Caprihans India Limited v. Hindoostan Mills Limited
2017-04-07
R.M.SAVANT
body2017
DigiLaw.ai
ORDER : 1. The above Arbitration Petition has been filed challenging the Award dated 20/10/2016 passed by the Arbitral Tribunal. 2. On behalf of the Respondent a preliminary issue is raised as regards the maintainability of the above Arbitration Petition on the ground that the Petition has been filed by the Power of Attorney of the Petitioner one Mofatraj Munot who is not authorized to do so having regard to the terms of the Power of Attorney dated 24/09/1997 executed by the Petitioner Company in his favour. 3. The Award dated 20/10/2016 has been passed in the arbitral proceedings arising out of the dispute between the Petitioner and the Respondent which dispute revolves around the terms of the Development Agreement dated 29/10/1993. The dispute in the said arbitration proceedings was in respect of the claim of the Petitioner against the Respondent in respect of the payment to be made by the Respondent in respect of the cost of construction which was to the tune of Rs.7.26 crores. In the said arbitration proceedings the Respondent had made a Counter Claim on the basis that the relationship of the parties was that of being Joint Venture Partners and that in the said circumstances the Respondent did not have to reimburse any prorata cost of construction and instead was entitled to 50% share in the profits in the development project. Under the said Development Agreement, the building known as “Kalpataru Heights” has been constructed. 4. The Petitioner, who is engaged in the business of manufacture and sale of PVC Films, Extruded Plastic Products, Laminates, Paper, Trading and Real Estate at various locations in Maharashtra and in the Union Territories of Daman and Diu, had taken a decision of focusing and concentrating on its core business of manufacturing and sale of PVC Films and Extruded Plastic Products and therefore decided to dispose of the Assets of its noncore business. It had accordingly authorized Kalpataru Homes Limited to dispose of and/or liquidate all the said Assets, as are more particularly specified in the Agreement dated 24/09/1997 entered into between the Petitioner and the said Kalpataru Homes Limited for sale, liquidation, disposal and realization of the aforesaid Assets. Under the said Agreement, the said Kalpataru Homes Limited have agreed and undertaken to sell, dispose of and liquidate the said Assets and realize to the Petitioner specified overall amount underwritten by them.
Under the said Agreement, the said Kalpataru Homes Limited have agreed and undertaken to sell, dispose of and liquidate the said Assets and realize to the Petitioner specified overall amount underwritten by them. It is under the said Agreement that the Petitioner interalia agreed to grant certain powers and authority to its two Directors viz. Mr. Mofatraj Pukhraj Munot and Mr. Suresh Amritlal Gandhi so as to facilitate the smooth implementation of the said Agreement. It is in terms of the said Agreement that the Petitioner irrevocably nominated, constituted and appointed its two Directors i.e. the said Mofatraj Munot and Suresh Gandhi jointly and each of them severally Attorney/s in its name and for and on its behalf and on its account to do all or any of the acts mentioned in the said Power of Attorney. A reference to the terms of the said Power of Attorney would be made a bit later. 5. The authority of the said Mofatraj Pukhraj Munot – the Constituted Attorney of the Petitioner, to file the above Arbitration Petition is questioned on the ground that the said Power of Attorney does not authorize the said Mofatraj Munot to file an Arbitration Petition. A reference is made to clause (G) of the Schedule of the Assets as also clause (7) of the said Power of Attorney to buttress the said contention. 6. At this stage it would be relevant to reproduce the relevant clauses of the said Power of Attorney and the same are reproduced herein under : Recitals in the Preamble (v) Under the said Agreement it was inter alia agreed by us to grant certain powers and authorities to our Directors, MR.MOFATRAJ PUKHRAJ MUNOT and MR.SURESH AMRITLAL GANDHI to facilitate the smooth implementation of the said Agreement, as hereinafter appearing : NOW KNOW YE AND ALL THESE PRESENTS WITNESSETH THAT, WE, CAPRIHANS INDIA LIMITED, do hereby irrevocably nominate, constitute and appoint the said MR. MOFATRAJ PUKHRAJ MUNOT and MR.
