Asian School Of Business, Represented By Its President, Represented By Power Of Attorney Prof C. Krishnakumar v. Research Institute Rajagiri, Represented By Its Authorized Representative
2025-09-10
K.NATARAJAN
body2025
DigiLaw.ai
JUDGMENT : K. NATARAJAN, J. This petition filed by the petitioner/1st respondent by challenging the order passed by the Arbitral Tribunal on IA No.1/2024 in AC No. 6/2024 dated 09.04.2024 in A.R.No. 218/2023. 2. Heard the arguments of the learned counsel for the petitioner and the counsel for the respondent. 3. The case of the petitioner is that the respondent raised the arbitral proceedings before the sole arbitrator. As per the arbitrator appointed by the High Court, vide order dated 09.04.2024 in AR No. 218/2023. After raising the claim to the respondent filed the written statement and filed an application by raising the preliminary issue in respect of claim made by the claimant as incompetent person, namely as Issac Varghese. And it is contended by the petitioner that as per the bylaw of the society, any suit or be sued by the Director of the society and when there is a specific by law is made as per Section 9 of the Societies Registration Act, 1860. The only competent person shall filed a suit or be sued. When there is no such bylaw, then the general body meeting should be held and appoint a person to file the suit or proceedings. Such being the case, as per the by law of the petitioner, the claimant clause 11, the Director is the competent person to file the claim petition. And the same was amended in December 2004 and subsequently in 2024 there was a meeting convened by the governing council body, who is not competent to appoint any person, but they said to be appointed the very Varghese to file the petition. Therefore, he is incompetent to make claim before the Tribunal. And this issue was already raised by the petitioner before the High Court in the application filed by the respondent under Section 11 of the Act,. And the High Court has observed, the court cannot go into that issue and it is all the contentions were kept open and therefore the petitioner moved an application before the Arbitrator to frame the preliminary issue and answer regarding the competence of the claim petition. But the Arbitratoral tribunal instead of passing the order, it was postponed the Case. On the ground, the question of maintainability of the entire pleadings and evidence has to be considered and the issue cannot be considered as a preliminary issue.
But the Arbitratoral tribunal instead of passing the order, it was postponed the Case. On the ground, the question of maintainability of the entire pleadings and evidence has to be considered and the issue cannot be considered as a preliminary issue. Thereby, the application filed by the petitioner came to be dismissed. Feeling aggrieved by the same, the petitioner is before this Court. 4. The learned counsel by the petitioner is vehemently contented that the issue raised by the petitioner is the preliminary issue, where the time required to answer the issue before proceeding with passing of the award. But the postponing the matter for without passing the order dismissing application is not correct. The same issue was raised by the petitioner before the High court. On the application filed by the respondent for appointing the arbitrator under Section 11 of the Act, the High Court has observed all the contentions are kept open and the High Court cannot deal with the said issue. Such being the case, the petitioner bound to raise that issue before the Tribunal and as per Section 16 (5) of the Act, the Tribunal bound to answered the plea raised by the respondent and then proceeded to pass the award. Therefore, without passing the order, continuing the proceedings is illegal and therefore, prayed for setting aside the order. In support of his argument, he has relied upon the Judgment of the Hon’ble Supreme Court. In the case of 2024 KHC 6512 Ajay Madhusudan Patel v. Jyotrinda S. Patel (2025) 1 SCC 611 in the case of Cox and Kings Lmited v, Sap India Private Limited and Another. And also relied upon the Judgment of the Hon’ble Supreme Court reported IN 2022 (3) KHC 99 in the case of Nazeer P. v. Salafi Trust and Another and contended that, as per Section 9 of the Travancore Cochin literary, Scientific and charitable societies Registration Act, 1955,. The only competent person shall file the suit and suit in the name of the President, Chairman or Principal or Secretary, or trustees, as shall be determined by the Rules and regulations of the society and in default of such determination, the name of the person as shall be appointed by the governing body on the occasion. Therefore, it is contended that no such Governing body appointed the present respondent Varghese to represent the case.
Therefore, it is contended that no such Governing body appointed the present respondent Varghese to represent the case. Such being the case, the very claim made by the incompetent person shall be decided as a preliminary issue and therefore the petition set aside the order. 5. Per contra, learned counsel for the respondent vehemently objected the petition and supported the orders passed by the tribunal contending that Section 16 Sub Section (5) of the Arbitration and Conciliation Act, applies only to the jurisdiction of the tribunal. There is no such plea raised by the petitioner regarding jurisdiction of the arbitratoral tribunal. It is only the incompetence of the claimant who filed the claim petition before the arbitrator. And also filed the application before the High Court for appointing the Arbitrator. Even this Court while passing the order appointing the Arbitrator, an I.A filed by the respondent came to be dismissed, where he sought for production of the document from the respondent. That it is not necessary to adjudicate the matter for the purpose of appointing the arbitrator. Such being the case, once again the petitioner cannot raise this issue. He further contended that even otherwise the tribunal has not rejected his application, but it is stated that the competency cannot be considered as a preliminary issue, but it will be postponed for deciding that issue. In such being the case, it cannot be considered as rejection of the application and it is submitted that the appointing the Vargheese called representative of the claim petitioner. It is the internal affairs of the Society, the petitioner being third party, he has no competent to challenge the same. He further contended that the very petitioner filed an application before the Arbitrator/Tribunal for impleding the secretary of the society as additional claimant, which is pending for consideration. The said fact was suppressed by the petitioner herein. Therefore, there is no merit in this petition filed by the petitioner, hence prayed for dismissing the petition. In support of his contention the learned counsel for the respondent also relied upon the judgment of the Hon'ble Supreme court reported 2018 KHC 6035 in the case of Indian Farmers' Fertlizer Co-Operative Ltf. (M/s) v. M/s Bhadra Products. The counsel also relied upon another judgment 2019 KHC 7192 case of Deep Industries Ltd (M/s) v. Oil and Natural Gas Corporation Ltd. And another, and prayed for dismissing this petition.
