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2004 DIGILAW 663 (PNJ)

Mir Singh v. Puri Constructions (P) Ltd.

2004-07-06

M.M.KUMAR

body2004
JUDGMENT M.M. Kumar, J. - The legal representatives of Sultan have filed the instant petition under Section 115 of the Code of Civil Procedure, 1908 (for brevity, the Code) challenging concurrent findings recorded by both the Courts below. Both the Courts below have allowed the petition filed by the respondent-firm under Section 20 of the Arbitration Act, 1940 (for brevity, 1940 Act) in view of the arbitration clause 11 of the arbitration agreement dated 2.4.1986 Ex.P3. Both the Courts have further held that the dispute was liable to be referred to the arbitration of Mr. Kapil Sibal as per the agreement between the parties. 2. Brief facts of the case necessary for disposal of the instant petition are that on 3.4.1989 Civil Suit No. 17 was filed by the respondent-firm M/s Puri Construction (P) Ltd. claiming that the petitioner had approached the firm through the property dealers for sale of land situated at Village Wazirabad, District Gurgaon. The detailed description of the land is given in paragraph 3 of the petition. The respondent-firm agreed to buy this land at the rate of Rs. 1,95,000/- and on 2.4.1986 an agreement to sell was executed by Sultan (now represented by his legal representatives - petitioners) in favour of the respondent-firm. There are usual terms and conditions in the agreement to sell. However, the respondent-firm claimed in its petition under Section 20 of 1940 Act that there was an agreement for referring any dispute between the parties to the arbitration of Mr. Kapil Sibal, Senior Advocate C-I, Maharani Bagh, New Delhi. The respondent-firm further alleged that it has always been ready and willing to perform its part of the contract. However, the petitioner had avoided to execute the sale deed. Claiming that the dispute was liable to be referred to the arbitration of Mr. Kapil Sibal, the petition was filed for issuance of direction to the petitioner to file the arbitration agreement and for referring the matter to the sole arbitration of Mr. Kapil Sibal. 3. In reply, the stand taken by the petitioner was that the petition filed by the respondent-firm was time barred. The ownership of the land, the agreement to sell dated 2.4.1986 and part payment of sale consideration by the respondent-firm were not disputed. However, it was asserted that the respondent-firm had failed to execute the sale deed for want of funds. In reply, the stand taken by the petitioner was that the petition filed by the respondent-firm was time barred. The ownership of the land, the agreement to sell dated 2.4.1986 and part payment of sale consideration by the respondent-firm were not disputed. However, it was asserted that the respondent-firm had failed to execute the sale deed for want of funds. The petitioner also opposed the assertion that there was an arbitration clause and that the name of Mr. Kapil Sibal has been interpolated lateron without the knowledge and consent of the petitioner. It was further claimed that in cases where there is an agreement for reference of dispute to an arbitrator, the agreement cannot be treated as complete and enforceable unless the name of the arbitrator is duly filled in. 4. Both the Courts below have found that the suit under Section 20 of 1940 Act was instituted by the respondent-firm through its authorised agent Mr. Mohinder Singh Puri who had duly signed and verified the petition. It was further found that there was no interpolation by adding the name of Mr. Kapil Sibal and the agreement dated 2.4.1986 Ex.P3 was valid. It contained a valid arbitration clause. In pursuance to arbitration clause 11 in agreement dated 2.4.1986 Ex.P3, both the Courts below directed that the dispute be referred to the sole arbitration of Mr. Kapil Sibal. The parties were directed to file their claim/counter claim. The view of the learned Appellate Court on the issue concerning the agreement to sell Ex.P3 dated 2.4.1986 reads as under :- "There can be no denial to the fact that mere marking of an exhibit on a document does not dispense with its proof. The statement of Mahinder Puri P.W.1 as it stands also does not appear to be sufficient to prove this document. However, in the circumstances of this case, the petitioner was not obliged to lead any other evidence to prove the document. The peculiar circumstance of this case is the admission of Sultan Singh appellant of the execution of this agreement. Although, the agreement is not specifically