Full Judgment Text
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 583 OF 2003
IN
ARBITRATION PETITION NO. 155 OF 2002
IN
AWARD NO. 2 OF 2002
Satinderpal Singh Anand, )
Residing at 501, Violena Building, )
St. Anne's Church Road, )
Bandra (W), )
Mumbai400 050. ) ...Appellant.
(Orig. Petitioner)
Vs.
Sharanpal Balmukund Chopra, )
Residing at Chopra House, )
108, Dr.Ambedkar Road, )
Bandra (W), )
Mumbai400 050. ) ...Respondent.
(Orig. Respondent.)
Mr. O. J. Menezes with Mr. R. S. Tripathi for the Appellant.
Mr. H.J. Thakkar, Sr. Advocate i/by Ms. Geeta Shastri for the
Respondent.
WITH
APPEAL NO. 680 OF 2003
IN
ARBITRATION PETITION NO. 155 OF 2002
IN
AWARD NO. 2 OF 2002
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Sharanpal Balmukund Chopra, )
Residing at Chopra House, )
108, Dr.Ambedkar Road, )
Bandra (W), )
Mumbai400 050. ) ...Appellant
(Orig. Respondent.)
Vs.
Satinderpal Singh Anand, )
Residing at 501, Violena Building, )
St. Anne's Church Road, )
Bandra (W), )
Mumbai400 050. ) ...Respondent.
(Orig. Petitioner)
Mr. H.J. Thakkar, Sr. Advocate i/by Ms. Geeta Shastri for the Appellant.
Mr. O. J. Menezes with Mr. R. S. Tripathi for the Respondent.
CORAM : DR. S.RADHAKRISHNAN &
ANOOP V. MOHTA, JJ.
DATE OF RESERVING THE JUDGMENT : 10TH MARCH, 2008.
DATE OF PRONOUNCING THE JUDGMENT : 5TH, MAY, 2008.
JUDGMENT (PER ANOOP V. MOHTA, J.):
. As the parties, issues and impugned judgment are common, we
are disposing of both the Appeals by this common judgment.
2. The original Petitioner- Appellant (also called hereinafter for
reference “Anand's) has preferred this Appeal No.583/2003 against the
impugned order passed in Arbitration Petition No. 155/2002 in Award
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No. 2 of 2002. The original respondent (called hereinafter for reference
Chopra's) has also preferred Appeal No.680 of 2003 on limited ground
against the said judgment.
The appellant's case in Appeal No.583/2003 is as under:-
3. Prior to 24/07/1979, Chopra and his brother were owners of a
plot of land admeasuring 4644 sq.yards. By an Agreement of Sale
dated 10/11/1979, both the brothers agreed to sell to M./s. Emkay
Construction Co., 3300 sq. yards which was demarcated from the rest
of the property by a red boundary line in the plan annexed to the
Agreement. A compound wall was thereafter constructed separating
the said two pieces of land. The respondent is the owner of immovable
property at Bandra admeasuring 1344 sq. yds., with a structure of a
ground floor and part first floor standing thereon having 4 flats besides
a portion of the said structure in possession of the respondent. Flat
No.3 was in occupation of the appellant who resided there with his
family. On the first floor of the building there were two rooms and a
toilet. They were also in occupation of the appellant.
4. Flat No. 4 was in the occupation of a tenant named Mr.Naik and
Flat Nos. 1 and 2 were in the occupation of a tenant named Mr. Pereira
who had also encroached on a portion of the open land surrounding his
flats. Tenant named Mr. Pereira was not on speaking terms with the
respondent for more than 15 years due to acrimonious litigation
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between the two of them. The respondent is an Engineer, Builder and
Contractor by profession. The appellant is one of the legal heirs and
representatives of Mr. Sardar Singh Gurdit Singh Anand (father of the
appellant).
5. In the year 1987, pursuant to instructions of respondent the
appellant negotiated with tenant Pereira for vacating the flats in his
occupation and securing alternate accommodation elsewhere. The
respondent and late Sardarsingh Anand and appellant were also
negotiating for sale of a portion of land of the respondent.
Sometime prior to July, 1987, the respondent approached the
appellant along with a broker. Both of them impressed upon the
appellant the possibility of developing the property. The appellant was
reluctant as there was problem from the two tenants occupying the
flats. The ejectment proceedings initiated against tenant Pereira was
pending in Small Causes Court. Besides, BMC was not ready to give
permission to sub divide the plot of land in view of previous sale of the
land of a portion admeasuring 3300 sq. yards to M/s. Emkay
Construction Co. The issue of extra FSI used by Emkay Construction
Co. was also one of the problem.
6. On 23/06/1987, pursuant to negotiations tenant Pereira agrees to
vacate the two flats on the respondent paying him Rs.11.60 lacs to
secure alternate accommodation elsewhere. The respondent executed
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document with tenant Pereira stating that on respondent paying
Pereira a sum of Rs.11.60 lacs the tenant shall vacate the premises (2
flats) in his occupation.
7. On 01/07/1987, the respondent executed agreement with tenant
Naik for obtaining possession of flat No.4 in his occupation on payment
of Rs.3.35 lacs by the respondent.
8. On 05/07/1987, tenant Naik addresses letter to the respondent
stating that he had secured accommodation at Andheri and calls upon
the respondent to make arrangement to pay him Rs.3.35 lacs as per
agreement.
9. On 11/07/1987, the respondent executes stamped receipt in
favour of father of the appellant acknowledging receipt of a sum of
Rs.4.50 lacs for sale of open land admeasuring 4533 sq.ft. @ Rs.1000/-
per sq.ft., for a total consideration of Rs.45 lacs. The said receipt
states that possession of open land given to the appellant's father. Out
of the consideration of Rs.4.50 lacs paid, Rs.3.35 lacs paid in cheque
and balance amount of Rs.1.15 lacs paid in cash. This fact is recorded
in the receipt executed.
10. On 11/07/1987, tenant Naik executes receipt for Rs.3.35 lacs
received from the respondent and hands over vacant possession of
flat No.4 to the respondent.
11. On 24/07/1987, the respondent addressed letter of authority to
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the tenant Pereira authorising him to deal with the Appellant's father
for obtaining vacant possession of 2 flats in Pereira's possession within
the limits mentioned in the agreement i.e. Rs.11.60 lacs.
On 24/07/1987, prior to the hearing of the Motions the
respondent produced a forged Letter of authority wherein in his own
handwriting he has inserted the sentence “as the liability to vacate is
that of S.S.Anand”. He also forged the signature of tenant Pereira on
the same for which he was prosecuted for forgery. (By doing so he
wanted to cast the burden of shifting the tenant Pereira on S.S.Anand
and create a dispute about the price of the land which was sold.
12. The respondent paid a sum of Rs.11,60,000/- to tenant Pereira
and obtained vacant possession on 31/07/1987 from him on behalf of
the appellant. Pereira executing a writing recording that he had
received Rs.7,50,000/- by cheque and Rs.4.10 lacs by cash from
S.S.Anand and handed over vacant possession of the flat Nos. 1 and 2
to S.S.Anand as per instructions from S.P.Chopra. S.S.Anand also
obtained writing from tenant Pereira recording the above facts. The
said writing further stated that he or the owner S.P.Chopra shall have
no claim in respect of the flat required by Pereira as an alternative
accommodation.
13. As alleged, on 12/09/1987, as respondent not executing a regular
Agreement for sale the respondent gave appellant's father a copy of
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the application addressed to B.M.C. and signed by him for the
construction of a building on 4533 sq.ft. of land in accordance with the
plans annexed.
14. On 20/01/1988, the respondent's Advocate's letter to Advocate
at Baroda stating that the draft agreement ready and would be
forwarded separately.
15. On 02/02/1988, the respondent filed suit No.363/1988 against
the appellant and his father for eviction from only 2 flats on the ground
that they are trespassers therein. No prayer in the plaint for
declaration that they are trespassers in the flats. Said suit filed even
before receipt of letter dated 29/01/1988. In his plaint the respondent
annexed only 2 documents and no other correspondence prior to the
th
suit i.e. letter of authority dated 24 July, 1987 without the
interpolation and police complaint. In the plaint, the respondent
clearly states that the appellant had removed his material from the
open space and that cars are being parked in the compound. Mesne
profits sought @ Rs.15000/- p.m., for 2 flats. Possession of open space
and shed not claimed.
16. On 29/02/1988, the appellant's father files Suit No.721/1988
against the respondent for specific performance of the agreement for
sale cum development. In the plaint it is clearly stated that possession
of open land had been given as per receipt dated 11/07/1987 and the
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said area of 4533 sq.ft., had been demarcated and that the late Sardar
Singh and his family were freely, openly and exclusively occupying the
said 2 flats and surrounding land. About occupation of land
admeasuring 4533 sq.ft. and it has been stated that after filing of the
suit he had received letter dated 29/01/1988 enclosing respondent's
draft agreement for sale cum development. In the plaint it has been
stated that the respondent is wanting to take possession of the 2 flats
and land which was in exclusively possession of the appellant.
17. On 27/05/1988, this court, passed Ad-interim Order whereby
pending the hearing of the Motions taken out by both parties, the shed
shall be under lock and key of the appellant and his father, that they
are allowed to bring their cars in the compound and that the open
space claimed by the appellant and his father would not be put to use
by either party.
18. On 18/10/1991, this Court made appellant's Notice of Motion
No.944/1988 absolute and the respondent is restrained by an
injunction order from interfering with appellant's possession of the 2
flats and open space admeasuring 4533 sq.ft. The order further allows
the appellant and his father non-residential use of the flats on payment
of Municipal taxes.
19. The appellant took out Notice of Motion No. 1071 of 1988 in suit
No. 363 of 1988. The late father of the respondent took out Notice of
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Motion No. 944 of 1988 in Suit No. 721 of 1988 and also Notice of
Motion No. 545 of 1988 in Suit No. 363 of 1988. All the Motions were
disposed of by a common order dated 18/10/1991. The appellant had
filed affidavit dated 29/03/1988 in Notice of Motion No. 944 of 1988 in
Suit No. 721 of 1988, wherein in para 23, had offered to reutrn the
amount paid to Mr. Periera and Rs.3,35,000/- paid to Mr. Naik to late
S.S. Anand but late S.S.Anand in his affidavit in rejoinder dated
09/06/1988 in para 25 had stated that it is too late for the appellant to
refund the same.
