Delhi District Court
Sh. Mahesh Kumar vs Sh. Kishan Dass on 3 February, 2012
1
IN THE COURT OF SHRI MAN MOHAN SHARMA
ADDITIONAL DISTRICT JUDGE (CENTRAL) 12
TIS HAZARI COURTS, DELHI.
Civil Suit No.: 472/09
Unique ID no. 02401C0217892009
Sh. Mahesh Kumar
Prop. Of
M/s Brij Lal Mahesh Kumar
R/o F1150/151, Sector11,
Rohini, Delhi110085
....Petitioner
Versus
1. Sh. Kishan Dass
S/o Shri Ram Kishan Dass
Prop. Of
M/s Ashoka Dal & Flour Mills,
Plot No. 738, Khasra No. 530,
Village Burari, Delhi
Also at:
Kishan Dass
S/o Sh. Ram Kishan Dass
41067, Naya Bazar,
Delhi110006.
2. Shri Kailash Chander Gupta
Arbitrator
C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 1 of 28
2
Delhi Gain Merchant Association (Regd.)
156/41, Naya Bazar, Delhi110006
.....Respondent
Date of institution: 22.05.2009
Reserved for judgment on: 25.01.2012
Date of pronouncement of judgment: 03.02.2012
Petition u/s 34 of the Arbitration and Conciliation Act, 1996
against the award dated 24.02.2009
JUDGMENT:
1. The petitioner is aggrieved from the arbitration award dated 24.02.2009 wherein his claim was dismissed.
Background of the Case
2. The case as put forward by the petitioner is that at the first instance he had filed a suit for recovery in the sum of Rs. 6,37,065.28 in the Court of ld. District & Sessions Judge, Delhi against the respondent.
3. The cause of action as propounded by the petitioner in the said suit had been that he has been running a business of grains and commission agent having office at 2675A, Gali Jatwara, Naya C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 2 of 28 3 Bazar, Delhi110006 in the name and style of M/s Brij Lal Mahesh Kumar being its sole proprietor. On the other hand, the respondent no. 1 is the sole proprietor of M/s Ashoka Dal & Flour Mills. The petitioner supplied to the respondent no. 1 Moong contained in 150 bags being 15203.9 Quintals in weight @ Rs.2315/ per bag amounting to Rs. 351970/28. It was supplied vide bill No. 80. As per the terms of the bill the respondent no. 1 had to make the payment within 5 days of the bill date. The respondent issued a cheque bearing No.799188 dated 15.06.2002 drawn on Canara Bank, Kamla Nagar, Delhi for an amount of Rs. 351970/28 in discharge of the above said liability. The above said cheque was returned back unpaid. The petitioner issued a legal notice through his counsel on 30.04.2005 to which the respondent no. 1 sent a false and frivolous reply dated 13.05.2005 through his counsel. This lead to the filing of the suit which was contested by the respondent no. 1 who filed his written statement.
4. During the course of the suit the respondent no. 1 moved an application under Order 14 Rule 5 CPC for framing of C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 3 of 28 4 additional issue as to whether the Court has the jurisdiction to try the present suit in view of the arbitration clause. The Court was pleased to frame a preliminary issue and on hearing the arguments disposed of the preliminary issue vide orders dated 14.09.2007 which reads as under: "Parties are accordingly directed to appear before the aforesaid association on 24.09.2007 at 4.00 PM and plaintiff would lodge his formal statement of claim with association on such date."
5. When the petitioner went to the office of the Arbitrator there was nobody to accept the statement of claim of the appellant and the appellant was forced to send the statement of claim vide Regd. Post to the office of the Aritrator Delhi Grain Merchants Association.
6. On the receipt of the said statement of claim by Regd. Post the appellant was asked to appear before the Arbitrator and the appellant appeared before the Arbitrator. The respondent also appeared before the arbitrator and filed his written statement. The appellant also filed his replication to the written statement C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 4 of 28 5 of the respondent.
