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2023 DIGILAW 582 (JK)

Ace Enterprises through Abdul Rehman Bhat v. Jagdeep Rana Arbitrator (IOC)

2023-10-05

VINOD CHATTERJI KOUL

body2023
JUDGMENT : 1. In view of controversy involved in this case, it would be appropriate to first take up and decide contempt petition, CCP(S) no.29/2023. 2. This contempt petition dates back to the time when a civil suit for Declaration and Mandatory Injunction was filed by petitioner herein before the court of Judge Small Causes, Srinagar (for short “Trial Court”) on 13th April 2006. It was on 17th April 2006 that an application under Section 8 of Arbitration and Conciliation Act was preferred for appointment of Arbitrator. It appears that while application was pending, respondent-Corporation appointed Mr Jagdeep Rana (respondent no.2 herein) as sole arbitrator. On the application of petitioner, an order dated 22nd June 2011 came to be passed by Trial Court, staying proceedings before arbitrator/respondent no.2 herein till objections were filed. 3. On 24th June 2011, the arbitrator is said to have adjourned the proceedings sine die with liberty to respondent no.1 to seek revival of arbitral proceedings as and when stay granted by Trial Court was vacated. On an application of respondent-Corporation, arbitrator passed an order 16th September 2011, recalling his earlier order dated 24th June 2011 and expressing that there was no direction to stay arbitral proceedings. This appears to have triggered petitioner to come up with contempt petition against respondents before the Trial Court, which, however, was vide Order dated 6th November 2012 dismissed. 4. The order dated 6th November 2012 was challenged by petitioner in a petition, OWP no.377/2014, which was disposed of vide judgment dated 16th December 2015, in which it was observed by a Bench of this Court that in case of disobedience of any injunction granted or other order made under Rule 1 or Rule 2 of Order XXXIX of the Code of Civil Procedure or breach of any of the terms on which the injunction was granted or the other was made, the court granting injunction or making the order or any court to which the suit or proceeding is transferred, may order the property of the person guilty of such disobedience or breach, to be attached and may also order such person to be detained in civil prison. It was also observed that there exists a special provision enacted by the legislature in the shape of Order XXXIX Rule 2-A CPC to punish a person for disobedience of orders of injunction and to maintain the dignity of the courts subordinate to the High Court. As regards the order dated 6th November 2013, it was observed that the court below acted beyond its bounds, authority and jurisdiction and to undone the outrageous miscarriage of justice meted out in the case by resorting to a jurisdiction not vested in court below, it was a fit case to exercise powers vested in the Court under Article 227 of the Constitution of India. And accordingly, allowed petition of present petitioner and set-aside the order dated 6th November 2013, with a direction to the court below to act in the matter in accordance with law. The parties were directed to appear before court below on 28th December 2015. It was brought to the notice of the Court during course of arguments that arbitrator appointed in violation of ad interim orders of the court below has concluded proceedings and passed final award against the interests of petitioner. To this submission, this Court directed that pending decision in the contempt petition, there would be stay of final award. It was also viewed that in the event it is found that there had been a violation of interim order of the Trial Court, the appointment of Arbitrator and the proceedings conducted by him together with any award passed by him would be rendered non est in the eyes of law. 5. The matter, as is evident from perusal of the file, went to the Supreme Court as respondents herein preferred a Civil Appeal no.1820 of 2018 titled as R.K.Arora General Manager and another v. M/s Ace Enterprises. The Supreme Court disposed of the appeal with the directions: (i) that the application filed by respondent (petitioner herein) for initiating contempt shall be treated as an application for taking action under Order XXXIX Rule 2A of J&K CPC; and (ii) that the Trial Court shall first see whether there is any disobedience of the order of injunction and in case the court enters a finding of disobedience, the rest under Order XXXIX Rule 21 alone shall follow. 6. The Trial Court in terms of order dated 21st April 2018, dismissed the application for initiation of contempt proceedings. 