20. On 05/12/1991, the respondent filed Written Statement on Suit
No.363 of 1988 denying the claim of the appellant and contending that
they had right to possess the property under alleged writing dated
11/07/1987 and claimed possession not only of 2 flats but of land
admeasuring 4533 sq.ft. and shed in the compound alleged to have
been sold them and they were put in possession in part performance.
21. On 22/10/1991, the respondent's application for continuation of
the Ad-interim order passed by this Court rejected. Pursuant to the
same, the appellant renovated the dilapidated shed and starts using
the same. It is submitted from the above facts and is clear that the
appellant and his father were in possession of not only the 2 flats but
also the open land admeasuring 4533 sq.ft. and the shed even prior to
the respondent's suit No.363/1988 which for eviction from only 2 flats.
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22. On 05/12/1991, the appellant and his father file written
Statement in respondent's suit No. 363/1988. In para 1, it is clearly
stated that they are in possession of not only the 2 flats but also the
open space of 4533 sq.ft. and the shed. It has been stated that the
area of 4533 sq.ft. has been demarcated by constructing a small bund
(which is also reflected at page 58 of the appellant's suit No.721/88),
and it has been stated that respondent's suit No. 363/1988 is bad for
non-joinder of causes of action as the said suit is restricted only to
possession of 2 flats. It has also been stated that the appellant and his
father are not trespassers and as the foundation of the respondent's
suit is false the same was liable to be dismissed.
23. On 23/06/1992, two Appeals filed by the respondent against the
order of the learned Single Judge and the same disposed of by filing
consent terms and the two suits are referred to arbitration.
All differences, claims and counter claims between the parties
arising out of and in relation to suit No. 363 of 1988 and suit No. 721 of
1988 were referred to arbitration of Sole Arbitrator, Mr.S.R.Shah.
24. On 09/09/1992, the respondent files his written statement in
appellant's Suit No.721/1988 and he still states that he is in possession
of the open land and denies the appellant's possession. Same fact is
repeated at page 140 and 141 which is submitted in contrary to the
th
Ad-interim order dated 27 May, 1988 passed by this Court and the
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Interim Order dated 18/10/1991 passed by this court. Various
meetings held before the Arbitrator and the respondent suddenly
stopped attending the meetings as he was in the process of disposing
off the entire property in violation of the Interim injunction. The said
fact was not known to the appellant at that time.
25. On 27/10/1994, the respondent sells the entire property
including the subject matter of the injunction and receives Rs.90 lacs
as earnest money.
26. On 20/12/1994, the respondent convicted for forgery by trial
Court for forgery and cheating and sentenced to one month's rigorous
imprisonment and fine of Rs.1 lakh.
27. On 21/12/1995, the appellant's father expires and Chamber
Summons No.633/1996 taken out to bring on record the legal heirs in
appellant's Suit No.721/1988. Said Chamber Summons allowed vide
th
order dated 19 March, 1997 and legal heirs of deceased S.S.Anand
bought on record and described as such in Suit No.721/1988.
The said Chamber Summons was allowed on 19/03/1997. After
amendment, the plaint in Suit No.721 of 1988 was reaffirmed and
signed by the respondent for himself and as Constituted Attorney of
the other heirs of deceased S.S.Anand.
28. On 02/09/1997, the respondent terminates agreement for sale
with third party and forfeits Rs.90 lacs. Third party files suit for specific
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performance against the respondent.
29. In the month of February, 1998, the appellant comes to know
about sale of the property to the third party.
30. On 29/04/1998, all the legal heirs of the deceased file Contempt
Petition against the respondent and third party and on 27/07/1998 this
court issues a bailable warrant against the respondent.
Heirs of deceased Mr.S.S.Anand, including Smt. Basant Kaur filed
Appeal No. 308 of 2002 against order dated 25/01.2002 though Ms.
Basant Kaur had expired on 20/07/2000. In the said Appeal, Advocate
Mr. Owen Menezes represented the respondent and all other heirs of
deceased S.S.Anand. The said Appeal was admitted on keeping the
plea of maintainability raised by appellant open to be decided at stage
of hearing. The said Appeal No.308 of 2002 dismissed by Division
Bench of this Court.
31. On 24/11/1998, the respondent filed Petition for appointment of
Arbitrator under the new Act and in the petition all legal heirs of
deceased S.S. Anand are shown.
32. On 08/04/1999, the Respondent took out interim application
before Arbitrator for dismissal of suit No. 363 of 1988 under O-22 Rule
9 of CPC and also to strike off defence under O-39 Rule 11 of CPC in
Suit No.721 of 1988 for alleged contempt. The appellant filed reply
and same was argued and the order was to be passed with main
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Award.
The common evidence was lead in both suit No.s 721/1988 and
363 of 1988. Examination in chief and cross examination was done of
the respondent and Mr. Rohira before the Arbitration.
33. On 13/08/1999, an order passed appointing Arbitrator under the
1940 Act without prejudice to rights and contentions of the parties.
41. On 08/09/1999, the appellant makes an application before
Arbitrator for passing Interim Award (1) for dismissal of respondents
Suit No. 363/1988 on the ground that legal heirs of deceased
S.S.Anand not brought on record (2) for striking defense of Respondent
in Appellant's Suit No. 721/1988 in view of the fact that the
respondent had disposed off the entire property in violation of the
Interim order passed by this Hon'ble Court.
34. On 22/10/1999, the respondent files affidavit of evidence
claiming possession of only 2 flats and in para 42 for the first time
claims possession of only the shed. Possession of open land
admeasuring 4533 sq.ft. not claimed. In para 41 he still asserts that
he is in physical and legal possession of all structures including the
shed. For the first time he claims mesne profits @ Rs.15,000/- p.m. per
flat in contrast to his claim in Suit No. 363/1988.
35. On 25/10/1999, the arbitrator settled issues in both suits.
36. On 14/12/1999, at the very first date of the respondent's cross-
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examination objection is taken by the appellant's Advocate that the
respondent's evidence is beyond his pleadings and the same recorded
by the Arbitrator.
37. On 24/01/2000, the appellant files his affidavit of evidence and in
para 14 repeats that the respondent's Suit No. 363/1988 is bad for
non-joinder of causes of action in that open space admeasuring 4533
sq.ft. not claimed, as well as, the shed.
38. On 06/10/2000 , cross-examination of all parties completed and
matters posted for argument.
39. On 21/03/2001, during the course of argument and after 13
years respondent makes application to amend his suit No.363/1988 to
claim possession of the open space admeasuring 4533 sq.ft. and shed.
Also increase in mesne profits from Rs.15,000/- for 2 flats to Rs.45000/-
p.m. per flat.
40. On 09/04/2001, detailed affidavit- in-reply filed by the appellant
to the respondent's amendment Application. Arbitrator hears
amendment application but declines to pass an order stating that the
same would be passed at the time of final award.
41. On 17/01/2002, Award passed by the arbitrator who condones
delay in bringing legal heirs on record of the deceased S.S.Anand even
though no application made by respondent for the same and has
rejected the amendment application of the respondent. The Arbitrator
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awards possession of not only 2 flats but also open land admeasuring
4533 sq.ft. and shed to the respondent directly in conflict with Issue
No.1 framed. He also awards mesne profit of Rs.15000/- p.m. for both
flats and Rs.30,000/- p.m. if possession is not given. The respondent
is also directed to refund the appellant Rs.11.60 lacs @ 6% interest.
42. On 15/04/2002, Arbitration petition filed by the appellant and
stay granted by the learned single Judge.
43. On 13/06/2002, the respondent filed his affidavit- in-reply.
44. On 24/06/2002, the arbitration petition was admitted, expedited
and interim reliefs granted.
45. On 25/02/2003, the Judgment of this court modifying the award,
the learned Judge hold that the appellant is not a trespasser but yet
awards possession of 2 flats and open space admeasuring 4533 sq.ft.
and shed to the respondent contrary to issue No.1 framed. The
learned Judge does not grant specific performance only on the ground
that a view taken by the arbitrator was a possible view. No appeal
filed by the respondent challenging these findings. The appeal of the
respondent only restricted to learned Judge declining to grant mesne
profit and increasing rate of interest from 6% to 18%.
46. On 28/07/2003, Appeals admitted.
47. On 10/09/2003, Notice of Motion disposed of. The Court records
that the Appellant Chopra had already deposited in Court a sum of
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Rs.31,50,600/- interim order passed by Division al Bench of this Court.
48. First of all, it is necessary to consider the scope of the Appellate
Court in such matter arising out of Section 30 and 33 of the Arbitration
Act-1940 in view of the following judgments:-
1. (2005) 6 S.C.C. 462, Bhagawati Oxygen Ltd. Vs. Hindustan
Copper Ltd.
2. (2003) 7 S.C.C. 396, State of U.P. Vs. Allied Constructions.
3. (2002) 6 S.C.C. 201, Shyama Charan Agarwala & Sons Vs. Union
of India.
4. AIR 1987 S.C. 2316, Municipal Corporation of Delhi Vs. M/s.
Jagan Nath Ashok Kumar & Anr.
5. AIR 1971 S.C.1646, The President, Union of India & Anr. Vs.
Kalinga Construction Co. (P) Ltd.
6. 2007 (2) Mh.L.J. 499 Union of India Vs. Ghanekar Builders and
Chemicals Pvt. Ltd.
The following are the basic principles which can be taken note of
in this background.
a) An arbitrator is a Judge, appointed by the parties and as such the
award passed by him is not to be likely interfered with.
b) The Court while exercising the power under Section 30 cannot re-
appreciate the evidence or examine correctness of the
conclusions arrived at by Arbitrator.
c) The jurisdiction is not appellate in nature and an award passed
by an Arbitrator cannot be set aside on the ground that it was
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erroneous.
d) It is not open to the Court to interfere with the Award merely
because in the opinion of the court, another view is equally
possible.
e) It is only when the Court is satisfied that the Arbitrator had
misconducted himself or the proceedings or the award had been
improperly procured or is 'otherwise' invalid that the Court may
set aside the award.
f) The Court cannot reappreciate the evidence. The interpretation
of the contract is a matter within the jurisdiction of the
Arbitrator.
