Delhi District Court
Sampuran Singh vs Amit Choudhury on 21 August, 2019
1
IN THE COURT OF MS VANDANA JAIN
ADDITIONAL DISTRICT JUDGE-07
SOUTH-EAST DISTRICT, SAKET COURTS
NEW DELHI
Arbt No. 168/2018
In the matter of:
Sampuran Singh
R/o Fairview House, Southdown Road,
Shawford, Winchester, Hants,
SO21 2BY, England
.....Petitioner
VERSUS
1.Amit Choudhury
45/71, West Punjabi Bagh,
New Delhi-110026.
2. Kavandeep Singh Sampuran
R/o Fairview House, Southdown Road,
Shawford, Winchester, Hants,
SO21 2BY, England
....Respondents
Date of Institution : 05.06.2018
Date of Judgment : 21.08.2019
Sampuran Singh Vs. Amit Choudhury & Ors Page no. 1 of 32
2
ORDER
1. Vide this order, I shall dispose off objections filed under Section 34 of Arbitration & Conciliation Act.
2. Ld Sr Advocate for petitioner has argued that petitioner had never signed any arbitration agreement and he was not made party to the arbitration but was yet impleaded in the arbitration by order of the arbitrator. He further argued that the agreement claimed that the property with a declared price of Rs. 7,00,00,000/- (Rupees Seven Crores) and a market estimated price at around Rs. 20,00,00,000/- (20 Crores) ought to be sold for Rs. 1,00,00,000/- (1 Crore). It is further argued that respondent no. 1 was well aware that the petitioner resides in Winchester, England but respondent no. 1 did not carry out service at his residence choosing to do so at the vacation home of petitioner in Delhi where petitioner stays occasionally when he visits Delhi. It is further argued that service was also attempted at a company where petitioner is a director but where petitioner has no office. Even the substituted service was Sampuran Singh Vs. Amit Choudhury & Ors Page no. 2 of 32 3 carried out only in Ludhiana where the property is located and not in Winchester, England. It is further argued that substituted service was made only in newspapers having circulation in Punjab whereas petitioner lives in Winchester, England.
3. It is further argued that unregistered and insufficiently stamped agreement to sell was allegedly entered into between respondent no. 1 and respondent no. 2 who is son of the petitioner herein. It is further argued that respondent no. 2 had denied singing such an agreement.
4. He further argued that petitioner had gifted the property i.e. subject of the purported arbitration agreement, to his son respondent no. 2 on 18.03.2015 but took it back from him in August, 2016 on account of his impending divorce and the likely financial complications arising therefrom.
5. It is further argued that respondent no. 1 was unknown to the petitioner until June, 2016 when he came to meet the petitioner's Sampuran Singh Vs. Amit Choudhury & Ors Page no. 3 of 32 4 wife claiming that their son i.e. respondent no. 2 owed him money. While the petitioner and his wife were quite surprised by the same they entertained the respondent no. 1 and associates as respondent no. 2 had a joint business with respondent no. 1 in Dubai. The circumstances in which this business was started as a cover for the amounts being extorted by respondent no. 1 from respondent no. 2. It is further argued that there are emails between respondent no. 1, petitioner and his wife which shows that he was consistently asking them for money and he also knew that they live in Winchester, England.
6. It is further argued that on 19.09.2016, respondent no. 1 sent an e-mail to the petitioner's wife and claimed that these cheques were given to him by respondent no. 2 in repayment of some debt. He also sent a letter claiming to be confirmation of some debt by respondent no. 2 in his favour and claimed the existence of some memorandum of understanding. On 30.09.2016, a letter was written by the family solicitors to respondent no. 1 asking for the copy of purported Memorandum of Understanding and telling respondent no. Sampuran Singh Vs. Amit Choudhury & Ors Page no. 4 of 32 5 1 not to encash the cheques. Thereafter, an evasive reply was received to the above e-mail and respondent no. 1 refused to provide any information claiming that he did not recognize the family solicitors.
