Bombay High Court
Siddhivinayak Realties Pvt ... vs 1.V Hotels Ltd, And 5 Others on 27 July, 2022
Author: Gauri Godse
Bench: G.S. Patel, Gauri Godse
4-OSAPP-355-2014 IN ARBP-667-2011 WITH IAL-15376-2021 IN APP-355-2014.DOC
Ashwini
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 355 OF 2014
IN
ARBITRATION PETITION NO. 667 OF 2011
WITH
INTERIM APPLICATION (L) NO. 15376 OF 2021
IN
APPEAL NO. 355 OF 2014
V Hotels Ltd & Ors ...Appellants
Versus
Siddhivinayak Realties Pvt Ltd ...Respondents
Mr Amin Arsiwala, with Farzeen Pardiwalla, for the Appellants.
Mr DV Deokar, with Sachin Pandey & D Parikh, i/b Parimal K
Shroff & Co, for the Respondent.
Mr GS Godbole, with Sagar Patil & Pooja Yadav, for MCGM.
CORAM G.S. Patel &
Gauri Godse, JJ.
ASHWINI HULGOJI DATED: 27th July 2022 GAJAKOSH PC:-
Digitally signed by ASHWINI HULGOJI GAJAKOSH1. The Appeal is directed against an detailed order dated 10th Date: 2022.08.01 14:06:15 +0530 May 2013. The dispute pertains to what was once the famous Hotel Page 1 of 6 27th July 2022 4-OSAPP-355-2014 IN ARBP-667-2011 WITH IAL-15376-2021 IN APP-355-2014.DOC Centaur at Juhu. We will hear the Appeal itself finally on 4th, 6th and 7th October 2022.
2. In the meantime our attention is drawn to two orders dated 13th August 2021 and 13th September 2021 passed by a previous Division Bench on Interim Application (L) No. 15376 of 2021. That Interim Application was filed by the Respondent to the Appeal, the Petitioner in Section 34 Arbitration Petition No. 667 of 2011. By the impugned order made on the Section 34 Petition, the learned Single Judge set aside an arbitral award of 13th July 2011.
3. Mr Arsiwala appears for the Appellants, originally Respondents in Section 34 Petition.
4. In its Interim Application (L) No. 15376 of 2021, the Respondent, Siddhivinayak Realties Pvt Ltd, complained that the Appellants had not paid property tax to the Municipal Corporation.
A warrant of attachment had been issued. Siddhivinayak Realties said that if the property was auctioned it would be prejudiced. It asked that the Appellant be directed to pay the property tax dues and if it did not that the Appeal should be dismissed. In the alternative, the submission was that Siddhivinayak Realties should be allowed to make the payment on a without prejudice basis.
5. On 13th August 2021, the Appellants said that according to them, only Rs.1.25 crores was payable. An amount of Rs.1.4 crores had been deposited earlier. After some adjustments, the Appellants Page 2 of 6 27th July 2022 4-OSAPP-355-2014 IN ARBP-667-2011 WITH IAL-15376-2021 IN APP-355-2014.DOC said they were only liable to pay Rs.85 lakhs and not Rs.3,74,76,940/- as demanded by the MCGM.
6. The Division Bench, which had before it an Appeal under Section 37, then directed the Appellants to pay Rs.1 crore to the Corporation within two weeks. There was a direction to the Assessor and Collector of the Corporation to hear the Appellants and consider their submissions oral and written and to reconcile accounts and then to submit a report to Court. In the meantime, the Corporation was not to proceed with the sale of the attached property.
7. Time for this purpose was extended later on 13th September 2021.
8. Mr Godbole for the Corporation says that the Corporation is needlessly joined. Such an order could not have been passed against it. In any event, the Assessor and Collector has completed the exercise and has said that a balance of Rs.2,59,81,707/- is payable. There is a new report of 5th March 2022 and it shows that an amount of Rs.4,34,33,921/- is payable.
9. He submits, in our view quite rightly, that the order of 13th August 2021 and its continuance on 13th September 2021 is entirely beyond jurisdiction. It is true, he admits, that the Corporation did not challenge either order but that was out of the deference to the Court.
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10. We believe Mr Godbole is correct and the fact that the MCGM has followed the orders does not mean that those orders are or were jurisdictionally competent. We do not sit in Appeal over the previous Division Bench's order but find no principle of jurisprudence says that we are bound by a jurisdictionally thoroughly incompetent order. Like us, the previous Division Bench was hearing and hearing only, an Appeal under Section 37 of the Arbitration Act. This meant that it had to deal with the subject matter of the Appeal, which was an order under Section 34 challenging an award. The Division Bench was not exercising writ jurisdiction. It was not also exercising a jurisdiction of a first appellate Court, i.e. a Court hearing a regular First Appeal. Section 37 of the Arbitration Act tells us that only a certain class of orders are appealable. Section 37(1)(c) says that an order setting aside or refusing to set aside an arbitral award under Section 34 is appealable.
11. Under no circumstances and in no situation was such an IA by Siddhivinayak maintainable before a Section 37 Court. Indeed, there is a statutory remedy under the Mumbai Municipal Corporation Act 1888 where an assessment property tax is to be disputed or challenged. The Act itself provides for a full remedy and also specifies the forum of competent jurisdiction viz., the Small Causes Court. This Court therefore had absolutely no jurisdiction to make any order on the IA. The only order that could have been would be to permit a withdrawal of the IA with liberty to make an appropriate application to a jurisdictionally competent Court.
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12. It is for this reason that we hold that the two orders of 13th August 2021 and 13th September 2021 are entirely beyond the scope of Section 37 of the Arbitration and Conciliation Act 1996. We accept that the MCGM has acted on those orders but, as we noted this does not make them jurisdictionally competent. It only means that there is now according to the MCGM an amount of Rs Rs.4,34,33,921/- payable.
13. We will do both the Appellants and Respondents the courtesy of giving them a copy of what has been submitted by Mr Godbole. They are both and each entitled to take appropriate steps in accordance with law.
14. The orders of 13th August and 13th September 2021 stand vacated. The MCGM is not a party to these proceedings and is deleted as such, if that is required.
15. All rights and remedies in law of the MCGM are unaffected.
16. We clarify that we have only reproduced the figures as reported to us. We have made no observations on the correctness of the report/s or the calculations. In that behalf, all contentions are left open.
17. For completeness a copy of the Report tendered by Mr Godbole is taken on record and marked "G1" for identification with today's date.
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18. We come to understand that the record in the Appeal is complete.
19. However we allow both sides to prepare advance written submissions with accompanying compilations of authorities duly indexed and paginated. These should also be readied in soft copy and tendered in advance.
20. List the matter on 4th October 2022, 6th October 2022 and 7th October 2022 at 2.30 pm. (Gauri Godse, J) (G. S. Patel, J) Page 6 of 6 27th July 2022