Sudesh Mahajan v. Rattan Kumar .

B.N Kirpal, J.— This is an appeal against the order of the learned Single Judge who allowed the respondent's application under order 39 rules 1 & 2 cpc and dismissed the appellant's application under Order 39 Rule 4 CPC and restrained the appellant herein from dispossessing the respondent from the suit premises bearing No. 58/105, Sahyog Building, Nehru Place, New Delhi.

2. Briefly stated, the facts are that the appellant herein had filed a suit under Section 20 of the Arbitration Act, being Suit No. 831-A/85. It was alleged in the said suit that there was a partnership deed dated 15th February, 1980 which was executed between the appellant and the respondent whereby a partnership firm known as Messrs. Royal Enterprizes was formed. It was contended that the partnership had been dissolved when a notice dated 8th April, 1985 had been given and the respondent had been called upon to give vacant and peaceful possession of the suit premises to the appellant herein in terms of the partnership agreement contained in the partnership deed. As the possession was not given, an application under Section 20 of the Arbitration Act was filed for referring the dispute to arbitration.

3. The respondent herein in his reply contended that the partnership was a camouflage, and the respondent was, in fact, a tenant in the premises in question since November, 1979 on a monthly rent of Rs. 800/-. The case of the respondent was that the partnership was a sham transaction and no element of partnership existed.

4. During the pendency of that suit, on 9th December, 1985 the counsel for the appellant herein stated that the parties had agreed to appoint Ms. Sudha Srivastava, Advocate as an arbitrator to decide the matter in dispute between the parties and she was to give her award and that the matter should be listed for 18th December, 1985. On 18th December, 1985 the counsel for both the parties made a statement in Cour questing for adjournment to 20th December, 1985 for recording compromise.

5. On 20th December, 1985 the award was filed in Court and statements of both the appellant and the respondent were recorded. Both of them stated that they had understood the terms of the award and they accepted the same. They also admitted their signatures on the foot of the award. The award itself stated that the arbitrator had, inter alia, taken into consideration the oral evidence and according to the award, the respondent was to hand over the vacant possession of the aforesaid premises to the appellant herein by 31st December, 1989. The appellant was not to interfere in the business to be carried by the respondent who was required to pay a sum of Rs. 1000/- p.m to the appellant herein towards her would have no right, title or interest in any of the assets of the business which would be carried on by the respondent. Along-with the award, the proceedings dated 20th December, 1985 were also filed. The proceedings contained the statement of the respondent herein which was to the effect that he had admitted that there was a partnership business between the parties and that the partnership should be dissolved. He further stated that he would hand over vacant possession of the premises by 31st December, 1989 and he would pay Rs. 1000/- p.m to the appellant herein towards her share irrespective of profit or loss. The statement of the appellant herein was also recorded who admitted the terms of the statement of the respondent and thereupon the aforesaid award was passed.

6. On the award being filed, H.C Goel, J. vide his judgment dated 20th December, 1985 passed a decree in terms thereof.

7. The respondent continued to enjoy the benefits of the said decree. Shortly before the expiry of the aforesaid period, the respondent filed the present suit No. 3131 of 1989 on 6th November, 1989. In the said suit, the prayer was for a decree for declaration that the respondent herein was a tenant in the aforesaid premises and that the relationship of landlord and tenant continued to exist. It is significant to note that there was no prayer in the suit for a decree setting aside the earlier decree dated 20th December, 1985 passed by H.C Goel, J. Alongwith the present suit, an application under Order 39 Rules 1 and 2 CPC was also filed. By the impugned judgment dated 8th February, 1990, as we have already noted, the learned Single Judge granted the injunction prayed for and the appellant was restrained from dispossessing the respondent. In arriving at this conclusion, the learned Single Judge was of the prima facia view that the question whether the respondent was a tenant or not, could not be decided by arbitration. According to the learned Judge, the respondent admitted that he was a tenant and if he was a tenant, his eviction could not be decided by the arbitrator. In our opinion, the learned Single Judge erred in granting the injunction in favour of the respondent.

8. Admittedly, the arbitration award was made by Ms. Sudha Srivastava, Advocate on 20th December, 1985. As is evident from the judgment dated 20th December, 1985 of H.C Goel, J., it is the arbitrator who filed the award in Court. Statements of both the parties were recorded firstly by the arbitrator and thereafter by the Court and both the parties admitted that a partnership existed between them and that the possession of the premises in question would be handed over by 31st December, 1989.

9. Even though the respondent had originally set up a plea that he was a tenant, before the arbitrator the respondent admitted that there was a valid partnership between the parties. The respondent gave up his plea of being a tenant. Whether the respondent was a tenant or not, was a question of fact. This question had to be decided on the basis of evidence led before the arbitrator or on the basis of the statements made before her. In the present case, the respondent chose to admit the claim of the appellant herein and made a categorical statement accepting the fact that he was a partner with and not a tenant of the appellant. On the basis of this fact having been admitted, the question of the Rent Controller having jurisdiction cannot arise.

