Bombay High Court
Mrs. Padmini Chandran Menon vs Vijay Chandran Menon And Ors on 10 January, 2018
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
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THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
ARBITRATION PETITION NO.9 OF 2015
Mrs.Padmini Chandran Menon )
Aged about 78 years, )
W/o.Late Chandran Menon )
Residing at 1202-A, Laurels, )
81 & 83, C.P.Ramasamy Road, )
Alwarpet, Chennai - 600 018. ) .. Petitioner
VERSUS
1. Vijay Chandran Menon )
Residing at Kairali )
Tarabai Park, Kolhapur 416 003. )
2. Satish Chandran Menon )
Residing at Kairali, )
Tarabai Park, Kolhapur 416 003. )
3. Mrs.Preethi Menon )
W/o. Vijay Chandran Menon )
Residing at Kairali )
Tarabai Park, Kolhapur 416 003. )
4. Mrs.Shanta Narayanan )
W/o. P.A. Narayanan )
Residing at 1202-A, Laurels, )
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81 & 83, C.P.Ramasamy Road, )
Alwarpet, Chennai - 600 018. )
5. Mr.Ram Krishnan Menon )
Kairali, 236-E, Tarabai Park, )
Kolhapur. ) .. Respondents
along with
CIVIL APPLICATION NO.7 OF 2017
IN
ARBITRATION PETITION NO.9 OF 2015
Vijay Chandran Menon )
Residing at Kairali )
Tarabai Park, Kolhapur 416 003. ) .. Applicant
In the matter of
Mrs.Padmini Chandran Menon )
Aged about 80 years, )
W/o.Late Chandran Menon )
Residing at 1202-A, Laurels, )
81 & 83, C.P.Ramasamy Road, )
Alwarpet, Chennai - 600 018. ) .. Petitioner
VERSUS
1. Vijay Chandran Menon )
Residing at 236, 'E' Kairali, )
Tarabai Park, Kolhapur 416 003. )
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2. Satish Chandran Menon )
Residing at 236, 'E' Kairali, )
Tarabai Park, Kolhapur 416 003. )
3. Mrs.Preethi Vijay Menon )
Residing at Kairali )
Tarabai Park, Kolhapur 416 003. )
4. Mrs.Shanta R. Narayanan )
Residing at 1202-A, Laurels, )
81 & 83, C.P. Ramasamy Road, )
Alwarpet, Chennai - 600 018. )
5. Mr.Ram Krishnan Menon )
Residing at 'Menon Enclave 1' )
Kairali, 236-E, Laxminarayan Nagar, )
Patolewadi, Kolhapur - 416 005. ) .. Respondents
---
Mr.Venkatesh Dhond, Senior Advocate a/w Mr.Prasad Shenoy,
Ms.Shubha Anant i/by Mr.Shivam Singh for the petitioner.
Mr.Abhay Nevagi a/w Mr.Amit Siwan, Mr.Vivek Patil i/by M/s.Vivek
Patil & Associates for the respondent nos.1 & 3.
Mr.Sandesh Shukla a/w Mr.Hafeez Patawala i/by M/s.Abhay Nevagi &
Associates for the respondent no.2.
Mr.Shyam Kapadia i/by M/s.Crawford Bayley & Co. for the respondent
no.4.
---
CORAM : R.D. DHANUKA, J.
RESERVED ON : 5th December 2017 PRONOUNCED ON : 10th January 2018 ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 4 arbp-9.15(j).doc Judgment :-
. By this petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act"), the petitioner seeks an appointment of the sole arbitrator by invoking clause 12 of the Memorandum of Family Arrangement dated 8th January 2006 entered into between the parties.
2. In so far as the Civil Application No.7 of 2017 is concerned, by this civil application, the applicant (original respondent no.1) seeks permission to place on record as well as refer to and rely upon the documents annexed along with the said civil application (except Exhibit-A) during the hearing of the Arbitration Petition No.9 of 2015 and seek to file additional objections based on those documents. Some of the relevant facts for the purpose of the deciding this petition are as under :-
3. The petitioner is the mother of the respondent nos.1, 2 and
4. The respondent no.3 is the daughter in law of the petitioner. The respondent no.5 is the brother in law of the petitioner and has been impleaded pursuant to the amendment carried out in this arbitration petition by an order dated 6 th December 2016. The petitioner is the widow of Chandran Menon who died intestate.
4. On 8th January 2006, Deed of Family Arrangement was arrived at. It is the case of the petitioner that the said deed of family arrangement was drawn up by the respondent no.1 and was executed by all the heirs of late Chandran Menon and heirs of Ram Menon. No discussions or drafts were preceded by the said family arrangement.
::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 :::ppn 5 arbp-9.15(j).doc The petitioner was not even consulted despite being a Senior Member of the family and was merely informed that the basic and fundamental premise underlying the said family arrangement was to demarcate and divide the shares of the founder brothers (Chnadran Menon & Ram Menon). It is the case of the petitioner that she was persuaded by the respondent nos.1 and 2 into signing the said family arrangement and on the assurance that the interest of the petitioner would be taken care of by the sons and it would be an equitable distribution of assets in the hands of all the three children.
5. It is the case of the petitioner that the respondent no.4 who had also been persuaded into signing the family arrangement was also assured that the moneys paid under the said family arrangement was her due share in the companies and the immovable properties. The said family arrangement contained an arbitration agreement in clause 12 thereof which is extracted as under:-
"12. The disputes, if any, among the parties hereto shall be settled by the process of arbitration as contemplated in the Arbitration and Conciliation Act, 1996 or any other statutory modifications thereof."
6. It is the case of the petitioner that in the year 2008, the respondent no.1 expressed his desire to repair and remodel the old structure referred to as Kairali Bungalow. The petitioner did not suspect at that point of time that the respondent no.1 had by then his own designs to move the petitioner out of the house in which she had been living for almost 40 years. Dispute arose between the petitioner and the respondent no.1 and reached unbearable levels for the petitioner. It is the case of the petitioner that since the respondent no.1 refused to ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 6 arbp-9.15(j).doc account for the monies of the petitioner, her share of the monies left behind by her husband as against the extravagance in which the respondent no.1 was now indulging. According to the petitioner, the petitioner was reduced to a dependant on the respondent no.1 who would graciously allow her a sum of Rs.20,000/- per month towards maintenance.
7. Some time in the year July or August 2011, the respondent no.4 informed the petitioner that she had received a letter from Menon & Menon Pvt. Ltd. in respect of the KIT property and purporting to be a statement concerning Capital Gains Tax. It is the case of the petitioner that until 2006, even the income tax returns of the respondent no.4 were organised and filed by the respondent no.1 and in so far as the petitioner is concerned, income tax returns and all other financial dealings continued to be handled by the respondent no.1 until recently.
