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Madhya Pradesh High Court · body

2013 DIGILAW 777 (MP)

Bharti Infratel Ltd. v. Ram Gopal Tripathi

2013-07-09

Sujoy Paul

body2013
ORDER 1. This appeal filed under section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) is directed against the impugned order dated 27.1.2011 passed by the Court below as well as the award dated 23.3.2010. Brief facts necessary for adjudication of this appeal are as under : The respondent/original applicant had filed an arbitration case bearing No.9/08 before this Court for appointment of Arbitrator. This Court was pleased to appoint Shri S.S.Trivedi as an Arbitrator to resolve the dispute between the parties. The Arbitrator, in turn, started the proceedings in which the original applicant filed his statement of claim, present appellants/non-applicants therein filed their written statement. The dispute was arising out of an agreement executed between M/s. Bharti Infratel Ltd. (appellant) and the original applicant. The Arbitrator after hearing the parties ordered that the present appellant had not deposited the monthly consideration in time. After completion of three years, the appellant was required to enhance the consideration and pay it to the original applicant. This was also not done by him and, therefore, the contract needs to be cancelled. In addition, it is directed that the present appellant is entitled for removal of the tower from his building. The Arbitrator directed the company to remove the tower from the roof of the original applicant by 7.9.2010. This order of the Arbitrator was called in question by filing an appeal under Section 34 of the Arbitration Act before the Additional Sessions Judge, Gwalior, which was registered as Arbitration Case No.27/2011. The Court below affirmed the order by passing a detailed order. 2. Shri Deepak Khot, learned counsel for the appellant, submits that the appellant is not challenging the portion of the award and the appellate order to the extent the Arbitrator and the appellate Court had given finding that contract needs to be cancelled. In other words, Shri Khot, learned counsel for the appellant, submits that the appellant-Company is not aggrieved by the finding of the Arbitrator and the appellate Court in as much as the contract is held to be terminated because of non payment of considerations in time. He submits that the appellant is aggrieved only with the direction whereby the Arbitrator had directed for removal of the tower from the roof of the original applicant’s house. He submits that the appellant is aggrieved only with the direction whereby the Arbitrator had directed for removal of the tower from the roof of the original applicant’s house. To assail this portion, the appellant submits that the provisions of M.P. Accommodation Control Act, 1961 would be applicable in the present case. The agreement dated 8th September, 2004 makes it crystal clear that it was an agreement for rent. The accommodation in which tower was installed, falls within the definition of “accommodation” under the Accommodation Control Act. 3. By taking this Court to various provisions of the Accommodation Control Act, the learned counsel for the appellant submits that the Accommodation Control Act will hold the field and, therefore, even assuming that contract was rightly terminated by the Arbitrator and upheld by the Appellate Court, removal of tenant can be done only by way of methodology prescribed under the Accommodation Control Act. In other words, Shri Khot submits that section 12 of the Accommodation Control Act provides consideration on which eviction can be prayed for. If something is prescribed in law, it has to be done in the same manner. Thus, it is contended that the Arbitrator has exceeded his jurisdiction in directing the eviction of the appellant which is beyond the terms of the agreement. 4. He relied on judgment of Supreme Court reported in (2008)13 SCC 80 (Delhi Development Authority v. R.S. Sharma and Company, New Delhi), (2006)13 SCC 622 (Chief Engineer of BPDP/REO, Ranchi), AIR 1980 SC 587 (Shyamcharan Sharma v. Dharamdas), and AIR 1996 SC 2684 (Punjab State Electricity Board, Mahilpur v. M/s. Guru Nanak Cold Storage and ice Factory, Mahilpur and another), in support of his contention. Shri Khot fairly submits that this contention regarding applicability of Accommodation Control Act was neither raised by the present appellant before the Arbitrator, nor before the appellate Court. However, on the strength of (2008)13 SCC 80 , it is contended that it is a pure question of law and, therefore, this Court can examine it even if it is advanced for the first time in the shape of oral submissions. 5. Shri Ravindra Dixit, learned counsel for the original applicant-respondent, supported the orders passed by the Arbitrator and the appellate Court. 5. Shri Ravindra Dixit, learned counsel for the original applicant-respondent, supported the orders passed by the Arbitrator and the appellate Court. By drawing attention of this Court on the forehead of the agreement, it is argued that in fact it is an ‘agreement for equipment’ and by no stretch of imagination it can be said to be an agreement for rent or agreement for tenancy. He drew attention of this Court on clause 9 of the agreement to submit that the Arbitrator was well within his jurisdiction to direct removal of the tower from the roof head of the respondent. He relied on ILR 2008 M.P. 2956 (Managing Director, M.P. State Mining Corporation Ltd. and another), AIR 2004 Karnataka 109 (Karnataka State Road Transport Corporation and another v. M. Keshava Raju ), (2012)1 SCC 302 (Leela Hotels Limited v. Housing and Urban Development Corporation Limited) and 2008(3) MPLJ 356 (Narmada Construction v. Western Coalfields Ltd.). Lastly, by relying ILR 2010 M.P. 1256 (S.Pal and Company v. State of M.P. and another), he submits that the scope of interference in this appeal is limited. This Court is not obliged to sit as an appellate authority to reweigh the evidence and the material. In absence of specifying the necessary ingredients on which interference can be made, no interference, at this stage is warranted. He submits that the appellant had not taken the plea of applicability of Accommodation Control Act at any stage including in the present appeal before this Court, it cannot be entertained for the first time by way of argument. 