Delhi High Court
Rotary Club Of Delhi Midtown vs Sunil K. Jain on 30 April, 2007
Equivalent citations: 2007(3)ARBLR169(DELHI)
Author: Vipin Sanghi
Bench: Vipin Sanghi
JUDGMENT Vipin Sanghi, J.
1. The petitioner Rotary Club of Delhi Midtown impugns the arbitration award dated 18.9.2004 passed by the Sole Arbitrator Sh. O.P. Vaish, Senior Advocate, who is also a member of the petitioner club. The respondent was earlier a member of Rotary Club Delhi University since 1985. He continued to remain a member of the said club until 31.12.2000. He resigned from Rotary Club Delhi University and applied to become a member of the petitioner club. He was inducted as a member of the petitioner club w.e.f. 19.1.2001. It appears that all steps as per the manual of procedures for induction of a new member were undertaken by the petitioner club. The petitioner was invited to attend six club meeting prior to his induction which he attended.
2. It appears that the then Secretary of Rotary Club Delhi University, Sh. Rajesh Saini wrote a letter dated 23.5.2001 to the respondent with a copy marked, inter alia, to the Secretary of the petitioner club alleging that there have been some irregularities about one RCC (Rotary Community Corps) Project and that the respondent was not returning the property of the club involved in that project. This communication was sent after nearly six months of the induction of the respondent into the petitioner club.
3. Based on the aforesaid communication of Sh. Rajesh Saini, the petitioner club apparently issued a communication on 1.6.2001 to the petitioner asking him to explain and clarify his stand on the issue. A reply was submitted by the respondent on 9.6.2001. The respondent categorically denied the allegations made against him. He stated that there was no outstanding due payable by him to the Rotary Club Delhi University. Being a rotarian he had offered some space on his farm house to the said club for setting up a centre rendering free services to the villagers of village Hamid Pur. He further stated that despite repeated requests by the villagers, neither any expenses were being paid by the club for running of the centre, nor an alternative place was provided for shifting the centre. At that stage the villagers had no choice but to shift the centre of their own to some other place in the village under intimation to the then President. He further stated that no one from the club visited the centre after its shifting and it was only the respondent who used to sometimes visit the centre and contribute from his own pocket some money for keeping the centre running.
4. It appears that the Rotary Club Delhi University sent another communication on 11.6.2001 to the petitioner club stating that Sh. Pramod Goyal, the then President of the said club had no authority to issue and had not issued a 'No Objection'/'No Dues' Certificate in favor of the respondent herein, which had been submitted by the respondent to the petitioner club at the time of his seeking membership thereof. Yet another communication of 1.8.2001 was issued by the Honorary Secretary of Rotary Club Delhi University, once again making the same allegations as before by stating that the respondent had not cleared the dues of the club and that the certificate produced by the respondent had not been signed by Sh. Pramod Goyal, the then President of the club.
5. The petitioner constituted a committee of three members, which recommended that the respondent be required to obtain a fresh 'No Objection Certificate' from the current office bearers of Rotary Club Delhi University. The petitioner club, on 5.10.2001, issued a communication to the respondent acting on the various communications received from the Rotary Club Delhi University, and conveyed its decision to provide one opportunity to the respondent to arrange a 'No Objection' Certificate and the recommendation for his candidature duly signed by the President and Honorary Secretary of Rotary Club Delhi University within 15 days from the date of the said letter, failing which, it was stated, that his membership to the club would stand terminated. This was objected to by the respondent.
6. On 16.10.2001 the petitioner club issued another communication to the respondent conveying that a Board meeting would be held on 17.10.2001 and the Board had decided to give a chance to the respondent to clarify the points raised by the office bearers of the former club i.e. Rotary Club Delhi University. The respondent was asked to present himself before Board members. On 19.11.2001 the petitioner issued another communication stating that since the respondent was unable to get a fresh 'No Objection' Certificate, the Board would take a decision in its meeting to be held on 23.11.2001.
