Full Judgment Text
$~29
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. 26/2016 & IA No.291/2017
M.P.TYAGI ..... Petitioner
Through: Ms Seema Singh, Advocate alongwith
petitioner in person.
versus
MILITARY ENGINEER SERVICES & ORS ..... Respondents
Through: Mr Pankaj Batra, Advocate.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
O R D E R
% 24.03.2017
VIBHU BAKHRU, J
1. The petitioner has filed the present petition under Section 34 of the
Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’), inter alia,
assailing the Minutes of the Meeting of the Dispute Redressal and
Reconciliation Committee (hereafter ‘DRRC’) held on 30.12.2015 (signed
on 09.02.2016). The said minutes are claimed to be the arbitral award
disposing of the disputes referred to DRRC.
2. The principal ground urged by the petitioner is that the said award is
unreasoned and non-speaking. Ms Seema Singh, the learned counsel for the
petitioner claims that no statement of defence was filed; an appropriate
hearing was not granted to the petitioner; that the claims raised by the
petitioner were not considered or adjudicated; and the impugned award is
cryptic and unreasonable. She also contends that the procedure and approach
adopted by DRRC was not a judicial approach. She drew the attention of
O.M.P. 26/2016 Page 1 of 7
this Court to the Minutes of the Meeting dated 30.12.2015 (hereafter ‘the
impugned award’), which indicates that only three members of the DRRC
were present on 30.12.2015. The minutes record that the views of the other
members were taken on telephone. The said minutes are also not signed by
all members of DRRC and, therefore, the impugned award cannot be
considered as an arbitral award in the eyes of the law as it does not conform
to Section 31 of the Act.
3. Mr Batra, the learned counsel for the respondents raised a preliminary
objection as to the jurisdiction of this Court to entertain the present petition.
He submitted that this Court did not have the jurisdiction as the subject
matter is below the pecuniary jurisdiction of this Court. He submitted that
the disputes related to the election of the office bearers of respondent no.1
association and, therefore, the value of the subject matter would be nil; thus,
according to him, the present petition ought to have been filed before the
District Court.
4. He also earnestly contended that provisions of Section 42 of the Act
would not be applicable and merely because the petitioner had filed an
application under Sections 15 and 11 of the Act would not necessarily mean
that by virtue of Section 42 of the Act, the present petition would lie before
this Court.
5. He pointed out that the petitioner had earlier filed a suit for similar
reliefs, which was at the material time valued at ` 100/- and the same was
below the pecuniary jurisdiction of this Court.
6. Insofar as the merits of the contentions are concerned, Mr Batra did
O.M.P. 26/2016 Page 2 of 7
not seriously dispute that the impugned award is unreasoned. He stated that
although the impugned award is short and cryptic, DRRC had considered all
relevant facts and the Minutes of the Meeting dated 30.12.2015 (impugned
award) clearly reflected the same.
7. I have heard the learned counsel for the parties.
8. This Court does not find any merit in the contention that this Court
does not have jurisdiction to entertain the present petition. Plainly, the
grievance of the petitioner was with regard to elections conducted for
appointing office bearers of the respondent no.1 association. Thus, the
claims made by the petitioner were not monetary claims or claim for real
assets, which could be accurately quantified in monetary terms.
9. The question whether this Court would have the jurisdiction to
entertain the present petition would necessarily have to be considered in the
context of Section 2(1)(e)(i) of the Act, which is set out below:-
“(e) “Court” means –
(i) in the case of an arbitration other than
international commercial arbitration, the principal
Civil Court of original jurisdiction in a district,
and includes the High Court in exercise of its
ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the
subject-matter of the arbitration if the same had
been the subject-matter of a suit, but does not
include any civil court of a grade inferior to such
principal Civil Court, or any Court of Small
Causes.”
