Delhi District Court
Smt. Raminder Kaur vs M/S Gursant Trading And Chit Fund Pvt. ... on 23 April, 2008
- :: 1 :: -
IN THE COURT OF SH. RAJ KUMAR CHAUHAN :
ADDITIONAL DISTRICT JUDGE : DELHI
Date of Institution : 29.3.2005.
Date on which the
Judgment has been
Reserved : 29.3.2008.
Date of Judgment : 23.4.2008.
In the matter of: -
MCA No. 4/2005.
1.Smt. Raminder Kaur
Widow of Sh. Jatinder Pal Singh
2304, Hudson Lane, GTB Nagar,
New Delhi.
2.Sh. S.D.S. Varmani
W/o Late Sh. Haveli Ram
2304, Hudson Lane, GTB Nagar,
New Delhi. ... Appellants.
Vs.
1.M/s Gursant Trading And Chit Fund Pvt. Ltd.
4636, Ganesh Bazar, Cloth Market,
Fatepuri, Delhi.
2.Sh. Sudhir Gupta, Sole Arbitrator,
M/s Balaji Agencies,
2067, Ground Floor Namdhari Building,
- :: 2 :: -
Behind Jubli Cinema, Delhi-6.
3.Sh. Surinder Singh Chawla
S/o Sh. D.S. Chawal
Q-11, Ground Floor,
Rajouri Garden, New Delhi-27. ... Respondents.
- : ORDER : -
1.The appellant has instituted the present miscellaneous civil appeal u/s 37 (2) r/w/s 11 and 12 of the Arbitration And Conciliation Act, 1996 (hereinafter referred as the Act) inter alia alleging that the respondent no. 1 company has filed the reference petition on 13.10.2004 before the Ld. Arbitrator Sh.
Sudhir Gupta, Sole Arbitrator. The Ld. Sole Arbitrator/Arbitral Tribunal has got no jurisdiction to try the present proceedings and has been misconducting himself in conducting the proceedings. It is further alleged that the Ld. Arbitrator is not only misconducting himself but has also acted in gross contravention of the Act and against the principles of natural justice and is not independent and impartial. In para no. 4 to 9, the appellant has given the facts in support of the above averments on record to show misconduct by the Ld. Arbitrator. It is further alleged that the appellant had filed an application
- :: 3 :: -
for setting aside ex-parte order which was allowed subject to cost of Rs. 2,000/- whereas the fees of the Ld. Arbitrator is Rs. 2,100/-. In the subsequent paragraphs, the subsequent events have been narrated showing the impartiality on the part of the Ld. Arbitrator. In para no. 19 of the appeal, it is stated that on 9.3.2005, the appellant has moved an application u/s 7 and 16 of the Act stating that the Ld. Arbitrator has got no jurisdiction to try the present proceedings because there was no agreement in the eyes of law. It is further stated that the agreement relied by the claimant before the Ld. Arbitrator was neither signed by the claimant nor by the respondent. It is further stated that on 28.3.2005, the Ld. Arbitrator arbitrarily struck of the defence of the appellant without deciding the application of the appellant wherein it has questioned the jurisdiction of the Ld. Arbitrator.
Thereafter, the Ld. Arbitrator fixed the case for final arguments on 29.3.2005 without giving opportunity to the appellant to cross examine the claimant on the question of maintainability of the present claim.
2.The respondent no. 2 i.e. the Ld. Arbitrator is in a hurry to pass an order and misconducting himself without having jurisdiction
- :: 4 :: -
and has struck of the defence in an arbitrarily and illegal manner. It is further stated that because of the above reasons, the present appeal has been filed to change the Arbitrator on the grounds that there is no agreement between the parties for appointment of the Ld. Arbitrator. The agreement dated 18.4.2004 is no agreement in the eyes of law and the reference itself was illegal. The reference petition was barred by limitation. No notice dated 22.11.2002 has ever been served upon the appellant before filing the arbitral proceedings.
Various other similar grounds questioning the maintainability of the arbitral proceedings have been taken and lastly it is prayed that the order dated 28.3.2005 passed by the Ld. Arbitrator be set aside in the interest of justice.
3.I have heard the learned counsel Sh. Bhupesh Narula for appellant. No one argued on behalf of the respondent despite opportunity. During the arguments, I have asked the learned counsel for appellant as to whether the present appeal u/s 37 (2) r/w/s 11 and 12 of the Act was maintainable? The learned counsel for appellant sought time to file citations in support of his arguments but did not submit any law. The question raised
- :: 5 :: -
by this Court was not replied by the learned counsel for appellant, hence, I myself has gone through the provisions in which the appeal has been filed. Section 37 (2) of the Act provides as under: -
"37. Appealable orders.- (1) ... ... ...
(2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal.-
(a) accepting the plea referred in sub-
section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
(3) ... ... ..."
4.Section 16 (2) and (3) provides as under: -
"16. Competence of arbitral tribunal to rule on its jurisdiction.- (1) ... ... ...
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence, however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be
- :: 6 :: -
raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.
(4) ... ... ..."
5.The above provisions makes it crystal clear that the appeal u/s 37 (2) of the Act where the Arbitral Tribunal has accepted the plea referred in Sub Section 2 and Sub Section 3 of the Section 16 of the Act i.e. the plea raised with regard to Arbitral Tribunal does not have jurisdiction or that the Arbitral Tribunal is exceeding the scope of its authority. I have perused the order dated 28.3.2005 which is sought to be set aside in the present appeal to ascertain whether the plea of Arbitral Tribunal having no jurisdiction was accepted or the Arbitral Tribunal has exceeded its authority? On 28.3.2005, the Ld. Arbitrator has passed the following order: -
"28.3.2005 Present: Sh. Bhupesh Narula, Adv., counsel for respondent no. 1 and 2.