7. Petitioner has come to know from respondent no. 2 that respondent no. 1 had taken amounts of over Rs. 11 Crores out of which an amount of Rs. Approximately Rs. 7 Crores was sent through bank transfers.
8. It is further argued that petitioner was unaware of the business transactions of his son. It is further argued that after receiving the papers related to arbitration proceedings, petitioner was able to see the purported agreement to sell signed by respondent no. 2, however, respondent no. 2 confirmed that he had never signed such an agreement. Petitioner also observed that purported agreement to sell included the wrong address for respondent no. 2. Petitioner's vacation home address had been shown as the address of the respondent no. 2 in this agreement but the wrong address i.e. (No. Sampuran Singh Vs. Amit Choudhury & Ors Page no. 5 of 32 6 56, Block C5 instead of No-58, Block C5) had been mentioned as the address of the respondent no. 2. It is further argued that address for the property that was allegedly being sold through this purported agreement to sell also bore the wrong address of village Manouhar instead of Bhanohar. In fact agreement also clearly specifies through clause IX that specific performance would only be enforced through the courts.
9. It is further argued that statement of claim filed by respondent no. 2 was without any supporting evidence whatsoever that respondent no. 2 needed money and as such agreed to sell the property to respondent no. 1 who bizarrely submits that he agreed to buy the same without ascertaining the nature or value of the property and without even checking whether the same is owned or in the possession of the respondent no. 2 or not. Respondent no. 1 claimed to have served respondent no. 2 with a notice prior to arbitration as well as with a notice of the arbitration proceedings after these proceedings had commenced. The proceedings were declared exparte by the tribunal. Respondent no. 1 produced witnesses, Sampuran Singh Vs. Amit Choudhury & Ors Page no. 6 of 32 7 namely himself, his wife, his brother-in-law and a witness from HDFC bank with claimant's wife's bank records. Claimant's evidence proves neither readiness nor willingness. It is further argued that it was the claimant's case that it was his wife who had the demand draft made for the alleged payment of consideration under the agreement to sell. However, the copy of the demand draft produced by the bank reveals that states purpose of the draft was repayment of loan.
10. It is further argued that respondent no. 1 had the land records summoned on 14.10.2017 through which they found that the land had been transferred to petitioner by respondent no. 2. As such, respondent no. 1 moved an application to amend the statement of claim, however, no challenge was made to the gift deed in favour of petitioner by respondent no.2.
11. It is further argued that purported agreement to sell cannot be acted upon as stamp duty has not been paid as per Article 23(A) of Indian Stamp Act, 1899.
Sampuran Singh Vs. Amit Choudhury & Ors Page no. 7 of 32 8
12. It is further argued that Ld Tribunal has completely ignored Section 20 of the Specific Relief Act in granting relief to the respondent no. 1. Respondent no. 2 was never in possession of the property which was joint family property.
13. It is further argued that purported agreement to sell cannot be relied upon being unregistered.
14. It is further argued that agreement to sell is shown to be a careless fabrication as it includes the wrong address for respondent no. 2 and the subject property. It is further argued that award passed by Ld Arbitrator is liable to be set aside.
15. Ld counsel for respondent, on the other hand, has argued that arbitral proceedings between Kavandeep Singh Sampuran and Amit Choudhury were pending before the Ld Arbtiral Tribunal and his right to file statement of defence was forfeited on account of non- appearance of respondent no. 2 herein. The matter was listed by the Ld Arbitral Tribunal for producing the witnesses by respondent no. 1 Sampuran Singh Vs. Amit Choudhury & Ors Page no. 8 of 32 9 herein/claimant therein. For purposes of serving Dasti summons on the concerned officer of the Sub Divisional Magistrate (Civil), Jila Kacheri Area, Model Gram, Ludhiana, Punjab, respondent no. 1 visited there and got the information that the land in question had been transferred by Kavandeep Singh Sampuran to the petitioner herein i.e. Sampuran Singh.