8. It is the case of the petitioner that the petitioner was forced to leave her own matrimonial home in and around September 2011. The petitioner has also made several other allegations in the arbitration petition including the allegation of forgery of the signature of the petitioner by the respondent no.1. The petitioner and the respondent no.4 filed a criminal complaint against the respondent no.1 before concerned police station in Kolhapur which has been registered as FIR. The petitioner has also filed a Suit (RCS No.261 of 2014) challenging the sale effected by the respondent no.1 in favour of a third person using the forged power of attorney. It is the case of the petitioner that the said family arrangement is vitiated by fraud and suppression which came to ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 7 arbp-9.15(j).doc light only during the family meeting held in May 2012 at the residence of the respondent no.4.
9. It is the case of the petitioner that during the month of May 2012, a family meeting was held at the residence of the respondent no.4. The respondent no.1 though confirmed that the shareholding of the petitioner and the respondent no.4 was much more than what was found in the records of the company, the respondent no.1 refused to divulge the correct facts concerning the estate of Late Chandran Menon. The petitioner accordingly sent a letter dated 23 rd September 2012 to the respondent no.1 of the discussions and disputes as discussed in the month of May 2012 and reiterated her demand for transparency and fair access to the accounts of Menon & Menon Pvt. Ltd. to the petitioner. Various meetings were held in the office of solicitors of the respondent no.1 in Mumbai. The solicitors in Mumbai suggested the name of the judge who could be appointed as a sole arbitrator. The respondent nos.1 and 3 through their solicitors vide email dated 7 th August 2013 suggested two names of retired judges who could be appointed as arbitrators. The petitioner however could not agree to the names suggested by the solicitors of the respondents.
10. It is the case of the petitioner that she is comfortable only with Malyalam and was keen on an arbitrator who is not only conversant in Malayalam but also the legal nuances concerning family relationship peculiar to the State of Kerala. The petitioner accordingly through her advocate suggested the name of Shri Justice P.K. Balasubramanyan, a former Chief Justice of the Jharkhand High Court. The respondent no.1 however did not agree to the said suggestion made ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 8 arbp-9.15(j).doc by the petitioner through her advocate. The petitioner sent another letter dated 16th November 2013 once again suggesting the same name. The respondent nos.1 and 3 however vide their advocate's letter dated 12 th December 2013 expressed their disagreement with the appointment of retired Justice Shri P.K. Balasubramanyan as a sole arbitrator.
11. The respondent no.1 however vide his letter dated 26 th December 2013 addressed to the respondent no.4 alleged that various properties were already given to the respondent no.4 under the said family arrangement and over and above an amount of Rs.184 lakh was also paid to the respondent no.4. It was alleged that the family settlement was fully acted upon. All clauses in the said family settlement were already honoured. A retired Supreme Court Judge had opined that there was nothing to arbitrate and thus the respondent no.1 did not give his consent for arbitration as was proposed by the petitioner at the behest of the respondent no.4.
12. By a separate letter dated 26th December 2013 addressed to the petitioner, the respondent no.1 raised similar contention that the family settlement was acted upon in toto and from 2006 till very recently, there were no issues. It was alleged that the petitioner had however raised frivolous demand. In the said letter also, the respondent no.1 referred to the legal opinion obtained from a retired Supreme Court Judge who had opined that there was nothing to arbitrate and settlement had been fully complied with many years ago. The respondent no.1 accordingly refused to give consent for arbitration.
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13. The petitioner vide her letter dated 7 th March2014 to the respondent no.1 in response to the letter dated 26 th December 2013 denied the allegations made in the said letter and put forward her case. The petitioner recorded that till most of 2013, the respondent no.1 and his legal adviser were agreeable for arbitration when the respondent no.1 though could impose his Terms of Reference and choice of arbitrator on the petitioner. The petitioner placed on record that her only requirement was for a Malayalam speaking arbitrator with whom she could articulate directly which was not acceptable to the respondent no.1. On 7th March 2014, the respondent no.4 also addressed a separate letter to the respondent no.1 denying the allegations made by him in his letter dated 26th December 2013 and placed her case on record.
14. Since there was no agreement on the name suggested by the petitioner, the petitioner filed this petition inter alia praying for appointment of arbitrator under the said arbitration clause recorded in clause 12 of the Memorandum of Family Arrangement dated 8 th January 2006 and 16th September 2014. This petition was initially filed on the original side of this Court and was numbered as Arbitration Application No.261 of 2014 and was subsequently transferred to the appellate side of this Court and has been numbered as Arbitration Petition No.9 of 2015.
15. Mr.Dhond, learned senior counsel appearing for the petitioner submits that the petitioner is about 81 years old and was persuaded by the respondent nos.1 and 2 to enter into the said family arrangement on the assurance that the interest of the petitioner would be taken care of by the sons and there would be an equitable distribution of assets in the hands of all the three children. Similar assurance was also ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 10 arbp-9.15(j).doc made by the respondent nos.1 to 3 to the respondent no.4 who is the daughter of the petitioner and sister of the respondent nos.1 and 2, in the estate of the deceased husband of the petitioner in "Chandran Menon family concern."
16. It is submitted by the learned senior counsel that the existence of arbitration agreement is not in dispute. The respondent no.1 himself has suggested the names of a retired Chief Justice of India and a retired Judge of the Supreme Court respectively. There was no consensus on the name of the arbitrator exchanged between the parties. He submits that this arbitration petition thus filed under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable.
17. Learned senior counsel also invited my attention to some of the allegations/contentions raised in the affidavit-in-reply filed by the respondent no.1 from 24th October 2104 alleging that the said family arrangement was already acted upon and the share of respective parties under the said family arrangement was already handed over to the respective parties. It was alleged in the reply that the bungalow where entire Menon family resided was gifted by the petitioner along with aunt of the respondent no.1 to the wife of the respondent no.1 as per the Memorandum of Family Arrangement (MOFA). The petitioner had also signed the necessary Gift Deed on 29 th May 2007. In the affidavit-in- reply, the respondent no.1 also contended that since the said MOFA was already acted upon and the payments were already made to the parties to the said family arrangement including the petitioner, there was nothing to arbitrate in the said MOFA and thus this arbitration petition for seeking appointment of arbitrator shall be dismissed on that ground alone.
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18. It is also alleged by the respondent no.1 in the said affidavit that the party having taken benefit of the said agreement for several years cannot be allowed to resile from the settlement and is estopped from doing so. It is contended by the respondent no.1 that the said agreement thus cannot be allowed to be re-opened after several years of execution. In the affidavit-in-reply, it is contended by the respondent no.1 that the petitioner as well as the respondent no.4 have also alleged that the said agreement is vitiated by fraud which allegation cannot be decided by an arbitrator and can be examined only by the competent civil Court having all powers to elaborate evidence.
19. The respondent nos.2 and 3 filed separate affidavits opposing the petition and raised various issues which were raised by the respondent no.1. The respondent no.4 filed a separate affidavit supporting the case of the petitioner.
20. Mr.Dhond, learned senior counsel for the petitioner placed reliance on Section 11 (6-A) of the Arbitration and Conciliation Act, 1996 inserted by Act 3 of 2016 with effect from 23rd October 2015 which reads thus :-
"Section 11(6-A) - The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement."
