Madras High Court
M/S.Raj Palace Sundar vs M/S.Andhra Mahila Sabha on 3 July, 2024
Author: M.Sundar
Bench: M.Sundar
OSA (CAD) Nos.60 and 61 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.07.2024
CORAM
THE HONOURABLE MR.JUSTICE M.SUNDAR
and
THE HONOURABLE MRS.JUSTICE K.GOVINDARAJAN THILAKAVADI
O.S.A. (CAD) Nos. 60 and 61 of 2024
and
C.M.P. No.12880 of 2024 in O.S.A. (CAD) No.60 of 2024
and
C.M.P. No.12881 of 2024 in O.S.A. (CAD) No.61 of 2024
1.M/s.Raj Palace Sundar
rep. By its Partners
R.Sundareswaran and R.P.Rajan,
No.12, Dr.Durgabai Deshmukh Road,
R.A. Puram, Chennai – 28.
2.R.Sundareswaran
3.R.P.Rajan .. Appellants in
both O.S.As
Vs
M/s.Andhra Mahila Sabha
rep. By its Additional Secretary
Mr.T.K.Ranganathan,
No.12, Dr.Durgabai Deshmukh Road,
R.A. Puram, Chennai – 28. .. Respondent in
both O.S.As
Original Side Appeals filed under Order XXXVI Rule (1) of
The Original Side Rules read with Section 37 of The Arbitration and
Conciliation Act, 1996 (under Section 13(1) of The Commercial
Courts Act, 2015) against the judgment and decree dated
https://www.mhc.tn.gov.in/judis
1/30
OSA (CAD) Nos.60 and 61 of 2024
06.06.2024 in A.Nos.2682 and 2683 of 2024 in O.P. Nos.293 and
596 of 2019.
For Appellants : Mr.V.Raghavachari,
Sr. Counsel
for Mr.Adarsh Subramanian
and Ms.Anisha Chandrakumar
in both OSAs
For Respondent : Mr.Vijay Narayan,
Sr. Counsel
for Ms.Aparajitha Vishwanath
in both OSAs
COMMON JUDGMENT
(Judgment of the Court was delivered by M.Sundar, J.) This common order will now govern the captioned two 'Original Side Appeals' (hereinafter 'OSAs' in plural and 'OSA' in singular for the sake of brevity, convenience and clarity) and captioned two 'Civil Miscellaneous Petitions' (hereinafter 'CMPs' in plural and 'CMP' in singular for the sake of brevity, convenience and clarity) thereat.
2. Captioned matters are in the Admission Board. Mr.V.Raghavachari, learned senior counsel instructed by Mr.Adarsh Subramanian and Ms.Anisha Chandrakumar, counsel on record for the three appellants and Mr.Vijay Narayan, learned senior counsel https://www.mhc.tn.gov.in/judis 2/30 OSA (CAD) Nos.60 and 61 of 2024 instructed by Ms.Aparajitha Viswanath, who has lodged caveat on behalf of the lone respondent are before us. After hearing the learned senior counsel for the appellants for some time, we issued notice regarding admission to the respondent. Learned counsel on record for the caveator accepted notice for the lone respondent and learned counsel on record for both sides and the respective learned senior counsel leading them consented to have the main OSAs taken up and heard out. On this basis i.e., with the consent of both sides, captioned main OSAs were heard out.
3. Captioned OSAs are statutory appeals and the memoranda of grounds of appeals read that both OSAs have been presented in this Court (on 12.06.2024) under Section 37 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' (hereinafter 'A and C Act' for the sake of brevity, convenience and clarity) read with Section 13(1) of 'The Commercial Courts Act, 2015 (Act 4 of 2016)' (hereinafter 'CCA' for the sake of brevity, convenience and clarity). The memoranda of grounds of appeals mention Section 37 but it does not mention any sub-sections or clauses thereat. To be noted, there will be a little more elaboration and discussion elsewhere infra in this order. https://www.mhc.tn.gov.in/judis 3/30 OSA (CAD) Nos.60 and 61 of 2024
4. Owing to the limited legal perimeter within which a legal drill under Section 37 of A and C Act should perambulate and also in the light of the facts/nature of the matter at hand, short facts shorn of granular particulars or in other words, factual matrix in a nut shell will suffice.