16. It is further argued that in these circumstances, respondent no. 1 moved an application for amendment of the statement of claim before Ld Arbitral Tribunal and said application was allowed vide order dated 20.11.2017 passed by Ld Arbitral Tribunal and the amended statement of claim was taken on record and Sampuran Singh was impleaded as respondent no. 2 therein. Notice was ordered to be served on him.
17. Ld counsel has further argued that petitioner herein was served at C-5, Building No. 56, Vasant Kunj, New Delhi and C-5, Building No. 58, Vasant Kunj, New Delhi and Sigma HSE Ltd at Naurang House, K.G. Marg, Cannaught Place, New Delhi. At the same time, notices were also published in three newspapers namely Statesman, Ludhiana Vaani [Gurmukhi Edition] and Daily Post (both Sampuran Singh Vs. Amit Choudhury & Ors Page no. 9 of 32 10 having circulation in Ludhiana).
18. Ld counsel has further argued that thereafter arbitral award was passed on 20.02.2018 and by way of e-mail dated 20.02.2018, Ld Arbitral Tribunal has informed both the parties about the passing of the award and signed copy of the award was forwarded to the parties. Ld counsel has further argued that despite having received the knowledge of the arbitral proceedings by the petitioner herein, he failed to appear and contest the proceedings.
19. Ld counsel further argued that relief of specific performance can be granted against subsequent transferee who had knowlede of the said agreement. He has relied upon Lala Durga Prasad & Anr Vs. Lala Deep Chand & Anr AIR 1954 SC 75 and Ramji Lal & Ors Vs. Ram Pershad & Anr AIR 1979 Del 129
20. He has also argued that successor in interest would be bound by the terms of the agreement. Ld counsel has argued that since agreement to sell included successor in interest of Kavandeep Singh Sampuran i.e. petitioner herein and, therefore, petitioner would be bound by the terms of the agreement to sell. He has relied upon Geo-Group Communication Inc Vs IOL Broadband Ltd (2010) 1 Sampuran Singh Vs. Amit Choudhury & Ors Page no. 10 of 32 11 SCC 562 and Ravi Prakash Goel Vs. Chandra Prakash Goel & Anr (2008) 13 SCC 667.
21. He has further argued that relief of specific performance can be sought through arbitration and he has relied upon Olympus Superstructures Pvt Ltd Vs. Meena Vijay Khetan & Ors (1999) 5 SCC 651, Booz Allen & Hamilton Inc. Vs. SBI Home Finance Ltd & Ors (2011) 5 SCC 532, State of U.P. Vs. Allied Constructions (2003) 7 SCC 396 in this regard.
22. He has further argued that registration of the agreement to sell does not have any significance in a case for specific performance as for seeking specific performance, agreement is not required to be registered. He has further argued that records of arbitration are sufficient to furnish proof that the arbitration proceedings were fairly carried out.
23. With respect to readiness and willingness, he has further argued that since more than 90% of the total consideration amount was already paid, therefore, respondent was under no obligation to Sampuran Singh Vs. Amit Choudhury & Ors Page no. 11 of 32 12 prove readiness and willingness. He has further argued that he has approached the petitioner before invoking arbitration i.e. on 01.12.2015 and 07.12.2015 calling upon petitioner herein to receive balance amount and for execution of sale deed but the petitioner never turned up to execute sale deed and receive balance amount.
24. He has further argued that apart from the agreement to sell dated 16.04.2015, separate MOU was also executed on that day (16.04.2015) wherein loan of Rs. 3,00,00,000/- (Three Crores) was given to the petitioner herein and on that day, total amount given to the petitioner was Rs. 2.6 Crores out of which Rs. 80,00,000/- were towards agreement to sell. It is argued that Ld Sr Advocate for the petitioner has mixed both the transactions in order to confuse the court. He further submits that objections are liable to be dismissed. He submits that objections are liable to be dismissed.
