Delhi District Court
Sh. Anshul Nagar vs M/S National Agricultural ... on 31 July, 2017
IN THE COURT OF MS. ASHA MENON: DISTRICT &
SESSIONS JUDGE (SOUTH DISTRICT) SAKET: NEW DELHI
CISARBTN2982017
CNRDLST 010028432017
Sh. Anshul Nagar
S/o Late Sh. Priyakant Nagar,
R/o A2, Kothari Sadan,
11th Road, Khar (West),
Mumbai400052. .....Petitioner
Versus
M/s National Agricultural Cooperative
marketing Federation of India Ltd. (NAFED)
Having Head office at
1, Sidharth Enclave,
NAFED House,
Ashram Chowk,
New Delhi. ......Respondent
Date of Institution: 20.07.2012 Order reserved on: 28.06.2017 Order pronounced on: 31.07.2017 O R D E R This order will dispose off the objections filed U/s 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Act') against the award dated 26.03.2012 of the ld. Sole Arbitrator, Sh. R.L. Meena in the Arbitration Case No.01/2008.
The matter had been received from the Hon'ble High Court in terms of Notification No. 27187/DHC/Orgl. dated 24.11.2015 as amended on 24.07.2016 as communicated vide letter dated 25.07.2016 received from the Hon'ble High Court of Delhi.
Brief facts as have emerged from the record are that the father of the objector late Sh. Priyakant Nagar was employed with the CISARBTN2982017 Page 1 of 10 respondent, M/s National Agricultural Cooperative Marketing Federation of India Ltd. ('NAFED' in short) as Executive Director when he passed away on 29.09.1991. The objector being the eldest son was offered employment by NAFED on compassionate grounds as Senior Assistant in its Mumbai branch on 11.12.1991 which he accepted. Late Sh. Priyakant Nagar had been allotted flat No.401 4 th Floor, Rinku Cooperative Housing Society, plot no.317, Linking Road, Khar (West) which was vacated by his family but subsequently on account of several difficulties being faced by the family of the objector, he was alloted flat no. A2, Kothari Sadan, 11 th Road, Khar (W), Mumbai with all the facilities and amenities vide letter dated 01.10.1993 and he took possession on 01.10.1993.
A dispute arose on the nonpayment of the terminal benefits of late Sh. Priyakant Nagar to his family, also on account of the objector availing of study leave without attending classes and applying again for study leave. As a result disciplinary proceedings were also taken against him and he was dismissed from service. Thereafter, the matter was referred to the Ld. Sole Arbitrator for obtaining the vacant possession of the flat no. A2, Kothari Sadan, 11 th road, Khar (W), Mumbai along with other recoveries such as market rent / penal rent.
It may be noted here that for obtaining the terminal benefits of late Sh. Priyakant Nagar, the present objector Sh. Anshul Nagar / his mother had moved the Hon'ble High Court but vide order dated 14.07.2008 in Writ Petition(C) No.1643841/2006 he was directed to approach the Arbitrator for the terminal benefits. Sh. Anshul Nagar also questioned his termination in the Labour Court, CISARBTN2982017 Page 2 of 10 Mumbai which was pending at the the time of the arbitration but has since been concluded in his favour. The dispute regarding the terminal benefits was also referred to Sh. R.L. Meena who was seized of the matter relating to the vacation of the premises. The award that has been impugned, however, relates to only the matter relating to the vacation of the quarters. It may also be noted here that Sh. Anshul Nagar vacated the premises as recorded in the orders of the Hon'ble High Court on 02.11.2015, in terms of the orders of the Hon'ble High Court dated 15.09.2015.
By way of the impugned Award dated 26.03.2012, the Ld. Sole Arbitrator came to the conclusion that Sh. Anshul Nagar must vacate the premises within a month of the award and hand over the possession of the flat with all the items as mentioned in Annexure 7 of the claim petition. The Ld. Sole Arbitrator also directed Sh. Anshul Nagar to pay the penal rent of the flat as detailed below :
a For February, 2005 20% of Pay + Rs.2437.40
D.P.
b For March, 2005 30% of Pay + Rs.3656.10
D.P.
c For April, 2005 40% of Pay + Rs.4874.80
D.P.
d For May, 2005 50% of Pay + Rs.6093.50
D.P.
e For subsequent 50% of Pay + Rs.6093.50
months and after D.P.
May, 2005 (Per
month)
CISARBTN2982017 Page 3 of 10
The objector was also directed to pay interest @ 18% per annum on the arrears of the penal rent from the date of the award till the payment in terms of Section 31(7)(b) of the Act. Further direction was also issued that if the flat was not vacated within one month of the award, Sh. Anshul Nagar was to pay compensatory rent @ Rs.15,000/ per month till the vacation of the flat.
