Rakesh Balaaneja (Smt. ) v. Sushila Bajaj and others
2011-12-16
SANJAY MISRA, SIBGHAT ULLAH KHAN
body2011
DigiLaw.ai
Sanjay Misra, J.— In this case on 23.11.2010 following order was passed : "Hon'ble The Chief Justice through order dated 17.11.2011 nominated this Bench to hear this appeal and fixed today's date in view of the direction of the Supreme Court to decide the matter very expeditiously. Heard learned counsel for the parties. Respondent nos. 2 to 4 i.e. arbitrator and two witnesses of the agreement (alleged agreement) dated 5.1.1983 have not yet been served in appeal. However, Sri Ranjit Saxena, learned counsel for the appellant states that it is not necessary to take fresh steps to serve them as they were also defendants along with the appellant and this appeal is directed against judgment and decree through which trial court has rejected the plaint under Order 7 Rule 11 C.P.C. on the application of defendant respondent no.1 represented by Sri Triveni Shankar, learned counsel. Sri Ranjit Saxena, learned counsel for the appellant wanted to address the Court on the question of genuineness or otherwise of the agreement dated 5.1.1983. However, we did not permit him to raise the arguments as that would have been beyond the scope of this appeal. The Hon. Supreme Court observed that: "All pleas are left open to the parties to be urged before the High Court including the plea of forgery." We interpret the said part of Supreme Court order as meaning that High Court is required to decide all the pleas which are raised including plea of forgery provided that the same is within the scope of the proceedings pending before the High Court. Gist of the arguments is given below:- The main argument on merit of learned counsel of the appellant is that an application under Order 7 Rule 11 C.P.C. filed by defendant respondent no.1 had already been rejected on 29.7.2010 hence within one month therefrom similar second application was not maintainable and it could not be allowed.
Gist of the arguments is given below:- The main argument on merit of learned counsel of the appellant is that an application under Order 7 Rule 11 C.P.C. filed by defendant respondent no.1 had already been rejected on 29.7.2010 hence within one month therefrom similar second application was not maintainable and it could not be allowed. The reply to this contention by Sri Triveni Shankar, learned counsel for the defendant respondent no.1 is that just the other day i.e. on 30.7.2010 Delhi High Court had dismissed the appeal of the present plaintiff appellant hence that gave a fresh cause of action to the defendant respondent no.1 to file another application under Order 7 Rule 11 C.P.C. read with Section 151 C.P.C. and by virtue of Section 35 and 37 of Arbitration Act the rejection of objection against arbitration award becomes final only after decision of appeal. Sri Triveni Shankar, learned counsel for the respondent no.1 has further argued that Arbitration Act is a self contained code and even challenge to the agreement for partnership can be decided only under the said Act and not by Civil court. Both the parties have cited several authorities. Sri Ranjit Saxena, learned counsel has mainly placed reliance upon N. Radha Krishnan Vs. Maestro Engineers and others 2010 (1) S.C.C. Page 72. Judgment is reserved." This First Appeal has been filed under Section 96 C.P.C. against judgment and decree dated 21.2.2011 passed by Civil Judge (Senior Division), Gautam Buddah Nagar in Original Suit No.411 of 2002 Smt. Rakesh Bala Aneja vs. Smt. Sushil Bajaj and others rejecting the plaint under Order 7 Rule 11 C.P.C. read with Section 151 C.P.C. The first effective relief claimed in the plaint was that the deed dated 5.1.1983 (of partnership) be declared as null and void. The second effective relief was for permanent injunction restraining defendant no.2 Shri J.S. Sood, the Arbitrator to further proceed in arbitration proceedings as sole arbitrator. The arbitrator gave the award on 4/23.8.2003. The Arbitrator specifically rejected the plea that the basic agreement /deed of partnership dated 5.1.1983 was forged. Earlier similar application filed by the defendant under Order 7 Rule 11 C.P.C. had been rejected by the same court on 29.7.2010.
The arbitrator gave the award on 4/23.8.2003. The Arbitrator specifically rejected the plea that the basic agreement /deed of partnership dated 5.1.1983 was forged. Earlier similar application filed by the defendant under Order 7 Rule 11 C.P.C. had been rejected by the same court on 29.7.2010. Prior to that objections filed by the plaintiff under Section 34 of Arbitration Act 1996 against Arbitrator's award dated 4/23.8.2003 had been rejected by the Single Judge of Delhi High Court on 30.10.2009. However, just after one day of rejection of earlier application under Order 7 Rule 11 C.P.C. i.e. 29.7.2010, Delhi High Court rejected First Appeal directed against order of Single Judge dated 30.10.2009 on 30.7.2010. According to defendant-respondent no.1 it was rejection of appeal which finalized the matter hence she was entitled to file second application under Order 7 Rule 11 C.P.C. Learned counsel for the respondent no.1 has heavily placed reliance upon the Supreme Court authority reported in Shipping Corporation of India vs. Machado Brothers A.I.R. 2004 S.C. 2093 wherein it has been held that if due to subsequent development suit has become infructuous, it may be dismissed as such under Section 151 C.P.C. The facts of the said case were that the suit related to certain disputes in the working of an agency however, subsequently the agency itself had been terminated which was subject matter of a fresh suit. The Supreme Court held that due to subsequent termination of agency and filing of suit questioning such termination, the earlier suit became infructuous. In the earlier order dated 29.7.2010 the Civil Judge held that the suit was filed for cancellation of the original agreement and not for any arbitration agreement. The Supreme Court in Y.B. Patil and others vs. Y.L. Patil A.I.R. 1977 S.C. 392 has held that principles of res-judicata can be invoked not only in separate subsequent proceedings; they also get attracted in subsequent stage of the same proceedings. Once an order made in the course of a proceeding becomes final, it would be binding at the subsequent stage of that proceeding. Dismissal of appeal by Division Bench of Delhi High Court on 30.7.2010 could not provide a fresh opportunity to the defendant to file another application under Order 7 Rule 11 read with Section 151 C.P.C. In respect of agreement dated 5.1.1983 nothing new had been said by the Division Bench.