25. I have heard the arguments and have perused the record carefully.
26. I shall deal with arguments point wise.
(A) Service Upon Petitioner:-
Admittedly, notice to Sampuran Singh was sent at C-5, H. No. Sampuran Singh Vs. Amit Choudhury & Ors Page no. 12 of 32 13 56, 2nd Floor, Vasant Kunj, New Delhi and C-5, H. No. 58, 2 nd Floor, Vasant Kunj, New Delhi were received back with report "addressee left without instructions". Sigma HSE Ltd was having address of Unit 2, Moorside Point, Moorside Road, Winchester, Hampshire SO 23 7RX UK, however, address of Naurang House, K.G. Marg, Cannaught Place, New Delhi was mentioned which was received back with report of refusal. Since address was not correct this refusal cannot be deemed to be appropriate service. An attempt was also made by way of publication having circulation in Delhi and Ludhiana in Gurmukhi language as well where property is situated. It is pertinent to mention here that as per Form-32 of Sigma HSE Ltd, Sampuran Singh was national of Great Britain and was having permanent address of U.K. despite having knowledge about the same, respondent did not chose to serve the petitioner (Sampuran Singh) at his residential address. No publication was effected in newspaper having circulation in Winchester, U.K. Form-32 also contained e-mail address of the petitioner, however, no service was effect upon said e-mail address as is clear from the arbitral record, therefore, the service is not deemed to be effected upon the Sampuran Singh Vs. Amit Choudhury & Ors Page no. 13 of 32 14 petitioner. The findings of Ld Arbitral Tribunal recording the service of petitioner herein are incorrect.
(B) Relief against Subsequent Transferee:-
Ld counsel for respondent has further argued that relief of specific performance can be granted against subsequent trasnsferee who had knowledge of the agreement. He has relied upon Lala Durga Prasad & Anr Vs. Lala Deep Chand & Anr AIR 1954 SC 75 and Ramji Lal & Ors Vs. Ram Pershad & Anr AIR 1979 Del 129 whereas Ld Sr Advocate for the petitioner submits that Sampuran Singh had no knowledge of the said agreement. In the preceding paragraph it has already been observed that Sampuran Singh was not served with the arbitration proceedings. As far as having knowledge of the agreement dated 16.04.2015 is concerned, it is pertinent to mention here that respondent herein had placed on record several e-mails, however, none of the said e-mails talks about an agreement to sell regarding purchase/selling of property at Ludhiana. Respondent no. 1 has placed a copy of e-mail dated 06.06.2016 shown to have been sent by him to Kavandeep Singh Sampuran attaching one page of agreement to sell dated 16.04.2015 Sampuran Singh Vs. Amit Choudhury & Ors Page no. 14 of 32 15 relating to the clause of specific performance. The entire e-mail containing the body of the e-mail have not been annexed and the page sent do not suggest as to with whom the same was entered into. The plain reading of this page would not suggest that any agreement to sell was executed between the parties. This incomplete alleged e-mail is insignificant. Further, it has been allegedly sent only to Kavandeep Singh and to petitioner herein. An e-mail of 30.03.2015 form respondent to. 1 to Kavandeep Singh has also been filed which finds mention of certain documents needs to be signed. The attachments have been shown as agreement to sell, affidavit-cum-indemnity bond, possession letter, receipt-cum- agreement and receipt. First of all this e-mail was not proved before Ld Arbitrator and does not find mention in the award. Secondly, this is prior to the date of alleged execution of agreement to sell i.e. 16.04.2015 and does not have any bearing on the point that petitioner herein had the notice of the execution of any agreement to sell between Kavandeep Singh Sampuran and respondent no. 1 with respect to his land at Ludhiana. There are other e-mails with respect to return of some amount by the son of the petitioner to the Sampuran Singh Vs. Amit Choudhury & Ors Page no. 15 of 32 16 respondent no. 1 but there is not even a single document on record which shows that Sampuran Singh had knowledge of the agreement to sell dated 16.04.2015. The Arbitral Tribunal has proceeded against the petitioner herein on the ground that transfer has been effected by Kavan Sampuran Singh in favour of Sampuran Singh during the pendency of the arbitration proceedings. It is pertinent to mention here that in the award, it is mentioned that property was transferred by son of the petitioner in his favour during August 2016 