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2018 Supreme(Bom) 1188

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT NAGPUR
A.S. CHANDURKAR, J.
Shri Chandrashekar S/o Daulatram Bisen - Applicant
Versus
M/s Yogi Construction & Anr. - Respondents
Arbitration Appeal No. 3 of 2017
Decided On : 07-09-2018

Advocates:
Advocate Appeared:
For the Applicant : Shri A.A. Ninawe

Headnote:

Arbitration and Conciliation Act, 1996 - Section 34 and Section 37(1) (c) - Specific Relief Act, 1963 - Section 16 (c) and 28(1)(a) - Arbitrator Is Quashed - Sale Deed - Consequential Orders - Facts in brief are that appellant and respondent No-1 entered into an agreement of sale of a flat - That agreement contained an arbitration clause- Pursuant to orders passed in proceedings under Section 11(6) of said Act this Court appointed a Sole Arbitrator to adjudicate disputes between parties- Pursuant to such reference being made appellant filed his statement of claim before sole Arbitrator - Despite grant of opportunities to respondent No-1 herein proceedings were not contested and Sole Arbitrator passed his award by accepting claim made by appellant - By impugned judgment that application was allowed and after setting aside award matter was remanded for fresh adjudication their by same Arbitrator or by any or Arbitrator as would be agreed by parties- Being aggrieved appellant has filed present appeal – Held, Court was not justified in observing that Arbitrator could not have directed sale of property which was already sold without first cancelling said sale deed - Reliance in that regard has been placed on decision in - Needless to state that if appellant would have been found entitled to relief as claimed in arbitration proceedings consequential orders could have been passed in that regard by Arbitrator - Judgment in Misc - Civil Application to extent it has remanded proceedings to Arbitrator is quashed and set aside - Setting aside of award under Section 34(2)(b)(ii) of Act is maintained - Similarly observations made in impugned order with regard to cancellation of sale deed would not operate - Appeal disposed of

JUDGMENT :

1. This appeal filed under Section 37(1) (c) of the Arbitration and Conciliation Act, 1996 (for short, the said Act) takes exception to the order passed by the learned Principal District and Sessions Judge, Nagpur in Misc. Civil Application No.1118/2015 whereby that application filed under Section 34 of the said Act by the respondent No.1 herein has been allowed and the award passed by the Sole Arbitrator on 3-9-2015 has been set aside.

2. The facts in brief are that on 30-4-2012, the appellant and the respondent No.1 entered into an agreement of sale of a flat. That agreement contained an arbitration clause. Pursuant to orders passed in proceedings under Section 11(6) of the said Act, this Court appointed a Sole Arbitrator to adjudicate the disputes between the parties. Pursuant to such reference being made, the appellant filed his statement of claim before the sole Arbitrator. Despite grant of opportunities to the respondent No.1 herein, the proceedings were not contested and on 3-9-2015, the Sole Arbitrator passed his award by accepting the claim made by the appellant. The appellant was held entitled to possession of the flat in question on the payment of balance consideration within a period of two months and the respondent No.1 was directed to deliver possession of that flat to the appellant within a period of three months. Being aggrieved the respondent No.1 filed proceedings under Section 34 of the said Act for challenging the award. By the impugned judgment dated 6-1-2017 that application was allowed and after setting aside the award the mater was remanded for fresh adjudication either by the same Arbitrator or by any other Arbitrator as would be agreed by the parties. Being aggrieved the appellant has filed the present appeal.

3. Shri A.A. Ninawe, learned Counsel for the appellant submitted that the Court erred in setting aside the award that was passed in favour of the appellant. The respondent No.1 despite grant of sufficient opportunity failed to appear before the Arbitrator and contest the proceedings. By raising false grounds in the proceedings under Section 34 of the said Act, the respondent No.1 sought to invoke the jurisdiction of the Court. It was submitted that under provisions of Section 34(2) of the said Act the scope for interference was limited and in absence of participation by the respondent No.1 before the Arbitrator, the contentions as urged were not liable to be accepted. It was submitted that pursuant to the award as passed, necessary pay orders were remitted to the respondent No.1 and the balance consideration was duly paid. It was further submitted that the Court committed an error in holding that the readiness and willingness on the part of the appellant had not been considered by the Arbitrator or that reasonable opportunity was not given to the respondent No.1. Further the Court was not justified in observing that the Arbitrator could not have directed sale of the suit property without cancelling the sale deed that was executed by the respondent No.1 in favour of a third party. It was then submitted that there was no power with the Court to remand the proceedings to the Arbitrator as held in Kinnari Mullick & another vs. Ghanshyam Das Damani (2018)11 SCC 328. The learned Counsel also placed reliance on the decisions in Satya Pal Anand v. State of M. P. (2016) 10 SCC 767, State of West Bengal v. Shivananda Pathak (1998) 5 SCC 513 and Food Corporation of India and Ors. vs. Yadav Engineer and Contractor 1982 Mh.L.J. 803 in support of his contentions.

4. The respondent No.1 has been duly served but it has not chosen to contest the appeal. With the assistance of the learned Counsel for the appellant, I have perused the records of the case and I have given due consideration to his submissions.

5. Perusal of the impugned order indicates that in proceedings under Section 34 of the said Act, the Court has set aside the award principally on the ground that reasonable opportunity was not given to t









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