Karnataka High Court
M/S Naj Properties And Developers vs Mrs. Neelufar on 21 February, 2025
Author: H.P.Sandesh
Bench: H.P.Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF FEBRUARY, 2025
R
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
MISCELLANEOUS FIRST APPEAL NO.4022/2020 (AA)
BETWEEN:
M/S. NAJ PROPERTIES AND DEVELOPERS,
A PROPRIETARY CONCERN
HAVING ITS OFFICE AT NO.2,
MOSQUE ROAD, FRAZER TOWN,
BENGALURU - 560 005.
BY ITS PROPRIETOR
MR. JABIR ASGHAR. ... APPELLANT
(BY SRI. RAVISHANKAR S., ADVOCATE)
AND:
1. MRS. NEELUFAR,
AGED ABOUT 58 YEARS,
W/O DR. MOHAMMED KOUSAR HUSSAIN,
R/AT NO.2746, SAWDAY ROAD,
MYSURU - 570 021.
2. MRS. NISHAT MODI,
AGED ABOUT 46 YEARS,
W/O MR. KHALID MODI,
R/AT NO.32, COLES ROAD
FRAZER TOWN,
BENGALURU - 05.
3. MS. NABILA JABIR,
AGED ABOUT 29 YEARS,
D/O MR. JABIR ASGHAR.
2
4. MS. NAALIA JABIR,
AGED ABOUT 24 YEARS,
D/O MR. JABIR ASGHAR.
5. MS. AALIYA JABIR,
AGED ABOUT 21 YEARS,
D/O MR. JABIR ASGHAR.
RESPONDENTS NO.3 TO 5 ARE
R/AT NO.2/5, 3RD FLOOR,
MOSQUE ROAD, FRAZER TOWN,
BENGALURU - 560 005.
6. MR. B.SHIVALINGEGOWDA,
DISTRICT JUDGE (RETD.),
ARBITRATION AND CONCILIATION CENTRE,
BANGALORE (DOMESTIC AND INTERNATIONAL)
KHANIJA BHAVANA, NO.49,
3RD FLOOR, EAST WING,
RACE COURSE ROAD,
BENGALURU - 560 001.
... RESPONDENTS
(BY SMT. SYEDA SHEHNAZ, ADVOCATE FOR
SRI. V. BALAKRISHNA, ADVOCATE FOR R1 AND R2;
NOTICE TO R3 TO R6 IS DISPENSED WITH
VIDE ORDER DATED 25.01.2021)
THIS M.F.A. IS FILED UNDER SECTION 37(1)(c) OF THE
ARBITRATION AND CONCILIATION ACT, AGAINST THE ORDER
DATED 04.09.2020 PASSED IN AS.NO.46/2017 ON THE FILE OF
THE XX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
BENGALURU (CCH-32), DISMISSING THE SUIT FILED UNDER
SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT,
1996.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 01.02.2025, THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
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CORAM: HON'BLE MR. JUSTICE H.P.SANDESH
CAV JUDGMENT
Heard the learned counsel for the appellant and the learned counsel for respondent Nos.1 and 2.
2. This miscellaneous first appeal is filed under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 praying this Court to set aside the order passed in A.S.No.46/2017 dated 04.09.2020, on the file of the 20th Additional City Civil and Sessions Judge, Bangalore (CCH-32) and consequently to set aside the award passed in A.C.No.114/2014 dated 05.01.2017 passed by the Sole Arbitrator at Arbitration and Conciliation Centre, Bangalore (Domestic and International) and grant such other reliefs as deemed fit under the circumstances of the case.
3. The appellant sought the following reliefs before the arbitrator:
A. DECLARE that the registered Specific Power of Attorney dated 17.01.2004 executed by 1st and 2nd Respondents along with late Mrs. Najma Jabir, in terms of the JDA dated 17.01.2004, is coupled with interest and hence irrevocable;
DECLARE that the revocation of Specific Power of Attorney dated 17.01.2004 by the revocation deed 4 dated 18.07.2011 is illegal, void and not binding on the claimant.
DECLARE that the Sale Deed executed by the claimant in favour of Mr. Jabir Asghar is valid and lawful and that it conveys a proper title and interest in the Schedule C & D properties in favour of its purchaser, Mr. Jabir Asghar as a consequence thereof, further DECLARE THAT Mr. Jabir Asghar is the absolute owner of Schedule C & D Properties:
Or in the alternative, In the event this Hon'ble Tribunal were to hold that the revocation of the Specific Power of Attorney is valid.
DIRECT the 1st and 2nd Respondents to execute a Sale Deed in favour of the nominee of the claimant conveying 50% of the undivided interest in the schedule A property in terms of the JDA.
B. PARTITION Schedule B properties by metes and bounds in terms of the JDA, excluding the Schedule B property;
C. RESTRAIN the 1st and 2nd Respondents and anybody claiming through or under them by granting a permanent injunction from interfering with the peaceful possession of the Schedule properties by Mr. Jabir Asghar.5
4. While seeking such reliefs described the schedule A to D of the claim statement. It is contended that one Meeran Mohamed Abdul Gafoor who had purchased the Schedule 'A' property on 09.03.1939, gifted it to his daughter one Khurshidunnisa under two gift deeds dated 23.09.1946 and 05.02.1951. The said Khurshidnunnisa, in turn gifted it in favour of her three daughters i.e., respondent Nos.1 and 2 and one Najma Jabir - late wife of one Jabir Asghar - the proprietor of the claimant concern and mother of respondent Nos.3 to 5, by separate deeds dated 11.01.1988. During the year 2003, respondent Nos.1 and 2 approached the claimants' proprietor- Jabir Asghar and expressed their interest to develop the 'A' schedule property by constructing a residential or commercial complex thereon; after holding several meetings between and amongst the said Khurshidunnisa, respondent Nos.1 and 2 and also late Nazma Jabir and the claimant, respondent Nos.1 and 2 and late Najma Jabir offered the claimant to undertake at its cost the construction of a building on the 'A' schedule property comprising basement, ground, first and second floors and to give 50% built up area in the building along with 50% undivided interest in the schedule 'A' property apart from exclusive right to 6 own the terrace portion of the 'B' schedule property, on its paying them certain money also. It was further agreed that the claimant in exercise of its exclusive terrace rights, may also put up any construction thereon. The claimant's proprietor-Jabir Asghar accepted that offer and consequently there came to be a Joint Development Agreement (JDA) executed between and amongst them on 17.01.2004 and it was registered also. Simultaneously with the execution of JDA, respondent Nos.1 and 2 and their sister late Najma Jabir also executed a power of attorney in favour of the claimant so to enable it to do various acts and deeds, inter-alia to construct a multi storied/commercial and to sell, convey or transfer their 50% of the undivided interest in the 'A' Schedule property. Under that power of attorney respondent Nos.1 and 2 along with late Najma Jabir received monetary consideration in terms of Clause 10 of JDA and hence, the sane was coupled with interest and was not revocable.