5. Factual matrix in a nut shell is that the genesis of the matter is a license agreement between appellants (to be noted appellant no.1 is name of the partnership firm, appellant nos. 2 and 3 are the partners who constitute appellant no.1 partnership firm) and the respondent which is a society registered under The Societies Registration Act, 1975; that the respondent is the owner of the immovable property which is subject matter of this license agreement; that the respondent 'Andhra Mahila Sabha' shall be referred to as 'said sabha' and the appellants shall be collectively referred to as 'said hotel' both for the sake of convenience as appellants are running a hotel qua the 'license agreement dated 13.06.2008' (hereinafter 'said license agreement' for the sake of convenience and clarity); that the said license agreement is for a period of six years (from 14.10.2008 to 14.10.2014) with provision for renewal for another six years i.e., upto 14.10.2020; that the said license agreement has a clause captioned 'Arbitration' i.e., Clause (L); that vide Clause (L), dispute resolution is by resorting https://www.mhc.tn.gov.in/judis 4/30 OSA (CAD) Nos.60 and 61 of 2024 to arbitration; that this Clause (L) serves as arbitration agreement between said sabha and said hotel i.e., 'arbitration agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act; that disputes erupted between said sabha and said hotel qua said license agreement and arbitration agreement was triggered; that the matter went before an 'Arbitral Tribunal' (hereinafter 'AT' for the sake of brevity); that a sole arbitrator who is a former Hon'ble Judge of this Court is AT; that AT made an award dated 11.03.2019 inter-alia directing the said hotel to surrender the licensed property to the said sabha within three months after removing some unauthorised construction in the third floor and a swimming pool; that AT framed a specific issue as regards whether the agreement is a lease' or 'license' and returned a categorical finding that it is the latter i.e., license; that if it is a license, there is no concept to transfer of possession (unlike lease) but we deem it appropriate to not to dilate or delve more on this as that would be outside the statutory remit of a legal drill now at hand; that this award was assailed by both parties resorting to Section 34 of A and C Act; that Section 34 petition of said hotel is O.P.No.293 of 2019 and Section 34 petition of the said sabha is O.P.No.596 of 2019; that when both the OPs were pending before the Section 34 Court, in and by an order dated 09.08.2021, the https://www.mhc.tn.gov.in/judis 5/30 OSA (CAD) Nos.60 and 61 of 2024 parties i.e., said hotel and said sabha were referred to a sole mediator (a learned senior counsel of this Bar); that such reference to mediation was at the request of both sides; that the learned mediator, post 09.08.2021 held three sittings, on 13.09.2021, 26.09.2021 and 23.10.2021; that on 23.10.2021, settlement was arrived at and a 'mediated settlement agreement dated 23.10.2021' was drawn up, signed by both sides i.e., said hotel and said sabha as well as their respective counsel (hereinafter 'said mediated settlement agreement' for the sake of convenience and clarity); that both parties agreed to file this mediated settlement agreement in the Section 34 Court and give a closure to the OPs; that pursuant to said mediated settlement agreement on 29.10.2021 both parties in the Section 34 Court i.e., said sabha and said hotel filed the said mediated settlement agreement, (dated 23.10.2021) and requested the Section 34 Court to make an order in terms of the same; that Section 34 Court acceded to this joint request and made a common order (common order in the two OPs referred to earlier) inter-alia recording the terms of said mediated settlement agreement and disposing of the two Section 34 petitions i.e., two OPs saying that said mediated settlement agreement shall form part of the records and that the Section 34 OPs are disposed of in terms of the same; https://www.mhc.tn.gov.in/judis 6/30 OSA (CAD) Nos.60 and 61 of 2024 that an application which was pending before Section 34 Court also consequently stood closed; that it is to be noted that in and by said mediated settlement agreement {now order of Section 34 Court dated 29.10.2021}, the said license agreement (dated 13.06.2008) was to continue to be in force till 31.05.2024; that on 01.05.2024, said sabha addressed a letter to said hotel inter-alia adverting to