Calcutta High Court (Appellete Side)
M/S. J. J. Grihanirman Private Limited vs Nirmal Kumar Khemka And Others on 19 July, 2023
Author: Shampa Sarkar
Bench: Shampa Sarkar
July 19, 2023
Sl. No.14 & 15
Court No.19
s.biswas
CO 2051 of 2023
M/s. J. J. Grihanirman Private Limited
vs.
Nirmal Kumar Khemka and others
WITH
CO 4546 of 2016
M/s. J. J. Grihanirman Private Limited
vs.
Parvati Devi Khemka and others
Mr. Debasish Kundu, Sr. Adv.
Mr. Abhishek Haldar
Mr. Subhankar Chakraborty
Mr. A. Kundu
Mr. Saptarshi Bhattacharjee
... for the petitioner
in both the revisional applications
Mr. V. V. V. Sastry
... for the opposite party nos.1 & 2
in CO 2051 of 2023
Mr. Arijit Bardhan
Mr. Rishabh Dutta Gupta
... for the opposite party nos.3 to 14
in CO 2051 of 2023
and opposite party nos.30 to 34
in CO 4546 of 2016
Mr. Vinay Kumar Purohit
... for the opposite party nos.4, 6 to 29
in CO 4546 of 2016
Three major parties are involved in the present
dispute, namely, the petitioner, who is the developer
engaged by the Khemkas, the Khemkas, who had
been granted lease in respect of the property situated
at premises No.23 Rustomjee Street, Kolkata 700019
by the sebaits of the property and the Modis, who
were sold the property, allegedly, behind the back of
the petitioner. The property is a debuttar property.
Both the revisional applications are taken up
together as the issues are interrelated.
2
On the prayer of the petitioner, CO 4546 of
2016 has been assigned to this court upon being
released by a learned Co-ordinate Bench, before
whom the matter was pending.
The subject matter of challenge in this
revisional application is an order dated September 5,
2016, passed in Title Suit No.44 of 2014, by the
learned Civil Judge (Senior Division), Tenth Court at
Alipore, South 24 Parganas.
The reliefs claimed in the civil suit, are quoted
below:-
"a) Decree for declaration that the suit property
described in schedule "A" is a Debutter Estate of the
defendant no. 4 and it cannot be encumbered by way
of sale, gift, mortgage, long-term lease or otherwise
without permission from Principal Court of Civil
Jurisdiction;
b) Decree for declaration that the impugned
deed of indenture of conveyance dated 12th October,
2010 described in schedule "B" executed by the
defendant nos. 4 to 29 in favour of the defendant
nos. 30 to 34 without obtaining prior permission
from Court is void ab initio, inoperative and not
binding upon the plaintiff and it should be treated as
cancelled and delivered up;
The Additional District Sub- Registrar South 24
Parganas at Alipore is informed by sending a copy of
the judgment of this suit to note that the order of
cancellation in the concerned volume.
c) Decree for declaration that the defendant nos.
5 to 29 for their personal gain collusively obtained
decree on compromise from the Hon'ble High Court
in F.A. No. 246 of 1972 and F.A. 204 of 1974 by
practicing fraud upon the Court thereby cheated the
Debutter Estate of the defendant no. 4;
d) Decree for declaration that the defendant
nos. 5 to 29 have executed the impugned deed
misappropriated the sale proceeds detrimental to the
interest of the defendant no. 4;
e) A decree of perpetual injunction restraining
the defendants as their men, servants, agents and
assigns from taking any steps and/or further steps
3
pursuant to and in terms of the impugned deed
dated 12th October, 2010;
f) A decree for specific performance of contract
directing the defendant nos.1 to 29 to execute deed
of sub-lease in respect of the suit property described
in schedule "A" in favour of the plaintiff for a period
of 99 years on and from 1st May, 1965; Or
alternatively, decree for mandatory injunction
directing the Defendant Nos. 1 to 34 to execute and
register the Sale Deed in favour of the plaintiff in
respect of the suit property on obtaining permission
either from the Hon'ble High Court or from the
Learned District Judge, South 24 Parganas at
Alipore at a price the impugned deed was executed
and registered;
g) A decree for confirmation of possession of the
plaintiff in respect of the suit property described in
Schedule "A";
h) A decree of perpetual injunction restraining
the defendants and their men, servants, agents and
assigns from interfering with the plaintiff's peaceful
possession and enjoyment of the suit property
described in schedule "A";
i) A decree for damages against the defendants
and each of them to be paid to the plaintiff to the
tune of Rs. 2,35,02,718/- ( Rupees Two Crore Thirty
Five Lakh Two Thousand Seven Hundred Eighteen)
Only for causing extreme hardship, mental pain and
agony, loss and/or damage to the
avocation/business of its Directors for not executing
deed of sublease for 99 years in favour of the plaintiff
in respect of the suit property and for executing the
impugned deed described in schedule-B without
Court's permission thereby permanently creating
cloud over the plaintiff's right and enjoyment in
respect of the suit property;
j) Injunction;
k) Receiver;
1) Attachment;
m) Such further or other reliefs."
