Research › Search › Judgment

Gauhati High Court · body

2014 DIGILAW 486 (GAU)

Shefali Paul v. Ashok Kuman Jain

2014-05-05

N.CHAUDHURY

body2014
JUDGMENT AND ORDER (Oral) This is an appeal under Section 37 (1) (b) of the Arbitration & Conciliation Act, 1996, challenging the validity of judgment and order dated 08.07.2005 passed by the learned District Judge, Dibrugarh, in Misc. Arbitration Case No. 1 of 2005. By this order the learned District Judge allowed an application filed under Section 34 of the said Act and set aside the award of the arbitrator with further direction to the parties to appear before the arbitrator again for resolution of their dispute. 2. The respondent No.1 instituted the proceeding under Section 34 of the Arbitration & Conciliation Act, 1996, before the learned District Judge at Dibrugarh vide Misc. Arbitration Case No. 1 of 2005 stating that he as a tenant had entered into a commercial premises under the appellant No.1 herein. The tenancy was created by a lease deed registered on 12.04.1994 and one of the recitals of the said deed was that in case of any dispute or difference between the parties regarding anything connecting the demised premises, it shall be referred to the sole arbitration of Sri Sankar Lal Dhelia and the award passed by him shall be final, conclusive and binding between the parties. The lease deed expired on 31.03.20001 and the tenancy went on fresh terms and conditions, but no further deed was executed. While everything was going on smoothly, all on a sudden on 04.01.2005 the respondent No.1 was evicted from the premises in execution of award vide Title Execution No. 1 of 2004. After being evicted, the petitioner came to know that there was arbitration proceeding and that there was an award passed against him. The petitioner contacted his advocate to find out all necessary details to obtain certified copies of the case record which he received on 05.01.2005 thereafter. Having come to know about the award dated 28.01.2004, the petitioner filed proceeding under Section 34 of the Arbitration & Conciliation Act, 1996, on 11.02.2005. He further came to know that the award was shown to have been sent to him under registered cover on 08.03.2004 but he did not receive any award as claimed. Having come to know about the award dated 28.01.2004, the petitioner filed proceeding under Section 34 of the Arbitration & Conciliation Act, 1996, on 11.02.2005. He further came to know that the award was shown to have been sent to him under registered cover on 08.03.2004 but he did not receive any award as claimed. With these averments the respondent No.1 made prayer for setting aside of the award on the ground that the same was vitiated by violation of the principles of natural justice; that the arbitration agreement was non-existent after 31.03.2001; that the arbitrator being a witness of the lease deed could not have acted as arbitrator; that the dispute in regard to eviction of tenant is not an arbitrable dispute etc. Misc. Case No. 37 of 2005 was registered in regard to said application and the learned Court issued notice upon the present appellant who appeared and submitted objection. 3. The appellant specifically denied the averments made in Paragraph – 4 of the application in regard to ignorance about the arbitration proceeding and also as to knowing about the award only on 05.01.2005 after receipt of records. In Paragraph-11 of the objection it was stated that the award having been already executed by the same Court there was no scope of the petition under Section 34 the Arbitration & Conciliation Act, 1996. It was further pleaded that the award having been made a decree of the Court and consequently it having been executed, there was no scope for the Executing Court to go behind the decree and to set it aside. The award, therefore, being non-existent under the aforesaid circumstances there was no question of entertainment of the application under Section 34 of the Arbitration & Conciliation Act, 1996. The appellant, therefore, prayed for dismissal of the proceeding. The arbitrator who was impleaded as opposite party No.2 in the aforesaid proceeding also filed a separate written statement. In paragraph- 9 of the objection, the arbitrator stated that the petitioner of the proceeding was sole respondent before proceeding in arbitration and that he was intimated about the award in due time on 08.03.2004 through post. This opposite party also submitted documents including forwarding letter dated 08.03.2004, the postal receipt and acknowledgement due shown to have been signed by the petitioner of the proceeding. This opposite party also submitted documents including forwarding letter dated 08.03.2004, the postal receipt and acknowledgement due shown to have been signed by the petitioner of the proceeding. None of the parties led evidence and they placed reliance on the documents produced and the averments made in their respective pleadings. The learned Court after hearing the parties passed its award on 08.07.2005 after framing three points for determination. The said three points for determination are quoted below: “1) Whether this Court has jurisdiction to entertain a petition under Section 9 and 34 of Arbitration Act when the award becomes decree and partly executed? 2) The petitions filed by the petitioner are barred by limitation? 