21. Mr.Dhond, learned senior counsel for the petitioner placed reliance on the judgment of the Supreme Court in the case of Thyssen Stahlunion GMBH Vs. S.A.I.L. reported in (1999) 9 SCC 334 and also invited my attention to the arbitration agreement recorded in clause 12 ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 12 arbp-9.15(j).doc of the Family Arrangement dated 8 th January 2006 and would submit that under the said arbitration agreement, the parties had already agreed that the disputes, if any, among the parties shall be settled by process of arbitration as contemplated under the Arbitration Act or any statutory modification thereof. He submits that in view of such agreement, though the arbitral proceedings had commenced before coming into force of the amendment to Section 11 and more particularly by insertion of Section 11 (6-A) of the Arbitration Act, the parties will be governed by the provision inserted by way of amendment to the Arbitration Act even after commencement of the arbitral proceedings. Reliance is placed on paragraph 22, 25 and 36 to 38 of the said judgment in the case of Thyssen Stablunion GMBH Vs. S.A.I.L. (supra) in support of this submission.
22. Learned senior counsel placed reliance on Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 and would submit that the said amendment specifically provided that on agreement between the parties, the Act as amended would be applicable to pending arbitral proceedings. He submits that in such cases, it is irrelevant as to whether the arbitral proceedings or any proceedings in relation thereto have been filed on 23rd October 2015 or after the said date. He submits that Section 11(6-A) is thus squarely applicable to this case. He submits that in view of the said provision under Section 11(6-A) of the Arbitration and Conciliation Act, 1996, powers of this Court are confined to the examination of the existence of an arbitration agreement, notwithstanding any judgment, decree or order of any Court.
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23. It is submitted that this Court thus cannot decide other issues raised by the respondents on maintainability of the proposed claims or otherwise. He submits that the contesting respondents have not disputed the existence of an arbitration agreement. As a matter of record, the respondent no.1 has also suggested the names of two retired judges of the Supreme Court. There was however no consensus on the names of the arbitrators suggested by the parties. In view thereof, this petition filed under Section 11(6) of the Arbitration Act is maintainable and deserves to be allowed.
24. Learned senior counsel also placed reliance on the judgment of the Supreme Court in the case of Duro Felguera Vs. Gangavaram Port Ltd., reported in (2017) 9 SCC 729 and more particularly paragraphs 18, 19 and 47 to 49 thereof in support of the submission that under Section 11(6-A) of the Arbitration Act, only question that a Court should and needs to look into is the existence of an arbitration agreement. He also placed reliance on the judgment of this Court in the case of M/s.Amisha Buildcon Pvt. Ltd. Vs.Jidnyasa Co-op. Housing Society Ltd., reported in 2016 SCC OnLine Bom 5234 holding that the Court while appointing an arbitrator under Section 11 has to confine to the examination of existence of an arbitration agreement in view of the amended provisions under Section 11(6-A) of the Arbitration Act. It is submitted by the learned senior counsel that the respondent nos.1 to 3 have been deliberately delaying the hearing of the present arbitration application on one pretext to other.
25. Learned senior counsel for the petitioner also placed reliance on the following judgments:-
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(i) Indian Oil Corporation Ltd. Vs. SPS Engineering Ltd., (2011)
3 SCC 507 (paragraphs 14 and 15);
(ii) Schlumberger Asia Services Ltd. Vs. ONGC Ltd., (2013) 7
SCC 562 (paragraph 25);
(iii) SBP and Company Vs. Patel Engineering & Anr., 2005 (8)
SCC 618;
(iv) Gayatri Project Ltd. Vs.Sai Sai Krishna Construction (2014)
Comp LI 200 (SC) (paragraphs 14 and 15);
(v) National Insurance Company Limited Vs. Baghara Polyfab
Private Limited reported in (2009) 1 SCC 267 (paragraphs 22 onwards);
(vi) Arasmeta Captive Power Co. Vs. Lafarge India Pvt. Ltd. (2014) 1 Comp LJ 209 SC (paragraph 19);
(vii) Visa International Vs. Continental Resources (USA) (2009) 2 SCC 55;
(viii) Today Homes & Infrastructure Vs. Ludhiana Improvement Trust, (2013) 3 Comp LJ 329 (paragraphs 13 & 14).
26. Learned senior counsel submits that in addition to the Supreme Court as well as this Court already having held that powers of Court under Section 11(6-A) is confined to examination of existence of an arbitration agreement, several High Courts have taken a similar view.
27. Mr.Cama, learned senior counsel for the respondent nos.1 and 3 assisted by Mr.Abhay Nevagi and other counsel, on the other hand, submits that cause of action even according to the petitioner in the present matter arose in and around August 2013, when the arbitration agreement was invoked by the petitioner. He submits that since cause of ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 15 arbp-9.15(j).doc action had accrued in and around in the year 2013, the present proceedings are governed by the provisions of the Arbitration and Conciliation Act, 1996 and not by the Arbitration and Conciliation (Amendment) Act, 2015 and more particularly Section 11(6-A) of the Arbitration Act. He submits that admittedly, the arbitration petition has been filed by the petitioner on 16th September 2014 i.e. much prior to the date of the Arbitration and Conciliation (Amendment) Act, 2015 came into force and thus Section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015 would not apply to this arbitration petition and the same would be governed by unamended Section 11(6) of the Arbitration and Conciliation Act, 1996.
28. Learned senior counsel placed reliance on the judgment of the Supreme Court in the cases of SBP and Company Vs. Patel Engineering & Anr. (supra) and also National Insurance Company Limited Vs. Baghara Polyfab Private Limited (supra) and would submit that principles laid down by the Supreme Court in these judgments would squarely apply to the present proceedings and not the judgments relied upon by the petitioner dealing with the provision of Section 11 (6-A) of the Arbitration and Conciliation Act, 1996 inserted by the Arbitration and Conciliation (Amendment) Act, 2015.
29. It is submitted by the learned senior counsel that since the matter would be governed by the provision of Section 11(6) unamended, this Court will have to decide as to whether the parties to the agreement had already acted upon the said agreement and there was an accord and satisfaction or not. He submits that this Court will also have to decide before appointing any arbitrator as to whether allegation of fraud made ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 16 arbp-9.15(j).doc by the petitioner and the respondent no.4 in this petition can be at all referred to the arbitration. He submits that the Court cannot disturb the family settlement arrived at between the parties and thus cannot refer such disputes to the arbitration.
30. Learned senior counsel placed reliance on the judgment of the Supreme Court in the case of TRF Ltd. Vs.Energo Engineering Projects Ltd. reported in 2017(7) SCALE 162 and also the judgment of the Supreme Court in the case of A.Ayyasamy Vs.A.Paramasivam & Ors., reported in 2016 AIR (SC) 4675 in support of the submission that allegation of fraud cannot be referred to the arbitration. He also placed reliance on the judgment of the Supreme Court in the case of Rasiklal Ashra Vs.Gautam Rasiklal Ashra & Anr. in SLP No.15286 of 2011. Reliance is also placed on the judgment of the Supreme Court in the case of Kale & Ors. Vs.Deputy Director of Consolidation & Ors., reported in (1976) 3 SCC 119 and in the case of New India Assurance Company Ltd. Vs. Genus Power Infrastructure Ltd., reported in 2015 (145) AIC 14 (S.C.).
