Karnataka High Court
M/S Chamundi Hotels Private Limited vs M/S Krishnarajendra Charitable Trust ... on 30 March, 2022
Author: B. Veerappa
Bench: B. Veerappa
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF MARCH, 2022
PRESENT
THE HON'BLE Mr. JUSTICE B. VEERAPPA
AND
THE HON'BLE Mrs. JUSTICE M.G. UMA
MISCELLANEOUS FIRST APPEAL No.4393/2015 (AA)
BETWEEN:
M/S CHAMUNDI HOTELS PRIVATE LIMITED.,
BANGALORE PALACE COMPOUND,
JAYAMAHAL ROAD,
BANGALORE-06,
REPRESENTED BY ITS DIRECTOR
SRI A .C. SRINIVAS RAJU,
...APPELLANT
(BY SRI ADITYA SONDHI, SENIOR COUNSEL FOR
SMT. MANEESHA KONGOVI, ADVOCATE AND
SRI NISCHAL DEV, ADVOCATE)
AND:
1. M/S KRISHNARAJENDRA CHARITABLE TRUST (REGD.)
NO.38/11, SECOND MAIN ROAD,
G.D. PARK EXTENSION,
BANGALORE-03.
REPRESENTED BY ITS HONORARY SECRETARY.
SRI. L.K. RAJU.
S/O LATE B.V. MUNIRAJU.
AGED ABOUT 73 YEARS.
2
2. SRI. G. RAGHAVENDRA RAO,
AGED ABOUT 70 YEARS,
SOLE ARBITRATOR,
R/AT NO.18, 2ND CROSS,
JUDICIAL OFFICERS LAYOUT,
SANJAYANAGAR,
BANGALORE-94.
...RESPONDENTS
(BY SRI R.S. RAVI, SENIOR COUNSEL FOR
SRI R. ANIL KUMAR, ADVOCATE FOR R1;
NOTICE TO R2 IS DISPENSED WITH VIDE ORDER DATED
29.06.2015)
*****
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 37(1)(b) OF THE ARBITRATION AND CONCILIATION ACT
PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED
30.3.2015 PASSED IN A.S.NO.98/2010 ON THE FILE OF THE 6TH
ADDITIONAL CITY CIVIL & SESSIONS JUDGE, BENGALURU CITY
(CCH-11) AND CONSEQUENTLY CONFIRM THE ARBITRAL AWARD
DATED 20.08.2010 PASSED BY THE 2ND RESPONDENT/Arbitrator in
C.M.P. No.27/2007.
THIS MISCELLANEOUS FIRST APPEAL HAVING BEEN HEARD
AND RESERVED FOR JUDGMENT, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, B.VEERAPPA J.,
DELIVERED THE FOLLOWING:
3
JUDGMENT
The appellant/defendant No.1 filed the present Miscellaneous First Appeal against the Judgment & Decree dated 30.3.2015 made in A.S. No.98/2010 on the file of the VI Additional City Civil & Sessions Judge, Bangalore City, allowing the Arbitral suit filed under the provisions of Section 34 of the Arbitration and Conciliation Act, thereby setting aside the award dated 20.8.2010 passed by the 2nd respondent/Arbitrator in C.M.P. No.27/2007 and reserving liberty to the appellant to take legal steps against the present 1st respondent/Trust for recovery of rent in respect of the schedule property in accordance with law, which would be subject to the decision of the Hon'ble Supreme Court in Special Leave to Appeal (Civil) No.3303/1997 and other connected matters.
I. FACTS OF THE CASE
2. It is the case of the appellant that he is the owner of the suit schedule properties morefully described in the Arbitration Suit and respondent No.1/Trust was permitted to use the premises on the basis of the agreement of licence dated 21.11.1995 on payment 4 of licence fee of Rs.20,000/- per month and licence was for a period of 48 months and could be renewed for a further period of 11 months with a 10% enhancement of licence fee over the existing rent. Under the terms of the licence, the 1st respondent was liable to pay monthly licence fee on or before 10th of every month. Under clause 5(b) of the licence, the appellant was entitled to put an end to the licence without assigning any reason. Under clause 12 of the agreement of licence, the appellant was entitled to terminate the licence for non payment of licence fee, electricity or water charges and other sums lawfully payable for a period of three months or for any breach of the terms and conditions of the licence. Respondent No.1 was permitted to provide better facilities and amenities and put up electric and water connections for the existing buildings for the requirement of Ayurvedic college at its own cost.
3. It is the further case of the appellant that after completion of works mentioned in terms of clause 4(a), a supplementary agreement of licence was entered into between the appellant and the 1st respondent on 24.9.1997, thereby the 1st respondent was permitted to use the premises under the terms of licence granted 5 by the appellant. The 1st respondent was a chronic defaulter of licence fee and as long back as on June 1998, Respondent No.1 was due in a sum of Rs.1,67,421/- to the appellant. In the month of September 1998, the 1st respondent paid a sum of Rs.20,000/- to the appellant and by its letter dated 27.8.1998, 1st respondent assured the appellant that payment of licence fee would be made in a phased manner and accordingly, a sum of Rs.1,00,000/- by two cheques of Rs.50,000/- each was paid by the 1st respondent only in January - 2000 leaving a balance of Rs.67,421/-.
4. It is further case of the appellant that the period of licence was expired on 31.7.1999 and the appellant by its letter dated 16.9.1999 requested the 1st respondent to pay enhanced licence fee of Rs.22,000/- per month in terms of clause 2 of the licence. Inspite of the same, he has not paid the licence fee from 1999 to 2006. On 14.8.2006, the appellant had called upon Respondent No.1 to pay the arrears of licence fee of Rs.6,08,000/-. Further, in the month of December 1999, the 1st respondent illegally put up construction covering a total area of 3,311 square feet without 6 obtaining prior approval as required under Clause 4(a) of the licence, thereby violated the terms of the licence.
5. In view of the above, the appellant did not wish to continue the agreement of licence dated 21.11.1995 and therefore, a notice was issued on 16.10.2006 to Respondent No.1 terminating the agreement of licence w.e.f. mid night of 31.1.2007, as contemplated under Clause 12(4) and clause 5(b) of the agreement of licence, thereby the use of the schedule premises after 31.01.2007 by the 1st respondent is illegal. Therefore, the appellant is entitled to the compensation for the same.
6. When things stood thus, the 1st respondent filed Arbitration Case No.A.A. 8/2007 before the VI Addl. City Civil Judge, Bangalore City and obtained an order of Temporary Injunction restraining the appellant from dispossessing him. After disposal of the Arbitration Case, the 1st respondent filed C.M.P. No. 27/2007 before this Court for appointment of arbitrator and this Court by the order dated 4.12.2007 appointed the 2nd respondent as the sole Arbitrator. The 1st respondent submitted its claim petition with list of 7 documents. The appellant filed statement of objections. Since Respondent No.1 did not vacate and hand over the possession of the property to the appellant, the appellant made a counter-claim before the 2nd respondent/ Arbitrator for directing Respondent No.1 to pay damages for the use and occupation of the schedule property and to quit and deliver vacant possession to the appellant.
7. The 2nd respondent/Arbitrator considering the claim made by the 1st respondent and the objections along with counter claim filed by the appellant by the order dated 20.8.2010, has dismissed the Petition and allowed the counter claim of the appellant in part and the present Respondent No.1/Trust was ordered to quit and deliver vacant possession of the schedule premises within 90 days from the date of the award and directed that the 1st respondent - Trust shall also pay damages at the rate of Rs.1,00,000/- from 1.2.2007 till delivery of possession of the schedule premises. Also directed the 1st respondent/Trust to pay cost of the proceedings in a sum of Rs.50,000/- to the appellant.