Aggrieved by this award, the present petition has been filed U/s 34 of the Act submitting that the award could not be passed as the Ld. Sole Arbitrator had no jurisdiction to adjudicate the disputes which were specifically barred U/s 84 of the Multi State Cooperative Societies Act, 2002. It was claimed that the jurisdiction over the eviction vested not in the Ld. Arbitrator but in the Court of the Small Causes in terms of the provisions of Provincial Small Causes Courts Act. 1887.
It is further submitted that the Ld. Sole Arbitrator proceeded and conducted the arbitration in a manner as was unknown to law and against the settled principles of natural justice and the award was in conflict with the public policy. It was submitted that the eviction was ordered on the basis of the disciplinary enquiry and the termination of service of the objector and therefore, was clearly barred U/s 84 of the Multi State Cooperative Societies Act, 2002.
It is further submitted that the Ld. Sole Arbitrator could not have directed the present respondent / NAFED who were the claimants before the Ld. Sole Arbitrator to conduct the valuation of the premises in question behind the back of the objector and to call for the further material and information relating to the salary of the objector after the award was reserved, against which the present objector had CISARBTN2982017 Page 4 of 10 filed an affidavit opposing the same, despite which the award was passed. Hence, it was prayed that the award be set aside and quashed.
No reply seems to have been filed to these objections by the respondent which however, opposed the same. Both the sides have filed written arguments. It may be mentioned here that in the course of hearing, the Hon'ble High Court had required computation to be filed regarding the penal rent in view of the observations made by the Hon'ble High Court while admitting the petition vide orders dated 27.07.2012. The objector/petitioner has objections to this computation on behalf of the respondent of the penal rent payable under the impugned Award dated 26.03.2012.
I have considered all the material on the record and I heard the submissions of Sh. Mohit K. Daraad, Ld. Counsel for the objector and Sh. Rakesh Kumar and Sh. Trilochan P. Ravi, Ld. Counsel for the respondent. I have also considered the cited judgments relied upon by the respondent.
Ld. Counsel for the objector submitted that the ld. Sole Arbitrator had no jurisdiction to determine this dispute as eviction was governed by special law. It is also submitted that when the termination was under challenge before the Labour Court, the Ld. Sole Arbitrator ought not to have proceeded with the matter particularly in view of the subsequent event whereby the termination was found to be invalid. It was submitted that the eviction was on account of termination of service which was on account of disciplinary proceedings and therefore, the termination was also an offshot of the disciplinary proceedings and clearly beyond the jurisdiction of the Ld. Sole Arbitrator. It is also argued that in calculating the penal rent CISARBTN2982017 Page 5 of 10 payable by the objector, the Ld. Sole Arbitrator had not followed the NAFED manual. Further, there was no provision under the rules for the compensatory rent or interest on penal rent.
On the other hand, Ld. Counsel for the respondent submitted that the objections U/s 34 of the Act were only for limited purpose and therefore, the present objections were not maintainable. The objections raised were not covered by the grounds provided U/s 34 of the Act which had to be strictly followed. It is further submitted that the arbitration was a statutory arbitration under the Multi State Cooperative Societies Act, 2002. Moreover, it was submitted that though the allotment of a flat related to employment, NAFED was not under any mandatory obligation to provide quarters and though the allotment arose out of the employment, it was not a condition of employment and therefore, it was not related to the disciplinary proceedings.
It was submitted that the award suffers from no lacuna and the reasons for awarding the penal rent and directing the eviction were clearly specified in the Award. It was further pointed out that the rent itself was so low and the objector had continued to remain in the premises of the respondent from 2004 when his services were terminated till 2015 when he handed over the keys before the Hon'ble High Court. Thus, rent fixed for these premises being low there was no cause for interference. It was submitted that the calculation was given to the Hon'ble High Court to facilitate settlement as directed by the Hon'ble High Court but since no settlement was reached, the calculationsheet submitted to the Court was not relevant to these objections. It was also submitted that the basic pay was as per the CISARBTN2982017 Page 6 of 10 rules and even in the present objections, the objector had failed to disclose what was the basic pay according to him and in what manner, the calculation was wrong.
Furthermore, it was submitted that if at all there was any discrepancy, the Executing Court could look into it and the discrepancy in calculation would be no ground to file the objections U/s 34 of the Act. Reliance has been placed on the judgment of the Hon'ble Supreme Court in the cases titled N. Chellappan Vs. Kerala State Electricity Board, (1975) 1 Supreme Court cases 289 and P.R. Shah, Shares and Stock Brokers Pvt. Ltd. Vs. B.H.H. Securities Private Limited and Others, (2012) 1 Supreme Court Cases 594, to submit that the mistake of law or fact and mistake in calculation would not be covered U/s 34 of the Act. Thus, Ld. Counsel has submitted that the objections were liable to be dismissed. The written submissions filed by the objector and the respondent herein are not referred to in detail as they basically follow the pleadings as well as the oral arguments.