7. The Arbitrator framed preliminary issue whether the claim of the petitioner was barred by time the arguments on the said issue were heard and Ld. Arbitrator also referred the said matter to their legal advisor and the legal advisor, Shri Praveen Kumar Jain, Advocate, gave his legal opinion.
8. On the basis of the legal opinion the impugned award dated 24.02.2009 was passed vide which the claim of the petitioner was rejected being barred by time.
9. The petitioner has averred that the award is bad in the eyes of law and is liable to be set aside.
Grounds of Challenge to Award
10. The grounds to challenge as pressed by the petitioner and opposed by the respondent no. 1 are:
(i). The Ld. Arbitrator did not act in a just, free and fair manner. On the contrary he acted in an unjust manner.
(ii). The Ld. Arbitrator failed to appreciate the law and the facts.
(iii). The Ld. Arbitrator instead of deciding the matter on its C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 5 of 28 6 own and has sought legal opinion which is beyond the provisions of the Arbitration & Conciliation Act, 1996.
(iv). The Ld. Arbitrator had no jurisdiction to try and entertain the present claim.
(v). The Ld. Arbitrator has failed to appreciate the provisions of the Limitation Act as well as of the Arbitration & Conciliation Act, 1996 while coming to the conclusion that the award is barred by time.
(vi). The Ld. Arbitrator after initiating the proceedings has come to a wrong conclusion that the award is barred by time that when the claim was filed and hearing was initiated the Arbitrator could not have come to the conclusion that the claim petition is barred by time.
(vii). The Delhi Grain Merchants Association has no proper rules and regulations for hearing of the arbitration case and the case was heard as per the whims and fancies and hence was not just and fare hence, the impugned award is liable to be set aside.
(viii). The Ld. Arbitrator has failed to appreciate the provisions C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 6 of 28 7 of section 25 of the Arbitration & Conciliation Act, 1996 while coming erroneous conclusion that the claim of the appellant is barred by time.
Arguments, Findings and Reasons
11. I have heard Shri Dalip Rastogi, Ld. Counsel for petitioner, and Shri Subhash Chand, SPA of the respondent no. 1. I have also considered the material on record including the record of arbitration proceedings transmitted by the respondent no. 2 to this Court. I have also considered the written arguments filed by the parties.
12. Learned counsel of the petitioner has argued that arbitration as a system of alternative disputes resolution machinery must stand the scrutiny of Courts. The entire proceedings as conducted are sham and in deprivation of the principles of natural justice and fair play. The petitioner has challenged the jurisdiction of the arbitrator. Without dealing with the same, which goes to the root of the matter, the arbitrator rejected the claim of the petitioner on the point of limitation. There has been a miscarriage of justice. The Ld. Arbitrator did not act in a just, C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 7 of 28 8 free and fair manner. On the contrary he acted in an unjust manner. The Arbitrator failed to appreciate the law and the facts and instead of deciding the matter on its own and has sought legal opinion which is beyond the provisions of the Arbitration & Conciliation Act, 1996. The Arbitrator had no jurisdiction to try and entertain the present claim. The Arbitrator has failed to appreciate the provisions of the Limitation Act as well as of the Arbitration & Conciliation Act, 1996 while coming to the conclusion that the award is barred by time. The Arbitrator after initiating the proceedings has come to a wrong conclusion that the award is barred by time that when the claim was filed and hearing was initiated the Lastly it has been argued that the Delhi Grain Merchants Association has no proper rules and regulations for hearing of the arbitration case and the case was heard as per the whims and fancies and hence was not just and fair hence
13. Petitioner relied upon law laid down in Saroj Bala vs. RAjive Stock Brokers Ltd. 118 (2005) DLT 472 to bring home the point that obligation to record reasons cannot be undermined as C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 8 of 28 9 it has a salutary purpose to serve and for want of reasons the award is liable to be set aside.