8. Being aggrieved by the said Award, the present 1st respondent - Trust filed Arbitration Suit No.98/2010 under the 8 provisions of Section 34 of the Arbitration and Conciliation Act, 1996 before the VI Addl. City Civil & Sessions Judge, Bangalore city, who after hearing both the parties by the impugned Judgment and Decree allowed the arbitration suit filed by the present 1st respondent/Trust and set aside the award dated 20.8.2020 passed by the learned Arbitrator in CMP No.27/20027. Liberty is reserved to the appellant to take legal steps against the present 1st respondent/Trust for recovery of the rent in respect of the schedule property in accordance with law, which will be subject to the result of the Civil Appeal No.3303/1997 and other connected matters pending adjudication before the Hon'ble Supreme Court. Hence the present appeal is filed by the appellant.
9. We have heard the learned counsel for the parties to the lis.
II. ARGUMENTS ADVANCED BY SRI ADITYA SONDHI, LEARNED SENIOR COUNSEL FOR THE APPELLANT
10. Sri Aditya Sondhi, learned senior counsel along with Smt. Maneesha Kongovi and Sri Nischal Dev, learned counsel for the appellant contended that the licence agreement dated 21.11.1995 9 between the appellant and the 1st respondent is not in dispute in respect of 45,067 square feet of land along with building of 14,017 square feet built up area. The supplementary agreement entered into between the parties on 24.9.1997 after the Bangalore Palace (Acquisition and Transfer) Act, 1996 {'Palace Act' for short} came into force w.e.f 18.11.1996, thereby the learned Sessions Judge is not justified in allowing the arbitration suit filed by the present 1st respondent/Trust by setting aside the award dated 20.08.2010 passed by the 2nd respondent/Arbitrator. He would further contend that the learned Single Judge of this Court in Writ Petition No.32175/1996 and connected matters by the order dated 10.12.1996, has granted the interim order in favour of the petitioners therein imposing three conditions and all further consequences and actions contemplated subsequent to vesting in terms of the provisions of Section 4 and the notification issued thereunder are stayed (Date of vesting is 18.2.1996). He would further contend that in Writ Petition No.32175/1996 and connected matters filed by the appellant, the Coordinate Bench of this Court by the final order dated 31.3.1997, has continued the interim order dated 10.2.1996 for a period of four weeks and observed that the 10 said order would however not enable the petitioners therein (appellant in the present MFA and others) to transfer or allow the user of the disputed property to any other person in any manner without the prior sanction of the respondent/State.
11. Learned senior counsel further contended that against the final order dated 31.3.1997 made in Writ Petition No.32175/1996, Sri Srikanta D.N. Wadiyar filed petition for Special Leave to appeal (Civil) No.8801/1997 before the Hon'ble Supreme Court. The Hon'ble Supreme Court by the order dated 30.4.1997, has passed the following order:
"Special Leave granted.
Issue notice in the stay application. In the meanwhile, there shall be status-quo, as existing today. Printing dispensed with. Additional documents, if any, shall be filed within twelve weeks."
12. Learned senior counsel further contended that in Civil Appeal No.3303 of 1997 filed by Sri Srikanta D.N. Wadiyar, I.A. No.13 of 2011 is filed by the State Government praying to permit the State Government to widen the road in the adjoining areas of 11 the Palace ground, Ramana Maharshi Road (Bellary road) and Jayamahal road and for other reliefs. In the said application, the State of Karnataka produced the statement showing the area of land of Bangalore Palace ground required for widening the Bellary road from BDA junction to Mekhri circle (2.55 Kms. to 4.05 Kms) i.e., 1.5 kilometers as well as for widening Jayamahal road from Mekhri Circle to Cantonment Railway Station. In the said statement, at serial No.3, name of the owner is shown as "Sri A. Chandrashekar Raja, M/s Chamundi Hotels Pvt. Ltd. (i.e. appellant herein) from Chanage 1.582 to 2.74 kilometers; length 1158.00 meters; average width 9.53 ; area - 11038.75 square meters." The Hon'ble Supreme Court while allowing I.A. No.13 of 2011 by the order dated 21.11.2014, has observed at paragraphs 7, 8 and 9 as under:
7. Learned counsel for the respondent-State argued that existing roads in and around Bangalore Palace are very congested leading to frequent traffic jams and traffic disorders. As such the widening of the road has become essential. It is further contended that widening of the road is in the public interest to avoid traffic jams. It is also informed that BBMP had already 12 widened Bellary Road from Rajbhawan to Devanhalli, except the stretch near the Bangalore Palace ground.
8. Learned counsel for the appellants in the present case and learned counsel for the appellants in the connected appeals, except the appellant in Civil Appeal No. 3309 of 1997, in response to above arguments, submitted that they are ready to surrender the required land as above provided Transfer Development Right (TDR) is given to them under the TDR Rules. Some of the appellants said to have already received usual compensation also.
9. Learned counsel for the non-applicants (appellants in various appeals) have stated that, in the public interest, as expressed in the need to widen the existing roads, they would be willing to accept the proposal of the Bruhat Bangalore Mahanagara Palike in its letter dated 26.12.2009.
The State, however, did not grant its approval to this proposal and has instead offered to pay compensation for the acquisition as per the rates relevant at the time of the passing of the Act. The impasse is, therefore, to be crossed.
13Ultimately, the Hon'ble Supreme Court allowed I.A. No.13/2011 subject to the condition that the appellants therein (Sri Srikanta D.N. Wadiyar (D) through L.Rs.) and in the connected appeals shall be given TDR for widening of the road as per TDR rules, thereby the ownership of the appellant in respect of the property in question where the 1st respondent is continuing as tenant, has been recognized.
13. Learned senior counsel further contended that the present 1st respondent is not a party to the earlier proceedings before this Court or Supreme Court and he received notice from the Government, thereby he filed Writ Petition No.50804/2004 in respect of the very schedule property, wherein at paragraphs 2 and 7 it is specifically stated as under:
"2. It is submitted that the premises in question in which the petitioner is running the college, belongs to M/s Chamundi Hotel Private Limited, represented by its Managing Director Sri A.C. Chandrashekara Raju. The katha of the property dated 31.8.1982 shows the name of M/s Chamundi Hotel Private Limited. A true copy of 14 the said khatha is produced herewith and marked as Annexure-B.
7. It is submitted that the 2nd respondent is taking steps to evict the Petitioner from the premises in question, on the ground that the continuation of the Petitioner is unauthorized one, without realising the fact that the Petitioner had been lawfully inducted by its legitimate owner; the Institution & Hospital and Research centre is running since 1995 and the dispute between the Government and his Highness Sri Srikantadatta Narasimharaja Wodeyar is pending before the Hon'ble Supreme court of India. "
14. In the said writ petition, the petitioner therein (present 1st respondent) has sought for quashing the final notice dated 18.11.2004 issued by the Deputy Commissioner and also sought for writ of mandamus directing the respondents therein (State of Karnataka and the Deputy Commissioner) to permit the petitioner therein to continue in the existing premises till they have shifted the institution to the newly allotted place, after clearance of the legal hurdle involved.