5. The claimant's (developer's) portion, i.e., 50% of the total built up area shall be its property as and when the construction was completed. In the event of any dispute or difference arising between the parties thereto, which cannot 7 resolved amicably, the parties were required to appoint an arbitrator each of their choice and such arbitrators shall with mutual consent appoint an umpire and the said arbitrator/umpire shall together resolve the disputes or differences in accordance with the Arbitration and Conciliation Act, 1996. With a view to assure proper title to the claimant in respect of its entitlement of 50% undivided share in the 'A' schedule property pursuant to the execution of Joint Development Agreement and the power of attorney, Khurshidunnisa, respondent Nos.1 and 2 and their sister late Najma Jabir all executed a registered deed on 25.07.2005 confirming the HIBA made in their favour. Pursuant to the execution of JDA and power of attorney, the claimant undertook several acts and works, which are extracted hereinbelow:
• Borrowed a loan of Rs.75,00,000/- (Rupees Seventy Five Lakhs) from SBI, Shivajinagar, for the purpose of construction of the Schedule 'B' property, • Engaged M/s. Architects Inc Architects for preparation of various drawings for the construction of Schedule 'B' property, • Applied for and obtained the plan sanctions from BBMP for construction of the schedule 'B' property, 8 • Engaged engineers and contractors for the construction of Schedule 'D' property. • Invested its own funds to the extent of Rs.2,00,000/-
(Rupees Two Crore only) towards the construction of Schedule 'B' property.
• Regularly inspected the project site and monitored the progress of construction.
• Applied for and obtained amalgamation of khata in respect of Schedule 'A' property.
• Applied for and obtained necessary sanction and permission for water and electricity supply to Schedule 'B' property.
• Repaid substantial portion of the loan amount along with interest.
6. It is the contention of the claimant that he has spent a great deal of time, energy and money in ensuring construction of the 'B' schedule property as planned. In the JDA though it was stated that residential apartment would be constructed but, at the time of commencement of construction the claimant, the respondent Nos.1 and 2 and also late Najma Jabir jointly decided to construct a commercial building on the 'A' schedule property with a right to the claimant to construct a residential pent house 9 on the terrace portion of the 'B' schedule property. Accordingly, the claimant got the construction plan revised and sanctioned by BBMP. The respondent Nos.1 and 2 not only were aware of such a change of the use of the land/construction, but also actively consenting for it used to visit the construction site regularly. It is also the contention that after the completion of the construction of 'B' schedule property in the year 2006, the claimant, respondent Nos.1 and 2 along with Najma Jabir having decided to let out the 'B' schedule property, authorized the claimant to look for a potential lessee; the claimant, met the representatives of M/s. Great Wholesale Club Limited (now known as M/s. Spencers Retail Pvt. Ltd.) and after several meetings, the claimant, respondent Nos.1 and 2 and late Najma Jabir entered into an agreement of lease and leased them the 'B' schedule property on monthly rent. Along with lease agreement, the parties also entered into an agreement of hire, where under certain movables were also rented. As per the said agreements, the lessee was required to pay 50% of the rent to the claimant and 16.66% each to the respondent Nos.1 and 2 and late Najma Jabir.10
7. M/s. Spencers who occupied the 'B' schedule property as lessees started paying rental as per the ratio aforesaid. In the meanwhile, Jabir Asghar-proprietor of the claimant-Concern, moved into schedule 'D' property along with his family and has been residing there, by paying all the necessary taxes. Najma Jabir-wife of Jabir Asghar-claimants' proprietor passed away on 12.03.2010 leaving behind him (husband) and three daughters i.e., respondent Nos.3 to 5; so, the claimant, on his behalf himself and also on behalf of respondent Nos.3 to 5 issued a letter to M/s. Spencers informing them to pay it the share of the rental of late Najma Jabir and consequently M/s. Spencers were paying so. In exercise of the powers given to it under the power of attorney dated 17.01.2004, the claimant executed a sale deed on 08.09.2011 in favour of itself i.e., Jabir Asghar to convey himself the 'C' and 'D' schedule properties and consequently, got the khata of that property also changed to his name. That being so, claimant was shocked to receive a notice caused by respondent Nos.1 and 2 claiming among others that they had cancelled the power of attorney issued in its favour. Further, they and Khurshidunnisa all had also revoked the confirmation deed dated 25.07.2005. 11
Such revocation, prima facie is illegal and a unsustainable in law as power of attorney being one coupled with interest in the 'A' schedule property on which the claimant substantially has acted upon. Further, in view of the existing Mohammadan Law and particularly having regard to the fact that once the donee viz., Najma Jabir since had been expired, deed of confirmation could not have been revoked.
8. It is contended that respondent Nos.1 and 2 met M/s. Spencers and misled them to believe that the claimant had no right to receive the rental of the 'B' schedule property in view of the revocation deed; therefore, M/s. Spencers since stopped paying rental to the claimant that necessitated it to cause a notice on 22.10.2011 calling upon M/s. Spencers to pay the rental and to which as there was no response and hence it was constrained to file a suit in O.S.No.25266/2013 before the City Civil Court, Bengaluru and the same is pending for disposal. It is contended that the claimant has invested more than Rs.2 Crores in constructing the 'B' schedule property; in view of the terms of JDA and power of attorney followed by the deed of confirmation and the conveyance deed dated 08.09.2011, claimant has become the lawful and absolute owner of the 'C' and 'D' schedule 12 properties; however, on account of the untenable stand taken by respondent Nos.1 and 2 that the claimant had no right to execute the sale deed, it treated that there arose dispute under the JDA and so issued notice of reference of the dispute to arbitration; eventually, the claimant also filed a petition before the Hon'ble High Court of Karnataka in CMP No.114/2014 and the matter was referred to arbitration. The respondent Nos.1 and 2 are interfering with the peaceful enjoyment of 'C' and 'D' properties by the claimant in many ways including by influencing M/s. Spencer's not to pay the rental lawfully due to it. In view of referring the matter to the arbitration, notice was issued and respondent Nos.1 and 2 have opposed the claim of the claimant by registering a joint statement of objections and have also made the counter claim wherein it is contended that the very claim is not maintainable either in law of on facts. The claimant was required to build a residential apartment on the 'A' schedule property and the question of construction of commercial complex has no bearing and the claimant is misrepresenting the facts and misleading the authority. It is contended that the alleged JDA was not enforced and the covenants therein at Clauses 2, 3.3, 4.1, 4.3., 8.1, 14.1, 14.3 and 16.4, which the claimant has not 13 extracted in his pleading, would certainly throw light on the factual position of the parties concerned.