admitted, yet the appellant has admitted having agreed to sell the land and has also admitted having received part of the sale consideration. He has not pleaded nor has put on record any other agreement which was executed between the parties for sale of his land. Although, the agreement is not specifically admitted, yet the appellant has admitted having agreed to sell the land and has also admitted having received part of the sale consideration. He has not pleaded nor has put on record any other agreement which was executed between the parties for sale of his land. He has not denied his signatures on Ex.P3. No circumstance is brought on the record to show as to why the appellant signed the document without appreciating its contents. All these circumstances clearly prove the execution of agreement Ex.P3 by appellant Sultan Singh. Thus, it can not be said that the respondent failed to prove this document." The Appellate Court further rejected the argument with regard to interpolations by observing as under :- "It is true that if there are interpolations in an agreement, it would be deemed that the matter added lateron was not agreed to between the parties. It would also amount to tampering with the document. However, the statement of Mahinder Puri P.W.1 that the name of Kapil Sibal and his address and other description was already mentioned in the agreement when it was signed by Sultan Singh. He has made it clear that the writing in clause 11 was made a day before execution of the agreement while the writing with blue ink was added on the day of execution of the agreement because that related to the description of the party, land and the price of the land agreed to be sold. Sultan could not appear in the witness box because he died earlier to that. There is no one on the record saying that this writing was not there when the agreement was executed, who could be believed. Mir Singh one of the L.Rs of Sultan Singh appearing as R.W.1 although says so but his statement in this regard is not believable because his presence at the time of execution of the agreement is not proved. So, the name of Shri Kapil Sibal does not appear to be an interpolation made in the agreement by the petitioner." Objection to maintainability of the petition 5. Mr. So, the name of Shri Kapil Sibal does not appear to be an interpolation made in the agreement by the petitioner." Objection to maintainability of the petition 5. Mr. Arun Khosla, learned counsel for the respondent-firm has raised a preliminary objection with regard to maintainability of the instant petition by arguing that the order passed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for brevity, 1996 Act) is merely an administrative order and such an order could not be subject matter of judicial review either under Section 115 of the Code or under Article 226 of the Constitution. In support of his submission, the learned counsel has placed reliance on two judgments of the Supreme Court in Konkan Railway Corpn. Ltd. and others v. Mehul Construction Co., (2000) 7 SCC 201 and the judgment of the Constitution Bench in Konkan Railway Corporation Ltd. and another v. Rani Construction Pvt. Ltd., (2002) 2 SCC 388. He has also referred to the judgment of the Supreme Court in Hythro Power Corporation Ltd. v. Delhi Transco Ltd., JT 2003(6) SC 515. 6. Mr. M.L. Sarin, learned counsel for the petitioners has argued that the preliminary objection raised by the respondent-firm is based on unwarranted presumption that the provisions of 1996 Act would apply to the instant case. According to the learned counsel, the controversy raised in the present case, necessarily has to be governed by the provisions of 1940 Act. The learned counsel has made a reference to Section 85(2) of 1996 Act dealing with repeal and saving clause of 1940 Act. Mr. Sarin has also referred to Section 6 of the General Clauses Act, 1897 (for brevity, 1897 Act) and submitted that it is only in cases where 1996 Act is expressly retrospective in operation that it could be made applicable as such. In support of his submission the learned counsel has placed reliance on a Full Bench judgment of this Court in the case of Parshotam Dass v. State of Haryana, 2003(2) PLR 816. The learned counsel has maintained that despite the repeal of 1940 Act, the provision has been made applicable to arbitral proceedings which had commenced before 1996 Act came into force, subject to any agreement to the contrary between the parties. The learned counsel has maintained that despite the repeal of 1940 Act, the provision has been