MOFATRAJ PUKHRAJ MUNOT and MR. SURESH AMRITLAL GANDHI jointly and each of them severally (hereinafter called 'the Attorney/s) as our true and lawful Attorney/s in our name and for and on our behalf and on our account to do all or any of the following acts, deeds, matters and things and to exercise all or any of the following powers and authorities in relation to the maintenance, protection, sale, transfer, alienation, disposal, liquidation and realization of all the said Assets belonging to us which the said Assets are briefly described hereunder and/or in the Schedules and Annexures forming part of these presents, that is : ”Schedule of Assets (G) 'KALPATARU HEIGHTS' AT BOMBAY CENTRAL, MUMBAI Kalpataru Heights is a highrise residential building under construction at Bombay Central, Mumbai, being constructed in terms of Development Agreement dated 28th October, 1993, entered into between Hindoostan Spinning & Weaving Mills Ltd. and Ourselves (the Principals herein) for construction and completion of the said Building till receipt of occupation/completion certificate thereof from the concerned authorities, and sale and realisation of the proceeds on sale of apartments and other premises comprising 'Kalpataru Heights'.
Recitals in the Operative Part (5) In connection with any matters relating to the said Assets to accept service of any writ, summons or other legal process or notice and to appear and to represent us in any proceedings before any court, tribunal or other authority heretofore and hereafter instituted by or against the Principals including before any Revenue Officer or before any other Officer of any Government, Municipality or other Local Government, Body or Authority in all matters in any manner connected with or pertaining to the said Assets and also to appoint Advocates, Solicitors and Legal Advisers to prosecute or defend in the premises aforesaid or any of them as occasion may require and from time to time to remove any of them and to appoint others in their place and to pay them such fess and remuneration as the Attorney's shall think fit and for any of the purposes aforesaid to make, sign, execute, affirm and declare appearances, warrants, Vakalatnamas, Plaints, Petitions, applications, defences, statements, forms, affidavits, pleadings, undertakings, consent terms, accounts, documents, papers and writings, as may be necessary or thought proper.” (emphasis supplied) (7) In connection with any matters relating to the said Assets, and any dispute/s or difference/s or disagreement/s between any parties concerned therein and ourselves, to refer to arbitration any such dispute/s, difference/s or disagreement/s either to a sole Arbitrator or to a panel of arbitrators, and to appear and represent us in such arbitration proceedings and file references, claims and defences on our behalf and to accept and implement award/s made in any such proceedings.” 7. The learned Senior Counsel appearing on behalf of the Respondent Shri Doctor would, in support of his preliminary objection, contend that having regard to the schedule of the Assets as also having regard to Clause (7) of the Power of Attorney, the said Mofatraj Munot does not have the authority to file the above Arbitration Petition challenging the Award dated 20/10/2016. It was the submission of the learned Senior Counsel that since a challenge to an Arbitration Award can be raised under Section 34 of the Arbitration and Conciliation Act, 1996, the Power of Attorney should have specifically conferred the power on the said Mofatraj Munot to file an Arbitration Petition.
It was the submission of the learned Senior Counsel that since a challenge to an Arbitration Award can be raised under Section 34 of the Arbitration and Conciliation Act, 1996, the Power of Attorney should have specifically conferred the power on the said Mofatraj Munot to file an Arbitration Petition. It was the submission of the learned Senior Counsel that since there is no reference to the “challenge of an Award” in the said Clause (7) of the Power of Attorney in the absence of a specific power being conferred on the said Mofatraj Munot, the above Arbitration Petition could not have been filed by him. The learned Senior Counsel sought to place reliance on the judgment of a Learned Single Judge of this Court reported in 1993 (Bom) 253 in the matter of Shantilal Khushaldas & Bros. Pvt. Ltd. v/s. Smt. Chandanbala Sughir Shah and another, and the judgment of a learned Single Judge of the Madras High Court reported in AIR 1952 Madras 559 in the matter of P.M. Desappa Nayanim Varu & ors. V/s. Ramabhaktula Ramiah & ors. 8. Per contra, it was the submission of the learned Senior Counsel appearing on behalf of the Petitioner Shri Pravin Samdani that Kalpataru Heights being one of the Assets mentioned in the Schedules and since Clause (5) and Clause (7) of the Power of Attorney specifically refer to “Petitions” and “arbitration”, the Power of Attorney Shri Mofatraj Muniot is authorized to file the above Arbitration Petition. The learned Senior Counsel for the Petitioner sought to place reliance on the judgment of a Division Bench of this Court reported in (1983) Bom. C.R.631 in the matter of Killick Nixon Ltd. and ors. v/s. Bank of India and ors. and another judgment of the Division Bench of this Court reported in AIR 1959 Bom. 386 in the matter of Western India Theaters Ltd. v/s. Ishwarbhai Somabhai Patel. It was the submission of the learned Senior Counsel that since the Power of Attorney executed in favour of the said Mofatraj Munot is a General Power of Attorney, mere absence of the words “challenge to an Award” would not take away the right of the Power of Attorney to file the above Arbitration Petition considering the width of the general power which is conferred by the said Power of Attorney and especially having regard to Clause (5) thereof. 9.