15
15. The said writ petition i.e., W.P. No.50804/2004 came to be dismissed as premature on 15.06.2007 reserving liberty to the State Government and the Deputy Commissioner to evict the petitioner therein (i.e., present Respondent No.1) from the schedule premises in accordance with the provisions of Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974. He would further contend that against the said order, the present 1st respondent Trust filed Writ Appeal No.1397/2007 and the Coordinate Bench of this Court by the judgment dated 30.08.2007 disposed off Writ appeal observing that if any action taken by the State Government to evict the present 1st respondent - Trust, without following the procedure prescribed under the provisions of the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974, it is open for the present 1st respondent to raise all contentions raised in the writ appeal. Against the said order passed, the State filed Special Leave to appeal (Civil) No.11044/2008 and the same came to be dismissed by the order dated 30.11.2009.
16
16. Learned senior counsel would further contend that in Civil Appeal No.3305/1997 filed by the present appellant, the 1st respondent filed application for impleading as long back as on 13.04.2013 and till today, he has not pursued his application and no orders are passed even after lapse of nearly nine years. In the impleading application, it is admitted that after execution of the agreement dated 21.11.1995, the applicant was put in possession of the leased premises and the applicant had invested huge amounts of money in the leased premises towards construction activities. It is also stated in the impleading application that the applicant was not made a party in the said proceedings i.e. C.A. No.3305/1997 though the Government and the appellant are trying to evict the applicant to take possession of the leased premises. Thereby, 1st respondent has admitted that he is a tenant under the appellant.
17. Learned senior counsel would further contend that the 1st respondent - Trust filed C.M.P. No.27/2007 and the same came to be dismissed and the counter claim filed by the appellant allowed in part by the order dated 20.08.2010. The present 1st respondent - 17 Trust has admitted the relationship of owner and tenant between the appellant and the 1st respondent in Writ Petition No.50804/2004 and also in the Arbitral proceedings. Therefore, the 1st respondent is estopped from questioning the title of the appellant having admitted agreement of licence dated 21.11.1995 and supplementary agreement of licence dated 24.9.1997. He would further contend that the 1st respondent was a party to Special Leave to appeal (Civil) No.8801/1997. He further contended that there is no error in the award dated 20.08.2010 passed in CMP No.27/2007, which calls for interference under Section 34 of the Arbitration and Conciliation Act by the learned District Judge. The learned Sessions Judge by the impugned judgment & decree has erroneously set aside the award dated 20.8.2010. Therefore, he sought to allow the present Miscellaneous First Appeal by setting aside the impugned judgment and decree dated 30.3.2015 made in A.S. No.98/2020 and restore the award passed by the 2nd respondent/Arbitrator.
18. In support of his contentions, learned senior counsel for the appellant has relied upon the following judgments: 18
1. Dr. Luis Proto Barbosa vs.. Union of India, reported in 1992 SUPP(2) SCC 644
2. Manjula Saha & Another -vs- Maya Rani Saha (Sd) through LRS (judgment of the High Court of Delhi in Cont.Cas (C) 836/2017 dated 23rd April, 2018).
3. Oswal Singh Sabha -vs- J.K. & Company and others (Judgment of High Court of Rajasthan at Jodhpur in S.B. Civil Revision Petition No.271/2014 decided on 20.08.2015)
4. M/s Equestrain Centre for excellence -vs- M/s Chamundi Hotel Private Limited (judgment of learned Single Judge this Court in M.F.A. No.2620/2017 dated 2.08.2017), which is confirmed by the Hon'ble Supreme Court in Special Leave to Appeal No.24207/2017 dated 20.9.2017.
5. R.N. Gosain Vs Yashpal Dhir reported in (1992) 4 SCC 683 (paragraphas 2 10,11 and 13)
6. K.S. Patcha Vs. Arun Sarna reported in 2008 SCC ONLINE DEL 884 (paragraphs 7 and 8) 19
7. Project Director, National High ways No.45 E and 220, National Highways Authoirty of India Vs. M. Hakeem and another reported in (2021) 9 SCC 1 (paragraphs 23, 24, 25, 42 and 48)
8. Sanyong Engineering and Construction Co. Ltd., National Highways Authority of India(NHAI) reported in (2019) 15 SCC 131 (paragraphs 36 and 37) III. ARGUMENTS ADVANCED BY SRI R.S. RAVI, LEARNED SENIOR COUSNEL FOR RESPONDENT NO.1
19. Per contra, Sri R.S.Ravi, learned senior counsel for the 1st respondent while justifying the impugned judgment and decree passed by the learned Sessions Judge, has contended that 1st respondent is not a party to Writ Petition No.32175/1996 and therefore, the interim order granted in the said writ petition is not binding on the 1st respondent. In the interim order dated 10.12.1996 passed in the said writ petition and connected matters, it was made clear that all further consequences and actions contemplated subsequent to vesting in terms of Section 4 of the Palace Act and the notification issued thereunder are stayed. Even 20 in the final order dated 31.3.1997, it is directed that the interim arrangement made on 10.12.1996 shall continue for a period of four weeks and the said order would however not enable the petitioners therein to transfer or allow the user of the disputed property to any other person in any manner without the prior sanction of the respondent/State. He further contended that the Hon'ble Supreme Court in Special Leave to appeal (Civil) No.8801/1997 arising out of the order dated 31.3.1997 passed in W.P. 32175/96, by the order dated 30.4.1997 while granting special leave, has issued notice in the stay application and in the meanwhile, granted an order of status quo, as existing on that day and directed to file additional documents, if any within twelve weeks. Admittedly, the present 1st respondent is not a party to the said proceedings. He would further contend Section 4 of the Palace Act deals with transfer and vesting of the palace in the State Government and it prescribes that on the appointed day i.e., 21.11.1996, the Bangalore Palace and the right, title and interest of the legal representatives or heirs or other persons in relation to the Palace, shall, by virtue of the Palace Act stand transferred to, and shall vest absolutely in the State Government. Sub-section (1) of 21 Section 5 of the Palace Act depicts that the palace shall be deemed to include all assets, rights, leaseholds, powers, authorities and privileges and all property, moveable and immovable, including buildings, regalia, painting, art works, sculptures and all other rights and interests, in or arising out of such property, as were immediately before the appointed day in the ownership, possession, power or control of the legal representatives. Sub-section (2) of section 5 of the Palace Act depicts that all properties aforesaid, which have vested in the State Government under Section 4 shall, by virtue of such vesting be freed and discharged from any trust, obligation, mortgage, lease, charge etc., Thereby, the contention of the appellant that he is the owner even after vesting, cannot be accepted.