as during the pendency of the proceedings. Though as per the record, property was transferred by respondent no. 2 in favour of petitioner in August 2016 when the arbitration proceedings had not commenced. Reference notice was allegedly sent in December 2016 i.e. much after transferring the property to the petitioner herein. Therefore, by no stretch of imagination, this transaction between son and father would be governed by the principles of Lis-Pendens, as portrayed in the impugned award. The agreement dated 16.04.2015 could not bind the petitioner herein who was not a signatory to this agreement. Ld counsel for respondent had relied upon Geo-Group Communication Inc Vs IOL Broadband Ltd (2010) 1 SCC 562 Sampuran Singh Vs. Amit Choudhury & Ors Page no. 16 of 32 17 and Ravi Prakash Goel Vs. Chandra Prakash Goel & Anr (2008) 13 SCC 667 in order to say that successor in interest would be bound by the terms of arbitration agreement. Admittedly the transaction in August 2016 was after the date of execution of alleged agreement to sell dated 16.04.2015. However, these judgments are not applicable to the facts in hand. In Geo-Group Communication Inc (Supra) the successor and interest was found to be bound as it was the case of amalgamation and it became successor in interest by operation of law as in amalgamation, all the rights and liabilities of transferor company merges in that of transferee company.
Similarly in Ravi Prakash Goel (Supra), LR of deceased person moved an application u/s 11 of Arbitration Act after the death of the party who was signatory to the arbitration agreement to invoke arbitration clause. The facts of this case cannot be equated with the case in hand and are entirely different. These judgments cannot be said to be applicable to the facts in hand in view of above discussion. In these circumstances, petitioner not being the signatory to the agreement dated 16.04.2015 could not have been arrayed as a party in the arbitration proceedings. Impugned award is bad on these Sampuran Singh Vs. Amit Choudhury & Ors Page no. 17 of 32 18 findings of Ld Arbitral Tribunal.
(C)Whether present dispute in question was Arbitrable or Not ?
Perusal of award reveals that Ld Arbitrator had relied upon clause XIV in order to invoke the arbitration and the respondent has also relied upon the same, however, agreement to sell dated 16.04.2015 finds mention of Clause IX.1 which provides for specific performance to be enforced by the court. Both the clauses i.e. IX.1 as well as XIV.1 are reproduced herein:-
"IX.1 The Seller agrees that on or before 31.12.2015 the Seller will execute the Sale Deed in relation to the property and get the same registered in favour of the Buyer or his nominee on receipt of the full and the final balance amount, failing which the Buyer will be entitled to get the Sale Deed executed and registered through the Court of law by specific performance and in such an event, the Seller will be liable for any expenses incurred by the Buyer for execution and registration of the Sale Deed."
Sampuran Singh Vs. Amit Choudhury & Ors Page no. 18 of 32
19
" XIV.1 The Buyer and the Seller hereby agrees
that in case of any dispute arising out of the
present agreement to sell or any dispute in
relation to the implementation of the present
agreement to sell, and then the said dispute shall be resolved by the mode of arbitration in terms of the Arbitration and Conciliation Act, 1996. The parties agree that the seat of Arbitration would be in Delhi."
Reading of both these clauses shows that clause XIV.1 is a general clause whereby all the disputes including dispute in relation to implementation of the agreement were to be referred to arbitration whereas clause IX.1 specifically provides enforcement of specific performance through the court. Section 2 (1) (e) of Arbitration Act defines "Court". Same is reproduced herein as under:-
"(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil Sampuran Singh Vs. Amit Choudhury & Ors Page no. 19 of 32 20 jurisdiction, having jurisdiction to decide the questions forming the subjectmatter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial
arbitration, the High Court in exercise of its
ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subjectmatter of the arbitration if the same had been the subjectmatter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;"
Arbitral Tribunal has been defined separately under Section 2 (1) (d) which includes the sole Arbitrator or panel of arbitrator. Therefore, arbitral tribunal cannot mixed up with the court defined herein.