the consent order of Section 34 Court pointing out that said hotel was given further 2 ½ years time post 1 ½ decades and reminded the said hotel that said sabha would be entitled to resume its activities in the licensed area; that said sabha vide this letter made it clear that said hotel will not be entitled to continue its activities in the licensed area beyond 31.05.2024; that said hotel responded vide letter dated 13.05.2024 saying that said sabha had allegedly misled the learned mediator and the Hon'ble Court by saying that it requires the licensed area for expanding its health care facilities whereas it has now come to light that it is not so (to be noted, it is likely to be licensed to another hotel is contention of said hotel); that on the very next day i.e., 14.05.2024, said hotel came up with two applications viz., A.Nos.2682 and 2683 of 2024 with prayers to recall the common order dated 29.10.2021 made in two Section 34 OPs (recording said mediated settlement agreement) and to re-open the two OPs https://www.mhc.tn.gov.in/judis 7/30 OSA (CAD) Nos.60 and 61 of 2024 for disposal of the same on merits respectively; that these two applications taken out by said hotel were served on said sabha as it was in disposed of OPs and therefore, learned counsel for said sabha was before the Court when the two applications were listed on 06.06.2024 before the Hon'ble Single Judge who made the Section 34 order; that on 06.06.2024, that Hon'ble Single Judge who presided over Section 34 Court (as of 29.10.2021) heard both sides i.e., learned senior counsel for said hotel which took out the applications as well as learned senior counsel for said sabha which was the respondent in the applications and made a common order in the two applications dismissing both the applications inter-alia saying that said hotel cannot dictate terms as regards how the owner i.e., said sabha should use the licensed area and concluded that there are no merits in the applications; that this 06.06.2024 common order in these two applications is the impugned order qua captioned two OSAs.
6. This Court having set out factual matrix containing facts that are imperative for appreciating this common order as well as the trajectory the matter has taken thus far in reaching this Court vide captioned two Section 37 (A and C Act) appeals, now proceeds to record that learned senior counsel for appellants notwithstanding very many averments/grounds in the https://www.mhc.tn.gov.in/judis 8/30 OSA (CAD) Nos.60 and 61 of 2024 memorandum of grounds of appeals predicated his campaign against the impugned order on five points i.e.,
(a)There is no legal bar qua the applications that were taken out;
(b) Even if 13.06.2008 agreement is a license (to be noted said hotel contended that it is a lease before AT), on a demurrer, Section 60 of 'The Easements Act, 1882 (Act of 1882)' [hereinafter 'Easements Act' for the sake of brevity, convenience and clarity] would come to his rescue as the said hotel has executed work of permanent character and incurred expenses for the execution qua licensed area. To put it differently, Section 60(b) of Easements Act is what the argument is predicated on;
(c) Said sabha being party at fault cannot take advantage of its own fault, as according to said hotel, said sabha submitted in the course of mediation before learned mediator that the licensed area is required for the health care facilities which will benefit the public at large, that said sabha is already doing this https://www.mhc.tn.gov.in/judis 9/30 OSA (CAD) Nos.60 and 61 of 2024 in Hyderabad and intends to replicate the same in Chennai by using the licensed area for setting up health care facilities and provide affordable health care with ethical practices and thus the said hotel was lulled into the belief that the licensed area will be used for the health care facility post 31.05.2024 and as it has come to light that it is not to be, said sabha is allegedly the party at fault and the applications, in which the impugned order was made, became necessary;
(d) Aforementioned two applications were disposed of by the Hon'ble Single Judge in the first listing itself without calling for a counter from the said sabha. This means that said applications have been dismissed at the threshold whereas averments and allegations therein ought to have been probed;
(e) The challenge now is not to the order made by Section 34 Court and it is only a simple request for hearing out Section 34 petitions on merits.