made applicable to arbitral proceedings which had commenced before 1996 Act came into force, subject to any agreement to the contrary between the parties. Elaborating his argument, the learned counsel has pointed out that Section 21 of 1996 Act contemplates that the arbitral proceedings in a particular dispute would commence on a date when a request that the dispute be referred to the arbitration is received by the respondent. In support of his submission, the learned counsel has placed reliance on a judgment of the Supreme Court in the case of M/s Shettys Constructions Co. Pvt. Ltd. v. M/s Konkan Railway Construction and another, AIR 1999 SC 1535 and argued that the Supreme Court has taken this view in that case because demand for referring the dispute to the arbitration was made prior to the coming into force 1996 Act and the arbitration suit was to be decided under 1940 Act. The learned counsel has also argued that both parties in the instant case have proceeded under 1940 Act and has accepted its applicability. Referring to the facts of the present case, the learned counsel has argued that the original application filed by the respondent-firm before the Civil Judge is under Section 20 of 1940 Act which was filed on 3.4.1989, whereas 1996 Act came into operation on 20.1.1996. The learned counsel has emphasised that the judgments in Konkan Railway Corpn. Ltd. and others v. Mehal Construction Co.s case (supra) and Konkan Railway Corporation Ltd. and another v. Rani Construction Pvt. Ltd.s case (supra) would have to application and, therefore, the principle laid down in Section 11(6) of 1996 Act would not apply to the facts of the present case. 7. After hearing learned counsel for the parties on the preliminary objection, I am of the considered view that the instant petition is maintainable and it cannot be governed by the provisions of 1996 Act. The agreement between the parties was executed on 2.4.1986 Ex.P3 and an amount of Rs. 52,710/- was received by the petitioner vide Ex.P4 on the same date. On 12.3.1989 the respondent-firm has issued publication in a local newspaper. On none of these dates, the provisions of 1996 Act were applicable nor the 1996 Act is retrospective. 8. The agreement between the parties was executed on 2.4.1986 Ex.P3 and an amount of Rs. 52,710/- was received by the petitioner vide Ex.P4 on the same date. On 12.3.1989 the respondent-firm has issued publication in a local newspaper. On none of these dates, the provisions of 1996 Act were applicable nor the 1996 Act is retrospective. 8. It would be apposite to make a reference to Sections 21 and 85 of 1996 Act which read as under :- "21. Commencement of arbitral proceedings. - Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. ..... 85. Repeal and savings. - (1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed. (2) Notwithstand such repeal, - (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act." A conjoint reading of both the provisions makes it evident that although 1940 Act has been repealed, yet it would apply to arbitral proceedings which have commenced before January 25, 1996 when 1996 Act came into force. By Section 85(2), a non-obstante clause has been incorporated and 1940 Act would continue to apply to the arbitral proceedings which have commenced before 25th January, 1996 despite the repeal of the 1940 Act. 9. The question as to when proceedings could be considered to have commenced has been answered by Section 21 of 1996 Act. The arbitral proceedings in respect of a dispute would be deemed to have commenced on the date on which a request for that dispute to be referred to arbitration is received by the respondent. It is true that no request for referring the dispute to arbitration has been sent by one party to the other. The arbitral proceedings in respect of a dispute would be deemed to have commenced on the date on which a request for that dispute to be referred to arbitration is received by the respondent. It is true that no request for referring the dispute to arbitration has been sent by one party to the other. However, on 3.4.1989 the suit was filed by the respondent-firm and notice of the suit was served on the petitioners who had filed their written statement. Under Section 21 read with Section 85(2) of 1996 Act, it has to be accepted that the proceedings in this case had commenced on 3.4.1989 when notice of the suit was issued as has been provided by Section 85(2)(a) read with Section 21 of 1996 Act. This view is supported by the judgment of the Supreme Court in the case of M/s Shettys