6. I have bestowed my anxious consideration on the rival contentions of the parties and perused the record. 7. Shri Khot, learned counsel for the appellant, fairly admits that in the proceedings before the Arbitrator, in the appeal memo under section 34 of the Arbitration Act or in this present appeal under section 37, the appellant had not chosen to raise objection regarding jurisdiction based on A.A. Act, 1961 against the Arbitrator in as much as he directed the removal of tower from the roof head of the respondent’s house. The only contention in this regard is that since it is a pure question of law, this Court can entertain it at appellate stage. I deem it proper to deal with this aspect as a first issue. 8. Learned appellant has heavily relied on (2008)13 SCC 80 in this regard. The only contention in this regard is that since it is a pure question of law, this Court can entertain it at appellate stage. I deem it proper to deal with this aspect as a first issue. 8. Learned appellant has heavily relied on (2008)13 SCC 80 in this regard. However, a perusal of the said judgment shows that it does not help the appellant in any manner in the facts and circumstances of the present case. The Arbitration Act of 1996 brought into force with a view to resolve disputes in an effective and speedy manner. The main object of the Act is to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration and to minimize the supervisory role of Courts in the arbitral process and to permit an arbitral Tribunal to use mediation, conciliation or other procedures during the arbitral proceedings for settlement of disputes. This view was taken by the Supreme Court in Bharat Sewa Sansthan v. Uttar Pradesh Electronics Corporation Limited [ AIR 2007 SC 2961 ]. 9. In section 16 of the 1996 Act, it was made clear in sub-section 2 that a plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of an Arbitrator. The intention of bringing sub section 2 is to ensure that objection if any by either of the parties should be taken before the Arbitrator on the first available opportunity. This provision was inserted with a view to ensure that such objection is taken and decided at the threshold so that on this aspect unnecessary litigation does not crop up. In the present case, in the statement of claim itself, the respondents had prayed for removal of the tower from the roof head . In the written statement the appellant had not chosen to take any objection regarding the said relief. In other words, no objection was taken in the written statement by the appellant that so far the aforesaid relief prayed for by the respondent is concerned, the Arbitrator had no authority. In the written statement the appellant had not chosen to take any objection regarding the said relief. In other words, no objection was taken in the written statement by the appellant that so far the aforesaid relief prayed for by the respondent is concerned, the Arbitrator had no authority. This objection is not taken in the appeal under section 34 and in the appeal preferred before this Court under section 37 of the Act. For the first time, the arguments are advanced that Accommodation Control Act is applicable and, therefore, the Arbitrator has travelled beyond the terms of agreement and thereby exceeded his authority/jurisdiction. 10. In my considered opinion, the aforesaid contention cannot be entertained for the first time before this Court. There is no foundation regarding this plea before the forums below. The object of enacting the Arbitration Act is the speedy disposal and to resolve the dispute with an object to minimize the litigation and dispute between the parties. Another intention of the Legislature is to minimize the supervisory role of the Courts in arbitral proceedings. On the basis of aforesaid considerations, Legislature thought it proper to insert section 16(2) of the Act which prohibits the parties to raise objection or question of jurisdiction at later stage, the stage later than the first available opportunity in this regard. The Karnataka High Court has considered this aspect in the case of AIR 2004 Karnataka 109 (Karnataka State Road Transport Corporation and another v. M. Keshava Raju). Para 15 of the said judgment reads as under: “In our considered opinion, the above plea cannot be entertained for more than one reason. Firstly, one of the objects in enacting the Act is to have early completion of arbitration proceedings minimizing the supervisory role of Courts in arbitral process. Sections 4, 5 and 16 of the Act have been enacted to give effect to that object. Secondly, even the method of arbitration as a dispute resolution mechanism and the procedure envisaged for that are intended to reach the finality to resolve the dispute between the parties as quickly as possible. Therefore, it is imperative that the party raising jurisdiction point, should raise such plea at the earliest, that is to say, at the threshold of the proceedings. Therefore, it is imperative that the party raising jurisdiction point, should raise such plea at the earliest, that is to say, at the threshold of the proceedings. If that is not insisted, it is trite, the very object in enacting the Act, on the basis of the ‘Uncitral Modern law’, would be defeated. The jurisdiction plea now raised for the first time in the Memorandum of Appeal was not raised either directly or by necessary implication before this Court in C.M.P. No.4/1996 or before the Arbitrator or before the Court below. The appellant having acquiesced in the jurisdiction of the Arbitral Tribunal without any demur and protest, having participated in the proceedings and having suffered an award cannot now turn round and raise the plea that the orders of this Court in C.M.P. No.4 of 1996, the award of the Arbitrator and the judgment of the civil Court dated 20.6.2000 in Arbitration Suit No.6 of 1998 are nullity.” 