(Vide Bhagvati Oxigen (Supra) )
g) Unless one or the other condition under Section 30 is satisfied,
an Award cannot be set aside.
(Vide State of U.P. (Supra) ).
h) The Award can be set aside if there is a jurisdictional error acting
without jurisdiction or beyond jursidiction, ignoring relevant
clauses.
(Vide Shyam Charan Agarwala (Supra))
i) Reasonableness of the reason given by an Arbitrator in making
award when there is no evidence of violation of principle of
natural justice and or two views are possible.
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(Municipal Corporation Delhi (Supra).)
j) In proceeding to set aside the award Appellate Court cannot sit in
appeal over the conclusion of the Arbitrator by re-examining and
re-appraising the evidence considered by the Arbitrator and hold
that the conclusion reached by the Arbitrator is wrong specially
when the finding of the Arbitrator is not perverse.
(Vide The president Union of India (Supra))
k) The Appellate Bench would not be justifying in enlarging the
scope upon the controversy, in an Appeal against dismissal of
petition challenging the Arbitral Award.
(Union of India Vs. Ghanekar Builders. (Supra)
)
49. The learned Single Judge after considering the record and rival
submissions of the parties, by the impugned Judgment principally
passed the decree in terms of the award except the following
modifications which is reproduced as under:-
'(1) Mesne profits awarded in favour of Chopra are set
aside.
(2) The amount of Rs.16,10,000/- to be paid by Chopra
to legal heirs of Sardar Singh who are on record in
Suit No. 721/88, with interest thereon for pre-
reference period at the rate of 18% p.a. on the
principal sum of Rs.16,10,000/- from 11/7/1987 till
judgment and thereafter at the rate of 18% from
the date of the suit till date of the award and
thereafter, at the same rate from the date of the
award till realisation. This is both towards
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compensation and interest.
(3) Mr.Chopra to deposit the said amount in this Court
on or before 31/8/2003. On such deposit, legal heirs of
Sardar Singh including Satinder to hand over
possession of the property to Chopra within two
months of deposit. On possession being handed
over, the amount deposited along with interest, if any, to
be paid to the L.Rs. of Sardar Singh Anand.
Petition stands disposed of accordingly.“'
50. The operative part of the award is as under:-
'In result I pass the final order of award as under:
(a) The Respondents are ordered and decreed to
handover vacant and peaceful possession of flat No. 1
and 2, the shed and vacant area admeasuring 4533 sq.ft.
in the suit premises viz. 108, Chopra House, Dr.
Ambedkar Road, Bandra, Bombay 400 050 to the
Claimant within eight weeks from the date of service of
the Award.
(b) If the Respondents remain in the occupation of the
suit premises after the expiry of eight weeks from
the date of service of the award the mesne profits
payable by them to the Claimant will be @
Rs.30,000/- p.m. till peaceful possession is given to
the Claimant.
c) The Respondents are ordered and decreed to pay to
the Claimant the sum of Rs.90,000/- being the
st
amount of arrears of compensation from 1 August,
st
1987 till 31 January, 1988 and further mesne
profits / compensation at the rate of Rs.15,000/-
st
p.m. with effect from 1 February, 1988 till
possession is handed over to Claimant, within the
time mentioned in (a) and thereafter at the rate of
Rs.30,000/- per month till possession is given to the
Claimant.
d) The Claimant is directed to refund to the
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Respondents the sum of Rs.16,10,000/- with
st
interest thereon at 6% p.a. with effect from 1 August,
1987 till payment.
e) The Claimant will be at liberty to adjust his dues and
compensation towards the amount of Rs.16,10,000/-
and interest payable by him to the Respondents taking
into consideration what is stated in (b) and (c) above.
f) The claim of the Respondents for specific
performance of the agreement for sale is dismissed.
g) The Claim of the Respondents for Rs.50,00,000/-
against the Claimant dismissed.
h) The Respondent is not entitled to any reliefs except
the one relating to their claim.
i) Each party to bear its own costs.
Mumbai. (S.R.Shah)
th
Dated:- 17 January, 2002. Sole Arbitrator.'
51. Admittedly, both the suits and the disputes arising out of the
same parties and the same subject were referred for Arbitration by
consent dated 23/06/1993. By an order dated 13/08/1999 even
subsequent to the death of Sardar Singh in the month of December,
1995 this Court directed the parties to Arbitration, therefore, the
parties before the Arbitrator of both the Suits. The Arbitrator in view of
the reference by consent of the parties, proceeded and decided
accordingly. The legal heirs of Sardar Singh were the parties to the
proceedings. Therefore, before the Arbitrator all the parties including
L.Rs. of Sardar Singh were on record and as the subject matter of both
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the suits were referred, it is difficult to accept the contention of the
Appellant and rightly observed by the learned Single Judge, that the
proceedings stood abated. The learned Single Judge, in this back-
ground after considering the authorities cited by the parties rightly
rejected the contention of the appellant with this regard by observing
as under:-
'At this stage, issue may be considered whether suit
No.363 of 1988 stands abated. In the normal course,
proceedings have to be taken out for bringing on record
the legal heirs. In the instant case, in an application
under Section 20 which was taken out in Suit No. 363 of
1988, legal heirs of Sardar were brought on record. At
the state of reference, there was no objection raised on
the part of the legal heirs of Sardar that the reference
could not be made in Suit No.363/88 on the ground that
the suit filed by Chopra stood abated. That reference was
in proceeding in appeal arising out of interim order. In
other words, in appeal itself arising from interim orders by
conduct of the parties it can be said that the legal heirs of
Sardar were brought on record. If that be the case, all
that was required is a formal amendment of the suit. It is
true that if the legal heirs are not brought on record
within the stipulated time, the suit stands abated.
However, consequent to bringing on record the legal heirs
of Sardar, necessary action must follow that abatement
was set aside as otherwise reference could not have been
made to arbitrator in respect of the subject matter of Suit
No.363 of 1988. Even otherwise, on the facts of this case,
effective decree could have been passed without bringing
on record the L.Rs. of Sardar Singh Anand to meet the
ends of justice.
In the light of that, there will be a decree in terms of
the award. Interest on the principal amount awarded
would be at the rate of 18% from the date of decree till
payment.
Both the Suits stands disposed of accordingly.'
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22
52. It is difficult to accept the contention that the suit abated as
submitted and even otherwise as observed by the learned Single
Judge, we see no reason to interfere with the finding so arrived at even
with this regard sepcially when the Court is not powerless and or there
is no bar with the L.Rs. cannot be brought on record by the Court and
secondly, as both the suits were tagged together, the estate of
deceased was represented by the legal heirs and therefore, also
proceedings cannot be said to be abated. On this ground, therefore,
award passed cannot be said to be nullity.
53. It is not in this matter that Appeal would abate due to failure of
substitution of heirs of deceased. In other suit, the Estate of the
deceased was represented and as both the suits were tried together,
such heirs as fully represented the whole estate as contemplated
under Order 22 Rule 2 of the Code of Civil Procedure (for short, “'CPC').
In the present case, as noted, the learned Single Judge has rightly
passed the order and allowed to bring legal heirs on record as
observed and done by the Apex Court in AIR 1996 S.C. 702 Newanness
alias Mewajannessa Vs. Shaikh Mohamad & Ors
.. The relevant portion is
as under:-
'Therefore, the appeal as a whole schould be dismissed as
having been abated. We find no force in the contention.
Since the third defendant is already on record
representing all the heirs of the first defendant widow, the
question of abatement does not arise. Even otherwise,
we find that substitution should be allowed, since no
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23
injustice would be done in bringing the legal
representatives on record. Thus the objection is over
ruled. The application for substitution is allowed.'
AIR (30) 1943, Bombay 457, Ishwarlal Laxmichand Patel Vs. Kuber
54. In
Mohan Lawar & Ors., this Court held that appeal does not abate only
because the son was brought on record and not the widow after the
death of sole Appellant. In Ramnibas Jhunjhunwalla Vs. Benarashi L.
Jhunjhunwalla, AIR 1968 Calcutta 314,
in the Arbitration proceedings
after the death of both the parties before Judgment, it is observed that
the Court has inherent power to bring the L.Rs. On record. The
provisions of Order 22 of the CPC do not apply.
In Rani Ramakant Vs. The First Additional Civil Judge, (SD), Mirzapur, AIR
2006 Allahabad 5,
by referring to Section 41 of the Arbitration Act 1940
and Order 22 Rule 3 and 4 of C.P.C. reiterated that the Arbitration
Proceedings does not abate on death of party.
55. Apart from this, in the present facts and circumstances, we find
that no perversity in the impugned order. On the contrary, still it is
within the framework of law and record and it is in the interest of
justice.
56. In view of peculiar facts and circumstances of the case, the
Judgment cited by the appellants are distinct and distinguishable on
facts itself. The law with regard to the scope and effect of Order 22 of
C.P.C. need no discussion, in view of the peculiarity of the present
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24
matter as referred above. The Hon'ble Supreme Court in Union of India
Vs. Ram Charan, AIR 1964 S.C. 215 observed that the Application for
bringing Legal Representaitves on record is necessary. Therefore, as
noted, the learned Single Judge in the facts of the case has given full
justice to the parties and modified the order. The judgments, as cited
by the appellant, are not based on Arbitration Proceedings under
Arbitration Act-1940.
57. The defendants in Suit No.363 of 1988 ( Chopra's) are in use and
occupation of the two flats being flat Nos. 1 and 2 and the vacant area
of 4533 sq. fts. in the compound wall pursuant to the receipt dated
th th
11 July, 1987 and letter of authority dated 24 July, 1987 addressed
by the Plaintiff to the Tenant Mr. Perreira and further held that the
defendant failed to prove that the vacant possession of the said two
flats were given in part performance pursuant to the amount of
Rs.11,60,000/- paid by them to the tenant Mr.Perreira which amount
was to be adjusted towards the purchase price of Rs.45,00,000/-
(Rupees forty five lacs only). The plaintiff i.e. Anand in Suit No.721 of
1988 failed to prove that there was a valid, concluded and binding
contract between the parties in respect of the suit premises and
therefore, not granted specific performance of the Agreement for sale
of the suit property described in Scheduled “'A' and 'B' to the plaint.