20. Learned senior counsel for the 1st respondent would further contend that the provisions of section 32 of the Palace Act depicts that the provisions of the Palace Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any other law other than the Palace Act etc., 22 Section 33 of the Palace Act prescribes that every contract entered into by the legal representatives or heirs or other persons in relation to the Palace which has vested in the State Government under Section 4 and in force immediately before the appointed day, shall on and from expiry of thirty days from the appointed day, cease to have effect unless such contract is, before the expiry of that period, ratified in writing by the Board and in ratifying such contract, the Board may make such alteration or modification therein as it may think fit. Learned senior counsel would further contend that the Hon'ble Supreme Court by the order dated 30.04.1997 in Petition for Special Leave to Appeal (Civil) No.8801/97, has granted status quo, as existing on that day. He further contended that the 1st respondent/Trust filed Writ Petition No.50804/2004 to quash the final notice dated 18.11.2004 issued by the Deputy Commissioner, as the same is illegal, arbitrary and unsustainable and also for writ of mandamus directing the respondents therein i.e., the State of Karnataka and the Deputy Commissioner to permit the present 1st respondent/Trust to continue in the existing premises till they have shifted the institution to the newly allotted place, after clearance of the legal 23 hurdle involved. The said writ petition came to be rejected by the order dated 15th June 2007 holding that the petition is premature and reserving liberty to the State of Karnataka and the Deputy Commissioner to evict the present 1st respondent/Trust from the schedule premises in accordance with the provisions of Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974 or any other relevant statute. Against the said order, Writ Appeal No.1397/2007 came to be filed and the Coordinate Bench of this Court while disposing of the said writ appeal has observed at paragraph-6 as under:
6. The main grievance of the appellant is that as the acquisition the Palace is under challenge as the per the Bangalore Palace (Acquisition and Transfer) Act,1996 and since the validity or application is pending before the Hon'ble Supreme Court in SLP (Civil) No.8801/1997, no steps can be taken to evict the appellant as indicated by the learned single Judge by the use of words " or any other relevant statute". We see some justification in the arguments of the learned counsel. As the matter is seized by the Apex Court and there is an order of status quo, the authorities cannot proceed under the provisions of the Bangalore Palace 24 (Acquisition and Transfer) Act, 1996, till the same is decided by the Apex court or until further orders are passed in that regard. However, so far as the present impugned notice Annexure-Q is concerned, we find the conclusion of the learned single Judge that the writ petition is premature appears to be justified, in view of the fact that mere issuance of notice will not entitle the authorities to throw the appellant without following the procedure as prescribed under the provisions of the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974. if such action is taken by the respondents, it is open for the appellant to raise all the contentions as now are raised in the writ appeal.
21. Learned senior counsel for the 1st respondent would contend that three is bar to plea of jurisdiction being raised by way of an objection under Section 34 of the Arbitration and Conciliation Act, even if no such objection was raised under Section 16 of the Act. He would further contend that the learned Arbitrator has not properly appreciated the material on record, thereby erroneous award came to be passed dismissing the claim petition filed by the present 1st respondent and allowing the counter-claim filed by the appellant, in part and directing the present 1st respondent/Trust to 25 quit and deliver vacant possession of the schedule premises within 90 days from the date of the award and to pay damages at the rate of Rs.1,00,000/- from 1.2.2007 till delivery of possession of the schedule premises and also costs of Rs.50,000/-. Therefore, the learned Sessions Judge while allowing the arbitration suit filed by the present 1st respondent has rightly set aside the order passed by the learned Arbitrator reserving liberty to the appellant to take legal steps against the present 1st respondent for recovery of the rent in respect of the schedule property as per the due procedure established by the law, which would be subject to the decision of the Hon'ble Supreme Court in Special Leave to appeal (Civil) Appeal No.3303/1997 and other cases. Therefore, learned counsel sought to dismiss the present appeal.
22. In support of his contentions, learned counsel for the 1st respondent relied upon the following judgments:
1. Lion Engg. Consultants vs. State of M.P., reported in (2018)16 SCC 758 (para-4)
2. Gujarat Urja Vikas Nigam Ltd. Vs. Essar Power Ltd., reported in (2008)4 SCC 755 (paragraph 62) 26
3. Narayanamma vs. Govindappa reported in (2019)19 SCC 42 (paragraph-28)
4. ONGC Ltd. V. Saw Pipes Ltd., reported in AIR 2003 SC 2629 (para 75).
IV. POINT FOR DETERMINATION
23. In view of the aforesaid rival contentions urged by learned counsel for the parties, the point that would arise for our consideration in the present Miscellaneous First Appeal is as under:
"Whether the learned Sessions Judge is justified in allowing the Arbitration Suit No.98/2010 filed by the 1st respondent/Trust, in exercise of the powers under Section 34 of the Arbitration and Conciliation Act, 1996 by setting aside the Arbitral Award dated 20th August 2010 passed by the 2nd respondent/Arbitrator in C.M.P. No.27/2007 and reserving liberty to the appellant to take legal steps against the 1st respondent/Trust for recovery of rent in respect of the schedule property as per the due procedure established by the law, which would be subject to the decision of the Hon'ble Supreme Court in Special Leave to Appeal (Civil)No.3303/1997 and other cases ?"27
V. CONSIDERATION
24. We have given our anxious consideration to the arguments advanced by the learned senior counsel for the parties and perused the entire material on record including the original records carefully.
25. It is an undisputed fact that the appellant and the 1st respondent entered into license agreement dated 21.11.1995 in respect of 45,067 square feet of the land along with the building of 14,017 square built up area. It is also not in dispute that the supplementary agreement entered into between the appellant and the 1st respondent on 24.9.1997 i.e., after the Palace Act came into force w.e.f 18.11.1996. It is also not in dispute that the learned Single Judge of this Court by the order dated 10.12.1996 made in W.P. 32175/1996 and connected matters, has granted interim order in favour of the present appellant in the following terms:
"I direct the physical possession of the entire Palace Ground, including Palace building and other buildings, shall continue to remain with the petitioners, subject to the following conditions:28
iii) No part of the land shall be alienated or encumbered in any manner; the nature of the land shall not be changed; no vegetation standing on the ground shall be cut or removed; no permanent construction of whatever kind shall be put up.
iii) Excepting the licensees/lessees in occupation of certain areas in the palace ground under the petitioner in W.P. 32175/1996, whose names are furnished in the list filed under Memo, no other part of the land shall be given on license/lease by any of the petitioners without obtaining specific orders of this Court;
iii) If khatha of the property has been changed by the respondent after 4-12-1996, the same is directed to be struck off and the khatha shall stand restored in the names of the those whose names were found entered as on 04.12.1996.
xx xx xx xx xx xx And further held as under:
29
All further consequences and actions contemplated subsequent to vesting in terms of Section 4 and the notification issued thereunder are stayed (the date of vesting is 18.2.1996).
(underline supplied)
26. It is not in dispute that the Coordinate Bench of this Court by the order dated 31.3.1997 in W.P. No.32175/1996 and connected matters, has continued the interim order as under:
After the Judgment was pronounced, learned counsel appearing for the petitioners prayed for grant of appropriate interim directions for the preservation of the property in dispute and stay of operation of the impugned Act, for the purpose of enabling them to move the Hon'ble Supreme Court in SLP and getting appropriate orders.
After hearing the other side, it is directed that the interim arrangement made on 10-12-1996 shall continue for a period of four weeks. This order would however not enable the petitioners to transfer or allow the user of the disputed property to any other person in any manner with out the prior sanction of the respondent-state.30
27. It is an undisputed fact that against the order passed by the Coordinate Bench of this Court stated supra, Sri Srikanta D.N. Wadiyar filed SLP (civil) 8801/97 before the Hon'ble Supreme Court. The Hon'ble Supreme Court by the order dated 30.4.1997 upon hearing while granting special leave, has granted status quo, as existing on that date, which reads as under:
"Special Leave granted.
Issue notice in the stay application. In the meanwhile, there shall be status-quo, as existing today. Printing dispensed with. Additional documents, if any, shall be filed within twelve weeks."
The said matter is still pending for adjudication between the parties before the Hon'ble Supreme Court.
28. It is also not in dispute that in the said appeal, I.A. No.13 of 2011 is filed praying to permit the State Government to widen the road in the adjoining area of Palace ground, Ramana Maharshi road (Bellary road) and Jayamahal road and for other reliefs. In the statement accompanying the application, at serial No.3, name of the owner is shown as "Sri A. Chandrashekar Raja, M/s 31 Chamundi Hotels Pvt. Ltd. (i.e. appellant herein) from Chanage 1.582 to 2.74 kilometers; length 1158.00 meters; average width 9.53 ; area - 11038.75 square meters." The Hon'ble Supreme Court while allowing I.A. No.13 of 2011 by the order dated 21.11.2014, has observed at paragraphs 7, 8 and 9 as under:
7. Learned counsel for the respondent-State argued that existing roads in and around Bangalore Palace are very congested leading to frequent traffic jams and traffic disorders. As such the widening of the road has become essential. It is further contended that widening of the road is in the public interest to avoid traffic jams. It is also informed that BBMP had already widened Bellary Road from Rajbhawan to Devanhalli, except the stretch near the Bangalore Palace ground.
