Delhi High Court - Orders
Yogesh Jain vs Rakesh Jain on 7 January, 2021
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~14(original side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. 9/2020 & I.A. 12414/2020, I.A. 12415/2020
YOGESH JAIN ..... Petitioner
Through: Mr. Avadh Kaushik, Adv.
versus
RAKESH JAIN ..... Respondent
Through: None
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
ORDER
% 07.01.2021
(Video-Conferencing)
I.A. 12414/2020 (Exemption) in O.M.P. 9/2020
1. Subject to the petitioner's filing of legible copies of dim documents as well as certified copies thereof, on which he seeks to rely, within a period of two weeks from today, exemption is granted for the present.
2. The application stands disposed of in the above terms.
O.M.P. 9/2020 & I.A. 12415/2020 (Under Section 151 r/w Section 36 (3) of the Arbitration & Conciliation Act, 1996)
1. Issue notice in O.M.P. 9/2020 as well as in I.A. 12415/2020 (stay) returnable on 19th April, 2021.
2. Counter affidavit to the main petition as well as reply to the stay application, if any, be filed within four weeks, with advance copy to learned counsel for the petitioner, who may file rejoinder thereto, if any, within two weeks thereof.
Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 1 of 9 Signing Date:08.01.2021 21:07:093. Mr. Avadh Kaushik, learned counsel for the petitioner, seeks ad interim stay of the arbitral proceeds pending before the learned sole Arbitrator.
4. It is necessary to set out, in brief, the sequence of events which have led to the passing of the impugned award dated 10th October, 2020, by the learned Sole Arbitrator as under:
(i) The petitioner and the respondent are brothers.
(ii) According to the petitioner, Mr. Onkar Mal Jain, who is presently adjudicating on the disputes between the petitioner and the respondent as a sole arbitrator, was appointed as a Mediator, to mediate between the parties. It may be noted that, vide the judgment dated 18th April, 2017, a Coordinate Bench of this Court, of Hon'ble Mr. Justice S. Murlidhar (as he then was), specifically negatived this plea of the petitioner and held that there was a valid arbitration agreement involving the petitioner and that, Mr. Onkar Mal Jain was appointed by the parties as arbitrator. Mr. Avadh Kaushik submits that an appeal, against the said judgment, is presently pending before the Division Bench of this Court. However, for the sake of convenience, Mr. Onkar Mal Jain shall be referred to hereinafter in this order as "the learned sole arbitrator", though the use of this appellation in the present order shall not derogate from the case of the petitioner, in the appeal pending before the Division Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 2 of 9 Signing Date:08.01.2021 21:07:09 Bench.
(iii) For eight years, till 2010, the petition alleges that, there was no communication from the learned sole arbitrator. During this period, the petition alleges that, the respondent filed a statement of claim before the learned sole arbitrator on 31st March, 2008, though no copy thereof was made available to the petitioner and that, on 9th May, 2008, on the unilateral request of the respondent Rakesh Jain, the learned sole arbitrator decided to proceed with bidding for sale of the properties of the parties, following which, on 19th September, 2009, the properties were given to the respondent against a token consideration of ₹ 1, without valuation and without adjudication of the competing liabilities.
(iv) According to the recitals in the petition, on 1st April, 2010, the learned sole arbitrator passed an interim award against which the petitioner and his wife Ms. Preeti Jain preferred OMP 455/2012, under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act"), before this Court. Mr. Apoorv Jain, the son of the petitioner, also filed a similar challenge against the interim award dated 1st April, 2010, vide OMP 688/2012.
(v) OMP 455/2012 was dismissed, vide judgment dated 18th April, 2017, to which reference has already been made hereinabove, as barred by time. Nevertheless, in the body of the Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 3 of 9 Signing Date:08.01.2021 21:07:09 judgment, the learned Single Judge held that there was a valid subsisting arbitration agreement between the petitioner and the respondent and that the appointment of the learned sole arbitrator was a valid appointment. As noted hereinabove, the aforesaid judgment dated 18th April, 2017, of the learned sole arbitrator in OMP 455/2012 was assailed, by the petitioner, by way of FAO(OS) 148/2017, which is presently pending before this Court.