7. On 29.12.2001, the petitioner club issued a communication conveying the termination of the membership of the respondent by the Board of the petitioner club in its meeting held on 27.12.2001. The respondent represented against the termination of his membership vide communication dated 29.1.2002. However, the petitioner maintained its earlier decision and communicated the same on 21.2.2002.
8. The respondent sought the resolution of the dispute with regard to the termination of his membership with the petitioner club by seeking the appointment of an arbitrator in terms of an arbitration agreement contained in the articles of the petitioner club read with Manual of Procedures, 2001 of Rotary International.
9. He filed a petition under Section 11(6) of the Arbitration and Conciliation Act before this Court, which was allowed and the matter referred to the Arbitrator Sh. O.P. Vaish, Sr. Advocate, with the consent of parties.
10. The Arbitrator entered upon the reference. He fixed 1.6.2004 for appearance of the parties after consulting the claimants and respondents. He directed issuance of notice to the parties for the said date indicating that they should come prepared with all the papers, with three sets of documents.
11. On 1.6.2004 the arbitrator in the presence of the parties passed the following order:
Dated: 1st June, 2004 Present: Coram Mr. Sunil Kumar Jain, Claimant in person Mr. Atul Bhargav & Mr. Ajay Mehra for the respondents Mr. Atul Bhargav and Mr. Ajay Mehra state that they are representing the respondent and have been authorized to appear before me by Sh.Sashi Bhudhiraja, President of the Respondent Club. Both parties agreed that since the Arbitration has to proceed as per manual of procedure of Rotary, they would not like to be represented by any advocates and they would conduct the proceedings themselves. Both parties filed their written submissions and documents they were relying upon. Based upon the same parties made their submissions and also agreed that I may proceed with the matter without any issues being framed or evidence being led by the parties based upon the documents filed by them and their written submissions, I could proceed to decide the matter.
Parties further had no objection if I, sought an opinion of Rotary District Governor, who is Administrative head of Rotary clubs with respect to Rotary Club of Delhi University.
Claimant submitted that before his induction as a member of Respondent club, he had submitted a no objection letter from the then President of the club, Rtn. Pramod Goel. Respondents pointed out that the said letter does not carry any date. It was however seen that in the text of the letter itself the date was given as 20th November, 2000. After hearing both the parties and perusing the records produced by them it became apparent that the major controversy was whether claimant had submitted a valid no objection certificate from Rotary Club of Delhi University of which he was a member since 1985. It was however noticed that Sh. Pramod Goel was no longer in India. I, therefore requested either of the parties to make available to me his contact details. Parties were informed that the next date of hearing will be intimated to them.
O.P. Vaish Sole Arbitrator
12. Since a controversy had arisen between the parties as to whether the respondent had submitted a valid 'No Objection' Certificate from Rotary Club Delhi University or not, the learned Arbitrator contacted Sh.Pramod Goyal, the then President of Rotary Club Delhi University through E-mail on 28.6.2004 to enquire from him if he could provide any background to the dispute with regard to the issuance of the 'No Dues Certificate' attributed to him. Sh. Pramod Goyal it appears responded by E-mail dated 1.7.2004 the relevant extract thereof reads as follows:
As for Mr. Sunil Jain, his leaving the Club (Delhi University) was known to everybody in the Club and the No Dues letter was issued only after the matter was widely discussed in the Board, though we never wanted him to leave. Now since I am no longer associated with the club, and matter is in Arbitration, I can admit that serious factionalism and growing politics within the club, had massive toll on the membership and was affecting the very basis of the club.
With regards to RVC project, if my memory serves me right, was started several years back, may be in 1997 or 98 and Mr. Jain had agreed to allow the project to be setup on his piece of land in a village in North Delhi. (I don't remember the name though). He was always supportive of club projects and took active role, but I fail to understand what accounts was he suppose to submit. Nothing was advanced or loaned to him in his individual capacity, and whatever project work was being carried out was decided and executed by the club, through Board decisions and/or other committees of the club. The project ran thru successive Club Presidents and as far as I recollect, the project was still in running when this matter of his leaving the club was discussed and his NO DUES was approved and RVC didn't even figure in the discussions. The club secretary should have all the records pertinent to those meetings.
