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2013 DIGILAW 187 (BOM)

Anilkumar Phoolchand Sanghvi v. Chandrakant Phoolchand Sanghvi

2013-01-23

ANOOP V.MOHTA, MOHIT S.SHAH

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Judgment : This appeal is directed against the following order of the learned Single Judge, dated 14 January 2013:- “If the Mediator does not finalize the proposal placed before him and submit his final report as stated on or before 15 March 2013, this Appeal from Order to stand dismissed without any further reference to the Court.” 2. Appointment of the Mediator was made by another learned Single Judge of this Court by order dated 7 September 2012 in Arbitration Application No.34 of 2012, which was filed by the present respondents under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as “the Arbitration Act”). In the said arbitration application, the Court passed consent order dated 7 September 2012 recording that both the learned Senior Counsel appearing on behalf of the contesting parties had agreed before the Court that they would explore the possibility of a mediated settlement since the parties are closely related (parties are brothers). Accordingly, Mr. Sriram Panchoo, Senior Advocate has been appointed as a mediator. Parties agreed that all their disputes and differences be made the subject matter of the mediation proceedings without prejudice to their rights and contentions and all proceedings between the parties were agreed to be held in abeyance in the meantime to facilitate a settlement being explored. Further hearing of the arbitration application was adjourned to 2 November 2012, so that the Court would be apprised of the progress in the meantime. Parties also agreed to bear the fees and expenses of the mediator in equal proportion. We are informed that the learned Single Judge, hearing arbitration application, has been adjourning hearing of the said application from time to time and that by order dated 4 January 2013, at the joint request of learned counsel for parties, further hearing of the arbitration application has been adjourned to 15 March 2013. 3. As far as Appeal from Order no.275 of 2012 giving rise to the present appeal is concerned, by order dated 5 October 2012 the learned Single Judge merely adjourned hearing of appeal from order to 27 November 2012. The learned Single Judge passed subsequent order dated 4 December 2012, which reads as under:- “It is stated that the Mediator has fixed two meetings in the week commencing from 17th December, 2012. 2. The learned Single Judge passed subsequent order dated 4 December 2012, which reads as under:- “It is stated that the Mediator has fixed two meetings in the week commencing from 17th December, 2012. 2. In these circumstances and as a last chance list this Appeal from Order under the same caption on 14th January, 2013. No further adjournments will be granted.” 4. Thereafter, when the arbitration application under Section 11 came up for hearing before another learned Single Judge, as stated above, following order came to be passed on 4 January 2013:- “The Court has been apprised of the fact that mediation proceedings are in progress. Hence, on the joint request of Counsel, the further hearing shall stand over to 15 March 2013.” 5. When appeal from order was listed for hearing on 14 January 2013, learned counsel appearing for all parties informed the Court that the mediation was in progress and that by order dated 4 January 2013 the hearing of arbitration application under Section 11 of the Act was adjourned to 15 March 2013. Interim report dated 10 January 2013 of the learned Mediator was also placed on record of the appeal from order. After indicating that next mediation session was fixed on 25 and 26 January 2013, the interim report of the learned Mediator concluded with the following paragraphs:- “The mediation has made substantial progress. The parties are trying to narrow down their differences and arrive at a settlement which effectively resolves the disputes between them. The parties are in the process of preparing a draft settlement agreement for consideration during the next mediation session.” 6. However, the learned Single Judge passed the following impugned order on 14 January 2013:- “If the Mediator does not finalize the proposal placed before him and submit his final report as stated on or before 15 March 2013, this Appeal from Order to stand dismissed without any further reference to the Court.” It is the aforesaid order which is challenged in this appeal. 7. Learned counsel for respondents has raised a preliminary objection about the maintainability of the appeal in view of the bar raised by Section 100A as well as Section 104(2) of the Civil Procedure Code, 1908. 8. 7. Learned counsel for respondents has raised a preliminary objection about the maintainability of the appeal in view of the bar raised by Section 100A as well as Section 104(2) of the Civil Procedure Code, 1908. 