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2023 Supreme(Guj) 162

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, J.
VIRALBHAI NATWARBHAI PATEL – Petitioner
Versus
BHARATBHAI PRAVINBHAI PATEL – Respondent
Special Civil Application No. 12158 of 2022
Decided On : 20-01-2023

Advocates:
Advocate Appeared:
For the Petitioners: MEHUL SHAH, MANAN A. SHAH.
For the Respondents: SHAKEEL A. QURESHI, PARAS K. SUKHWANI.

Headnote:

Constitution of India, 1950 - Article 226, 227 - Arbitration Act, 1996 - Section 11(5), 34, 30 - Limitation Act, 1963 - Article 119(b) - Arbitration proceedings - Award is void - Set aside entire proceedings - Petitioners have sought order declaring that entire arbitration proceedings initiated and concluded by respondent No. 4 and consequent award are illegal, without jurisdiction and competence, null and void abinitio, without having any force of law and contrary to settled principle of law - A further prayer is made to set aside entire proceedings – Held, Case of Amrit Bhikaji Kale vs. Kashinath Janardhan Trade, this Court has held that when a Tribunal of limited jurisdiction erroneously assumes jurisdiction by ignoring a statutory provision and its consequences in law on status of parties or by a decision are wholly unwarranted with regard to jurisdictional fact, its decision is a nullity and its validity can be raised in collateral proceeding - In light of this position of law, even submission of learned counsel for respondents that petition is grossly belated and barred on ground of delay and latches deserves to be an objection which does not defeat consideration - For all these grounds therefore, award of Arbitral Tribunal is held to be illegal, without jurisdiction and has to be treated as null and void - Award is therefore quashed and set aside - Petition allowed.

JUDGMENT :

BIREN VAISHNAV, J.

1. Rule. Respective learned advocates waive service of notice of Rule for and on behalf of the respective respondents.

2. Heard Mr. Mehul Shah, learned Senior Counsel assisted by Mr. Manan Shah, learned advocate for the petitioners, Mr. Shakeel A. Qureshi, learned advocate for respondent Nos. 1 to 3 while Mr. Paras K. Sukhwani, learned advocate for respondent No. 4.

3. In this petition, under Article 226 of the Constitution of India, the petitioners have sought a writ, order or direction declaring that the entire arbitration proceedings initiated and concluded by respondent No. 4 and the consequent award dated 30.05.2016 are illegal, without jurisdiction and competence, null and void abinitio, without having any force of law and contrary to the settled principle of law. A further prayer is made to set aside the entire proceedings.

4. The facts in brief are that the subject lands are agricultural lands bearing survey No. 1106 and 1109, block Nos. 1406 admeasuring 23426 situated at village Variav, Taluka Choryasi, District Surat. The lands were originally owned by Mr. Rajubhai Manilal Patel and Mr. Rameshbhai Manilal Patel. The original owners executed a registered sale deed in favour of petitioner No. 1 - Mr. Viral Natvarbhai Patel on receipt of entire consideration. It is the case of the petitioners that on 15.03.2004, a purported settlement agreement came to be executed between the present petitioners and respondent Nos. 1 to 3, whereby, it was agreed that the subject lands would be divided amongst themselves in the ratio as stated in the agreement. The agreement had an arbitration clause which stated that in case of any dispute between the parties, all the parties to the agreement shall appoint the sole arbitrator:

    (i) The case of the petitioners is that to their shock and surprise, the petitioners received a notice dated 19.02.2016 from respondent No. 4 the sole arbitrator who informed the petitioners of date of hearing as 28.02.2016. A second notice was issued on 04.03.2016 fixing the hearing on 12.03.2016. On 09.03.2016, the petitioners replied to the arbitrator the respondent No. 4 stating that the petitioners had neither given any consent to appoint respondent No. 4 as the sole arbitrator nor had appointed the respondent No. 4 for resolving the dispute between the parties and the unilateral decision of the respondent Nos. 1 to 3 in appointing the respondent No. 4 as an arbitrator, was contrary to the settlement agreement. On this, the arbitrator issued a further notice on 28.03.2016 keeping the hearing on 09.04.2016. On 16.04.2016, the Arbitral Tribunal rejected the reply of the petitioners. It is the case of the petitioners that this order of rejection dated 16.04.2016 was not served on the petitioners and, therefore there was no point of challenging an order which they had not received. The Arbitral Tribunal passed the impugned award dated 30.05.2016. It is the case of the petitioners that since the award is without jurisdiction and is a nullity in the eye of law and by the award, respondent No. 4 drew a decree, the entire arbitration proceedings being null and void as the appointment was unilateral and contrary to the settlement agreement, the award deserves to be quashed and set aside.

(ii) It is the case of the petitioners that since the respondents had filed an Execution Application on 07.01.2017 for execution of the award to which the petitioners had filed a reply on 08.08.2017 and the execution proceedings were pending and in view of the proceedings pending before the Revenue Authorities with regard to change in the mutation entry pursuant to the award in question, there has been some delay in filing the petition and therefore, the period where the petitioners were bona-fide prosecuting before the Executing Court must be excluded. The revenue proceedings are a subject matter of challenge as respondent Nos. 1 to 3 have consistently failed to get the revenue entry mutated in their favour and

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