Ld counsel for respondent has relied upon Olympus Superstructures Pvt Ltd Vs. Meena Vijay Khetan & Ors (1999) 5 Sampuran Singh Vs. Amit Choudhury & Ors Page no. 20 of 32 21 SCC 651, Booz Allen & Hamilton Inc. Vs. SBI Home Finance Ltd & Ors (2011) 5 SCC 532, State of U.P. Vs. Allied Constructions (2003) 7 SCC 396 on the point that dispute seeking relief of specific performance of an agreement to sell can be referred to arbitration. There is no denial to the ratio that the specific performance is an arbitrable dispute, however, proposition herein in the present case is completely different. In the present case two separate clauses have been given and there is an exclusive clause IX.1 to deal with enforcement of specific performance. The judgments relied upon by Ld counsel for respondent do not deal with this proposition and, therefore, they are insignificant under the present facts and circumstances.
On the other hand, Ld counsel for petitioner has relied upon Privilege Health Care Services Vs DLF Qutab Encalve Complex 2013 SCC OnLine P7H 14290 which has further relied upon "Dilip Bafna Vs. K.S. Vasudev 2008 (1) ICC 535"
In Privilege Health Care Services (Supra) clause 13 of the agreement provided for the consequences in case of making delay in making the payments by the 2nd part and clause 14 specifically Sampuran Singh Vs. Amit Choudhury & Ors Page no. 21 of 32 22 provided the consequences flowing from the first paragraph, i.e. refusing or failing to fulfill its part of MOU. In clause 14 it was specifically mentioned that first part shall be entitled to either terminate the MOU or to file suit for specific performance. In the aforesaid case there was a special clause 5 providing for arbitration clause in case of any dispute arising between the parties with respect to interpretation or with terms of performance on the terms and conditions of the MOU. In these facts and circumstances, court relied upon "Dilip Bafna Vs. K.S. Vasudev 2008 (1) ICC 535"
wherein also there were two clauses, claim of which provided a special one of which was very specific with respect to filing suit for specific performance. In this judgment, it was held that since there was a exclusive clause for specific performance to be enforced through court, therefore, this dispute will be decided by the court only and not through the mode of arbitration.
The facts of both of these cases are quite similar to the facts in hand. Since a specific clause 9 has been provided for getting the specific performance enforced through court of law, therefore, the words "dispute in relation to implementation of present agreement to Sampuran Singh Vs. Amit Choudhury & Ors Page no. 22 of 32 23 sell" would not give the arbitrator the jurisdiction to decide the case of specific performance. In view of the aforesaid discussion, it is held that dispute between the parties was not arbitrable and the claimant/respondent ought to have approached civil court for seeking specific performance.
(D) Consequence of Inadequate Stamping/Non-
Registration of Agreement to Sell dated 16.04.2015:-
It is trite that the statutory law cannot be ignored by the Arbitral Tribunal.
In order to analyze the scope of section 34 CPC, reliance is placed upon judgment of Hon 'ble Supreme Court in "Steel Authority of India Ltd Vs Gupta Brother Steel Tubes Ltd (JT 2009 (12) SC 135) which summarizes the position of section 34 at para 18, as follows:-
" In a case where an arbitrator travels beyond the contract, the award would be without jurisdiction and would amount to legal misconduct and because of which the award would become amenable for being set aside by a court.