8. Learned counsel for appellants has, however, submitted that the bar created by Section 100A of CPC would apply only where the appeal is heard and decided by the single Judge , but in fact in the present case the appeal from order was not heard by the learned Single Judge and therefore the bar under Section 100A will not apply. As regards the bar under Section 104(2) of CPC, learned counsel has relied on the decision of the Supreme Court in P.S. Sathappan (dead) by LRS. v/s. Andhra Bank Ltd. and ors, (2004) 11 SCC 672 . Paragraphs 29 & 30 of order read as under:- “29. Thus, the consensus of judicial opinion has been that Section 104(1) Civil Procedure Code expressly saves a Letters Patent Appeal. At this stage it would be appropriate to analyze Section 104 C.P.C. Sub-section (1) of Section 104 CPC provides for an appeal from the orders enumerated under sub-section (1) which contemplates an appeal from the orders enumerated therein, as also appeals expressly provided in the body of the Code or by any law for the time being in force. Sub-section (1) therefore contemplates three types of orders from which appeals are provided namely, 1) orders enumerated in sub-section (1). 2) appeals otherwise expressly provided in the body of the Code, and 3) appeals provided by any law for the time being force. It is not disputed that an appeal provided under the Letters Patent of the High Court is an appeal provided by a law for the time being in force. 30. As such an appeal is expressly saved by Section 104(1), Sub-clause 2 cannot apply to such an appeal. Section 104 has to be read as a whole. Merely reading sub-clause (2) by ignoring the saving clause in sub-section (1) would lead to a conflict between the two sub-clauses. Read as a whole and on well established principles of interpretation it is clear that sub-clause (2) can only apply to appeals not saved by sub-clause (1) of Section 104. Section 104 has to be read as a whole. Merely reading sub-clause (2) by ignoring the saving clause in sub-section (1) would lead to a conflict between the two sub-clauses. Read as a whole and on well established principles of interpretation it is clear that sub-clause (2) can only apply to appeals not saved by sub-clause (1) of Section 104. The finality provided by sub-clause (2) only attaches to Orders passed in Appeal under Section 104, i.e., those Orders against which an Appeal under "any other law for the time being in force" is not permitted. Section 104(2) would not thus bar a Letters Patent Appeal. Effect must also be given to Legislative intent of introducing Section 4 C.P.C. and the words "by any law for the time being in force" in Section 104 (1). This was done to give effect to the Calcutta, Madras and Bombay views that Section 104 did not bar a Letters Patent. As Appeals under "any other law for the time being in force" undeniably include a Letters Patent Appeal, such appeals are now specifically saved. Section 104 must be read as a whole and harmoniously. If the intention was to exclude what is specifically saved in sub-clause (1), then there had to be a specific exclusion. A general exclusion of this nature would not be sufficient. We are not saying that a general exclusion would never oust a Letters Patent Appeal. However when Section 104(1) specifically saves a Letters Patent Appeal then the only way such an appeal could be excluded is by express mention in 104(2) that a Letters Patent Appeal is also prohibited. …....” 9. It is, however, not necessary for us to express any final opinion on the question of maintainability of this appeal, because apprehension of the learned counsel for appellants that the impugned order dated 14 January 2013 would result into automatic dismissal of the appeal from order, if mediation does not succeed by 15 March 2013, is not well founded. All that the learned Single Judge has observed is that if the mediator does not finalize the proposal placed before him and submit his final report, as stated, on or before 15 March 2013, then the appeal from order would stand dismissed. Thus all that the impugned order purports to do is to place a deadline for conclusion of the mediation proceedings and nothing more. Thus all that the impugned order purports to do is to place a deadline for conclusion of the mediation proceedings and nothing more. If the learned Mediator submits report of successful mediation, obviously the learned Single Judge would pass appropriate orders in the appeal from order for recording settlement between the parties. For that purpose, the appeal will have to be listed for hearing/orders. Even if the mediation proceedings were to fail and the learned Mediator submits failure report on or before 15 March 2013, there will be no question of dismissal of the appeal from order. , but the appeal from order will have to be listed for hearing before the learned Single Judge after 15 March 2013. 10. At this stage it would also not be out of place to refer to section 148 CPC, which reads as under:- “148. Enlargement of time. -Where any period is fixed or granted by the Court for the doing of any act prescribed or allowed by this Code, the Court may, in its discretion, from time to time, enlarge such period, not exceeding thirty days in total, even though the period originally fixed or granted may have expired.” (emphasis supplied) We are of the view that the limit of 30 days in total indicated in the above provision would apply where a period is fixed or granted by the Court for the parties to do any act prescribed or allowed by the Code, but the conciliation forum or authority should not be subjected to such deadlines. 