31. Mr.Nevagi, learned counsel for the respondent nos.1 & 3 continued the argument left by Mr.J.P. Cama, learned senior counsel for the respondent nos.1 & 3 and would submit that the respondent no.5 is an insane person and has not been served with a copy of the proceedings. He submits that in any event, unless a next friend of the respondent no.5 is appointed by this Court, the proceedings cannot be allowed to be proceeded with.
::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 :::ppn 17 arbp-9.15(j).doc 32. Mr.Dhond, learned senior counsel for the petitioner in
rejoinder submits that the judgment of the Supreme Court in the case of Thyssen Stablunion GMBH Vs. S.A.I.L. (supra) would squarely apply to the facts of this case. He submits that issue raised by the petitioner is already concluded by the said judgment as well as judgment of this Court in the case of M/s.Amisha Buildcon Pvt. Ltd. Vs.Jidnyasa Co-op. Housing Society Ltd. (supra) and also the judgment of the Supreme Court in the case of Duro Felguera Vs. Gangavaram Port Ltd. (supra) and also by the judgments of several High Courts having taken the same view.
33. Learned senior counsel distinguishes the judgments relied upon by Mr.Cama, learned senior counsel for the respondent nos.1 & 3 and Mr.Nevagi on the ground that none of those decisions are applicable to the present case since there is an express agreement to make the amended law applicable recorded in Clause 12 of the Memorandum of Family Arrangement. He submits that the respondent nos.1 & 3 have fairly conceded that the decision of this Court in the case of Rendezvous Sports World Vs. The Board of Control for Cricket in India, reported in 2016 SCC OnLine Bom 6064 as well as in the case of Enercon GmBH Vs. Yogesh Mehra reported in 2017 SCC OnLine Bom 1744 is that Arbitration and Conciliation (Amendment) Act, 2015 is also applicable to the Court proceedings filed before 23rd October 2015.
34. In so far as the judgment of the Supreme Court in the case of Jayatilal Ramanlal relied upon by the learned counsel for the respondent nos.1 & 3 is concerned, Mr. Dhond, learned senior counsel for the ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 18 arbp-9.15(j).doc petitioner submitted that the said judgment merely states that in matters of taxation, in the interests of economic uniformity, it is desirable that where decisions of other High Courts had taken a consistent view than that should be followed. He submits that the said judgment cannot be applied as binding precedent to follow conflicting decisions of other High Courts in the cases other than the matters of taxation and that also when binding decisions of Supreme Court and this Court are available.
35. It is submitted by the learned senior counsel that the petitioner in this case seeks to set aside Memorandum of Family Arrangement in arbitration as she has been fraudulently induced to agree upon the terms thereunder. There is no question/issue as to enforceability of the said agreement. The issue raised by the respondent nos.1 & 3 is that it is not enforceable as there has been a full and final satisfaction of the said agreement cannot be examined by this Court in these proceedings in view of limited scope of enquiry under Section 11 (6-A) of the Arbitration and Conciliation Act, 1996.
36. In so far as the reliance is placed on the judgment of the Supreme Court in the case of Kale & Ors. Vs.Deputy Director of Consolidation & Ors. (supra) relied upon by Mr.Nevagi, learned counsel for the respondent nos.1 & 3 is concerned, learned senior counsel for the petitioner submits that Supreme Court in the said judgment has held that any such settlement arrived at in the family arrangement must be voluntary and should not be induced by fraud, coercion or undue influence. He submits that it is consistent stand of the petitioner that the said agreement was executed on the basis of fraudulent misrepresentation ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 19 arbp-9.15(j).doc set out in this petition. He submits that issue as to whether the petitioner is estopped from challenging the said agreement which has to be decided by the arbitrator and cannot be examined by this Court in view of limited enquiry under Section 11(6-A) of the Arbitration and Conciliation Act, 1996.
37. In so far as the judgment of the Supreme Court in the case of A.Ayyasamy Vs.A.Paramasivam & Ors. (supra) relied upon by the learned senior counsel for the respondent nos.1 & 3 is concerned, Supreme Court in the said judgment has held that only where serious issues of fraud involving criminal wrongdoing are involved can a dispute not be referred to arbitration. He submits that in this case, the fraud as alleged by the petitioner is simply that the petitioner was fraudulently and dishonestly induced to execute the said agreement. There are no serious issues of fraud involving any criminal wrongdoing with respect to those fraudulent misrepresentation made by the respondent no.1 or the respondent no.4.
38. In so far as the civil application filed by the respondent no.1 is concerned, learned senior counsel for the petitioner opposes the said civil application on various grounds including on the ground that this arbitration petition is pending in this Court since 2014 and has been adjourned from time to time for the reasons attributable to the respondent nos.1 to 3. No such documents were relied upon by the respondent nos.1 to 3 at any point of time though detailed affidavits are filed by them. He submits that in any event, the factual dispute raised by the respondent no.1 in the affidavits and in the said civil application cannot be gone into by this Court in view of the limited scope of ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 20 arbp-9.15(j).doc enquiry permissible under Section 11 (6-A) of the Arbitration and Conciliation Act, 1996.
39. Learned counsel appearing for the respondent no.2 adopts the submission made by Mr.Cama, learned senior counsel and Mr.Nevagi, learned counsel for the respondent nos.1 & 3. In addition to the arguments of the respondent nos.1 and 3, he made an attempt to distinguish the judgment of the Supreme Court in the case of Duro Felguera Vs. Gangavaram Port Ltd. (supra) on the ground that the facts before the Supreme Court in the said judgment were totally different. Mr.Kapadia, learned counsel for the respondent no.4 supports the case of the petitioner and invited my attention to various averments made in the affidavit-in-reply filed by his client supporting the case of the petitioner.
REASONS AND CONCLUSIONS :-
40. Clause 12 of the Memorandum of Family Arrangement dated 8th January, 2006 provides that the dispute, if any, among the parties to the said agreement shall be settled by process of arbitration as contemplated in the Arbitration & Conciliation Act, 1996 or any other statutory modification thereof. A perusal of the correspondence exchanged between the parties clearly indicates that the respondent nos.1 and 3 had suggested the names of a retired Chief Justice of India and another retired Judge of the Supreme Court as the arbitrators. The petitioner on the other hand had suggested the name of Shri Justice P.K. Balsubramanian, a former Chief Justice of the Jharkhand High Court as the sole arbitrator. There was no consensus on the name of the learned arbitrator suggested by the parties. However, at the later stage when the petitioner once again suggested the ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 21 arbp-9.15(j).doc name of Shri Justice P.K. Balsubramanian (Retd.) as the sole arbitrator, the respondent nos.1 and 3 informed the petitioner that they had obtained a legal opinion from a former Judge of the Supreme Court of India who had opined that the said agreement entered into between the parties was already acted upon and nothing therein was to be arbitrated upon and thus based on such opinion obtained by the respondent nos.1 and 3, they refused to accept the name of the learned arbitrator suggested by the petitioner or did not suggest any other arbitrator. It is thus clear beyond reasonable doubt that the existence of the arbitration clause recorded in clause 12 of the said Memorandum of Family Arrangement entered into between the parties is not disputed by any of the respondents.