9. The claimant has swindled the money borrowed from the Bank by mortgaging the properties of respondent Nos.1 and
2. In the notice dated 21.07.2011 or in the notice of ejectment dated 10.10.2011 and further, in the reply caused thereto by the claimant on 22.10.2011 and also in the rejoinder caused by the respondent Nos.1 and 2 to the reply notice dated 10.01.2012, the contention of the arbitration clause in JDA had not been raised. Therefore, in view of Section 8 of the Arbitration Act, the claimant cannot raise such a contention later on in the proceedings initiated subsequently. The notice issued by the claimant on 31.01.2012 which was not warranted, is not maintainable. It is contended that in the JDA, it is clearly stated that, residential apartment was to be constructed in the 'A' schedule property and which the claimant since did not, the agreement did not take-off. Khurshidunnisa was not a party to the JDA which was not put into operation; therefore, the specific power of attorney which was of any consequence was revoked and more so, Najma Jabir since had passed away, the question of executing any document with regard to 'A' schedule property 14 does not arise. The construction of multi-storied commercial building since was not the subject matter of the JDA, that was not enforced and so, the specific power of attorney was revoked. It is contended that the JDA since was not executed (enforced), the question of invoking the arbitration Clause therein did not arise. Further, revocation of the confirmation deed was also of any consequence when the JDA itself was not enforced. The respondent Nos.1 and 2 have almost cleared the loan of Rs.75 lakhs accorded to them by SBI, Shivajinagar Branch and therefore, the question of its repayment as claimed by the claimant does not sustain. The claimant is a registered fraud and who has been duping the mother-in-law and sister-in-laws, has cheated them and has taken money to an extent of Rs.2,50,00,000/-. There was no question of jointly deciding to construct a commercial building in 'A' schedule property and a residential pent house on the terrace of the portion of 'B' schedule property. If at all there were to be any alteration or amendment or change of plan from residential construction to commercial, as per Clause 16.4 of the JDA mandatorily, there ought to have been a supplementary deed of agreement and that was also required to be registered. But in the case herein, 15 there was no such supplementary agreement and therefore, in its absence, the claimant cannot take the contention of its choice with the malafide intention to knock-off the property. Further, the claimants' proprietor being the brother-in-law of respondent Nos.1 and 2 and also being a powerful person in the Congress - a political party, is giving them threats and so was to his mother-in-law also.
10. The claimant has not incurred any expenditure or brought-in any capital to put up any construction as per the terms of JDA. The Municipal numbers furnished in the claim statement have been fraudulently obtained by misrepresenting the facts and the letter issued by the Bank is very clear to show that the loan sanctioned on 29.04.2006 was on the collateral security and on the guarantee of mortgaging their property by way of deposit of title deeds. Thus, it would make clear that the JDA executed on 17.01.2004 was given up and not enforced. They have not executed any lease deed and therefore, the question of sharing the rents does not arise. The claimant had no right or authority to execute sale deed on 08.09.2011 in respect of 'C' and 'D' schedule properties and it would only demonstrate the fraudulent act to cheat them and to knock-off the property 16 and money. In the suit in O.S. No.25266/2013 filed against M/S Spencers, they have filed an impleading application and are contesting it. The claimants' proprietor is a dubious person and when their sister was alive, he was having affair with his neighbor - a widow staying in Blessing Apartments, Serpentine Street, Richmond Town, Bengaluru-560 015, and it was in that context their sister was found dead under mysterious circumstances and thereafter, he married that neighbor.
11. The wife of the claimants' proprietor, who was no other than their own sister and was residing in a rented house in Richmond Town along with the claimant had requested them for accommodation till they make alternate arrangement. In the meanwhile, their sister died under mysterious circumstances. The claim, that the terrace portion is the exclusive property of the claimant is not true; they and their deceased sister are the absolute owners of the property in question; the question of co- ownership does not arise, the claimant is not entitled to claim any rent; the claimant has not made any payment to the bank towards the loan. It is also contended that the Hon'ble High Court of Karnataka dismissed the CMP filed in No.70/2012 on 06.09.1013 reserving liberty to appoint another Arbitrator. 17 Thereafter, the claimant slept over the matter for a period of six months and since did not name his Arbitrator, it is barred by limitation and so also for the reason that the alleged JDA is dated 17.01.2004. The claimant has also suppressed the fact of pendency of the proceeding in Arbitration Petition in AA No.150/2012 filed by him before the City Civil Court, Bengaluru and during the pendency of that proceeding the adjudication for arbitration is not maintainable. The bank having notified the schedule property for auction under SARFASI Act for non- payment of loan amount since had issued them notice on 01.12.2011 for an amount of Rs.62,15,985.54/-, and they are repaying that entire amount and hence prayed for the following:
(a) dismiss the claim of the claimant as not
maintainable;
(b) allow the counter claim of the respondent Nos.1 and 2, in regard to 50% of the illegal claim of the undivided interest in the respondents' Rs.2,50,000/-(Rupees Two Crore Fifty lakhs only) properties.
(c) Rs.2,50,00,000/- (Rupees Two Crore Fifty lakhs only) as on January 2012 and a sum of Rs.62,15,985.54 (Rupees Sixty Two Lakhs Fifteen Thousand Nine Hundred Eight Five and 18 Fifty Four Paise only) of the bank loan paid by them be paid along with interest at 14.75% per annum.
(d) all costs and incidental to the proceedings and such other relief/s as this Hon'ble Authority deems fit in the facts and circumstances of the case, in the interest of justice and equity.
12. Opposing the counter claim of respondent Nos.1 and 2, claimant has filed the rejoinder contending that respondent Nos.1 and 2 by making several untenable and frivolous allegations against him and his concern, have deviated beyond the scope of the dispute. It is contended that while entering into JDA, the parties initially had contemplated for construction of residential apartment, however, due to change in thought and for better commercial building; respondent Nos.1 and 2 having taken the benefit of rents of the commercial building, now cannot contend that the JDA was not enforced or that it was invalid. The allegation that it has not invoked the arbitration clause of the JDA at the first instance is totally misconceived. In fact, it had initiated arbitral proceeding in accordance with the arbitration Clause in the JDA by issuing a notice on 31.01.2012. The contention of respondent Nos.1 and 2 that JDA was not put 19 into operation as the donor Kurshid Unnissa was not a party thereto is opposed to basic tenets of law inasmuch as, once a property is gifted without any conditions, the donor had no right or interest in the property so gifted. The contention of respondent Nos.1 and 2 that the JDA was not executed and as such the question of invoking the arbitration clause therein does not subsist, is absolutely false and self serving as they cannot approbate and reprobate. It is contended that the allegation that its proprietor is a registered fraud is not recognized in legal parlance and further its proprietor has been duping his mother- in-law and sisters-in-law and also by cheating them, has taken away the money to an extent of Rs.2.5 crores are all false. It has constructed schedule 'B' property by investing its own funds and also from the loan borrowed to which, it is the principal borrower and respondent Nos.1 and 2 are the guarantors. Its proprietor being a law abiding citizen, has filed a civil suit to recover the rent arrears due and in that suit, respondent Nos.1 and 2 got impleaded recently as parties. The counter claim of respondent Nos.1 and 2 is vague and ambiguous as they have not given the description of their properties, and further respondent Nos.3 to 5 also have right in the schedule properties 20 and there is no cause of action of the counter claim which is also time barred.
