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CALCUTTA HIGH COURT
Indira Banerjee and Sahidullah Munshi, JJ.
Star Track Agency Private Limited —Appellant
versus
Efcalon Tie up Private Limited —Respondent
F.M.A. No.919 of 2015
Decided on 20.5.2016
For the Appellant:Mr. S.K. Kapoor, Mr. Sakya Sen, Mr. Aniruddha Mitra, Mr. Amritam Mondal, Mr. S. Basu and Mr. S.K. Kasera, Advocates
For the Respondent:Mr. Subyasachi Chowdhury, Mr. Swatarup Banerjee, Mr. Anirban Kar, Ms. Anindita Ghosh and Mr. Rajesh Upadhyay, Advocates
Headnote:(a) Arbitration and Conciliation Act, 1996 – Section 34 – Court does not sit in appeal over arbitral award – The arbitrator, however must give reasons – Merits of an award might only be looked into if in conflict with the public policy of India – Award can be set aside if arbitrary or unreasonable – Illegality of a trivial nature does not warrant setting aside of the award. (Para 87, 89, 92, 95, 99)
(2012) 1 SCC 594; (2015) 3 SCC 49; 1994 Supp (1) SCC 644; (2003) 5 SCC 705; (2006) 4 SCC 445 – Relied upon
AIR 1937 PC 251; (2002) 2 SCC 50; (2012) 8 SCC 584; (1994) 4 SCC 250 – Referred
(b) Arbitration and Conciliation Act, 1996 – Section 34 – Arbitral award – Not to be interfered lightly if the view taken by arbitrator is a plausible one – Court cannot interfere unless it is perverse or suffers from manifest error of law – Instantly court below maki ng unsubstantiated, unjustified and uncalled-for remarks of bias against arbitrator – Impugned order showing non application of mind. (Para 102, 107, 108, 118)
(2006) 11 SCC 181; (2011) 10 SCC 573; AIR 1954 SC 689; AIR 1955 SC 468; AIR 1959 SC 1362; AIR 1960 SC 588; AIR 1965 SC 214; (1984) 4 SCC 679 : AIR 1985 SC 1156; (2001) 5 SCC 691; (2012) 5 SCC 306; (2010) 11 SCC 296 – Relied upon
(c) Arbitration and Conciliation Act, 1996 – Section 12 – Named arbitrator – His authority can not be challenged on ground of being known or close to one party. (Para 110)
(d) Arbitral law – Arbitration proceedinsg cannot be stalled just because one party was locked in litigation with its superior landlord who was not a party to the arbitration. (Para 121)
(e) Arbitration and Conciliation Act, 1996 – Section 34 – Arbitrator is the master of facts – Court cannot sit in appeal over factual findings recorded by the Arbitrator. (Para 123)
(f) Arbitration and Conciliation Act, 1996 – Section 7 – Arbitration clause – Independent agreement, unrelated to performance of other terms and conditions of contract – Arbitration agreement survives even if the contract is terminated or comes to an end. (Para 139)
(2011) 14 SCC 66 – Relied upon
(g) Indian Contract Act, 1872 – Section 64 and 65 – Efcalon having no right to license out the said premises, inducting the appellant into the premises – Appellant thus had no right to be in occupation of the premises – Award allowing possession of the premises to appellant but not requiring him to pay occupation charges to anybody – No sustainable – Held appellant has ot pay occupation charges, if not to Efcalon, to Kolkata Port Trust. (Para 149)
Result: Appeal dismissed.
Indira Banerjee, J.—This appeal, under Section 37(1) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as the 1996 Act, is against a judgment and order dated 6th December, 2014, passed by the Court of the Additional 10th District Judge, Alipore, District – South 24-Parganas, allowing the application being Misc Case No.15 of 2013 filed by the respondent under Section 34 of the 1996 Act and setting aside an award dated 22nd April, 2012 of the learned Arbitrator, Shri Prabir Kr. Roychoudhury, Bat at Law, in an arbitration to adjudicate disputes between the appellant and the respondent in respect of a purported licence agreement dated 26th December, 2004 between the respondent and the appellant in relation to Premises No. P-10, Taratala Road, Kolkata-700 088, hereinafter referred to as the said premises.
2. Kolkata Port Trust is the owner of the said premises. By an indenture of lease executed by and between Kolkata Port Trust and one Das Reprographics Limited, a company within the meaning of the Companies Act, 1956, which has since been wound up, Kolkata Port Trust had leased out the said premises to the said company for a period of 29 years, 1 month and 25 days with effect from December, 1963.
3. The said indenture of lease provided option for renewal of the lease for a further term of 30 years, subject to the conditions as contained in the said indenture of lease. It appears that the company had applied for renewal of the lease some time in August, 1991 about five months before the date of its expiry. The lease was not renewed, but the company continued in possession of the said premises, without interference.
4. By an order dated 21st December, 1994, of this Court in Company Petition No.151 of 1996, the company was directed to be wound up and the Official Liquidator was directed to take possession of the assets of the company in liquidation.
5. Pursuant to an order dated 27th August, 1997, passed in the winding up proceedings, advertisements were issued for sale of the assets of the company in liquidation.
6. By an order dated 16th January, 1998 this Court accepted the offer of the respondent, Efcalon Tie Up Private Ltd., hereinafter referred to as ‘Efcalon’, of Rs.50 lakhs for purchase of the assets of the company in liquidation, having regard to an agreement made by Efcalon with the workmen of the company in liquidation, to reemploy the workmen.
7. United Bank of India filed an appeal against the said Order dated 16th January, 1998, contending that the sale of the assets had been conducted with undue haste, without trying to ensure the best price for the assets of the company in liquidation.
8. By a judgment and order dated 9th April, 2003, a Division Bench of this Court, comprising Their Lordships, the Hon’ble Justice Altamas Kabir and Hon’ble Justice Aloke Kumar Basu (as Their Lordships were) confirmed the sale of the assets in favour of Efcalon.
9. On consideration of the fact that Efcalon was going to run the factory and re-employ its workers, the Division Bench observed that it was desirable that Kolkata Port Trust, should grant a fresh lease of the said premises in favour of
10. Efcalon, since the earlier lease had expired in the meanwhile. Efcalon filed an application for modification of the order dated 9th April, 2003 and sought a direction on Kolkata Port Trust to renew the lease in favour of Efcalon or its nominee, on the same terms.
11. By an order dated 1st December, 2004, the Court modified its earlier order dated 9th April, 2003, observing that even though the initial lease had expired on 22nd January, 1992, the lease contained a clause giving the parties option of renewal.
12. Some of the relevant parts of the order dated 1st December, 2004 are extracted hereinbelow:
“………While considering the matter we cannot lose sight of the fact that the applicant herein purchased the assets of the company (in liquidation) with the intention of running the company as a going concern as to prov
