PUNJAB & HARYANA HIGH COURT
Hemant Gupta, J.
Prem Chand Garg
Versus
Haryana State Industrial Development Corporation Ltd.
Civil Revision No. 1557 of 2004,
Decided On : FEBRUARY 22, 2006
Civil Procedure Code, 1908 - Section 151 - Constitution of India, 1950 - Article 227 - Supervisory jurisdiction - Civil Revision - There is no limitation prescribed for exercise of such jurisdiction - Mere fact that some time has passed, this Court will not permit the illegalities to be perpetuated.
Transfer of Property Act, 1882 - Section 52 - Principle of lis-pendense - Plea of bonafide purchaser is not available when property is purchased during the pendency of the litigation
Arbitration Act, 1940 - Section 14, 17, 34 - Arbitration - Rule of the Court - Withdrawal of application under section 14 read with 17 of the Act on mistaken advice - Corporation failed to act fairly and to point out correct legal and factual position - Once Industrial plot was allotted to the petitioner on 21.7.1997 - Agreement between the petitioner and HSIDC was executed on 20.10.1977 - Agreement contained arbitration clause that any disputes arising out in any way touching the agreement were required to be referred to the sole arbitrator - Allotment in favour of the petitioner was cancelled on 23.6.1981 and the plot was resumed and reallotted to Respondent No. 2 on 15.12.1981 - Petitioner filing CWP which was disposed on 27.9.1991 and in compliance of order an Arbitrator was appointed by the Corporation/State Govt. who vide his award found the order of resumption as illegal - Trial Court on 20.11.1995 made the award as rule of the court - In appeal respondent No. 2 was impleaded as party on her application under order 1 Rule 10 of the CPC - Appellate Court allowing the appeal on the ground that the Civil Court Chandigarh has no jurisdiction to try the matter and returned the application under section 14 and 17 for presentation before the competent court - Petitioner filing the said application before Gurgaon Court as the plot in question was situated within the jurisdiction of the said Court - While dismissing the applicaton for grant of ad - interim injunction trial court held that the petitioner should have moved an application under Sec. 14 read with Sec. 17 of the Act before their Court alone - Whether the order passed by Chandigarh Court is patently illegal and has caused manifest injustice to the petitioner ? Yes - Inter - alia Held,
i) The arbitrator was appointed by the Corporation/State Government, therefore the first appellate Court is factually and legally incorrect (Para 15)
ii) Since Respondent No. 2 was not in physical possession of the plot therefore, the allotment in her favour was only a paper transaction which does not confer any right. (Para 16)
iii) Return of application under sec. 14 is immaterial and inconsequential as the order passed by the first Appellate Court is patently illegal (Para 16)
iv) Respondent No. 3 is purchaser during the pendency of the litigation - Plea that he is bonafide purchaser is not available to him. (Para 17)
v) If the petitioner has sought the return on the application under mistaken advice, this court cannot allow the illegalities to be perpetuated (Para 18)
Trial Court order dated 20.11.1993 is restored - First appellate Court - Order is set-aside.
Hemant Gupta, J.
1. The present case has chequered history. One Industrial Plot No. 121, in Industrial Estate, Dundahera (now Udyog Vihar), Phase-I, Gurgaon was allotted to the petitioner on 21.7.1977. An agreement was executed between the petitioner and Haryana State Industrial Development Corporation-Respondent No. 1 on 20.10.1977. In terms of the agreement, the petitioner was to complete the construction within 2 years and to commence production within a period of 3 years from the date of the allotment of the plot. Said agreement also contained an arbitration clause. As per the said clause any disputes or differences arising out of or in any way touching or concerning the agreement were required to be referred to the sole arbitration of the nominee of Secretary to Government of Haryana, Industrial Department.
2. The allotment in favour of the petitioner was cancelled on 23.6.1981 and the plot resumed. Soon after the resumption the plot was re-allotted to Respondent No. 2 on 15.12.1981.
3. The petitioner herein filed a Civil Suit challenging the said resumption order. An application was filed by respondent No. 1 herein under Section 34 of the Arbitration Act, 1940 (for short the Act) for the stay of the proceedings in view of the arbitration clause. Vide order dated 16.5.1985, the learned Trial Court allowed the application filed by respondent No. 1 and stayed further proceedings. The appeal against the said order was dismissed on 22.7.1985. The resolve the dispute between the parties Shri B.L. Tanwar, IAS was appointed as arbitrator but before he could proceed in the matter, Shri Tanwar retired. On 5.9.1988 Shri Y.P. Raheja, IAS, was appointed as an arbitrator. Even the said Arbitrator did not enter into the reference and did not proceed further with the arbitration.
4. On 14.8.1991, the petitioner filed C.W.P. No. 14870 of 1991 before this Court challenging the resumption order dated 23.6.1981. The said writ petition was disposed of on 27.9.1991 with the following order:
Learned Counsel fro the petitioner expressly stated before us that the petitioner consented to the appointment of the Arbitrator in pursuance of Annexure P. 5. The Secretary, Haryana State Industrial Development Corporation Limited, is hereby directed to appoint an Arbitrator who shall proceed to decide the matter expeditiously as much delay has already been caused. The petition is accordingly disposed of.
In compliance with the above directions of this Court, Shri J.M. Sethi Advocate, was appointed as an Arbitrator. The Arbitrator so appointed made and published the award dated 27.8.1993. In terms of the said award, the resumption of the plot vide order dated 23.6.1981 was found illegal and was set aside.
5 The petitioner, thereafter, moved application dated 25.9.1993 under Section 14 read with Section 17 of the Act for directing the learned Arbitrator to file the award in Court to make it rule of the Court. Objections were filed by Respondent No. 1 under Section 30 of the Act but the learned Trial Court dismissed the objections on 20.11.1995 and made the award dated 27.8.1993 as rule of the Court. Respondent No. 2. who was allotted plot on 15.12.1981, was not impleaded as party to such proceedings. In appeal by Respondent No. 1 before the learned District Judge, Chandigarh, Respondent No. 2 was impleaded as party on her application under Order 1 Rule 10 of the Code of Civil Procedure. The said appeal was allowed on 13.9.2001 by the learned District Judge, Chandigarh relying upon M/s Guru Nanak Foundation v. Rattan Singh and Sons A.I.R. 1981 Supreme Court 2075. It was held by the learned Court that the application under Section 14 and 17 of the Act could be filed only before this Court as a sole Arbitrator was appointed by this Court. Thus, it was concluded that the Civil Court at Chandigarh has no jurisdiction to try this matter. The learned Additional District Judge, Chandigarh, thus, ordered the return of the application under Sections 14 and 1
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