The Arbitrator, therefore, rightly declined to grant specific
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25
performance based upon the alleged draft agreement (Exhibit 'J').
Furthermore, Anand's failed to prove the loss and damage suffered as
per the particulars to the Plaint. The learned Single Judge also, rightly
observed as under:-
'The next aspect, however, is that even assuming
that the said finding of trespass is set aside, whether it is
possible to hold that the relief for specific performance
ought to have been granted or can be granted. The
learned arbitrator has given a finding that the parties
were not at ad idem in so far as consideration and the
terms concerned. Before the arbitrator there were
documents. One such document is the unsigned
agreement forwarded to Chopra by counsel of late Sardar
Singh and the other, the draft of agreement sent by
Chopra to advocate for Sardar Singh styled as
development agreement. In order to grant specific relief,
it must be proved that the there was agreement to sell
and that agreement was not purely an agreement for
development and further that all terms had been settled.
In so far as agreement to sell is concerned, the material
on record would evidence firstly that the area to be sold
was specified. Secondly the price was specified. This can
be evidenced from the receipt and other documents.
However, the correspondence exchanged between the
parties will also have to be examined. By letter of
29/08/1987 addressed by Chopra to Anand, Chopra
informed Sardar Singh that as he had not given further
details about dealings with other tenants the authority is
cancelled. By letter dated 06/10/1987 addressed to Shri.
Chopra it is pointed out that Chopra has gone back on his
original commiments. On 03/11/1987 Chopra wrote to
Sardar setting out the flats as and when vacated were to
remain in his possession. It was further pointed out that
there were no commitments made by Chopra as a lot of
things had to be done before concrete shape could be
taken to the agreement to reduce it in writing. On
22/12/1987 Advocate for Sardar Sing sent Chopra a draft
agreement styled as agreement for sale and
development. There is some dispute as to which is the
correct document. It is not necessary to go into that
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aspect. On 13/01/1988 Advocate of late Sardar Anand
wrote to Chopra that draft agreement had been sent and
it had not been returned back and it was therefore,
thought that Chopra was agreeable to all the terms and
conditions of the agreement of sale and development and
therefore should now execute the document. On
20/01/1988 in answer to letter of Advocate for Sardar,
received by Chopra's Advocate on 31/12/1987, informed
that the matter was still at negotiation stage, various
terms still had to be agreed upon before the agreement
can be concluded and the permission of appropriate
authority had to be obtained. The letter also says that
Chopra had drafted agreement for development and the
same was being forwarded to Sardar. There is another
letter of 27/01/1988 addressed to Sardar about flats,
taken in possession by Sardar. There are police
complaints. On 29/01/1988 draft of the development
agreement, on behalf of Chopra, was forward to advocate
of late Sardar. There is also other correspondence which
need not be reproduced. It is therefore, clear that it was
agreed to sell a specific area for a particular price. There
were disputes as to whether the transaction would be an
agreement to sell or development agreement and other
terms and conditions. It is on this basis that the arbitrator
came to the finding that the parties were not at ad idem
as to the nature of the contract. Once that be the case, in
my opinion and considering the material, it is not possible
to reappreciate the evidence and come to the different
finding than that arrived at by the Arbitrator in so far as
decree for specific performance is concerned. The view
taken is a possible view. In my opinion, therefore, it is not
possible to interfere with the findings by the arbitral
Tribunal on that count. Once that be the case, relief by
way of specific performance will have to be rejected. '
58. The Arbitrator can award or grant specific performance if case is
made out but the fact that it is a discretionary relief which Court and or
Arbitrator need to consider while granting the specific performance. In
view of the finding given by the Arbitrator as well as the learned Single
Judge, we are of the view that there is no case made out by the
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appellant to interfere with the above possible view expressed by the
Arbitrator and confirmed by the learned Single Judge. There is no
perversity and or illegality in the order. The impugned judgment is
within the framework of law and the record.
59. While considering the above reasoning given by the learned
Single Judge as observed with the possession of the Anand's is based
on the receipt dated 11/07/1987 which is admitted in evidence.
Another document is dated 06/11/1986 to the B.M.C. seeking
inspection of documents and an application for development dated
12/09/1987 by Chopra referring to the area i.e. 4533 sq. fts. The
evidence of Mr.Perreira laid in Criminal case is also material. The said
Perreira had in fact handed over the possession to Sardar. He was in
possession pursuant to the agreement and letter of authority. The
finding, therefore, given by the Arbitrator that Satindarpal and his son
was trespassers by ignoring the documentary evidence on record has
rightly observed by the learned Single Judge. The grant of specific
performance on the same ground though rejected based on the
material available that itself is no reason to held that Satindarpal and
his son were trespassers. Their possession is permissive in nature and
not of trespassers. In this background, the interim order passed by
this Court protecting possession of late Sardar not only to the two flats
but to the shop, garage and land, just cannot be overlooked unless it is
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affected. Therefore, undisputedly, possession of the Sardarsingh has
been in this background permissive in nature and therefore, cannot be
said to be authorized and or of traspassers. The act of payment of
Rs.16,10,000/- (Rupees sixteen lacs, ten thousand only) i.e.
11,60,000/- (Rupees elevan lacs sixty thousand only) paid to the
Tenant Mr.Perreira and other amounts paid to the Tenant Naik and
Rs.5,000/- paid for legal proceedings is also material. In other words,
Mr. Chopra has using the said money without any interest to
Sardarsing. The finding, therefore, as arrived by the learned Single
Judge and the modification of the Award in our opinion following
finding is also correct.
'In my opinion, the possession of Sardar Singh not being
that of a trespasser, as he has parted with consideration,
it was not open to the Arbitrator to grant relief by way of
mesne profits unless Chopra had first returned the
moneys paid on his behalf. In the light of that, award of
the Arbitrator awarding mesne profits in the sum of
Rs.15,000/- and Rs.30,000/- clearly discloses an error of
law apparent on the face of record and is liable to be set
aside.'
60. The Arbitrator has directed refund of Rs.16,10,000/- and fixed 6%
interest thereon w.e.f. 01/08/1987 till the payment. There was no
agreement for interest. Therefore, having once directed to refund, the
said amount as no decree for specific performance can be granted.
The money have not been using by Mr.Chopra, need to be
compensated as rightly observed by the learned Single Judge. The
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29
interest was claimed @ 18% p.a. in the suit. The principal amount was
also paid on different dates. We are of the view, therefore, that the
said amount of Rs.16,10,000/- as directed need to be paid with interest
@ of 9% instead of 18% from 11/07/1987 till the filing of the suit and at
the same rate from the date of filing of the suit till the award on the
principal amount of Rs.16,10,000/- . We are restricted the interest @
9% instead of 18% for the reason that Sardarsingh, in this background
admittedly occupied and used the premises without any compensation
or consideration.
61. We are, therefore, maintain the modified award passed by the
learned Single Judge except the rate of interest. It should be 9%
instead of 18% on the principal sum as observed above. The rest of
the order passed by the learned Single Judge is maintained.
62. The learned Single Judge has observed that the Atrbitral Tribunal
could not have gone beyond the terms of the reference. The terms of
the reference was of two flats and not other property as at that time,
as claimed, the possession is with the owner. The learned Single Judge
has also rightly observed that, there is nothing on record to show that
the possession of shop, garage and land handed over to Sardarsingh
except for the receipt. There is no other documentary evidence on
physical parting of possession by Chopra to late Sardar. Once this
Court come to a conclusion that there was no agreement to sale and
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30
no specific performance can be granted and therefore, there is no
question of retaining the possession of the said property except with
the right owner. The grant of interim relief, pending the proceedings
that itself cannot be reasoned to deny the deprived possession of the
property to the true owner Late Sardarsingh or his L.Rs. who are
admittedly the owner of the property. Even otherwise, the parties
have led the evidence and contested the matter in all respect. One
facet is also cannot be overlooked is based on the Suit No. 363 of
1988, the Arbitrator had framed the issue in respect of the two flats
and vacant area admeasuring 4533 sq. fts. in the compound. The
specific performance so claimed is of the suit premises in Suit No.721
of 1988 by Anand against Chopra. The Arbitrator has also recorded
that the Respondents claimed possession of not only of the sale of two
flats but also the open space and the shop, garage pursuant to the
alleged agreement for sale. The another facet is that admittedly the
parties have by consent terms agreed to refer the disputes and
differences, claims and counter- claims between arising out of and in
relation to the suit property No.363 of 1988 and 721 of 1988.
Considering the purpose and object of Arbitration Act, such arbitral
dispute between the same parties arising out of the common litigations
need to be settled at once and not in piecemeal. In the present case,
having once participated and availed all the opportunities, the
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impugned orders cannot be said to be without jurisdiction and illegal.
Therefore, in this background also, the grant of award for whole
property and as confirmed by the learned Single Judge in our view
cannot be said to be perverse and beyond the reference as contended
by the learned counsel appearing for the appellants. The Judgments
and authorities so cited are apparently distinct and distinguishable on
the facts itself. The peculiar facts in the present case, as disccussed
above, though law and power of arbitrator to deal within the point of
reference is clear, yet the circumstances in the present case itself is
sufficient not to deal with those cases on respective facts and,
therefore, we are not dealing with the citations so referred by the
Appellant in Appeal No.583 of 2003 of Anand.
63. In this background, we are confirming the opinion as expressed
by the learned Single Judge that 'the ultimate relief of directing
handing over the possession need not be interfered with'.
64. In the result, the award stand partly modified as ordered by the
learned Single Judge i.e. The mesne profits awarded in favour of
Chopra are set aside. The amount of Rs.16,10,000/- to be paid by
Chopra's Legal heirs to the Sardar Singh as directed with interest for
pre-reference period @ 9% instead of 18% on the principal sum from
11/07/1987 till the Judgment and therefore, @ 9% from the date of the
suit till the date of award and thereafter at the same rate from the
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date of the award till realisation. The rest of the order is confirmed.
65. In the light of this, there will be a decree in terms of the modified
award.
66. Both the appeals are disposed of accordingly.
67. The interim order passed and pending during these Appeals are
also stand disposed of in view of the above.
. No costs.
(ANOOP V. MOHTA, J.) (DR. S.RADHAKRISHNAN, J.)