What has happened after I left is unknown. I am glad that I am not there now, to go thru all this.
13. Before the learned Arbitrator a letter dated 18.10.2001 was also produced written in Hindi by Sh. Narender Mann S/o Sh. Jagmehar Singh, 208, Hamid Pur, Post Office, Alipore, Delhi 110036 addressed to the President of the petitioner club, which Sh. Narender Mann wrote on behalf of RVC Hamid Pur. He states that the Jagriti Centre being run by Rotary Club Delhi University at Hamid Pur initially was being run in an orderly way. However, for the past one year the said centre had been facing a lot of difficulties from the side of the club. Sometimes it was stated that the Gymnasium has been handed over to some other entity, and at other times they (i.e., the office bearers of the Rotary Club Delhi University) state that the furniture has been disposed of, and yet at other times they state that the equipment has been defalcated in collusion with the respondent herein. However, truth is that the RVC Centre is possessed of all the equipment and the members of the club have not made any inquiry with regard to the centre in the last three years, and have also not contributed any amount towards the expense of the centre. Some time back, the members of the club had come, and he (Jagmehar Singh) even offered to return the belongings of the centre to them. However, they refused to take it back and now they are writing false communications. He further stated that in all this process, the respondent Shri Sunil Kumar Jain has no role to play. He again reiterated that all the equipment and belongings of the centre are with the RVC centre, Hamid Pur.
14. The learned Arbitrator proceeded to pass his reasoned award taking into account the material placed before him. The gist of the reasoning adopted by the learned Arbitrator is essentially that the respondent had been admitted to membership of the petitioner after duly complying with the requirement of the standard club bye laws. The petitioner had enough opportunity to enquire about the respondent who attended six meetings before being admitted as a member. The Rotary Club Delhi University apparently was suffering from internal problems and politics. Above all, the Arbitrator relied on the communication received from Shri Pramod Goyal through e-mail as extracted above.
15. The petitioner has challenged the award primarily on the ground that the arbitrator has violated the principles of natural justice. The submission of the petitioner is that in the proceedings held on 1.6.2004, the parties were informed that the next date of hearing will be intimated to them. However, according to the petitioner, no further notice of any proceedings was served on the petitioner and the petitioner, therefore, did not participate in any proceedings. They were simply served with the award from which they learnt that the learned Arbitrator had communicated with Sh. Pramod Goyal through E-mail. The learned Arbitrator had relied upon material obtained behind their back without granting an opportunity to the petitioner to meet the same, thereby also violating the principles of natural justice.
16. Counsel for the petitioner submits that after 1.6.2004 in fact no hearing was held and the same is evident from a perusal of para 0.2 of the Arbitration Award itself where the learned Arbitrator records that the matter was heard on 1.6.2004. The petitioner submits that petitioner for the first time came to know about some alleged hearing held on 17.9.2004 from the counter affidavit of the respondent filed in the present proceedings. Consequently, the petitioner while filing its rejoinder affidavit dated 16.1.2006 have denied knowledge of any such hearing in paragraphs 'B' and 'E' of the said rejoinder.
17. Petitioner also seeks to rely on two affidavits dated 28.8.2006 of Sh. Atul Bhargava and another dated 7.4.2007 of Sh.Ajay Mehra both of whom are supposed to have appeared before learned Arbitrator on 17.9.2004. However, there is no affidavit of Shri Ajay Mehra on record. They are claimed to have denied the receipt of any notice for, or of any knowledge of hearing before the Arbitrator held on 17.9.2004, or of their participation in any arbitral proceedings except on 1.6.2004. It is stated that the affidavits of Mr. Atul Bhargava and Mr. Ajay Mehra have remained uncontroverter. It is, therefore, submitted that the arbitral award is liable to be set aside under Section 34(2)(iii) of the Arbitration and Conciliation Act.