None for claimant.
It is 4.00 PM. Now, the matter was fixed for 24.3.2005. But due to some problem it was adjourned for today after informing and taking consent of both the parties on telephone.
- :: 7 :: -
Let the other party be awaited.
(Sole Arbitrator) It is 4.25 PM.
Present: Sh. Bhupesh Narula, Adv. For the respondent no. 1 and 2.
Also present Sh. G.S. Ahuja, Adv. For the claimant company.
The Adv. for the respondent no. 1 and 2 has not yet deposited the cost of Rs. 500/- in compliance of order dated 16.3.2005. He refused to pay the cost even after todays. Last opportunity to comply the order and despite my orders for the payment of cost to which the counsel for the respondents has give lame excuses in order to make the compliance. Since this is second date of hearing from the date of order i.e. 16.3.2005, where in the order for the payment of cost was passed, which till date have not been complied with and I am not satisfied with the lame/false excuses raised by the counsel and I am of the considered view that despite my leniency of granting them the opportunity after proceeding them ex-parte and they are not coming forward to contest the present proceedings with clean hands.
Therefore, the defence of the respondents is strucked off. The matter is now fixed for final arguments on 29.3.2005 at the same premises at 4.00 PM.
(Sole Arbitrator) 28.3.2005"
6.The above order passed by the Ld. Arbitrator shows that the defence of the appellant was struck of for non-compliance of the
- :: 8 :: -
previous order for payment of cost. The learned counsel for appellant pointed out that on the same date, he has recorded his opposition to the above order as under: -
"No opportunity afforded to the respondent to cross examine the claimant. As the case is fixed for filing reply and replication for jurisdiction and the case was only fixed for further proceedings. Without prejudice to the question of jurisdiction please supply me the certified copy of order dasti without prejudice.
Bhupesh Narula, Adv."
7.The learned counsel for appellant has not shown me any law to substantiate the grounds of appeal that the order dated 28.3.2005 was passed by the Ld. Arbitrator while exceeding its authority so as to make it a subject matter of appeal u/s 37 (2) of the Act. As per Chapter 5, Section 19 of the Act, it is provided that the arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872). Further Sub Section 2 of Section 19 of the Act provides that the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings. In the appeal it is no where
- :: 9 :: -
alleged that the parties has agreed to a procedure where the defence could not be struck of and cost could not be imposed. Moreover, in the present appeal, the appellant has taken those grounds which cannot be entertained by the Civil Courts during the pendency of the arbitral proceedings. The reliance can be placed on AIR 2006 NOC 249 (Jhar) wherein it was held that during the pendency of arbitration, civil Court has no jurisdiction to entertain petition and decide nature of objections raised therein. Questions can be raised before and decided by Arbitrator. In AIR 2004 Ori. 153 it was held that the Arbitrator himself in exercise of power conferred on him by or under section 16 can decide the question whether or not the arbitration clause in question was scored out at the time of agreement between the parties and as such, whether or not he has jurisdiction to decide the matter or adjudicate the dispute. In the present case, the application u/s 7 and 16 of the Act questioning the jurisdiction of the Arbitral Tribunal was moved on 9.3.2005. On 9.3.2005, the application was taken on record and the respondent who is appellant herein was directed to pay cost of Rs. 500/- imposed earlier. The matter was adjourned for 16.3.2005 for reply and arguments on the application alongwith
- :: 10 :: -
final arguments. On 16.3.2005, it is recorded in the order sheet by the Ld. Arbitrator that the learned counsel for respondent was not ready to deposit the cost of Rs. 500/- in compliance of the order dated 9.3.2005 stating that he shall not deposit the cost until the application u/s 7 and 16 of the Act of the respondent was disposed of. The matter was adjourned for 24.3.2005, however, it was taken on 28.3.2005 and the impugned order was passed.
8.The above discussion and the reference of the order passed by the Ld. Arbitrator shows that the appellant has failed to show that the plea with regard to Arbitral Tribunal having no jurisdiction has been accepted by it. In case the plea raised with regard to the jurisdiction had been accepted, the appeal could have been instituted only by the claimant and not by the respondent. The provisions of Section 37 (2) of the Act is clear and no appeal can be entertained under the said provisions in case the plea raised with regard to the incompetency of jurisdiction by the Arbitral Tribunal is rejected. It was on that point, the learned counsel for appellant has sought time to file the citations but he has failed to do so and could not assist the
- :: 11 :: -
Court in that regard. With regard to the other points on which the respondent could come into appeal was that the Arbitral Tribunal has exceeded its authority. The above discussions shows that there is nothing to suggest in the arbitral proceedings conducted by the Ld. Arbitrator that it has exceeded its authority. Thus, there is nothing in the impugned order dated 28.3.2005 passed by the Ld. Arbitrator which can be subject matter of the appeal u/s 37 (2) of the Act. The present appeal is, therefore, devoid of merits and, therefore, accordingly, stands dismissed. Parties are left to bear their own cost. The interim order dated 29.3.2005 with regard to the stay of the arbitral proceedings stands vacated. The Ld. Arbitrator is free to decide the arbitral proceedings as per law. Copy of this order be sent to the Ld. Arbitrator alongwith arbitral proceedings. Parties are directed to appear before the Ld. Arbitrator on 10.5.2008. Appeal file be consigned to the record room after due compliance.
Announced in the open Court on 23.4.2008.
(RAJ KUMAR CHAUHAN) ADDITIONAL DISTRICT JUDGE, DELHI