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 583 OF 2003
IN
ARBITRATION PETITION NO. 155 OF 2002
IN
AWARD NO. 2 OF 2002
Satinderpal Singh Anand, )
Residing at 501, Violena Building, )
St. Anne's Church Road, )
Bandra (W), )
Mumbai400 050. ) ...Appellant.
(Orig. Petitioner)
Vs.
Sharanpal Balmukund Chopra, )
Residing at Chopra House, )
108, Dr.Ambedkar Road, )
Bandra (W), )
Mumbai400 050. ) ...Respondent.
(Orig. Respondent.)
Mr. O. J. Menezes with Mr. R. S. Tripathi for the Appellant.
Mr. H.J. Thakkar, Sr. Advocate i/by Ms. Geeta Shastri for the
Respondent.
WITH
APPEAL NO. 680 OF 2003
IN
ARBITRATION PETITION NO. 155 OF 2002
IN
AWARD NO. 2 OF 2002
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2
Sharanpal Balmukund Chopra, )
Residing at Chopra House, )
108, Dr.Ambedkar Road, )
Bandra (W), )
Mumbai400 050. ) ...Appellant
(Orig. Respondent.)
Vs.
Satinderpal Singh Anand, )
Residing at 501, Violena Building, )
St. Anne's Church Road, )
Bandra (W), )
Mumbai400 050. ) ...Respondent.
(Orig. Petitioner)
Mr. H.J. Thakkar, Sr. Advocate i/by Ms. Geeta Shastri for the Appellant.
Mr. O. J. Menezes with Mr. R. S. Tripathi for the Respondent.
CORAM : DR. S.RADHAKRISHNAN &
ANOOP V. MOHTA, JJ.
DATE OF RESERVING THE JUDGMENT : 10TH MARCH, 2008.
DATE OF PRONOUNCING THE JUDGMENT : 5TH, MAY, 2008.
JUDGMENT (PER ANOOP V. MOHTA, J.):
. As the parties, issues and impugned judgment are common, we
are disposing of both the Appeals by this common judgment.
2. The original Petitioner- Appellant (also called hereinafter for
reference “Anand's) has preferred this Appeal No.583/2003 against the
impugned order passed in Arbitration Petition No. 155/2002 in Award
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3
No. 2 of 2002. The original respondent (called hereinafter for reference
Chopra's) has also preferred Appeal No.680 of 2003 on limited ground
against the said judgment.
The appellant's case in Appeal No.583/2003 is as under:-
3. Prior to 24/07/1979, Chopra and his brother were owners of a
plot of land admeasuring 4644 sq.yards. By an Agreement of Sale
dated 10/11/1979, both the brothers agreed to sell to M./s. Emkay
Construction Co., 3300 sq. yards which was demarcated from the rest
of the property by a red boundary line in the plan annexed to the
Agreement. A compound wall was thereafter constructed separating
the said two pieces of land. The respondent is the owner of immovable
property at Bandra admeasuring 1344 sq. yds., with a structure of a
ground floor and part first floor standing thereon having 4 flats besides
a portion of the said structure in possession of the respondent. Flat
No.3 was in occupation of the appellant who resided there with his
family. On the first floor of the building there were two rooms and a
toilet. They were also in occupation of the appellant.
4. Flat No. 4 was in the occupation of a tenant named Mr.Naik and
Flat Nos. 1 and 2 were in the occupation of a tenant named Mr. Pereira
who had also encroached on a portion of the open land surrounding his
flats. Tenant named Mr. Pereira was not on speaking terms with the
respondent for more than 15 years due to acrimonious litigation
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between the two of them. The respondent is an Engineer, Builder and
Contractor by profession. The appellant is one of the legal heirs and
representatives of Mr. Sardar Singh Gurdit Singh Anand (father of the
appellant).
5. In the year 1987, pursuant to instructions of respondent the
appellant negotiated with tenant Pereira for vacating the flats in his
occupation and securing alternate accommodation elsewhere. The
respondent and late Sardarsingh Anand and appellant were also
negotiating for sale of a portion of land of the respondent.
Sometime prior to July, 1987, the respondent approached the
appellant along with a broker. Both of them impressed upon the
appellant the possibility of developing the property. The appellant was
reluctant as there was problem from the two tenants occupying the
flats. The ejectment proceedings initiated against tenant Pereira was
pending in Small Causes Court. Besides, BMC was not ready to give
permission to sub divide the plot of land in view of previous sale of the
land of a portion admeasuring 3300 sq. yards to M/s. Emkay
Construction Co. The issue of extra FSI used by Emkay Construction
Co. was also one of the problem.
6. On 23/06/1987, pursuant to negotiations tenant Pereira agrees to
vacate the two flats on the respondent paying him Rs.11.60 lacs to
secure alternate accommodation elsewhere. The respondent executed
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5
document with tenant Pereira stating that on respondent paying
Pereira a sum of Rs.11.60 lacs the tenant shall vacate the premises (2
flats) in his occupation.
7. On 01/07/1987, the respondent executed agreement with tenant
Naik for obtaining possession of flat No.4 in his occupation on payment
of Rs.3.35 lacs by the respondent.
8. On 05/07/1987, tenant Naik addresses letter to the respondent
stating that he had secured accommodation at Andheri and calls upon
the respondent to make arrangement to pay him Rs.3.35 lacs as per
agreement.
9. On 11/07/1987, the respondent executes stamped receipt in
favour of father of the appellant acknowledging receipt of a sum of
Rs.4.50 lacs for sale of open land admeasuring 4533 sq.ft. @ Rs.1000/-
per sq.ft., for a total consideration of Rs.45 lacs. The said receipt
states that possession of open land given to the appellant's father. Out
of the consideration of Rs.4.50 lacs paid, Rs.3.35 lacs paid in cheque
and balance amount of Rs.1.15 lacs paid in cash. This fact is recorded
in the receipt executed.
10. On 11/07/1987, tenant Naik executes receipt for Rs.3.35 lacs
received from the respondent and hands over vacant possession of
flat No.4 to the respondent.
11. On 24/07/1987, the respondent addressed letter of authority to
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the tenant Pereira authorising him to deal with the Appellant's father
for obtaining vacant possession of 2 flats in Pereira's possession within
the limits mentioned in the agreement i.e. Rs.11.60 lacs.
On 24/07/1987, prior to the hearing of the Motions the
respondent produced a forged Letter of authority wherein in his own
handwriting he has inserted the sentence “as the liability to vacate is
that of S.S.Anand”. He also forged the signature of tenant Pereira on
the same for which he was prosecuted for forgery. (By doing so he
wanted to cast the burden of shifting the tenant Pereira on S.S.Anand
and create a dispute about the price of the land which was sold.
12. The respondent paid a sum of Rs.11,60,000/- to tenant Pereira
and obtained vacant possession on 31/07/1987 from him on behalf of
the appellant. Pereira executing a writing recording that he had
received Rs.7,50,000/- by cheque and Rs.4.10 lacs by cash from
S.S.Anand and handed over vacant possession of the flat Nos. 1 and 2
to S.S.Anand as per instructions from S.P.Chopra. S.S.Anand also
obtained writing from tenant Pereira recording the above facts. The
said writing further stated that he or the owner S.P.Chopra shall have
no claim in respect of the flat required by Pereira as an alternative
accommodation.
13. As alleged, on 12/09/1987, as respondent not executing a regular
Agreement for sale the respondent gave appellant's father a copy of
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7
the application addressed to B.M.C. and signed by him for the
construction of a building on 4533 sq.ft. of land in accordance with the
plans annexed.
14. On 20/01/1988, the respondent's Advocate's letter to Advocate
at Baroda stating that the draft agreement ready and would be
forwarded separately.
15. On 02/02/1988, the respondent filed suit No.363/1988 against
the appellant and his father for eviction from only 2 flats on the ground
that they are trespassers therein. No prayer in the plaint for
declaration that they are trespassers in the flats. Said suit filed even
before receipt of letter dated 29/01/1988. In his plaint the respondent
annexed only 2 documents and no other correspondence prior to the
th
suit i.e. letter of authority dated 24 July, 1987 without the
interpolation and police complaint. In the plaint, the respondent
clearly states that the appellant had removed his material from the
open space and that cars are being parked in the compound. Mesne
profits sought @ Rs.15000/- p.m., for 2 flats. Possession of open space
and shed not claimed.
16. On 29/02/1988, the appellant's father files Suit No.721/1988
against the respondent for specific performance of the agreement for
sale cum development. In the plaint it is clearly stated that possession
of open land had been given as per receipt dated 11/07/1987 and the
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said area of 4533 sq.ft., had been demarcated and that the late Sardar
Singh and his family were freely, openly and exclusively occupying the
said 2 flats and surrounding land. About occupation of land
admeasuring 4533 sq.ft. and it has been stated that after filing of the
suit he had received letter dated 29/01/1988 enclosing respondent's
draft agreement for sale cum development. In the plaint it has been
stated that the respondent is wanting to take possession of the 2 flats
and land which was in exclusively possession of the appellant.
17. On 27/05/1988, this court, passed Ad-interim Order whereby
pending the hearing of the Motions taken out by both parties, the shed
shall be under lock and key of the appellant and his father, that they
are allowed to bring their cars in the compound and that the open
space claimed by the appellant and his father would not be put to use
by either party.
18. On 18/10/1991, this Court made appellant's Notice of Motion
No.944/1988 absolute and the respondent is restrained by an
injunction order from interfering with appellant's possession of the 2
flats and open space admeasuring 4533 sq.ft. The order further allows
the appellant and his father non-residential use of the flats on payment
of Municipal taxes.
19. The appellant took out Notice of Motion No. 1071 of 1988 in suit
No. 363 of 1988. The late father of the respondent took out Notice of
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9
Motion No. 944 of 1988 in Suit No. 721 of 1988 and also Notice of
Motion No. 545 of 1988 in Suit No. 363 of 1988. All the Motions were
disposed of by a common order dated 18/10/1991. The appellant had
filed affidavit dated 29/03/1988 in Notice of Motion No. 944 of 1988 in
Suit No. 721 of 1988, wherein in para 23, had offered to reutrn the
amount paid to Mr. Periera and Rs.3,35,000/- paid to Mr. Naik to late
S.S. Anand but late S.S.Anand in his affidavit in rejoinder dated
09/06/1988 in para 25 had stated that it is too late for the appellant to
refund the same.