The law is that challenge to an award can be on very narrow grounds as provided U/s 34 of the Act. In the present petition, the objector has sought to first challenge the award on the ground that the dispute was not contemplated as referable under the Multi State Cooperative Societies Act, 2002 and thus, the arbitral award ought to be set aside U/s 34(2)(iv) of the Act. It is also submitted that the award is in conflict with the Public Policy of India i.e. U/s 34(2)(b)(ii) of the Act. However, on a perusal of the record and after hearing the submissions, this Court does not find that this is so. Taking the first submission first, the explanation itself provides that the question of a CISARBTN2982017 Page 7 of 10 conflict with the Public Policy of India should not entail a review of the merits of the disputes. In the present instance, that is what is being sought.
Furthermore, the record does not support the contention of the objector that the Ld. Sole Arbitrator had taken material behind his back to pass the award. The only clarification that the Ld. Sole Arbitrator sought was in respect of the calculation of the penal rent in terms of the rules governing the allotment of quarters and overstay. As per the rules provided that the penal rent is to be calculated in a specific manner i.e. 20% of pay + D.P. for the first month, 30% of pay + D.P. for the second month; 40% of pay + D.P. for the third month, 50% of pay + D.P. for the fourth month and the subsequent months. This rule was not a matter of challenge before the ld. Sole Arbitrator nor can it be before this Court U/s 34 of the Act. In order to facilitate the calculation, the Ld. Sole Arbitrator sought details from the NAFED but had also notified the present objector of having done so. Despite such knowledge, the objector did not choose to provide his salary statement to the Ld. Sole Arbitrator.
No doubt the Hon'ble High Court has observed that as per the salary slip of the objector for the month of April, 2000, it was the last month for which the salary had actually been paid to the objector. The basic monthly pay was Rs.2180/ and the gross salary was Rs.9006/ whereas the NAFED for the purpose of the calculation by the ld. Sole Arbitrator, which was adopted by the Ld. Sole Arbitrator did not refer to this last salary drawn and actually paid to the objector but to the one notionally fixed on the date of the termination of his service and there was some error in the calculation CISARBTN2982017 Page 8 of 10 of the penal rent by the Ld. Sole Arbitrator.
This miscalculation could have been got rectified by the objector by recourse to the provision of Section 33 of the Act for correction which apparently he did not choose to do. The Ld. Sole Arbitrator as noticed above, held that the respondent was liable to a sum of Rs.2437.40 towards penal interest for February, 2005 and in view of the calculationsheet filed by the respondent in the course of hearing before this Court, this penal rent has been calculated to a total of Rs.1625764.20 which included penal rent of Rs.521806.70 and compensatory rent of Rs.6,32,500.00 and interest of Rs.471457.50. Thus, the Ld. Counsel for the objector submitted that this was at variance with the figures provide to the Hon'ble High Court. It was then explained by the ld. Counsel for the respondent as being on account of a further period of two years and was calculated upto the date of the vacation of the premises.
In these circumstances, it cannot be concluded that merely because an effort was made by the Ld. Sole Arbitrator to gather the material to determine what would be proper penal rent recoverable, the arbitration was against the fundamental policy of India. If at all, these were only errors in calculation which could have been easily rectified.
Coming to the question of jurisdiction, this question was raised before the Ld. Sole Arbitrator and the Ld. Sole Arbitrator dealt with it in the judgement rejecting the contention that eviction was not covered by the arbitration in the light of Section 84 of the Multi State Cooperative Societies Act, 2002. The award being a reasoned award and in the light of the settled law in this regard, that a Court while CISARBTN2982017 Page 9 of 10 dealing with a petition u/s. 34 of the Act does not sit in appeal over the award, it is concluded that objections cannot be raised before this Court again nor can the subsequent decision of the Labour Court put the clock back, as the status on the date of the award was that the employment of the objector with the respondent had been terminated.
Thus, I find no merits in the objections. However, in the light of the observations made by the Hon'ble High Court on 27.07.12 regarding discrepancy in calculations, in the interest of justice, the objector, Sh. Anshul Nagar and the respondent / NAFED will submit before the Ld. Sole Arbutrator a request u/s 33 of the Act for correction within one month of this order which shall be disposed of by the Ld. Sole Arbitrator in accordance with law.
The objections are accordingly dismissed. The file be consigned to the Record Room.
Announced in open Court
today i.e.31.07.2017 (ASHA MENON)
District & Sessions Judge (South)
Saket/New Delhi.
CISARBTN2982017 Page 10 of 10