7. In response to the aforementioned submissions on which appellants' campaign against the impugned order was https://www.mhc.tn.gov.in/judis 10/30 OSA (CAD) Nos.60 and 61 of 2024 predicated, Mr.Vijay Narayan, learned senior counsel made submissions to the contrary and they are as follows:
(i) Threshold argument that OSAs under Section 37 of A and C Act are neither maintainable nor entertainable qua impugned order was raised saying scope of Section 37 is limited;
(ii) As regards first point that there is no legal bar, it was pointed out that the applications which led to the impugned order are not predicated on any term in the said mediated settlement agreement but on the basis of the minutes as recorded by the learned mediator on 26.09.2021, which is clearly impermissible qua confidentiality of mediation proceedings and therefore there is a legal bar;
(iii) The benefit under Section 60 of Easements Act does not arise as said mediated
settlement agreement was arrived at after taking into account all the pros, consequences and after cost benefit analysis as well as risk benefit analysis and therefore it is too late in the day or a clear https://www.mhc.tn.gov.in/judis 11/30 OSA (CAD) Nos.60 and 61 of 2024 afterthought to say that said hotel is entitled to benefit under Section 60 of Easements Act;
(iv) As regards party at fault, it was reiterated that the issue pertaining to setting up health care facility in the licensed area has not been made a clause/covenant in said mediated settlement agreement and therefore it cannot be gainsaid that said sabha is party at fault;
(v) As regards not calling for a counter, learned senior counsel pointed out that impugned order was made after hearing both sides and calling for a counter is at the discretion of the Hon'ble Court concerned and therefore this can hardly be a ground of appeal;
(vi) As regards the last point that it is not a challenge to the Section 34 order of A and C Act, learned senior counsel submitted that if Section 34 Court order is not being assailed it would only mean that said mediated settlement agreement would govern the parties.
https://www.mhc.tn.gov.in/judis 12/30 OSA (CAD) Nos.60 and 61 of 2024
8. By way of reply, learned senior counsel for appellants submitted that captioned OSAs are under Section 37(1)(c) of A and C Act as it is arising out of an order, which according to learned senior counsel falls under the category of setting aside or refusing to set aside an arbitration award under Section 34.
9. We carefully considered the rival submissions and we find that the captioned appeals deserve to be dismissed. The reasons are being set out infra. To be noted, in the adumbration infra, we shall be setting out the points, the discussion on the points and our dispositive reasoning one after the other. The adumbration is as follows:
10.1 As regards the first point on OSA under Section 37 of A and C Act, we have no difficulty in saying that an appeal under Section 37 of A and C Act would not lie as against the impugned order which has dismissed two applications for recalling an order made by Section 34 Court (recording compromise memo) and refusing to re-open Section 34 proceedings more so in the light of the submission of learned senior counsel for appellants that the appeals are filed under Section 37(1)(c) of A and C Act. The reason is the narrative thus far will make it clear that the https://www.mhc.tn.gov.in/judis 13/30 OSA (CAD) Nos.60 and 61 of 2024 impugned order i.e., impugned common order under challenge is an order which is neither one setting aside an arbitral award in a Section 34 legal drill nor one refusing to set aside an arbitral award in a Section 34 legal drill. In this regard, the language in which sub-section (1) of Section 37 is couched is of immense significance and as already alluded to supra, in the adumbration of High Court orders which are appealable under Section 37, it has been made clear vide sub-section (1) of Section 37 that appeals will lie only against orders adumbrated thereunder and from no others. To be noted, the expression 'and from no others' is within parenthesis in sub-section (1) of Section 37 of A and C Act. This is clearly a negative import. This negative import of the expression '(and from no others)' in sub-section (1) of Section 37 was elucidatively explained in an order dated 14.07.2017 made by another Hon'ble Division Bench in O.S.A. No.113 of 2017 (Raj Television Network Ltd., Vs. Thaicom Public Company Limited). To be noted, Raj TV case arose under Section 50 of A and C Act (Part II foreign award) but this aspect was adverted to. The relevant paragraphs are sub paragraphs (e) and (f) of paragraph 4, which read as follows:
'4(e) A perusal of Section 50 of the A and C Act would show that Mr.R.Parthasarathy is correct in contending that an appeal would lie only if the learned Single Judge had refused to https://www.mhc.tn.gov.in/judis 14/30 OSA (CAD) Nos.60 and 61 of 2024 pass an order for enforcing a foreign award and an appeal will not lie in a case like this where the learned Single Judge has allowed the petition for enforcement of a foreign award. However, we are unable to agree that this would completely denude this court of powers under Clause 15 of Letters Patent to entertain an appeal. The reason is simple. With regard to Part I of the A and C Act, orders that are appealable are set out in Section 37 of the A and C Act and the same reads as follows :
“37.Appealable orders.-- (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:--
[(a)refusing to refer the parties to arbitration under section 8;
(b)granting or refusing to grant any measure under section 9;
(c)setting aside or refusing to set aside an arbitral award under section 34.] (2)An appeal shall also lie to a Court from an order of the arbitral tribunal--
(a)accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
(b)granting or refusing to grant an interim measure under section 17.