3) Whether the award passed by O.P No.3 is liable to be set aside? i) Whether arbitrator appointed as per the lease deed can pass an award for eviction of tenant? ii) Whether the award passed by the arbitrator was malafide practicing fraud etc?” 4. The learned Court noted that unlike the earlier law in Arbitration Act, 1940, there is no requirement for making the award as rule of the Court and there is no need for filing award in Court which can be enforced straight way. The learned Court held that the writ for execution was issued on 04.10.2004 and the decree was executed on 04.01.2005 whereas application under Section 34 of Arbitration & Conciliation Act was filed on 11.02.2005. Under such circumstances, in view of the averments made by the petitioner that he did not receive any notice and the A/D card bears signature of some other person not known to him and that he came to know about the award only during execution of the award, it is observed that the proceeding was filed well within a period of limitation. The learned Court also held that the arbitrator being a witness to the lease deed was not competent to be an arbitrator and moreover, in view of the provision of Urban Areas Rent Control Act, an arbitrator is not competent to pass award for eviction of the tenant. Referring to the case of Natraj Studios (P) Ltd. vs. Navrang Studios & Another reported in 1981 SC 537, the learned Court observed that public policy requires that contract which nullify the rights conferred on tenant by the Act cannot be permitted even if there is an agreement for Arbitration. Referring to the case of Natraj Studios (P) Ltd. vs. Navrang Studios & Another reported in 1981 SC 537, the learned Court observed that public policy requires that contract which nullify the rights conferred on tenant by the Act cannot be permitted even if there is an agreement for Arbitration. The same being contrary to Section 5 of the Assam Urban Areas Rent Control Act, arbitration is not permissible. Accordingly, the ex parte award was set aside and parties were directed to appear before the arbitrator to raise issues as to maintainability of arbitration before him. This judgment was passed on 08.07.2005. The present appeal is directed against this judgment and award. 5. I have heard Mr. G.P. Bhowmik, learned counsel for the petitioner and Mr. D. Baruah, learned counsel for the respondent No.1. None appears for the respondent No.2. 6. Mr. G.P. Bhowmik, learned counsel for the petitioner, has argued that under Section 34 of the Arbitration & Conciliation Act, an application for setting aside award can be filed only within a period of 3 (three) months. There is a provision for condonation of delay for a period of 30 (thirty) days thereafter. But in the instant case there was neither any application for condonation nor could the Court condone delay for period over 12 (twelve) months. The award was passed on 28.01.2004, whereas Section 34 of the Arbitration & Conciliation Act, 1996, application was filed on 11.02.2005. This being the position the application under Section 34 was grossly barred by limitation. Once Section 34 application itself is barred by limitation, there is no question of entering into merit of the learned Court and in that view of the matter the whole award must be set aside. 7] Per contra, Mr. D. Baruah, learned counsel for the respondent No.1, submits that under Section 34 of Arbitration & Conciliation Act, an application for setting aside the award may not be made after 3 (three) months from the date on which party making the application had received the arbitral award. In the case in hand there is nothing on record to come to a finding that the award was made available to the respondent No.1 on any earlier date prior to 05.01.2005. In the case in hand there is nothing on record to come to a finding that the award was made available to the respondent No.1 on any earlier date prior to 05.01.2005. The finding of the learned trial court is that the respondent No.1 did not have any knowledge about the award before he was evicted on 04.01.2005 in execution of the ex parte award dated 28.01.2004. The service of the award on the respondent No.1 on any prior date either by letter dated 08.03.2004 or on any other date could not be proved by the appellant herein and as such the plea of the proceeding being barred by time was not accepted by the learned trial court. This finding of the learned trial court can be interfered with only if it is shown that such finding is erroneous or based on no evidence. Parties proceeded to prove their respective cases on the basis of pleadings and documents. The respondent No.1 being objector relied on the registration receipt of letter dated 08.03.2004 and the so-called A/D card. Upon perusal of these documents, the learned court found that the A/D card was signed by somebody else and the contention of the respondent No.1 that it is not signed by him was accepted. The appellant also did not lead any evidence for taking presumption for service of notice dated 08.03.2004 on the respondent No.1 and moreover as pointed out by the learned trial court, postage charge of the registration report being Rs.25 only, it is clear that the letter dated 08.03.2004 did not accompany the award which, if enclosed, the weight of the envelop would have been much higher and consequently higher postage charge would have been realised by the postal