41. The question that arises for consideration of this Court in this petition is whether various issues raised by the respondent nos.1 to 3 in the affidavits in reply filed in this proceeding, including the issue as to whether there was accord and satisfaction between the parties in view of the petitioner having allegedly accepted what was due and payable to the petitioner under the said agreement and as to whether the allegations of fraud made by the petitioner in execution of the Memorandum of Family Arrangement could be at all referred to arbitration or not. The question also arises for consideration of this Court is whether the provision of section 11(6-A) of the Arbitration & Conciliation Act, 1996 inserted by the Arbitration & Conciliation (Amendment) Act, 2015 would apply to the arbitration proceedings commenced by virtue of a notice issued by the petitioner invoking the arbitration agreement and the arbitration petition filed under section 11(6) of the Arbitration & Conciliation Act, 1996 having been pending on the date of such provision i.e. section 11(6-A) of ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 22 arbp-9.15(j).doc the Arbitration & Conciliation Act, 1996 having been brought into effect or not.
42. The Supreme Court in case of Thyssen Stahlunion GMBH (supra) has construed the provisions of section 85(2)(a) of the Arbitration & Conciliation Act, 1996 and has held that the parties can agree to the applicability of the new Act even before the new Act comes into force and when the old Act is still holding the field. There is nothing in the language of section 85(2)(a) which bars the parties from so agreeing. There is, however, a bar that he cannot agree to the applicability of the old Act after the new Act has come into force when the arbitral proceedings under the old Act have not commenced though the arbitration agreement was under the old Act. The Supreme Court rejected the submission of the respondent therein that the parties could not have agreed to the application of the new Act till they knew the provisions thereof and that would mean that any such agreement as mentioned in the arbitration clause would be entered into only after the new Act had come into force. The Supreme Court held that when the agreement uses the expression "unless otherwise agree" and "law in force", it does give an option to the parties that new Act would apply to the pending arbitration proceedings. That agreement can be entered into even before the new Act comes into force and it cannot be said that the agreement has to be entered into only after coming into force of the new Act.
43. It is not in dispute that section 11(6-A) was inserted by the Act 3 of 2016 with effect from 23rd October, 2015. It is not in dispute that when the said provisions was inserted, this arbitration petition filed by the ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 23 arbp-9.15(j).doc petitioner under section 11(6) of the Arbitration & Conciliation Act, 1996 was already pending before this Court and is still pending.
44. Section 26 of the Arbitration & Conciliation (Amendment) Act, 2015 reads as under :-
"26. Act not to apply to pending arbitral proceedings. - Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act."
45. A perusal of section 26 of the Arbitration & Conciliation (Amendment) Act, 2015 clearly indicates that the said provision is a non- obstante provision. It is clear that if parties agree that the provisions contained in the said Arbitration & Conciliation (Amendment) Act, 2015 shall also apply to the arbitral proceedings commenced in accordance with the provisions of section 21 of the Arbitration & Conciliation Act, 1996, the said amended provision would apply to such proceedings commenced earlier, otherwise the Arbitration & Conciliation (Amendment) Act, 2015 shall apply in relation to the arbitral proceedings on or after the date of commencement of the Arbitration & Conciliation (Amendment) Act, 2015. It is not the case of the respondents that there is no agreement between the parties that the parties will not be governed by any statutory amendment, repeal of the provisions of the Arbitration & Conciliation Act, 1996. In my view, in view of section 26 of the Arbitration & Conciliation (Amendment) Act, 2015 and in view of the specific agreement between the parties that the disputes will be settled not only in accordance with the provisions of the Arbitration & Conciliation ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 24 arbp-9.15(j).doc Act, 1996 prevailing on the date of the execution of the said agreement but also any statutory modifications thereof, the parties in this case would be governed by the provisions of the Arbitration & Conciliation (Amendment) Act, 2015 also including section 11(6-A) of the Arbitration & Conciliation (Amendment) Act, 2015.
46. This Court in case of M/s.Amisha Buildcon Pvt. Ltd. (supra) has considered this issue and has held that under section 11(6-A) of the Arbitration & Conciliation (Amendment) Act, 2015, the Court while appointing an arbitrator under section 11 has to confine to the examination of the existence of the arbitration agreement. This Court appointed the arbitrator having found that there was no dispute about the existence of the arbitration agreement between the parties and held that the issue of arbitrability raised by the respondents cannot be decided by this Court under section 11(6) of the Arbitration & Conciliation Act, 1996 and the same can be decided by the learned arbitrator as and when the statement of claim is filed by the claimant. In my view, the said judgment of this Court would clearly apply to the facts of this case. I am respectfully bound by the said judgment.
47. This Court in case of Vipin Bhimlal Shah Vs. Slum Rehabilitation Authority in Arbitration Application No.251 of 2015 delivered on 12th October, 2017 has construed the section 11(6-A) of the Arbitration & Conciliation Act, 1996 inserted by the Arbitration & Conciliation (Amendment) Act, 2015 and has taken a similar view. The said judgment also applies to the facts of this case. I am bound by the said judgment.
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48. Supreme Court in case of Duro Felguera, S.A.(supra) has considered the provisions of section 11(6) and also section 11(6-A) which was inserted on the Arbitration and Conciliation (Amendment) Act, 2015. It is held by the Supreme Court that under section 11(6-A), power of the court is confined only to examine the existence of the arbitration agreement. The principles laid down in the said judgment squarely applies to the facts of this case. I am respectfully bound by the said principles.
49. Meghalaya High Court in case of Shri Sunil Sharma vs. The Union of India and others, 2017 SCC OnLine Megh 152 has considered the provisions of section 11(6-A) of the Arbitration Act and held that in view of the said provision, the powers of Court in an application filed under section 11(6) is confined to the extent, as to whether there exist an arbitration agreement between the parties or not. In my view the judgment of Meghalaya High Court in case of Shri Sunil Sharma (supra) applies to the facts of this case. I am in agreement with the views expressed by the Meghalaya High Court.
50. Delhi High Court in case of Jindal Stainless Limited vs. Damco India Private Ltd., 2016 SCC OnLine Del 6368 has while considering an application under section 11(6) of the Arbitration Act and also while considering an issue as to whether the contract was no longer in existence and the arbitration clause had also perished by 'accord and satisfaction' held that in view of the introduction of sub-section 6A in section 11 of the Arbitration Act by virtue of Arbitration and Conciliation (Amendment) Act, 2015, the scope of examination is now confined only to the existence of the arbitration agreement. In the said matter also, the ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 26 arbp-9.15(j).doc existence of the arbitration agreement was not disputed. Delhi High Court rejected the contention of the respondent therein that the question as to the legality and validity of the arbitration agreement must be decided by the Court while appointing an arbitrator. It is also held that the earlier decisions to the said effects are no longer applicable because by virtue of section 11(6A) of the Act, the role of the Court while considering an application under section 11 is now confined to examining the existence of the arbitration agreement. In my view the judgment of Delhi High Court in case of Jindal Stainless Limited (supra) squarely applies to the facts of this case. I am in agreement with the views expressed by the Delhi High Court.