13. The respondent Nos.1 and 2 filed the statement of objections to the rejoinder filed by the claimants contending that it is the claimant which has deviated from the scope of dispute and not they, since it is an admitted fact that if the JDA was to be executed, the construction of the residential building was to be completed within 18 months and it was not so; they have not contended that JDA was not executed. The plan which was sanctioned on 11.05.2004 and valid up to 10.5.2006 was not enforced; it is they who have built the commercial complex with their own funds. Their bank account in the State Bank of India, Shivajinagar Branch, Bengaluru would disclose the true picture as to the amount brought in by the claimant. There was any agreement lest JDA entered with the claimant to put up commercial complex, which they had taken up. Incidentally proprietor of the claimant happened to be his second son-in-law of their mother being the husband of their sister and in that relation, he has used his authority over his wife and swindled the money and it is in that context they have contended that the claimant had no locus-standi to claim as rightful owner of the 21 schedule property. The special power of attorney was revoked since the JDA did not take-off and as such it is invalid in law. Kurshidunnissa-their mother, though was a party to JDA, but neither she had confirmed it nor was consulted. The claimant has neither invested any money to the residential property nor constructed it instead, it was their property that was mortgaged to raise the loan and it is they who are discharging it. The respondent Nos.3 to 5, who are the daughters of the claimant have chosen not to file any defence statement. Based on the pleadings of the parties, the arbitrator has framed the following issues and re-cast the issues, which are extracted hereinbelow:
ISSUES (1) Whether the claimant proves that late Najma Jabir and respondent Nos.1 and 2 executed Joint Development Agreement dated 17.01.2004 in their favour and also the Specific Power of Attorney dated 17.01.2004 for consideration as averred? (2) Whether the claimant proves that the Specific Power of Attorney dated 17.01.2004 was coupled with interest and hence irrevocable?
(3) Whether the claimant proves the revocation of Special Power of Attorney dated 17.01.2004 by the respondent Nos.1 and 2 by revocation deed 22 dated 18.07.2011 is illegal, void and not binding by them?
(4) Whether the sale deed dated 08.09.2011 executed by the claimant for himself and also being the GPA holder of respondent Nos.1 and 2 in favour of himself and his daughters (Respondent Nos.3 to 5) is valid and lawful?
(5) Whether the claimant proves the execution of the confirmation deed dated 25.07.2005?
(6) Whether the claimant proves that they have invested money as averred by them?
(7) Whether the respondent Nos.1 and 2 proves that Joint Development Agreement was not acted upon?
(8) Whether the claimant proves the execution of the registered Supplementary Agreement by respondent Nos.1 and 2 and it was for construction of commercial complex?
(Issue re-casted vide order dated 26.06.2015) (9) Whether the respondent Nos.1 and 2 are entitled to the counter claim of Rs.2.5 Crores and with interest as prayed for?
(10) What Order or Award?
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(re-casted issue No.8) Whether the claimant proves that the parties to the JDA agreed for construction of a commercial complex instead of a residential complex"?
Additional issue Nos.1 and 2 raised as per order dated 26.06.2015
1. "Whether the claim is barred by limitation?
2. Whether by renting out the commercial complex and by receiving rents thereof the respondent Nos.1 and 2 are not entitled to question the validity of JDA?"
14. At the trial, Jabir Asghar - the proprietor of the claimant concern got examined himself as P.W.1 and produced the documents at Exs.P.1 to 27. In his cross-examination, the learned counsel for respondent Nos.1 and 2 also got marked Exs.R.1 to 13, Exs.P4(a) to (c), P-5(a) to (c) and Exs.P-7(a) and
(b) the portions of the respective documents. On the side of the respondents and in particular of respondent Nos.1 and 2, the respondent No.1 deposed herself as R.W.1 and also produced the documents at Exs.R14 to 48. One more witness Khalid Mohd. Modi, the husband of respondent No.2 was examined as R.W.2. The learned counsel for the claimant got marked Ex.P28 24 in the cross examination of R.W.1. Exs.P29 and 30 and Exs.R49 and 50 came to be marked by consent. The respondent Nos.3 to 5 have not offered any evidence on their side.
15. The arbitrator having considered the pleadings and the evidence on record, answered issue Nos.1 to 4 in the negative and answered issue No.5 that the claimant proves the execution of the confirmation deed dated 25.07.2005 and also answered issue No.7 that respondent Nos.1 and 2 prove that JDA was not acted upon. Having considered the material on record, the arbitrator dismissed the claim petition and also the counter claim of respondent Nos.1 and 2.
16. Being aggrieved by the said order, A.S.No.46/2017 was filed before the XX Additional City Civil and Sessions Judge (CCH-32), Bangalore City. Having considered the grounds urged in the arbitration suit, framed the points for consideration as to whether the arbitral award dated 05.01.2017 passed in A.C.No.114/2014 by the Arbitration Tribunal is liable to be set aside and the same was answered in the negative and dismissed the suit.
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17. Being aggrieved by the said concurrent finding of the Arbitration Tribunal and also findings given in A.S.No.46/2017, the present miscellaneous first appeal is filed before this Court.
18. The learned counsel for the appellant in his argument would vehemently contend that the order passed by the Arbitration Tribunal and also the suit while exercising the power under Section 34 of the Arbitration and Conciliation Act committed an error and the same suffers from legal infirmities. It is also contended that the arbitration award is without any basis and the same is passed on assumptions and presumptions and the learned Judge while acting under Section 34 of the Act has completely ignored the mandate therein. It is also contended that the finding of the learned arbitrator that the registered JDA dated 17.01.2004, is not acted at all is much against the contents of the very same document and the learned Arbitrator has completely overlooked the contents of the very document and the exhibited documents before the Tribunal. Though the JDA was initially for putting up construction of a residential apartment and during the course of commencement, it was mutually agreed to take up construction of a commercial complex. This mutual agreement coupled with the conduct of 26 the parties therein as per the terms of the agreement, the learned arbitrator could not have concluded that the said JDA dated 17.01.2004 is not acted at all. Conveniently, the learned arbitrator has not dealt with the other clauses which speaks volumes on the conduct of respondent Nos.1 and 2 and late Mrs. Najma Jabir. It is contended that it is not the case of respondent Nos.1 and 2 that they are illiterates who do not know reading, writing and understanding of the nature of the transaction. While they knowingly entered into several transactions and now for malafide reasons have disowned the same on some untenable and frivolous grounds. It is trite that non-consideration of the terms of the contract, exhibited documents and contractual obligations before the Trial Court by the learned arbitrator and gathering the intention of the parties judiciously is a ground for setting aside of the award by the Court under Section 34 of the Act and committed an error in the suit also. The entire arbitral award is in conflict with the public policy of India and also vitiated by patent illegality and that the arbitrator who ought to drawn conclusions which he ought to have drawn under the circumstances, the learned Judge has also ignored the same and has refused to interfere without even 27 going into the legalities in it. It is contended that it is a clear case of novation or alteration of a contract which falls within the meaning of Section 62 of the Contract Act, as the parties to the original agreement who had specifically agreed to put up residential apartments, then came to a mutual understanding that they should go for a commercial complex and accordingly, the same was also put up and benefits enjoined therein by all the parties and fails to take note of the subsequent event and understanding and collecting the rent. It is contended that both the Arbitral Tribunal and learned Judge failed to consider the plethora of documents, which have been produced and entire pleadings and proof of the respondents were against the doctrine of estoppel and that by their conduct have acquiesced themselves.