(M/s) v. M/s Bhadra Products. The counsel also relied upon another judgment 2019 KHC 7192 case of Deep Industries Ltd (M/s) v. Oil and Natural Gas Corporation Ltd. And another, and prayed for dismissing this petition. 6. Upon hearing the argument and perused the records. 7. The point that arises foe my consideration as under 1. Whether the order under challenge call for any interference ? 8. On perusal of the records, this not in dispute, there was an arbitral agreement between the parties and therefore the respondent approached High court by filing application A.R 218 /23 for appointment of the arbitrator. It is also not in dispute, the petitioner here raised various objections including the competency of the person who filed the petition under Section 11 of the Act and this Court considering the arguments of both sides, allowed the petitioner, appointed the C. Justice K. Padmanabhan Nair a former Judge of the High Court as sole arbitrator vide order dated 09.04.2024. While passing the order at para 11 of the order the High Court also stated all the contents of the parties including the authority of the persons representing them to participate in the arbitration proceedings for and above those parties are left open to be raised before the learned Arbitrator. 9. Based upon the observation made by the High Court in the order, the petitioner raised the objection regarding competence of the claimant who represent the respondent society. It is also submitted by both the counsels, now the pleadings are completed. Only left is for framing of issues and adducing the evidence by the both parties. However, the Tribunal and the application filed by the petitioner where the tribunal passed the order has under”- “14. I have heard Counsel appearing for the claimant and respondents. After hearing both sides and perusing the documents, it is clear that to consider the question of maintainability the entire pleadings and evidence has to be considered. This issue cannot be considered as a preliminary issue. So, it is decided to post the Arbitration Claim for evidence and for further steps if any. The matter will be considered elaborately after taking evidence and hearing the parties.” On perusal of this order passed by the Arbitrator, regarding question of maintainability the entire pleadings and evidence to be considered.
This issue cannot be considered as a preliminary issue. So, it is decided to post the Arbitration Claim for evidence and for further steps if any. The matter will be considered elaborately after taking evidence and hearing the parties.” On perusal of this order passed by the Arbitrator, regarding question of maintainability the entire pleadings and evidence to be considered. Of course, the High Court, while pointing the arbitrator, the parties are permitted to raise the said contention in the arbitration proceedings and accordingly the petitioner moved an application for competency of the very claim petition filed by the one Varghese representing the society. The learned Counsel for the petitioner has relied upon the two judgments of the Hon'ble Supreme Court that is Ajay Madhusudhan Patel's (Supra). In another case, in Cox and Kings Ltd. (Supra) at para 33 and 34 as held as :- 33. Once the Arbitral Tribunal is constituted, it shall be open for the respondents to raise all the available objections in law, and it is only after (and if) the preliminary objections are considered and rejected by the tribunal that it shall proceed to adjudicate the claims of the petitioner. 34. Further, on the issue of impleadment of Respondent 2, which is not a signatory to the arbitration agreement, elaborate submissions have been made on both the sides, placing reliance on terms of the agreements, email exchanges, etc. In view of the complexity involved in the determination of the question as to whether Respondent 2 is a party to the arbitration agreement or not, we are of the view that it would be appropriate for the Arbitral Tribunal to take a call on the question after taking into consideration the evidence adduced before it by the parties and the application of the legal doctrine as elaborated in the decision in Cox & Kings. At para 34 of the judgments the Hon'ble Apex Court has once again reiterated the judgment on Cox and Kings case. Therefore the The preliminary issues shall be considered by the Arbitral Tribunal based upon the evidence. Now the petitioner said to be already filed his written statement and documents. The respondent also produced all the documents in support of his claim. Such being the case when the preliminary issues regarding maintainability of the petition filed by the very claimed petitioner is under challenge.
Now the petitioner said to be already filed his written statement and documents. The respondent also produced all the documents in support of his claim. Such being the case when the preliminary issues regarding maintainability of the petition filed by the very claimed petitioner is under challenge. The arbitrator or a tribal required to frame the preliminary issue in respect of the competence of the claimant and after answering the same, then required to proceed with passing the final award. The preliminary issue regarding the competency or maintainability of the petition cannot be heard along with the main petition while passing the final award. If the tribunal comes to the conclusion that the claim petition filed by the person who is not competent, then award cannot be passed in favour of the claimant. Such being the case, it is necessary for the tribunal to frame the preliminary issue in respect of the competency of the claimant and Based upon the documentary evidence produced by the parties, it can pass the order and proceed with the case on merits. Such being the case, dismissing the application filed by the petitioner even without postponing the same is not correct. Therefore, the order under challenge required to be interfered by this court. Accordingly, this Original petition is allowed. The order under challenge is set aside. It is also needless to say the petitioner also already filed another petition for impleading secretary as their additional claimant and that application is still pending. The Tribunal is liberty to pass the order on the said petition. The tribunal shall pass preliminary issue on the competency, if the tribunal found the claim made by the petitioner is incompetent and if any application filed by the society by representing any other competent person, that has to be considered.