(3)No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court. ” {Underlining and highlighting done to supply emphasis} https://www.mhc.tn.gov.in/judis 15/30 OSA (CAD) Nos.60 and 61 of 2024 4(f) In Section 37 of the A and C Act, the Legislature itself has categorically mandated '(and from no others)' in parenthesis, which is clearly a negative import. This was noticed and elucidated in Fuerst Day Lawson Limited Vs. Jindal Exports Limited reported in (2011) 8 SCC 333. In Fuerst Day Lawson Limited's case, the Supreme Court held that an appeal under Clause 15 of Letters Patent will not lie and appeal against orders or proceedings assailing awards will lie only if it fits into Section 37 of the A and C Act. Relevant paragraphs in Fuerst Day Lawson Limited's case are as follows:
'89.It is, thus, to be seen that Arbitration Act, 1940, from its inception and right through to 2004 (in P.S. Sathappan[(2004) 11 SCC 672] ) was held to be a selfcontained code. Now, if the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid expression of Tulzapurkar, J., that it carries with it “a negative import that only such acts as are mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done”. In other words, a letters patent appeal would be excluded by the application of one of the general principles that where the special Act sets out a self-contained code the applicability of the general law procedure would be impliedly excluded. https://www.mhc.tn.gov.in/judis 16/30 OSA (CAD) Nos.60 and 61 of 2024
90.We, thus, arrive at the conclusion regarding the exclusion of a letters patent appeal in two different ways;
one, so to say, on a micro basis by examining the scheme devised by Sections 49 and 50 of the 1996 Act and the radical change that it brings about in the earlier provision of appeal under Section 6 of the 1961 Act and the other on a macro basis by taking into account the nature and character of the 1996 Act as a self-contained and exhaustive code in itself.
91.In light of the discussions made above, it must be held that no letters patent appeal will lie against an order which is not appealable under Section 50 of the Arbitration and Conciliation Act, 1996 .' 10.2 Aforementioned elucidation is more as a contra distinction to say that there is no such negative import in Section 50 but we are referring to this only to say that the negative import of the expression '(and from no others)' in sub-section (1) of Section 37 is of immense significance as no order other than the ones which find place in the adumbration under sub-sections (1) and (2) of Section 37 are appealable under Section 37. In this regard, we emphasise and reiterate that an appeal under Clause 15 of Letters Patent would not lie and this point was settled by Hon'ble Supreme Court in Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd., reported in 2011 (8) SCC 333 and the relevant https://www.mhc.tn.gov.in/judis 17/30 OSA (CAD) Nos.60 and 61 of 2024 paragraph adverting to P.S. Sathappan (Dead) by Lrs Vs. Andhra Bank Ltd., & Others reported in [(2004) 11 SCC 672] has been extracted and reproduced supra in the Raj Television case law extracted supra. This means that an intra-court appeal under A and C Act can only be against (assailing) one of the orders adumbrated under sub-sections (1) and (2) of Section 37 and there is no other provision for an appeal under A and C Act and it is not even Clause 15 of Letters Patent of this Chartered High Court. This by itself drops the curtains on the captioned appeals but as elaborate submissions were made by learned senior counsel on both sides and as the main OSAs were heard out, we deem it appropriate to set out our views making it clear that the same shall not be construed as having entertained an appeal under Section 37 and/or as having heard out Section 37 appeal on merits. In other words, it is only for completion of facts and for better appreciation of this order as we are very clear that this first point itself is the end of the road for the appellants and it drops the curtains as regards Section 37 legal drill as we hold that captioned OSAs are not maintainable and therefore the question of entertainability pales into insignificance.