10. Thus, the material question to be addressed is whether the petitioner
O.M.P. 26/2016 Page 3 of 7
would be competent to maintain the suit before this Court in respect of the
claims made before DRRC, if there was no arbitration agreement between
the parties. This Court also has original jurisdiction to decide suits. Thus, it
is at once clear that since the disputes raised by the petitioner cannot be
ascribed any monetary value, the petitioner would be at liberty to elect the
Court - whether this Court or the District Court - subject to the valuing of
the suit accordingly.
11. The learned counsel for the respondents had earnestly relied on the
decision of the Coordinate Bench of this Court in Arun Kumar Jain and
Anr. v. Delhi Development Authority : (2009) 158 DLT 289 in support of
his contention that this Court would not have jurisdiction to agitate the
disputes. The said decision is wholly inapplicable to the facts of the present
case. In that case, the Court was considering a challenge to an award where
the subject matter of the disputes also related to a property. In that case, the
petitioner had instituted a suit valuing it below ` 20 lacs. Whilst, the suit
was pending, the jurisdiction of this Court was enhanced to above ` 20 lacs
and the suit was transferred to the District Court. At the material time, an
application under Section 34 of the Arbitration Act, 1940 for staying the suit
on account of the arbitration agreement between the parties, was also
pending before the Court. The learned Additional District Judge considered
the said application and referred the disputes to arbitration.
12. The provisions of the Arbitration Act, 1940 are now inapplicable.
There have been material changes in the provisions of the Arbitration Act,
1940 and the Arbitration and Conciliation Act, 1996; whereas under the
Arbitration Act, 1940, the Court referred disputes to arbitrations, under the
O.M.P. 26/2016 Page 4 of 7
provisions of Section 8 of the Act, this Court can only refer parties to
arbitration. However, the said distinction may also not be relevant in the
facts of the present case since in the present case neither the disputes nor
parties were referred to arbitration.
13. It is correct that the petitioner had initially filed a suit. However, on
the respondent pointing out the dispute resolution clause in the
Memorandum of Association of respondent no.1 association, the petitioner
had withdrawn the said suit and thereafter proceeded to make its claim
before DRRC. The suit having been withdrawn, there is no question of
referring to the value indicated in the withdrawn suit to determine the value
of the subject matter of the claims made by the petitioner before DRRC.
Concededly, no pecuniary value could be ascribed to the claims made by the
petitioner and, therefore, it would be open for the petitioner to choose its
forum to challenge the impugned award.
14. In the aforesaid circumstances, the reference made to Section 42 of
the Act is also not relevant.
15. Insofar as the merits of the case are concerned, there can be no dispute
that the impugned award is unsustainable. The impugned award, in fact, is a
decision recorded in the Minutes of the Meeting held on 30.12.2015 and is
also not styled as an arbitral award. The relevant portion of the minutes -
which is stated to constitute the entire impugned award reads as under :-
“1. Matter of M. P. Tyagi : During the last DRRC meeting
held on 30.11.2015, Sh M P Tyagi was summoned by
DRRC to present his grievances in front of DRRC. After
detailed discussion Sh. M.P. Tyagi was advised by
O.M.P. 26/2016 Page 5 of 7
DRRC to sort out the matter amicably within the branch
in the interest of Association and brotherhood, which Sh.
M.P. Tyagi agreed and assured to do so after giving a
serious thought to the advice. But till date nothing has
been done from his side, neither to resolve the issue with
the branch nor deposited the amount due against the legal
expenses incurred by the HQ and Delhi branch, as per
article 24 of MOA. The complaint of Sh. M.P. Tyagi and
records/reports/views submitted by Sh. Anil Kapoor
Election Chairman Delhi Branch and Sh. Bharat Bhasin
Election chairman head Quarters was considered/
deliberated by the Committee point wise. After detailed
discussion the Committee did not find any merit in the
complaint of Sh. M.P. Tyagi.