14. On behalf of the respondent no. 1 it is argued that the award is within the four corners of law and the jurisdiction to challenge the same is very limited. Reliance has been placed upon case law Olympus Superstructures Pvt Ltd. Vs. Meena Vijay Khetan, AIR 1999 SC 2102 wherein it has been held that scope of setting aside the arbitration award is very limited. In the similar vein in Krishan Kumar Mundra Vs. Narendra Kumar Anchalia, 2004(2) Arb LR 469 (Del) it has been held that an arbitration award can be set aside if only any of the five grounds as contained in section 34(2) (a) or any of the two grounds contained in section 34(2) (b) of the Act exist and not otherwise. Reliance is also placed upon Kalyan chand Goyal & Co. Vs. DDA, 2005(4) RAJ 581 (Del) arguing that the scope of setting aside the arbitration award is very limited which is apparent from the use of word 'only' and it excludes any other grounds except as contained in section 34(2) (a) or 34(2) (b) of the Act. The respondent has also cited State of Rajasthan Vs. C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 9 of 28 10 Nav Bharat Construction Company, AIR 2002 SC 258 stating that if a party fails to establish its case within the four corners of section 34 of the Arbitration & Conciliation Act, 1996, the award cannot be set aside. Sailing in the same boat is law pronounced in M. Ansuya Devi Vs. M. Manik Reddy, (2003) 8 SCC 565 wherein it has been held that if a party fails to establish its case within the four corners of section 34 of the Arbitration & Conciliation Act, 1996, the award cannot be set aside. Another case cited is GE Capital Transportation Financial Services Vs. South Asian Enterprises Ltd. 130(2006) DLT 500 relying that court must keep in mind that the intention of the Legislature to replace the Arbitration Act, 1940 with the Arbitration & Conciliation Act, 1996 was to attach finality to the arbitration proceedings and the interference of the Court was intended to be cut drastically.
15. The respondent no. 1 has argued that the arbitrator acted fairly and justly. Case law UOI Vs. RomeshKumar Rajgharia, AIR 1974 Cal. 345 (DB) is cited to bring home the point that specific averments and grounds for setting aside an award have C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 10 of 28 11 to be stated to enable the Court to set aside an award, even though it may be a nullity. Case law of Ramchand Gurdasmal Vs. Govindram Gurdasmal, AIR 1918 Sind 13. Has been relied upon the point that where a party contests the validity of an award the onus is on it to prove that the same is bad. Another case Kripa Sindhu Biswas Vs. Sudha Sindhu Biswas, AIR 1973 Cal 496 has been relied upon on the point that if the award does not show on its face that the arbitrators misconducted the enquiry, the criticism alone cannot take the place of proof of misconduct. Also relied upon is the case of State of Kerala Vs. T. A. Thomas, AIR 1973 Ker 262 citing that if the decision of an arbitrator is in accordance with ordinary rules of fair play, misconduct will not be inferred on his part.
16. Arguing against the claim of the petitioner that the arbitrator has not appreciated the law or the facts case of Rajasthan State Road Transport Corporation Vs. Indag Rubber Ltd. (2006) 7 SCC 700 has been relied upon on the point that the arbitrator by whose decision the parties have agreed to be bound down is the final judge both on facts and in law and however erroneous C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 11 of 28 12 his decision may be, it cannot be interfered with by any Court. On the same point the case of T. K. Aggarwal Vs. Tara Chand Jain, (2005) 119 DLT, 470 (Del.) has been referred to rely upon that the arbitrators are judges of law as well as of facts and have jurisdiction to decide wrong as well as right and thus if they reach a decision fairly after hearing both sides, their award cannot be attacked. Reliance is also placed upon the case law D.N. Deshpande Vs. Tata Finance Ltd., AIR 1996 Bom 120 and it is cited that the position of an arbitrator is different from a Court. The arbitrators are judges of law as well as fact and their error in law does not vitiate the award.