9. It is in context of the aforesaid submissions that this Court is required to adjudicate upon whether the said Mofatraj Munot had the authority to file the above Arbitration Petition. As indicated in the earlier part of this Order, the Petitioner had taken a decision to dispose of and/or liquidate all its Assets which were of its noncore business. The said Power of Attorney dated 24/09/1997 is a General Power of Attorney executed in favour of the said Mofatraj Munot which Power of Attorney has been executed pursuant to the Agreement dated 24/09/1997 executed between the Petitioner and the said Kalpataru Homes who as indicated above was authorized to dispose of and/or liquidate the said Assets. The said Power of Attorney therefore conferred powers on the said Shri Mofatraj Munot and one Suresh Amritlal Gandhi to do all or any of the acts mentioned therein on behalf of the Petitioner towards liquidation and realization of all said Assets. In the said Power of Attorney, Schedule of the Assets have been mentioned and Clause (G) of the said Assets refers to “Kalpataru Heights” which is a building constructed by the Petitioner under the Joint Venture Agreement. In so far as the said Clause (G) is concerned, the said clause postulates that various acts to be done in respect of the said building which interalia includes sale and realization of the proceeds, sale of apartments and other premises comprising “Kalpataru Heights”. The said Power of Attorney confers a general power on the Attorneys Shri Mofatraj Munot and Suresh Gandhi to do all acts, matters, deeds and things relevant or pertaining to all or any of the items of the 'said Assets”. 10. At this stage it would be relevant to refer to Clause (5) of the said Power of Attorney. The said Clause (5) has already been reproduced herein above. The said Clause (5) confers power on the Attorneys to file various proceedings mentioned therein which include Petitions, Applications etc., in all matters in any manner connected with or pertaining to the said Assets. Hence Clause (5) also confers a wide power on the Attorneys to file various proceedings in Courts of law or Tribunal or Authorities pertaining to the said Assets and also to appoint Advocates, Solicitors etc.
Hence Clause (5) also confers a wide power on the Attorneys to file various proceedings in Courts of law or Tribunal or Authorities pertaining to the said Assets and also to appoint Advocates, Solicitors etc. It is on the basis of the said power conferred on the Attorneys that the written statement came to be filed by the Attorney of the Petitioner Shri Mofatraj Munot in the Arbitral proceedings and also the Counter Claim. Hence the Power of Attorney cannot be construed to mean that though the attorney has the power to file a written statement and a counterclaim he is not vested with the power to institute proceedings to challenge the Award. 11. Now coming to Clause (7) of the said Power of Attorney, the said Clause confers power on the Attorneys to refer to arbitration any such dispute/s or difference/s or disagreement/s which may arise in connection with any matters relating to the said Assets. It is provided in the said Clause (7) that arbitration might be either to the sole Arbitrator or to a panel of Arbitrators, and to appear and represent the Petitioner in such arbitration proceedings and file references, claims and defences on behalf of the Petitioner and to accept and implement award/s made in any such proceedings. Hence though there is an absence of any reference made in the said Clause (7) of the power conferred on the Attorneys to challenge the Award, however, if Clause (5) and Clause (7) are read together, they lead to an irresistible conclusion that the Attorneys of the Petitioner have also the power to institute proceedings to challenge the Award without which the Clause (5) conferring power on the Attorneys to file Petitions, Applications etc, would be meaningless. 12. In my view, it is not possible to accept the submission of the learned Senior Counsel appearing on behalf of the Respondent Shri Doctor that since there is an absence of a specific reference to the challenge to an Award in Clause (7), the Attorney of the Petitioner Shri Mofatraj Munot was not authorized to file the above Arbitration Petition challenging the Award dated 20/10/2016. 13. Now coming to the judgments relied upon on behalf of the Respondent in support of the preliminary objection. In so far as the judgment in Shantilal Khushaldas & Bros.