department. According to the learned counsel, service of a forwarding letter even if assumed to have been made would not establish that the award was served on the respondent No.1 and this being the position, limitation imposed under Section 34(3) would not start running unless and until the arbitral award is physically received by the respondent No.1. The learned counsel for the respondent placed reliance on 2 judgments of the Hon’ble Supreme Court. The learned counsel for the respondent placed reliance on 2 judgments of the Hon’ble Supreme Court. Relying on the judgment of Booz-Allen & Hamilton Inc vs. SBI Home Finance Limited reported in 2011 5 SSC 532, the learned counsel drew attention to paragraph-36 of the said judgment, wherein the Hon’ble Supreme Court has held that in matter relating to eviction or tenancy matter where by special statute the tenant enjoys statutory protection against the eviction the same would not be arbitrable dispute and the statutory Courts are only conferred jurisdiction to pass decree. Paragraph-36 of the same judgment is quoted below: “……….. 36. The well-recognised examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matter governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes.” 8. It is thus clear from the paragraph referred to above that relief of eviction of a tenant is governed under Section 5 of the Assam Urban Areas Rent Control Act, 1972. It is provided in the said Section that no tenant can be evicted without there being a decree of Court based on any some or other grounds mentioned in the said section. The Court has also been defined under the Act. This being the position, there is a specific remedy and forum provided to landlord and tenant under the provisions of Assam Urban Areas Rent Control Act, 1972. It is established principle that if law requires something to be done in a particular matter it has to be done in that manner and not otherwise. While legislature in its wisdom has laid down a particular procedure for eviction of a tenant under the provisions of Assam Urban Areas Rent Control Act, it has to be done by the procedure prescribed by the statute only. While legislature in its wisdom has laid down a particular procedure for eviction of a tenant under the provisions of Assam Urban Areas Rent Control Act, it has to be done by the procedure prescribed by the statute only. Here in this case parties entered into a contract and thereby, an arbitration clause was inserted in the lease agreement conferring jurisdiction on arbitrator for arriving at a decision as to whether tenant should be evicted from the premises or not. Statute has conferred such jurisdiction only on a Civil Court and not on any other extraneous authority. Arbitrator also will be an extraneous authority from this point of view and accordingly relying on the aforesaid judgment of Booz-Allen (Supra) it is to be held that the dispute which forms the subject matter of the present proceeding under Arbitration and Conciliation Act, 1996, is not at all an arbitrable dispute. This being the position the arbitrator cannot have any jurisdiction to entertain the proceeding and/ or to pass any award. 9] While it is true that in view of the law laid down in the case of Mc. Dermott International Inc. vs. Burn Standard Co. Ltd & Others reported in (2006) 11 SCC 181 under Section 34 of Arbitration & Conciliation Act, a Court can at best set aside an arbitration award but it cannot direct the parties to appear before the arbitrator and/ or to go for arbitration. After all, it is up to the parties as to whether they would choose to go for arbitration or not. The second part of the judgment passed by the learned trial court, therefore, asking the parties to appear before the arbitrator after setting aside the award is contrary to the law laid down by the Hon’ble Supreme Court in the case of Mc. Dermott International Inc. (Supra). 10] After hearing the learned counsel for the parties and on perusal of the materials available on record, it does not appear that the application under Section 34 of Arbitration & Conciliation Act submitted by the respondent No.1 herein was barred by limitation. The learned Principal Civil Court, therefore, rightly entertained the application under Section 34 of the Act. Once the application under Section 34 is entertained, the legality and validity of the award passed by the arbitrator becomes open. The learned Principal Civil Court, therefore, rightly entertained the application under Section 34 of the Act. Once the application under Section 34 is entertained, the legality and validity of the award passed by the arbitrator becomes open. Now in view of the judgment of the Hon’ble Supreme Court in the case of Booz-Allen (Supra), the dispute itself is apparently a non arbitrable one and as such the award passed by the learned tribunal is obviously illegal and without jurisdiction. The appeal is accordingly dismissed. However, in view of law laid down in Mc. Dermott International Inc. (Supra), however, the direction given by the learned District Judge, Dibrugarh, directing the parties to appear before the arbitrator is also set aside in view of the law laid down by the Hon’ble Supreme Court in the case of Mc. Dermott International Inc. (Supra). The order in so far as setting aside the award is not interfered inasmuch as the dispute is not arbitrable one. 11. No order as to cost.