11. With the aforementioned clarification that what is to https://www.mhc.tn.gov.in/judis 18/30 OSA (CAD) Nos.60 and 61 of 2024 follow shall not be construed as discussion and/or dispositive reasoning in a Section 37 appeal and it is only for the limited purpose of capturing what unfurled in the hearing albeit with our views. We also make it clear that in the event of this order being called in question in the hierarchy of Courts and in the event of Hon'ble Supreme Court holding that impugned order is assailable in a Section 37 appeal it would be desirable to set out our views on the other points that were urged elaborately.
11.1 As regards the first point that there is no legal bar we find that confidentiality is an essential part of mediation. In the impugned order, Hon'ble Single Judge has no doubt referred to Section 22 of 'The Mediation Act, 2023 (32 of 2023)' (hereinafter 'Mediation Act' for the sake of brevity, convenience and clarity). This Mediation Act is dated 14.09.2023 but it is a conditional legislation wherein all these 65 sections thereat have not kicked in and only some of the sections kicked in on 14.09.2023. To be noted, only 21 out of 65 sections viz., Sections 1,3, 26, 31 to 38 (both inclusive), 45 to 47 (both inclusive), 50 to 54 (both inclusive), 56 and 57 kicked in on 09.10.2023 vide Notification under sub-section (3) of Section 1 of Mediation Act being Notification made by Central Government, this Notification is S.O. https://www.mhc.tn.gov.in/judis 19/30 OSA (CAD) Nos.60 and 61 of 2024 4384(E) and a scanned reproduction of the same is as follows:
11.2 This means that Section 22 of Mediation Act had not kicked in on the date of the impugned order. As there is no Notification other than the 09.10.2023 Notification being Notification of the Central Government under sub-section (3) of Section 1, Section 22 of Mediation Act has not kicked in even as of today. Though Section 22 of Mediation Act has not kicked in, a careful perusal of Section 61 and Sixth Schedule of Mediation Act (to be noted Section 61 and obviously Sixth Schedule also have not kicked in as of today) makes it clear that conciliation occurring https://www.mhc.tn.gov.in/judis 20/30 OSA (CAD) Nos.60 and 61 of 2024 in Part III of A and C Act would now stand governed by the Mediation Act as and when Section 61 and obviously Sixth Schedule along with it is notified. The sum and substance or in other words the crux and gravamen i.e., the kernel of the whole issue is mediation and arbitration are two ADR mechanisms but the comparison begins and ends there as in arbitration, there is adjudication unlike mediation where there is no adjudication and it is merely concessions and admissions made by both sides. In this view of the matter, confidentiality gains immense significance.
This is nicely set out in Sections 74 and 75 of A and C Act which are slotted under Part III captioned 'Conciliation' which talk about status and effect of settlement agreement and confidentiality and the two Sections read as follows:
'74. Status and effect of settlement
agreement:
The settlement agreement shall have the same status and effects as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral Tribunal under section 30.
75. Confidentiality:
Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to https://www.mhc.tn.gov.in/judis 21/30 OSA (CAD) Nos.60 and 61 of 2024 the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.' In this regard, without referring to Section 22 of Mediation Act which has been adverted to in the impugned order or any other provision like Section 61 (Sixth Schedule) confidentiality qua mediation stands governed vide case laws in the light of Moti Ram (dead) through Lrs and Another Vs. Ashok Kumar and Another reported in (2011) 1 SCC 466, which was pressed into service by learned senior counsel for said sabha. In Moti Ram's case, Hon'ble Supreme Court had referred the matter to resolve a dispute by resorting to mediation and post mediation, the Court Secretary placed a report received from the mediator which captured what transpired in the mediation which had failed. In this regard, Hon'ble Supreme Court made it clear that mediation proceedings are totally confidential proceedings and unlike proceedings in Court they are not contested openly in the public gaze. Thereafter, it was made clear that if the mediation succeeds, the mediator should send the agreement signed by both parties without mentioning what transpired during the mediation proceedings. This means that confidentiality will prevail https://www.mhc.tn.gov.in/judis 22/30 OSA (CAD) Nos.60 and 61 of 2024 irrespective of whether mediation succeeds or fails. We deem it appropriate to extract and reproduce paragraphs 1 and 2 of Moti Ram's case, which read as follows:
'1. On 31-8-2010 we had referred the matter for mediation to the Mediation Centre at Chandigarh to attempt to resolve the dispute between the parties. Today, when the matter was called out, our Court Secretary placed before us the report dated 29-9-2010 received from the mediator, which is as follows:
“Mr Ashok Kumar states that he would be ready and willing to vacate the shop on receipt of 1/3rd of the value of the shop which according to him is worth approximately 50 lakhs and he be paid an amount of 15 lakhs (approx.). The appellant landlord is not ready and willing to offer the said amount and has extended the concession by giving up on the pending rent only which according to him is pending for last 28 years. The tenant has also expressed his willingness to purchase the property for an amount of Rs. 30 lakhs but the landlord has refused to dispose of the same on the ground of personal necessity.”