17. While advancing submission of the jurisdiction of arbitrator to take legal opinion reliance is placed upon section 26 of the Arbitration and Conciliation Act, 1996. Case law Juggoboundhu Saha Vs. Chand Mohan Saha, AIR 1916 Cal 806 (DB) has been relied upon to cite that the arbitrator can take assistance in technical matters if so necessary for discharge of his duties. On this aspect the case of Abdul Halim Vs. Ismail Momin, AIR 1925 Pat 465 has been cited to press the point C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 12 of 28 13 that the arbitrator is quite within his powers to consult on questions of law and it cannot be termed as misconduct. Another case relied upon on this point is Louis Dreyfus & Co. Vs. R. A. Arunachala Ayya, AIR 1931 PC 289 to buttres the argument that if the arbitrator consults some outsides on the general rules of law that does not tantamount to leaving the burden of decision upon such outsider and that it does not constitute misconduct.
18. On the point of lack of jurisdiction of the arbitrator plea of waiver has been taken. Case law of S. N. Malhotra Vs. Airport Authority of India, 2008(2) ARB LR 76 (Del) DB has been cited to press the point that if objection to jurisdiction is not taken at first instance before the Arbitrator, the same is deemed to have been waived and that it cannot be taken for the first time in objections under section 34 of the Act. On this aspect the case of J. K. Kashyap Vs. M. G. Capital Services, 2002(2) RAJ 547 (Del) is also relied upon by citing that when a party participated before the Arbitrator and thus nonchallenge to his jurisdiction amount to waiver and such party is estopped from C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 13 of 28 14 raising such objection under section 34 of the Act. Next case cited on this aspect is State of Punjab Vs. Harish Chandra (India) Pvt. Ltd. 2004(2) ARB LR 203 ( P & H) reading that once the matter is argued by the parties without raising any demur to jurisdiction, then it cannot take this plea subsequently. In the sequel case of UOI Vs. Noria Ram Gian Prakash, AIR 2007 NOC 1445 (Cal) (DB) is cited to point out that if the party acquiesces in jurisdiction of arbitrator it cannot later on plead to the contrary.
19. Arguing against the point that the ld. arbitrator has failed to appreciate the statutory provisions of limitation and arbitration reliance has been placed on Jullundur Ex. Servicemen Motor Transport Cooperative Society Ltd. Vs. General Assurance Society Ltd., AIR 1978 P & H 336 by referring that omission to raise certain objection before the Arbitrator disentitles the party to raise the same in application for setting aside the award. Case of McDermott International Inc. Vs. Burn Standard Company Ltd. Arb LR 498 (SC) has been relied upon on the point that in dealing with the objections to award the court does C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 14 of 28 15 not sit in appeal to examine the correctness of the award on merits. Also relied upon is the case law of FCI Vs. Garg Rice Mills, 140 (2007) DLT 361 citing that the jurisdiction of the Court to consider the legality and validity of the award is very limited. Case of Shree Durga Const. Vs. DDA, 1998 (1) Arb LR 509 (Del) has been relied upon on the point that where arbitrator gives cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will require no interference.
20. The respondent no. 1 has argued that the Delhi Grain Merchants Association has proper rules and regulations. Reliance has been placed upon Food Corporation of India Vs. Niaz Mohammad, AIR 2007 NOC 1158 (Raj) reading that the party having raised no objection to the procedure during the arbitration proceedings is precluded from raising the same later on.
21. The respondent no. 1 has finally relied upon Ispat Engineering & Fondary Works vs. Steel Authority of India (2001) 6 SCC 347 reading that the parties cannot object to decision of C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 15 of 28 16 arbitrator upon the law or on the facts except as provided under section 30 of the Arbitration Act, 1940.
22. No other point has been argued or urged.
23. I have considered the rival submissions and the material on record. I have also considered the ratio of case law cited. With utmost humility, this court is bound by the law pronounced by the Superior Courts.