Sampuran Singh Vs. Amit Choudhury & Ors Page no. 23 of 32 24
ii) An error relatable to interpretation of the contract by an arbitrator is an error within his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on the face of the award.
iii) If a specific question of law is submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision in point of law does not make the award bad on its face.
iv) An award contrary to substantive provision of law or against the terms of contract would be patently illegal.
v) Where the parties have deliberately specified the amount of compensation in express terms, the party who has suffered by such breach can only claim the sum specified in the contract and not in excess thereof. In other words, no award of compensation in case of breach of contract, if named or specified in the contract, could be awarded in excess thereof.
vi) If the conclusion of the arbitration is based Sampuran Singh Vs. Amit Choudhury & Ors Page no. 24 of 32 25 on a possible view of the matter, the court should not interfere with the award.
vii) It is not permissible to a court to examine the correctness of the findings of the arbitrator , as if it were sitting in appeal over his findings."
Further, in addition to the same, it has to be seen that there should not be any arbitrariness or willingness while passing the award in this regard, judgment Associate Builders Vs DDA (2014) ARBLR 307 (SC) is clear wherein it was held:-
" it is clear that the juristic principle of a "judicial approach" demands that a decision be fair, reasonable and objective. On the observe side, anything arbitrary and whimsical would obviously not be a determination which would either be fair, reasonable or objective. The Audi Alterum Partem principle which undoubtedly is a fundamental juristic principle in Indian Law is also contained in section 18 and 34 (2) (a) (iii) of the Arbitration and Conciliation Act.. The third juristic principle is that a decision which is perverse or so irrational that no reasonable Sampuran Singh Vs. Amit Choudhury & Ors Page no. 25 of 32 26 person would have arrived at the same is important and requires some degree of explanation. It is settled law that where a finding is based on no evidence, or an arbitral tribunal takes into account something irrelevant to the decision which it arrives at; or ignores vital evidence in arriving at its decision, such decision would necessarily be perverse.. It must clearly be understood that when a court is applying the "public policy" test to an arbitration award. It does not act as a court of appeal and consequently errors of fact can not be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus, an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once, it is found that the arbitrators approach is not arbitrary or Sampuran Singh Vs. Amit Choudhury & Ors Page no. 26 of 32 27 capricious, then he is the last word on facts... It is with this very important caveat that the two fundamental principles which form part of the fundamental policy of Indian Law (that the arbitrator must have a judicial approach and that he must not act perversely) are to be understood."
Further, in addition, it has to be seen that award should not be patently illegal which goes to the root of matter. In this regard reliance is placed upon "National Highways Authority of India Vs Afcons Infrastructure Ltd (152 (2008) DLT 24)" wherein it has been stated observed that :-
"the present case is not one where the arbitral tribunal has ignored the terms of the contract. What the arbitral tribunal had done is to arrive at a particular interpretation after considering the relevant terms of the contract and just because the interpretation that has been arrived at by the tribunal is not palatable to the petitioner, is not ground enough for interfering with the award. Such interference can only be justified where the award is contrary to the substantive provisions of law or the Sampuran Singh Vs. Amit Choudhury & Ors Page no. 27 of 32 28 provisions of the Act or if it is against the terms of the contract. The award must be so patently illegal and that it goes to the root of the matter. If the illegality is of a trivial nature, the award can not be said to be against public policy. The award must be so unfair and unreasonable that it shocks the conscience of the court. It is then that such an award can be said to be opposed to public policy of India. I do not find the present award to contain any such patent illegality, much less an illegality which goes to the root of the matter. The award is also not of such a kind that it shocks the conscience of the court... This being the case, no interference is called for."
With this background let's dwell upon this point. Ld Sr Advocate for petitioner has argued that agreement to sell is insufficiently stamped and is not registered. Ld counsel for respondent has relied upon Devender Singh Vs. Hari Singh 2017 SCC Online Del 8036. Ratio of this judgment is not at all disputed wherein it is held that agreement to sell is not required to be registered for seeking relief of specific performance. As far as Sampuran Singh Vs. Amit Choudhury & Ors Page no. 28 of 32 29 specific performance is concerned, proviso of Section 49 of Registration Act, 1908 clearly provides that in a suit for specific performance, an unregistered agreement to sell can be relied upon, however, it is pertinent to mention here that in the present case, respondent has claimed that possession was also given to the respondent by way of executing a possession letter on the basis of said agreement to sell. Section 17 (1-A) of Registration Act, 1908 amended w.e.f. 24.09.2001 provides for registration of agreement to sell and clearly states that it requires registration for the purposes of Section 53-A of the Transfer of Property Act, meaning thereby that possession can not flow from an unregistered agreement to sell, though there is no bar to seeking specific performance.
