the Hon'ble High Court to adjudicate a dispute between the parties in a petition u/S. 11(6) of The Arbitration and Conciliation Act, 1996 bearing no. ARB.P.262/2017 in case titled as Sushila Sharma Vs. Sunil Kumar Sharma vide order dated 15.09.2017. It was also ordered that the arbitration shall take place under the aegis of Delhi International OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 43 of 45 Arbitration Centre, New Delhi. Therefore, the respondent no. 2 or the petitioner cannot be allowed to say that he was biased one.
33. It is reiterated that while deciding the objections u/S. 34 of the Act, the Court does not sit as an Court of Appeal. Further, the Court while dealing with objections u/S. 34 of the Act would not substitute its view for the view of the arbitral tribunal, even if the Court comes to a conclusion that a different view was possible from the view taken by the arbitral tribunal.
The Ld. Arbitrator had reached his conclusion judiciously and correctly by giving cogent reasons in support thereof.
34. The Court while deciding the objections u/S. 34 of the Act can also not appreciate or re-appreciate the findings of fact returned by the arbitral tribunal and further the findings returned by the arbitral tribunal are not to be intervened, unless they are perversive or erroneous on the face of the record. No such perversity or error has been pointed out during the course of the arguments by the Ld. Counsel for the petitioner or respondent no. 2 nor there is any circumstance from which any of the ground stated in Section 34 of the Act like fraud, bias, violation of natural justice etc. can be made out to set aside the arbitration award.
35. This Court cannot reappraise the evidence or the conclusions arrived at by the Ld. Arbitrator, as this Court does not sit in appeal over the conclusions of the Ld. Arbitrator. The petitioner has also failed to OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 44 of 45 demonstrate as to how the award or the terms thereof are contrary to the fundamental policy of India or the findings arrived therein are totally perverse. The view taken by the Ld. Arbitrator was judicious as well as plausible view in the matter. The Ld. Arbitrator himself was a qualified Lawyer / Advocate, appointed by the Hon'ble High Court, therefore, his neutrality cannot be doubted, even otherwise petitioner and respondent no. 2 are estopped from doing so.
36. In these circumstances, the arbitration award dated 16.12.2021 has been rightly passed by the Ld. Arbitrator by giving cogent reasons in support of his decision after considering the entire material before him. As a consequence, the present petition u/S. 34 of The Arbitration and Conciliation Act, 1996 has no merits. Same is dismissed. No order as to cost(s).
File be consigned to record room.
Announced in the open court (Sanjeev Aggarwal) today on 31.10.2023. District Judge (Commercial)-02 Patiala House Courts, New Delhi OMP (Comm) 49/2022 (CNR No. DLND010024542022) Page No. 45 of 45