24. The settled position of law is that the scope and arena of the interference by the Courts with an arbitral award under Section 34(2) of Act, 1996 is limited. Hon'ble the Supreme Court in Delhi Development Authority Vs. R.S. Sharma and Company, New Delhi reported in (2008) 13 SCC 80 after referring to a catena of judgments has held that an arbitration award is open to interference by a court under Section 34(2) of the Act, 1996 if it is contrary to either the substantive provisions of law or the contractual provisions and/or is opposed to public policy.
25. Under section 34 of the Act, the Court does not sit as an appellate court to reapprise the entire findings of the Arbitrator. C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 16 of 28 17 Once the view which is taken by the Arbitrator is a plausible view, the court will not interfere with the findings and conclusions merely because a different view is possible as is sought to be propounded by the objector. Once the Arbitrator arrives at a plausible finding of fact by reference to the documents and interpreting the same, such conclusion cannot in any manner be contended to be either illegal or perverse so as to entitle this Court to interfere with such finding under Section 34 of the Act. It is therefore axiomatic to say that if two views are possible from a situation an Arbitrator is fully entitled to take one plausible view.
26. As held in Oil and Natural Gas Corporation Limited vs. SAW Pipes Limited (2003) 5 SCC 705 the jurisdiction or the power of the Arbitral Tribunal is prescribed under the Act and if the award is dehors the said provisions, it would be, on the face of it, illegal. The decision of the Tribunal must be within the bounds of its jurisdiction conferred under the Act or the contract. In exercising jurisdiction, the Arbitral Tribunal cannot act in breach of some provision of substantive law or the C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 17 of 28 18 provisions of the Act. It has further been held that if the award is contrary to the substantive provisions of law or the provisions of the Act or against the terms of the contract, it would be patently illegal, which could be interfered under S. 34. However, such failure of procedure should be patent affecting the rights of the parties.
27. It is the settled law that if a statute has prescribed a particular thing to be done in a particular manner it must be done in that manner only. All other ways are forbidden.
28. The Arbitration and Conciliation Act, 1996 is a selfcontained statute in respect of the matters contained therein. Therefore where the said Act has made specific provisions, any departure from the same is not envisaged.
29. The first and foremost ground taken by the petitioner is that the ld. Arbitrator did not act in a just, free and fair manner. Though this objection has been taken in an omnibus manner but there is material on which such an apprehension has been propounded by the petitioner.
30. The question to be examined is whether the petitioner is entitled C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 18 of 28 19 to take such a plea when even no whisper was raised before the Arbitral Tribunal. The Arbitration and Conciliation Act, 1996 has laid down a well defined procedure to make such a challenge. It is contained in Chapter III of the Arbitration and Conciliation Act, 1996, more specifically section 12 and 13.
31. In that view of the matter, if the petitioner had harboured any grievance against the fairness, impartiality etc. of the Arbitral Tribunal it was open to him to challenge the Arbitrator as to his independence and impartiality in accordance with Section 13(2) of the Arbitration and Conciliation Act 1996 i.e. within 15 days of his becoming so aware of the circumstances showing bias, lack of fairness or impartiality etc. No such challenge has been made during the course of Arbitration proceedings. That having not been done it can be presumed that there was no such objection. Other inference also flows that if there was any objection available to the petitioner he is deemed to have waived the same. The latter inference flows from reading of section 4 of the Arbitration and Conciliation Act, 1996.
32. Thus, in view of the above discussion, the petitioner is C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 19 of 28 20 precluded from making any such challenge for the first time in the proceedings under section 34 of the Arbitration and Conciliation Act. Even otherwise, on the face of it the averments of lack of fairness or impartiality are not only omnibus but they are vague and lack in material particulars.