Construction Co. Pvt. Ltd. (supra). In the cases of Delhi Transport Corportion Ltd. v. Rose Advertising, JT 2003(4) SC 100 and Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., JT 1999(8) SC 66 the Supreme Court has further held that 1940 Act would continue to apply. Moreover, at no stage of the proceedings before the Courts below a single objection was raised and the parties accepted that the 1940 Act was applicable as the application filed by respondent-firm itself was under Section 20 of 1940 Act. 10. The argument raised by the learned counsel for the respondent-firm by placing reliance on a judgment of the Supreme Court in the case of The Secretary to the Govt. of Orissa and another v. Sarbeswar Rout, AIR 1989 SC 2259, cannot be accepted because in that case for the purposes of awarding interest, the date of commencement of the proceedings was to be discovered and it was held that the proceedings commenced on the filing of a proper claim in accordance with the prescribed procedure. The Supreme Court in Sarbeswar Routs case (supra) did not have the opportunity to deal with Sections 21 and 85(2) of 1996 Act which were enacted much later. Therefore, the argument is devoid of merit. On merits 11. Having cleared the decks by disposing of a preliminary objection, it would now be appropriate to notice the arguments raised by learned counsel for the parties on merits of the controversy 12. Mr. Therefore, the argument is devoid of merit. On merits 11. Having cleared the decks by disposing of a preliminary objection, it would now be appropriate to notice the arguments raised by learned counsel for the parties on merits of the controversy 12. Mr. M.L. Sarin, learned counsel for the petitioners has argued that the suit under Section 20 of 1940 Act was filed by the respondent-firm and it was their bounden duty to prove on record the agreement dated 2.4.1986 Ex.P3. According to the learned counsel, the respondent-firm has miserably failed to prove the agreement to sell. He has drawn my attention to Ex.P3 and has pointed out that it has only been signed by Sultan and there is no signature of any one else. Mohinder Singh Puri has not been the signatory nor a witness. The learned counsel has maintained that a bare perusal of the agreement would show that the name of Mr. Kapil Sibal has been added later on. The learned counsel has also made a reference to paragraphs 5 and 6 of the written statement to show that the petitioner has always been ready and willing to perform his part of the contract, whereas the respondent-firm has failed to come forward for execution of the sale deed on account of lack of funds. The learned counsel has insisted that there is interpolation and cuttings in the agreement to sell Ex.P3 and the agreement cannot be executed. He has also pointed out that the agreement has been recorded on the stamp papers purchased by Sardar Singh and Dharam Pal. The learned counsel has then argued that the suit in any case is barred under Article 137 of the Limitation Act, 1963 as the agreement to sell is dated 2.4.1986 and the suit was filed after the expiry of three years on 3.4.1989. 13. Mr. Arun Khosla, learned counsel for the respondent-firm has argued that pure findings of facts have been recorded by both the Courts below with regard to existence of agreement to sell and absence of any interpolation in clause 11 concerning arbitration. The learned counsel has maintained that in a petition under Section 115 of the Code, the findings of facts cannot be challenged as has been held by a Constitution Bench of the Supreme Court in the case of Pandurang Dhondi Chougule and others v. Maruti Hari Jadhav and others, AIR 1966 SC 153. The learned counsel has maintained that in a petition under Section 115 of the Code, the findings of facts cannot be challenged as has been held by a Constitution Bench of the Supreme Court in the case of Pandurang Dhondi Chougule and others v. Maruti Hari Jadhav and others, AIR 1966 SC 153. The learned counsel has stressed that all the arguments with regard to execution of the agreement as well as existence of arbitration clause are based on findings of facts and, thus, the petition is liable to be dismissed on merits. 