On an application under Section 8 of the
Arbitration and Conciliation Act, 1996 (hereinafter
referred to as the said Act) filed by the Khemkas, the
suit was dismissed as barred under the provision of
the said Act.
4
This civil revisional application has been
pending since long and the issues raised by the
petitioner have not been decided.
Mr. Kundu submits that Title Suit No.4546 of
2016 was a composite suit. Other reliefs were
claimed against the sebaits, who sold the property to
Mr. Bardhan's clients i.e. the Modis (the opposite
party nos.3 to 14 in CO 2051 of 2023). As such,
under the settled principles of law, the suit could not
have been dismissed. The suit should have been
heard as a whole. Moreover, the court did not have
the jurisdiction to dismiss the suit on an application
under Section8 of the said Act.
Further contention of Mr. Kundu is that the
challenge to the deed of conveyance executed by the
sebaits, behind the back of the petitioner herein (the
developers), was not a part of the arbitration
agreement. The rights of the petitioners in the suit
for declaration and permanent injunction and the
challenge to the deed of sale executed between the
sebaits and Modis, had gone unadjudicated.
Declarations that the Khemkas were to execute a
deed of sub-lease as per the decision of the Hon'ble
High Court, in an earlier suit, had also gone
unadjudicated. The arbitration clause was between
the Khemkas and the petitioner with regard to the
development agreement, in respect of the premises.
5
The arbitration clause was incorporated in a contract
which was insufficiently stamped. Thus, according to
Mr. Kundu, the revisional application should be
allowed and the order dated September 5, 2016
passed in Title Suit No.44 of 2014, should be set
aside.
The submissions of Mr. Kundu have been
rebutted by the learned advocates for Khemkas and
the Modis on the ground that when the suit was
dismissed as being barred under the provisions of
Arbitration Act, the same would amount to a deemed
decree. The proper remedy of the petitioner would be
in an appeal.
The issue to be decided by this court, in this
revisional application is whether the order impugned
would be amenable to the jurisdiction of this court
under Article 227 of the Constitution of India and if
such question is answered in the positive, whether
the learned court below erred in dismissing the
entire suit, in which reliefs had been claimed against
other persons who were not parties to the arbitration
agreement, entered into between the Khemkas and
the petitioner.
CO 2051 of 2023 is an application challenging
the order dated June 17, 2023 by which the learned
Additional District Judge, 15th Court, Alipore, South
24 Parganas, allowed the misc. arbitration execution
6
case no. 58 of 2020, thereby rejecting an application
filed by the petitioner under Section 151 of the Code
of Civil Procedure.
By the said application, the petitioner prayed for
dismissal of the execution case on the ground that
the arbitration award was a nullity. The contract
which incorporated the arbitration agreement was
void, as it was not sufficiently stamped.
Mr. Kundu submits that the learned court failed
to take into consideration the following:
a) As per the ratio in Hon'ble Apex Court in N.
N. Global Mercantile Private Limited vs.
Indo Unique Flame Limited & Ors.
reported in (2023) SCC OnLine SC 495, the
award was a nullity. The Hon'ble Apex
Court in paragraph 119 had held that if the
arbitration clause was incorporated in a
contract which was insufficiently stamped,
the same would be a void contract and the
courts could not look into the same.
b) Four Hon'ble Judges Bench of the Hon'ble
Apex Court in the matter of Kiran Singh
and others vs. Chaman Paswan and others
reported in AIR 1954 SC 340, held that the
question with regard to nullity of a decree,
could be raised at any time, even at the
7
stage of execution or in collateral
proceedings.
c) The application under Section 151 of the
Code of Civil Procedure, was rightly filed
before the learned Executing Court
challenging the executability of the decree,
after the law was declared in N.N Global
(supra)
d) The ratio of the said judgment would have a
retrospective effect.
e) Without adjudication of the validity of the
order by which the Title Suit No.44 of 2014
had been dismissed, the arbitration between
the Khemkas and the petitioner could not be
reached to its logical conclusion.
Mr. Kundu, further submits that this court
must interfere with the order passed in the execution
proceeding on the ground that the learned executing
court misconstrued the provisions of Section 36 of
the Indian Stamp Act. The learned executing court
erroneously held that once the contract had been
accepted in evidence and marked as an Exhibit, the
admissibility of the same could not be questioned.
The decision in N. N. Global (supra), could not be
looked into for the reason that the executing court
could not go behind the award.