33. The next objection taken by the petitioner is that the Arbitrator failed to appreciate the law and facts. It has also been argued that the Arbitrator has sought legal opinion which is beyond the scope of law. This argument cuts no ice. As per section 26 of the Arbitration and Conciliation Act, 1996 the Arbitrator is well within his domain to seek expert opinion. In fact no challenge of this nature was made in the course of Arbitration proceeding and having made no such objection the provision of Section 4 of the Arbitration and Conciliation Act applies and the objections are deem to have been waived. On the other hand the conduct of the petitioner in the arbitration proceedings is chequered. He not only did not carry out his obligation to pay the charges fixed for such legal opinion, he played truant also. The respondent no. 1 was made to pay petitioner's share of expenses also. C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 20 of 28 21
34. Next objection taken by the petitioner is that the provisions of Limitation Act and Arbitration and Conciliation Act have been misinterpreted and apply wrongly by the Arbitrator. It is the settled proposition of law that when a judicial authority has jurisdiction to act or pass a judgment it may pass a right judgment or may pass a wrong judgment. This cause is the raison d'etre of judicial review. The judicial review is not of the decision but of the decision making process. There is a well defined system of hierarchy in judicial system. The same is in place to ensure the checks and balances in the system. However the errors must be patent and not merely flimsy or a trifle. Section 34 of the Act provides for judicial scrutiny of the award within the scope as fixed by the Legislature in its wisdom.
35. In the present case, the claim of the petitioner has been rejected on account of the bar of limitation. The relevant dates under consideration as per the statement of claim are are as under: Goods sold to defendant on: 06.06.2002 Cheque issued by defendant: 15.09.2002 Cheque dishonoured on : 19.06.2002 C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 21 of 28 22 Suit filed on: 01.06.2005 Reference to Arbitration : 14.09.2007 Date fixed for appearance: 24.09.2007
36. There has been no challenge to the said order of ld. Additional District Judge, Delhi, by which the parties were referred to arbitration. Thus the order has attained finality. The Court of Ld. Additional District Judge, Delhi, vide its order dated 14.09.2007 had directed the parties to appear before the Delhi Grain Merchant Association, on 24.09.2007 and also directed the claimant to file his statement of claim before the said Arbitral Tribunal on that day. Thus the petitioner was liable to file his statement of claim on that day but the same was not filed on that day. The plea of the petitioner is that on the date fixed he went to the office of the Delhi Grain Merchant Association but there was no body to accept the statement of claim and thus he was forced to send the same by registered post. In so many words the claimant has not stated on which date he had sent the statement of claim by registered post. However the record points out that it was ostensibly sent on 13.03.2008. There is C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 22 of 28 23 no explanation by the petitioner for this period or the delay occasioned.
37. In the arbitration file there is a letter dated 24.09.2007 (page 88 of the Arbitration file) of the respondent no. 1 for recording his appearance on that day. Apparently no proceedings have been drawn by the Arbitrator on that day. Thereafter, it is only on 04.04.2008 that an endorsement has been made on the claim of petitioner that 'Sh. Kailash Chand Gupta, Deputy Chairman may consider and dispose of' (page 73 of the Arbitration file). The said endorsement has been signed by one Sh. Om Prakash Jain. There is nothing on record to show that prior to the endorsement dated 04.04.2008 the Arbitral Tribunal has been constituted or the arbitration proceedings commenced. There is nothing on record to suggest that on the date on which the aforesaid endorsement was made, the arbitration proceedings were already terminated due to absence of the claimant/petitioner. In fact there have been no proceedings drawn since 24.09.2007 till 04.04.2008. The first proceeding of the Arbitral Tribunal has been drawn on 08.04.2000 and the C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 23 of 28 24 next date of hearing is fixed by respondent no. 2/sole Arbitrator for 15.04.2008 and thereafter the Arbitration proceeded under the sole Arbitration of respondent no. 2 namely Sh. Kailash Chander Gupta.
38. The moot question which emerges is whether it the Court of ld.
Additional District Judge, Delhi vide his order dated 14.09.2007 appointed the respondent no. 2, Shri Kailsah Chander Gupta as an Arbitrator? The answer is, no. Vide the said order the reference was to Delhi Grain Merchant Association. The next question is whether Delhi Grain Merchant Association or Shri Kailash Chander Gupta is synonym? Status or constitution of Delhi Grain Merchant Association is a vital question as the reference of dispute has been to it.