51. Delhi High Court in case of Picasso Digital Media Pvt. Ltd. vs. Pick-A-Cent Consultancy Service Pvt.Ltd., 2016 SCC OnLine Del 5581 has considered an application under section 11(6) of the Arbitration Act and also dealt with the issue raised by the respondent that the petitioner had played a fraud on the respondent by making a misrepresentation and thus appropriate Forum for resolution of such dispute was the court and the dispute cannot be referred to arbitration.
52. Delhi High Court considered section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015 and held that the examination by the Court is as far as the said petition was concerned has to be confined to the question whether there exists an arbitration agreement between the parties or not. The respondent in that case also had not denied the fact that the party had entered into MoU containing an arbitration clause. Delhi High Court therefore, could not at that stage examine whether the respondent had a justified claim against the ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 27 arbp-9.15(j).doc petitioner as a result of the respondent contending that the misrepresentation made by the petitioner led to the execution of the Agreement. It is held that such a question will be examined in the arbitration proceedings. Delhi High Court accordingly appointed an arbitrator, without expressing any opinion on the contentions on merits of either party. In my view, the said judgment of Delhi High Court in case of Picasso Digital Media Pvt. Ltd. (supra) squarely applies to the facts of this case. I am in agreement with the views expressed by Delhi High Court in the said judgment.
53. Madhya Pradesh High Court in case of Proprietor M/s.Goyal and Company vs. General Manager Union Bank of India and Anr., 2016 SCC OnLine MP 8214 has while considering an application under section 11(6) of the Arbitration and Conciliation Act, 1996, also considered the provisions of section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015. In that matter, the petitioner had filed an application under section 11 of the Arbitration Act before the District Judge instead of filing such an application before the High Court. The said application was rejected by the District Court. The petitioner thereafter had filed a writ petition before the High Court. High Court held that in view of judgment of Supreme Court in case of SBP & Company vs. Patel Engineering Ltd. (supra) the applicant shall file an application under section 11(6) of the Arbitration Act before the designate Judge of the High Court.
54. Madhya Pradesh High Court held that since there was no dispute that the arbitration agreement was arrived at between the parties, ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 28 arbp-9.15(j).doc in terms of section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015, at this stage, the issue is confined to the examination of the existence of the arbitration agreement. This court held that in view of the said provision, an independent arbitrator needs to be appointed to resolve the dispute between the parties. High Court however made it clear that it would be open to the respondent to raise all legally permitted objections before the arbitrator including the objection relating to non arbitrability of dispute and failure of the applicant to act in terms of the arbitration clause. In my view, the said judgment of Madhya Pradesh High Court in case of Proprietor M/s.Goyal and Company (supra) would squarely applies to the facts of this case. I am in agreement with the views expressed by the Madhya Pradesh High Court.
55. Learned Single Judge of this court in case of Rendezvous Sports World Vs. The Board of Control for Cricket in India (supra) in three chamber summons seeking dismissal of the application of execution of the arbitral awards considered the effect of the amendment to section 36 of the Arbitration and Conciliation (Amendment) Act, 2015 and various other provisions of the Arbitration and Conciliation Act, 1996. This Court also considered section 26 of the Arbitration and Conciliation (Amendment) Act, 2015. Learned Single Judge held that amended section 36 of the Arbitration Act cannot be said to operate retrospectively, its operation is prospective in nature. It is held that under the original section 36, filing of an application under Section 34 had the effect of casting shadow upon the executability of the award. This act of the the award-debtor disabled the award-holder from executing the award in his favour irrespective of the merit in the challenge.
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56. It is held that there could be no question of any right accruing to the award-debtor by filing the application under Section 34. The Amended Section 36 lifts the shadow over the right of the award- holder. His disability gets removed. At the same time, the application under Section 34 of the award-debtor remains intact. The provision enables the award-debtor to apply to the Court for make the award in- executable pending his application. His right to apply for interim relief during the pendency of the application under Section 34 is not affected in any way. The amending Act brings in balance between the rights and liabilities of both the sides. The ambit and scope of the Amended Section 36, is to cure the defect by removing the imbalance.
57. It is held that thus the application of the provision on the petitions under Section 34 pending on 23rd October, 2015, is prospective. It makes no difference if the application under Section 34 filed by the award-debtor was prior to 23rd October, 2015. Removal of shadow over the rights of the award-holder cannot be said to be prejudicial to the award-debtor. He has to now only file an application for interim reliefs, which may or may not, be subject to imposition of condition. It is held that the vested right of the award-debtor under section 34 of the Arbitration Act is unaffected by the amendment to section 36 of the Arbitration Act.
58. Learned Single Judge of this Court in case of Yogesh Mehra vs.Enercon GmBH and others connected matters (supra) has considered the similar chamber summons for dismissal of the execution application arising out of arbitral awards. This Court considered a similar situation ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 30 arbp-9.15(j).doc and held that it is the new Act alone that would apply. Learned Single Judge of this court in the said judgment followed the earlier judgment delivered by the learned Single Judge of this Court in case of Rendezvous Sports World Vs. The Board of Control for Cricket in India (supra).
59. Calcutta High Court in case of Sri.Tufan Chatterjee vs. Sri.Rangan Dhar 2016 SCC OnLine Cal 483 which judgment is relied upon by the learned counsel for the respondent nos.1, 2 and 3 has interpreted the provisions of section 26 of the Amendment Act and also Sections 32, 85 and 9 thereof. Calcutta High Court also considered the fact that the respondents therein had filed an application seeking dismissal of the application of the appellant under section 9 of the Arbitration Act, 1996 in view of the amendment of section 9 by the Amendment Act of 2015 and held that there is significant difference between the language of Section 85(2)(a) of the Arbitration Act and Section 26 of the Arbitration and Conciliation (Amendment) Act 2015. It is held that Section 85(2)(a) makes the provisions of the repealed enactments applicable "in relation to" arbitral proceedings, whereas Section 26 of the Amendment Act of 2015, which reads "nothing in this Section shall apply to the arbitral proceedings", restricts the applicability of the Amendment Act of 2015 to arbitral proceedings which commenced before the commencement of the said Act. The crucial difference is in the words "in relation to" in Section 85 (2) (a) of the 1996 Act which are not there in Section 26 of the Amendment Act of 2015.
