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Pramode Kumar Mittal v. Sri Bhuramal Chiranjilal Mittal And Others
Concise Analytical Summary of the Court's Opinion
Factual and Procedural Background
This is an application under Section 14(2) of the Arbitration Act, 1940, seeking a direction that the arbitrator file an interim award made and published on 6 January 1977 in this Court.
The parties are members (descendants) of the same family (the Mittal family) and there arose diverse disputes among them relating to businesses, trusts, companies and properties. These disputes were referred to sole arbitration by Shri B.P. Khaitan pursuant to an arbitration agreement dated 21 June 1976.
On 8 January 1977 the petitioner received by registered post an interim award and/or directions signed by the arbitrator. The petitioner applied for an order directing the arbitrator to file that interim award in Court.
Legal Issues Presented
- Whether the directions given by the arbitrator constitute an "award" within the meaning of Section 2(b) of the Arbitration Act, 1940, and are therefore capable of being filed in Court.
- Whether this Court has jurisdiction to entertain the application for filing the award (i.e., whether the subject-matter of the award falls within the territorial and subject-matter jurisdiction of this Court).
- Whether the fact that the award may affect immovable property and is unregistered prevents the Court from directing that the award be filed.
- Whether absence of proper stamping (as required by Article 12 of the Stamp Act) prevents the award from being directed to be filed in Court.
Arguments of the Parties
Petitioner
- The petitioner sought an order directing the arbitrator to file the interim award dated 6 January 1977 in Court.
- Implicit in the application is the position that the document sent by the arbitrator constituted an award and should be filed.
Opposing Respondents
- Contended that the directions sent by the arbitrator were not an interim "award" and hence not capable of being filed.
- Contended that this Court lacked jurisdiction because the properties (notably No. 2, Brabourne Road) belonged to Andhra Steel Corporation Ltd. and disputes concerning properties standing in the name of separate corporate entities were not agreed to be referred to arbitration.
- Argued that the award was an unregistered document which purported or operated to create/declare/assign/limit/extinguish rights in immovable property and therefore required registration under the Registration Act, 1908; being unregistered, it could not be filed.
- Argued that the award was not properly stamped as required under Article 12 of the Stamp Act and thus should not be accepted for filing.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Anandi Lall Poddar v. Keshavdeo Poddar, AIR 1949 Cal 549 | Support for the view on jurisdictional reach of local Courts under the relevant definition of "Court" in earlier Arbitration Act provisions. | Used to support the conclusion that a court in whose territory part of the cause of action arises (here, directions affecting property within Court's jurisdiction) may entertain filing of the award. |
| Union of India v. Khem Chand Rajkumar, ILR (1973) 1 Cal 529 | Consistent approach on jurisdictional questions under the Act as applied by a single Judge of the Calcutta High Court. | Reinforced the Court's view that the existence of a dispute affecting property within the Court's territorial jurisdiction suffices to entertain the application. |
| Mettapalli Chelamayya v. Mettapalli Venkataratnam, (1972) 3 SCC 799 (AIR 1972 SC 1121) | Where an award contains severable obligations, one requiring registration and another not, the award can be admissible in evidence; severability principle. | Relied on to indicate that even if parts of the award related to immovable property (requiring registration) and other parts did not, the award may still be filed and the question of severance could be considered later. |
| Champalal v. Mst. Samrathbai, AIR 1960 SC 629 | Observation that an award which requires registration may nevertheless be filed before registration, though it might not be enforceable or relied on in evidence for asserting rights in immovable property. | Applied to hold that lack of registration does not prevent filing; enforceability or evidentiary use may be affected. |
| Satish Kumar v. Surinder Kumar, AIR 1970 SC 833 | Referenced as a Supreme Court decision whose facts were different from the instant case. | Not applied substantively; Court stated that facts in that case differed and therefore it did not change the present conclusion. |
| Nanibala v. Ram Gopal, AIR 1945 Cal 19 | Observations by a Division Bench of the Calcutta High Court referenced by respondents. | Court held that the respondents could not derive much assistance from these observations in light of the Supreme Court authorities relied upon by the Court. |
Court's Reasoning and Analysis
The Court proceeded through the objections raised in the application and addressed them sequentially.
1. Nature of the document (award vs. mere directions):
- The Court examined the nature of the directions given by the arbitrator and the statutory definition of "Award" under Section 2(b) of the Arbitration Act, 1940.