8
Mr. Sastry, learned advocate for the Khemkas
(the opposite party nos.1 and 2 in CO 2051 of 2023),
submits that the validity of the contract on account
of the same being insufficiently stamped, had been
raised in an application under Section 16 of the
Arbitration and Conciliation Act, 1996 before the
learned Arbitrator and the said application was
dismissed.
It is further contended by Mr. Sastry that an
award had been passed directing that 50% of the
constructed area should be handed over to the
Khemkas and the 50% of the same would remain
with the petitioner. Further, cost of Rs.32 lakhs
along with interest at the rate of 6% per annum, was
also imposed upon the petitioner/award debtor. An
application under Section 34 of the said Act was filed
by the petitioner, for setting aside the award. The
said application was dismissed. Against the order of
dismissal, an appeal was filed under Section 37 of
the Act, which is pending hearing.
Mr. Bardhan, learned advocate appears on
behalf of the Modis. The Modis were added in the
execution proceedings. The Modis came in to the
picture when the sebaits of the said debuttar
property, which had been leased to the Khemkas had
sold the property to them. Mr. Bardhan submits that
right title and interest in respect of the entire
9
property, including the structure raised by the
petitioners, had passed on to the Modis. Mr.
Bardhan submits that the ratio of N. N. Global
(supra) would be applicable in this case. The award
was a nullity. Hence, the execution case should be
dismissed.
Mr. Sastry opposes the submissions of Mr.
Bardhan.
Mr. Kundu , learned Advocate for the petitioner
submits that the contentions of Mr. Sastry were
based on facts, but the legal implication of the ratio
of N. N. Global (supra) was yet to be decided. Also,
the challenge to the initial order of dismissal of the
suit which was a composite suit against the vendors
and Mr. Bardhan's clients had remained undecided.
Neither the sebaits nor Mr. Bardhan's clients were
parties to the arbitration. The arbitration proceeding
was not with regard to such issues.
Heard the parties.
Mr. Sastry hands over an order passed by
another Judge of this court, dated July 13, 2015 in
which, the existence of the arbitration agreement
was noted and the parties were referred to the
arbitration. The petitioner was a party to the said
proceeding.
It also appears that the points raised in CO
4546 of 2016 were raised in an application under
10
Section 47 of the Code of Civil Procedure filed by the
petitioner, in this execution proceeding. It was
contended that the award was not executable in view
of the fact that the order of dismissal of the suit was
under challenge before the High Court. The validity
of the order of dismissal and the irregularities in the
same, were pleaded in the objection with regard to
the executability of the award.
The application under Section 47 of the Code of
Civil Procedure was withdrawn by the petitioner,
without seeking any liberty to file afresh.
Once again, the petitioner filed an application
under Section 151 of the Code of Civil Procedure
alleging the award to be a nullity, by relying upon
the decision in N. N. Global (supra).
Thus, the objection with regard to executability
of the award, on the ground of pendency of CO 4546
of 2016 was not proceeded with. Such challenge was
abandoned, with the withdrawal of the application
filed under Section 47 of the Code of Civil Procedure.
The application under Section 34 of the said
Act, filed by the petitioner was also rejected on the
ground that award had provided for both the
Khemkas and the petitioner. 50% of the constructed
area was to be retained by the petitioner. No
illegality was found in the award. An appeal
therefrom is pending.
11
This court is of the view that the orders passed
in different stages of the arbitration and the
challenges to the arbitration proceedings as also the
award, have all gone against the petitioner.
CO 4546 of 2016 was not persuaded with
diligence. The revisional application had been
pending since 2016 and had been listed before
different courts. It had also been dismissed for
default and thereafter restored. Even if, the
submissions of Mr. Kundu that the learned civil
court did not have jurisdiction to dismiss the suit
while deciding an application under Section 8 of the
Arbitration and Conciliation Act and the suit should
have been heard as a composite court by the learned
civil court in view of the decision in Sukanya
Holdings (P) Ltd. v. Jayesh H. Pandya & anr.,
reported in (2003) 5 SCC 531, merit consideration,
this court is of the view that the ultimate decision of
the learned civil court was dismissal of the suit and
such order is an appealable order. Moreover, the
cause of action against the khemkas do not survive
after completion of the arbitration proceedings.
The learned civil court passed the following
order:-
T.S 44/2014
05.09.2016
Both parties are present. Today is fixed for
hearing of the petition filed u/s 8 of
Arbitration Act filed by defendant no. 1 to 3.
12
Defendant no. 1 to 3 has filed an
adjournment petition which is considered and
rejected and the petition filed u/S 8 of
Arbitration Act is taken up for hearing.
However before Ld. Advocate appearing for
defendant no. 1 to 3 begins his submission,
Ld. Advocate representing defendant no. 4 to
29 submits that he concedes with the
contention of the instant petition filed by
defendant no. 1 to 3 and though he has not
filed any petition in that regard, the oral
submission may be considered by the Court
in this regard and both the Ld. Advocates
representing defendants submits that the
plaintiff is also taking part in the arbitration
proceedings and Ld. Advocate appearing for
the plaintiff also admits in the open Court in
presence of Ld. Advocate representing the
defendants that the plaintiff is taking part in
the Arbitration proceedings and considering
the submission and admission of Ld.