60. Insofar as judgment of the Calcutta High Court in case of M/s.Reliance Capital Limited vs. Chandana Creations & Ors.(supra) ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 31 arbp-9.15(j).doc relied upon by the learned counsel for the respondent nos.1 to 3 is concerned, section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 after construing it is held that the bare look of the said provision gives an impression that the arbitral proceedings which commenced before coming in the said amended Act shall still be regulated and guided by the unamended provisions unless the parties agree that the amended provisions would apply. The Calcutta High Court in the said judgment adjourned the execution application sine-die on the ground that the application under section 34 of the Arbitration Act was filed before coming into force of the Arbitration and Conciliation (Amendment) Act, 2015 and held that the execution application could not be proceeded with despite the fact that there was no express order of stay passed by the competent court. I am in agreement with the views of the Calcutta High Court holding that unless the parties agree that the amended provisions would apply, section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 gives an impression that the arbitration proceedings which commenced before coming into the said amended provisions, shall still be regulated and guided by the unamended provisions. It is not in dispute that in this case, the arbitration agreement entered into between the parties clearly recorded that the parties will be governed by not only the provisions of Arbitration and Conciliation Act, 1996 but also by the statutory amendment thereto. In view of such specific agreement between the parties, in my view even if the notice invoking arbitration agreement was issued prior to 23 rd October,2015 and an application under section 11(6) of the Arbitration Act was filed prior to the date of such amendment and is pending since then would be governed by the provisions of the Arbitration and Conciliation (Amendment) Act, ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 32 arbp-9.15(j).doc 2015 and more particularly section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015 and thus powers of court is confined to the examination of the existence of the arbitration agreement only.
61. Insofar as judgment of Calcutta High Court in case of Saraf Agencies Pvt. Ltd. & Anr.(supra) relied upon by the learned counsel for the respondent nos. 1 to 3 is concerned, the Calcutta High Court had considered an application under section 34 of the Arbitration and Conciliation Act, 1996 thereby impugning an interim award. Calcutta High Court in the said judgment held that the right of a party under given conditions to challenge the award upto the highest level, is a vested right which vested in the parties when a request was made under Section 21 of the Act to refer the dispute to arbitration. The Amendment Act did not take away this right by any express terms. It is held that the right and remedy are preserved under Clause-6 of the General Clauses Act, 1897. In the said matter before the Calcutta High Court, the Court did not consider the arbitration agreement similar to the arbitration agreement recorded in this case which specifically recorded that the parties would be governed by the provisions of the Arbitration and Conciliation Act, 1996 and also would be governed by any statutory amendment or thereto. The said judgment relied upon by the learned counsel for the respondent nos. 1 to 3 is thus clearly distinguishable in the facts of this case.
62. Insofar as judgment of Calcutta High Court in case of West Bengal Power Development Corporation Ltd. (supra) delivered by the learned Single Judge of Calcutta High Court is concerned, Calcutta High ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 33 arbp-9.15(j).doc Court considered an application challenging an award under section 34 of the Arbitration and Conciliation Act after the Arbitration and Conciliation (Amendment) Act, 2015 came into force though the arbitration proceedings had commenced as far back as on 23 rd October,2015. It is held that the law prevailing at the time of commencement of the arbitration will apply till the disposal of the setting aside application at the highest level. The amending Act of 2015 did not alter any vested substantive right. It is accordingly held that the right of the petitioner in arbitration which commenced before the coming into force of the amending Act, to challenge the award without any condition is preserved by the amendment Act. The Calcutta High Court in the said judgment also did not consider the agreement between the parties similar to the arbitration agreement in this case. The said judgment relied upon by the learned counsel for the respondent nos.1 to 3 is thus clearly distinguishable in the facts of this case and would not assist the case of the respondent nos.1 to 3.
63. Insofar as judgment delivered by the Division Bench of Delhi High Court in case of Ardee Infrastructure Pvt.Ltd. (supra) relied upon by the learned counsel for the respondent nos. 1 to 3 is concerned, the said proceeding was challenging an award dated 13th October,2015 and was filed on 4th January,2016. The learned Single Judge had directed the appellant to deposit certain amounts for granting stay of the impugned award. Delhi High Court did not agree with the views expressed by the Calcutta High Court in case of Sri.Tufan Chatterjee (supra) and held that section 26 of the Amending Act, if a narrow view of the expression "to the arbitral proceedings" is to be taken, is silent on those categories of ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 34 arbp-9.15(j).doc cases where the arbitral proceedings commenced prior to 23rd October, 2015 and where even the award was made prior to 23rd October, 2015, but where either a petition under Section 34 was under contemplation or was already pending on 23rd October, 2015, in such eventuality, the amended provisions pertaining to those categories would apply only if they were merely procedural and did not affect any accrued right.
64. In the said matter, it is held that the proceedings under section 34 would have to be considered under the unamended provisions of the Arbitration and Conciliation Act, 1996. A perusal of the judgment clearly indicates that the Delhi High Court did not consider the arbitration agreement similar to the arbitration agreement entered into between the parties to this application. In my view, the judgment of Delhi High Court in the said judgment is thus clearly distinguishable in the facts of this case and would not assist the case of the respondent nos. 1 to 3. In my view, the principles laid down by the Supreme Court in case of Thyssen Stahlunion GmBH (supra) would apply to the facts of this case.
65. Insofar as Calcutta High Court in case of Electrosteel Castings Limited Vs. Reacon Engineers (India) Private Limited, reported in 2016 SCC OnLine Cal 1257 relied upon by the learned counsel for the respondent nos. 1 to 3 is concerned, the Calcutta High Court had considered the effect of section 19(2) of the Arbitration and Conciliation (Amendment) Act, 2015. The arbitral award in that matter was published on 30th July, 2015. The arbitration application was filed on 26th November,2015 i.e. after amending Act came into force. The Calcutta High Court construed section 19(2) of the Amendment Act and ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 35 arbp-9.15(j).doc also section 36 and held that section 36 only stipulated that an award would be enforced in accordance with the Code of Civil Procedure. There is nothing in the Chapter relating to execution in the Civil Procedure Code which provides for taking security from a judgment debtor. It is held that the repeal and savings clause of the Amendment Act of 2015 did not make applicable the amendment Act in case of arbitration which commenced before its enactment. It is held that the subject arbitration commenced much prior to coming into force of the Amendment Act, nothing in it applies to the subject arbitration.
66. The Calcutta High Court held that the law in force before 31st December, 2015 did not recognize taking of security from the award debtor for staying of operation of the award. The award was stayed automatically upon "making" of the application to set aside the award. In my view in the said judgment, the Calcutta High Court had not considered the arbitration agreement similar to the arbitration agreement entered into between the parties in this case. The said judgment is thus clearly distinguishable in the facts of this case and does not assist the case of the respondent nos.1 to 3.
67. This Court in case of The Board of Trustees of Port of Mumbai vs. Afcons Infrastructure Limited 2016 SCC OnLine Bom 10037 and in particular paragraph 289 thereof has considered the provisions of amended section 34 of the Arbitration and Conciliation Act 1996 amended by the Arbitration and Conciliation (Amendment) Act, 2015 to an application filed under unamended section 34 of the Arbitration Act. In that matter, this court rejected the argument of the ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 36 arbp-9.15(j).doc respondent that the additional grounds inserted in section 34 under Arbitration and Conciliation (Amendment) Act, 2015 would be applicable to the pending petitions as on 23 rd October,2015 or thereafter on the ground that in that matter the parties did not agree that the parties would be governed by the provisions of any statutory amendment to the provisions of Arbitration and Conciliation Act, 1996. This Court held that in view of there being no such agreement to the agreement between the parties to be governed by the amendment to the Arbitration and Conciliation Act, 1996, or repeal thereto the provisions of the amended section 34 brought into effect on 23rd October,2015 would not be applicable to the facts of that case. The principles of law laid down by this Court in case of The Board of Trustees of Port of Mumbai (supra) would squarely applies to the facts of this case. In this case, the parties have specifically agreed that the parties would be governed by the provisions of the Arbitration and Conciliation Act, 1996 and also the statutory modification thereto or repeal thereof.