20. On 05/12/1991, the respondent filed Written Statement on Suit
No.363 of 1988 denying the claim of the appellant and contending that
they had right to possess the property under alleged writing dated
11/07/1987 and claimed possession not only of 2 flats but of land
admeasuring 4533 sq.ft. and shed in the compound alleged to have
been sold them and they were put in possession in part performance.
21. On 22/10/1991, the respondent's application for continuation of
the Ad-interim order passed by this Court rejected. Pursuant to the
same, the appellant renovated the dilapidated shed and starts using
the same. It is submitted from the above facts and is clear that the
appellant and his father were in possession of not only the 2 flats but
also the open land admeasuring 4533 sq.ft. and the shed even prior to
the respondent's suit No.363/1988 which for eviction from only 2 flats.
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10
22. On 05/12/1991, the appellant and his father file written
Statement in respondent's suit No. 363/1988. In para 1, it is clearly
stated that they are in possession of not only the 2 flats but also the
open space of 4533 sq.ft. and the shed. It has been stated that the
area of 4533 sq.ft. has been demarcated by constructing a small bund
(which is also reflected at page 58 of the appellant's suit No.721/88),
and it has been stated that respondent's suit No. 363/1988 is bad for
non-joinder of causes of action as the said suit is restricted only to
possession of 2 flats. It has also been stated that the appellant and his
father are not trespassers and as the foundation of the respondent's
suit is false the same was liable to be dismissed.
23. On 23/06/1992, two Appeals filed by the respondent against the
order of the learned Single Judge and the same disposed of by filing
consent terms and the two suits are referred to arbitration.
All differences, claims and counter claims between the parties
arising out of and in relation to suit No. 363 of 1988 and suit No. 721 of
1988 were referred to arbitration of Sole Arbitrator, Mr.S.R.Shah.
24. On 09/09/1992, the respondent files his written statement in
appellant's Suit No.721/1988 and he still states that he is in possession
of the open land and denies the appellant's possession. Same fact is
repeated at page 140 and 141 which is submitted in contrary to the
th
Ad-interim order dated 27 May, 1988 passed by this Court and the
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11
Interim Order dated 18/10/1991 passed by this court. Various
meetings held before the Arbitrator and the respondent suddenly
stopped attending the meetings as he was in the process of disposing
off the entire property in violation of the Interim injunction. The said
fact was not known to the appellant at that time.
25. On 27/10/1994, the respondent sells the entire property
including the subject matter of the injunction and receives Rs.90 lacs
as earnest money.
26. On 20/12/1994, the respondent convicted for forgery by trial
Court for forgery and cheating and sentenced to one month's rigorous
imprisonment and fine of Rs.1 lakh.
27. On 21/12/1995, the appellant's father expires and Chamber
Summons No.633/1996 taken out to bring on record the legal heirs in
appellant's Suit No.721/1988. Said Chamber Summons allowed vide
th
order dated 19 March, 1997 and legal heirs of deceased S.S.Anand
bought on record and described as such in Suit No.721/1988.
The said Chamber Summons was allowed on 19/03/1997. After
amendment, the plaint in Suit No.721 of 1988 was reaffirmed and
signed by the respondent for himself and as Constituted Attorney of
the other heirs of deceased S.S.Anand.
28. On 02/09/1997, the respondent terminates agreement for sale
with third party and forfeits Rs.90 lacs. Third party files suit for specific
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12
performance against the respondent.
29. In the month of February, 1998, the appellant comes to know
about sale of the property to the third party.
30. On 29/04/1998, all the legal heirs of the deceased file Contempt
Petition against the respondent and third party and on 27/07/1998 this
court issues a bailable warrant against the respondent.
Heirs of deceased Mr.S.S.Anand, including Smt. Basant Kaur filed
Appeal No. 308 of 2002 against order dated 25/01.2002 though Ms.
Basant Kaur had expired on 20/07/2000. In the said Appeal, Advocate
Mr. Owen Menezes represented the respondent and all other heirs of
deceased S.S.Anand. The said Appeal was admitted on keeping the
plea of maintainability raised by appellant open to be decided at stage
of hearing. The said Appeal No.308 of 2002 dismissed by Division
Bench of this Court.
31. On 24/11/1998, the respondent filed Petition for appointment of
Arbitrator under the new Act and in the petition all legal heirs of
deceased S.S. Anand are shown.
32. On 08/04/1999, the Respondent took out interim application
before Arbitrator for dismissal of suit No. 363 of 1988 under O-22 Rule
9 of CPC and also to strike off defence under O-39 Rule 11 of CPC in
Suit No.721 of 1988 for alleged contempt. The appellant filed reply
and same was argued and the order was to be passed with main
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13
Award.
The common evidence was lead in both suit No.s 721/1988 and
363 of 1988. Examination in chief and cross examination was done of
the respondent and Mr. Rohira before the Arbitration.
33. On 13/08/1999, an order passed appointing Arbitrator under the
1940 Act without prejudice to rights and contentions of the parties.
41. On 08/09/1999, the appellant makes an application before
Arbitrator for passing Interim Award (1) for dismissal of respondents
Suit No. 363/1988 on the ground that legal heirs of deceased
S.S.Anand not brought on record (2) for striking defense of Respondent
in Appellant's Suit No. 721/1988 in view of the fact that the
respondent had disposed off the entire property in violation of the
Interim order passed by this Hon'ble Court.
34. On 22/10/1999, the respondent files affidavit of evidence
claiming possession of only 2 flats and in para 42 for the first time
claims possession of only the shed. Possession of open land
admeasuring 4533 sq.ft. not claimed. In para 41 he still asserts that
he is in physical and legal possession of all structures including the
shed. For the first time he claims mesne profits @ Rs.15,000/- p.m. per
flat in contrast to his claim in Suit No. 363/1988.
35. On 25/10/1999, the arbitrator settled issues in both suits.
36. On 14/12/1999, at the very first date of the respondent's cross-
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14
examination objection is taken by the appellant's Advocate that the
respondent's evidence is beyond his pleadings and the same recorded
by the Arbitrator.
37. On 24/01/2000, the appellant files his affidavit of evidence and in
para 14 repeats that the respondent's Suit No. 363/1988 is bad for
non-joinder of causes of action in that open space admeasuring 4533
sq.ft. not claimed, as well as, the shed.
38. On 06/10/2000 , cross-examination of all parties completed and
matters posted for argument.
39. On 21/03/2001, during the course of argument and after 13
years respondent makes application to amend his suit No.363/1988 to
claim possession of the open space admeasuring 4533 sq.ft. and shed.
Also increase in mesne profits from Rs.15,000/- for 2 flats to Rs.45000/-
p.m. per flat.
40. On 09/04/2001, detailed affidavit- in-reply filed by the appellant
to the respondent's amendment Application. Arbitrator hears
amendment application but declines to pass an order stating that the
same would be passed at the time of final award.
41. On 17/01/2002, Award passed by the arbitrator who condones
delay in bringing legal heirs on record of the deceased S.S.Anand even
though no application made by respondent for the same and has
rejected the amendment application of the respondent. The Arbitrator
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15
awards possession of not only 2 flats but also open land admeasuring
4533 sq.ft. and shed to the respondent directly in conflict with Issue
No.1 framed. He also awards mesne profit of Rs.15000/- p.m. for both
flats and Rs.30,000/- p.m. if possession is not given. The respondent
is also directed to refund the appellant Rs.11.60 lacs @ 6% interest.
42. On 15/04/2002, Arbitration petition filed by the appellant and
stay granted by the learned single Judge.
43. On 13/06/2002, the respondent filed his affidavit- in-reply.
44. On 24/06/2002, the arbitration petition was admitted, expedited
and interim reliefs granted.
45. On 25/02/2003, the Judgment of this court modifying the award,
the learned Judge hold that the appellant is not a trespasser but yet
awards possession of 2 flats and open space admeasuring 4533 sq.ft.
and shed to the respondent contrary to issue No.1 framed. The
learned Judge does not grant specific performance only on the ground
that a view taken by the arbitrator was a possible view. No appeal
filed by the respondent challenging these findings. The appeal of the
respondent only restricted to learned Judge declining to grant mesne
profit and increasing rate of interest from 6% to 18%.
46. On 28/07/2003, Appeals admitted.
47. On 10/09/2003, Notice of Motion disposed of. The Court records
that the Appellant Chopra had already deposited in Court a sum of
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16
Rs.31,50,600/- interim order passed by Division al Bench of this Court.
48. First of all, it is necessary to consider the scope of the Appellate
Court in such matter arising out of Section 30 and 33 of the Arbitration
Act-1940 in view of the following judgments:-
1. (2005) 6 S.C.C. 462, Bhagawati Oxygen Ltd. Vs. Hindustan
Copper Ltd.
2. (2003) 7 S.C.C. 396, State of U.P. Vs. Allied Constructions.
3. (2002) 6 S.C.C. 201, Shyama Charan Agarwala & Sons Vs. Union
of India.
4. AIR 1987 S.C. 2316, Municipal Corporation of Delhi Vs. M/s.
Jagan Nath Ashok Kumar & Anr.
5. AIR 1971 S.C.1646, The President, Union of India & Anr. Vs.
Kalinga Construction Co. (P) Ltd.
6. 2007 (2) Mh.L.J. 499 Union of India Vs. Ghanekar Builders and
Chemicals Pvt. Ltd.
The following are the basic principles which can be taken note of
in this background.
a) An arbitrator is a Judge, appointed by the parties and as such the
award passed by him is not to be likely interfered with.
b) The Court while exercising the power under Section 30 cannot re-
appreciate the evidence or examine correctness of the
conclusions arrived at by Arbitrator.
c) The jurisdiction is not appellate in nature and an award passed
by an Arbitrator cannot be set aside on the ground that it was
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17
erroneous.
d) It is not open to the Court to interfere with the Award merely
because in the opinion of the court, another view is equally
possible.
e) It is only when the Court is satisfied that the Arbitrator had
misconducted himself or the proceedings or the award had been
improperly procured or is 'otherwise' invalid that the Court may
set aside the award.
f) The Court cannot reappreciate the evidence. The interpretation
of the contract is a matter within the jurisdiction of the
Arbitrator.