The decision of the earlier DRRC held on 3rd Aug. 2015
holds good as such the complaint of Sh. M.P. Tyagi was
rejected. Therefore, DRRC after proper deliberations
amongst themselves including non attending members
over telephone unanimously is in opinion that as per
MOA Article 24 Sh M.P. Tyagi will automatically lose
his membership of the MESBAI. However the matter be
submitted to the council in its next meeting to be held at
Kolkata for final decision. And hence the matter is
disposed off from DRRC.”
16. It is apparent that there is neither any discussion as to the
claims/dispute raised by the petitioner nor are any reasons indicated in the
impugned award as to why claims or the contentions advanced by the
plaintiff were rejected. Apart from the bald statement that all points were
considered and DRRC took an unanimous view to reject the claims made by
the petitioner, there is not even a remote reference to the reasons which
persuaded DRRC to reject the petitioner’s claim.
17. Plainly, the minutes (impugned award) do not conform to the
O.M.P. 26/2016 Page 6 of 7
provisions of Section 31 of the Act. First of all, it is not signed by all
members of the arbitral tribunal and, therefore, falls foul of Section 31(1) of
the Act. The award is, concededly, cryptic and unreasoned and, therefore,
also falls foul of Section 31(3) of the Act. In view of the above, it is difficult
for this Court to even accept the minutes as an arbitral award since it appears
to be only a recording of the minutes of a meeting attended by three persons
of DRRC.
18. In view of the above, the challenge of the petitioner to the impugned
award must be sustained. The petition is, accordingly, allowed with cost
quantified at ` 5,000/-. Pending application also stands disposed of. The cost
shall be paid to the petitioner within a period of two weeks from today. The
impugned award – the Minutes of the Meeting dated 30.12.2015 – insofar as
it relates to the claims made by the petitioner is set aside. The petitioner is at
liberty to re-agitate this issue in accordance with law.
19. Order dasti.
VIBHU BAKHRU, J
MARCH 24, 2017
MK
O.M.P. 26/2016 Page 7 of 7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. 26/2016 & IA No.291/2017
M.P.TYAGI ..... Petitioner
Through: Ms Seema Singh, Advocate alongwith
petitioner in person.
versus
MILITARY ENGINEER SERVICES & ORS ..... Respondents
Through: Mr Pankaj Batra, Advocate.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
O R D E R
% 24.03.2017
VIBHU BAKHRU, J
1. The petitioner has filed the present petition under Section 34 of the
Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’), inter alia,
assailing the Minutes of the Meeting of the Dispute Redressal and
Reconciliation Committee (hereafter ‘DRRC’) held on 30.12.2015 (signed
on 09.02.2016). The said minutes are claimed to be the arbitral award
disposing of the disputes referred to DRRC.
2. The principal ground urged by the petitioner is that the said award is
unreasoned and non-speaking. Ms Seema Singh, the learned counsel for the
petitioner claims that no statement of defence was filed; an appropriate
hearing was not granted to the petitioner; that the claims raised by the
petitioner were not considered or adjudicated; and the impugned award is
cryptic and unreasonable. She also contends that the procedure and approach
adopted by DRRC was not a judicial approach. She drew the attention of
O.M.P. 26/2016 Page 1 of 7
this Court to the Minutes of the Meeting dated 30.12.2015 (hereafter ‘the
impugned award’), which indicates that only three members of the DRRC
were present on 30.12.2015. The minutes record that the views of the other
members were taken on telephone. The said minutes are also not signed by
all members of DRRC and, therefore, the impugned award cannot be
considered as an arbitral award in the eyes of the law as it does not conform
to Section 31 of the Act.
3. Mr Batra, the learned counsel for the respondents raised a preliminary
objection as to the jurisdiction of this Court to entertain the present petition.
He submitted that this Court did not have the jurisdiction as the subject
matter is below the pecuniary jurisdiction of this Court. He submitted that
the disputes related to the election of the office bearers of respondent no.1
association and, therefore, the value of the subject matter would be nil; thus,
according to him, the present petition ought to have been filed before the
District Court.
