IN THE HIGH COURT OF RAJASTHAN AT JAIPUR BENCH
Mohammad Rafiq, J.
Manish Vyas son of late Shri Goverdhan Das and others - Applicants
Versus
Dr. Sohan Lal Sihag and others - Respondents
S.B. Arbitration Application No. 44 of 2010
Decided On : 21-10-2016
Arbitration and Conciliation Act, 1996 - Section 11 - Rajasthan Public Trust Act, 1959 - Arbitration Act - Section 9 - Applicant-claimants - Charitable trust - Partnership deed - Partnership firm - Challenging judgment - Arbitration Application and Civil Miscellaneous Appeal is between same parties and therefore both were clubbed by order of Honble Chief Justice and are being decided together a new and independent Arbitrator may be appointed for resolving dispute between parties - Civil Miscellaneous Appeal has been filed by non applicants - Held, Supreme Court in and Another General Fiber Dealers Ltd and Another held that where award has been set aside but order of reference has not been superseded appointment of a fresh arbitration tribunal and carrying on of arbitration further were within terms of arbitration agreement - Supreme Court in Oil & Natural Gas Corporation Ltd. v. SAW Pipes Ltd has held that if arbitral tribunal has not followed mandatory procedure prescribed Act it would mean that it has acted beyond its jurisdiction and thereby award would be patently illegal which could be set aside - If it is held that such award could not be interfered it would be contrary to basic concept of justice - Application Allowed
Mohammad Rafiq, J.
The dispute in the present Arbitration Application and Civil Miscellaneous Appeal is between the same parties and therefore both were clubbed by order of Hon'ble the Chief Justice and are being decided together.
2. Arbitration Application has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short, 'the Arbitration Act') by two applicants, namely, Manish Vyas and Dr. Rajesh Kumar Singh (hereinafter shall be referred to as 'claimants'), inter-alia with prayer that upon setting aside the award dated 08.01.2007 passed by the learned Arbitrator, a new and independent Arbitrator may be appointed for resolving the dispute between the parties. Civil Miscellaneous Appeal has been filed by non applicants (hereinafter shall be referred to as non-claimants), namely, Dr. Sohan Lal Sihag, Manjeet Singh and Dr. Ram Sagar Nagar, challenging the judgment dated 31.03.2010 passed by the Additional District Judge No.3, Jaipur City, Jaipur, in Civil Miscellaneous (Arbitration) Case No.30/2009, who, while allowing the objections filed by non-applicant-claimants Manish Vyas and Dr. Rajesh Kumar Singh, set aside the award dated 08.01.2007.
3. Essential facts giving rise to these matters are that a charitable trust by the name of Nirvana Charitable Trust, Sriganganagar (Rajasthan) was registered under the Rajasthan Public Trust Act, 1959. The trust purchased a land measuring 0.16 hectare at Bagru, District Jaipur on 16.01.2002. The Trust applied to the Government of India as well as the Dental Council of India on 24.09.2002 for establishment of a new dental college, namely, Rajasthan Dental College & Hospital at Bagru Khurd, Jaipur. The Government of India, vide letter dated 30.09.2003, permitted the Trust to establish the college for the academic session 2003-04. The University of Rajasthan, vide communication dated 30.09.2003, conveyed to the JNV University that Trust has been granted fresh affiliation for B.D.S. Course with annual intake of 100 seats. The trust on 23.10.2003 took financial help from the Banks. The UTI Bank sanctioned corporate loan of Rs.650 lacs to the Trust. The Jaipur Development Authority alloted 21,420.23 square meter of land on 26.12.2002 for the college and executed a lease deed in favour of the Trust. A Memorandum of Understanding was executed on 11.02.2003 between the Trust through its trustees Mr. Manjit Singh and three other persons including both the claimants Manish Vyas and Dr. Rajesh Kumar Singh. This MOU was given effect to from 26.09.2001. The MOU was executed to run administration and carry out management activities of the Dental College. Four persons were appointed as Directors for management, administration and running of the college. Out of those four persons, two are the claimants and third one was Dr. Sohan Lal and fourth one was Dr. Ram Sagar. While claimant Manish Vyas was given share of 40%, claimant Dr. Rajesh Kumar Singh and non-claimants Dr. Sohan Lal and Dr. Manjeet Singh were given share of 20% each.
4. As per the case of the claimants, a partnership deed was executed between claimants and non-claimants, and partnership firm was constituted for running the college, named, M/s. Rajasthan Dental College & Hospital, which was actually established by the Trust. However, as per the non-claimants, the Trust in its meeting convened on 25.06.2004, took a decision that it has no concern with the partnership firm and claimants, who claimed themselves to be the Directors, were removed. The claimants on 14.09.2004 then filed an application under Section 9 of the Arbitration Act for injunction before the District Judge, Jaipur City, Jaipur, on the basis of MOU and alleged that since 13.09.2004 they were not being allowed to enter the college. The Trust on coming to know about the aforesaid application, filed an application on 01.10.2004, applied for its impleadment as party to the said application on the premise that outcome of the same was likely to directly
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