19. It is contended that the entire revocation of the Specific Power of Attorney is much against the basic tenets of law, which contemplates that a registered document cannot be revoked unilaterally by the affected parties. In the instant case on hand, the Specific Power of Attorney which is coupled with interest was unilaterally revoked by respondent Nos.1 and 2, that too much after the completion of the construction as desired 28 and that too without following due procedure as contemplated under Section 202 of the Contract Act. No notice was issued before taking the drastic step calling upon the appellant to explain the same by giving an opportunity of being heard in the matter, as such, the most common principles of law are being completely violated in the instant case on hand. However, the learned Judge and the learned arbitrator have completely ignored the same and proceeded erroneously. The learned counsel contend that the respondents cannot approbate and reprobate and residential construction was modified for commercial complex and completed the construction for commercial purpose and even entered into an agreement while letting out the property for the commercial purpose and collecting rent, which was rented out to the commercial purpose. It is contended that all of them have executed the rent agreement Ex.P.7 and collected rent from 2006 to 2015 and hence cannot approbate and reprobate. The Arbitral Tribunal as well as the learned Judge committed an error in rejecting the counter claim made by the appellant herein and the fact that M/s. Spencers is tenant of all of them is not in dispute. 29
20. The learned counsel contend that an application is filed under Order 41 Rule 27 of CPC along with documents and the same also to be considered. The learned counsel contend that these documents also clinches the very issue i.e., copy of the MOU dated 23.11.2005/ 28.11.2005, copy of Form No.16-A submitted to the Income Tax Department and copy of the statement of income submitted by respondent Nos.1 and 2 to the Income Tax Department. It was the contention of the appellant that though the JDA referred to the putting up of residential apartment and sanction was accorded at the first instance and it was subsequently modified under Ex.P.27 sanction plan. The appellant has produced Ex.P.26 the earlier sanction plan and Ex.P27, which is the modified plan. It is contended that a MOU was entered by the appellant, respondent Nos.1 and 2 and the deceased Najma Jabir as second party with M/s. Great Wholesale Club Ltd., wherein it was agreed to let the schedule premises consisting of ground, first and second floor. In terms of this MOU, the modification of the plan was sought which was accorded as per Ex.P.27. The MOU dated 28.11.2005, which was entered between the appellant, respondent Nos.1 and 2 and the deceased Smt.Najma Jabir, is 30 prior to the execution of the lease deed at Ex.P.7 dated 01.09.2006. Therefore, the MOU referred above is the vital document which will clear the cloud of the dispute between the parties. It is contended that the MOU referred above could not be produced earlier as it was misplaced. It was traced recently during the verification of the documents, which his advocate has sought for the preparation of cross-examination in the event of respondent Nos.1 and 2 lead their evidence in O.S.No.25266/2013 and O.S.No.25267/2013. It is contended that though respondent Nos.1 and 2 before the arbitration accepted that they received the rents from the tenant towards their share, however there was no clinching evidence to support the said plea. The documents now sought to be produced are the copies of Form No.16-A, which was the payment of the tax which was deducted by the tenant and remitted to the Income Tax Department. In pursuant to the deposit of the tax made by the tenant, respondent Nos.1 and 2 declared their income by relying upon the payment made by the tenant. The copies of the income tax return and Form No.16-A was with the auditor which was obtained recently and the same could not be produced 31 earlier and hence the same may be received as additional documents.
21. The learned counsel for the appellant in support of his arguments relied upon the order passed by this Court in M.F.A.No.101959/2024 decided on 03.12.2024. Referring this judgment, the learned counsel would contend that in this judgment scope of Section 34 of the Arbitration and Conciliation Act is discussed, wherein the order was set aside and the matter was remanded to pass appropriate orders in accordance with law keeping in mind the discussion made therein. It was held that having regard to the position of law as laid down in the case of Project Director National Highways v. M. Hakeem reported in AIR 2021 SC 3471 also case of Union of India and Another v. Tarsem Singh and others reported in (2019) 9 SCC 304, the District Court is required to pass suitable orders in accordance with law.
22. The learned counsel also relied upon the judgment of the Apex Court in the case of NAGUBAI AMMAL AND OTHERS v. B. SHAMA RAO AND OTHERS reported in AIR 1956 SC 593, wherein discussion is made with regard to the doctrine of 32 election and approbate and reprobate. The Larger Bench in paragraph No.23 held that the doctrine of election is not however confined to instruments. A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn around and say if is void for the purpose of securing some other advantage. That is to approbate and reprobate the transaction.
23. The learned counsel also relied upon the judgment of the Apex Court in the case of NATIONAL INSURANCE CO. LTD. v. MASTAN AND ANOTHER reported in (2006) 2 SCC 641 and brought to the notice of this Court paragraph No.23 wherein it is held that the "doctrine of election" is a branch of "rule of estoppel", in terms whereof a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had.
24. The learned counsel also relied upon the judgment of the Apex Court in the case of UNION OF INDIA v. N. MURUGESAN reported in SCC-2022-2-25 and brought to the notice of this Court paragraph No.26, wherein it is held that 33 these phrases are borrowed from the Scott's law. They would only mean that no party can be allowed to accept and reject the same thing, and thus one cannot blow hot and cold. The principle behind the doctrine of election is inbuilt in the concept of approbate and reprobate. Once again, it is a principle of equity coming under the contours of common law. Therefore, he who knows that if he objects to an instrument, he will not get the benefit he wants cannot be allowed to do so while enjoying the fruits. One cannot take advantage of one part while rejecting the rest. A person cannot be allowed to have the benefit of an instrument while questioning the same. Such a party either has to affirm or disaffirm the transaction. This principle has to be applied with more vigour as a common law principle, if such a party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the other part. An element of fair play is inbuilt in this principle. It is also a species of estoppel dealing with the conduct of a party.
25. The learned counsel also relied upon the judgment of the Apex Court in the case of INDIAN OIL CORPORATION LIMITED v. SHREE GANESH PETROLEUM RAJGURUNAGAR reported in (2022) 4 SCC 463, wherein in paragraph No.42 34 after considering various judgments held that an award could be said to be against the public policy of India in, inter alia, the following circumstances:
42.1. When an award is, on its face, in patent violation of a statutory provision.
42.2. When the Arbitrator/Arbitral Tribunal has failed to adopt a judicial approach in deciding the dispute.
42.3 When an award is in violation of the principles of natural justice.
42.4 When an award is unreasonable or perverse. 42.5 When an award is patently illegal, which would include an award in patent contravention of any substantive law of India or in patent breach of the 1996 Act.