4. He also earnestly contended that provisions of Section 42 of the Act
would not be applicable and merely because the petitioner had filed an
application under Sections 15 and 11 of the Act would not necessarily mean
that by virtue of Section 42 of the Act, the present petition would lie before
this Court.
5. He pointed out that the petitioner had earlier filed a suit for similar
reliefs, which was at the material time valued at ` 100/- and the same was
below the pecuniary jurisdiction of this Court.
6. Insofar as the merits of the contentions are concerned, Mr Batra did
O.M.P. 26/2016 Page 2 of 7
not seriously dispute that the impugned award is unreasoned. He stated that
although the impugned award is short and cryptic, DRRC had considered all
relevant facts and the Minutes of the Meeting dated 30.12.2015 (impugned
award) clearly reflected the same.
7. I have heard the learned counsel for the parties.
8. This Court does not find any merit in the contention that this Court
does not have jurisdiction to entertain the present petition. Plainly, the
grievance of the petitioner was with regard to elections conducted for
appointing office bearers of the respondent no.1 association. Thus, the
claims made by the petitioner were not monetary claims or claim for real
assets, which could be accurately quantified in monetary terms.
9. The question whether this Court would have the jurisdiction to
entertain the present petition would necessarily have to be considered in the
context of Section 2(1)(e)(i) of the Act, which is set out below:-
“(e) “Court” means –
(i) in the case of an arbitration other than
international commercial arbitration, the principal
Civil Court of original jurisdiction in a district,
and includes the High Court in exercise of its
ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the
subject-matter of the arbitration if the same had
been the subject-matter of a suit, but does not
include any civil court of a grade inferior to such
principal Civil Court, or any Court of Small
Causes.”
10. Thus, the material question to be addressed is whether the petitioner
O.M.P. 26/2016 Page 3 of 7
would be competent to maintain the suit before this Court in respect of the
claims made before DRRC, if there was no arbitration agreement between
the parties. This Court also has original jurisdiction to decide suits. Thus, it
is at once clear that since the disputes raised by the petitioner cannot be
ascribed any monetary value, the petitioner would be at liberty to elect the
Court - whether this Court or the District Court - subject to the valuing of
the suit accordingly.
11. The learned counsel for the respondents had earnestly relied on the
decision of the Coordinate Bench of this Court in Arun Kumar Jain and
Anr. v. Delhi Development Authority : (2009) 158 DLT 289 in support of
his contention that this Court would not have jurisdiction to agitate the
disputes. The said decision is wholly inapplicable to the facts of the present
case. In that case, the Court was considering a challenge to an award where
the subject matter of the disputes also related to a property. In that case, the
petitioner had instituted a suit valuing it below ` 20 lacs. Whilst, the suit
was pending, the jurisdiction of this Court was enhanced to above ` 20 lacs
and the suit was transferred to the District Court. At the material time, an
application under Section 34 of the Arbitration Act, 1940 for staying the suit
on account of the arbitration agreement between the parties, was also
pending before the Court. The learned Additional District Judge considered
the said application and referred the disputes to arbitration.
12. The provisions of the Arbitration Act, 1940 are now inapplicable.
There have been material changes in the provisions of the Arbitration Act,
1940 and the Arbitration and Conciliation Act, 1996; whereas under the
Arbitration Act, 1940, the Court referred disputes to arbitrations, under the
O.M.P. 26/2016 Page 4 of 7
provisions of Section 8 of the Act, this Court can only refer parties to
arbitration. However, the said distinction may also not be relevant in the
facts of the present case since in the present case neither the disputes nor
parties were referred to arbitration.