18. On the other hand, counsel for the respondent submitted that since the sole arbitrator was himself a rotarian and a member of the petitioner club, in the meeting held on 1.6.2004 both the parties agreed that the Arbitration should proceed as per manual of procedure of Rotary and therefore, they would not like to be represented by any advocates and that they would conduct the proceedings themselves. Both the parties filed their written submissions and documents on which they were relying, and made their respective submissions. It was also agreed that issues need not to be framed and no evidence was required to be led by the parties and that the arbitrator could proceed to decide the matter.
19. To the objection with regard to the lack of notice by the Arbitrator for the proceedings fixed on 17.9.2004, the respondent submits that since this was an arbitration between the petitioner club and its member, and has been conducted by senior rotarian himself, who was also a member of the same club, there was informality in the process of service of notice, and consequently in the proceedings held on 17.9.2004 while the presence of the respective parties was recorded, their signatures on the order sheet were not obtained. Same was position with regard to the proceedings held on 1.6.2004, which proceedings are not in disputes.
20. He further submits that the petitioner had sent a communication dated 9.11.2004 to the arbitrator authorising Mr.Ashok Bharti to collect from him the record of the arbitration proceedings duly pagenated. However, no specific objection was raised in relation to the hearing held on 17.9.2004. Having considered the rival submissions and the Arbitral record, I am of the view that there is no merit in the submissions of the petitioner and this petition deserves to be rejected. From the order sheet of 1.6.2004 itself it is clear that the learned Arbitrator was authorised to seek the opinion of a Rotary District Governor, who is the Administrative Head of Rotary Club, with respect to Rotary Club Delhi University. In the said proceedings, the arbitrator also briefly recorded the submissions of the parties. The claimants/respondent herein placed reliance on a `No Objection' letter from the then President of the Rotary Club Delhi University, Sh. Pramod Goel. The arbitrator further records that after hearing the parties, it appears that the controversy centers around the issue whether a valid 'No Objection Certificate' from Rotary Club Delhi University had been submitted or not.
21. It appears that the issue with regard to the availability of Sh. Pramod Goel arose in those proceedings and the arbitrator was informed that he is no longer in India. The order further records that the arbitrator requested either of the parties to make available to him his contact details. This to my mind is extremely relevant, since it clearly shows that both the parties were put to notice that the arbitrator would try to get in touch which Sh. Pramod Goyal to make his own inquiries since the real controversy was whether Sh. Pramod Goyal, in his capacity as the President of Rotary Club, Delhi University had issued a 'No Objection' Certificate to the respondent or not. It also appears from the said order that neither party objected to this procedure, and in fact consented to the same being adopted by the learned Arbitrator. The order further records that the parties were informed that the next date of hearing will be intimated to them. From the arbitral record it is seen that Mr. Ashok Bharti collected a file containing complete papers and documents relating to the award of the arbitration in this case on 16.11.2004. Therefore, it appears that the petitioner became aware of the holding of the proceedings on 17.9.2004 as early as on 16.11.2004, i.e. even prior to the filing of the present objections. If it were to be believed that the respondents did not have notice of the hearing fixed on 17.9.2004 and that its representatives did not attend any such meeting, it raises the issue as to why in the objection petition filed by the petitioner, on 16.12.2004, no such specific grievance was raised with regard to the hearing held on 17.9.2004. Only a general grievance has been made that after evidence was received in the form of E-mail communication from Sh. Pramod Goyal on 1.7.2004, no opportunity was given to the petitioner to even look into the same, much less to rebut the same.
22. Coming to the affidavit filed by Sh. Atul Bhargava filed on record on 28.8.2006, the same inter alia, records:
I say that during the proceedings held on 1st June, 2004, there was no discussion that the learned Arbitrator will contact and/or interact with Mr. Pramod Goel, former President of Rotary Club of Delhi University about the matter.