2. In this connection, we would like to state that mediation proceedings are totally confidential proceedings.
This is unlike proceedings in court which are conducted openly https://www.mhc.tn.gov.in/judis 23/30 OSA (CAD) Nos.60 and 61 of 2024 in the public gaze. If the mediation succeeds, then the mediator should send the agreement signed by both the parties to the court without mentioning what transpired during the mediation proceedings. If the mediation is unsuccessful, then the mediator should only write one sentence in his report and send it to the court stating that the “mediation has been unsuccessful”. Beyond that, the mediator should not write anything which was discussed, proposed or done during the mediation proceedings. This is because in mediation, very often, offers, counter offers and proposals are made by the parties but until and unless the parties reach to an agreement signed by them, it will not amount to any concluded contract. If the happenings in the mediation proceedings are disclosed, it will destroy the confidentiality of the mediation process. ' 11.3 In the case on hand, 23.10.2021 said mediated settlement agreement is the agreement signed by both parties but 26.09.2021 minutes is only what transpired in the mediation and more importantly 26.09.2021 minutes which refers to putting the licensed area to health care facility does not form part of the said mediated settlement agreement dated 23.10.2021 on the basis of which the Section 34 Court gave quietus to the two OPs. Therefore, Section 60 argument does not really cut ice.
12. In the light of the views expressed supra, the next https://www.mhc.tn.gov.in/judis 24/30 OSA (CAD) Nos.60 and 61 of 2024 argument regarding party at fault also becomes a non-starter. This takes us to our view (at the risk of repetition for completion of facts and on a demurrer qua maintainability as per allusion elsewhere supra in this order) regarding the applications being disposed of without calling for a counter. Calling for a counter is the discretion of the Hon'ble Court concerned (the discretionary determinant is inter-alia disputation qua facts) and in the case on hand, the impugned order more particularly paragraphs 4, 5 and 6 thereat make it clear that both sides were heard and both sides were represented by learned senior counsel instructed by respective counsel on record.
13. The point that the captioned appeals not being those challenging Section 34 proceedings in our considered view is also a non-starter as the Section 34 Court has neither set aside nor refused to set aside i.e., neither sustained nor dislodged the impugned arbitral award dated 11.03.2019 vide the impugned order. To be noted it was submitted with specificity that Section 37(1)(c) has been invoked as regards captioned OSAs (as captured supra).