39. Arbitral Tribunal derives his jurisdiction from the arbitration agreement as it is creature of an agreement. When the matter was referred by Court to Delhi Grain Merchant Association whether the entering into reference by Shri Kailash Chander Gupta conferred upon him the necessary jurisdiction to act as an arbitrator without him being a named arbitrator vide the order C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 24 of 28 25 of the ld. Additional District Judge, Delhi or whether the defect, if any, in his jurisdiction got cured as the parties proceeded with the arbitration without any demur or objection and thus constituted waiver to right to object within the meaning of section 4 of the Arbitration and Conciliation Act, 1996?
40. Another point which merits consideration as to the treatment for the purpose of limitation the period between 24.09.2007 till 08.04.2008. During this period the arbitration was neither commenced nor terminated as from the records it is very much clear that no Arbitral Tribunal was constituted. On 24.09.2007 till 08.04.2008 it is not the case of any of the parties or could be culled our from the records that the Arbitral Tribunal was constituted on the receipt of reference from the court and proceedings stood terminated any day before the day when the petitioner presented his claim by registered post. If that is so, what is the legal status of the proceedings conducted w.e.f. 08.04.2008 till the passing of the impugned award? Though there is no justification on the part of the petitioner as to why he waited for such a long time after 24.09.2007 when he is stated C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 25 of 28 26 to have visited the office of Delhi Grain Merchant Association and found nobody to receive the statement of claim or what made him to wait till 13.03.2008 for sending his statement of claim by registered post, but what treatment has to be given to this period and whether it has a bearing on the aspect of limitation is a moot question which must have been considered but has not been considered at all.
41. In the final analysis it emerges that apparently the Arbitral Tribunal was not constituted on 24.09.2007. It is not the Delhi grain Merchant Association that has acted as Arbitrator as a juristic body but it is Sh. Kailash Chander Gupta who has so entered into the reference as a sole Arbitrator. In view of the above discussion and various moot questions raised above, these facts go to the root of the matter visàvis the jurisdiction and must be answered by the Arbitral Tribunal as under section 16 of the Arbitration and Conciliation Act, 1996, the Arbitral Tribunal is competent to rule on is jurisdiction. This court at the first instance cannot embark upon an inquiry into the same as that would amount to usurping upon the jurisdiction of the C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 26 of 28 27 Arbitral Tribunal. As the question of jurisdiction is genesis of arbitration proceedings therefore apparently there is patent illegality in the award. This patent illegality goes to the root of the matter. Under these facts and circumstances the award is liable to be set aside and matter remanded back to the respondent no. 2 to consider these questions and answer them in accordance as well as all the points involved in the matter under reference.
42. Under these facts and circumstances, it is ordered that the Arbitration award dated 24.09.2009 is set aside and matter is remanded back for fresh decision to the sole Arbitrator/respondent no. 2, Sh. Kailash Chander Gupta, and the parties are directed to appear before the Sole Arbitrator on 20.03.2012 at 4 P.M.
43. The petitioner is directed to pay a sum of Rs. 5500/ to respondent no.1 on account of legal opinion charges deposited by him and also directed to pay another sum of Rs.11,000/ to respondent no.1 towards the costs of these proceedings on account of expenses and inconvenience suffered by him due to C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 27 of 28 28 no fault on his part.
44. A copy of this order be also sent to respondent no.2/sole Arbitrator.
45. Nothing stated herein shall tantamount to an expression of opinion on the merits of the case and the Ld. Arbitrator Tribunal shall proceed in the matter uninfluenced by the observations made above and shall arrive at his independent findings in accordance with law.
46. Petition stands disposed of in these terms.
47. File be consigned to Record Room.
Announced in the Open Court on this 3rd day of February 2012 (MAN MOHAN SHARMA) ADJ (Central)12, Delhi C.S. 472/2009 Mahesh Kumar vs. Kishan Dass & Anr. Page 28 of 28