- On that basis, the Court rejected the respondents' contention that the instrument was not an award and held that the objection could not be sustained. The respondents had not pressed that point very strongly.
2. Jurisdiction of the Court to entertain the application:
- The Court noted that under Section 2(c) of the Act, "Court" means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of the suit.
- The arbitrator's Clause 21(1) included directions concerning tenancy rights in premises including No. 2, Brabourne Road, Calcutta — an immovable property within the territorial jurisdiction of this Court.
- The respondents contended that disputes regarding properties standing in the name of corporate entities (e.g., Andhra Steel Corporation Ltd.) were outside the arbitration reference. The Court characterized that as a disputed factual question which should not be resolved in this limited application for filing the award.
- The Court concluded that the existence of a dispute about property within the Court's jurisdiction gave the Court sufficient jurisdiction to entertain the application. The Court relied on earlier Calcutta High Court authorities (Anandi Lall Poddar and Union of India v. Khem Chand Rajkumar) as supporting precedent for this approach.
3. Effect of non-registration under the Registration Act, 1908:
- Respondents argued that the award purported to affect immovable property and so required registration and could not be filed unregistered.
- The Court analyzed Clause 21(1) and similar directions, concluding that the award, properly read, did not itself create, declare, assign or extinguish title to immovable property. Instead it narrated past transactions and gave directions which required further instruments to be executed for implementation.
- The Court acknowledged the possibility that the award might contain severable obligations (movable vs immovable assets), and observed the Supreme Court authority (Mettapalli Chelamayya) that where obligations are severable an award can be admissible even if part would require registration.
- The Court concluded that even if registration were required for parts of the award, that fact did not prevent the Court from directing that the award be filed; registration or enforceability could be addressed subsequently. The Court cited Champalal v. Mst. Samrathbai for the proposition that filing may precede registration though enforceability/evidentiary effect may be limited.
4. Lack of proper stamping (Article 12 of the Stamp Act):
- The Court accepted that the award was not properly stamped. However, relying on Section 35 of the Stamp Act, the Court held it would not be proper to reject the application on the ground of inadequate stamping at this stage.
- The Court directed that, if the award is to be filed, the arbitrator should stamp the document properly; for this purpose the applicant would first place necessary funds with the arbitrator to meet stamp duty.
5. Procedural and protective directions:
- The Court noted that the arbitrator had been requested by both parties to file the award but had not done so. The Court directed filing subject to stamping and the applicant funding the stamp duty.
- The Court made clear that its order directing filing would not prejudice the respondents from raising points about the award's validity, jurisdictional objections, or other defenses in appropriate proceedings later.
Holding and Implications
Holding:
The Court ordered that the interim award published by the arbitrator on 6 January 1977 be filed in this Court, subject to the following conditions and directions:
- The award shall be filed in Court, but the arbitrator must properly stamp the document in accordance with the Stamp Act.
- The applicant (petitioner) must, in the first instance, provide the arbitrator with the necessary funds to meet stamping requirements.
- The order directing filing does not prevent the opposing respondents from subsequently raising objections to the award's validity, propriety or to the arbitrator's jurisdiction in appropriate proceedings.
- Costs of this application are to be costs in the arbitration proceedings.
- The arbitrator is to act on the signed copy of the minutes.
Implications:
- Direct effect on the parties: The award is to be filed in Court subject to stamping; the respondents retain all rights to challenge the award later on jurisdictional or other grounds; costs are to be borne as costs in the arbitration.
- The opinion does not announce any new legal principle beyond its application of existing authorities; it resolves the narrow procedural question of whether the Court should direct filing of the interim award and imposes practical conditions (stamping/funding) while preserving parties' substantive rights to challenge the award later.
1. This is an application under Section 14(2) of the Arbitration Act, 1940 for directing the arbitrator to file the interim award made and published by him on the 6th January, 1977. in this Court.
