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2013 DIGILAW 1089 (BOM)

Rajesh M. Mahtani v. R. M. Khan

2013-06-17

ANOOP V.MOHTA

body2013
Judgment:- Heard finally, by consent of the parties. 2. The Petitioner who is Respondent in Arbitration Proceedings initiated by the original Claimants (Respondent Bank) under Section 84 of the Multi State Co-operative Societies Act, 2002 (for short, MSCS Act), has invoked Section 9 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act). 3. Admittedly, the Arbitrator was appointed by the Registrar under the MSCS Act. The Petitioner participated in the proceedings and thereafter filed an Application alleging fraud against the Bank and also contended that the Arbitration proceedings, so initiated, is not maintainable and thereby even challenged the jurisdiction of the Arbitral Tribunal on that ground. By order dated 23 June 2012, the learned Arbitrator by reasoned order rejected the said Application and observed as under: It is not the allegations of the Respondent No.1 that on the other ground this authority has no jurisdiction and the claim petition is not maintainable. The Respondents claiming to frame the issue as preliminary for adjudication of the claim. To my view that the allegations of fraud made by the Respondent No.1 will consider at the time of decision of the claim petition on merits. The said issue will be framed and then the matter will proceed for further hearing and final decision. At this stage, the application is hereby rejected and the claim petition fixed for framing the issues.” 4. It is therefore, clear that the learned Arbitrator rightly kept the issue of fraud open, to be decided on merits alongwith the main petition. Even otherwise, mere allegations of fraud and/or misappropriation of amount, as alleged itself are not sufficient. The party one who makes allegations must support the same by material particulars which need to be decided by the Tribunal after giving an opportunity to both the parties. The contesting Respondent here is a bank established under the MSCS Act. The authentication of their record and/or documents, just cannot be tested mere by allegations of fraud. The rebuttal, even if any, needs to be proved by the Applicants by leading appropriate evidence. Therefore, I see there is no reason, at this stage, to interfere with the order so passed. 5. Strikingly, the Petitioner has invoked Section 9 of the Arbitration Act and prayed for various interim reliefs, including the stay of the Arbitration proceedings, so initiated, under the provisions of MSCS Act. Therefore, I see there is no reason, at this stage, to interfere with the order so passed. 5. Strikingly, the Petitioner has invoked Section 9 of the Arbitration Act and prayed for various interim reliefs, including the stay of the Arbitration proceedings, so initiated, under the provisions of MSCS Act. There exists Arbitration agreement/clause of arbitrable disputes. The Arbitrator, therefore, as appointed has to decide the same in accordance with law. 6. The Arbitration Act, though invoked in view of Section 84 of the MSCS Act, there is no such provisions whereby the Court under Section 9 can stay the Arbitration proceedings as sought to be contended and/or prayed in the Petition. It is beyond the jurisdiction of the Court under Section 9 of the Arbitration Act. The MSCS Act also silent in this regard. 7. The contention that if there is allegation of fraud and/or misappropriation of money is raised, the Court and/or the Tribunal must consider the same first before proceed with the matter and as it goes to the root, any Court including this Court, under Section 9 of the Arbitration Act to protect the interest of the Petitioner and stay further proceedings, is impermissible. The Petitioner is remediless for the time being. 8. The learned counsel appearing for the Petitioner relied on the Judgment of Punjab-Haryana High Court (Pushpa Wati Vs. Oriental Bank of Commerce and Ors.) (II (2006) BC 450, 2005 128 CompCas 135 PH). The judgment so cited by the learned counsel appearing for the Petitioner nowhere gives the proposition as sought to be contended by the learned counsel appearing for the Petitioner. At this stage, the Court is considering Section 9 Petition and if the Arbitration Act nowhere permits and/or provides the Court to pass such order, as prayed and as the learned Arbitrator has kept the issue open and proceeded to consider the same at the time of final hearing of the matter along with the merits, I am inclined to observe that the case of the Petitioner has not closed yet. As noted, the Petitioner first prove the basic case of alleged fraud and/or misappropriation of the amount, specifically when the contesting Respondent Bank is not admitting those averments and/or the allegations. The documents so placed on record and/or sought to be challenged, need detail inquiry and trial. As noted, the Petitioner first prove the basic case of alleged fraud and/or misappropriation of the amount, specifically when the contesting Respondent Bank is not admitting those averments and/or the allegations. The documents so placed on record and/or sought to be challenged, need detail inquiry and trial. The Court under Section 9 certainly not in a position to conduct the trial merely because the allegations are raised and the learned Arbitrator has rejected Section 16 Application, by keeping point of fraud open for final adjudication. The remedy under Sub Section (6) of Section 16 of the Arbitration Act is also available to the Petitioner, even in a situation where the allegations as made, not accepted by the Tribunal. The Petitioner is not remediless. 9. The case of the protection of his property, pending the Arbitration proceedings and/or such other proceedings which are also subject matter of the litigation between the parties. The remedy is available under Section 17 of the Arbitration Act. The learned Arbitrator, in a given case, may consider the Application and pass the appropriate order as the Tribunal has not finally decided the case. 10. The Criminal complaint and/or representation so made by the Petitioner to the Police Department and/or the concerned officers needs to be tackled in accordance with law by the appropriate authorities/Court. Even otherwise, the Arbitration Act, nowhere permits and empowers the Arbitral Court to deal and/or consider the same for passing any order, as sought and prayed by the Petitioner in the present Petition. 11. I am not deciding the merits of the averments and/or allegations so raised, including the Criminal Complaint so raised/filed. The competent authority and/or the Court to decide and/or adjudicate the same. 12. Therefore, keeping all points open and in view of the above reasons and as the present Application is not maintainable and as no case is made out for granting any interim relief as prayed, the present Petition is dismissed.