68. Insofar as judgment delivered by the Division Bench of this Court in case of Commissioner of Income-Tax, Bombay City-II (supra) relied upon by the learned counsel for the respondent nos. 1 to 3 in support of the submission that the decision of the other High Court taking a different view than the view taken by this court also can be followed for the sake of uniformity is concerned, a perusal of the said judgment clearly indicates that the said judgment was delivered in income tax reference filed by the Commissioner of Income Tax against an assessee. No binding judgments of this court were cited before the Division Bench. The appellant had referred to and relied upon on the Full Bench decision ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 37 arbp-9.15(j).doc of Kerala High Court which was subsequently followed by the judgment of Punjab and Haryana High Court.
69. The Division Bench of this Court held that it is a well settled practice of this court atleast as far as income tax law is concerned, that decision of the other High Court ought to have been followed for the sake of uniformity. This court observed that the Court is aware that the practice is not uniform among the High Courts, but nevertheless the Court is of the opinion that it is desirable one. Unless the judgment of another High Court dealing with an identical or comparable provision can be regarded as per incurium, it should ordinarily be followed. In my view, the said judgment of the Division Bench is delivered in an income tax matter considering income tax law and more particularly when there were no binding judgments of this court were pointed out. The principles of law laid down by this Court considering the provisions of Income Tax Act in these circumstances cannot be extended to the facts of this case.
70. In this case, the Supreme Court as well as this court has already interpreted section 11(6-A) and other provisions of the Arbitration and Conciliation (Amendment) Act, 2015 and thus this Court is not bound to follow the judgment of other High Courts taking a different view. This Court however has taken into consideration the judgment of other High Court which views are consistent with the views taken by this Court. Be that as it may, each and every judgment relied upon by the learned counsel for the respondent nos. 1 to 3 are clearly distinguishable in the facts of this case and do not assist the case of the respondents.
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71. Insofar as judgment of Supreme Court in case of A.Ayaswami vs. A.Paramasivan & Ors., (supra) relied upon by the respondent nos.1 to 3 is concerned, in my view the said judgment also would not assist the case of the respondent nos.1 to 3 in view of the specific wordings in section 11(6-A) that notwithstanding any judgment, decree or order of any court, the Supreme Court or the High Court while considering any application under sub-section 4 or sub-section 5 or sub- section 6 confined to the examination of the existence of an arbitration agreement. Supreme Court in the said judgment was not considering the effect of section 11(6-A) of the Arbitration and Conciliation(Amendment) Act, 2015. Be that as it may, the nature of the allegations of fabrication etc. made by the applicant in the correspondence or in the arbitration application does not require any meticulous enquiry or that there is no serious issue of fraud involveding criminal wrongdoing that the exception to arbitrability carved out in case of N.Radhakrishnan vs. Maestro Engineers & Ors. (2010) 1 SCC 72 may come into existence. In any event, the issue of arbitrability has to be decided only by the arbitral tribunal and not by this court while entertaining an application under section 11(6) of the Arbitration and Conciliation Act, 1996 in view of section 11(6-A) of the Act. The judgment of Supreme Court in case of A. Ayyasamy (supra) would not assist the case of the respondent nos.1 to 3.
72. In view of the specific agreement between the parties that the parties would be governed by the provisions of Arbitration and Conciliation Act and statutory modification thereof, even though the notice invoking arbitration agreement under section 21 was already issued, prior to 23rd October,2015 and though this arbitration application ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 39 arbp-9.15(j).doc filed under section 11(6) was already pending on 23 rd October,2015 and even thereafter, section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015 would apply to the parties. This Court thus cannot go into the issue of arbitrability and several other issues raised by the respondent nos. 1 to 3 and also by the applicant touching the merits or otherwise and the same can be decided only by the arbitral tribunal. I am bound by the principles of law laid down by the Supreme Court and this court in number of judgments referred to aforesaid which are relevant and are applicable to the facts of this case.
73. This court has accordingly not expressed any views on the other issues raised by the parties and has confined itself only to the fact that the arbitration agreement exist between the parties and the same is not disputed. The parties had in-fact had exchanged the names of the arbitrators but could not arrive at any consensus on the name. Various issues raised by the respondent nos.1 to 3 while refusing to refer the dispute to the arbitration are after thought. In any event such issue cannot be gone into by this Court having limited powers in view of section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015.
74. Insofar as the submission of the learned counsel for the respondent nos.1 and 3 that the respondent no.5 is allegedly an insane person and thus unless the next friend of the respondent no.5 is appointed by this Court, the proceedings cannot be allowed to be proceeded with is concerned, the papers and proceedings are already served upon the respondent no.5. Learned counsel for the respondent nos.1 and 3 could not produce any proof in support of his allegation that the respondent ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 40 arbp-9.15(j).doc no.5 is an insane person and thus the next friend of the respondent no.5 is required to be appointed by this Court. There is thus no substance in this submission made by the learned counsel for the respondent nos.1 and 3.
75. Insofar as the prayers in the Civil Application No. 7 of 2017 filed by the respondent no.1 for seeking permission to rely upon additional documents annexed to the civil application are concerned, in my view said application is thoroughly misconceived and is filed after expiry of about three years. Be that as it may, the respondent nos. 1 to 3 can always rely upon such documents before the arbitral tribunal subject to the admissibility, proof and relevance thereof and thus cannot be considered by this court, which are relied upon by the respondent no.1 in support of issues other than the issue of existence of the arbitration agreement and touching the merits of the matter. The applicant has rightly opposed this civil application on various grounds. In my view the civil application is thus without any merit subject to the aforesaid clarification and thus no relief can be granted in favour of the respondent no.1 in this civil application.
76. In my view, the arbitration agreement exist and thus this application filed under section 11(6) of the Arbitration and Conciliation Act, 1996 is maintainable. The applicant is entitled to get an arbitrator appointed under the arbitration agreement arrived at between the parties.
77. I therefore pass the following order :-
(i) I propose to appoint Shri Justice Anoop V.Mohta, a former Judge of this Court as the sole arbitrator in this matter. The learned prospective ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 ::: ppn 41 arbp-9.15(j).doc arbitrator shall file disclosure statement in terms of section 11(8) read with 12(1) of the Arbitration and Conciliation Act, 1996 within two weeks from the date of communication of this order.
(ii) Place the matter on board for directions after two weeks.
(R.D. DHANUKA, J.) ::: Uploaded on - 10/01/2018 ::: Downloaded on - 11/01/2018 02:18:56 :::