IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.Y. KOGJE, J.
Heirs of Legal of Sidhrajsinhji Pragrajsinhji and Others – Petitioners
Versus
Bengal Cynosure Development Private Limited and Others – Respondents
Special Civil Application No. 11903 of 2015
Decided On : 20-08-2019
Constitution of India, Article 226 – Pleased to issue a writ of certiorari or any other appropriate writ, order or direction declaring the impugned Arbitration Award dated 14.11.2013 as arbitrary, contrary to the principles of natural justice and illegal, as being contrary to the substantive law of India and the Arbitration and Conciliation Act, 1996 and thus beyond the authority and jurisdiction of the Arbitration Tribunal – Held, On the point of alternative remedy, Section 34 of the Act provides for appeal. However, it also stipulates grounds for appeal. Sub-section 2(a) provides for setting aside the arbitral award where party challenging it furnishes proof that the arbitration agreement is not valid under law to which the parties have subjected it, the party making the application has not been given proper notice of the appointment of Arbitrator or the arbitral proceedings or was otherwise unable to present his case or the arbitral award deals with dispute not contemplated by or not falling within the terms of the submission of arbitration or it contains decisions on matters beyond the scope of the submission to arbitration. The Arbitrator has therefore assumed the jurisdiction, which otherwise the Arbitrator could not exercise in the facts of this case – Petition allowed (Paras 13,14 and 15)
Facts of the Case:
– Pleased to issue a writ of certiorari or any other appropriate writ, order or direction declaring the impugned Arbitration Award dated 14.11.2013 as arbitrary, contrary to the principles of natural justice and illegal, as being contrary to the substantive law of India and the Arbitration and Conciliation Act, 1996 and thus beyond the authority and jurisdiction of the Arbitration Tribunal
Finding of the Court:
On the point of alternative remedy, Section 34 of the Act provides for appeal. However, it also stipulates grounds for appeal. Sub-section 2(a) provides for setting aside the arbitral award where party challenging it furnishes proof that the arbitration agreement is not valid under law to which the parties have subjected it, the party making the application has not been given proper notice of the appointment of Arbitrator or the arbitral proceedings or was otherwise unable to present his case or the arbitral award deals with dispute not contemplated by or not falling within the terms of the submission of arbitration or it contains decisions on matters beyond the scope of the submission to arbitration. The Arbitrator has therefore assumed the jurisdiction, which otherwise the Arbitrator could not exercise in the facts of this case
Result: Petition allowed
JUDGMENT :
A.Y. KOGJE, J.
1. RULE. Learned Advocate Mr. S.P. Kotai waives service of Rule on behalf of respondent Nos.1 and 2 and learned Advocate Mr. Nayan Parekh waives service of Rule on behalf of respondent No. 3.
2. This petition under Article 226 of the Constitution of India is filed with the following prayers:-
(B) Your Lordships may be please be issue a writ of certiorari or any other appropriate writ setting aside the impugned award dated 14.11.2013.
(C) Your Lordships may be pleased to issue a writ of certiorari or any other appropriate writ, order or direction declaring the impugned Agreement For Sale dated 304.2008 as illegal, as being not executed in accordance with the provisions of the Registration Act, 1908 and the Transfer of Property Act, 1882 and thus not enforceable in law.”
3. At the outset, it is recorded that by order dated 29.07.2015, prayer (clause-22-C) was given up by the petitioners, therefore, restricting the relief to prayer (clauses-A) and B) to declare the arbitration award as arbitrary, contrary to the principles of natural justice, illegal and contrary to the substantive law of the Arbitration and Conciliation Act, 1996. The challenge, therefore, is to the arbitration award primarily on the ground of bias as the Arbitrator himself was personally interested in the subject matter, i.e. immovable property UNDER the arbitration. The subject matter is land admeasuring 90 acres known as “Piram Island” of Taluka Ghogha, District Bhavnagar.
4. Learned Senior Advocate for the petitioners submitted that the Arbitrator who passed the impugned award was Navinchandra C.Shah alias Modi and the award is passed in respect of the land mentioned hereinabove. Learned Senior Advocate for the petitioners therefore drew attention of this Court first to the Memorandum of Understanding (MOU) dated 15.02.2008 which was entered into between late Shri Siddhrajsinhji P.Raol, the petitioners are heirs and legal representatives of late Shri Siddhrajsinhji and two Private Limited Companies, viz. M/s.Ritman Concrete Pvt. Ltd. and M/s.Pacard Exports Pvt. Ltd. Both the companies were jointly and severally represented by its authorized signatory Navinchandra C. Shah alias Modi and the documents of MOU referred to the payment made towards consideration. He thereafter drew attention of this Court to the agreement to sale dated 30.04.2008 between late Shri Siddhrajsinhji and other relatives who held interest in the land and the present respondents, viz. M/s.Bengal Cynosure Development Pvt. Ltd. and M/s. BCSI Realtors Pvt. Ltd. It is submitted that the agreement to sale is a bogus agreement to sale and does not bear signature of late Shri Siddhrajsinhji He compared the documents with MOU and submitted that signature of late Shri Siddhrajsinhji is completely different and is not found on each and every page of the agreement to sale unlike MOU.
4.1 It is submitted that in the MOU, Arbitrator Shri Dipak Chakraborty was mentioned to be the sole Arbitrator whereas in the agreement to sale, in clause-10 Navinchandra C.Shah alias Modi was referred to as the sole Arbitrator. He submitted that the fact of agreement to sale being executed is highly doubtful. Over and above this, referring the name of the person who is signatory of the MOU as an Arbitrator is clear indication of the prejudged issues. It is also submitted that such document is also doubtful as though provision is made for two witnesses, but no witnesses are mentioned for execution of agreement to sale. It is therefore submitted that initiation of the arbitration itself is wi
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