14. Having heard learned counsel for the parties at a considerable length, I am of the considered view that this petition is liable to be dismissed because both the Courts below have recorded a finding of fact that the agreement to sell dated 2.4.1986 Ex.P3 has been duly signed by Sultan Singh and there is a tacit admission by him with regard to its execution inasmuch as it has been conceded that he had agreed to sell the land and has also admitted the receipt of part payment of the sale consideration as witnessed in Ex.P4 dated 2.4.1986. He did not deny his signatures on the agreement to sell Ex.P3. It has further been found by both the Courts below that there is no interpolation in the agreement to sell dated 2.4.1986 Ex.P3 and the allegation with regard to adding the name of Mr. Kapil Sibal, Senior Advocate as an arbitrator later on has not been accepted. It is also well settled that an agreement to sell does not require attestation and the same cannot be questioned on the ground of non-examination of any attesting witness. Under Section 67 of the Indian Evidence Act, 1872 (for brevity, 1872 Act) a document can be proved by proving the signatures of the vendor/vendee as the case may be. However, Section 68 of 1872 Act would not be attracted because it would apply only to cases where the document is required to be witnessed by an attesting witness. Reliance in this regard could be placed on a judgment of the Supreme Court in the case of Hans Raji v. Yosodanand, (1996)7 SCC 122 where it has been held that even if some marginal witness has attested the sale deed, it was not required to be proved by production of such a witness. Reliance in this regard could be placed on a judgment of the Supreme Court in the case of Hans Raji v. Yosodanand, (1996)7 SCC 122 where it has been held that even if some marginal witness has attested the sale deed, it was not required to be proved by production of such a witness. It was further held that Section 68 of 1872 Act would not be attracted. What has been made applicable to sale deed would equally apply to the agreement to sell because both the documents relate to the same class, namely, they do not require any attestation. In the present case, signatures on the agreement to sell Ex.P3 and receipt Ex.P4 accepting a part payment of the sale consideration have not been denied by Sultan Singh and, therefore, the document cannot be attacked on the ground that no attesting witness has been produced because there is no such requirement of law that an agreement to sell has to be attested. 15. Moreover, it is well-settled that the findings of facts cannot be gone into by a revisional Court as has been held by a Constitution Bench of the Supreme Court in Pandurang Dhondi Chougules case (supra). This view has been reiterated in the cases of D.L.F. Housing & Construction Co. (P) Ltd. v. Sarup Singh, (1969) 3 SCC 807 and Essar Constructions v. N.P. Rama Krishna Reddy, (2000) 6 SCC 94. Therefore, I am not inclined to disturb the findings of facts recorded by both the Courts below. 16. The argument of learned counsel for the petitioners that the suit is barred under Article 137 of the Limitation Act, 1963 as the same is alleged to have been filed after the expiry of three years cannot be accepted because in neither of the two Courts below such an argument was raised despite the fact that issue No. 4 was framed. The Civil Judge in paragraph 23 of its judgment has observed that issue No. 4 with regard to limitation was not touched at the time of argument and similar is the position before the learned Additional District Judge. The question of limitation is a mixed question of law and fact and the same cannot be raised for the first time in a revision petition. The question of limitation is a mixed question of law and fact and the same cannot be raised for the first time in a revision petition. It has been repeatedly held by the Supreme Court that the plea of limitation cannot be set up for the first time at the stage of revision or second appeal. The aforementioned view has been taken by a Constitution Bench of the Supreme Court in the case of Banarsi Dass v. Kansi Ram, AIR 1963 SC 1165 and also in the case of Municipal Council, Ahmednagar v. Shah Hyder Beig, (2000) 2 SCC 48. Therefore, I do not find any merit in the argument raised by the learned counsel. 17. For the reasons recorded above, this petition fails and the same is dismissed. The dispute between the parties is referred to the arbitration of Mr. Kapil Sibal as mentioned in arbitration clause No. 11 of the agreement dated 2.4.1986, Ex.P3. The parties are directed to approach the arbitrator and file their claims/counter claims before him within a period of two months. The Arbitrator shall proceed to pronounce the award within a period of four months thereafter. In the peculiar facts and circumstances of the case, there shall, however, be no order as to costs. Petition dismissed.