42.6 When an award is contrary to the interest of India, or against justice or morality, in the sense that it shocks the conscience of the Court.
26. The learned counsel also relied upon the judgment of the Apex Court in the case of S.V. SAMUDRAM v. STATE OF KARNATAKA AND ANOTHER reported in (2024) 3 SCC 623 wherein in paragraph No.43 it has held that accounting for the 35 legal position, the Court could have at best set aside the award and could not modify the same.
27. The learned counsel also relied upon the judgment of the Apex Court passed in Special Leave to Appeal (C) Nos.15336-15337/2021 dated 20.02.2024, wherein five questions were formulated, which are as follows:
1. Whether the powers of the Court under Section 34 and 37 of the Arbitration and Conciliation Act, 1996 will include the power to modify an arbitral award?
2. If the power to modify the award is available, whether such power can be exercised only where the award is severable and a part thereof can be modified?
3. Whether the power to set aside an award under Section 34 of the Act, being a larger power, will include the power to modify an arbitral award and if so, to what extent?
4. Whether the power to modify an award can be read into the power to set aside an award under Section 34 of the Act?
5. Whether the judgment of this Court in Project Director NHAI vs. M. Hakeem, followed in 36 Larsen Air Conditioning and Refrigeration Company vs. Union on India and S.V. Samudram vs. State of Karnataka lay down the correct law, as other benches of two Judges (in Vedanta Limited vs. Shenzden Shandong Nuclear Power Construction Company Limited, Oriental Structural Engineers Pvt. Ltd vs. State of Kerala and M.P. Power Generation Co. Ltd. vs. Ansaldo Energia Spa) and three Judges (in J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd., Tata Hydroelectric Power Supply Co. Ltd. vs. Union of India and Shakti Nath vs. Alpha Tiger Cyprus Investment No.3 Ltd.) of this Court have either modified or accepted modification of the arbitral awards under consideration?
28. The learned counsel relied upon the judgment of the High Court of Judicature at Madras in the case of AIRPORTS AUTHORITY OF INDIA v. M/S. URC CONSTRUCTIONS PVT.LTD. reported in 2024 Supreme (Mad) 1568, wherein it is held that in the light of narrative thus far, the impugned order is set aside solely for the purpose of facilitating a de novo Section 34 legal drill. This means, we make it clear that we have not expressed any view or opinion on the merits of the 37 matter and referred the judgment in the case of Hakeem (supra) referred to a Larger Bench and also held that all questions are left open and discussed with regard to Section 34(5), 34(6) and several judgments are referred. Insofar as the submission of the learned counsel for the respondent that if Section 34(5) is considered as directory, the entire purpose of the amendments would be rendered otiose is concerned, is held that there is no merit in the submission made by the learned counsel for the respondent. It is held that the Court can always direct the petitioner to issue notice along with papers and proceedings upon other party before the matter is heard by the Court for admission as well as for final hearing and discussed the scope of Section 34.
29. The learned counsel referring these judgments would vehemently contend that both the Arbitral Tribunal as well as learned Judge committed an error in dismissing the claim petition and hence it requires interference.
30. Per contra, the learned counsel for respondent Nos.1 and 2 in his argument would contend that the Arbitration Tribunal as well as the learned Judge have taken note of that a 38 reasoned order has been passed and there was an interpolation and brought to the notice of this Court page No.117 and clause 16.4. The learned counsel contend that Ex.P.4 ceases when not aced upon and document Exs.P.4 and 5 is also drafted by him. When there is an interpolation, the same has been considered and also taken note of the recitals of Special Power of Attorney and the document and when the document of Ex.P.4 not acted upon, rightly comes to the conclusion that the same is not acted upon. The learned counsel contend that the earlier document executed by them were revoked. The learned counsel contend that taken note of the conduct after revocation of the document, sale deed was executed on 18.07.2011 in favour of the daughters and the Court has to take note of the conduct. The learned counsel contend that JDA is abandoned and interpolation is also not signed and Exs.P.7 and 8 already produced and JDA is not acted upon and there is an admission to that effect. The Commercial complex built by the respondents only and not built by the claimant/appellant and the conditions of Ex.P.4 has not been complied.
31. The learned counsel relies upon the judgment of the Apex Court in the case of ASSOCIATED ENGINEERING 39 CO. v. GOVERNMENT OF ANDHRA PRADESH AND ANOTHER reported in (1991) 4 SCC 93. The learned counsel referring this judgment would contend that in paragraph NoS.24 and 25 discussion was made that the arbitrator cannot act arbitrarily, irrationally capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it. An arbitrator who acts in manifest disregard of the contract acts without jurisdiction. His authority is derived from the contract and is governed by the Arbitration Act which embodies principles derived from a specialized branch of the law of agency.
32. The learned counsel referring this judgment would contend that the arbitrator has to act in terms of the contract and accordingly he has given the reasons while rejecting the claim and it does not require interference. The 40 learned counsel contend that the document clearly discloses that the signatures are forged and having noticed the same, power of attorney was revoked and when he did not put up any construction and swindled the money, the same was paid by the respondents when loan was availed from the bank and all these aspects has been considered by the arbitrator and the learned Judge and it hence does not require any interference.
33. The respondents also filed the statement of objections to the main petition denying the averments made in the appeal memo and contend that the findings of the award is clear that Ex.P.5, I do not see any illegality in the revocation of the power of attorney and to say that it does not bind the claimant. The learned counsel contend that the appellant, respondent Nos.1 and 2 along with late Mrs. Najma Jabir had entered into a JDA and executed Special Power of Attorney for construction of residential apartments, but the appellant did not comply with any of the terms and conditions of the JDA and had abandoned the JDA. The findings at paragraph No.22 of the award is re-produced in the statement of objections. The learned counsel contend that a bank loan of Rs.75,00,000/- was availed from SBI by mortgaging the property of respondent 41 Nos.1 and 2 and respondent Nos.1 and 2 only repaid the entire loan amount to the bank and the documents are in custody of the bank till date. Such finding was also given by the Court considering the material on record. The learned counsel contend that the very contention that the Tribunal committed an error is erroneous and in paragraph No.19 of the award, discussed Clause No.16.4 of the JDA and a detailed discussion was made. The learned counsel brought to the notice of this Court that the JDA was not acted upon and another plan was obtained on 22.07.2006, which is not part of the JDA dated 17.01.2004 and in this regard also, a detailed order has been passed and hence it does not require any interference.