8. Learned counsel for the appellants in the present case and learned counsel for the appellants in the connected appeals, except the appellant in Civil Appeal No. 3309 of 1997, in response to above arguments, submitted that they are ready to surrender the required land as above provided Transfer Development Right (TDR) is given to them under the TDR Rules. Some of the appellants said to have already received usual compensation also.32
9. Learned counsel for the non-applicants (appellants in various appeals) have stated that, in the public interest, as expressed in the need to widen the existing roads, they would be willing to accept the proposal of the Bruhat Bangalore Mahanagara Palike in its letter dated 26.12.2009.
The State, however, did not grant its approval to this proposal and has instead offered to pay compensation for the acquisition as per the rates relevant at the time of the passing of the Act. The impasse is, therefore, to be crossed.
Ultimately, the Hon'ble Supreme Court allowed the application subject to the condition that the appellants in the present appeal and connected appeals shall be given TDR for widening of the road as per TDR rules, thereby the ownership of the appellant in respect of the property in question where the 1st respondent is continuing as tenant, has been recognized.
29. The material on record clearly depicts that though the present 1st respondent - Krishnarajendra Charitable Trust was not a party to the earlier proceedings either before this Court or before the Hon'ble Supreme Court, on the notice issued by the 33 Government, he has filed W.P. 50804/2004 in respect of the very property in question against the State Government as well as the Deputy Commissioner, Bangalore Urban without impleading the present appellant - Chamundi Hotel Private Limited. In paragraph
- 2 of memorandum of the said writ petition, present 1st respondent/Trust admitted that the premises in question in which it is running the college, belongs to Chamundi Hotel Private Limited represented by its Managing Director - A.C. Chandrashekara Raju. The khatha of the property depicts the name of Chamundi Hotels Private Limited., thereby the ownership of the appellant in respect of the property in question where the 1st respondent is continuing as tenant, has been recognized. At paragraph -7 of the said writ petition, it is specifically stated that the Deputy Commissioner, Bangalore Urban district was taking steps to evict the present 1st respondent (petitioner therein) from the premises in question, on the ground that the continuation of the present 1st respondent/Trust is unauthorized one, without realizing the fact that the present 1st respondent (petitioner therein) has been lawfully inducted by its legitimate owner and the dispute between the Government and His Highness Srikantadatta Narasimharaja Wodeyar is pending before 34 the Hon'ble Supreme Court. The prayer in the said writ petition reads as under:
1) Quash by issue of writ of certiorari the impugned final notice bearing No.LAQ-II.CR.191.86-87, dated 18.11.2004, vide ANNEXURE:Q, as the same is illegal, arbitrary and unsustainable;
2) Issue writ in the nature of mandamus directing
the respondents to permit the petitioner
institution to continue in the existing premises till they have shifted the institution to the newly allotted place, after clearance of the legal hurdle involved; and
3) Pass such other or further orders as this Hon'ble Court deems it just and expedient in the circumstances of the case, including an award of costs, in the interest of justice and equity.
30. Thereby, the 1st respondent has not disputed the ownership of the appellant and the licence agreement dated 21.11.1995 and also the supplementary agreement entered into between the parties on 24.9.1997 i.e., after the Palace Act came into force w.e.f 18.11.1996. Admittedly, Writ Petition 35 No.50804/2004 filed by the 1st respondent came to be dismissed as premature on 15.06.2007 reserving liberty to the State Government and the Deputy Commissioner to evict the present 1st respondent/Trust from the schedule premises in accordance with the provisions of Karnataka Public Preemies (Eviction of unauthorised Occupants) Act, 1974. Against the said order, the present 1st respondent/Trust filed Writ Appeal No.1397/2007 and the Coordinate Bench of this Court by the judgment dated 30.8.2007 while disposing writ appeal upholding the orders of the learned Single Judge, has observed at paragraph 6 as under:
6. The main grievance of the appellant is that as the acquisition the Palace is under challenge as the per the Bangalore Palace (Acquisition and Transfer) Act,1996 and since the validity or application is pending before the Hon'ble Supreme Court in SLP (Civil) No.8801/1997, no steps can be taken evict the appellant as indicated by the learned single Judge by the use of words " or any other relevant statute". We see some justification in the arguments of the learned counsel. As the matter is seized by the Apex Court and there is an order of status quo, the authorities cannot proceed under the provisions of the Bangalore Palace 36 (Acquisition and Transfer) Act, 1996, till the same is decided by the Apex court or until further orders are passed in that regard. However, so far as the present impugned notice Annexure-Q is concerned, we find the conclusion of the learned single Judge that the writ petition is premature appears to be justified, in view of the fact that mere issuance of notice will not entitle the authorities to throw the appellant without following the procedure as prescribed under the provisions of the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974. if such action is taken by the respondents, it is open for the appellant to raise all the contentions as now are raised in the writ appeal.
31. It is also not in dispute that against the said Judgment, the State filed Petition for Special Leave to Appeal (Civil) No.11044/2008, which came to be dismissed on 30.11.2009. It is also brought to the notice of this Court that the present 1st respondent/Trust filed an application for impleading in Civil Appeal No.3305/1997 as long back as back as on 13.4.2013 and till today, he has not persuaded the application and no order was passed even after lapse of nearly nine years. In the application filed for impleading, the 1st respondent has admitted that appellant is the 37 landlord and he is the tenant and execution of the agreement dated 21.11.1995 and he having been put in possession of the leased premises. It is also stated in the application that the 1st respondent has invested huge amounts of money in the leased premises towards construction activities, thereby he admitted that he is the tenant under the appellant.
32. It is not in dispute that the 1st respondent - Krishnarajendra Charitable Trust filed the claim petition before the learned Arbitrator requesting to decide the following disputes between the parties.
a) Decide whether the Respondent is entitled for enhancement of Rent/fee? If so whether as per the Agreement of Licence dated 21-11-1995 or otherwise and from what date to what date and fix the rate of rent.
b) If the rent/ license is to be enhanced what is the rate of interest claimant is entitled for the investment made by them for repair and renovation as per the Agreement of License.
38
c) How much inconvenience will be caused to claimant for shifting the institution running by them whether shifting is possible.
d) What is intention of the respondent to termination of license/tenancy? whether only with an intention to increase the rent.
e) In case if the Respondent is entitled for the Possession of the Premises, what is the amount is to be paid by them for the investment made by the Claimant and at what rate whether at 18% per month or more ?
f) Award the costs of this petition be the costs in the Arbitration proceedings as well as;
g) To grant such other or further relief/s as this Hon'ble Court may deem fit to grant in the circumstances of the case and Further Claimants prays that this Hon'ble Arbitrator may be pleased to order for (a) grant a permanent injunction Restraining the Respondent or their henchmen to disposes the claimant from the suit Scheduled Premises except due process of law. (b) grant permanent injunction restraining 39 the Respondent from interfering the Claimant or their employees, students, patients for enter and exit from the premises.