Dismissal of appeal by Division Bench of Delhi High Court on 30.7.2010 could not provide a fresh opportunity to the defendant to file another application under Order 7 Rule 11 read with Section 151 C.P.C. In respect of agreement dated 5.1.1983 nothing new had been said by the Division Bench. It had only affirmed whatever had earlier been held by the Single Judge while rejecting objections of the plaintiff under Section 34 of the Arbitration Act on 30.10.2009. Learned counsel for the plaintiff-appellant has mainly placed reliance upon the authority of the Supreme Court reported in N. Radha Krishnan vs. Maestro Engineers and others 2010 (1) SCC 72 holding that if the matter is complicated involving various questions and issues then despite existence of arbitration agreement and the dispute falling within the purview thereof still if dispute requires detailed investigations and production of elaborate evidence then it shall be tried by a court. In the said case serious allegations as to fraud and malpractices committed in account books and manipulation of finances of partnership firm had been made. Accordingly it was held that the matter did not warrant to be tried and decided by arbitrator and for furtherance of justice it should be tried in a court of law which would be more competent and have the means to decide such a complicated matter. The Delhi High Court through its judgment dated 30.10.2009 while rejecting objections against the award of the arbitrator held that the plea that the basic agreement dated 5.1.1983 was forged had been turned down by the Arbitrator and the court while hearing objections under Section 34 of Arbitration Act could not arrive at a different finding of fact on the same evidence. In the judgment of Delhi High Court in F.A.O. (O.S.) No.38 of 2010 which was dismissed on 30.7.2010 the Division Bench concurred with the said opinion of the Single Judge. The Division Bench in para-7 held as follows: "From the aforesaid, in our view, it is clear that the plea of forgery and fraud is being raised by the appellants herein only with a view to divest the respondent no.2 from the fruits of the award. Even otherwise, it is trite law that on the basis of the evidence recorded by the Arbitrator this court cannot form an opinion different from that formed by the Arbitrator.
Even otherwise, it is trite law that on the basis of the evidence recorded by the Arbitrator this court cannot form an opinion different from that formed by the Arbitrator. This ground taken by the appellant for assailing the award is, therefore, liable to be rejected and has been rightly rejected by the learned Single Judge." We do not propose to enter into the controversy in detail. This appeal deserves to be allowed only on the ground that earlier order dated 29.7.2010 rejecting similar application under Order-7 Rule 11 C.P.C. operated as a bar for consideration of same plea subsequently. Accordingly appeal is allowed. Impugned decree is set aside. Suit is restored on the file of the court below and the court below is directed to decide the suit very expeditiously. We make it abundantly clear that all the pleas including plea of effect of award and judgment of Delhi High Court in respect thereto may be raised and if raised shall be decided by the trial court in its final judgment without being influenced by any finding recorded either in its earlier order dated 29.7.2010 or the order dated 21.2.2011 challenged through this appeal and set aside by this judgment. It is further made clear that absolutely no final opinion has been expressed on any point through this judgment except the point that second application under Order 7 Rule 11 C.P.C. was not maintainable. As the Supreme Court directed very early hearing of this appeal hence it is directed that the court below shall decide the suit very expeditiously. For the purposes of expeditious disposal of the suit the following direction regarding filing of written statement is being issued which otherwise in appeal like the present one would not have been advisable to issue. Even though under Order-8 Rule 1 C.P.C. time to file written statement has elapsed long before still as applications under Order-7 Rule 11 C.P.C. were being prosecuted by the defendant-respondent no.1 hence in view of Supreme Court authority reported in Kailash vs. Nanku A.I.R. 2005 S.C. 2441 it is directed that defendant-respondent no.1 may be permitted to file written statement on 16.1.2012 alongwith cost of Rs.50,000/- to be deposited on the same date. It is further directed that absolutely no un-necessary adjournment shall be granted to any of parties in any form.
It is further directed that absolutely no un-necessary adjournment shall be granted to any of parties in any form. If any adjournment is granted then it shall be for a short period and on payment of very heavy cost which shall not be less than Rs.5,000/- per adjournment. Both the parties are directed to appear before the court below on 16.1.2012 on which date written statement alongwith cost of Rs.50,000/- shall be filed and date for framing issues shall be fixed. _