(vi) The petitioner submits that vide letter dated 28th April, 2018, the learned sole arbitrator recommenced the arbitral proceedings, and directed the parties to file their respective claims, post the passing, by him, of the interim award dated 1st April, 2010. Consequent thereupon, the respondent Rakesh Jain filed his second statement of claim on 28th May, 2018.
(vii) On 18th September, 2020, the petitioner moved an application before the learned sole arbitrator under Section 32 read with Section 16 of the 1996 Act, seeking termination of the arbitral proceedings being conducted by the learned sole arbitrator. Reliance was placed, by the petitioner on the judgment of a learned Single Judge of this Court in Usha Chatrath v. J. B. Kohli1. It was contended by the petitioner, in the said application, relying on the judgment in Usha Chatrath1, that, consequent to the passing of the interim award dated 1st April, 2010, after bidding had been conducted in 1 MANU/DE/1856/2019 Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 4 of 9 Signing Date:08.01.2021 21:07:09 respect of the properties in disputes by the learned sole arbitrator, the mandate of the learned sole arbitrator terminated and that, the order was, in fact, in the nature of a final adjudication of the claims of the parties. As such, the petitioner submitted that the learned sole arbitrator was completely unjustified in seeking to re-open the proceedings eight years later on 28th April, 2018. As such, the application called upon the learned sole arbitrator not to continue with the arbitral proceedings as they already stood terminated by operation of law.
(viii) The aforesaid application of the petitioner stands rejected by the learned sole arbitrator by the impugned letter dated 10th October, 2020, which reads thus:
Dated: 10th October 2020 From: ONKAR MAL JAIN, ARBITRATOR ([email protected]) To, Mr. Yogesh Jain ([email protected]). Mr. Rakesh Jain ([email protected]).
In the matter of Arbitration BETWEEN Yogesh Jain AND Rakesh Jain I have received application from Yogesh Jain being ref no.VJ/31 dated 18.09.2020 seeking termination of the Arbitral Proceedings and reply thereto from Rakesh Jain being ref no. RJ-01 dated 26.09.2020 objecting to the application of Yogesh Jain and also to the termination of Arbitral Proceedings. No rejoinder to the reply of Rakesh Jain has been filed by Yogesh Jain.Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 5 of 9 Signing Date:08.01.2021 21:07:09
I have carefully gone through the application filed by Yogesh Jain, the reply filed by Rakesh Jain and Section 32 as well as Section 16 of the Arbitration and Conciliation Act, 1996 (as amended).
Section 32 contains a heading "Termination of Proceedings". Sub-section (1) provides that the arbitral proceedings shall be terminated by the final arbitral award or by an order of the Arbitral Tribunal under sub-section (2). Sub-section (2) enumerates the circumstances when the Arbitral Tribunal shall issue an order for the termination of the arbitral proceedings.
At this stage no final award has been passed, as envisaged in Section 32 (2)(a). Further, the situation as contemplated under 32(2)(b) are not attracted in the facts of this case. Therefore, no termination of the Arbitration proceedings can be granted under section 32(2)(a) or 32(2)(b).
Whether termination of proceedings in the present case can be treated to be covered by Section 32(2)(c) is the question to be considered. Clause (c) contemplates two grounds for termination i.e. (i) the Arbitral Tribunal finds that the continuation of the proceedings has for any other reason become unnecessary, or (ii) impossible. The present application also fails the test under section 32(2)(c) as the current proceedings have not become unnecessary or impossible.
Therefore, no case of termination of arbitration proceedings as contemplated in Section 32 of the Arbitration & Conciliation Act, 1996 is made out.