6. The Trial Court in terms of order dated 21st April 2018, dismissed the application for initiation of contempt proceedings. Against this order, an appeal was preferred before the court of Additional Sessions Judge, Srinagar (for brevity “Appellate Court”) who vide order dated 10th July 2018 allowed the appeal and set-aside order dated 21st April 2018 and remanded the matter to the Trial Court with a direction that Trial Court shall address itself to the fact as to whether there has been disobedience of the order dated 22nd June 2011 passed by it or not. Worthwhile to mention here that the Appellate Court has rightly observed that the Trial Court has traversed beyond the authority as it was directed to see and ascertain the import and effect of order dated 22nd June 2011 but not to find out its original and that the Trial Court has erroneously gone into the origin of the order which it has not been mandated to go into. It was also correctly opined by the Appellate Court that the Trial Court was not required to ascertain as to whether the order had been passed rightly or wrongly or as to whether the order had been passed under the provisions of Order XXXIX Rule 1 or 2 CPC or under Section 151 CPC, but the Trial Court was required to see as to whether there had been disobedience of the order dated 22nd June 2011 or not, which the Trial Court had failed to appreciate and decide and therefore, order dated 21st April 2018 could not sustain in the eyes of law. 7. In terms of order dated 18th November 2019, the Trial Court did find disobedience of order dated 22nd June 2011 on the part of respondent/ arbitrator. The said order was again put to challenge before the court of Principal District Judge, Srinagar. In terms of order dated 17th December 2020, order of the Trial Court dated 18th November 2019 was set-aside and matter again remanded to the Trial Court. Aggrieved thereof, petitioner herein filed a petition, bearing CM(M) no.120/2020, which is pending adjudication. It was in terms of order dated 28th December 2020 that this Court directed to maintain status quo. 8. In terms of order dated 17th December 2020, order of the Trial Court dated 18th November 2019 was set-aside and matter again remanded to the Trial Court. Aggrieved thereof, petitioner herein filed a petition, bearing CM(M) no.120/2020, which is pending adjudication. It was in terms of order dated 28th December 2020 that this Court directed to maintain status quo. 8. It is maintained by petitioner that while the petition is pending, respondents have moved an execution petition for enforcement of the Award before the Executing Court, which is gross violation and disobedience of the orders dated 16th December 2015, 28th December 2020 and 17th May 2022. The said application is stated to have been entertained and notice has been issued to petitioner to file objections. 9. A Bench of this Court while issuing notice to respondents, vide order dated 9th February 2023 stayed the execution proceedings before the court of Additional District Judge, Srinagar. 10. When this Court heard the matter at length, the respondent/arbitrator, who was present in person on 25th May 2023, tendered unconditional apology by stating that violation of the orders was because he was misguided and that he ought not to have proceeded and should not have violated the orders. In this regard he also filed an affidavit seeking apology. 11. It is pertinent to mention here that submission of unconditional apology by respondent/arbitrator reflects and shows that how he has been throughout misguided. It is worth mentioning here that counsels, who were representing the respondent-Corporation, had also been representing the arbitrator, which should not and ought not to have been done by them. 12. In view of unconditional apology tendered by respondent/arbitrator, a lenient view is taken and contempt petition, bearing CCP(S) no.29/2023 is closed. 13. However, closure of contempt would not mean that all that has been done by the respondent/arbitrator after issuance of order dated 22nd June 2011 by the Trial Court, is permitted to remain intact as the proceedings initiated and concluded by respondent/arbitrator are illegal and are declared void ab initio. 14. As a consequence of above appointment of respondent no.2, namely, Jagdeep Raina, the arbitral proceedings initiated and concluded by him by way of passing final award is/are quashed. 15. 14. As a consequence of above appointment of respondent no.2, namely, Jagdeep Raina, the arbitral proceedings initiated and concluded by him by way of passing final award is/are quashed. 15. Execution petition, if any, filed by respondent-Corporation and/or pending before any court of law with respect to the above quashed Award shall stand dismissed and impugned order dated 17th December 2020 is also set-aside. 16. CM(M) no.120/2020 is, accordingly, allowed and disposed of in terms of above. 17. Parties are free to take recourse to such remedy/proceeding as may be available to them under law including arbitration proceedings.