13. It is correct that the petitioner had initially filed a suit. However, on
the respondent pointing out the dispute resolution clause in the
Memorandum of Association of respondent no.1 association, the petitioner
had withdrawn the said suit and thereafter proceeded to make its claim
before DRRC. The suit having been withdrawn, there is no question of
referring to the value indicated in the withdrawn suit to determine the value
of the subject matter of the claims made by the petitioner before DRRC.
Concededly, no pecuniary value could be ascribed to the claims made by the
petitioner and, therefore, it would be open for the petitioner to choose its
forum to challenge the impugned award.
14. In the aforesaid circumstances, the reference made to Section 42 of
the Act is also not relevant.
15. Insofar as the merits of the case are concerned, there can be no dispute
that the impugned award is unsustainable. The impugned award, in fact, is a
decision recorded in the Minutes of the Meeting held on 30.12.2015 and is
also not styled as an arbitral award. The relevant portion of the minutes -
which is stated to constitute the entire impugned award reads as under :-
“1. Matter of M. P. Tyagi : During the last DRRC meeting
held on 30.11.2015, Sh M P Tyagi was summoned by
DRRC to present his grievances in front of DRRC. After
detailed discussion Sh. M.P. Tyagi was advised by
O.M.P. 26/2016 Page 5 of 7
DRRC to sort out the matter amicably within the branch
in the interest of Association and brotherhood, which Sh.
M.P. Tyagi agreed and assured to do so after giving a
serious thought to the advice. But till date nothing has
been done from his side, neither to resolve the issue with
the branch nor deposited the amount due against the legal
expenses incurred by the HQ and Delhi branch, as per
article 24 of MOA. The complaint of Sh. M.P. Tyagi and
records/reports/views submitted by Sh. Anil Kapoor
Election Chairman Delhi Branch and Sh. Bharat Bhasin
Election chairman head Quarters was considered/
deliberated by the Committee point wise. After detailed
discussion the Committee did not find any merit in the
complaint of Sh. M.P. Tyagi.
The decision of the earlier DRRC held on 3rd Aug. 2015
holds good as such the complaint of Sh. M.P. Tyagi was
rejected. Therefore, DRRC after proper deliberations
amongst themselves including non attending members
over telephone unanimously is in opinion that as per
MOA Article 24 Sh M.P. Tyagi will automatically lose
his membership of the MESBAI. However the matter be
submitted to the council in its next meeting to be held at
Kolkata for final decision. And hence the matter is
disposed off from DRRC.”
16. It is apparent that there is neither any discussion as to the
claims/dispute raised by the petitioner nor are any reasons indicated in the
impugned award as to why claims or the contentions advanced by the
plaintiff were rejected. Apart from the bald statement that all points were
considered and DRRC took an unanimous view to reject the claims made by
the petitioner, there is not even a remote reference to the reasons which
persuaded DRRC to reject the petitioner’s claim.
17. Plainly, the minutes (impugned award) do not conform to the
O.M.P. 26/2016 Page 6 of 7
provisions of Section 31 of the Act. First of all, it is not signed by all
members of the arbitral tribunal and, therefore, falls foul of Section 31(1) of
the Act. The award is, concededly, cryptic and unreasoned and, therefore,
also falls foul of Section 31(3) of the Act. In view of the above, it is difficult
for this Court to even accept the minutes as an arbitral award since it appears
to be only a recording of the minutes of a meeting attended by three persons
of DRRC.
18. In view of the above, the challenge of the petitioner to the impugned
award must be sustained. The petition is, accordingly, allowed with cost
quantified at ` 5,000/-. Pending application also stands disposed of. The cost
shall be paid to the petitioner within a period of two weeks from today. The
impugned award – the Minutes of the Meeting dated 30.12.2015 – insofar as
it relates to the claims made by the petitioner is set aside. The petitioner is at
liberty to re-agitate this issue in accordance with law.
19. Order dasti.
VIBHU BAKHRU, J
MARCH 24, 2017
MK
O.M.P. 26/2016 Page 7 of 7