(Vide Bhagvati Oxigen (Supra) )
g) Unless one or the other condition under Section 30 is satisfied,
an Award cannot be set aside.
(Vide State of U.P. (Supra) ).
h) The Award can be set aside if there is a jurisdictional error acting
without jurisdiction or beyond jursidiction, ignoring relevant
clauses.
(Vide Shyam Charan Agarwala (Supra))
i) Reasonableness of the reason given by an Arbitrator in making
award when there is no evidence of violation of principle of
natural justice and or two views are possible.
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18
(Municipal Corporation Delhi (Supra).)
j) In proceeding to set aside the award Appellate Court cannot sit in
appeal over the conclusion of the Arbitrator by re-examining and
re-appraising the evidence considered by the Arbitrator and hold
that the conclusion reached by the Arbitrator is wrong specially
when the finding of the Arbitrator is not perverse.
(Vide The president Union of India (Supra))
k) The Appellate Bench would not be justifying in enlarging the
scope upon the controversy, in an Appeal against dismissal of
petition challenging the Arbitral Award.
(Union of India Vs. Ghanekar Builders. (Supra)
)
49. The learned Single Judge after considering the record and rival
submissions of the parties, by the impugned Judgment principally
passed the decree in terms of the award except the following
modifications which is reproduced as under:-
'(1) Mesne profits awarded in favour of Chopra are set
aside.
(2) The amount of Rs.16,10,000/- to be paid by Chopra
to legal heirs of Sardar Singh who are on record in
Suit No. 721/88, with interest thereon for pre-
reference period at the rate of 18% p.a. on the
principal sum of Rs.16,10,000/- from 11/7/1987 till
judgment and thereafter at the rate of 18% from
the date of the suit till date of the award and
thereafter, at the same rate from the date of the
award till realisation. This is both towards
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19
compensation and interest.
(3) Mr.Chopra to deposit the said amount in this Court
on or before 31/8/2003. On such deposit, legal heirs of
Sardar Singh including Satinder to hand over
possession of the property to Chopra within two
months of deposit. On possession being handed
over, the amount deposited along with interest, if any, to
be paid to the L.Rs. of Sardar Singh Anand.
Petition stands disposed of accordingly.“'
50. The operative part of the award is as under:-
'In result I pass the final order of award as under:
(a) The Respondents are ordered and decreed to
handover vacant and peaceful possession of flat No. 1
and 2, the shed and vacant area admeasuring 4533 sq.ft.
in the suit premises viz. 108, Chopra House, Dr.
Ambedkar Road, Bandra, Bombay 400 050 to the
Claimant within eight weeks from the date of service of
the Award.
(b) If the Respondents remain in the occupation of the
suit premises after the expiry of eight weeks from
the date of service of the award the mesne profits
payable by them to the Claimant will be @
Rs.30,000/- p.m. till peaceful possession is given to
the Claimant.
c) The Respondents are ordered and decreed to pay to
the Claimant the sum of Rs.90,000/- being the
st
amount of arrears of compensation from 1 August,
st
1987 till 31 January, 1988 and further mesne
profits / compensation at the rate of Rs.15,000/-
st
p.m. with effect from 1 February, 1988 till
possession is handed over to Claimant, within the
time mentioned in (a) and thereafter at the rate of
Rs.30,000/- per month till possession is given to the
Claimant.
d) The Claimant is directed to refund to the
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20
Respondents the sum of Rs.16,10,000/- with
st
interest thereon at 6% p.a. with effect from 1 August,
1987 till payment.
e) The Claimant will be at liberty to adjust his dues and
compensation towards the amount of Rs.16,10,000/-
and interest payable by him to the Respondents taking
into consideration what is stated in (b) and (c) above.
f) The claim of the Respondents for specific
performance of the agreement for sale is dismissed.
g) The Claim of the Respondents for Rs.50,00,000/-
against the Claimant dismissed.
h) The Respondent is not entitled to any reliefs except
the one relating to their claim.
i) Each party to bear its own costs.
Mumbai. (S.R.Shah)
th
Dated:- 17 January, 2002. Sole Arbitrator.'
51. Admittedly, both the suits and the disputes arising out of the
same parties and the same subject were referred for Arbitration by
consent dated 23/06/1993. By an order dated 13/08/1999 even
subsequent to the death of Sardar Singh in the month of December,
1995 this Court directed the parties to Arbitration, therefore, the
parties before the Arbitrator of both the Suits. The Arbitrator in view of
the reference by consent of the parties, proceeded and decided
accordingly. The legal heirs of Sardar Singh were the parties to the
proceedings. Therefore, before the Arbitrator all the parties including
L.Rs. of Sardar Singh were on record and as the subject matter of both
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21
the suits were referred, it is difficult to accept the contention of the
Appellant and rightly observed by the learned Single Judge, that the
proceedings stood abated. The learned Single Judge, in this back-
ground after considering the authorities cited by the parties rightly
rejected the contention of the appellant with this regard by observing
as under:-
'At this stage, issue may be considered whether suit
No.363 of 1988 stands abated. In the normal course,
proceedings have to be taken out for bringing on record
the legal heirs. In the instant case, in an application
under Section 20 which was taken out in Suit No. 363 of
1988, legal heirs of Sardar were brought on record. At
the state of reference, there was no objection raised on
the part of the legal heirs of Sardar that the reference
could not be made in Suit No.363/88 on the ground that
the suit filed by Chopra stood abated. That reference was
in proceeding in appeal arising out of interim order. In
other words, in appeal itself arising from interim orders by
conduct of the parties it can be said that the legal heirs of
Sardar were brought on record. If that be the case, all
that was required is a formal amendment of the suit. It is
true that if the legal heirs are not brought on record
within the stipulated time, the suit stands abated.
However, consequent to bringing on record the legal heirs
of Sardar, necessary action must follow that abatement
was set aside as otherwise reference could not have been
made to arbitrator in respect of the subject matter of Suit
No.363 of 1988. Even otherwise, on the facts of this case,
effective decree could have been passed without bringing
on record the L.Rs. of Sardar Singh Anand to meet the
ends of justice.
In the light of that, there will be a decree in terms of
the award. Interest on the principal amount awarded
would be at the rate of 18% from the date of decree till
payment.
Both the Suits stands disposed of accordingly.'
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22
52. It is difficult to accept the contention that the suit abated as
submitted and even otherwise as observed by the learned Single
Judge, we see no reason to interfere with the finding so arrived at even
with this regard sepcially when the Court is not powerless and or there
is no bar with the L.Rs. cannot be brought on record by the Court and
secondly, as both the suits were tagged together, the estate of
deceased was represented by the legal heirs and therefore, also
proceedings cannot be said to be abated. On this ground, therefore,
award passed cannot be said to be nullity.
53. It is not in this matter that Appeal would abate due to failure of
substitution of heirs of deceased. In other suit, the Estate of the
deceased was represented and as both the suits were tried together,
such heirs as fully represented the whole estate as contemplated
under Order 22 Rule 2 of the Code of Civil Procedure (for short, “'CPC').
In the present case, as noted, the learned Single Judge has rightly
passed the order and allowed to bring legal heirs on record as
observed and done by the Apex Court in AIR 1996 S.C. 702 Newanness
alias Mewajannessa Vs. Shaikh Mohamad & Ors
.. The relevant portion is
as under:-
'Therefore, the appeal as a whole schould be dismissed as
having been abated. We find no force in the contention.
Since the third defendant is already on record
representing all the heirs of the first defendant widow, the
question of abatement does not arise. Even otherwise,
we find that substitution should be allowed, since no
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23
injustice would be done in bringing the legal
representatives on record. Thus the objection is over
ruled. The application for substitution is allowed.'
AIR (30) 1943, Bombay 457, Ishwarlal Laxmichand Patel Vs. Kuber
54. In
Mohan Lawar & Ors., this Court held that appeal does not abate only
because the son was brought on record and not the widow after the
death of sole Appellant. In Ramnibas Jhunjhunwalla Vs. Benarashi L.
Jhunjhunwalla, AIR 1968 Calcutta 314,
in the Arbitration proceedings
after the death of both the parties before Judgment, it is observed that
the Court has inherent power to bring the L.Rs. On record. The
provisions of Order 22 of the CPC do not apply.
In Rani Ramakant Vs. The First Additional Civil Judge, (SD), Mirzapur, AIR
2006 Allahabad 5,
by referring to Section 41 of the Arbitration Act 1940
and Order 22 Rule 3 and 4 of C.P.C. reiterated that the Arbitration
Proceedings does not abate on death of party.
55. Apart from this, in the present facts and circumstances, we find
that no perversity in the impugned order. On the contrary, still it is
within the framework of law and record and it is in the interest of
justice.
56. In view of peculiar facts and circumstances of the case, the
Judgment cited by the appellants are distinct and distinguishable on
facts itself. The law with regard to the scope and effect of Order 22 of
C.P.C. need no discussion, in view of the peculiarity of the present
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24
matter as referred above. The Hon'ble Supreme Court in Union of India
Vs. Ram Charan, AIR 1964 S.C. 215 observed that the Application for
bringing Legal Representaitves on record is necessary. Therefore, as
noted, the learned Single Judge in the facts of the case has given full
justice to the parties and modified the order. The judgments, as cited
by the appellant, are not based on Arbitration Proceedings under
Arbitration Act-1940.
57. The defendants in Suit No.363 of 1988 ( Chopra's) are in use and
occupation of the two flats being flat Nos. 1 and 2 and the vacant area
of 4533 sq. fts. in the compound wall pursuant to the receipt dated
th th
11 July, 1987 and letter of authority dated 24 July, 1987 addressed
by the Plaintiff to the Tenant Mr. Perreira and further held that the
defendant failed to prove that the vacant possession of the said two
flats were given in part performance pursuant to the amount of
Rs.11,60,000/- paid by them to the tenant Mr.Perreira which amount
was to be adjusted towards the purchase price of Rs.45,00,000/-
(Rupees forty five lacs only). The plaintiff i.e. Anand in Suit No.721 of
1988 failed to prove that there was a valid, concluded and binding
contract between the parties in respect of the suit premises and
therefore, not granted specific performance of the Agreement for sale
of the suit property described in Scheduled “'A' and 'B' to the plaint.