33. The present appellant also filed objections/counter-claim claiming that he is the owner of the property in question and sought eviction of the 1st respondent and also damages. The learned Arbitrator after holding enquiry by the order dated 20.8.2010 has dismissed the claim petition filed by the 1st respondent and allowed the counter-claim filed by the appellant in the following terms:
The Claim petition is dismissed. Counter Claim of the Respondent is allowed in part.
The Claimant Trust is ordered to quit and deliver vacant possession of the Schedule Premises within 90 days from the date of the Award. The Claimant Trust shall also pay damages at the rate of Rs.1,00,000/- (Rupees One Lakh per month) from 01.02.2007 till delivery of possession of the Schedule Premises. It shall also pay the cost of the proceedings in sum Rs.50,000/- to the Respondent and bear its own cost.
34. Thereby, the 1st respondent - Trust has admitted that appellant is the landlord and he is the tenant not only in Writ Petition No.50804/2004 but also in the Arbitral proceedings. 40 Thereby, the 1st respondent is estopped from questioning the title of the appellant having admitted the agreement of licence dated 21.11.1995 and the supplementary agreement of licence dated 24.09.1997, which was entered into after the Bangalore Palace Act, 1996 came into force w.e.f 18.11.1996.
35. Being aggrieved by the award dated 20th August 2010 passed by the 2nd respondent/Arbitrator in C.M.P. No.27/2007, the 1st respondent filed A.S. No.98/2010 before the VI Addl. City Civil & Sessions Judge, Bangalore city, praying to set aside the Award dated 20th August 2010.
36. Admittedly, the 1st respondent has not challenged the award passed on the counter-claim filed by the appellant and what was challenged in the suit was only the award dated 20.8.2020 dismissing the claim petition filed by the 1st respondent and therefore, single arbitration suit filed by the 1st respondent against the two awards passed by the arbitrator was not maintainable. Even in the grounds urged in the suit, the 1st respondent has not disputed the agreement of licence dated 21.11.1995 and supplementary agreement dated 24.9.1997 entered into between 41 the parties and admitted that he continued as tenant under the appellant. It is further urged in the suit that during the pendency of an S.L.P. before the Hon'ble Supreme Court, the appellant cannot initiate eviction proceedings against the 1st respondent/Trust. Considering the material on record, the learned Sessions Judge allowed the arbitration suit in the following terms:
"The A.S. No.98/2010 is hereby allowed.
The impugned award dated 20th August 2010 passed by the 2nd defendant/arbitrator in CMP No.27/2007 is hereby set aside.
The defendant is at liberty to take legal steps against the plaintiff for recovery of the rent in respect of the schedule property in accordance with the law as per the due procedure established by the law, which would be subject to the decision of Hon'ble Supreme Court in Special Leave to appeal (Civil) Appeal No.3303/1997 and other cases."
37. Admittedly, the introduction of Bangalore Palace (acquisition and transfer) Act, 1996 was subject matter of W.P. No.32175/1996 and connected matters filed by the appellant and others and at the inception, the learned Single Judge granted the interim order on 10.12.1996 and all further consequences and 42 actions contemplated subsequent to vesting in terms of the provisions of Section 4 of the Palace Act and the notification issued thereunder are stayed. The said interim order was continued by the Coordinate Bench of this Court by the order dated 31.3.1997 for a period of four weeks and directed that the said order would however not enable the appellant to transfer or allow the user of the disputed property to any other person in any manner without the prior sanction of the respondent/State.
38. It is also not in dispute that aggrieved by the order dated 31.3.1997 passed by the Coordinate Bench, Sri Srikanta D.N. Wadiyar filed Petition for Special Leave to appeal (civil) No. 8801/1997 before the Hon'ble Supreme Court. The Hon'ble Supreme Court by the order dated 30.4.1997 while granting special leave, has issued notice in the stay application and in the meanwhile granted an order of status of quo as existing on that day i.e., 30.04.1997, thereby the provisions of the Palace Act were not implemented. Therefore, exercising rights by the appellant in respect of the property as owner and the 1st respondent as a tenant, is continued. The 1st respondent having admitted the 43 agreement of licence dated 25.11.1995 and supplementary agreement of licence dated 24.9.1997 and ownership of the appellant in respect of the property in question, he cannot contend that the appellant is not entitled for rent during the pendency of the proceedings before the Hon'ble Supreme Court.
39. As already stated supra, this Court by the order dated 10.12.1996 in Writ Petition No.32175/1996 has granted an interim order and all further consequences and actions contemplated subsequent to vesting in terms of the provisions of Section 4 of the Palace Act and the notification issued thereunder are stayed and the same was continued by the Hon'ble Supreme Court by grant of order of status quo. Thereby, the 1st respondent/tenant bound to pay the rents to the present appellant. Unfortunately, the said aspect of the matter was not at all considered by the learned Sessions Judge while allowing the Arbitral Suit, in exercise of the powers under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996.
40. As already stated supra, the claimant/Trust (present 1st respondent) filed the claim petition praying to decide as to 44 whether the present appellant is entitled for enhancement of rent/fee and if so, whether as per the agreement of licence dated 21.11.1995 or otherwise and from what date to what date and to fix the rate of rent along with other prayers.
41. Admittedly, the appellant, who was respondent before the learned Arbitrator also filed claimed counter-claim and contended that the very claim by the claimant/Trust is without any basis. Since the appellant is the owner of the premises, the claimant/Trust is bound to pay the rent, in terms of the agreement lawfully entitled by the appellant, but the claimant/Trust was a chronic defaulter of the licence fee. Further, since the agreement of licence expired, the claimant/Trust (present 1st respondent) became a trespasser, thereby he is liable to pay damages. Therefore, in the counter-claim filed by the appellant, he has sought for a direction to the 1st respondent to quit and deliver vacant possession of the property in question.
42. Admittedly, the claim petition filed by the claimant (present 1st respondent) came to be dismissed by the learned Arbitrator and the counter claim filed by the appellant was allowed 45 granting 90 days' time to the claimant/Trust (present 1st respondent) to quit and deliver vacant possession of the schedule premises and also directed the claimant/Trust (present 1st respondent) to pay damages at the rate of Rs.1,00,000/- from 1.2.2007 till delivery of possession of the schedule premises. Thus, the learned Arbitrator passed two awards, one for dismissing the claim petition and another for allowing the counter claim filed by the appellant. The claimant/Trust (present 1st respondent) filed only one arbitration suit i.e. A.S. No.98/2010 and sought for setting aside the Award dated 20.8.2010 passed by the 2nd respondent/arbitrator and also to allow the claim petition. This Court is of the considered view that a single arbitration suit filed by the 1st respondent against two awards passed by the learned Arbitrator, is not maintainable. The said aspect of the matter has not at all been considered by the learned Sessions Judge and erroneously allowed the arbitration suit, which is impermissible.
43. The learned Sessions Judge failed to notice that the appellant filed Civil Appeal No.3305/1997 challenging the judgment dated 31.3.1997 passed in Writ Petition No.3383/1997 with regard 46 to validity of the Bangalore Palace Act and granting the order of status quo. The present 1st respondent being the tenant under the appellant, cannot shirk the responsibility of paying the rent/damages subject to outcome of the SLP filed before the Hon'ble Supreme Court with regard to the constitutionality of the Bangalore Palace Act. The said material not considered by the learned Sessions Judge.
44. The learned Sessions Judge recorded a finding that "it is evident that in view of the contention of the plaintiff, the plaintiff is a lessee of the schedule premises. Under the circumstances, the plaintiff is liable to pay the rent to the landlord/owner. The perusal of the award shows that upholding the termination of lease, the damages are awarded, but the entire award is liable to be set aside. Under these circumstances, it can be noted that the plaintiff has to pay the rent as per the agreement and the defendant is entitled to recover the rent in accordance with law as per due procedure", thereby erroneously allowed the arbitration suit, which cannot be sustained.