As far as Stamp Act is concerned, admittedly the document is insufficiently stamped. Section 35 of the Indian Stamp Act 1899 provides for procedure to be followed in case of instruments not duly stamped. Had it been the case that petitioner herein was duly served and thereafter would have not appeared deliberately before Ld Arbitrator, Section 36 of the Indian Stamp Act would have come into operation and there would have been implied waiver regarding the Sampuran Singh Vs. Amit Choudhury & Ors Page no. 29 of 32 30 objection to the stamping, however, in the present case it has already been observed in the preceding paragraphs that petitioner herein was not duly served and, therefore, Section 36 of Indian Stamp Act 1899 would not come into play. Ld Sr. Advocate for petitioner has relied upon Garware Wall Ropers Ltd Vs. Coastal Marine Constructions (2019) SCC OnLine SC 515 wherein it has been observed that in case document is insufficiently stamped, then the unstamped documents cannot be relied upon to invoke arbitration clause unless and until stamp duty is paid by the defaulting party. In the present cases, admittedly the document is insufficiently stamped. There is not even a whisper about the document being insufficiently stamped in the award. Therefore, it is clear that this issue was not taken into account by Arbitral Tribunal. Arbitral Tribunal ought not to have acted upon arbitration clause, therefore, dispute was not arbitrable even on account of this very reason.
(E) Award contrary to fundamental policy of Indian Award.
Scope of Section 34 of Arbitration & Conciliation Act, 1996 has Sampuran Singh Vs. Amit Choudhury & Ors Page no. 30 of 32 31 been discussed above in preceding point.
These judgments specifically clarifies that statutory law cannot be disregarded. Ld Sr. Advocate for the petitioner has argued that Section 16 (c) of Specific Relief Act have not been adhered to by respondent and it has been proved that respondent was ready and willing to fulfill its part of performance. As far as this argument is concerned, I do not find any merit in the said argument as respondent claims that he had already paid amount of Rs. 88,00,000/- out of Rs. 1,00,00,000/- (One Crore) which was the total sale consideration and, therefore, pleadings given in the statement of claim to the effect that he was ready and willing to perform his part of agreement were enough to comply with the requirements of Section 16 (c) of the said Act. In order to assess readiness and willingness, the facts and circumstances of the case have to be seen. 90% of the amount already stood paid allegedly so, nothing much was to be proved regarding readiness and willingness by respondent. The initiation of action itself would judicate the intention of the claimant or respondent.
(F) Rs. 80,00,000/- (Eight Lacs) Towards Return of Loan. Sampuran Singh Vs. Amit Choudhury & Ors Page no. 31 of 32 32 Ld Sr. Advocate for petitioner has further argued that Rs. 80,00,000/- were given by the respondent to the petitioner towards return of loan which was given by the petitioner to the respondent's wife and same is apparent from the endorsement below the demand draft which shows that purpose as return of loan. In this regard, it is stated that scope of Section 34 of Arbitration & Conciliation Act is limited and this court cannot appreciate the said facts and cannot interfere with the findings of Ld Arbitrator on the same.
27. In view of aforesaid discussions, objection petition is allowed. Impugned award dated 20.02.2018 is set aside.
28. File be consigned to Record Room after due compliance. Digitally signed by
VANDANA VANDANA JAIN
JAIN Date: 2019.08.28
16:46:55 +0530
Announced in the open ( VANDANA JAIN)
court on 21.08.2019 Additional District Judge-07
South-East, Saket Courts,
New Delhi.
Sampuran Singh Vs. Amit Choudhury & Ors Page no. 32 of 32