Advocates appearing for the plaintiff and
defendants, it appears to the Court that the
proceedings u/S 8 of Arbitration Act is going
on and as such this Court cannot proceed in
the instant suit when there is an arbitration
clause between the parties and arbitration
proceedings is going on according to the said
clause and accordingly the suit is dismissed
the jurisdiction being barred under
Arbitration Act.
It is clear from the above order, that the learned
court upon hearing the parties, came to the finding
that as the arbitration proceedings were continuing
and the plaintiff/petitioner was participating in the
said proceeding, the suit should be dismissed being
barred by the provisions of the Arbitration Act. It was
found to be barred by law.
The petitioner is at liberty to take appropriate
steps against the said order, in accordance with law,
by approaching the appropriate forum.
13
The issue which this court is required to decide
in CO 2051 of 2023, is whether the execution of the
award should be permitted, as directed by the
learned executing court, in view of the decision in
N.N. Global (supra).
Challenging the delay in the execution
proceedings, a special leave petition was filed by the
khemkas and a counter affidavit to the special leave
petition was filed by the petitioner. Upon hearing the
parties, the Hon'ble Apex Court passed the following
order on March 24, 2023:-
ORDER
IA No. 56131/2023 Application seeking permission to file additional documents/facts/annexures is allowed.
As per the additional documents at Annexure P-14 at page 10 an order of the Executing Court has been brought to our notice dated 28.2.2023 adjourning the proceeding to 31.3.2023 on account of the matter pending before this Court.
It is quite obvious to us that the Court has not even understood the purport of the order dated 03.2.2023 after noticing the same. In terms of that order we had asked the execution proceedings to go on day to day. Instead of taking it day to day, an excuse has been set out that the present matter is pending before the Supreme Court of India! We would only like to say that the concerned Judge must be more cautious in ensuring that the orders of this Court are complied with after understanding the same. The matter has been kept before this Court to monitor and ensure that the execution proceedings come to an end and not that the 14 concerned Judge should be adjourning matters to avoid the matter.
The Court below to forthwith proceed on day to day basis and submit a report to this Court and conclude the proceedings by the next date and place the orders before this Court. List in the first miscellaneous week in July, 2023.
Thereafter, the execution proceeded and the execution case was allowed by the learned executing court by passing an elaborate order. This revisional application has been filed challenging such order. This court admitted the revisional application, but refused to pass any stay order, in view of the order passed by the Hon'ble Apex Court dated March 24, 2023. By the said order, the learned executing court had already been directed to proceed with the execution case, on a day to day basis and file to a report before the Hon'ble Apex Court.
Thereafter, the matter appeared before the Hon'ble Apex Court on July 4, 2023 and the Hon'ble Apex Court did not make any observations with regard to the pending revisional application. The petitioner was represented by learned counsel before the Hon'ble Apex Court. The Hon'ble Apex Court directed the learned executing court to complete the execution and held thus:-
"Learned counsel for the petitioner(s) also points out that the execution petition has more than one part in execution of the 15 decree. The first being issue of possession, the second is money decree passed. He further submits that in view of the continuing occupation of the petitioner(s), interim order should be passed for deposit of the appropriate damages for use and occupation by the respondent(s).
Insofar as the money decree is concerned, we direct the respondent(s) to deposit a decretal amount in the trial Court within a period of four weeks from today. The Trial Court will also pass an order determining the interim amount for use and occupation of the premises by the respondent(s) till the disposal of the execution proceedings.
The report received from the concerned Court suggests that the execution is being taken up on day to day basis and we expect the execution to be over by the next date."
In view of the aforementioned order passed by the Hon'ble Apex Court, the execution case has reached finality. An order has been passed for completion of the entire execution, in discharge of the award. Thus, the order impugned dated November 12, 2018 passed in Execution Case 598/2018, cannot be scrutinized further by this court. The execution case was allowed. The observations of the Hon'ble Apex Court clearly indicate that the execution proceeding arising out of the award must be over by the next date and the award must be satisfied.
Any attempt of this court to adjudicate the revisional application, would be only an academic exercise. This court cannot reopen the issue. The execution proceeding has attained finality and the same is being monitored by the Hon'ble Apex Court. 16
The challenge to the correctness of the award, is still pending decision in an appeal under Section 37 of the Act and the issues which have been raised in CO 4546 of 2016 and in CO 2051 of 2023 are available in the appeal.
Both the revisional applications are dismissed. There shall be no order as to costs. Parties to act on the sever copy of this order.
(Shampa Sarkar, J.)