14. Learned senior counsel for the appellants pressed into service Indian Bank Vs. Satyam Fibres (India) Pvt. Ltd., https://www.mhc.tn.gov.in/judis 25/30 OSA (CAD) Nos.60 and 61 of 2024 reported in (1996) 5 SCC 550 as well as Meghmala and Ors., Vs. G.Narasimha Reddy & Ors., reported in (2010) 8 SCC 383 and adverted to paragraph 23 of Meghmala case for the proposition that Courts have inherent power to set aside an order obtained by fraud practised upon that Court. For the same proposition Sree Surya Developers and Promoters reported in (2022) 5 SCC 736 was also pressed into service. The oft quoted celebrated S.P.Chengalvarayan case in S.P.Chengalvaraya Naidu (dead) by Lrs Vs. Jagannath (dead) by Lrs and Others reported in (1994) 1 SCC 1 was also pressed into service for the broad proposition that fraud vitiates a judgment. The question here is whether 29.10.2021 order of the Section 34 Court was obtained by playing fraud. We have no hesitation in saying that the answer is in the negative as the only point which is being projected in this regard is what has been recorded is the minutes of the learned mediator dated 26.09.2021 where it has been recorded that said mediated settlement agreement (as already alluded to and captured supra) wherein it has been recorded that it would be using the licensed area for providing health care facilities for the benefit of the public at large i.e., affordable health care by replicating what it is already doing in Hyderabad. As this is only what transpired in the mediation and not part of said mediated https://www.mhc.tn.gov.in/judis 26/30 OSA (CAD) Nos.60 and 61 of 2024 settlement agreement, it can hardly be a ground and even it can hardly be a piece of document which can be pressed into service to dislodge a compromise order much less can it be gainsaid that fraud has been played upon the Court. To be noted this is absent Section 22 of Mediation Act which has not kicked in and it is in the light of Moti Ram principle and there is allusion about both elsewhere supra in this order.
15. On fraud, learned senior counsel also referred to the oft quoted celebrated judgment of Avitel Post Studioz Limited and Others Vs. HSBC PI Holdings (Mauritius) Limited reported in (2021) 4 SCC 713 and drew our attention to paragraphs 34 and 35. We are of the considered view that Avitel case also does not buttress the argument on fraud as Avitel case is an authority for the proposition in Ayyasamy being A.Ayyasamy Vs. A.Paramasivam reported in (2016) 10 SCC 386 which drew a distinction between 'simple allegation of fraud' and 'serious allegation of fraud' and laid down two tests i.e., whether the plea permeates the entire contract and above all the arbitration agreement rendering it void and whether the allegations of fraud touch upon internal affairs of the parties inter se having no implication in public domain. Therefore, Avitel case also does not https://www.mhc.tn.gov.in/judis 27/30 OSA (CAD) Nos.60 and 61 of 2024 come to the aid of the said hotel.
16. On Section 60(4) of Easements Act point, judgment in Fazal Haq case being Fazal Haq Vs. Data Ram and another reported in 1975 SCC OnLine All 33 was pressed into service. Though it is not a judgment of a co-ordinate Bench being a judgment of Hon'ble Division Bench of Allahabad High Court, we deem it appropriate to say that Fazal Haq case does not come to the aid of said hotel as Section 60(b) argument is again predicated on the 26.09.2021 minutes which cannot be looked into more particularly as such a covenant or clause does not find place in the 29.10.2021 said mediated settlement agreement .
17. Learned senior counsel for said sabha relying on Dhanjit Singh Sandhu case being State of Punjab and Others Vs. Dhanjith Singh Sandhu reported in (2014) 15 SCC 144 submitted that said sabha cannot be described as party at fault and on the contrary said hotel is a party which has derived benefit out of the 29.10.2021 order of Section 34 Court as it has used the licensed area upto 31.05.2024 though 12 years at the highest as regards said license agreement elapsed on 14.10.2020 and it cannot now be heard to contend that this 29.10.2021 order is vitiated by fraud.
https://www.mhc.tn.gov.in/judis 28/30 OSA (CAD) Nos.60 and 61 of 2024
18. As already alluded to supra, both captioned OSAs fail and both captioned OSAs are dismissed. Consequently, captioned CMPs thereat also perish with the OSAs, in other words, captioned CMPs are also dismissed. There shall be no order as to costs.
(M.S.J.) (K.G.T.J.)
03.07.2024
Index:Yes/No
Neutral Citation: Yes/No
mmi
To
The Sub Assistant Registrar,
Original Side, High Court,
Madras.
M.SUNDAR.J.,
https://www.mhc.tn.gov.in/judis
29/30
OSA (CAD) Nos.60 and 61 of 2024
and
K.GOVINDARAJAN THILAKAVADI, J.,
mmi
O.S.A. (CAD) Nos. 60 and 61 of 2024
03.07.2024
https://www.mhc.tn.gov.in/judis
30/30