2. In order to appreciate the controversy in this case, it is necessary to briefly refer to certain facts. Pramode Kumar Mittal, the petitioner herein, and the respondents all belong to the same family, hereinafter referred to as Mittal family. They are all descendants of the first respondent Bhuramal Chiranjilal Mittal. It is not necessary to refer to the actual relationship between the parties. There are several companies and firms which belong to the different parties to which also it is not necessary to refer in detail. The family was also interested in several trusts. Diverse disputes and/or differences arose in the Mittal family relating to and concerning the business of the said firms, trusts and companies and regarding the control and management thereof and also regarding the properties belonging to the parties. With a view to settle the said disputes the same were referred to the sole arbitration of Shri B.P Khaitan, Solicitor and Advocate, by an arbitration agreement dated the 21st June, 1976. Thereafter, there were several meetings but on the 8th January, 1977 the petitioner received by registered post an interim award and/or directions signed by the arbitrator. The petitioner is asking that the said interim award and/or directions be filed in Court.
3. One of the contentions raised in this application was that the directions sent by the arbitrator was not an interim award and as such was not capable of being filed in Court. Having regard to the nature of the directions given and having regard to the definition of ‘Award’ under Section 2(b) of the Arbitration Act, 1940 I am unable to uphold this objection. This objection was also not very seriously pressed on behalf of the respondents, who are opposing this application.
4. The next question that requires consideration in this case is whether this Court has jurisdiction to entertain this application for filing of the award, in other words, whether this is the appropriate Court for filing of the award. Under S. 2 (c) of the Act Court means a Civil Court having jurisdiction to decide the questions forming the subjectmatter of the reference if the same had been the subject-matter of the suit. In para 21(1) of the award the Arbitrator has directed as follows:
“21. (1) Andhra Steel Corporation Ltd. has a tenancy right in respect of premises No. 24 Alipore Road, Calcutta which is being used as residential house of members of Mittal family as also in respect of office space at No. 2, Brabourne Road, Calcutta. It has been agreed between the parties that Shri M.L Mittal and members of his family will be entitled to the tenancy rights in respect of premises No. 24 Alipore Road, Calcutta as also the office space at No. 2, Brabourne Road, Calcutta 1, therefore direct the parties to cause Andhra Steel Corporation Ltd. to surrender its tenancy rights in respect of premises No. 24 Alipore, Calcutta as also office space at No. 2 Brabourne Road, Calcutta in favour of Shri M.L Mittal or his nominee. Shri M.L Mittal will be entitled to obtain the tenancy rights in respect of premises No. 24, Alipore Road, Calcutta as also office space at No. 2, Brabourne Road, Calcutta from the respective landlords either in his name or in the name of his nominee on such terms and conditions as he may think fit. I direct that the resolutions be passed in the meeting of the Board of Directors of Andhra Steel Corporation Ltd. surrendering the tenancy rights in consultation with Shri M.L Mittal. The implementation of these directions will also reduce expenses of Andhra Steel Corporation Ltd.”
5. Admittedly there was direction regarding the immoveable property within the jurisdiction of this Court, namely No. 2, Brabourne Road, Calcutta. Therefore, by virtue of the aforesaid direction this Court would have jurisdiction to entertain this application. On behalf of the opposing respondents it was contended that No. 2, Brabourne Road premises belonged to Andhra Steel Corporation Ltd. and was not the subject-matter of properties agreed to be referred to the arbitration of Shri Khaitan. It was contended that what were agreed to be referred to arbitration were the disputes regarding the properties of the parties in their own name or in the names of the members of their families but disputes regarding properties standing in the name of separate corporate entities had not been agreed to be referred to arbitration. The arbitrator merely by giving direction in respect of the properties which had not been referred to his arbitration could not enlarge the scope of the arbitration, it was submitted. It, however, appears from the award of the arbitrator that all disputes had been agreed to be referred to his arbitration. The opposing respondents dispute this assumption. The question whether the No. 2 Brabourne Road property or other properties which are not standing in the name of the parties themselves and their families were the subject-matter of arbitration is a disputed question of fact which cannot and, in my opinion, should not be resolved in an application for filing of the award. It is clear, however, that there is a dispute whether the dispute in respect of the property which is within the jurisdiction of this Court and in respect of which directions have been given by the arbitrator had been referred to arbitration. That, in my opinion, would be sufficient part of the cause of action arising within the jurisdiction of this Court which will entitle this Court to entertain this application. In that view of the matter, I am unable to sustain this objection raised on behalf of the opposing respondents. The view which I am taking, in my opinion, is in consonance with the observations of the learned single Judge of this Court in the case of Anandi Lall Poddar v. Keshavdeo Poddar (AIR 1949 Cal 549) wherein the definition under Section 2 of the Arbitration Act, 1899 was slightly different. This view is also in consonance with the view of another learned single Judge of this Court in the case of Union of India v. Khem Chand Rajkumar (ILR (1973) 1 Cal 529). I, however, make it clear that the question whether the arbitration agreement had included disputes regarding properties other than those standing in the names of the parties to the dispute or of the members of their family, will have to be decided later on if this contention is raised in appropriate proceeding and directions, if any, given for filing of the award will not preclude raising such contention.