Now coming to Section 16 of the Arbitration & Conciliation Act, 1996, a similar challenge to the jurisdiction of this Tribunal was made by Yogesh Jain in the petition under section 34 of the Arbitration and Conciliation Act, 1996 before Hon'ble Delhi High Court bearing OMP No. 455 of 2012. The Hon'ble Delhi High Court vide its judgement dated 18.04.2017 has expressly negatived the contention of Yogesh Jain and has upheld the jurisdiction of this Tribunal to act as an arbitrator in the matter. Moreover, this challenge Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 6 of 9 Signing Date:08.01.2021 21:07:09 for the jurisdiction of the arbitrator has been made by Yogesh Jain at a very belated stage wherein one interim award and one interim order has already been passed by this Tribunal and has been acted upon.
In light of the above, I find no merit in the Application dated 18.09.2020 filed by Yogesh Jain seeking termination of the arbitral proceedings. Accordingly, the said Application is dismissed without any costs for the time being.
Parties are hereby warned that henceforth all the applications/petitions may be subjected to costs under Section 31A particularly the repetitive, manipulative, frivolous, non-bonafide or simply time-wasting applications/ petitions.
This email communication has been digitally signed below.
(ONKAR MAL JAIN- ARBITRATOR)"
5. A reading of the impugned letter reveals that there is no finding, by the learned sole arbitrator, on the specific submission, of the petitioner, that by operation of the judgment of this Court in Usha Chatrath (supra), the mandate of the the learned sole arbitrator stood terminated and that he could not, therefore, invite a second statement of claim and reopen the arbitral proceedings, as he chose to do.
6. On the aspect of vulnerability of an arbitral award to challenge on the ground that contentions urged were not considered, para 61 of the report (in the SCC) from the judgement of the Supreme Court in Ssangyong Engineering and Construction Co. Ltd. v. NHAI 2 clearly enunciated the law. The Supreme Court, in the said paragraph, quotes 2 (2019) 15 SCC 131 Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 7 of 9 Signing Date:08.01.2021 21:07:09 the judgment of the Court of Appeal at Singapore in CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK 3 in which the Court of Appeal held, relying on Redfern & Hunter on International Arbitration, that, while non-consideration of an argument advanced by a party may not, in every case, invalidate the award passed, the award stands vitiated if the court comes to the opinion that, had the submission, which was not considered, been considered, it would have materially affected the award. This Court has noticed the said decision in its recent judgment dated 4th January, 2021, in OMP (COMM) 440/2020 (EFS Facilities Services (India) Pvt. Ltd. v. Indeen Bio Power Limited).
7. Prima facie, the learned sole arbitrator was bound, while adjudicating on the petitioner's application under Sections 32 and 16 of the 1996 Act, to address the contention of the petitioner regarding the applicability of the judgment rendered by this Court in Usha Chatrath1.
8. Even on the ground of non-consideration of the said plea, I am, prima facie, of the view that the impugned communication dated 10th October, 2020, is unsustainable in law and may be liable to be set aside and, possibly, the matter remanded to the learned sole arbitrator to return a finding on the said contention. (I may note, here, that the learned sole arbitrator later withdrew the impugned letter dated 10th October, 2020, but vide subsequent order dated 29th October, 2020, reiterated the decision, albeit without any fresh reasoning.) 3 2011 SGCA 33 Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 8 of 9 Signing Date:08.01.2021 21:07:09
9. In view thereof, I deem it a fit case to stay, till the next date of hearing, the proceedings presently pending before Mr. Onkar Mal Jain, the learned sole arbitrator, in relation to the disputes between the petitioner and the respondent.
10. As such, till the next date of hearing, the learned sole arbitrator Mr. Onkar Mal Jain is restrained from proceeding with the arbitration of the disputes between the petitioner and the respondent.
11. Inasmuch as this order has been passed without notice to the respondent, the petitioner would comply with requirement of order XXXIX Rule 3 of the Code of Civil Procedure, 1908 (CPC), within the time stipulated in the said provision, by way of e-mail to the respondent.
12. The Registry is directed to email a copy of this order to the learned counsel for the petitioner as well as to the respondent at the e- mail provided in the memo of parties, as soon as it is ready.
C. HARI SHANKAR, J.
JANUARY 7, 2021 dsn Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. 9/2020 Page 9 of 9 Signing Date:08.01.2021 21:07:09