34. The learned counsel brought to the notice of this Court the objections filed to the application filed under Order 41 Rule 27 of CPC and contend that there is no perversity in passing the award. Therefore, the plaintiff cannot label the award as it has been passed against the fundamental policy of Indian law and there is no merit in the suit. When there is no merit, an attempt is made to produce the documents. The documents submitted at this belated stage are not vital or necessary documents and moreover the corresponding document at Ex.P.7 42 has been marked before the Arbitral Tribunal and Ex.P.7 agreement for lease and Ex.P.8 agreement for hire, both dated 01.09.2006. In view of the documents, the said documents referred does not sustain for any consideration and question of invoking Order 41 Rule 27 of CPC does not arise.
35. In reply to the arguments of the learned counsel for respondent Nos.1 and 2, the learned counsel for the appellant would contend that Exs.P.4 and 5 both are to be considered since there is a reference in Ex.P.5. The learned counsel contend that the MOU between the parties is in existence and residential apartment is converted for commercial purpose in terms of the MOU. The learned counsel submit that an application under Order 41 Rule 27 of CPC is filed seeking permission of this Court to produce the documents as additional evidence and both the tenants and the respondents agreed to payment of rent and directly making payment and hence cannot dispute the additional documents sought to the produced. The learned counsel contend that the respondents cannot approbate and reprobate. The learned counsel contend that in the cross- examination R.W.1 admitted the construction made by the 43 appellant and now cannot contend that they have constructed and they have cleared the bank loan.
36. As against this reply argument, the learned counsel for respondent Nos.1 and 2 would contend that there is no question of approbate and reprobate and Ex.P.4 is not in dispute. The learned counsel contend that the maxim not applies as held in the judgment of the Apex Court in the case of Nagubai Ammal (supra). The learned counsel contend that the judgment in the case of Indian Oil Corporation (supra) is also not applicable since there is only one agreement of JDA and the same is not disputed. The learned counsel contend that the judgment in the case of S.V.Samudram (supra) is also not applicable to the facts of the case and the citations given by the respondents are applicable to the facts of the case and hence it does not require interference of this Court.
37. Having heard the learned counsel for the appellant and the learned counsel for respondent Nos.1 and 2 and also considering the principles laid down in the judgments referred supra, the points that arise for the consideration of this Court are:
44
(i) Whether this Court can exercise the power under Section 37(1) of the Arbitration and Conciliation Act, 1996 and whether it requires interference of this Court exercising such powers?
(ii) Whether the appellant has made out a ground
to invoke Order 41 Rule 27 of CPC by allowing
I.A.No.2/2024 to produce the documents
sought for in the application?
(iii) What order?
Point No.(i) and (ii):
38. Having considered the material on record, this Court has to take note of the relief sought by the claimant before the arbitrator i.e., to declare that the registered specific power of attorney dated 17.01.2004 executed by respondent Nos.1 and 2 along with Mrs.Najma Jabir, in terms of JDA dated 17.01.2004 is coupled with interest and hence irrevocable. The relief is also sought to declare that the revocation of specific power of attorney dated 17.01.2004 by the revocation deed dated 18.07.2011 is illegal, void and not binding on the claimant and declare that the sale deed executed by the claimant in favour of Mr.Jabir Asghar is valid and lawful and that it conveys a proper 45 title and interest in respect of C and D properties and also relief is sought for the declaration that Jabir Asghar is the absolute owner of 'C' and 'D' schedule properties. Alternatively, relief is also sought that if the Tribunal were to hold that the revocation of the specific power of attorney is valid, direct respondent Nos.1 and 2 to execute a sale deed in favour of the nominee of the claimant conveying 50% of the undivided interest in the schedule 'A' property in terms of the JDA and for partition of 'B' schedule properties by metes and bounds in terms of the JDA excluding the schedule 'B' property and also to restrain respondent Nos.1 and 2 and anybody claiming through or under them by granting permanent injunction.
39. Having considered the relief sought by the appellant before the arbitrator and also the reasons assigned by the arbitrator, the arbitrator comes to the conclusion that the very JDA was not acted upon and also comes to the conclusion that there is no any supplementary agreement between the parties. The learned Judge while exercising the power under Section 34 of the Act comes to the conclusion that it does not require any interference. It has to be noted that there is no dispute that there was an agreement, which is marked as Ex.P.4 dated 46 17.01.2004 between respondent Nos.1 and 2 and the deceased Najma Jabir, who is the sister of respondent Nos.1 and 2 in favour of the appellant. It is important to note that on the very same day Ex.P.5 dated 17.01.2004 was also executed by them in favour of the appellant. It is also not in dispute that in terms of the agreement Ex.P.4 dated 17.01.2004 i.e., JDA, sanction plan was obtained for construction of residential apartment and the same was granted on 11.05.2004 and the same is marked before the Trial Court as Ex.P.26. It is important to note that a modified plan was also obtained for construction of the commercial building and the same is marked as Ex.P.27 dated 22.07.2006. It has to be noted that the appellant sought to produce the documents invoking Order 41 Rule 27 of CPC contending that the document dated 23.11.2005/28.11.2005 MOU entered into between the appellant, respondent Nos.1 and 2 and the deceased Najma Jabir and M/s. Great Wholesale Club Limited, clinches the issue between the parties. It is important to note that subsequent to this document, there was an agreement between the same parties in terms of Ex.P.7 dated 01.09.2006 and Ex.P.8 dated 01.09.2006 i.e., lease agreement and hire agreement entered into between the appellant, 47 respondent Nos.1 and 2 and late Najma Jabir and M/s. Great Wholesale Club Limited. It has to be noted that earlier there was an agreement between the parties on 28.11.2005 and the parties are one and the same. It is important to note that in Ex.P.8 agreement of hire entered into between the appellant, respondent Nos.1 and 2, late Najma Jabir and M/s. Great Wholesale Club Limited, the details are mentioned with regard to rent payable, time and rate of enhancement of rent, etc. It has to be noted that the appellant prays the Court to produce the additional documents.
40. Having perused the additional documents sought to be produced, it is not in dispute that the parties are one and the same. Clause 1(c) of the MOU stipulates that the original planning permit and building licence for commercial usage as department store, approved by Bangalore Mahanagara Palike and the same is mentioned for having taken up a decision to put up the commercial building. But the very contention of the respondents is that though plan was obtained for the purpose of construction of the residential building, the same was changed for commercial usage and they have not given any consent. When such document is placed before the Court as additional 48 evidence, there is a force in the contention of the learned counsel for the appellant that this document clinches the very issue involved between the parties since the Tribunal comes to the conclusion that the earlier JDA was not acted upon. This document is placed before the Court contending that subsequently there was an agreement between the parties for payment of rent and periodically enhancing the same and this document was not placed before the arbitrator and this document is dated 28.11.2005. Subsequently, Exs.P.7 and 8 came into existence after construction of commercial building. It is important to note that in the additional document, duration is also mentioned in clause 3, area is mentioned in clause 2, commencement date of the proposed lease is mentioned in clause 4 and rent details are mentioned in clause 5.