13. Now coming to the judgments relied upon on behalf of the Respondent in support of the preliminary objection. In so far as the judgment in Shantilal Khushaldas & Bros. Pvt. Ltd.'s case (supra) is concerned, it is in the context of the Power of Attorney in the said case that a learned Single Judge of this Court held that unless there is a specific power authorizing the Attorney to file a company petition for winding up in the Company Court, a mere authorization to file suits or proceedings for recovery of dues would not be sufficient for filing a Company Petition for winding up the Company. In so far as the judgment of the learned Single Judge of the Madras High Court in P.M.Desappa Nayanim Varu's case (supra) is concerned, in the said case the Plaintiffs had executed a Special Power of Attorney to file a suit for possession of lands etc in the Court of District Munsif of Tirupathi as it was not possible for them to personally conduct the said suit. Hence once the District Munsif returned the plaint on the ground that it was beyond the pecuniary jurisdiction of his Court. It was held that the Power of Attorney had no power to institute or conduct the suit in a proper forum. Since in the said case a special power was conferred on the agent for a particular purpose i.e. to conduct a suit in a particular Court, it is in the said context that the learned Single Judge of the Madras High Court held that the agent could not file a suit in another Court. In the instant case, having regard to Clause (5) and Clause (7) of the General Power of Attorney, the said judgments (supra) would not aid the Respondent to contend that the Power of Attorney did not give the authority to the said Shri. Mofatraj Munot to file the above Arbitration Petition. 14. Now coming to the judgments cited on behalf of the Petitioner, in the judgment of a Division Bench of this Court in Killick Nixon Ltd's case (supra) it has been held that where a general power is given followed by specific powers, the specific powers do not curtail the generality of the powers conferred by the earlier clauses.
14. Now coming to the judgments cited on behalf of the Petitioner, in the judgment of a Division Bench of this Court in Killick Nixon Ltd's case (supra) it has been held that where a general power is given followed by specific powers, the specific powers do not curtail the generality of the powers conferred by the earlier clauses. However where a specific power is given followed by the conferring of general powers the rule of ejusdem generis would apply and the general powers must be read as being in furtherance of the specific power and not as enlarging the specific power so given. It was further held that the rule is that specific instances do not derogate from the width of the general power initially conferred. Hence in the instance case when a general power has been conferred on the attorneys by Clause (5) of the operative part, non-mentioning of a challenge to a Award would not derogate from the width of the general power which has been conferred on the attorneys which is implicit in the said Clause (5) of the said Power of Attorney. In so far as the judgment of the Division Bench of this Court in Western India Theaters Ltd.'s case (supra) is concerned, the said Judgment holds that legal consequence of a petition not being properly signed by the Petitioner is a mere irregularity which can be cured at any time. Since, in the instant case, this Court has come to a conclusion that the attorney or agent of the Petitioner Shri Mofatraj Munot has been sufficiently empowered under the said Power of Attorney to file the instant Arbitration Petition, the application of the said judgment in Western India Theaters Ltd.'s case (supra) is not warranted. In my view, therefore, the preliminary objection raised on behalf of the Respondent to the filing of the above Arbitration Petition by the attorney of the Petitioner Shri Mofatraj Pukhraj Munot would have to be rejected and is accordingly rejected. The above Arbitration Petition to be placed for admission on 11.04.2017.