47
45. The learned Sessions Judge while allowing the Arbitration Suit by setting aside the Award passed by the learned Arbitrator, reserved liberty to the appellant to take legal steps against the present 1st respondent/Trust for recovery of the rent in respect of the schedule property in accordance with law, which will be subject to the decision of the Hon'ble Supreme Court in Special Leave to Appeal (Civil) No.3303/97 and connected matters, thereby he has modified the award passed by the learned Arbitrator while exercising the powers under the provisions of Section 34 of the Arbitration and Conciliation Act, which is impermissible.
46. Our view is fortified by the dictum of the Hon'ble Supreme Court in the case of NHAI v. M. Hakeem reported in (2021)9 SCC 1, wherein at paragraphs 23,24, 25, 42 and 48 it is held as under:
23. It is settled law that a Section 34 proceeding does not contain any challenge on the merits of the award. This has been decided in MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 :
(2019) 2 SCC (Civ) 293] , as follows : (SCC p. 167, para 14) 48 "14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings."
24. Likewise, in Ssangyong Engg. & Construction Co. Ltd. v. NHAI [Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 : (2020) 2 SCC (Civ) 213] , this Court under the caption "Section 34(2)(a) does not entail a challenge to an arbitral award on merits" referred to this Court's judgment in Renusagar Power Co. Ltd. v. General Electric Co. [Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644] , the Convention on the Recognition and 49 Enforcement of Foreign Arbitral Awards, 1958 ("the New York Convention") and various other authorities to conclude that there could be no challenge on merits under the grounds mentioned in Section 34 -- (see paras 34 to 48). This Court also held, in Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd. [Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd., (2018) 3 SCC 133 : (2018) 2 SCC (Civ) 65] (at p. 170), that the court hearing a Section 34 petition does not sit in appeal (see para 51).
25. As a matter of fact, the point raised in the appeals stands concluded in McDermott International Inc. v. Burn Standard Co. Ltd (2006) 11 SCC 181] , where this Court held : (SCC p. 208, paras 51-52) "51. After the 1996 Act came into force, under Section 16 of the Act the party questioning the jurisdiction of the arbitrator has an obligation to raise the said question before the arbitrator. Such a question of jurisdiction could be raised if it is beyond the scope of his authority. It was required to be raised during arbitration proceedings or soon after initiation thereof. The 50 jurisdictional question is required to be determined as a preliminary ground. A decision taken thereupon by the arbitrator would be the subject-matter of challenge under Section 34 of the Act. In the event the arbitrator opined that he had no jurisdiction in relation thereto an appeal thereagainst was provided for under Section 37 of the Act.
52. 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, the 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 51 arbitration as they prefer the expediency and finality offered by it."
42. It can therefore be said that this question has now been settled finally by at least 3 decisions [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] , [Kinnari Mullick v.
Ghanshyam Das Damani, (2018) 11 SCC 328 : (2018) 5 SCC (Civ) 106] , [Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd., (2021) 7 SCC 657] of this Court. Even otherwise, to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the Uncitral Model Law on International Commercial Arbitration, 1985 which, as has been pointed out in Redfern and Hunter on International Arbitration, makes it clear that, given the limited judicial interference on extremely limited grounds not dealing with the merits of an award, the "limited remedy" under Section 34 is coterminous with the "limited right", namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act, 1996. 52
48. Quite obviously if one were to include the power to modify an award in Section 34, one would be crossing the Lakshman Rekha and doing what, according to the justice of a case, ought to be done. In interpreting a statutory provision, a Judge must put himself in the shoes of Parliament and then ask whether Parliament intended this result. Parliament very clearly intended that no power of modification of an award exists in Section 34 of the Arbitration Act, 1996. It is only for Parliament to amend the aforesaid provision in the light of the experience of the courts in the working of the Arbitration Act, 1996, and bring it in line with other legislations the world over.
47. The learned Sessions Judge failed to notice that what was not pleaded before the learned Arbitrator with regard to status quo, cannot be pleaded for the first time in Arbitration Suit No.98/2010 under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996. The provisions of Section 34 of the Arbitration and Conciliation Act reads as under:
"34 Application for setting aside arbitral award. --
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section 53 (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if--
(a) the party making the application furnishes proof that--
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of 54 the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation. --Without prejudice to the generality of sub- clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of 55 three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award."
48. A careful perusal of the aforesaid provisions of the Act would clearly depict that the grounds provided as contemplated under the provisions of Section 34(2) of the Arbitration and Conciliation Act, are only available to challenge the award passed by the learned arbitrator. Admittedly in the present case, the 1st respondent, who was the claimant before the arbitrator has not raised the dispute of title or introduction of Bangalore Palace Act before the learned Arbitrator. What was raised was only with regard to enhancement of rent or fee, thereby it was not open for the 1st respondent to raise the above issues before the learned Sessions Judge in the suit filed under Section 34 of the Arbitration and Conciliation Act for the first time and it is impermissible. What 56 was not pleaded before the learned Arbitrator, who is the original authority, cannot be allowed to plead or urge in the arbitration suit for the first time, in view of the provisions of Arbitration and Conciliation Act, which is a special enactment. It is well settled that an appeal is a continuation of the original proceedings, but the arbitrator is the final judge on facts.
49. The learned Session Judge while allowing the Arbitration suit under Section 34 of the Arbitration and Conciliation Act, 1996 failed to notice that at the inception, the present 1st respondent admitted the relationship of tenant and landlord between himself and the appellant and also not disputed the original agreement of licence dated 21.11.1995 and supplementary agreement of licence dated 24.9.1997. Merely because the Bangalore Palace Act came into force, which is the subject matter of SLP pending before the Hon'ble Supreme Court stated supra, the present 1st respondent cannot take a different stand now to escape payment of rent/damages during the pendency of the SLP. It is settled law that a person cannot be allowed to approbate and reprobate. No party can take a stand as per his convenience and party cannot be 57 allowed to withdraw from the admission made by him in the pleadings in respect of the same subject of the matter. In the present case, the 1st respondent in the earlier proceedings before this Court, has admitted that he is the tenant and the appellant is the landlord. Now, he cannot take advantage to take a different stand to escape payment of rent/damages during the pendency of the SLP pending adjudication between the appellant and the State.
50. The Courts must keep in mind that the Courts cannot be converted into a wrestling filed, for trial of tricks where the Court has to act as an umpire. The Courts must effectively intervene and nip the evil of perjury and false statements in bud. Where a tenant takes a different stand in different Courts to defeat the effort of landlord to get the premises vacated at the time of need such an effort must be curbed down by the Courts effectively by binding him with his earlier statement in respect of the same premises and his plea of raising a dispute in respect of the rent admitted by him should not be heard and entertained. If the parties allowed to approbate and reprobate at their sweet will and convenience and take the Courts for a ride, the whole judicial system shall fail. The 58 courts must effectively check such parties who take inconsistent stand, according to their convenience in different proceedings. Admittedly in the present case, the 1st respondent in the earlier proceedings before this Court has admitted that he is the tenant and the appellant is the landlord and in fact he was paying rent by entering into agreement of licence dated 21.11.1995 and supplementary agreement dated 24.9.1997. Subsequently, he has taken a different stand, which is impermissible. The same is not considered by the learned Sessions Judge in the proper perspective while passing the impugned judgment and decree and the same cannot be sustained.