11. In view of finding of this Court that the appellant cannot be permitted to raise objection for the first time before this Court, there is no question of dealing with the judgments cited by the appellant regarding the cases arising out of M.P. Accommodation Control Act. The judgments cited by the appellant are based on different facts and circumstances and have no application in the facts and circumstances of the present case. Certain judgments are before commencement of the Arbitration and Conciliation Act, 1996 and does not deal with the specific provisions mentioned in the present Act. 12. Apart from this, in AIR 2010 SC 1299 (State of Maharashtra v. M/s. Hindustan Construction Company Ltd.), the apex Court opined as under : “The grounds sought to be added in the memorandum of arbitration appeal by way of amendment are absolutely new grounds for which there is no foundation in the application for setting aside the award. Obviously, such new grounds were not originally raised in the arbitration petition for setting aside the award. Moreover, no prayer was made by the appellant for amendment in the petition under section 34 before the concerned Court or at the appellate stage. Obviously, such new grounds were not originally raised in the arbitration petition for setting aside the award. Moreover, no prayer was made by the appellant for amendment in the petition under section 34 before the concerned Court or at the appellate stage. As a matter of fact, the learned Single Judge in paragraph 6 of the impugned order has observed that the grounds of appeal which are now sought to be advanced were not originally raised in the arbitration petition and that the amendment that is sought to be effected is not even to the grounds contained in the application under section 34 but to the memo of appeal. In the circumstances, it cannot be said that discretion exercised by learned Single Judge in refusing to grant leave to appellant to amend the memorandum of arbitration appeal suffers from any illegality.” (Emphasis supplied) 13. In view of this judgment also, it is clear that the appellant cannot be permitted to raise argument for the first time at appellate stage by way of amendment or by way of oral submission. The matter can be examined from yet another angle. Clause 9 of the Arbitration Agreement reads as under : “Any dispute or claim between the parties hereto arising out of or relating to this agreement, or its implementation and/or its effect, or the breach, termination, shall be referred to the arbitration of a sole Arbitrator in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The arbitration shall be held in Indore.” 14. A minute reading of this provision makes it crystal clear that the jurisdiction of Arbitrator was very wide. He had jurisdiction to decide the questions regarding implementation of the agreement and also its effect. The words “arising out of or relating to this agreement or its implementation/or its effect” has very wide meaning. If the Arbitrator is well within his jurisdiction (it is not in dispute here) with regard to his action in terminating the contract, whether it can be said that his direction for giving effect to the said finding for implementation of the contract is bad in law, impermissible or beyond jurisdiction. If the Arbitrator is well within his jurisdiction (it is not in dispute here) with regard to his action in terminating the contract, whether it can be said that his direction for giving effect to the said finding for implementation of the contract is bad in law, impermissible or beyond jurisdiction. In other words, if the agreement gives him the authority to decide about arbitration and other aspects of the agreement with further authority to pass appropriate orders regarding implementation and the effect of contract, in my opinion, the clause of the agreement was wide enough to give this power to the Arbitrator for directing the present appellant to remove the tower from the roof head of the respondents. Therefore, even other wise, the jurisdiction is very much there with the Arbitrator to pass the second portion of the order against which eye brows are raised for the first time before this Court. Accordingly, on the basis of aforesaid analysis, this petition must fail on both the counts. 15. In the considered opinion of this Court, at the cost of repetition, it is clear that the appellant cannot be permitted to raise the ground of jurisdiction of Arbitrator for the first time by way of oral submission before this Court. Secondly, the Arbitrator, as per clause 9 of the Agreement, was well within his jurisdiction to direct removal of the tower from the roof head of the respondents. The agreement was in fact an agreement for equipment and not agreement of rent as canvased by the appellant. On the basis of aforesaid reasons, I find no reason to disturb the orders passed by the Arbitrator and the appellate Court. The appeal fails and is hereby dismissed. No cost. .............