Bombay High Court
Vijay Krishnaji Sawant And 5 Ors vs Durgasingh L. Deora And Anr on 22 July, 2022
Author: G.S. Kulkarni
Bench: G.S. Kulkarni
Digitally
signed by
PRASHANT
PRASHANT VILAS
VILAS RANE
RANE Date:
2022.07.23
19:34:10
+0530
Shantanu 1 901.CARBPL17072-22
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION (L.) NO. 17072 OF 2022
Vijay Krishnaji Sawant & Ors. ..Petitioners
Vs.
Durgasingh L. Deora & Anr. ..Respondents
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Mr. S.M. Gorwadkar, Senior Advocate a/w Niranjan A. Mogre, Gaurav H.
Gangal i/b Siddhesh Borkar for the petitioner.
Ms. Manini Bharati a/w Mr. Amit Mehta, Mr. Omkar Davli and Mr.
Vinayak Shukla i/b Amit Mehta for the respondent no.1.
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CORAM : G.S. KULKARNI, J.
DATE : 22 July, 2022.
P.C.:
1. This is a petition filed under Section 37 of Arbitration and
Conciliation Act, 1996 (for short 'the Act') whereby the petitioners have
assailed an order dated 6 April,2022 passed by the learned sole
arbitrator on the respondent no.1's application filed under Section 17 of
the Act. By the impugned order learned sole arbitrator has granted the
following reliefs as set out in paragraph 152:-
"152. The applicant has prayed for stay of the Termination
Notice dated 30th January 2021. IN order to consider this prayer,
it is necessary to consider the difference between stay and
injunction. An injunction is applicable against a person, while an
order of stay operates against a Court. It is therefore not possible
to stay the Termination Notice. In the fitness of things, it is
absolutely necessary to grant reliefs in the following terms.
a) the Opponents are restrained from acting upon the
termination notice dated 30th January 2021.
b) the Opponents are restrained from in any manner,
selling, encumbering or creating third party rights or dealing
with or taking possession in respect of an area admeasuring
Shantanu 2 901.CARBPL17072-22
4939.85 sq.ft. (carpet area) (as per Schedule 'A' to the
Supplementary Agreement dated 11th February 2021 at pg.304
of the Affidavit in Rejoinder dated 8th September 2021 of the
Petitioner) out of the total area admeasuring 15807.52 sq.ft. in
Sale Building 'B' Wing, in the building being constructed on the
land bearing CTS No.629 (part) of Village Bandra, Bandra
(East), Mumbai 400051 along with corresponding car parking
area as per the DC Rules, in the project known as A&O Estado
Project being developed by Ashapura Builders and Developers;
c) the Opponents by themselves or through their
agents/nominees/heirs are restrained from in any manner
applying to Ashapura Options Pvt.Ltd. or sister concern for
release of the security, and/or dealing with or in respect of 6745
sq.ft. (carpet area) of the Devi Pada Security area totally
admeasuring 21584 sq.ft. in the first sale building to be
constructed by Ashapura Options Pvt.Ltd. (including its sister
concern) at land bearing Survey No.34A, Hissa No.1, CTS
No.215 of village Magathane in Taluka Borivali, Borivali (East),
Mumbai, alongwith the corresponding car parking area as per
the DC Rules as reflected in the Supplementary Agreement
dated 11th February 2021;
d) the Opponents by themselves or their agents/nominees
are restrained from acting upon : (I) the special power of
attorney dated 12th February 2021 bearing Registration No.DBR-
1/2589/2021 (pg.327 of the Affidavit in Rejoinder dated 8th
September 2021), and the blank signed agreement to sell
referred in the said power of attorney dated 12 th February 2021
(ii) the special power of attorney dated 11 th February 2021, to
the extent of an area admeasuring 4939.85 sq.ft. out of the total
entitlement of area admeasuring 15807.52 sq.ft as per Schedule
'A' to the Supplementary Agreement dated 11th February 2021;"
2. In the context of the submissions made by the learned
Counsel for the parties, as there is some relevance to paragraphs 153
and 153 of the impugned order, they are also required to be noted which
reads thus:
"153. Interim reliefs are accordingly granted in the above
terms. Mr.Ganoo, on instructions, stated that the Applicant
would be satisfied by grant of the above reliefs. I have already
held that the defence raised by the Opponents is probably the
most complete moonshine. Having regard to the conduct of the
Opponents in entering into Agreements in February 2021 after
illegally terminating the Applicant from the partnership, and
keeping in mind provisions of Section s31(8) and 31-A of the
Act, it is appropriate to impose costs of Rs.25,000/- on
Opponents. Opponents shall pay the costs on or before 30th April
2022 to the Applicant and shall not seek further extension of
Shantanu 3 901.CARBPL17072-22
time for paying the costs.
154. It is made clear that the observations made herein are
prima facie and tentative and have been made for deciding
Section 17 Application made by the Applicant."
3. On hearing the learned counsel for the parties for some time,
learned counsel for the parties would agree that the present proceeding
be disposed of in terms of the following order:-
ORDER
(i) The impugned award in so far as it directs in paragraph 152(a) to the effect that the opponents/petitioners are restrained from acting upon the termination notice dated 30 January 2021, shall remain stayed, pending the arbitral proceeding. However, this shall subject to the condition that the petitioners inform the respondents of all major decisions as also any decision prejudicial to the interest of the respondents in regard to the affairs of the partnership firm.
(ii) The learned sole arbitrator shall consider the issue of expulsion as one of the issues to be finally adjudicated in the arbitral proceeding and on the basis of the rival contentions, materials and evidence which may be placed on record on behalf of the parties.
(iii) It is agreed between the parties that the reliefs as granted in terms of paragraph 152 (b), (c) and (d) shall continue to operate till the final disposal of the arbitral proceedings.
4. Insofar as the observations as made by the arbitral tribunal in para 153 are concerned, the principal objection as urged by Mr.Gorwadkar, learned Senior Counsel for the petitioners is to the following observations:
"I have already held that the defence raised by the Opponents is probably the most complete moonshine. Having regard to the Shantanu 4 901.CARBPL17072-22 conduct of the Opponents in entering into Agreements in February 2021 after illegally terminating the Applicant from the partnership, and keeping in mind provisions of Sections 31(8) and 31-A of the Act, it is appropriate to impose costs of Rs.25,000/- on Opponents."
In the context of the petitioners' contention, it is required to be observed that the order passed on the Section 17 application, is an interim order and the observations as made in the order are prima facie and none of the observations, thus, can be said to be final observations. However, in regard to the contentions of Mr.Gorwadkar raising serious grievance on the above observations of the learned sole arbitrator in paragraph 153, it needs to be observed that such observations of the learned Arbitrator as quoted above are absolutely tentative and prima facie, and only for the purpose of the decision on the Section 17 application. Such observations hence, certainly shall in no manner whatsoever weigh with the learned sole arbitrator in considering the rival contentions at the final adjudication of the arbitral proceedings. Although the learned sole arbitrator himself in paragraph 154 has so clarified, however, looking at the tenor of such observations, the petitioners have insisted for such clarification, which is also acceptable to the respondents. This also as all rights and contentions of the parties on merits are expressly kept open. It is so re-clarified.
5. The petition is accordingly disposed of in the aforesaid terms. The learned sole arbitrator shall make an endeavour to dispose of the arbitral proceeding as expeditiously as possible as it is stated that the parties are already at the stage of recording of evidence.
6. No costs.
[G.S. KULKARNI, J.]