41. The learned counsel for the appellant in addition to the said MOU also produced the documents of TDS certificates of the respondents, which have been placed before this Court as additional documents for having declared the rent received and these documents also clinches the very issue involved between the parties since the respondents claim that the appellant did not construct the commercial building and they only constructed the 49 building. But the fact is that there was an agreement between the parties and they are receiving rents from the tenant. There are admissions on the part of D.W.1 when he was cross- examined regarding construction and getting the rent through the appellant. No doubt, this Court cannot re-appreciate the evidence, but injustice should not be caused to any party when there was an admitted document of JDA and subsequently an agreement was also entered into between the parties for the construction of commercial building. Now the said document is intended to be produced as additional evidence.
42. The learned counsel for respondent Nos.1 and 2 would contend that the application filed under Order 41 Rule 27 of CPC cannot be allowed in view of the marking of documents Exs.P.7 and 8 and both the Tribunal as well as the learned Judge fails to take note of the existence of Exs.P.7 and 8 i.e., agreement for lease and agreement for hire while considering the material on record and the same also clinches the issue between the parties and erroneously comes to the conclusion that there was no any supplementary agreement. Now, the appellant places the document along with an application filed under Order 41 Rule 27 of CPC that subsequent to the JDA, 50 there was one more agreement which came into existence in 2005. I have already pointed out that in clause 1(c) of the MOU, there is a recital for construction for commercial usage and when such material is available on record, in the absence of documents sought to be produced, the issue involved between the parties cannot be decided. The said document would determine the germane issue involved between the parties since the respondents dispute that though there was a JDA in terms of Ex.P.4, the same is not acted upon. But with regard to the same was acted upon, the present documents which have been sought to be produced clinches the issues involved between the parties as contended by the appellant. The very contention of the learned counsel for the respondents that additional documents cannot be received cannot be accepted since the learned Judge also affirmed the order of the Arbitration Tribunal in coming to the conclusion that the same does not require any interference. The Court has to take note of the relief sought in the arbitration proceedings and also take note of the fact that the counter claim made by the respondents was also rejected and the respondents main contention is that they made the payment in favour of the bank. There is no positive discussion with regard to the said 51 contention also. When such being the case, both the claim and counter claim to be considered in view of the additional documents sought to be placed before the Court. There is a force in the contention of the learned counsel for the appellant that doctrine of election and approbate and reprobate is applicable to the facts of the case on hand in view of the judgment of the Apex Court in the case of Nagubai ammal (supra). In the case on hand, the respondents in one breath says that there was no compliance of agreement Ex.P.4 and at the same time, say that they are receiving the rent in terms of Exs.P.7 and 8 and they contend that JDA was not acted upon. Admittedly, the building was constructed and the same is for commercial usage and lease agreement came into existence for commercial purpose only and they are getting rent. Hence, it is nothing but approbate and reprobate and they cannot blow hot and cold.
43. The Apex Court in its judgment in the case of Mastan (supra) discussed with regard to rule of estoppel and doctrine of election. In the case of Murugusen (supra), the Apex Court in detail discussed and held that principle has to be applied with more vigour as a common law principle, if such a 52 party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the other part. An element of fair play is inbuilt in this principle. It is also a species of estoppel dealing with the conduct of a party. The Court has to take note of the conduct of the parties also. It is important to note that the Apex Court in its judgment in the case of Indian Oil Corporation (supra) in paragraph No.42.2, held that when the Arbitrator/Arbitral Tribunal has failed to adopt a judicial approach in deciding the dispute, the Court can interfere with award if it is unreasonable or perverse and against the public policy of India. In the case of Samudram (supra) referred by the learned counsel for the appellant, it is held that accounting for the legal position, the Court could have at best set aside the award and could not modify the same. But the matter can be considered afresh. The larger bench of the Apex Court by order dated 20.02.2024 in Special Leave to Appeal (C) Nos.15336- 15337/2021 (supra), formulated five questions with regard to the powers of the Court under Sections 34 and 37 of the Act will include the power to modify an arbitral award?
44. Now this Court is not going to modify the award and having placed the material before the Court, the fundamental 53 issue between the parties is that there was no any supplementary agreement and that was the finding given by the Arbitral Tribunal and now the document is placed before the Court as additional evidence that there was a MOU in the year 2005 immediately after Ex.P.4 for construction of commercial building in terms of Ex.P.27, which is the modified sanction plan. The respondents are disputing that there was no supplementary agreement and when this document is placed before the Court, wherein the appellant is a party along with respondent Nos.1 and 2 and her sister and unless that document is considered by the Tribunal, the fundamental issue between the parties with regard to whether they have acted upon in terms of JDA or in terms of the document, which is sought to be produced along with additional documents the issue between the parties cannot be decided. The documents discloses that all the parties have signed the said document and the respondents dispute any such supplementary document and unless the same is considered and an opportunity is given to the parties to lead evidence on the document, this Court cannot sit and decide the same exercising the appellate jurisdiction. The Appellate Court jurisdiction power is very limited whether to look into the material and the reasons 54 assigned by the Arbitral Tribunal as well as the Court which exercises power under Section 34 of the Act are in consonance with the material on record. The matter has to be considered afresh in the light of production of additional documents of TDS declaration made by the respondents as well as MOU, which came into existence in 2005 and also to consider the material on record in terms of Exs.P.27, Exs.P.7 and 8 and also the fact that they are receiving the rent by letting out the premises for commercial purpose. The very contention that the agreement is only for construction of the building for residential and not for commercial purpose also to be looked into whether there was a provision made in the subsequent agreement which is now produced before the Court.
45. It has to be noted that the said document is placed before the Court in this proceedings and reasons assigned is also that the document was misplaced and during the search they found this document and the respondents have also not filed any written objections and orally opposes the production of the documents. This Court has already come to the conclusion that the said document is a clinching material for deciding the issues involved between the parties. Hence, the matter requires to be 55 considered afresh in the light of the additional documents, which have been placed before the Court along with the application under Order 41 Rule 27 of CPC. It has to be noted that arbitration proceedings was started long back in 2014 and the arbitration suit was filed in 2017 and at a belated stage, the document is placed before the Court in exercise of power under Section 37 of the Act. Hence, it is appropriate to award cost for the delayed production for these documents and hence I answer the points framed by this Court in the affirmative. Point (iii):
46. In view of the discussions made above, I pass the following:
ORDER
(i) The miscellaneous first appeal is allowed.
(ii) The application filed under Order 41 Rule 27 of CPC is allowed on cost of Rs.50,000/- and out of that, an amount of Rs.40,000/- is payable to respondents and remaining Rs.10,000/- shall vest with the State.
(iii) The Arbitral award dated 05.01.2017 passed in
A.C.No.114/2014 and the order dated
56
04.09.2020 passed in A.S.46/2017 are set
aside.
(iv) The matter is remitted back to the Arbitration Tribunal to consider the matter afresh in view of the allowing of the application filed under Order 41 Rule 27 of CPC and permit the parties to lead further evidence and decide the matter afresh in view of the observations made by this Court.
Sd/-
(H.P. SANDESH) JUDGE MD