11. The scheme of section 89 read with Order 10 Rule 1A to 1C of CPC is that when the Court directs the parties to a suit to opt for one of the various modes of settlement, on the option of parties the Court shall fix the date of appearance before such forum or authority as may be opted by the parties, the parties shall appear before such forum or authority for conciliation of the suit and where the forum or authority is satisfied that it would not be proper in the interest of justice to proceed with the matter further, then, it shall refer the matter again to the Court and direct the parties to appear before the Court on a date fixed by it. The above statutory scheme does not require the Court to impose a deadline on the conciliation forum or authority to put an end to the endeavours for amicable settlement of disputes between the parties to the suit. Even where the Court specifies the date by which the conciliation forum or authority should put an end to the conciliation process, the Court itself is not powerless to extend the date for continuing the conciliation proceedings depending on the progress being made in mediation/conciliation. 12. Section 151 CPC saving inherent powers of Court would be the more appropriate provision for a Court to rely upon in such matters when a suit is referred to conciliation forum or authority. Section 151 reads as under: “151. Saving of inherent powers of Court.-Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice, or to prevent abuse of the process of the Court.” 13. Even if the learned Mediator does not submit any final report on or before 15 March 2013, the appeal would not stand dismissed till 15 March 2013. The Court hearing the appeal from order would, therefore, have discretion to extend the time limit beyond 15 March 2013. However, we need not dwell on this aspect any further, as the parties have about seven weeks' time to continue their efforts for settlement by way of mediation, which the Court is expected to encourage in view of clear legislative policy as embodied in Section 89 of the Code of Civil Procedure, 1908. 14. It is also necessary to keep in mind that appointment of the learned Mediator was not made in the course of hearing appeal from order, but in the course of hearing of arbitration application under Section 11 of the Arbitration Act. That Court has been extending the time for submission of the report of the learned Mediator and the last extension granted by the learned Single Judge, hearing arbitration application, was on 4 January 2013, which clearly indicates that further hearing of arbitration application has been adjourned to 15 March 2013. The Court , which appointed the learned Mediator has not fixed any dead-line for the learned Mediator to conclude the mediation proceedings. The Court , which appointed the learned Mediator has not fixed any dead-line for the learned Mediator to conclude the mediation proceedings. We are informed that the said learned Mediator has succeeded in getting another serious dispute amongst partners of partnership firm, after spending considerable time and energy and in that case mediation proceedings were successfully concluded almost after a year and half. 15. As is well known, mediation is being resorted to world over for amicable settlement of civil disputes between parties and is becoming more popular because this method of dispute resolution addresses underlying interests of parties in an informal congenial environment rather than formal adjudication of rights of parties by merely looking at the letter of the law in an adversarial environment. As already stated earlier, parties herein are brothers. Therefore, it will always be in the best interest of parties and also in the interest of society that the disputes between such close relatives are resolved by mediation rather than encouraging the parties to fight legal battles, which would move from trial Court to the High Court in appeal and thereafter to the Apex Court sapping the energy, equanimity and resources of the parties for decades. It, therefore, ordinarily be worth while to grant the parties a few more weeks or months to resolve their disputes through mediation or conciliation. Advantage of mediation settlement is that by one settlement, parties may be able to put an end to several proceedings. In the instant case also, there are several other proceedings between the same parties including criminal proceedings, which have been stayed by the other learned judges of this Court and other Courts in the State. 16. It may be that because hearing of the appeal from order was adjourned from time to time, the learned Single Judge, taking up such appeals, may have lost patience and therefore the learned Single Judge has placed the dead-line of 15 March 2013. However, such matters can always be notified under the caption “For Settlement”, so that the Court does not have to read papers in advance and thereafter be faced with the requests for adjournment. 17. In the result, therefore, we dispose of this appeal in terms of the clarifications made hereinabove.