6. The next objection was that the award being an unregistered document could not be directed to be filed. It was contended that the award purported or operated to create or declare or assign or limit or extinguish rights in the immovable property and therefore, it required registration under the Registration Act, 1908 and not having been registered it was not capable of being filed. I am unable to accept this contention. The award itself, in my opinion, does neither create nor assign nor declare nor extinguish any right in any immovable property. The award read properly only recognises certain rights in the immovable properties which would require further instruments to be executed in order to implement the directions contained in the award.
7. I have set out cl. 21(1) of the award. This is typical of the directions contained in the award regarding immovable property. Read properly, in my opinion, this does not, by itself create or declare or assign or extinguish a title or interest in the property but only gives a narration of transactions which had taken place in the past or, at best, which gives certain directions in respect of the immovable assets; it had to be enforced by execution of other documents. Apart from that, as I have noticed before, the award admittedly contains a direction regarding the movable assets as well as immovable properties, movable properties being shares in several companies. It is possible to contend that the award is severable and, as such, the award in as far as the same deals with the movable assets is enforceable without registration. I need not, at this stage, decide finally whether the award is severable as such in the instant case but I recognise only the possibility of such severance. Where an award contains severable obligations, one requiring registration and the other not, such an award is admissible in evidence. See in this connection the observations of the Supreme Court in the case of Mettapalli Chelamayya v. Mettapalli Venkataratnam, (1972) 3 SCC 799 : AIR 1972 SC 1121 at p. 1125 or the report. It is not necessary for me at this stage to decide whether in the facts and circumstances of this case, the award dealing with movable assets and the award dealing with immovable assets were severable. But I only notice that this award is capable of this consideration and, if this is so, unless the award is filed this question cannot, in my opinion, be adjudicated. In the aforesaid view of the matter, as the Supreme Court observed, even if the award requires registration, it could be filed before its registration. But it might not be enforceable or it might not be relied on in evidence for the assertion of the rights created in the immovable properties by the award. See for this observations of the Supreme Court in the case of Champalal v. Mst. Samrathbai, AIR 1960 SC 629 and specially the observation at p. 631 or the report. In my opinion, the facts and circumstances of the case of Satish Kumar v. Surinder Kumar, AIR 1970 SC 833 were different from the facts of the instant case. In view of the decisions of the Supreme Court referred to hereinbefore, I am of the opinion that the opposing respondents cannot get much assistance from the observations of the Division Bench of this Court in the case of Nanibala v. Ram Gopal, AIR 1945 Cal 19 and the observations of the learned single Judge in the case of Anandi Lal Poddar v. Keshav Lal Poddar, AIR 1949 Cal 549. For the reasons aforesaid, in any event if the award is not registered it does not prevent the Court from directing the filing of the award at this stage.
8. Next objection was that the award had not been properly stamped as required under Article 12 of the Stamp Act. Undoubtedly that is so. But in view of the provision of Section 35 of the said Act, it would not be proper, in my opinion, to reject this application on this ground. But if the filing of the award is directed the document should be stamped properly by the arbitrator and for this purpose the applicant would, in the first instance, put the arbitrator in necessary funds. It appears that the arbitrator was called upon both by the petitioner as well as by the opposing respondents to file the award, which has not been done.
9. As I have negatived the contentions of the opposing respondents, there will therefore be an order in terms of prayer (a) of the petition subject to this direction that the arbitrator will stamp the document and for this purpose the applicant would put in the necessary funds, in the first instance.
10. This order, however, will not prejudice the opposing respondents from raising any of contentions about the validity and propriety of the award, inter alia, on the ground of jurisdiction as well as on any other grounds.
11. Costs of this application will be costs in the arbitration proceedings.
12. The arbitrator will act on the signed copy of the minutes.
13. Order accordingly.
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