Karnataka High Court
Shri M P Ravishankar vs Shri T Shivaprakash on 8 July, 2022
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 08TH DAY OF JULY, 2022
PRESENT
THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
WRIT PETITION NO.8582 OF 2022 (GM-RES)
C/W
WRIT PETITION NO.8604 OF 2022 (GM-RES)
IN W.P.NO.8582/2022
BETWEEN:
1. SHRI M P RAVISHANKAR
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE M PUTTASWAMY
RESIDING A/T NO F-14
SEWAGE FARM MAIN ROAD
H R GARDEN, VIDYARANYAPURAM
MYSORE 570008
2. SRI G H HUCHAPPA
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE HUCHEGOWDA
AGED ABOUT 74 YEARS
NO 162, 2ND MAIN
GOKULAM, 2ND STAGE
VV MOHALLA
MYSORE 570002
3. SHRI N PRABHAKAR RAO
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE NARAYAN RAO
AGED ABOUT 69 YEARS
2
RESIDING AT NO 14
YATINDARA NILAYA
3RD CROSS
SHANAKRPURAM
BANGLAORE 560004
...PETITIONERS
(BY SRI: L.M CHIDANANDAYYA, ADVOCATE)
AND
1. SHRI T SHIVAPRAKASH
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE THIMMEGOWDA
AGED 54 YEARS
R/AT NO 1278 & 1279
GAGANCHUMBI DOUBLE ROAD
E AND F BLOCK, KUVEMPUNAGAR
MYSORE 570023
2. SMT M.P. SANDHAYARANI
PARTNER, M/s AISHWARYA DEVELOPERS
W/O T SHIVAPRAKASH
AGED 45 YEARS
R/AT NO 1278 AND 1279
GAGANAGCHUMBI DOUBLE ROAD
E AND F BLOCK, KUVEMPUNAGARA
MYSORE 570023
3. M/s AISHWARYA DEVELOPERS
REGISTERED PARTNERSHIP FIRM
HAVING ITS OFFICE AT 1278 AND 1279
GAGANACHUMBI DOUBLE ROAD
E AND F BLOCK, KUVEMPU NAGAR
MYSORE 570023
4. M/s AKHILA KARNATAKA
BRAHMINS WELFARE SOCIETY
NO 1513, 1ST FLOOR, 7TH MAIN
RPC LAYOUT, HAMPINAGARA
BENGALURU-560040
ALSO AT 175/1, NEW NO K 22/1
RAMAVILASA ROAD, K R MOHALAL
3
MYSORE 570024
REP BY ITS GENERAL SECRETARY
MR B V MANJUANTH
5. SRI B V MANJUNATH
PARTNER, M/s AISHWARYA DEVELOPERS
ALSO GENERAL SECRETARY
AKHILA KARANTAKA
BRAHMINS WELFARE SOCIETY
S/O VISVESHVARAIAH
AGED ABOUT 69 YEARS
R/AT NO 175
4TH MAIN, LIC COLONY
SRIRAMAPURA
MYSORE 570008
6. SOLE ARBITRATOR
AT ARBITRATION AND CONCILIATION CENTRE
BENGALURU (DOMESTIC AND INTERNATIONAL)
KHANIJA BHAVAN
BANGALORE 560001
...RESPONDENTS
(BY SRI: P.D.SURANA, ADVOCATE FOR R1 TO R3,
SRI. C.R.MAHENDRA GOWDA, ADVOCATE R4 TO R5;
V/O DATED 25.5.22 NOTICE TO R6 D/W)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE
AN ORDER, DIRECTION OR WRIT IN THE NATURE OF
CERTIORARI, QUASHING THE COMPROMISE AWARD
ANNEXURE-A DATED 18/03/2019 IN A.C.NO.71/2018 BY THE
ARBITRAL TRIBUNAL CONSISTING OF SOLE ARBITRATOR AND
ETC.,
IN W.P.NO.8604/2022
BETWEEN:
1. SHRI M P RAVISHANKAR
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE M PUTTASWAMY
4
RESIDING A/T NO F-14
SEWAGE FARM MAIN ROAD
H R GARDEN, VIDYARANYAPURAM
MYSORE 570008
2. SRI G H HUCHAPPA
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE HUCHEGOWDA
AGED ABOUT 74 YEARS
NO 162, 2ND MAIN
GOKULAM, 2ND STAGE
VV MOHALLA
MYSORE 570002
3. SHRI N PRABHAKAR RAO
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE NARAYAN RAO
AGED ABOUT 69 YEARS
RESIDING AT NO 14
YATINDARA NILAYA
3RD CROSS
SHANAKRPURAM
BANGLAORE 560004
...PETITIONERS
(BY SRI: L.M CHIDANANDAYYA, ADVOCATE)
AND
1. SHRI T SHIVAPRAKASH
PARTNER, M/s AISHWARYA DEVELOPERS
S/O LATE THIMMEGOWDA
AGED ABOUT 54 YEARS
R/AT NO 1278 & 1279
GAGANCHUMBI DOUBLE ROAD
E AND F BLOCK, KUVEMPUNAGAR
MYSORE 570023