The Arbitrator, therefore, rightly declined to grant specific
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25
performance based upon the alleged draft agreement (Exhibit 'J').
Furthermore, Anand's failed to prove the loss and damage suffered as
per the particulars to the Plaint. The learned Single Judge also, rightly
observed as under:-
'The next aspect, however, is that even assuming
that the said finding of trespass is set aside, whether it is
possible to hold that the relief for specific performance
ought to have been granted or can be granted. The
learned arbitrator has given a finding that the parties
were not at ad idem in so far as consideration and the
terms concerned. Before the arbitrator there were
documents. One such document is the unsigned
agreement forwarded to Chopra by counsel of late Sardar
Singh and the other, the draft of agreement sent by
Chopra to advocate for Sardar Singh styled as
development agreement. In order to grant specific relief,
it must be proved that the there was agreement to sell
and that agreement was not purely an agreement for
development and further that all terms had been settled.
In so far as agreement to sell is concerned, the material
on record would evidence firstly that the area to be sold
was specified. Secondly the price was specified. This can
be evidenced from the receipt and other documents.
However, the correspondence exchanged between the
parties will also have to be examined. By letter of
29/08/1987 addressed by Chopra to Anand, Chopra
informed Sardar Singh that as he had not given further
details about dealings with other tenants the authority is
cancelled. By letter dated 06/10/1987 addressed to Shri.
Chopra it is pointed out that Chopra has gone back on his
original commiments. On 03/11/1987 Chopra wrote to
Sardar setting out the flats as and when vacated were to
remain in his possession. It was further pointed out that
there were no commitments made by Chopra as a lot of
things had to be done before concrete shape could be
taken to the agreement to reduce it in writing. On
22/12/1987 Advocate for Sardar Sing sent Chopra a draft
agreement styled as agreement for sale and
development. There is some dispute as to which is the
correct document. It is not necessary to go into that
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26
aspect. On 13/01/1988 Advocate of late Sardar Anand
wrote to Chopra that draft agreement had been sent and
it had not been returned back and it was therefore,
thought that Chopra was agreeable to all the terms and
conditions of the agreement of sale and development and
therefore should now execute the document. On
20/01/1988 in answer to letter of Advocate for Sardar,
received by Chopra's Advocate on 31/12/1987, informed
that the matter was still at negotiation stage, various
terms still had to be agreed upon before the agreement
can be concluded and the permission of appropriate
authority had to be obtained. The letter also says that
Chopra had drafted agreement for development and the
same was being forwarded to Sardar. There is another
letter of 27/01/1988 addressed to Sardar about flats,
taken in possession by Sardar. There are police
complaints. On 29/01/1988 draft of the development
agreement, on behalf of Chopra, was forward to advocate
of late Sardar. There is also other correspondence which
need not be reproduced. It is therefore, clear that it was
agreed to sell a specific area for a particular price. There
were disputes as to whether the transaction would be an
agreement to sell or development agreement and other
terms and conditions. It is on this basis that the arbitrator
came to the finding that the parties were not at ad idem
as to the nature of the contract. Once that be the case, in
my opinion and considering the material, it is not possible
to reappreciate the evidence and come to the different
finding than that arrived at by the Arbitrator in so far as
decree for specific performance is concerned. The view
taken is a possible view. In my opinion, therefore, it is not
possible to interfere with the findings by the arbitral
Tribunal on that count. Once that be the case, relief by
way of specific performance will have to be rejected. '
58. The Arbitrator can award or grant specific performance if case is
made out but the fact that it is a discretionary relief which Court and or
Arbitrator need to consider while granting the specific performance. In
view of the finding given by the Arbitrator as well as the learned Single
Judge, we are of the view that there is no case made out by the
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27
appellant to interfere with the above possible view expressed by the
Arbitrator and confirmed by the learned Single Judge. There is no
perversity and or illegality in the order. The impugned judgment is
within the framework of law and the record.
59. While considering the above reasoning given by the learned
Single Judge as observed with the possession of the Anand's is based
on the receipt dated 11/07/1987 which is admitted in evidence.
Another document is dated 06/11/1986 to the B.M.C. seeking
inspection of documents and an application for development dated
12/09/1987 by Chopra referring to the area i.e. 4533 sq. fts. The
evidence of Mr.Perreira laid in Criminal case is also material. The said
Perreira had in fact handed over the possession to Sardar. He was in
possession pursuant to the agreement and letter of authority. The
finding, therefore, given by the Arbitrator that Satindarpal and his son
was trespassers by ignoring the documentary evidence on record has
rightly observed by the learned Single Judge. The grant of specific
performance on the same ground though rejected based on the
material available that itself is no reason to held that Satindarpal and
his son were trespassers. Their possession is permissive in nature and
not of trespassers. In this background, the interim order passed by
this Court protecting possession of late Sardar not only to the two flats
but to the shop, garage and land, just cannot be overlooked unless it is
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28
affected. Therefore, undisputedly, possession of the Sardarsingh has
been in this background permissive in nature and therefore, cannot be
said to be authorized and or of traspassers. The act of payment of
Rs.16,10,000/- (Rupees sixteen lacs, ten thousand only) i.e.
11,60,000/- (Rupees elevan lacs sixty thousand only) paid to the
Tenant Mr.Perreira and other amounts paid to the Tenant Naik and
Rs.5,000/- paid for legal proceedings is also material. In other words,
Mr. Chopra has using the said money without any interest to
Sardarsing. The finding, therefore, as arrived by the learned Single
Judge and the modification of the Award in our opinion following
finding is also correct.
'In my opinion, the possession of Sardar Singh not being
that of a trespasser, as he has parted with consideration,
it was not open to the Arbitrator to grant relief by way of
mesne profits unless Chopra had first returned the
moneys paid on his behalf. In the light of that, award of
the Arbitrator awarding mesne profits in the sum of
Rs.15,000/- and Rs.30,000/- clearly discloses an error of
law apparent on the face of record and is liable to be set
aside.'
60. The Arbitrator has directed refund of Rs.16,10,000/- and fixed 6%
interest thereon w.e.f. 01/08/1987 till the payment. There was no
agreement for interest. Therefore, having once directed to refund, the
said amount as no decree for specific performance can be granted.
The money have not been using by Mr.Chopra, need to be
compensated as rightly observed by the learned Single Judge. The
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interest was claimed @ 18% p.a. in the suit. The principal amount was
also paid on different dates. We are of the view, therefore, that the
said amount of Rs.16,10,000/- as directed need to be paid with interest
@ of 9% instead of 18% from 11/07/1987 till the filing of the suit and at
the same rate from the date of filing of the suit till the award on the
principal amount of Rs.16,10,000/- . We are restricted the interest @
9% instead of 18% for the reason that Sardarsingh, in this background
admittedly occupied and used the premises without any compensation
or consideration.
61. We are, therefore, maintain the modified award passed by the
learned Single Judge except the rate of interest. It should be 9%
instead of 18% on the principal sum as observed above. The rest of
the order passed by the learned Single Judge is maintained.
62. The learned Single Judge has observed that the Atrbitral Tribunal
could not have gone beyond the terms of the reference. The terms of
the reference was of two flats and not other property as at that time,
as claimed, the possession is with the owner. The learned Single Judge
has also rightly observed that, there is nothing on record to show that
the possession of shop, garage and land handed over to Sardarsingh
except for the receipt. There is no other documentary evidence on
physical parting of possession by Chopra to late Sardar. Once this
Court come to a conclusion that there was no agreement to sale and
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no specific performance can be granted and therefore, there is no
question of retaining the possession of the said property except with
the right owner. The grant of interim relief, pending the proceedings
that itself cannot be reasoned to deny the deprived possession of the
property to the true owner Late Sardarsingh or his L.Rs. who are
admittedly the owner of the property. Even otherwise, the parties
have led the evidence and contested the matter in all respect. One
facet is also cannot be overlooked is based on the Suit No. 363 of
1988, the Arbitrator had framed the issue in respect of the two flats
and vacant area admeasuring 4533 sq. fts. in the compound. The
specific performance so claimed is of the suit premises in Suit No.721
of 1988 by Anand against Chopra. The Arbitrator has also recorded
that the Respondents claimed possession of not only of the sale of two
flats but also the open space and the shop, garage pursuant to the
alleged agreement for sale. The another facet is that admittedly the
parties have by consent terms agreed to refer the disputes and
differences, claims and counter- claims between arising out of and in
relation to the suit property No.363 of 1988 and 721 of 1988.
Considering the purpose and object of Arbitration Act, such arbitral
dispute between the same parties arising out of the common litigations
need to be settled at once and not in piecemeal. In the present case,
having once participated and availed all the opportunities, the
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impugned orders cannot be said to be without jurisdiction and illegal.
Therefore, in this background also, the grant of award for whole
property and as confirmed by the learned Single Judge in our view
cannot be said to be perverse and beyond the reference as contended
by the learned counsel appearing for the appellants. The Judgments
and authorities so cited are apparently distinct and distinguishable on
the facts itself. The peculiar facts in the present case, as disccussed
above, though law and power of arbitrator to deal within the point of
reference is clear, yet the circumstances in the present case itself is
sufficient not to deal with those cases on respective facts and,
therefore, we are not dealing with the citations so referred by the
Appellant in Appeal No.583 of 2003 of Anand.
63. In this background, we are confirming the opinion as expressed
by the learned Single Judge that 'the ultimate relief of directing
handing over the possession need not be interfered with'.
64. In the result, the award stand partly modified as ordered by the
learned Single Judge i.e. The mesne profits awarded in favour of
Chopra are set aside. The amount of Rs.16,10,000/- to be paid by
Chopra's Legal heirs to the Sardar Singh as directed with interest for
pre-reference period @ 9% instead of 18% on the principal sum from
11/07/1987 till the Judgment and therefore, @ 9% from the date of the
suit till the date of award and thereafter at the same rate from the
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date of the award till realisation. The rest of the order is confirmed.
65. In the light of this, there will be a decree in terms of the modified
award.
66. Both the appeals are disposed of accordingly.
67. The interim order passed and pending during these Appeals are
also stand disposed of in view of the above.
. No costs.
(ANOOP V. MOHTA, J.) (DR. S.RADHAKRISHNAN, J.)
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