10. The Rent Controller undoubted has the jurisdiction to order eviction of a tenant. If it had been an admitted case between the parties that the respondent had been a tenant, then there can be no doubt that neither the civil Court in an ordinary suit nor the arbitrator by way of an award can order eviction of a tenant. The jurisdiction in this regard vests exclusively with the Rent Controller. But the question whether the respondent was a tenant or not could certainly be decided by a civil Court and in an appropriate case, like the present, also by the arbitrator. If the civil Court or the atbitrator comes to the conclusion that the respondent is a tenant, then the civil Court would have no jurisdiction to direct the respondent to hand over possession to the appellant. But if the civil Court or the arbitrator comes to the conclusion that there is no relationship of landlord and tenant between the parties, then the jurisdiction of the civil court and likewise of the arbitrator is not ousted and possession can be directed to be handed over to the owner/landlord. This is precisely what happened in the present case. The appellant is the owner of the premises in question and once it is established as a fact that the respondent was not a tenant, then there can be no jurisdictional infirmity in the award dated 20th December, 1985.

11. It is contended by the learned counsel for the respondent that the award is a nullity because there was no reference to the arbitrator. We are unable to agree with this submission. The arbitrator has stated in her award that, “and whereas the parties mutually appointed me as an arbitrator and referred the disputes to me”. This award is signed by both the parties.

12. A similar question came up for consideration before the Supreme Court in the case of Vidya Harishankar Laxmiram Rajyaguru of Rajkot v. Pratapray Harishankar Rajyaguru of Rajkot, (1988) 3 SCC 21. The Supreme Court observed in that case that from the conduct of the parties it could be ascertained as to whether there was a valid reference of dispute in writing to the arbitrator or not. In that case also the award was signed by both the parties. The Supreme Court observed that the agreement to refer the dispute to arbitration could be deduced by signing of the award by both the parties. The present case cannot be distinguished from the aforesaid decision of the Supreme Court. Applying the said ratio, the only conclusion which must follow is that there was a valid reference of dispute by both the parties to the arbitrator and this reference was clearly evidenced from the award itself wherein reference has been made of this reference and the award is signed by both the parties.

13. It was then submitted that there was a procedural infirmity inasmuch as the Court could not have made the award a rule of the Court without giving thirty days notice. In our opinion, there is no merit in this contention. It is no doubt true that when an award is filed in the Court, notice has to be given to the parties to the dispute so as to enable them to file objections to the award, if they so desire. It is a period of thirty days within which objections can be filed. Where, however, the parties to the dispute appear before the Court and accept the award and categorically state that they do not want to file objections, then there is no provision of law which still makes it incumbent for the Court to wait for a period of thirty days before making the award a rule of the Court. As already indicated, the period of thirty days is to enable the parties to the award to file objections, if any party so desires. Where all the parties accept the award and make the statement to that effect, the Court is within its right to make the award rule of the Court immediately. We, therefore, do not find any infirmity in the present case.

14. It was then contended that the proceedings before the Court were only under Section 20 of the Arbitration Act, and the award cannot be made a rule of the Court. We again do not find any merit in this contention. The proceedings cannot be regarded as commencing, in the present case, after the award is filed in Court. It may be a procedural requirement of the Court that after the award has been filed in Court, it may be treated as a new proceeding and a separate suit number is allotted. Non-compliance with the said procedure cannot oust the jurisdiction of the Court to deal with the award. Once the award is filed in Court, it is the duty and responsibility of the Court to deal with the said award. When the award is filed and the parties accept the correctness of the award, the Court has no option but to pass a decree in terms thereof.

15. Before concluding, we would like to observe that in the present case the decree in terms of the award was passed on 20th December, 1985. The respondent had agreed to vacate the premises on or before 31st December, 1989. If there was any infirmity in the decree or in the award or in any proceedings, we would have expected an honest and diligent litigant to approach the Court at the earliest opportune moment. If the case of the respondent was that the state of affairs were not correctly reflected in the award, then the only remedy which was open to the respondent may possibly have been either to apply for review or file an appeal against the decree dated 20th December, 1985. What has actually happened is that for a period of nearly four years the respondent has, on the basis of the said decree, continued to remain in possession. The respondent has thus accepted the correctness of the decree and has derived the benefits thereof and, in our opinion, he is clearly estopped from challenging the correctness thereof. If there was any infirmity in the award or the proceedings, as are now sought to be pleaded, the respondent must have known about the same much before he filed the present suit. If he did not take action at an earlier point of time, it must follow that the respondent has condoned the procedural lapses, if any, though in the present case we are not satisfied that there was any procedural lapse or infirmity in the passing of the decree dated 20th December, 1985.

16. We may also observe that the suit itself, prima facie, which was instituted by the respondent, was not maintainable by virtue of the provisions of Section 32 of the Arbitration Act. According to the said Section, any question with regard to the existence, validity or effect of the arbitration agreement or of the award can be decided only according to the provisions of the Arbitration Act. Section 32 itself says that the said provision is notwithstanding any law for the time being in force. Therefore, whenever any award is made, the question as to whether the award is valid or whether the reference was in existence or validly made, can only be decided under the provisions of the Arbitration Act. The jurisdiction of the civil court is ousted because of the clear and unambiguous wording of Section 32 of the Arbitration Act. What the respondent had sought in the present case was to challenge the existence of the arbitration agreement and the validity of the award. Section 32 clearly states that the validity of the award and existence of the arbitration agreement can only be questioned under the provisions of the Arbitration Act. The course which was open to the respondent was to take resort to the proceedings either under Section 30 or Section 33 of the Arbitration Act. The present suit was clearly not maintainable.

17. For the aforesaid reasons, the appeal is allowed and the judgment dated 8th February, 1990 is set aside. The appellant would also be entitled to costs.

Appeal allowed.