2. SMT M.P. SANDHAYARANI
PARTNER, M/s AISHWARYA DEVELOPERS
W/O T SHIVAPRAKASH
AGED 45 YEARS
5
R/AT NO 1278 AND 1279
GAGANAGCHUMBI DOUBLE ROAD
E AND F BLOCK, KUVEMPUNAGARA
MYSORE 570023
3. M/s AISHWARYA DEVELOPERS
REGISTERED PARTNERSHIP FIRM
HAVING ITS OFFICE AT 1278 AND 1279
GAGANACHUMBI DOUBLE ROAD
E AND F BLOCK, KUVEMPU NAGAR
MYSORE 570023
4. M/s AKHILA KARNATAKA
BRAHMINS WELFARE SOCIETY
NO 1513, 1ST FLOOR, 7TH MAIN
RPC LAYOUT, HAMPINAGARA
BENGALURU-560040
ALSO AT 175/1, NEW NO K 22/1
RAMAVILASA ROAD, K R MOHALAL
MYSORE 570024
REP BY ITS GENERAL SECRETARY
MR B V MANJUANTH
5. SRI B V MANJUNATH
PARTNER, M/s AISHWARYA DEVELOPERS
ALSO GENERAL SECRETARY
AKHILA KARANTAKA
BRAHMINS WELFARE SOCIETY
S/O VISVESHVARAIAH
AGED ABOUT 69 YEARS
R/AT NO 175, 4TH MAIN,
LIC COLONY, SRIRAMAPURA
MYSORE 570008
6. SOLE ARBITRATOR
AT ARBITRATION AND CONCILIATION CENTRE
BENGALURU (DOMESTIC AND INTERNATIONAL)
KHANIJA BHAVAN
BANGALORE 560001
...RESPONDENTS
(BY SRI: P.D.SURANA, ADVOCATE FOR R1 TO R3,
SRI. C.R.MAHENDRA GOWDA, ADVOCATE R4 TO R5;
V/O DATED 25.5.22 NOTICE TO R6 D/W)
6
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE
AN ORDER, DIRECTION OR WRIT IN THE NATURE OF
CERETIORARI, QUASHING THE COMPROMISE AWARD
ANNEXURE-A DATED 09/01/2019 IN A.C.NO.70/2018 BY THE
ARBITRAL TRIBUNAL CONSISTING OF SOLE ARBITRATOR AND
ETC.,
THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 05.07.2022, COMING ON FOR
PRONOUNCEMENT OF ORDER, THIS DAY, POONACHA, J., MADE
THE FOLLOWING:
ORDER
Writ Petition No.8582/2022 is filed seeking to quash the Compromise Award dated 18.03.2019 passed in AC.No.71/2018. Writ Petition No.8604/2022 is filed seeking to quash the Compromise Award dated 09.01.2019 passed in AC.No.70/2018. Since the Petitioners were not parties to the Arbitral Awards dated 09.01.2019 and 18.03.2019, IA.I/2022 is filed seeking leave of this Court to permit the Petitioners to challenge the said Arbitral Awards.
7
2. The Petitioners and Respondents in both the Writ Petitions are same. Hence, both the Writ Petitions are considered together and this common order is passed.
3. Brief facts of the case are as under:
The Petitioners and Respondent Nos.1, 2 and 5 are the Partners of the Respondent No.3 - Firm. The Firm is constituted by the Deed of Partnership dated 16.06.2021 and re-constituted vide Deeds dated 01.04.2006 and 01.02.2007. It is the case of the Petitioners that the Firm had entered into two Agreements dated 01.12.2006 (Project 2 Mysuru) and dated 24.12.2012 (Project 3 Mysuru) for Land Development with the Respondent No.4
- Society to procure land, form a layout, develop infrastructure in all respects and hand it over to the Respondent No.4 - Society. Due to various disputes that arose in the course of implementation of the aforesaid agreements, an Arbitral Tribunal was constituted and arbitration proceedings were commenced between the Firm and the Respondent No.4 - Society in AC.No.71/2018 8 and AC No.70/2018. Both the parties filed their respective pleadings before the Arbitral Tribunal. Thereafter, the parties have filed Compromise Petitions and accordingly, the settlement Awards dated 18.03.2019 in AC No.71/2018 and 09.01.2019 in AC No.70/2018 were passed and the Arbitration proceedings were disposed off.
