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IN THE HIGH COURT OF BOMBAY
Nathwani N.P., J.
Appellants: Dinshaw Manekji Petit
Vs.
Respondent: G.B. Badkas and Ors.
Arbitration Petn. No. 62 of 1967Decided On: 25.01.1968
Counsels:
For Appellant/Petitioner/Plaintiff: G.A. Thakker and R.J. Bhatt, Advs.
For Respondents/Defendant: H.M. Seervai, Adv. General, T. Andhyarujina and Kenia, Advs.
ARBITRATION - ACT - S. 14(2) - APPLICATION FOR FILING AWARD - JURISDICTION - DEFENCE OF INDIA ACT, 1939 - S. 19 - ARBITRATION UNDER - WHETHER ARBITRATION ACT APPLIES - S. 19(1)(G) - EXCEPTION - S. 46 OF ARBITRATION ACT - INCONSISTENCY - RULES UNDER S. 19 - CONSTRUCTION.
Fact of the Case:
The petitioner and others were the trustees of a trust created by the late Sir Dinshaw Manekji Petit (2nd Baronet) under a declaration of trust dated 17th January 1931, and as such were owners/lessees of a property situate at Tardeo. Malbar Hill Division (hereinafter referred to as the Petit Mills Estate). The petitioner is the sole surviving trustee of the said trust. Respondents Nos. 4 to 7 as the Trustees of Indenture of Settlement dated 29th March 1923, were the lessors, and the petitioner and other trustees of the said trust dated 17th January 1931 the lessees of a portion of the Petit Mills Estate admeasuring about 64,000 square yards. By an order dated 1st April 1942, issued by the Collector of Bombay, under Rule 79 of the Defence of India Rules the Petit Mills Estate was requisitioned. Subsequently, however, by another order dated 28th October 1942, issued by the Collector of Bombay under Rule 75A of the Defence of India Rules the Petit Mills Estate was acquired. The Collector of Bombay offered and the trustees of the said trust dated 17th January 1931 accepted under protest and without prejudice to their rights and contentions a sum of Rupees 22,49,770 as compensation for the acquisition of the Petit Mills Estate. The trustees thereafter filed a suit in this Court, being suit No. 1669 of 1945, against the Dominion of India and the then province of Bombay for a declaration that they were the owners of the suit lands and for possession and other reliefs. The said suit was dismissed and thereupon an appeal was filed by the trustees, which appeal was also dismissed by the Appellate Court. The trustees then filed an appeal to the Supreme Court of India, being Appeal No. 241 of 1955. By a Consent Order obtained on 14th September 1960 disposing of the said appeal in the Supreme Court it was inter alia, provided that the Government of Maharashtra should pay to the Trustees as solatium 15 per cent of the said sum of Rs. 22,49,770 and that the amount of compensation, if any, payable to the Trustees as fair market value of the said property over and above the said sum of Rs. 22,49,770 should be determined by arbitration as and in the manner provided by Section 19 of the Defence of India Act and the rules made thereunder, and that in the event of the trustees being awarded any compensation as fair market value of the said property in excess of the said sum of Rs. 22,49,770 the Government of Maharashtra should pay to the Petitioner such additional compensation as also further amount equal to 15 per cent of the additional amount of compensation so awarded.
Finding of the Court:
The Court held that the provisions of Ss. 14 (2) and 17 of the Arbitration Act are wholly inconsistent with the provisions of Section 19 and the rules made thereunder.
Issues: 1. Whether the Arbitration Act applies to arbitrations under Section 19 of the Defence of India Act, 1939? 2. Whether the provisions of Ss. 14 (2) and 17 of the Arbitration Act are wholly inconsistent with the provisions of Section 19 and the rules made thereunder?
Ratio Decidendi: 1. The words "law for the time being in force" in Section 19(1)(g) of the Defence of India Act, 1939, refer to any law bearing upon the subject of arbitration which is in force at the time when the question of applicability of that law to arbitration under Section 19 of the Defence of India Act arises and covers any such law which came into force even after the passing of the Defence of India Act. The Arbitration Act therefore falls within the ambit of the said words "law for the time being in force" in Section 19 (l)(g) and its provisions do not apply to an award made under the said S. 19. 2. The provisions of Ss. 14 (2) and 17 of the Arbitration Act are wholly inconsistent with the provisions of Section 19 and the rules made thereunder.
Final Decision: Petition dismissed with costs.
2. The first Respondent did not appear at the hearing of the application. The learned Advocate General, however, who appeared for Respondents Nos. 2 and 3, raised a preliminary objection to the maintainability of the present petition. He submitted that the Court has no jurisdiction to order the first Respondent to file the Award for two reasons, firstly, S. 19(1) (g) of the Defence of India Act excludes the operation of the Arbitration Act to arbitration held under Section 19 of the Defence of India Act, and secondly, even assuming that the Arbitration Act applies to such arbitrations, by reason of Section 46 of the said Act, the provisions of Section 14(2), being inconsistent with the provisions of the said Section 19 and rules made thereunder, will not apply to an award made under the said Section 19. Mr. Thakker, the learned Counsel for the petitioner, disputed the validity of both these contentions and maintained that the present application was competent under Section 14(2) of the Arbitration Act.
3. The facts of the case are not in dispute. The petitioner and others were at all material times the trustees of a trust created by the late Sir Dinshaw Manekji Petit (2nd Baronet) under a declaration a of trust dated 17th January 1931, and as such were owners/lessees of a property situate at Tardeo. Malbar Hill Division (hereinafter referred to as the Petit Mills Estate). The petitioner is the sole surviving trustee of the said trust. Respondents Nos. 4 to 7 as the Trustees of Indenture of Settlement dated 29th March 1923, were the lessors, and the petitioner and other trustees of the said trust dated 17th January 1931 the lessees of a portion of the Petit Mills Estate admeasuring about 64,000 square yards. By an order dated 1st April 1942, issued by the Collector of Bombay, under Rule 79 of the Defence of India Rules the Petit Mills Estate was requisitioned. Subsequently, however, by another order dated 28th October 1942, issued by the Collector of Bombay under Rule 75A of the Defence of India Rules the Petit Mills Estate was acquired. The Collector of Bombay offered and the trustees of the said trust dated 17th January 1931 accepted under protest and without prejudice to their rights and contentions a sum of Rupees 22,49,770 as compensation for the acquisition of the Petit Mills Estate. The trustees thereafter filed a suit in this Court, being suit No. 1669 of 1945, against the Dominion of India and the then province of Bombay for a declaration that they were the owners of the suit lands and for possession and other reliefs. The said suit was dismissed and thereupon an appeal was filed by the trustees, which appeal was also dismissed by the Appellate Court. The trustees then filed an appeal to the Supreme Court of India, being Appeal No. 241 of 1955. By a Consent Order obtained on 14th September 1960 disposing of the said appeal in the Supreme Court it was inter alia, provided that the Government of Maharashtra should pay to the Trustees as solatium 15 per cent of the said sum of Rs. 22,49,770 and that the amount of compensation, if any, payable to the Trustees as fair market value of the said property over and above the said sum of Rs. 22,49,770 should be determined by arbitration as and in the manner provided by Section 19 of the Defence of India Act and the rules made thereunder, and that in the event of the trustees being awarded any compensation as fair market value of the said property in excess of the said sum of Rs. 22,49,770 the Government of Maharashtra should pay to the Petitioner such additional compensation as also further amount equal to 15 per cent of the additional amount of compensation so awarded.
4. Accordingly the Government of Maharashtra
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