23. He further states that he did not receive any notice from the learned sole Arbitrator for any other proceedings after the matter had been heard on 1.6.2004, and that he did not attend nor was aware of the other proceedings purportedly held by the arbitrator either before or after 1.6.2004.
24. Two things need to be noted in relation to this affidavit. The statement made by Sh.Atul Bhargava in para 3 of his affidavit as extracted herein above is at variance with the proceedings recorded by the sole arbitrator in respect of the hearing held on 1.6.2004. It is implicit from the order dated 1.6.2004, that the arbitrator would contact to Sh. Pramod Goyal, the former President of Rotary Club Delhi University, in relation to the controversy before him. There was no other purpose for requiring the parties to furnish the contact details of Sh. Pramod Goyal in case the arbitrator was not to contact him in relation to the disputes before him. In case the petitioner had any grievance with regard to the procedure adopted by the arbitrator, the petitioner would have either got recorded its dissent, or would have raised an objection before the arbitrator after 1.6.2004 which it did not. Even in the present petition, no grievance with regard to the minutes of the meeting held on 1.6.2004 has been raised by the petitioner. This raises doubts in the mind of the court with regard to the authenticity of the affairmations contained in the said affidavit.
The second aspect that needs to be noted in the affidavit of Sh. Atul Bhargava is that while he states that he did not attend, or that he was not aware of any other proceedings held by the learned sole Arbitrator after 1.6.2004. However, he does not make a definite and specific statement one way or another with regard to the proceedings held on 17.9.2004.
25. I, therefore, do not accept the affidavit of Sh. Atul Bhargava. The same has been filed without seeking any permission from the Court and consequently, the respondent was not obliged to reply to same. In any event, during the course of hearing the respondent who has throughout remained present in Court, denies the assertions of the petitioner and supports the orders passed by the learned Arbitrator. Counsel for the respondent further points out that in the proceedings held on 17.9.2004 the petitioner herein stated that it will be insulting for it to take the respondent back into the club. He submits that, that was the argument advanced by the club during the course of hearing on 17.9.2004 and that the arbitrator, possibly could not have made up or imagined the same while passing his order on 17.9.2004.
26. The arbitrator, after receiving the communication from Sh. Pramod Goyal it appears fixed the hearing on 17.9.2004 on which date both parties were represented. They were provided inspection of the correspondence exchange with Sh. Pramod Goyal. They addressed further arguments and reiterated the arguments they had earlier made. They further stated that they had nothing further to add. It was only thereafter that the case was reserved for making and publishing the award.
27. Under Section 19 of the Arbitration and Conciliation Act, the arbitral Tribunal is entitled to conduct the proceedings in the manner in which its considers the same to be appropriate. It is clear from the order dated 1.6.2004 of the Arbitrator that the parties agreed to the procedure to be followed by the arbitral Tribunal in conducting the proceedings. The arbitral Tribunal is not bound by the Code of Civil Procedure or by the Indian Evidence Act. All that is required of him is that he follows the principles of natural justice and treats the parties impartially and gives them full and equal opportunity to present their case. This, to my mind has been done by the learned Arbitrator.
28. A submission was made by the petitioner that said Sh. Pramod Goyal was obliged to the arbitrator, inasmuch as, the arbitrator was instrumental in getting Sh. N. Vittal as the Chief Guest on the installation function of Sh. Pramod Goyal as the President of Rotary Club Delhi University. It appears that this ground is not taken by the petitioner. In any event, this objection has no merit at all. Merely because the arbitrator might have rendered assistance in getting Sh. N. Vittal as the Chief Guest on the installation function of Sh. Pramod Goyal, it does not mean that Sh. Pramod Goyal would feel so indebted and obliged to the arbitrator that he would give a false reply to an e-mail communication, in which the arbitrator, in any event, has no personal interest. Pertinently, the allegation is not that Sh. Pramod Goyal was indebted to the respondent. I do not think this objection calls for any further comment.
29. Having considered the rival submissions of the parties, I find no merit in this petition and the same is dismissed with costs of Rs. 10,000/-.