To execute the settlement Award dated 18.03.2019 in AC.No.71/2018, the Respondent No.4 - Society filed Commercial Execution Case No.2/2021 and to execute the settlement Award dated 09.01.2019 passed in AC.No.70/2018, Commercial Execution Case No.3/2021 was filed in the Court of the Principal District and Sessions Judge, Mysuru.
4. It is the further case of the Petitioners that they are arrayed as parties in the execution proceedings for the first time and did not have the knowledge of the Arbitral proceedings, hence, have filed the present Writ Petition for quashing the Awards dated 18.03.2019 and 09.01.2019 passed by the Arbitral Tribunal. 9
5. The Respondents Nos.4 and 5 have filed their statement of objections and opposed the relief sought in the present Writ Petitions.
6. The learned Counsel for the Petitioners in furtherance of the reliefs sought in these Writ Petitions has put forth following contentions:
(a) the Petitioners were not parties to the Arbitral proceedings and the Firm was represented by the Respondent No.1 in the Arbitral proceedings and the Petitioners were not aware of the same including the Compromise Petition and the Awards passed by the Arbitral Tribunal;
(b) the Respondent No.1 by representing the Firm in the Arbitral proceedings without the knowledge and consent of the Petitioners has acted beyond the scope of the authority and the implied authority vested in every Partner as contemplated under Section 19 of the Partnership Act, 1921. Therefore, the Petitioners are not 10 bound by the acts done by the Respondent No.1 on behalf of the Firm;
(c) the Respondents have played fraud and behind the back of the Petitioners, dealt with the property of the Firm;
(d) the Respondent No.5 who is the Partner of the Firm also represented the Respondent No.4 - Society as its General Secretary. This is the other aspect of the fraud that was committed; and
(e) the Petitioners are entitled to maintain the present Writ Petition in view of the fraud committed by the Respondents.
7. In support of his contentions, the learned Counsel for the Petitioners relied upon following decisions;
i) Deep Industries Limited v. Oil and Natural
Gas Corporation Limited and another1
ii) Punjab State Power Corporation Limited
v. Emta Coal Limited and another2
iii) Chainraj Ramchand v.
3
V.S.Narayanaswamy
1
(2020) 15 SCC 706
2
(2020) 17 SCC 93
11
iv) Tilokram Ghosh and others v. Smt.Gita
Rani Sadhukhan and others4
v) Bali Nagwanshi v. State of Chhattisgarh
and others5
8. Per contra, learned Counsel for the
Respondents has vehemently contended that;
(a) these Writ Petitions are not maintainable to challenge the Arbitral Awards;
(b) the Petitioners in collusion with the Respondent Nos.1 and 2 have filed these Writ Petitions to escape their liability as per the terms of the Awards passed by the Arbitral Tribunal;
(c) the Petitioner No.1 is brother-in-law of the Respondent No.1 and brother of the Respondent No.2 and hence, they were well aware of all the proceedings before the Arbitral Tribunal;
(d) there has been an inordinate delay in filing these Writ Petitions, inasmuch as the Compromise 3 (1982) 95 LW 278 (Mad) (DB) 4 AIR 1989 Calcutta 254 5 W.A.No.81/2022 & cw matters, DD 28.06.2022 12 Petitions were filed on 09.01.2019 and 18.03.2019, on which dates the Arbitration proceedings were also disposed off. Thus, there is an inordinate delay of more than three years in filing these Writ Petitions;
(e) various subsequent events have transpired including execution of various Power of Attorneys by the Petitioners as well as commercial transactions and in view of the same, these Writ Petitions are liable to be dismissed for want of bona fide conduct in the Writ Petitioners; and
(f) disputed questions of fact are involved and the same cannot be adjudicated by way of Writ Petitions.
9. We have heard the submissions made by the learned Counsel for the Petitioners and Respondent Nos.4 and 5 and perused the material available on record.