51. Learned senior counsel for the 1st respondent relied upon the dictum of the Hon'ble Supreme Court in the case of Lion Engineering Consultants -vs- State of Madhya Pradesh and others reported in (2018)15 SCC 758, wherein the Hon'ble Supreme Court held that there is no bar to plea of jurisdiction being raised by way of an objection under Section 34 of the Arbitration & Conciliation Act even if no such objection was raised under Section 16 of the Act. In the said case, the matter arising out of a dispute 59 in execution of a works contract was referred to the arbitrator by the High Court and learned Arbitrator passed award in favour of the appellant therein. It was challenged under Section 34 of the Arbitration & Conciliation Act before the District Judge and there, the respondent therein sought to amend its objections after three years, which was rejected by the trial Court and on a petition under Article 227 of the Constitution, the High Court has allowed the said amendment. In those circumstances, the Hon'ble Supreme Court held that the plea of legal jurisdiction can be raised at the time of challenging the award under section 34 of the Arbitration and Conciliation Act. There is no quarrel with regard to the law laid down by the Hon'ble Supreme Court in the said judgment, but the same is not applicable to the peculiar facts and circumstances of the present case.
52. The another judgment relied upon by the learned senior counsel for the 1st respondent in the case of Gujarat Urja Vikas Nigam Limited -vs- Essar Power Limited reported in (2008)4 SCC 755 (Paragraph-62), the Hon'ble Supreme Court observed that since the High Court has appointed an arbitrator for deciding the 60 dispute between the licensee and the generating company, the Judgment of the High Court has to be set aside and only the arbitrator appointed by it could resolve such a dispute and accordingly, set aside the judgment of the High Court reserving liberty to the arbitrator nominated by it to adjudicate/arbitrate the dispute between the parties. The said judgment also has no application to the facts and circumstances of the present case.
53. In yet another judgment relied upon by the learned counsel for the 1st respondent in the case of Narayannamma and another -vs- Govindappa and others reported in (2019)19 SCC 42 (para 28), the Hon'ble Supreme Court observed that if both the parties are common participator in the illegality, in such a situation, the balance of justice would tilt in whose favour is the question. As held in the case of Immani Appa Rao case (AIR 1962 SC 370), if the decree is granted in favour of the plaintiff on the basis of an illegal agreement which is hit by a statute, it will be rendering an active assistance of the court in enforcing an agreement which is contrary to law. As against this, if the balance is tilted towards the defendants, no doubt that they would stand benefited even in spite 61 of their predecessor-in-title committing an illegality. However, what the court would be doing is only rendering an assistance which is purely of a passive character. Admittedly in the present case though the learned senior counsel for the 1st respondent contended that the supplementary agreement of licence dated 24.9.1997 entered into between the parties after the Bangalore Palace Act came into force, is illegal, the fact remains 1st respondent has admitted the ownership of the appellant in W.P 50804/2004 filed before this Court. The validity of the Bangalore Palace Act was subject matter of Writ Petition No.32175/1996 and connected matters filed before this Court and the learned Single Judge of this Court by the order dated 10.12.1996 has granted the interim order by imposing three conditions and all further consequence and actions contemplated subsequent to vesting in terms of the provisions of Section 4 of the Bangalore Palace Act and the notification issued thereudner, are stayed. The Coordinate Bench of this Court while dismissing the writ petitions by the final order dated 31.3.1997, has continued the interim order dated 10.12.1996. The final order dated 31.3.1996 passed in the said writ petitions was the subject matter of Special Leave to Appeal 62 (Civil) No.8801/1997, wherein the Hon'ble Supreme Court by the order dated 30.4.1997 while issuing notice, has directed the parties to maintain status quo as existing on the date of the order. Admittedly the said appeal is still pending for adjudication. In view of the above, it cannot be said that the supplementary agreement dated 24.9.1997 is illegal. Therefore, the judgment relied upon by the learned counsel for the 1st respondent has no application to the facts and circumstances of the present case.
54. In yet another judgment relied upon by the learned senior counsel for the 1st respondent in the case of Oil and Natural Gas Corporation Limited -vs- SAW Pipes Limited reported in AIR 2003 SC 2629, the Hon'ble Supreme Court held that if the award passed by the arbitral Tribunal is in contravention of provisions of the Act or any other substantive law governing the parties or is against the terms of the contract, the courts can set aside the arbitral award under Section 34 (2) of the Act. There is no quarrel with regard to the law laid down in the said judgment. In the present case, it is not the case of the 1st respondent that the learned Arbitrator passed the award allowing the counter-claim filed 63 by the appellant for damages, but it is the case of the 1st respondent, who is the plaintiff in O.S. No.98/2010 that the learned Arbitrator is not justified in rejecting the claim petition. As already states supra, 1st respondent has filed the Arbitration Suit only against rejection of the claim petition before the learned Arbitrator and not against allowing the counter-claim. Therefore, the judgment relied upon by the learned counsel for the 1st respondent has no application to the facts and circumstances of the case.
55. The learned Sessions Judge, Bangalore City ignoring all these material facts and even the maintainability of the single arbitration suit, has proceeded to allow the Arbitration Suit and modified the award passed by the Arbitrator permitting the appellant to take legal steps for recovery of the rent in respect of the schedule property, which is impermissible and the same cannot be sustained.
VI. CONCLUSION
56. On re-appreciation of the entire material on record and in the light of the judgments of the Hon'ble Supreme Court stated 64 supra, we answer the point raised in the present appeal in the negative holding that the learned Sessions Judge is not justified in allowing the Arbitration Suit No.98/2010 filed by the 1st respondent/Trust, in exercise of the powers under Section 34 of the Arbitration and Conciliation Act, 1996 by setting aside the Arbitral Award dated 20th August 2010 passed by the 2nd respondent/Arbitrator in C.M.P. No.27/2007. Accordingly, the impugned judgment & decree dated 30.3.2015 made in A.S. No.98/2010 is liable to be set aside and the Arbitral Award dated 20.8.2010 made in C.M.P. No.27/2007 has to be restored.
VII. RESULT
57. In view of the above, we pass the following order:
1. The Miscellaneous First Appeal is allowed in part.
2. The impugned judgment and Decree dated 30th March 2015 made in A.S. No.98/2020 on the file of the VI Addl. City Civil & Sessions Judge, Bangalore City, is hereby set aside.
3. The Arbitral award dated 20th August 2010 made in C.M.P. No. 27/2007 passed by the 2nd 65 respondent/Arbitrator, is hereby restored in so far the payment of damages to the appellant.
4. In view of restoration of the Arbitral award dated 20th August 2010 made in C.M.P. No.27/2007, the 1st respondent/Trust shall pay damages at the rate of Rs.1,00,000/- (Rupees one lakh only) from 1.2.2007 till today, within a period of three months, after adjusting the amount already deposited by the 1st respondent/Trust before this Court in the present appeal. The 1st respondent/Trust shall continue to pay the damages every month till the disposal of the Civil Appeal No.3303/1997 and connected matters pending adjudication before the Hon'ble Supreme Court. Inspite of adjustment of the amount already deposited as stated supra, still if there is any excess amount, the same shall be adjusted towards the future damages.
5. In so far as the direction issued by the order dated 20.8.2010 passed in C.M.P. No.27/2007 to quit and deliver vacant possession of the schedule premises to the appellant, the same is subject to the result of Civil Appeal 66 No.3303/1997 and connected matters, pending before the Hon'ble Supreme Court challenging the validity of the Bangalore Palace (Acquisition and Transfer) Act, 1996.
Sd/-
JUDGE Sd/-
JUDGE Gss*