10. Having regard to the contentions put forth by the learned Counsel for the parties, the question that falls for our consideration is, "Whether the Compromise Award dated 09.01.20109 passed in AC No.70/2018 and Compromise Award dated 18.03.2019 passed in 13 AC.No.71/2018 by the Arbitral Tribunal are liable to be interfered with by this Court in exercise of its extraordinary jurisdiction contained under Articles 226 and 227 of the Constitution of India?"
11. The learned Counsel for the Petitioners vehemently contended that they are entitled to file and prosecute these Writ Petitions, inasmuch as fraud has been played by the Respondents and ex facie the Respondent No.1 who had represented the Firm before the Arbitral Tribunal has acted beyond the scope of authority and dealt with the valuable assets of the Firm including the movable property by entering into the Compromise Petitions dated 18.03.2019 and 09.01.2019.
12. Per contra, the learned Counsel for the Respondents refers to various factual aspects pertaining to the transaction between the parties and seeks for dismissal of the Writ Petitions.
14
13. It is clear from the rival contentions of the parties that various disputed questions of fact are involved in these Writ Petitions. While Petitioners seek to impugne the actions of the Respondent No.1 representing the Firm before the Arbitral Tribunal, the Respondent Nos.4 and 5 specifically contend that although the Respondent No.1 represented the Firm before the Arbitral Tribunal, the Petitioners were in complete knowledge of all aspects of the proceedings before the Arbitral Tribunal.
14. It is also relevant to note that to execute the Arbitral Awards dated 09.01.2019 and 18.03.2019, Respondent No.4 has instituted execution proceedings which are pending consideration before the Principal District and Sessions Court at Mysuru.
15. It is clear that there exists disputes between the Partners of the Firm. It is also relevant to note that Re- constitution Deeds dated 01.04.2006 and 01.02.2007 contain an Arbitration clause, whereunder, all disputes pertaining to partnership relating to the business and other 15 affairs of the Firm is required to be resolved by taking recourse to Arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act' for short). There is no material on record which may demonstrate that any party has instituted any such arbitration proceedings.
16. Having regard to the fact that the execution proceedings have been initiated in Commercial Execution Case Nos.2/2021 and 3/2021 by the Respondent No.4 in which the Firm and all its Partners are arrayed as parties, any defences that are available to be taken by the Firm or its Partners vis-à-vis Respondent No.4 - Society can be effectively adjudicated in the said proceedings.
17. In the case of Deep Industries1, the Apex Court was considering as to whether an Award made under Section 34 of the Act could be interfered with in Writ jurisdiction under Article 227 of the Constitution of India. Therefore, this ruling will not aid the case of the Petitioners.
16
18. In the case of Punjab State Power Corporation Limited2, the Apex Court was considering the case as to whether a writ petition could be filed being aggrieved by an application filed under Section 16 of the Act. Hence, the said decision is wholly inapplicable to the facts of the present case.
19. In the case of Chainraj Ramchand3 the Division Bench of the Madras High Court was dealing with an appeal filed against a Compromise Award passed in a Civil Suit. Therefore, the said judgment will not come to the aid of the Petitioners.
20. In the case of Tilokram Ghosh4 the Division Bench of the Calcutta High Court was dealing with an appeal arising out of the arbitral proceedings instituted by the Partners of the Firm by taking recourse to the arbitration clause contained in the Deed of Partnership. Hence, the said judgment will not aid the case of the Petitioners.
17
21. In the case of Bali Nagwanshi5 the Division Bench of Chhattisgarh High Court was considering a case where for a special railway project compensation was awarded and various awards were passed by the Additional Collector/competent authority. Subsequently, the Collector noticing discrepancies, ordered an enquiry by a Committee, which came to the conclusion that the determination of compensation by the competent authority is erroneous and the railway officials were involved in the conspiracy. It is in challenge to the said proceedings that various Writ Petitions have been disposed of by a learned Single Judge of the High Court and the Division Bench had rendered the said ruling in the said factual backdrop. The said judgment is wholly inapplicable to the facts of the present case.
22. It is clear that there exists disputes amongst the Partners of the Firm and various allegations are put forth which are effectively met with counter allegations. The disputed questions of fact which arise for consideration 18 can be suitably and effectively adjudicated in other remedies that are available to the respective parties as indicated above.
23. In the circumstances, we are of the considered opinion that these Writ Petitions do not merit consideration in exercise of our extraordinary discretionary jurisdiction contained under Article 226 and 227 of the Constitution of India.
24. Accordingly, Writ Petitions fail and are dismissed.
Pending IA/s, if any, stand disposed off in view of the disposal of the main Petitions.
No costs.
sd/-
JUDGE sd/-
JUDGE nd